Exhibit 10.30
MASTER SECURITY AGREEMENT,
COLLATERAL ASSIGNMENT AND EQUITY PLEDGE
THIS MASTER SECURITY AGREEMENT, COLLATERAL ASSIGNMENT AND EQUITY
PLEDGE (as defined in Article 6 hereof, along with all other defined terms, this
"Security Agreement") is made and effective as of March 16, 2000, by EACH
"GRANTOR" THAT IS FROM TIME TO TIME LISTED ON SCHEDULE 1 HERETO OR OTHERWISE
ADDED AS A SIGNATORY HERETO (each, as more fully defined below, a "Grantor";
collectively, the "Grantors"), in favor of MCG FINANCE CORPORATION (including
any successor, participant, assignee, pledgee or transferee thereof,
"Administrative Agent"), as Administrative Agent for itself and the Lenders (as
defined in the Credit Agreement referred to below).
R E C I T A L S
WHEREAS, pursuant to that certain Credit Facility Agreement by and
among Borrowers, Lenders and Administrative Agent dated as of March 16, 2000 (as
may be amended from time to time, "Credit Agreement"), each Grantor is required
to have executed and delivered this Security Agreement encumbering all of each
Grantor's tangible and intangible personal property assets in favor of
Administrative Agent; and
WHEREAS, each Grantor has determined that it is in its best interest
to execute this Security Agreement inasmuch as each Grantor will derive
substantial direct and indirect benefits from the funding of the Advances by
Lenders pursuant to the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged) and intending to be legally bound
hereby, each Grantor and Administrative Agent hereby agree as follows:
ARTICLE 1: SECURITY INTEREST, COLLATERAL ASSIGNMENT AND PLEDGE
1.1. Grant of Security. Each Grantor (as of the effective date of becoming
a signatory hereto) hereby collaterally assigns and pledges to Administrative
Agent, and hereby grants to Administrative Agent a present, absolute,
unconditional and continuing security interest in, all of the following
property, assets and equity interests, whether or not such property and assets
are covered by Article 9 of the applicable UCC (collectively, and including all
Pledged Collateral, "Collateral"):
a. Fixtures and Improvements -- All of such Grantor's fixtures and
improvements to real property in all of its forms, including the following: all
buildings, structures, furnishings, and all heating, electrical, lighting, power
and air conditioning equipment, and all antennas, transmitters, receivers and
related equipment, and all other equipment that under applicable law constitutes
a
fixture, and all parts thereof and all accessions, additions, attachments,
improvements, substitutions and replacements thereto and therefor (any and all
of the foregoing being the "Fixtures"); and
b. Equipment (and Computer Hardware) -- All of such Grantor's
equipment in all of its forms, including the following: all machinery, tools,
motor vehicles, furniture and furnishings, and all antennas, transmitters,
receivers and related equipment, all communications, telecommunications,
switches and related equipment, and 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, and all documentation manuals and materials
with respect to such hardware, and all rights with respect to all of the
foregoing, including any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support rights,
improvement rights, renewal rights and indemnifications, and any model
conversions of any of the foregoing, and all parts thereof and all accessions,
additions, parts (including replacement parts), attachments, improvements,
substitutions and replacements thereto and therefor (any and all of the
foregoing being the "Equipment"); and
c. Inventory -- All of such Grantor's inventory in all of its forms,
including the following: (1) all raw materials and work in process therefor,
finished goods thereof, and materials used or consumed in the preparation,
manufacture, creation or production thereof, and (2) all goods in which any
Grantor has an interest in mass or a joint or other interest or right of any
kind (including goods in which any Grantor has an interest or right as
consignee), and (3) all goods which are returned to or repossessed by any
Grantor, and in each instance all accessions thereto, products thereof and
documents therefor (any and all of the foregoing being the "Inventory"); and
d. Receivables, Accounts, Contracts, Money, Instruments, Chattel
Paper and Related Documents -- All of such Grantor's accounts, receivables, cash
collateral accounts, lock box accounts, other deposit accounts, security
deposits, advance payments, contracts, contract rights, leases, licenses,
insurance policies, chattel paper, documents, instruments (whether or not
negotiable), money, general intangibles and other obligations of any kind, and
whether or not arising out of or in connection with the sale or lease of goods
or the rendering of services (any and all of the foregoing being the "Contract
Rights"), and all rights of any Grantor in and to all agreements, security
agreements, guaranties, leases and other contracts securing or otherwise
relating to any such Contract Rights (any and all such security agreements,
guaranties, leases and other contracts being the "Related Contracts"); and
e. Intellectual Property -- Without limiting any of the foregoing,
all of such Grantor's intellectual and information related property, rights and
assets, including the following (collectively, "Intellectual Property
Collateral"):
1. Computer Software and Data -- (a) All software programs and
data bases (including source code, object code and all related applications and
data files) owned, licensed or leased by any Grantor, and (b) all firmware
associated therewith or with any of the Equipment, and (c) all documentation and
materials (including all flow charts, logic diagrams, algorithms, manuals,
guides, instructions, indices, abstracts and specifications) with respect to
such software and
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firmware, and (d) all rights with respect to all of the foregoing, including any
and all copyrights, trademarks, 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
(collectively, "Computer Software Collateral"), and
2. Copyrights -- All copyrights of such Grantor in each work
or authorship and derivative works thereof, whether published or unpublished and
whether or not the same also constitutes a trade secret, whether statutory or
common law, registered or unregistered, throughout the world, including all of
such 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 all
applications for registration thereof, whether pending or in preparation, and
all copyright licenses, and further including the right to xxx for past, present
and future infringements of any thereof, all rights corresponding thereto
throughout the world, and all goodwill associated therewith, all extensions,
continuations and renewals of any thereof, and all proceeds of the foregoing,
including licenses, fees, royalties, income, payments, claims, damages and
proceeds of suit (collectively, "Copyright Collateral"), and
3. Patents -- All patents and like protections, including all
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same, and all applications for registration
thereof, whether pending or in preparation, all patent licenses, the right to
xxx for past, present and future infringements of any thereof, all rights
corresponding thereto throughout the world, and all goodwill associated
therewith, all extensions, continuations and renewals of any thereof, and all
proceeds of the foregoing, including licenses, fees, royalties, income,
payments, claims, damages and proceeds of suit (collectively, "Patent
Collateral"), and
4. Trademarks -- (a) All trademarks, service marks, trade
names, corporate names, company names, business names, operating names, domain
names, fictitious business names, trade styles, certification marks, collective
marks, call signs, logos, other source of business identifiers, prints, labels
and goods on which any of the foregoing appear or have appeared, designs
(including product designs) and general intangibles of a like nature (any and
all of the foregoing being the "Trademarks"), anywhere in the world, whether
registered or not and whether currently in use or not, all registrations and
recordings thereof and all applications to register the same, 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, and
(b) all Trademark licenses, and (c) all reissues, extensions or renewals of any
of the foregoing, and (d) all of the goodwill of the business connected with the
use of, and symbolized by, the items described in the foregoing, and (e) all
proceeds, fees, royalties, income or payments of, and rights associated with,
the foregoing, including any claim by any Grantor against third parties for
past, present or future infringement or dilution of any Trademark, Trademark
registration or Trademark license, or for any injury to the goodwill associated
with the use of any such Trademark or for breach or enforcement of any Trademark
license (collectively, "Trademark Collateral"), and
5. Trade Secrets -- 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 any Grantor's
business (any and all of the foregoing being the
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"Trade Secrets"), 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 Secrets, all Trade Secret
licenses, 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 (collectively,
"Trade Secret Collateral"); and
f. Publication, Programming and Production-Related Property --
Without limiting any of the foregoing, all of such Grantor's right, title,
interest and benefits in, to and under (a) all books, writings, journals,
articles and publications, and (b) all customer, subscriber, prospect, inquiry,
circulation, marketing, advertising, publicity, promotional and programming
files, lists, records, documents, contracts and agreements, including all files,
lists and records of active, expired, prospective, trial and conditional
customers and subscribers, and all files, lists and records of current, former
and prospective advertisers, and all internally generated, purchased and rented
mailing lists (but only to the extent of any Grantor's rights therein), and all
promotional letters, catalogues, flyers, reply cards, sales materials,
promotional materials, sample mailing pieces, artwork, drawings, advertising
materials, space advertising and any similar materials, and (c) all publication
rights, programming rights, editorial rights, promotional rights, advertising
rights, licensing rights, distribution and redistribution rights, and printing
and reprinting rights (and any and all agreements, contracts, documents and
materials in any way governing or relating to any of the foregoing rights), and
(d) all editorial, publishing, programming, manufacturing, prepublication and
post-publication, royalty, sales, pricing, cost and promotional files, lists,
records and documents, and (e) all indices, abstracts, compilations, summaries,
glossaries and archives of or for any of the foregoing items, and (f) all other
information and property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the foregoing
property identified in this clause or elsewhere in this Section 1.1 and
regardless of whether such property is embodied in a tangible or intangible
medium; and
g. Licenses and Authorizations -- Without limiting any of the
foregoing, all of such Grantor's right, title, interest and benefits in, to and
under all present and future Licenses, Authorizations and other rights for the
construction, development, operation and ownership of its business and
properties including, without limitation, any Licenses and Authorizations issued
by the Federal Communication Commission ("FCC") or any state public utilities
commission ("State PUC") (but only to the extent that and only during such time
as it is not unlawful to grant and enforce a security interest therein), and all
proceeds of such Licenses, Authorizations and other rights, and all rights of
such Grantor in and to all agreements, security agreements, guaranties, leases
and other contracts securing or otherwise relating to any such Licenses,
Authorizations and other rights; and
h. Other General Intangibles -- Without limiting any of the
foregoing, all of such Grantor's right, title, interest and benefits in, to and
under all other general intangibles, wherever arising, including the following:
(a) all corporate, partnership, limited liability company and joint venture
investments and other interests in and to any other entity (including all
ownership rights and interests in such Grantor's subsidiaries, whether or not
such rights and interests are certificated), and the proceeds and general
intangibles related thereto (including all dividends, distributions, capital
accounts and proceeds thereof), and (b) all leasehold interests (whether as
lessee or as lessor) and all related rights thereunder and proceeds thereof, and
(c) all tax refunds and other refunds or rights to
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receive payment from U.S. federal, state, or local governments or from foreign
governments, whether or not arising out of or in connection with the sale or
lease of goods or the rendering of services, and (d) all settlements, judgments
and other awards (whether or not resulting from judicial or arbitration
proceedings) and all tort and contract claims and causes of action; and all
rights of such Grantor in and to all security agreements, guaranties, leases and
other contracts securing or otherwise relating to any such general intangibles;
and
i. Securities and Investment Property -- Without limiting any of the
foregoing, all of such Grantor's right, title, interest and benefits in, to and
under all stocks, options, warrants, bonds, and other securities, security
entitlements, securities accounts, financial assets and other investment
property (including all such securities representing ownership in such Grantor's
subsidiaries), and the proceeds and general intangibles related thereto
(including all dividends and distributions); and
j. Other General Property -- All of such Grantor's other property
and rights of every kind and description and interests therein; and
k. Products and Proceeds -- All products, offspring, rents, issues,
profits, returns, refunds, income and proceeds of and from any and all of the
foregoing Collateral, including the following: all proceeds of the Licenses and
Authorizations, all proceeds that constitute property of the types described in
this Section 1.1, all proceeds deposited from time to time in any lock boxes of
any Grantor, and, to the extent not otherwise included, all payments, unearned
premiums and cash or surrender value under insurance policies (whether or not
Administrative Agent or any Lender is a loss payee or additional insured
thereof), and any indemnity, warranty or guaranty payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral;
in each instance (whether or not expressly specified above), wherever located,
and whether now existing, owned, leased or licensed or hereafter acquired ,
leased, licensed, arising, developed, generated, adopted or created for or by
any Grantor, and howsoever any Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).
1.2. Security for Secured Obligations. This Security Agreement secures the
payment and performance in full of (a) all obligations (monetary or otherwise)
of each Borrower and each other Obligor now or hereafter existing under the
Credit Agreement or any other Loan Document as well as under any other agreement
with Administrative Agent or any Lender to extend credit to any Obligor or to
any Affiliate of any such Obligor (whether for principal, interest, costs, fees,
expenses, protective advances or otherwise), and (b) all obligations (monetary
or otherwise) of any Grantor now or hereafter existing under this Security
Agreement or any other Loan Document (all such obligations under Clauses "(a)"
and "(b)" being referred to collectively as the "Secured Obligations").
1.3. Continuing Security Interest; Assignment; Termination. This Security
Agreement creates a continuing security interest in and collateral assignment
and pledge of the Collateral and will remain in full force and effect until
terminated as described below in this Section. This Security Agreement is
binding upon each Grantor and its successors, transferees and assignees, and
(together with the rights and remedies of Administrative Agent hereunder) inures
to the benefit of
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Administrative Agent and its successors, transferees, participants and
assignees. Without limiting the generality of the foregoing, except to the
extent restricted under the Credit Agreement, Administrative Agent and each
Lender may assign, syndicate, participate or otherwise transfer (in whole or in
part, and without any Grantor's consent) any Loan Document and any indebtedness
thereunder to any other Person, and such other Person or entity will thereupon
become vested with all the rights and benefits in respect thereof granted to
Administrative Agent or such Lender under any such Loan Document (including this
Security Agreement) or otherwise, subject, however, to any contrary provisions
in such assignment or transfer. The security interest, collateral assignment and
pledge granted herein will terminate (and all rights to the Collateral will
revert to Grantors) upon satisfaction of the following conditions: (a) payment
and performance in full of all Secured Obligations (unconditionally and
indefeasibly) and (b) the termination of the Credit Agreement (and the
Facilities thereunder). Upon any such termination, Administrative Agent (at
Grantors' request and sole expense) (a) will execute and deliver to a Grantor
(without any representation, warranty or recourse of any kind whatsoever) such
documents as such Grantor may reasonably request and provide to Administrative
Agent to evidence such termination, and (b) will deliver to a Grantor or to
another Person that Administrative Agent reasonably believes may be entitled
thereto (without any representation, warranty or recourse of any kind
whatsoever) all stock certificates and instruments representing or evidencing
Collateral being physically held by Administrative Agent hereunder.
1.4. Security Interest Absolute. All rights of Administrative Agent and
Lenders and the security interests, collateral assignments and pledges granted,
assigned and pledged to Administrative Agent hereunder, and all obligations of
each Grantor hereunder, are absolute and unconditional, irrespective of the
occurrence of any one or more of the following:
a. Any lack of validity or enforceability of any Loan Document;
or
b. The failure of Administrative Agent or any Lender or any
holder of any Note:
1. To assert any claim or demand or to enforce any right or
remedy under the provisions of any Loan Document or
otherwise, or
2. To exercise any right or remedy against any other
Obligor of, or any collateral securing, any obligations
of any Borrower owing to any Lender; or
c. Any change in the time, manner or place of payment of, or in
any other term of, any Secured Obligation; or
d. Any other extension, increase, refinancing, restructuring,
compromise or renewal of any Secured Obligation; or
e. Any reduction, limitation, impairment or termination of any
Secured Obligation for any reason, including any waiver,
release, surrender, alteration or compromise; or
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f. Any amendment to, rescission, waiver, or other modification
of, or any consent to departure from, the terms of any Loan
Document; or
g. Any addition, exchange, release, surrender or nonperfection of
any collateral (including the Collateral), or any amendment to
or waiver or release of or addition to or consent to departure
from any guaranty, for any Secured Obligation; or
h. Any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of,
any Grantor or its obligations hereunder, including, without
limitation, any and all suretyship defenses.
Each Grantor hereby waives any right to or any claim of any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of any invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Secured Obligation.
1.5. Equity Pledge.
x. Xxxxx of Security Interest. Pursuant to Section 1.1, without
limiting the generality thereof, each Grantor pledges, hypothecates, assigns,
charges, mortgages, delivers, and transfers to Administrative Agent and grants
to Administrative Agent a present, absolute, unconditional and continuing
security interest in all of the following property (collectively, "Pledged
Equity Collateral"):
1. All Pledged Equity currently owned by such Grantor; and
2. All Pledged Equity issued from time to time hereafter to
such Grantor; and
3. All other Pledged Equity Property (including, all
options and warrants for Pledged Equity) owned by such
Grantor, whether now or hereafter delivered to
Administrative Agent in connection with this Security
Agreement; and
4. All Dividends, Distributions, capital accounts, and
other payments and rights with respect to any Pledged
Equity Property received or receivable by such Grantor;
and
5. All proceeds of any of the foregoing; and
in each case, whether now existing or owned or hereafter acquired by such
Grantor and howsoever such Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).
b. Delivery of Pledged Equity Property. To the extent that any of
the Collateral is evidenced by a certificate or instrument, then all such
certificates or instruments (a) must be
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delivered to and held by or on behalf of Administrative Agent pursuant hereto,
and (b) must be in suitable form for transfer by delivery, and (c) must be
accompanied by all necessary powers, appointments and instruments of transfer or
assignment, duly executed in blank.
c. Dividends and Distributions on Pledged Shares. Except as
otherwise provided in the Credit Agreement, all Dividends, Distributions,
non-Dividend cash payments, and proceeds thereof paid or payable to any Grantor
must be paid directly to Administrative Agent (properly endorsed if required
hereby or requested by Administrative Agent) as additional Collateral hereunder,
unless and until Administrative Agent has terminated this Security Agreement as
provided in Section 1.3. All Dividends, Distributions, cash payments, and
proceeds that at any time and from time to time may be delivered to any Grantor
but which such Grantor is then obligated to deliver to Administrative Agent,
until delivery to Administrative Agent, must be held by such Grantor (a) in
trust for Administrative Agent and (b) separate, segregated and apart from its
other property.
1.6. Collateral Assignment of Contracts.
x. Xxxxx of Security Interest. Pursuant to Section 1.1, without
limiting the generality thereof, each Grantor collaterally assigns to
Administrative Agent all of such Grantor's right, title and interest in and to
all of such Grantor's contracts, licenses, leases and other agreements and all
rights, interests, powers, privileges and other benefits thereunder (including
the rights to receive all proceeds and payments under each such contract,
license, lease and other agreement). This assignment of each contract, license,
lease and other agreement constitutes a fully perfected, absolute, unconditional
and present assignment, provided, however, that prior to the occurrence of an
Event of Default, such Grantor may exercise any rights and powers under and may
receive all payments and enjoy all other benefits of each such contract,
license, lease and other agreement, subject to the terms and provisions of this
Security Agreement and the other Loan Documents.
b. Administrative Agent's Right to Cure. Administrative Agent shall
have the right (but not the obligation) to cure or remedy any breach or default
under any contract, license, lease or other agreement on the part of any
Grantor. The exercise by Administrative Agent of any of its rights hereunder
will not release any Grantor from any of its duties or obligations under any
such contracts, licenses, leases or other agreements included in the Collateral.
Neither Administrative Agent nor any Lender has any obligation or liability
under any such contracts, licenses, leases or other agreements included in the
Collateral by reason of this Security Agreement, nor is Administrative Agent or
any Lender obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
1.7. Collateral Interest in Certain Intellectual Property. Notwithstanding
the language of Section 1.1, Administrative Agent's interest in Copyrights,
Patents and Trademarks (and any applications therefor) is as a security interest
and pledge and not as an absolute assignment.
1.8. Restrictions on Granting Security Interests and Collateral
Assignments. Notwithstanding the terms of this Security Agreement, the
collateral assignment of and security interest in a Grantor's interests in
contracts, licenses, leases and other agreements shall not apply to
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any contract, license, lease or other agreement to the extent that each of the
following characteristics are satisfied with respect thereto: (a) it either (i)
exists on the Closing Date, or (ii) is a Material Contract entered into after
the Closing Date in accordance with the standards under Section 5.16 of the
Credit Agreement, or (iii) is not a Material Contract, and (b) its existence has
been disclosed to the Administrative Agent to the extent it is a Material
Contract, and (c) it expressly prohibits the granting of a security interest in
or the collateral assignment of such Grantor's interest therein, and (d) such
prohibition is enforceable under applicable law.
ARTICLE 2: REPRESENTATIONS AND WARRANTIES
Each Grantor hereby represents and warrants to Administrative Agent as set
forth in this Article. These representations and warranties are qualified in
their entirety by any and all disclosures made in the schedules to the Credit
Agreement.
2.1. Location of Collateral. Except as identified on Schedule 2.1, all of
the Equipment and Inventory of each Grantor is located at the address set forth
below the name of such Grantor on the signature page hereof. Except as
identified on Schedule 2.1, within the four months preceding the date of this
Security Agreement, none of the Equipment or Inventory has been located at any
place other than at such address. The principal places of business and chief
executive office of each Grantor and the offices where each Grantor keeps its
records concerning the Contract Rights and Related Contracts are located at the
address identified on Schedule 2.1.
2.2. Operating Names. Except as identified on Schedule 2.2, during the
preceding 12 years, no Grantor has been (a) operating under or known by any
legal or trade name different from the one set forth on the signature page
hereto or (b) the subject of any merger or other corporate reorganization.
2.3. Ownership; No Liens. Except as identified on Schedule 2.3, Grantors
are the sole and exclusive owners of or have the irrevocable, exclusive and
transferable right to possess and use the Collateral, and Grantors have full
authority to pledge, assign and grant a security interest in the Collateral. The
Collateral is free and clear of any Lien except (a) the security interest,
collateral assignment and pledge created by this Security Agreement and (b) as
otherwise 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 (1) financing statements and
intellectual property security agreements filed in favor of Administrative Agent
relating to this Security Agreement and (2) such other financing statements and
instruments as identified on Schedule 2.3.
2.4. Government Contracts. Except as identified on Schedule 2.4, no
Grantor is a party to any Federal, state or local government contract (either
domestic or foreign).
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2.5. Negotiable Documents, Instruments, Certificated Securities and
Chattel Paper. Contemporaneously with the execution hereof, each Grantor has
delivered to Administrative Agent possession of all originals of all negotiable
documents, certificated securities, instruments and chattel paper (other than
checks received in the ordinary course of business) currently owned or held by
such Grantor (duly endorsed in blank, if requested by Administrative Agent).
2.6. Intellectual Property Collateral. Except as disclosed on the
schedules to the Credit Agreement, with respect to each item of Intellectual
Property Collateral:
a. Such Intellectual Property Collateral is subsisting, valid and
enforceable, and to each Grantor's knowledge (after due inquiry), such
Intellectual Property Collateral has not been adjudged invalid or unenforceable,
in whole or in part.
b. To each Grantor's knowledge (after due inquiry), no claim has
been made that the use of any Intellectual Property Collateral does or may
violate the asserted rights of any third party.
c. Each Grantor has performed all acts and has paid all required
fees and taxes to maintain each and every item of its Intellectual Property
Collateral in full force and effect throughout the world, as applicable, except
where such fees and taxes are being contested in good faith with diligent
prosecution.
d. Each Grantor owns directly, or is entitled to use by license or
otherwise, all Patents, Trademarks, Trade Secrets, Copyrights, 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 such Grantor's
business. To the extent any such Intellectual Property Collateral was developed
or created for or on behalf of any Grantor as a "work for hire," then such
Grantor has obtained a waiver of any rights herein by the author or creator
hereof.
2.7. As to Pledged Shares. With respect to any Pledged Equity constituting
Collateral, all of such Pledged Equity is duly authorized and validly issued,
fully paid, and non-assessable. The Pledged Equity constitutes all of the issued
and outstanding shares (and other rights) of equity ownership of each Pledged
Equity Issuer owned by any Grantor.
2.8. Valid and Perfected Security Interest. This Security Agreement
creates a valid security interest in and collateral assignment and pledge of the
Collateral and proceeds thereof securing the payment of the Secured Obligations.
All filings and other actions necessary or desirable to perfect and protect such
security interest, collateral assignment and pledge have been duly taken or will
be duly taken as of the effective date hereof. Schedule 2.8 (a) lists each
filing (including filing locations and "debtor" names) that is necessary or
appropriate to perfect the security interests, collateral assignments and
pledges created hereby (including with respect to Intellectual Property
Collateral), and (b) identifies the items of Collateral that must be delivered
to or possessed by Administrative Agent to perfect Administrative Agent's
interest hereunder. Upon perfection (as described in this Section), such
security interest, collateral assignment and pledge will be of a first priority
ranking except as and to the extent noted in Section 2.3 (or on the
corresponding schedule thereto).
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2.9. Authorization and Approval. Except as noted in Section 2.8 (or on the
corresponding schedule thereto), no authorization, approval or other action by
(and no notice to or filing with) any Official Body or other Person is required
either (a) for the grant by any Grantor of the security interest, collateral
assignment and pledge granted hereby, or (b) for the execution, delivery and
performance of this Security Agreement by any Grantor, or (c) for the perfection
by Administrative Agent of its rights and interests hereunder, or (d) except as
provided in Section 5.9(d), for the exercise by Administrative Agent of its
rights and remedies hereunder.
2.10. Compliance with Laws and Contracts. Each Grantor is (and after
execution and delivery of the Loan Documents to which such Grantor is a party,
such Grantor will be) in compliance in all material respects with the
requirements of all applicable laws, rules, regulations, policies, orders and
decrees of every Official Body and with all contractual restrictions, in either
instance the non-compliance with which individually or in the aggregate could
reasonably be expected to have or cause a Material Adverse Effect.
2.11. Validity of Obligations. This Security Agreement constitutes the
legal, valid and binding obligation of each Grantor and is enforceable against
each Grantor in accordance with the terms hereof.
2.12. Solvency; Fraudulent Transfers. No Grantor is "insolvent," as such
term is defined in Section 101(32) of the Bankruptcy Code (11 U.S.C. ss.
101(32)). No Grantor, by virtue of its obligations and actions in connection
with the Loan Documents, has engaged or is engaging in any transaction that
constitutes a fraudulent transfer or fraudulent conveyance under applicable
federal or state law (including under Section 548 of the Bankruptcy Code or
under the Uniform Fraudulent Transfer Act or the Uniform Fraudulent Conveyance
Act).
ARTICLE 3: COVENANTS
Each Grantor covenants and agrees that, so long as this Security Agreement
remains effective, each Grantor will comply with the covenants set forth in this
Article, unless Administrative Agent otherwise consents in writing.
3.1. As to Equipment and Inventory.
a. Except as permitted by Section 5.14 of the Credit Agreement, each
Grantor will keep all the Equipment and Inventory (other than Inventory and
Equipment sold in the ordinary course of business or as otherwise permitted by
the Credit Agreement) at the places therefor specified in Section 2.1 or (upon
prior written notice to Administrative Agent of at least 30 calendar days) at
such other places in a jurisdiction where all of the representations and
warranties in Article 2 at that time will be true and correct. Each Grantor will
take all actions necessary to ensure the continued perfection of Administrative
Agent's interest in such Equipment and Inventory.
b. Each Grantor will maintain and preserve the Equipment in the same
condition, repair and working order as when new (ordinary wear and tear
excepted) and in all material respects
11
in accordance with all manufacturer's manuals. Each Grantor will forthwith (or,
in the case of any loss or damage to any Equipment, as quickly as practicable
after the occurrence thereof) make or cause to be made all repairs, replacements
and other improvements in connection with the Equipment that are necessary or
desirable to maintain the Equipment in accordance with the standard set forth in
this Section. Each Grantor will promptly furnish to Administrative Agent a
statement respecting any loss or damage to any of the Equipment.
c. Each Grantor will pay promptly before delinquent all property and
other taxes, assessments and governmental charges or levies imposed upon, and
all claims (whether for labor, materials or supplies) against, the Equipment and
Inventory, except to the extent the validity thereof is being contested in good
faith by appropriate proceedings diligently prosecuted and for which adequate
reserves in accordance with GAAP have been set aside.
3.2. As to Contracts and Related Rights.
a. Each Grantor will keep its principal place of business and chief
executive office and the office where it keeps its records concerning the
Contract Rights and Related Contracts, and all originals of all chattel paper
which evidence Contract Rights, located at the places therefor specified in
Section 2.1 or (upon prior written notice to Administrative Agent of at least 30
calendar days) at such other places in a jurisdiction where all of the
representations and warranties in Article 2 at that time will be true and
correct. Each Grantor will take all actions necessary to ensure the continued
perfection of Administrative Agent's interest in the Contract Rights and Related
Contracts. No Grantor will change its name except upon prior written notice to
Administrative Agent of at least 30 calendar days. Each Grantor will hold and
preserve such records and chattel paper concerning the Contract Rights and
Related Contracts and will permit representatives of Administrative Agent or any
Lender at any time during normal business hours to inspect and make abstracts
from such records and chattel paper.
b. Each Grantor will remain liable under the contracts, licenses,
leases and other agreements included in the Collateral to the extent set forth
therein. Without limiting the foregoing, unless a Grantor otherwise receives
Administrative Agent's prior written consent (which consent will not be
unreasonably withheld while no Default is occurring), then such Grantor (a) will
faithfully abide by, perform and discharge each and every material obligation,
covenant and agreement under each Material Contract (as such term is defined in
the Credit Agreement) to be performed by such Grantor, and (b) will not
materially amend, modify or otherwise alter the terms of any Material Contract
(including the term or duration thereof or the amount of or methodology for
calculating the compensation due thereunder), and (c) will not assign its rights
under any Material Contract, and (d) will not accept (and will not take any
action to cause) a surrender, termination, revocation or cancellation of any
Material Contract unless replaced by a substantially similar contractual
relationship reasonably acceptable to Administrative Agent, and (e) will enforce
the performance of each and every material obligation, covenant and condition of
each Material Contract to be performed by the other parties thereto, and (f)
will appear in and defend any action or proceeding arising under or in any
manner connected with any Material Contract.
c. Each Grantor will give prompt written notice to Administrative
Agent of the occurrence of any default, breach or other material event,
condition or circumstance relating to any
12
of such Grantor's Material Contracts (together, if applicable, with a true and
complete copy of any related written notice that such Grantor may have given to
or received from any other party thereto).
3.3. As to Pledged Equity Collateral.
x. Xxxxxx and Appointments. Each Grantor agrees that all Pledged
Equity (and all other equity ownership interests constituting Pledged Equity
Collateral) delivered by any Grantor pursuant to this Security Agreement will be
accompanied by duly executed undated blank powers, appointments or other
equivalent instruments of transfer acceptable to Administrative Agent. From time
to time at Administrative Agent's request, each Grantor will promptly deliver to
Administrative Agent such powers, appointments, instruments and similar
documents (satisfactory in form and substance to Administrative Agent) with
respect to the Collateral. From time to time at Administrative Agent's request
after the occurrence of any Event of Default, each Grantor will promptly
transfer any Pledged Equity or other shares of capital stock or ownership
interests constituting Collateral into the name of any nominee designated by
Administrative Agent.
b. Continuous Pledge; Protect Pledged Equity Collateral. At all
times, each Grantor will keep pledged to Administrative Agent pursuant hereto
all Pledged Equity, all other Pledged Collateral, all Dividends and
Distributions with respect thereto (subject, however, to Section 1.5.c), and all
other securities, instruments, proceeds, capital accounts, and rights from time
to time received by or distributable to any Grantor in respect of any Pledged
Equity Collateral. Each Grantor will warrant and defend the right and title
herein granted to Administrative Agent in and to the Pledged Equity Collateral
(and all right, title, and interest represented by the Pledged Equity
Collateral) against the claims and demands of all persons whomsoever.
c. Delivery of Dividends, Distributions and Other Collateral. Except
as provided in the Credit Agreement, promptly upon receipt and without any
request by Administrative Agent, each Grantor agrees to deliver to
Administrative Agent (properly endorsed if required hereby or requested by
Administrative Agent) all Distributions, all Dividends (subject, however, to
Section 1.5.c), all other non-Dividend cash payments, and all proceeds thereof,
all of which will be held by Administrative Agent as additional Pledged Equity
Collateral. All Dividends, Distributions, cash payments, and proceeds that at
any time and from time to time may be delivered to any Grantor but which such
Grantor is then obligated to deliver to Administrative Agent, until delivery to
Administrative Agent, must be held by such Grantor (a) in trust for
Administrative Agent and (b) separate, segregated and apart from its other
property.
d. Voting Rights.
1. Unless and until an Event of Default has occurred and is
continuing, each Grantor will have the exclusive right to exercise all voting
rights with respect to its Pledged Equity. Upon written request from a Grantor
(and at such Grantor's sole expense), Administrative Agent will promptly execute
and deliver such proxies and other documents, if any, as reasonably requested in
writing by such Grantor (together with a reasonably acceptable form thereof)
that are necessary to allow such Grantor to exercise voting power with respect
to any such Pledged Equity owned by such Grantor constituting Pledged Equity
Collateral; provided, however, that no vote may be cast or other action taken by
any Grantor (including, the giving of any consent, waiver, or
13
ratification) that could impair any Pledged Equity Collateral or would otherwise
be inconsistent with or violate any provision of any Loan Document (including
this Security Agreement).
2. After any Event of Default has occurred and is continuing
and Administrative Agent has notified any Grantor of Administrative Agent's
intention to exercise its voting power, unless otherwise then expressly
impermissible under applicable law, Administrative Agent may exercise (to the
exclusion of each Grantor) the voting power and all other incidental rights of
ownership with respect to any Pledged Equity or other ownership interests
constituting Pledged Equity Collateral. Each Grantor hereby grants
Administrative Agent an irrevocable proxy, exercisable under such circumstances,
to vote the Pledged Equity and such other Pledged Equity Collateral. Each
Grantor hereby covenants to promptly deliver to Administrative Agent such
additional proxies, appointments and other documents as may be necessary to
allow Administrative Agent to exercise such voting power and other incidental
ownership rights.
3.4. As to Intellectual Property Collateral.
a. No Grantor (1) will fail to maintain (in a manner consistent with
its historical practices) the quality of products and services offered under all
of the Trademark Collateral, or (2) will fail to employ with all of the
Trademark Collateral (whether or not registered with any Official Body) an
appropriate notice of such trademark, or (3) will fail to employ with all of the
Copyright Collateral an appropriate notice of such copyright, or (4) will fail
to employ with any Patent Collateral registered with the U.S. Patent and
Trademark Office, or in a foreign country, an appropriate notice of such
registration.
b. No Grantor will do or permit any act (or knowingly omit to do any
act) whereby any of the Intellectual Property Collateral may lapse or become
abandoned, forfeited, invalid, dedicated to the public or unenforceable (except
upon expiration of the end of an unrenewable term of a registration thereof)
without the prior written consent of Administrative Agent (which consent will
not be unreasonably withheld while no Default is occurring).
c. Each Grantor will promptly notify Administrative Agent if such
Grantor believes (or has reason to believe) that (1) any application or
registration relating to any material item of the Intellectual Property
Collateral may become abandoned, dedicated to the public, placed in the public
domain, invalid or unenforceable, or (2) there has been or will be an adverse
determination or development (including the institution of, or any determination
or development in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any other Official Body) regarding
such Grantor's ownership of any material item of the Intellectual Property
Collateral, its right to register the same, or its right to keep, maintain and
enforce the same.
d. If any Grantor files 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 other Official Body, then such
Grantor must notify Administrative Agent thereof within 30 calendar days
thereafter, and upon request of Administrative Agent, must promptly execute and
deliver any and all agreements, instruments, documents and papers that
Administrative
14
Agent may request to evidence Administrative Agent's security interest in such
Intellectual Property Collateral.
e. Each Grantor will perform all acts and will pay all required fees
and taxes (including in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any other Official Body)
to maintain each and every item of Intellectual Property Collateral in full
force and effect throughout the world and to pursue any application filed with
respect to the Intellectual Property Collateral, including the filing of
applications for renewal, affidavits of use, affidavits of incontestability and
opposition, and interference and cancellation proceedings.
f. Upon any Grantor's acquiring any Intellectual Property Collateral
the acquisition of which must be recorded in order to perfect such Grantor's
interest therein, then such Grantor will promptly record its interest therein
and will notify Administrative Agent thereof within 30 calendar days thereafter.
g. Each Grantor (1) will protect, defend and maintain the validity
and enforceability of the Intellectual Property Collateral, and (2) will use its
best efforts to detect infringements of the Intellectual Property Collateral and
promptly notify Administrative Agent in writing of material infringements
detected.
h. Each Grantor, on a continuing basis, will register such Grantor's
Trademarks, pursue patent protection for such Grantor's inventions, and register
the most recent versions of any of such Grantor's Copyrights.
i. No Grantor will enter into any agreement that would materially
impair or conflict with such Grantor's obligations hereunder with respect to its
Intellectual Property Collateral. No Grantor will permit the inclusion in any
material contract to which it becomes a party any provisions that could in any
way prevent the creation of a security interest in such Grantor's rights and
interest in any property included within the definition of the Intellectual
Property Collateral acquired or licensed under such contracts. No Grantor will
arrange for the creation or development of any Intellectual Property Collateral
as a "work for hire" without concurrently obtaining a waiver of all rights
therein by the author or creator thereof.
j. Each Grantor will promptly notify Administrative Agent in writing
upon obtaining knowledge of any event that materially adversely affects (1) the
value of any material Intellectual Property Collateral, or (2) the ability of
such Grantor to dispose of any material Intellectual Property Collateral, or (3)
the rights and remedies of Administrative Agent in relation thereto, including
the levy of any legal process against any of the Intellectual Property
Collateral.
k. Each Grantor, on a continuing basis, will make, execute,
acknowledge and deliver, and will file and record in the proper filing and
recording places in the United States, all such instruments, collateral
agreements and filings (including all appropriate financing and continuation
statements) with the United States Patent and Trademarks Office and the Register
of Copyrights, and will take all such action as Administrative Agent may
reasonably deem to be necessary or advisable to perfect or protect
Administrative Agent's security interest in all Intellectual
15
Property Collateral and otherwise to carry out the intent and purpose of this
Security Agreement, or for assuring and confirming to Administrative Agent the
grant or perfection of a security interest in all Intellectual Property
Collateral.
3.5. As to Customer and Material Business Records and Computer Software.
a. Upon Administrative Agent's request, each Grantor (at its cost
and expense) will maintain at a separate location a duplicate current copy of
(1) all lists, files and records of active and prospective customers and
subscribers, and (2) all material computer software and data bases (including
all material application and operating system software and all material data
files and operating manuals), and (3) all other material business files, records
and software that Administrative Agent may reasonably request in writing from
time to time. Unless Administrative Agent otherwise consents, such records,
materials and information must be kept (at Grantors' election) either with
Administrative Agent or with an unrelated business that is engaged in the
business of storing such items and that is reasonably acceptable to
Administrative Agent. For purposes of this Clause, such records, materials and
information will be considered "current" if they were accurate and complete
within the immediately preceding 30 calendar days.
b. If any Grantor elects to keep such records, materials and
information with an unrelated business, then (upon Administrative Agent's
request) such Grantor will notify such business at which such records, materials
and information are maintained (1) that Administrative Agent, each Lender and
their representatives are authorized from time to time to inspect, examine,
audit and make copies and abstracts of such records, materials and information
during normal business hours, and (2) that, upon receipt of written notice from
Administrative Agent that an Event of Default has occurred under the Loan
Documents, such business is to release and deliver such records, materials and
information to Administrative Agent in such manner and at such place as
Administrative Agent may direct (in its sole and absolute discretion), and (3)
that such business is not to release or return such records, materials or
information to any Grantor without Administrative Agent's prior written consent
unless (a) such Grantor has delivered a more current version thereof to such
business or (b) this Security Agreement has been terminated in accordance with
Section 1.3.
c. Each Grantor will also otherwise utilize standard industry
precautions to safeguard the utility, value and confidentiality of all such
records, materials and information covered by this Section.
3.6. As to Certain Investment Property (including Margin Stock). Without
obtaining Administrative Agent's prior written consent (which consent will not
be unreasonably withheld while no Default is occurring), no Grantor will
establish or maintain any "securities account" or "financial asset" with any
"securities intermediary" (as such terms are defined in Article 8 of the UCC),
unless a control agreement acceptable in form and substance to Administrative
Agent is first executed by such "securities intermediary" securing
Administrative Agent's first priority interest and rights in and to all
"financial assets" and "security entitlements" associated with such "securities
account". Without obtaining Administrative Agent's prior written consent (which
consent will not be unreasonably withheld while no Default is occurring), no
Grantor will purchase or carry any "Margin Stock" within the meaning of
Regulations T, U or X of the Board of Governors of the Federal Reserve System.
16
3.7. Insurance. Each Grantor will maintain insurance coverages to the same
extent and subject to the same requirements and conditions as required for
Borrowers under the Credit Agreement. Payments and proceeds of claims or losses
in respect of insurance coverage are to be delivered to Administrative Agent and
may be held by Administrative Agent (at its discretion) as additional Collateral
for, and at any time during the occurrence of an Event of Default may be applied
by Administrative Agent in whole or in part against, all or any part of the
Secured Obligations in such order as Administrative Agent elects.
3.8. Transfers and Other Liens.
a. No Grantor will sell, transfer, assign, lease, license or
otherwise dispose of any of the Collateral, except (1) Inventory sold, leased or
licensed in the ordinary course of business to unrelated third parties for value
received, and (2) Equipment that has become obsolete or worn out, and (3)
Equipment leased or licensed in the ordinary course of business to unrelated
third parties for value received, and (4) Intellectual Property Collateral
licensed to unrelated third parties for value received and subject to at least
commercially reasonable terms and conditions from the perspective of such
Grantor, and (5) as otherwise permitted by the Credit Agreement.
b. Each Grantor will maintain the security interest, collateral
assignment and pledge created hereby as a first priority interest (except as
otherwise permitted by the Credit Agreement), and no Grantor will create or
suffer to exist any Lien upon or with respect to any of the Collateral to secure
any indebtedness or obligations of any Person, (except as otherwise permitted by
the Credit Agreement).
3.9. Further Assurances. Each Grantor (from time to time at its own
expense) will promptly execute and deliver all further instruments and
documents, and will take all further action, that may be necessary or desirable
(or that Administrative Agent may reasonably request) in order to perfect,
preserve and protect any security interest, collateral assignment or pledge
granted or purported to be granted hereby or to enable Administrative Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, each Grantor:
a. Will xxxx conspicuously each chattel paper included in the
Contract Rights and, at the request of Administrative Agent, each of its records
pertaining to the Collateral with a legend (in form and substance reasonably
satisfactory to Administrative Agent) indicating that such chattel paper is
subject to the security interest, collateral assignment and pledge granted
hereby; and
b. If any Contract Rights shall be evidenced by a promissory note or
other instrument, negotiable document or chattel paper, then will deliver and
pledge to 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
reasonably satisfactory to Administrative Agent; and
c. Will execute and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices as may be necessary
(or as
17
Administrative Agent may reasonably request) in order to perfect and preserve
the security interests, collateral assignments, pledges and other rights granted
or purported to be granted to Administrative Agent hereby; and
d. Will furnish to Administrative Agent (from time to time at
Administrative Agent's request) statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Administrative Agent may reasonably request, all in reasonable
detail.
With respect to the foregoing and the grant of the security interest, collateral
assignment and pledge hereunder, each Grantor hereby authorizes 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
such Grantor where permitted by law. A carbon, photographic or other
reproduction of this Security Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
ARTICLE 4: LENDER
4.1. Administrative Agent Appointed Attorney-in-Fact. Each Grantor hereby
irrevocably appoints Administrative Agent as such Grantor's attorney-in-fact,
with full authority in the name, place and stead of such Grantor or otherwise,
from time to time in Administrative Agent's reasonable discretion, to take any
action and to execute any instrument which Administrative Agent may deem
reasonably necessary or advisable to accomplish the purposes of this Security
Agreement upon the occurrence and during the continuation of an Event of
Default. This authority includes the following:
a. To ask, demand, collect, xxx for, recover, compromise,
restructure, receive and give acquittance and receipts for
moneys due and to become due under or in respect of any of the
Collateral; and/or
b. To notify the parties obligated on any of the Collateral to
make payment to Administrative Agent of any amount due or to
become due in connection therewith; and/or
c. To receive, endorse, and collect any drafts, checks or other
instruments, documents and chattel paper in connection with
Clause "a" of this Section; and/or
d. To file any claims or take any action or institute any
proceedings which Administrative Agent may deem reasonably
necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of
Administrative Agent, any Lender or any Grantor with respect
to any of the Collateral; and/or
18
e. To execute (in the name, place and stead of any Grantor)
endorsements, assignments, powers and other instruments of
conveyance or transfer with respect to all or any of the
Collateral; and/or
f. To perform any and all of the affirmative obligations and
covenants of such Grantor hereunder (with notice thereof to be
provided to such Grantor by Administrative Agent within a
reasonable time thereafter).
Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest,
but that it will terminate upon the termination of this Security Agreement
pursuant to Section 1.3.
4.2. Administrative Agent May Perform. From time to time, Administrative
Agent (at its option) may perform (or may cause the performance of) any act
which any Grantor agrees hereunder to perform and which such Grantor fails to
perform after being requested in writing so to perform (it being understood that
no such request need be given during the continuance of an Event of Default),
and Administrative Agent from time to time may also take any other action which
Administrative Agent reasonably deems necessary for the maintenance,
preservation or protection of any of the Collateral or of its security interest
therein or collateral assignments or pledges thereof. The costs and expenses of
Administrative Agent incurred in connection with any such performance will be
payable by Grantors (jointly and severally) pursuant to Section 5.3 hereof.
4.3. Administrative Agent Has No Duty. The rights and powers conferred
upon Administrative Agent hereunder are solely to protect Administrative Agent's
and each Lender's interest in the Collateral and do not impose any duty on
Administrative Agent to exercise any such rights or powers. Except for
reasonable care of any Collateral in Administrative Agent's possession and the
accounting for moneys actually received by it hereunder, Administrative Agent
has no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.
4.4. Reasonable Care. Administrative Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, Administrative Agent will be deemed to have
exercised such reasonable care in the custody and preservation of any of the
Collateral if Administrative Agent takes such action for that purpose as any
Grantor reasonably requests in writing at times other than after the occurrence
or during the continuance of a Default. Notwithstanding the foregoing, any
failure or refusal by Administrative Agent at any time to comply with any such
request by any Grantor will not in itself be deemed a failure to exercise
reasonable care.
ARTICLE 5: DEFAULTS AND REMEDIES
5.1. Events of Default. The occurrence of any "Event of Default" under and
as defined in the Credit Agreement will constitute an independent Event of
Default ("Event of Default") hereunder.
19
5.2. Certain Remedies. If any Event of Default occurs and is continuing:
a. In addition to other rights and remedies provided for herein
(including under Article 4) or otherwise available to Administrative Agent or
any Lender (including under the other Loan Documents and/or applicable law),
Administrative Agent may also exercise in respect of the Collateral all the
rights and remedies of a secured party upon default under the UCC (whether or
not the UCC applies to the affected Collateral). Upon the occurrence of any
Event of Default, Administrative Agent will have the immediate right to enforce
and realize upon any and all collateral security granted under the Loan
Documents (including the Collateral hereunder) in any manner or order that
Administrative Agent deems expedient without regard to any equitable principles
of marshalling or otherwise. All rights and remedies available to Administrative
Agent or any Lender are to be considered cumulative in nature.
b. Without notice except as expressly specified herein or required
by applicable law, Administrative Agent may also sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of
Administrative Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as Administrative Agent may deem
commercially reasonable. To the extent notice of sale is required by law, each
Grantor agrees that prior notice to a Grantor of at least ten (10) calendar days
indicating the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.
Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. 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 (without further notice) may be made at the
time and place to which it was so adjourned.
c. Administrative Agent may require Grantors to, and each Grantor
hereby agrees (at its expense) that it will, forthwith assemble all or part of
the Collateral as directed by Administrative Agent and make it available to
Administrative Agent at a place designated by Administrative Agent that is
reasonably convenient to both Administrative Agent and Grantors.
d. Unless Administrative Agent otherwise consents, each Grantor will
remit to Administrative Agent all cash proceeds received in respect of any sale
of, or collection from, or other realization upon all or any part of the
Collateral. All cash proceeds received by Administrative Agent from any Grantor
or otherwise in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral (in the discretion of Administrative
Agent) may be held by Administrative Agent as additional Collateral for the
Secured Obligations, and/or then or at any time thereafter may be applied in
whole or in part by Administrative Agent against all or any part of the Secured
Obligations in an order consistent with the designated application of payments
provided for in Section 1.5 of the Credit Agreement. Any surplus of such cash or
cash proceeds held by Administrative Agent and remaining after payment in full
of all the Secured Obligations will be paid over to a Grantor or to whomsoever
Administrative Agent reasonably believes may be lawfully entitled to receive
such surplus.
e. To the extent any of the Collateral represents an interest in a
partnership, a limited liability company or other unincorporated enterprise, in
addition to any other rights and remedies available to Administrative Agent or
any Lender under the Loan Documents or applicable
20
law, Administrative Agent (at its option but with notice to the relevant
Grantor) may also exercise all rights and privileges of the holder of such
interest under the agreements governing such Collateral and the Organic
Documents for the related organization or may instruct such Grantor how to
exercise such rights and privileges (with which instructions each Grantor hereby
agrees to comply). Each Grantor, in addition, covenants and agrees (at
Administrative Agent's request) to amend (and to use its best efforts to cause
others to amend) any of the Organic Documents for such organization in order to
authorize Administrative Agent to so exercise any such rights and privileges
associated with such Collateral (including voting rights and the rights to
participate in management decisions). The rights of Administrative Agent under
this Subsection may be transferred to and exercised by any subsequent acquiror
or transferee of the Collateral pursuant to any sale of or foreclosure on such
Collateral. Each Grantor hereby agrees that the rights of Administrative Agent
and each Lender (or any subsequent acquiror or transferee of the Collateral)
under this Subsection may be enforced by specific performance or otherwise.
5.3. Special Securities-Related Remedies.
a. Compliance with Restrictions. Each Grantor agrees that, in any
sale of any of the Pledged Equity Collateral, Administrative Agent is authorized
to comply with any limitation or restriction in connection with the type of such
sale pursued as Administrative Agent may be advised by counsel is necessary or
reasonably desirable in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Official Body. Each Grantor further agrees that
such compliance will not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner, nor will Administrative
Agent or any Lender be liable or accountable to any Grantor for any discount
allowed by reason of the fact that such Collateral is sold at foreclosure or
otherwise in compliance with any such limitation or restriction or by reason of
the fact that such Pledge Equity Collateral may represent a minority interest in
any Grantor.
5.4. Special IP-Related Remedies (License of Intellectual Property
Collateral). Each Grantor hereby grants Administrative Agent a royalty-free,
non-exclusive, worldwide, irrevocable license (the "Remedies License") to make,
use and sell from time to time after the occurrence of any Event of Default that
is not waived by Administrative Agent and delivery of notice thereof by
Administrative Agent (unless such Event of Default is under Section 7.1.10 of
the Credit Agreement, in which case no such notification shall be required) all
present and future Intellectual Property Collateral of such Grantor (including
the right to sub-license such Intellectual Property Collateral) in connection
with the maintenance, preservation, preparation, sale, disposition, collection,
foreclosure, or other realization of, upon, or with respect to the Collateral or
payment of the Secured Obligations in accordance with the Loan Documents. The
Remedies License shall remain in full force and effect until this Security
Agreement is terminated in accordance with Section 1.3 (but any sub-license or
transfer of the Remedies License prior to the termination of the Remedies
License shall survive such termination of the Remedies Licenses unless otherwise
provided on such sub-license or transfer document). The rights of Administrative
Agent under the Remedies License are assignable by
21
Administrative Agent (without the consent of such Grantor) in connection with
(a) any sale or other disposition of Collateral in accordance with the Loan
Documents to the extent necessary or appropriate to permit the purchaser of such
Collateral to have continuing and royalty-free, worldwide rights with respect to
such Collateral or (b) any assignment or other transfer by Administrative Agent
of all or any part of its rights under and in accordance with the Loan
Documents. Upon or at any time after the occurrence of any Event of Default,
each Grantor will deliver to Administrative Agent (at Administrative Agent's
request but at such Grantor's expense) a copy of all such Intellectual Property
Collateral and all related other Collateral in a form requested by
Administrative Agent. Administrative Agent's rights as a licensee under this
Section constitute a separately enforceable contract from the balance of this
Security Agreement.
5.5. Indemnity and Expenses.
a. Each Grantor agrees (jointly and severally) to indemnify and hold
Administrative Agent and each Lender harmless from and against any and all
claims, losses and liabilities arising out of or in any manner resulting from
any or all of the following: (1) any Grantor's failure to perform or otherwise
observe any of its obligations hereunder, or (2) Administrative Agent's
enforcement of any of the provisions hereof, or (3) any Grantor's gross
negligence, misrepresentation, willful misconduct or fraud.
b. Upon demand, each Grantor (jointly and severally) will pay
Administrative Agent the amount of any and all costs and expenses that
Administrative Agent or any Lender may incur in connection with any of the
matters described under clause "a" of this Section. Without limitation, each
Grantor's obligation to reimburse Administrative Agent for such fees, costs and
expenses includes all reasonable fees and disbursements of Administrative
Agent's or any Lender's counsel and any other experts and agents that
Administrative Agent or any Lender may retain in connection herewith (whether or
not litigation is commenced).
c. If any Grantor fails or refuses to pay Administrative Agent any
amount due hereunder or to otherwise deliver to Administrative Agent any
property required to be delivered hereunder, then such amount (or, as
appropriate, the fair market value of such property) will accrue interest until
paid or delivered at a per annum rate equal to the lesser of: (i) two percent
(2%) per annum in excess of the highest rate then otherwise applicable to
indebtedness under the Credit Agreement (not including the default rate) or (ii)
the maximum amount permitted by applicable law.
5.6. Administrative Agent's Rights Upon Occurrence of Liquidation Events.
a. Right to Certain Payments and Distributions. Upon the occurrence
of any Liquidation Event, any payment or distribution of any kind or character
(whether in cash, securities or other property) that but for this Security
Agreement would be payable or deliverable to a Grantor must instead be paid or
delivered directly to Administrative Agent for application on the Secured
Obligations, whether or not then due or mature.
b. Non-Cash Payments and Distributions. Notwithstanding the
provisions of Clause "a" of this Section, if Administrative Agent receives
delivery of any such payment or distribution in connection with a Liquidation
Event in a form other than cash, then Administrative
22
Agent may hold such property as additional Collateral for the Secured
Obligations, and neither any Grantor nor any other Obligor of the Secured
Obligations will be entitled to a credit with respect to the Secured
Obligations, nor will the Secured Obligations otherwise be adjusted in any
respect, until such time as Administrative Agent (in its sole and absolute
discretion) has sold, discounted or otherwise liquidated such distribution (at a
price considered by Administrative Agent to be in its sole best interest) and
then (subject to the terms of Section 7.8), such credit or adjustment to the
Secured Obligations will be limited only to the net cash proceeds realized
therefrom after the payment of all costs and expenses associated with such sale
or liquidation.
c. Collection of Payments and Distributions. In addition to any
rights otherwise permitted under the Loan Documents or applicable law, each
Grantor hereby irrevocably authorizes and empowers Administrative Agent, upon
the occurrence of a Liquidation Event, to file and/or vote claims and take such
other proceedings, in each instance in Administrative Agent's own name or in the
name of a Grantor, or otherwise, all as Administrative Agent may deem reasonably
necessary or advisable for the enforcement of this Security Agreement. Each
Grantor further agrees duly and promptly (i) to take such action as may be
requested by Administrative Agent to assist in the collection and/or compromise
of any amounts owed to any Grantor, and (ii) to file appropriate proofs of claim
in respect of such amounts, and (iii) to execute and deliver to Administrative
Agent on demand such powers of attorney, proofs of claim, assignments of claim
or other instruments as may be requested by Administrative Agent to enable
Administrative Agent to enforce any and all claims upon or with respect to such
amounts, and (iv) to collect, compromise and receive any and all payments or
distributions which may be payable or deliverable at any time upon or with
respect to such amounts.
5.7. Delivery of Payments and Distributions. If any Grantor receives any
payment, distribution or any other funds or property in contravention of the
provisions hereof or any other Loan Document, then such Grantor must immediately
forthwith deliver such payment, distribution or other funds or property (or
proceeds thereof) to Administrative Agent in precisely the form received (except
for the endorsement or assignment without recourse of such Grantor where
necessary) for application on the Secured Obligations (or, at Administrative
Agent's option, held as additional Collateral therefor), whether or not then due
or mature. Until such funds or property are delivered to Administrative Agent,
such Grantor must hold such payment, distribution or other funds or property (or
proceeds thereof) (a) in trust for the benefit of and as property of
Administrative Agent and (b) separate from (i.e., not commingled with) its other
assets. If a Grantor fails or refuses to make any such endorsement or
assignment, then Administrative Agent (or any of its officers or employees) are
hereby irrevocably authorized by such Grantor to make the endorsement and/or
assignment.
5.8. Cooperation and Assistance. Each Grantor agrees (during the existence
of a Default) to take any actions that Administrative Agent may reasonably
request in order to enable Administrative Agent and each Lender to receive the
full rights and benefits granted to Administrative Agent and each Lender by the
Loan Documents. Each Grantor further agrees that, during the existence of a
Default or an Event of Default, each Grantor will assist and cooperate with
Administrative Agent (and will use its best efforts to cause others to assist
and cooperate with Administrative Agent) to ensure that each Grantor continues
(a) to operate in the normal course of business, and (b) to fulfill all of its
legal, regulatory and contractual obligations and (c) to otherwise
23
be properly and professionally managed. At Administrative Agent's request and
the expense of Grantors (jointly and severally), at any time during the
existence of an Event of Default, such assistance and cooperation may include
the employment of (and, to the maximum extent not prohibited by the rules,
regulations and orders of any Official Body with jurisdiction, the delegation of
appropriate management authority to) one or more qualified and independent
consultants and professional managers acceptable to Administrative Agent to
assist in the interim operations of Grantors; all of which each Grantor hereby
agrees not to challenge.
5.9. Special Regulatory (FCC) Remedies.
a. Each Grantor and Administrative Agent hereby acknowledge their
intent that, during the existence of an Event of Default, to the fullest extent
permitted by applicable law and governmental policy (including the rules,
regulations and policies of the FCC and each State PUC), Administrative Agent
will have all rights necessary or desirable to obtain, use and/or sell the
assets and operations of each Grantor and the other Collateral, and to exercise
all remedies available to Administrative Agent and each Lender under the Loan
Documents, the Uniform Commercial Code or other applicable law. Each Grantor and
Administrative Agent agree that, if any applicable law or governmental policy
changes subsequent to the date hereof that affects in any manner Administrative
Agent's rights of access to, or use or sale of, any Grantor's assets or other
Collateral (including Authorizations) or the procedures necessary to enable
Administrative Agent to obtain such rights of access, use or sale during an
Event of Default, then Administrative Agent and each Grantor will amend the Loan
Documents (in such manner as Administrative Agent reasonably requests) in order
to provide Administrative Agent with all such rights to the greatest extent
possible consistent with then-applicable law and governmental policy.
b. At any time during the existence of an Event of Default, at the
cost and expense of Grantors (jointly and severally), each Grantor will use its
best efforts to assist and cooperate in obtaining all approvals (including all
FCC and State PUC approvals) which are then required by applicable law or
contract for or in connection with any action or transaction contemplated by the
Loan Documents or the Uniform Commercial Code. Each Grantor further agrees, upon
Administrative Agent's request and at the expense of Grantors (jointly and
severally), at any time during the existence of an Event of Default, to prepare,
sign, file and diligently prosecute (and to use its best efforts to cause the
preparation, execution, filing and diligent prosecution by others) with the FCC
the assignor's or transferor's portion of any applications for consent to the
assignment of Authorizations or transfer of control thereof necessary or
appropriate under the rules of each Official Body for approval of any sale or
transfer of any Collateral or any Authorization pursuant to the exercise of
Administrative Agent's and Lenders' remedies under the Loan Documents. Each
Grantor further consents to (and agrees that it will not challenge), at any time
during the existence of an Event of Default, the transfer of control or
assignment of Authorizations and other assets to a receiver, trustee,
transferee, or similar official or to any purchaser of the Collateral pursuant
to any public or private sale, judicial sale, foreclosure or exercise of other
remedies available to Administrative Agent or any Lender as permitted by
applicable law.
c. In addition to the other rights and remedies provided for herein
or otherwise available to Administrative Agent or any Lender, upon the
occurrence of an Event of Default, Administrative Agent may require each Grantor
to, and each Grantor (at its sole expense) hereby
24
agrees that it will take all actions necessary or reasonably advisable (1) to
cooperate with Administrative Agent in effecting the transfer of any or all of
its Licenses to a transferee acceptable to the FCC or (2) to sell any or all of
its Licenses at public or private sale for cash, on credit or for future
delivery. Each Grantor will also use its best efforts to sell its Licenses for
the best available price, and (in furtherance of such efforts) each Grantor (a)
will hire one or more brokers to solicit buyers, and (b) will cause such
information and materials regarding its Licenses and operations to be compiled
as is customarily prepared or as is needed under the circumstances, and (c) will
make available to prospective purchasers such information (including any
information compiled in accordance with Clause "(b)") as is customary or as is
needed under the circumstances.
d. Notwithstanding anything to the contrary contained in any Loan
Document, neither Administrative Agent nor any Lender nor any Grantor will take
any action pursuant to the Loan Documents that would constitute or result in any
assignment of an Authorization or any transfer of control of any Grantor if such
assignment of Authorization or transfer of control would require under then
existing law (including the written rules and regulations promulgated by the
FCC) the prior approval of the FCC or any State PUC, unless such approval has
been obtained (as applicable) from such State PUC (to the extent failure to
obtain such approval by Administrative Agent could reasonably be expected to
have or cause a Material Adverse Effect) or from the FCC. Without limiting the
generality of the foregoing, Administrative Agent and each Lender each
specifically agrees that (a) voting rights with respect to the pledged equity
interests of each Grantor will remain with the holders of such voting rights
during the existence of an Event of Default unless and until any required prior
approvals to the transfer of such voting rights have been obtained (as
applicable) from such State PUC (to the extent failure to obtain such approval
by Administrative Agent could reasonably be expected to have or cause a Material
Adverse Effect) or from the FCC, and (b) during the existence of any Event of
Default and foreclosure upon the Collateral by Administrative Agent, there will
be either a private or public sale of the Collateral, and (c) prior to the
exercise of voting rights by the purchaser at any such sale, any consent of any
State PUC or the FCC required pursuant to any State Communications Act (to the
extent failure to obtain such consent could reasonably be expected to have or
cause a Material Adverse Effect) or the Federal Communications Act
(respectively) will be obtained.
ARTICLE 6: DEFINITIONS
6.1. Credit Agreement Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Security Agreement (including the
preamble and recitals hereof) have the meanings provided in the Credit
Agreement.
6.2. Rules of Construction. The rules of interpretation and construction
set forth in Section 9.2 of the Credit Agreement apply to the interpretation and
construction of this Security Agreement.
6.3. Certain Terms. The following terms (whether or not underscored) when
used in this Security Agreement (including the preamble and recitals hereof)
have the following meanings:
a. "Administrative Agent" means MCG Finance Corporation and any
successor, assignee, transferee, pledgee or participant thereof.
25
b. "Borrower(s)" means, individually and collectively, each Borrower
under and as defined in the Credit Agreement, including any successor or
assignee thereof.
c. "Collateral" is defined in Section 1.1.
d. "Computer Software Collateral" is defined in Section 1.1.
e. "Contract Rights" is defined in Section 1.1.
f. "Copyright Collateral" is defined in Section 1.1.
g. "Credit Agreement" is defined in the Recitals.
h. "Distribution" means all equity dividends, liquidating dividends,
shares or interests of equity resulting from (or in connection with the exercise
of) equity splits, reclassifications, warrants, options, non-cash dividends,
mergers, consolidations, distributions of capital accounts, and all other
distributions (whether similar or dissimilar to the foregoing) on or with
respect to any Pledged Equity or other shares or interests of equity
constituting Pledged Equity Collateral, but such term does not include
Dividends.
i. "Dividend" means cash dividends and cash distributions with
respect to any Pledged Equity or other Pledged Equity Property made in the
ordinary course of business, but such term shall not include a liquidating
dividend.
j. "Equipment" is defined in Section 1.1.
k. "Fixture" is defined in Section 1.1.
l. "Grantor" means each Person that from time to time executes this
Security Agreement (or a counterpart hereof or supplemental addendum hereto) as
a grantor hereunder, and any successor or permitted assignee thereof.
m. "Intellectual Property Collateral" means, collectively, the
Computer Software Collateral, the Copyright Collateral, the Patent Collateral,
the Trademark Collateral and the Trade Secrets Collateral, as defined in Section
1.1.
n. "Inventory" is defined in Section 1.1.
o. "License" means any authorization, permit, call sign, frequency
designation, consent, franchise, ordinance, registration, certificate, license,
agreement or other right filed with, granted by, or entered into by a federal,
state or local Official Body.
p. "Lien" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, option, claim, encumbrance, lien
(statutory or otherwise), charge
26
against or interest in property to secure payment of a debt or performance of an
obligation or other priority or preferential arrangement of any kind or nature
whatsoever.
q. "Liquidation Event" means any foreclosure on or any sale of all
or any material part of the assets of any Grantor, or any liquidation,
dissolution or other winding up (partial or complete) of any Grantor or any
Grantor's business, or any sale, receivership, insolvency or bankruptcy
proceeding, any assignment for the benefit of creditors, or any other proceeding
by or against any Grantor or its assets for any relief under any bankruptcy or
insolvency law relating to the relief of debtors, readjustment of indebtedness,
arrangements, reorganizations, compositions or extensions.
r. "Official Body" means any federal, state, local, or other
government (or any political subdivision, agency, authority, bureau, commission,
department or instrumentality thereof, including the FCC and each State PUC) and
any court, tribunal, grand jury or arbitrator, in each instance whether foreign
or domestic.
s. "Operating Agreements" means any consulting agreement, management
agreement, employment agreement, cost allocation agreement or other similar
agreement relating to the operation of any Grantor's business.
t. "Patent Collateral" is defined in Section 1.1.
u. "Person" means any natural person, corporation, partnership,
limited liability company, firm, association, trust, government, governmental
agency or any other entity, whether acting in an individual, fiduciary or other
capacity.
v. "Pledged Equity" means all shares of capital stock and all other
forms of equity or ownership rights and interests (whether in the form of
partnership interests, membership interests or otherwise) of or in any
corporation, partnership, limited liability company business trust or other
business entity.
w. "Pledged Equity Collateral" is defined in Section 1.5.
x. "Pledged Equity Issuer" means each Person who is an issuer of
Pledged Equity Collateral.
y. "Pledged Equity Property" means all Pledged Equity and all other
forms of equity interests and rights, all other securities (including, without
limitation, all options, warrants and puts for Pledged Equity), all assignments
of any amounts due or to become due, all other instruments which are now being
delivered by any Pledgor to Administrative Agent or may from time to time
hereafter be delivered by any Pledgor to Administrative Agent for the purpose of
pledge under the Security Agreement, and all proceeds of any of the foregoing.
z. "Pledgor" means each Person (a) who is a Grantor hereunder and
(b) who pledges Pledged Equity Collateral.
aa. "Related Contracts" is defined in Section 1.1.
27
bb. "Secured Obligations" is defined in Section 1.2.
cc. "Security Agreement" means this Master Security Agreement,
Collateral Assignment and Pledge and all exhibits, schedules and supplemental
addenda hereto, all as may be amended and otherwise modified from time to time
hereafter.
dd. "Securities Act" means the Securities Act of 1933, as amended
from time to time, and as implemented by the Securities Exchange Commission.
ee. "Trademark Collateral" is defined in Section 1.1.
ff. "Trade Secrets Collateral" is defined in Section 1.1.
gg. "UCC" means the Uniform Commercial Code as in effect in the
Commonwealth of Virginia or, if the laws of some other jurisdiction otherwise
dictates, then the Uniform Commercial Code as in effect in the jurisdiction
whose laws govern the interpretation of the relevant provisions of this Security
Agreement.
6.4. UCC Definitions. Unless otherwise defined herein or the context
otherwise requires, terms for which meanings are provided in the UCC are used in
this Security Agreement (including in the preamble and recitals hereof) with
such meanings.
28
ARTICLE 7: MISCELLANEOUS PROVISIONS
7.1. Loan Document. This Security Agreement and each separate assignment
executed in connection herewith are Loan Documents executed pursuant to the
Credit Agreement and (unless otherwise expressly indicated herein) are to be
construed, administered and applied in accordance with the terms and provisions
thereof.
7.2. Amendments. No amendment to or waiver of any provision of this
Security Agreement, nor consent to any departure by any Grantor herefrom, shall
in any event be effective unless such amendment, waiver or consent is in writing
and signed by Administrative Agent. Any such waiver or consent will be effective
only in the specific instance and for the specific purpose for which given.
7.3. Addresses for Notices. Any notice, request, consent, waiver or other
communication required or permitted under or in connection with this Security
Agreement will be deemed satisfactorily given if it is in writing and is
delivered either personally to the addressee thereof, or by prepaid registered
or certified U.S. mail (return receipt requested), or by a nationally recognized
commercial courier service with next-day delivery charges prepaid, or by
telegraph, or by facsimile (voice confirmed), or by any other reasonable means
of personal delivery to the party entitled thereto at its respective address set
forth below its signature to this Security Agreement (or, if blank, then to such
party at its address or facsimile number set forth in the Credit Agreement). For
any notice, request, consent, waiver, or other communication to be sent to any
of the Grantors, it will be deemed satisfactorily given if it is sent in care of
XxxxxxxXxxxxx.xxx, Inc. at the address set forth below its signature to this
Security Agreement (with a copy to Xxxxxxx Xxxxxxx; Xxxxx & Xxxxxxx, Ltd.; 000
Xxxxx Xxxx Xxxxxxxx; Xxxxxxxxxx, Xxxxx Xxxxxx 00000; Facsimile: (000) 000-0000).
If any Grantor fails to insert an address below (and in the Credit Agreement),
then such failure shall constitute a designation of its last known address as
the address for all notices, including notices of default and sale. Any party to
this Security Agreement may change its address or facsimile number for notice
purposes by giving notice thereof to the other parties hereto in accordance with
this Section, provided that such change shall not be effective until 2 calendar
days after notice of such change. All such notices and other communications will
be deemed given and effective (a) if by mail, then upon actual receipt or 5
calendar days after mailing as provided above (whichever is earlier), or (b) if
by facsimile, then upon successful transmittal to such party's designated
number, or (c) if by telegraph, then upon actual receipt or 2 Business Days
after delivery to the telegraph company (whichever is earlier), or (d) if by
nationally recognized commercial courier service, then upon actual receipt or 2
Business Days after delivery to the courier service (whichever is earlier), or
(e) if otherwise delivered, then upon actual receipt.
7.4. Severability. Wherever possible, each provision of this Security
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Security Agreement shall be prohibited
by or invalid under such law, then such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Security Agreement.
7.5. Governing Law; Entire Agreement. This Security Agreement shall be
governed by and construed in accordance with the internal laws of the
Commonwealth of Virginia, except to the
29
extent that the validity or perfection of the security interest, collateral
assignment or pledge hereunder (or remedies hereunder) in respect of any
particular Collateral are required to be governed by the laws of a jurisdiction
other than the Commonwealth of Virginia. This Security Agreement and the other
loan documents constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and supersede any prior agreements (written
or oral) with respect thereto.
7.6. Reinstatement. To the maximum extent not prohibited by applicable
law, this Security Agreement shall continue to be effective or be reinstated if
at any time any amount received by Administrative Agent or any Lender in respect
of the Credit Agreement or any other Loan Document is rescinded or must
otherwise be restored or returned by Administrative Agent or such Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Grantor or upon the appointment of any receiver, intervenor, conservator,
trustee or similar official for any Grantor or any substantial part of any
Grantor's assets, or otherwise, all as though such payments had not been made.
7.7. Conflict Provision. In the event of any irreconcilable conflict
between the terms and conditions of this Security Agreement and the terms and
conditions of the Credit Agreement, the terms and conditions of the Credit
Agreement shall govern.
7.8. Incorporation of Separate IP Security Agreements and Collateral
Assignments of Material Contracts. Each representation, warranty, covenant and
further assurance by any Grantor contained in any separate assignment or
security agreement relating to any Intellectual Property Collateral or any
material contract executed in connection the Credit Agreement is hereby
incorporated herein by reference.
7.9. Incorporation of Financing Statements and Exhibits Thereto. Each UCC
financing statement (including each exhibit thereto) executed by any Grantor in
connection with this Security Agreement is hereby incorporated herein by
reference.
7.10. Administrative Agent. References in this Security Agreement to
Administrative Agent shall mean either to Administrative Agent in such capacity
or (where appropriate) to Administrative Agent for the benefit of itself and
other Lenders. Unless otherwise indicated in this Security Agreement or the
other Loan Documents, all Collateral held and all payments received by
Administrative Agent are deemed to be held and received, respectively, for the
benefit of Lenders.
7.11. Waiver of Suretyship Defenses. Each Grantor hereby waives any and
all defenses and rights of discharge based on suretyship or impairment of
collateral (including any lack of attachment or perfection with respect thereto)
that it may now have or may hereafter acquire with respect to Administrative
Agent or any Lender or any of such Grantor's obligations hereunder or under any
other agreement that it may have or hereafter enter into with Administrative
Agent or any Lender.
7.12. Waiver of Subrogation. Until this Security Agreement is terminated
in accordance with Section 1.3, each Grantor hereby irrevocably waives any claim
or other rights which it may now have or may hereafter acquire against any other
Obligor that arise from the existence, payment,
30
performance or enforcement of any Grantor's obligations under this Security
Agreement or any other Loan Document, including any right of subrogation,
reimbursement, contribution, exoneration, or indemnification, any right to
participate in any claim or remedy of Administrative Agent or any Lender against
any other Obligor or any collateral which Administrative Agent or any Lender now
has or hereafter acquires, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law.
7.13. Waiver of Notice; Waiver of Bond. Each Grantor waives all rights of
notice and hearing of any kind prior to the exercise by Administrative Agent or
any Lender of its rights during the continuance of any Event of Default to
repossess the Collateral with judicial process or to replevy, attach or levy
upon the Collateral. Each Grantor waives the posting of any bond otherwise
required of Administrative Agent or any Lender in connection with any judicial
process or proceeding to obtain possession of, replevy, attach or levy upon
Collateral or other security for the Secured Obligations, to enforce any
judgment or other court order entered in favor of Administrative Agent or any
Lender, or to enforce by specific performance, temporary restraining order or
preliminary or permanent injunction this Security Agreement or any other Loan
Document.
7.14. Waiver of Liability. Each Grantor (a) agrees that neither
Administrative Agent nor any Lender (nor any director, officer, employee or
agent of Administrative Agent or any Lender) shall have any liability to any
Grantor (whether sounding in tort, contract or otherwise) for losses or costs
suffered or incurred by any Grantor in any way related to the transactions
contemplated or the relationship established by any Loan Document, or any act,
omission or event occurring in connection therewith, except for foreseeable
actual losses resulting directly and exclusively from Administrative Agent or
such Lender's own gross negligence, willful misconduct or fraud, and (b) waives,
releases and agrees not to xxx upon any claim against Administrative Agent or
any Lender (or their directors, officers, employees or agents) whether sounding
in tort, contract or otherwise, except for claims for foreseeable actual losses
resulting directly and exclusively from Administrative Agent's or such Lender's
own gross negligence, willful misconduct or fraud. Moreover, whether or not such
damages are related to a claim that is subject to the waiver effected above and
whether or not such waiver is effective, neither Administrative Agent nor any
Lender (nor any director, officer, employee or agent of Administrative Agent or
any Lender) shall have any liability with respect to (and each Grantor hereby
waives, releases and agrees not to xxx upon any claim for) any special,
indirect, consequential, punitive or non-foreseeable damages suffered by any
Grantor in any way related to the transactions contemplated or the relationship
established by any Loan Document, or any act, omission or event occurring in
connection therewith.
7.15. Forum Selection and Consent to Jurisdiction. Any litigation in any
way related to any Loan Document, or any course of conduct, course of dealing,
statements (whether verbal or written), actions or inactions of Administrative
Agent or any Lender or any Grantor will be brought and maintained exclusively in
the courts of the Commonwealth of Virginia or in the United States District
Court for the Eastern District of Virginia; provided, however, that any suit
seeking enforcement against any Grantor or any Collateral may also be brought
(at Administrative Agent's or such Lender's option) in the courts of any
jurisdiction where such Collateral may be found or where Administrative Agent or
any Lender may otherwise obtain
31
personal jurisdiction over such Grantor. Each Grantor hereby expressly and
irrevocably submits to the jurisdiction of the courts of the Commonwealth of
Virginia and of the United States District Court for the Eastern District of
Virginia for the purpose of any such litigation as set forth above and
irrevocably agrees to be bound by any final and non-appealable judgment rendered
thereby in connection with such litigation. Each Grantor further irrevocably
consents to the service of process by registered or certified mail, postage
prepaid, or by personal service within or outside the Commonwealth of Virginia.
Each Grantor hereby expressly and irrevocably waives (to the fullest extent
permitted by law) any objection which it may have or hereafter may have to the
laying of venue of any such litigation brought in any such court referred to
above and any claim that any such litigation has been brought in an inconvenient
forum. To the extent that any Grantor has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of execution
or otherwise) with respect to itself or its property, then such Grantor hereby
irrevocably waives such immunity in respect of its obligations under this
Security Agreement.
7.16. Waiver of Jury Trial. Administrative Agent, each Lender and each
Grantor each hereby knowingly, voluntarily and intentionally waives any rights
it may have to a trial by jury in respect of any litigation (whether as claim,
counter-claim, affirmative defense or otherwise) in any way related to any Loan
Document, or any course of conduct, course of dealing, statements (whether
verbal or written), actions or inactions of Administrative Agent, any Lender or
any Grantor. Each Grantor acknowledges and agrees (a) 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 (b) that it has been
advised by legal counsel in connection herewith, and (c) that this provision is
a material inducement for Administrative Agent and each Lender entering into the
Loan Documents and funding Advances thereunder.
7.17. Counterparts. This Security Agreement may be executed in any number
of counterparts with the same effect as if all the signatures on such
counterparts appeared on one document. Each counterpart will be deemed to be an
original, but all counterparts together will constitute one and the same
instrument.
[BALANCE OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement, as an instrument under seal (whether or not any such seals are
physically attached hereto), through their duly authorized officers, as of the
date first written above.
ATTEST: XXXXXXXXXXXXX.XXX, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
---------------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 0000 Xxxxx 00
X. X. Xxx 0000
Xxxx, XX 00000
Facsimile: (___) ___-____
ATTEST: GLOBAL 2000 COMMUNICATIONS, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: ALBANYNET, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: WEBWAY INTERNET, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: ASCENT NETWORKING, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: CYBERZONE, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: CARAVELA SOFTWARE, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 0 Xxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
ATTEST: NECANET, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 00 Xxx Xxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: PRIME COMMUNICATION
SYSTEMS, INCORPORATED
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 0000 Xxxxx Xxxx Xxxx
Xxxxxx 0 & 0
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: INFOBOARD, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: BORG INTERNET SERVICES, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 0000 Xxxxx Xxxxxx
Xxxxx, XX 00000-0000
Facsimile: (000) 000-0000
ATTEST: ULSTERNET, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: BOL ACQUISITION CO. II, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: BOL ACQUISITION CO. III, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
ATTEST: BOL ACQUISITION CO. VIII, INC.
(Grantor)
By: By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and Treasurer
[CORPORATE SEAL] Address: 0 Xxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
WITNESS: MCG FINANCE CORPORATION
(Administrative Agent)
By: /s/ Xxxxxx Xxxxxx
-------------------------------------- -----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Operating Officer and Chief
Financial Officer
Address: 0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
