EXHIBIT 10.3
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EXECUTION VERSION
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT") is dated as of
July 17, 2006 and entered into by and among NEXTWAVE WIRELESS LLC, a Delaware
limited liability company ("COMPANY"), each of THE UNDERSIGNED DIRECT AND
INDIRECT SUBSIDIARIES of Company (each of such undersigned Subsidiaries being a
"SUBSIDIARY GRANTOR" and collectively "SUBSIDIARY GRANTORS") and each ADDITIONAL
GRANTOR that may become a party hereto after the date hereof in accordance with
Section 16 hereof (each of Company, each Subsidiary Grantor, and each Additional
Grantor being a "GRANTOR" and collectively the "GRANTORS") and THE BANK OF NEW
YORK, as Collateral Agent for and representative of (in such capacity herein
called "SECURED PARTY") the Beneficiaries (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Pursuant to that certain Purchase Agreement dated as of July
17, 2006 (said Purchase Agreement, as it may hereafter be amended, restated,
supplemented or otherwise modified from time to time, being the "PURCHASE
AGREEMENT"; the terms defined therein and not otherwise defined in Section 26 or
elsewhere herein being used herein as therein defined) by and among Company,
each of the Guarantors named therein, each of the Purchasers named therein and
Secured Party, as Collateral Agent, Company has issued Notes to the Purchasers
(together with their successors and assigns and any subsequent holder of Notes
permitted under the Purchase Agreement, "HOLDERS").
B. Secured Party and Holders have entered into that certain
Collateral Agency Agreement dated as of the date hereof (the "COLLATERAL AGENCY
AGREEMENT"), pursuant to which Holders have appointed Secured Party, and Secured
Party has agreed to act, as agent for the Holders under this Agreement.
C. Subsidiary Grantors have executed and delivered the Guaranty
in favor of Secured Party for the benefit of the Holders, pursuant to which each
Subsidiary Grantor has guarantied the prompt payment and performance when due of
all obligations of Company under the Purchase Agreement.
D. It is a condition precedent to the purchase of the Notes by
the Holders that Grantors listed on the signature pages hereof shall have
granted the security interests and undertaken the obligations contemplated by
this Agreement.
NOW, THEREFORE, in consideration of the agreements set forth herein
and in the Purchase Agreement and in order to induce Holders to purchase the
Notes from Company pursuant to the Purchase Agreement, each Grantor hereby
agrees with Secured Party as follows:
SECTION 1. Grant of Security.
Each Grantor hereby assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of such Grantor's right, title and
interest in and to the following Collateral of such Grantor, in each case
whether now or hereafter existing, whether now owned or hereafter acquired, and
whether or not subject to the Uniform Commercial Code as it exists on the date
of this Agreement, or as it may hereafter be amended in the State of New York
(the "UCC"), including the following (the "COLLATERAL"):
(a) all Pledged Equity;
(b) each of the Spectrum Cash Account, the Asset Sale Proceeds
Account, and the Cash Reserve Account and all amounts on deposit from time to
time in such accounts, including all Investments;
(c) all FCC Licenses;
(d) all Spectrum Leases;
(e) the right to receive any payment of money, including without
limitation general intangibles for money due or to become due, derived in any
way from any FCC License, Foreign License, Spectrum Lease or Foreign Spectrum
Lease; and
(f) all Proceeds with respect to any of the foregoing Collateral.
Each category of Collateral set forth above shall have the meaning
set forth in the UCC (to the extent such term is defined in the UCC), it being
the intention of Grantors that the description of the Collateral set forth above
be construed to include the broadest possible range of assets.
Notwithstanding anything herein to the contrary, in no event shall
the Collateral include, and no Grantor shall be deemed to have granted a
security interest in, any of such Grantor's rights or interests in or under, any
license, contract, lease, permit, Instrument or franchise to which such Grantor
is a party or any of such Grantor's rights or interests thereunder to the
extent, but only to the extent, that such a grant would, under the terms of such
license, contract, lease, permit, Instrument or franchise, or under applicable
provisions of the Communications Act or FCC Rules, result in a breach of the
terms of, or constitute a default under, such license, contract, lease, permit,
Instrument, Security or franchise or applicable provisions of the Communications
Act or FCC Rules (other than to the extent that any such term would be rendered
ineffective pursuant to the UCC or any other applicable law (including the
Bankruptcy Code) or principles of equity); provided, that immediately upon the
ineffectiveness, lapse or termination of any such provision (including by reason
of any modification or change thereto or any change in the interpretation by the
FCC of applicable provisions of the Communications Act or FCC Rules by final
non-appealable action of the FCC) the Collateral shall include, and such Grantor
shall be deemed to have granted a security interest in, all such rights and
interests in accordance with the terms of any such ineffectiveness, lapse,
termination, modification or change.
Notwithstanding the foregoing, , it being acknowledged and agreed
that the creation of a security interest in Equity Interests issued by a Foreign
Subsidiary shall be limited to 66% of the issued and outstanding Capital Stock
of such Foreign Subsidiary entitled to vote (within the meaning of Treas. Reg.
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Section 1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock of
such Foreign Subsidiary not entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and the Collateral shall not include any other Equity
Interests issued by such Foreign Subsidiary.
SECTION 2. Security for Obligations.
This Agreement secures, and the Collateral is collateral security
for, the prompt payment or performance in full when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or
otherwise, of all Secured Obligations of each Grantor. "SECURED OBLIGATIONS"
means:
(a) with respect to Company, all obligations and liabilities of
every nature of Company now or hereafter existing under or arising out of or in
connection with the Purchase Agreement and the other Note Documents; and
(b) with respect to each Grantor and Additional Grantor, all
obligations and liabilities of every nature of such Grantor now or hereafter
existing under or arising out of or in connection with the Purchase Agreement,
Guaranty, Parent Guaranty and the other Note Documents;
in each case together with all extensions or renewals thereof, whether for
principal, interest, fees, expenses, indemnities or otherwise, whether voluntary
or involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Holder as a preference, fraudulent transfer
or otherwise, and all obligations of every nature of Grantors now or hereafter
existing under this Agreement (including, without limitation, interest and other
amounts that, but for the filing of a petition in bankruptcy with respect to
Company or any other Grantor, would accrue on such obligations, whether or not a
claim is allowed against Company or such Grantor for such amounts in the related
bankruptcy proceeding).
SECTION 3. Grantors Remain Liable.
Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts, licenses and agreements
included in the Collateral, to the extent set forth therein, to perform all of
its duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by Secured Party of any of its rights
hereunder shall not release any Grantor from any of its duties or obligations
under the contracts, licenses and agreements included in the Collateral, and (c)
Secured Party shall not have any obligation or liability under any contracts,
licenses, and agreements included in the Collateral by reason of this Agreement,
nor shall Secured Party be 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.
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SECTION 4. Representations and Warranties.
Each Grantor represents and warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except as expressly permitted by the
Purchase Agreement, such Grantor owns its interests in the Collateral free and
clear of any Lien and has not filed, authorized, or permitted to be filed any
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral in any filing or recording office.
(b) PERFECTION. The security interests in the Collateral granted
to Secured Party in accordance with the terms of Section 1 above for the ratable
benefit of Holders hereunder constitute valid security interests in the
Collateral, securing the payment of the Secured Obligations. Upon (i) the filing
of UCC financing statements naming each Grantor as "debtor", naming Secured
Party as "secured party" and describing the Collateral in the filing offices
with respect to such Grantor set forth on Schedule 1 annexed hereto, (ii) in the
case of the Pledged Equity consisting of certificated Securities, in addition to
filing of such UCC financing statements, delivery of the certificates
representing such certificated Securities, and (iii) in the case of the
Collateral Accounts, the execution and delivery to Secured Party of the Account
Control Agreement providing for control by Secured Party thereof, the security
interests in the Collateral granted to Secured Party for the ratable benefit of
Holders will constitute perfected security interests therein in accordance with
the terms of Section 1 above prior to all other Liens (except for Permitted
Liens and Liens permitted by Section 5.15 of the Purchase Agreement), and all
filings and other actions necessary or desirable to perfect and protect such
security interests have been duly made or taken.(1)
(c) OFFICE LOCATIONS; TYPE AND JURISDICTION OF ORGANIZATION. Such
Grantor's name as it appears in official filings in the jurisdiction of its
organization, type of organization (i.e. corporation, limited partnership,
etc.), jurisdiction of organization, principal place of business, chief
executive office, and organization number provided by the applicable
Governmental Authority of the jurisdiction of organization are set forth on
Schedule 2 annexed hereto.
(d) NAMES. No Grantor (or predecessor by merger or otherwise of
such Grantor) has, within the five year period preceding the date hereof, or, in
the case of the Company, since April 13, 2005, or, in the case of an Additional
Grantor, the date of the applicable Counterpart, had a different name from the
name of such Grantor listed on the signature pages hereof, except the names set
forth on Schedule 3 annexed hereto.
(e) DELIVERY OF CERTAIN COLLATERAL. All certificates evidencing,
comprising or representing the Pledged Equity have been delivered to Secured
Party duly endorsed or accompanied by duly executed instruments of transfer or
assignment in blank.
(f) PLEDGED EQUITY. All of the Pledged Equity set forth on
Schedule 4 annexed hereto has been duly authorized and validly issued and is
fully paid and non-assessable; there are no outstanding warrants, options or
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(1) Please confirm all Pledged Equity is certificated.
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other rights to purchase, or other agreements outstanding with respect to, or
property that is now or hereafter convertible into, or that requires the
issuance or sale of, any Pledged Equity; Schedule 4 annexed hereto sets forth
all of the Pledged Equity owned by each Grantor, and the percentage ownership in
each issuer thereof.
(g) COLLATERAL ACCOUNTS. Schedule 5 annexed hereto indicates the
institution or intermediary at which each of the Spectrum Cash Account, the Cash
Reserve Account and Asset Sale Proceeds Account is held and the account number.
The representations and warranties as to the information set forth
in Schedules referred to herein are made as to each Grantor (other than
Additional Grantors) as of the date hereof and as to each Additional Grantor as
of the date of the applicable Counterpart.
SECTION 5. Further Assurances.
(a) GENERALLY. Each Grantor agrees that from time to time, at the
reasonable expense of Grantors, such Grantor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby in any Collateral. Without limiting the generality of the foregoing, each
Grantor will: (i) furnish to Secured Party from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Secured Party may reasonably
request, all in reasonable detail, (ii) at any reasonable time, upon request by
Secured Party, exhibit the Collateral to and allow inspection of the Collateral
by Secured Party, or persons designated by Secured Party pursuant to Section 3.4
of the Purchase Agreement, and (iii) at Secured Party's request, appear in and
defend any action or proceeding that may adversely affect such Grantor's title
to or Secured Party's security interest in all or any material part of the
Collateral. Each Grantor hereby authorizes Secured Party to file in any
appropriate jurisdiction one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral without the
signature of any Grantor.
(b) PLEDGED EQUITY. Without limiting the generality of the
foregoing Section 5(a), each Grantor agrees that (i) all certificates
representing or evidencing the Pledged Equity shall be delivered to and held by
or on behalf of Secured Party pursuant hereto and shall be in suitable form for
transfer by delivery or, as applicable, shall be accompanied by such Grantor's
endorsement, where necessary, or duly executed instruments of transfer or
assignments in blank, all in form and substance satisfactory to Secured Party
and (ii) it will, upon obtaining any additional Equity Interests in a Person
that is, or becomes, a direct Material Subsidiary of such Grantor, promptly (and
in any event within ten Business Days) deliver to Secured Party a Pledge
Supplement, duly executed by such Grantor, in respect of such additional Pledged
Equity; provided, that the failure of any Grantor to execute a Pledge Supplement
with respect to any additional Pledged Equity shall not impair the security
interest of Secured Party therein or otherwise adversely affect the rights and
remedies of Secured Party hereunder with respect thereto. Within ten Business
Days of each such acquisition, the representations and warranties contained in
Section 4(f) hereof shall be deemed to have been made by such Grantor as to such
Pledged Equity, whether or not such Pledge Supplement is delivered.
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SECTION 6. Certain Covenants of Grantors.
Each Grantor shall:
(a) give Secured Party at least 15 Business Days' prior written
notice of (i) any change in such Grantor's name, identity or corporate structure
(including without limitation by reason of the Conversion) and (ii) any
reincorporation, reorganization or other action that results in a change of the
jurisdiction of organization of such Grantor;
(b) keep correct and accurate Records of Collateral at the
locations described in Schedule 2 annexed hereto; and
(c) permit representatives of Secured Party at any time during
normal business hours to inspect and make abstracts from such Records, and each
Grantor agrees to render to Secured Party, at such Grantor's reasonable cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto, as provided in Section 3.4 of the Purchase Agreement.
SECTION 7. Special Covenants With Respect to the Pledged Equity.
(a) FORM OF PLEDGED EQUITY. Secured Party shall have the right at
any time to exchange certificates or instruments representing or evidencing
Pledged Equity for certificates or instruments of smaller or larger
denominations. If any Pledged Equity is not a security pursuant to Section 8-103
of the UCC, no Grantor shall take any action that, under such Section, converts
such Pledged Equity into a security without causing the issuer thereof to issue
to it certificates or instruments evidencing such Pledged Equity, which it shall
promptly deliver to Secured Party as provided in this Section 7(a).
(b) COVENANTS. Each Grantor shall (i) not, except as expressly
permitted by the Purchase Agreement, permit any issuer of Pledged Equity to
merge or consolidate unless all the outstanding Equity Interests of the
surviving or resulting Person are, upon such merger or consolidation, subject to
the provisions of the last paragraph of Section 1, pledged and become Collateral
hereunder and no cash, securities or other property is distributed in respect of
the outstanding Equity Interests of any other constituent corporation; (ii)
cause each issuer of Pledged Equity not to issue Equity Interests in addition to
or in substitution for the Pledged Equity issued by such issuer, except to such
Grantor; (iii) immediately upon its acquisition (directly or indirectly) of any
Equity Interests, including additional Equity Interests in each issuer of
Pledged Equity, comply with Section 5(b), subject to the provisions of the last
paragraph of Section 1; and (iv) at its expense perform and comply in all
material respects with all terms and provisions of any agreement related to the
Pledged Equity required to be performed or complied with by it.
(c) VOTING AND DISTRIBUTIONS. So long as no Event of Default shall
have occurred and be continuing, (i) each Grantor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Pledged Equity
or any part thereof for any purpose not prohibited by the terms of this
Agreement or the Purchase Agreement; and (ii) each Grantor shall be entitled to
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receive and retain, and to utilize free and clear of the Lien hereof, any and
all dividends, other distributions, principal and interest paid in respect of
the Pledged Equity.
Upon the occurrence and during the continuation of an Event of
Default, subject to the provisions of Section 11(d) below, (x) upon written
notice from Secured Party to any Grantor, all rights of such Grantor to exercise
the voting and other consensual rights which it would otherwise be entitled to
exercise pursuant hereto shall cease, and all such rights shall thereupon become
vested in Secured Party who shall thereupon have the sole right to exercise such
voting and other consensual rights; (y) all rights of such Grantor to receive
the dividends, other distributions, principal and interest payments which it
would otherwise be authorized to receive and retain pursuant hereto shall cease,
and all such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to receive and hold as Collateral such dividends,
other distributions, principal and interest payments; and (z) all dividends,
principal, interest payments and other distributions which are received by such
Grantor contrary to the provisions of clause (y) above shall be received in
trust for the benefit of Secured Party, shall be segregated from other funds of
such Grantor and shall forthwith be paid over to Secured Party as Collateral in
the same form as so received (with any necessary endorsements).
In order to permit Secured Party to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which it may be entitled to
receive hereunder, (I) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to Secured Party all such proxies, dividend
payment orders and other instruments as Secured Party may from time to time
reasonably request, and (II) without limiting the effect of clause (I) above,
each Grantor hereby grants to Secured Party an irrevocable proxy to vote the
Pledged Equity and to exercise all other rights, powers, privileges and remedies
to which a holder of the Pledged Equity would be entitled (including giving or
withholding written consents of holders of Equity Interests, calling special
meetings of holders of Equity Interests and voting at such meetings), which
proxy, subject to the provisions of Section 11(d) below, shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Equity on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Equity or any officer or agent
thereof), upon the occurrence of an Event of Default and which proxy shall only
terminate upon the payment in full of the Secured Obligations (other than
indemnification obligations that are intended to survive termination of the Note
Documents), the cure of such Event of Default or waiver thereof as evidenced by
a writing executed by Secured Party.
SECTION 8. Secured Party Appointed Attorney-in-Fact.
Each Grantor hereby irrevocably appoints Secured Party as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(a) upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
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(b) upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other Instruments,
Documents and other documents in connection with clause (a) above;
(c) upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings that
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce or protect the rights of Secured Party with
respect to any of the Collateral;
(d) to pay or discharge taxes or Liens (other than taxes not
required to be discharged pursuant to the Purchase Agreement and Liens permitted
under this Agreement or the Purchase Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to become obligations
of such Grantor to Secured Party, due and payable immediately without demand;
(e) upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with the Collateral Accounts and other
documents relating to the Collateral;
(f) to file, or cause to be filed, to the extent permitted by law,
including the Communications Act and FCC Rules, such applications for approval
and to take all other and further actions required to obtain any approvals or
consents from the FCC or any other applicable regulatory authority required for
the exercise of any right or remedy hereunder; and
(g) subject to the provisions of Section 11(d) below, upon the
occurrence and during the continuance of an Event of Default, generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though Secured Party were the
absolute owner thereof for all purposes, and to do, at Secured Party's option
and Grantors' expense, at any time or from time to time, all acts and things
that Secured Party deems necessary to protect, preserve or realize upon the
Collateral and Secured Party's security interest therein in order to effect the
intent of this Agreement, all as fully and effectively as such Grantor might do.
SECTION 9. Secured Party May Perform.
If any Grantor fails to perform any agreement contained herein,
Secured Party may itself perform, or cause performance of, such agreement, and
the expenses of Secured Party incurred in connection therewith shall be payable
by Grantors.
SECTION 10. Standard of Care.
The powers conferred on Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
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Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property or accords to collateral in which Secured Party has a similar interest.
SECTION 11. Remedies.
(a) GENERALLY. If any Event of Default shall have occurred and be
continuing, Secured Party may, subject to clause (d) below, exercise in respect
of the Collateral, in addition to all other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a secured
party on default under the UCC (whether or not the UCC applies to the affected
Collateral), and also may (i) without notice except as specified below, sell the
Collateral or any part thereof in one or more parts at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable, and (ii) without
notice to any Grantor, transfer to or register in the name of Secured Party or
any of its nominees any or all of the Pledged Equity. Secured Party or any
Holder may be the purchaser of any or all of the Collateral at any such sale and
Secured Party, as agent for and representative of Holders shall be entitled, for
the purpose of bidding and making settlement or payment of the purchase price
for all or any portion of the Collateral sold at any such public sale, to use
and apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale. Each purchaser
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days' notice to
such Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Grantor hereby waives any claims against Secured Party
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree. If the
proceeds of the disposition of the Collateral are insufficient to pay all the
Secured Obligations, Grantors shall be jointly and severally liable for the
deficiency and the fees of any attorneys employed by Secured Party to collect
such deficiency. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 11 will cause irreparable injury to Secured
Party, that Secured Party has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against such Grantor, and each Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default has
occurred giving rise to the Secured Obligations becoming due and payable prior
to their stated maturities.
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(b) PLEDGED EQUITY. Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, Secured Party may be compelled, with respect to any sale of all
or any part of the Pledged Equity conducted without prior registration or
qualification of such Pledged Equity under the Securities Act and/or such state
securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Pledged Equity for their own account, for investment and
not with a view to the distribution or resale thereof. Each Grantor acknowledges
that any such private placement may be at prices and on terms less favorable
than those obtainable through a sale without such restrictions (including an
offering made pursuant to a registration statement under the Securities Act)
and, notwithstanding such circumstances, each Grantor agrees that any such
private placement shall not be deemed, in and of itself, to be commercially
unreasonable and that Secured Party shall have no obligation to delay the sale
of any Pledged Equity for the period of time necessary to permit the issuer
thereof to register it for a form of sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would, or should, agree to so register it. If Secured Party determines to
exercise its right to sell any or all of the Pledged Equity, upon written
request, each Grantor shall and shall cause each issuer of any Pledged Equity to
be sold hereunder from time to time to furnish to Secured Party all such
information as Secured Party may request in order to determine the amount of
Pledged Equity which may be sold by Secured Party in exempt transactions under
the Securities Act and the rules and regulations of the Securities and Exchange
Commission thereunder, as the same are from time to time in effect.
(c) COLLATERAL ACCOUNTS. In addition to any remedies set forth in
clause (a) above, upon the occurrence and during the continuance of an Event of
Default, Secured Party may instruct Account Bank to (i) sell any Investments or
other Collateral relating to the Collateral Accounts, (ii) transfer all
Investments or other Collateral relating to the Collateral Accounts, including
any cash, to any other account established in Secured Party's (or its agent's or
nominee's) name, (iii) register title to any other Collateral relating to any
Collateral Account in the name of Secured Party or any of its nominees or
agents, without reference to any interest of Grantor, or (iv) retain any of the
Collateral relating to any Collateral Account as Secured Party's property (for
the benefit of Holders) in satisfaction of an amount of Secured Obligations
equal to the then-current market value of such Collateral retained as determined
by Secured Party. All amounts and proceeds in any Collateral Account may, in the
discretion of Secured Party during the continuance of an Event of Default, (i)
be held by Secured Party as collateral for the Secured Obligations and/or (ii)
then or at any time thereafter be applied pursuant to Section 12 hereof. Secured
Party shall also have such rights and remedies in respect of such Collateral as
are set forth in the Account Control Agreement.
(d) FCC AND GOVERNMENTAL APPROVALS.
(i) Notwithstanding any other provision of this Agreement,
Secured Party shall take no action to exercise or enforce any remedy that is
available to Secured Party pursuant to this Agreement which exercise or
enforcement would constitute or result in any assignment of any FCC License,
Spectrum Lease or any other Governmental Authorization or other Collateral or
any transfer of control of any License Subsidiary or any FCC License, other
Governmental Authorization or any Spectrum Lease or other Collateral, whether de
jure or de facto, if such assignment or transfer of control of such License,
Authorization or Lease or other Collateral would require, under then existing
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law (including the Communications Act and the FCC Rules or the written rules and
regulations promulgated by the FCC or any other agency or government), the prior
approval of the FCC or any other Governmental Authority, without first obtaining
such approval; provided, however Secured Party shall not be liable to any person
for such actions to the extent that Secured Party relies upon the advice of
counsel or other experts selected by it in its sole discretion; and provided
further that Collateral Agent may take the actions permitted under Section 11(c)
above with respect to the Collateral Accounts (as currently defined herein), and
the parties hereto expressly acknowledge that no such permitted action under
Section 11(c) would (x) involve the Pledged Equity, FCC Licenses or Spectrum
Leases or (y) constitute or result in an assignment or transfer of control of a
type described in this Section 11(d)(i).
(ii) Notwithstanding the foregoing, during the continuance of
an Event of Default (as defined herein), each Grantor shall cooperate with
Secured Party to ensure that Secured Party may obtain and enjoy the full rights
and benefits granted to Secured Party by this Agreement and each other
agreement, instrument and document delivered to Secured Party in connection
herewith or in any document evidencing or securing the Collateral. Specifically,
each Grantor shall
(A) cooperate fully with Secured Party in obtaining all
approvals, consents, authorizations and qualifications from any Governmental
Authority or instrumentality (including but not limited to the FCC) that Secured
Party may, in its reasonable determination, deem necessary or advisable to
accomplish any such transfer or assignment of all or any part of the Collateral
and
(B) prepare, execute and, if requested by Secured Party,
file with any Governmental Authority or instrumentality (including but not
limited to the FCC) any application, request for consent, certificate,
instrument or other document that Secured Party may, in its reasonable
determination, deem necessary or advisable to accomplish any such transfer or
assignment of all or any part of the Collateral.
(iii) Notwithstanding any other language and provision herein
made, each Grantor hereby agrees to and authorizes an involuntary transfer of
control of any Subsidiary of Company after and during the continuation of any
Event of Default and, without limiting any rights of Secured Party under this
instrument, authorizes Secured Party to nominate a trustee or receiver to assume
control of any Subsidiary of Company, subject only to any required FCC or other
Governmental Authority consent and/or judicial consent or approval pending in
order to effectuate any such nomination and assumption of control. Such trustee
or receiver shall have all rights and powers permitted to it by law or court
order and as provided under this instrument and delegated to such trustee or
receiver. Each Grantor hereby expressly waives the right to object to the
appointment of a trustee or receiver as aforesaid and expressly agrees that such
appointment shall be made as an admitted equity and as a matter of absolute
right to Secured Party. Each Grantor shall cooperate fully in obtaining each
approval and consent of the FCC or any other Governmental Authority required to
effectuate the foregoing, including without limitation the preparation,
execution and filing with the FCC of the transferor's portion of any application
or applications for consent to the transfer of control necessary or appropriate
under Communications Act or the FCC's Rules for approval of the transfer of
11
control or assignment of all or any portion of the Collateral. Each Grantor
expressly acknowledges that its consent contemplates full cooperation by such
Grantor in the preparation, execution and filing of FCC Form 603 or any other
applicable FCC Form for involuntary transfer of any one or all of the FCC
Licenses or Spectrum Leases, and further acknowledges that authorization of the
FCC to the transfer of control of the right, title and interest of each Grantor
in and to all or any FCC Licenses and Spectrum Leases is integral to Secured
Party's realization of the value of the Collateral. Each Grantor further admits
and acknowledges that there is no adequate remedy at law for failure of any
Grantor to comply with the foregoing provisions and that such failure would not
be compensable in damages. Each Grantor agrees that Secured Party is entitled to
obtain specific performance of such Grantor's agreements under this paragraph of
Section 11(d), and hereby irrevocably waives any defense based on the adequacy
of a remedy at law that might be asserted as a bar to such remedy of specific
performance. Each Grantor acknowledges that the provisions of this paragraph are
intended to be enforceable at all times whether before or after commencement of
a proceeding for the dissolution, winding up, liquidation, arrangement,
reorganization and whether in bankruptcy, insolvency, receivership, or upon any
other similar proceeding involving any Grantor or any Subsidiary of Company.
In addition to all other rights and remedies at law or equity which
Secured Party may have, Secured Party shall have the right, subject to Section
11(d)(i) above, during the continuance of any Event of Default to apply at any
time to a court having jurisdiction thereof for the appointment of a receiver of
any and all of the Collateral. It is expressly agreed by each Grantor that such
court shall appoint such receiver with the usual powers and duties of receivers
in like cases and that such appointment shall be made by the court as a matter
of strict right to Secured Party, and without reference to the adequacy of the
value of the Collateral or to the solvency or insolvency of any Grantor or any
Subsidiary of Company, or any party defendant to any suit. Each Grantor hereby
specifically waives the right to object to the appointment of a receiver and
hereby expressly agrees that such appointment shall be made as an admitted
equity and as a matter of absolute right to Secured Party.
In the event of any changes in applicable law (including, without
limitation, changes in the Communications Act or the FCC Rules, or any Grantor
becoming subject to the jurisdiction of any applicable Governmental Authority)
occurring after the date hereof that affect in any manner Secured Party's rights
of access to, or use or sale of, the FCC Licenses or Spectrum Leases, or the
procedures necessary to enable Secured Party to obtain such rights of access,
use or sale (including, without limitation, changes allowing greater access),
Secured Party and Grantors, upon request of Secured Party, shall amend this
Agreement and the other Note Documents in such manner as Secured Party shall
reasonably request, in order to provide Secured Party with such rights to the
greatest extent possible consistent with such then applicable law.
12
SECTION 12. Application of Proceeds.
Except as expressly provided elsewhere in this Agreement, all
proceeds received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral shall be applied in
the following priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party hereunder
for the account of Grantors, and to the payment of all costs and expenses
paid or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for the
ratable benefit of the holders thereof) and, as to obligations arising
under the Note Documents, as provided in the Note Documents; and
THIRD: To the payment to or upon the order of Company, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
SECTION 13. Indemnity and Expenses.
(a) Grantors jointly and severally agree to indemnify Secured
Party and each Holder in accordance with Sections 1.4 and 1.5 of the Purchase
Agreement.
(b) The obligations of Grantors in this Section 13 shall (i)
survive the termination of this Agreement and the discharge of Grantors' other
obligations under this Agreement, the Purchase Agreement and the other Note
Documents and (ii), as to any Grantor that is a party to a Guaranty, be subject
to the provisions of Section 1(b) thereof.
SECTION 14. Continuing Security Interest; Transfer of Notes; Termination and
Release.
(a) This Agreement shall create a continuing security interest as
specified herein in the Collateral and shall (i) remain in full force and effect
until the payment in full of the Secured Obligations, (ii) be binding upon
Grantors and their respective successors and assigns, and (iii) inure, together
with the rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause but subject to the provisions of Section 10.2
of the Purchase Agreement, any Holder may assign or otherwise transfer any Notes
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Holders herein or
otherwise.
(b) Upon the payment in full of all Secured Obligations, the
security interest granted hereby shall terminate and all rights to the
Collateral shall automatically revert to the applicable Grantors without further
action required by any party hereto. Upon any such termination Secured Party
13
will, at Grantors' expense, execute and deliver to Grantors such documents as
Grantors shall reasonably request to evidence such termination. In addition,
upon the proposed sale or other disposition of any Collateral by a Grantor in
accordance with the Purchase Agreement for which such Grantor desires a security
interest release from Secured Party, such a release may be obtained pursuant to
the provisions of Section 10.4 of the Purchase Agreement.
SECTION 15. Secured Party as Agent.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Holders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Purchase Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 11 hereof in accordance with the instructions of the Required Holders.
(b) Secured Party shall at all times be the same Person that is
Collateral Agent under the Collateral Agency Agreement. Written notice of
resignation by Collateral Agent pursuant to Section 4.05 of the Collateral
Agency Agreement shall also constitute notice of resignation as Secured Party
under this Agreement; and appointment of a successor Collateral Agent pursuant
to Section 4.05 of the Collateral Agency Agreement shall also constitute
appointment of a successor Secured Party under this Agreement. Upon any such
resignation or removal, the Required Holders shall have the right to appoint a
successor Secured Party. If no successor Secured Party shall have been appointed
by the Required Holders and shall have accepted such appointment within sixty
(60) days after the retiring Secured Party's giving of notice of resignation or
the Required Holders' removal of the retiring Secured Party, then the retiring
Secured Party's resignation or removal shall nonetheless be effective, and the
Required Holders shall assume and perform all duties of the Secured Party until
such time, if any, as the Required Holders appoint a successor secured party.
Upon the acceptance of any appointment as Secured Party hereunder by a successor
Secured Party, such successor Secured Party shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Secured Party, and the retiring Secured Party's resignation hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefits as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party under this Agreement shall promptly (i) transfer to such successor
Secured Party all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Secured Party
under this Agreement, and (ii) execute (if necessary) and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring Secured Party shall be discharged from its
duties and obligations under this Agreement. After any retiring Collateral
Agent's resignation hereunder as Secured Party, the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was Secured Party hereunder.
14
SECTION 16. Additional Grantors.
The initial Grantors hereunder shall be Company and such of the
Subsidiaries of Company as are signatories hereto on the date hereof. From time
to time subsequent to the date hereof, the Parent and additional Subsidiaries of
Company or the Parent may become Additional Grantors, by executing a
Counterpart. Upon delivery of any such Counterpart to Secured Party, notice of
which is hereby waived by Grantors, each such Additional Grantor shall be a
Grantor and shall be as fully a party hereto as if such Additional Grantor were
an original signatory hereto. Each Grantor expressly agrees that its obligations
arising hereunder shall not be affected or diminished by the addition or release
of any other Grantor hereunder, nor by any election of Secured Party not to
cause any Material Subsidiary of Company to become an Additional Grantor
hereunder. This Agreement shall be fully effective as to any Grantor that is or
becomes a party hereto regardless of whether any other Person becomes or fails
to become or ceases to be a Grantor hereunder.
SECTION 17. Amendments; Etc.
No amendment, modification, termination or waiver of any provision
of this Agreement, and no consent to any departure by any Grantor therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party and the Required Holders and, in the case of any such amendment
or modification, by Grantors; provided this Agreement may be modified by the
execution of a Pledge Supplement by a Grantor in accordance with Section 5
hereof or a Counterpart by an Additional Grantor in accordance with Section 16
hereof and Grantors hereby waive any requirement of notice of or consent to any
such amendment. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
SECTION 18. Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served or sent by telefacsimile
or United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of telefacsimile,
or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided that notices to Secured Party
shall not be effective until received. For the purposes hereof, the address of
each party hereto shall be as provided in Section 10.1 of the Purchase Agreement
or as set forth under such party's name on the signature pages hereof or such
other address as shall be designated by such party in a written notice delivered
to the other parties hereto.
SECTION 19. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party or Required Holders
in the exercise of any power, right or privilege hereunder shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude any other or further exercise thereof or of
any other power, right or privilege. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
15
SECTION 20. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 21. Headings.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 22. Governing Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT
LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK) WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT
THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, IN WHICH CASE THE LAWS
OF SUCH JURISDICTION SHALL GOVERN WITH RESPECT TO THE PERFECTION OF THE SECURITY
INTEREST IN, OR THE REMEDIES WITH RESPECT TO, SUCH PARTICULAR COLLATERAL AND
EXCEPT TO THE EXTENT THAT THE RIGHTS AND OBLIGATIONS OF THE PARTIES ARE GOVERNED
OR LIMITED BY THE COMMUNICATIONS ACT AND THE FCC RULES. The rules of
construction set forth in subsection 1.3 of the Purchase Agreement shall be
applicable to this Agreement mutatis mutandis.
SECTION 23. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF
OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK.
BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 18 HEREOF; (IV) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION
16
OVER SUCH GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT
SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER
JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 23 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 24. Waiver of Jury Trial.
GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH GRANTOR AND SECURED PARTY ACKNOWLEDGE THAT THIS WAIVER IS
A MATERIAL INDUCEMENT FOR GRANTORS AND SECURED PARTY TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT GRANTORS AND SECURED PARTY HAVE ALREADY RELIED ON THIS WAIVER
IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THIS
WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH GRANTOR AND SECURED PARTY FURTHER
WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 24 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 25. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
SECTION 26. Definitions.
17
(a) Each capitalized term utilized in this Agreement that is not
defined in the Purchase Agreement or in this Agreement, but that is defined in
the UCC, including the categories of Collateral listed in Section 1 hereof,
shall have the meaning set forth in Articles 1, 8 or 9 of the UCC.
(b) In addition, the following terms used in this Agreement shall
have the following meanings:
"ACCOUNT BANK" means UBS Financial Services Inc.
"ACCOUNT CONTROL AGREEMENT" means any or all of the Asset Sale Proceeds
Account Control Agreement, the Cash Reserve Account Control Agreement and the
Spectrum Cash Account Control Agreement.
"ADDITIONAL GRANTOR" means a Subsidiary of Company that becomes a party
hereto after the date hereof as an additional Grantor by executing a
Counterpart.
"ASSET SALE PROCEEDS ACCOUNT" means the account established with Account
Bank and designated "NextWave Wireless LLC -- Asset Sale Proceeds Accnt", as
more fully described in Section 1 of the Asset Sale Proceeds Account Control
Agreement, any replacement for such account established with the written consent
of the Required Holders and any other account in which any investment of funds
from such account may be held.
"ASSET SALE PROCEEDS ACCOUNT CONTROL AGREEMENT" means the Account Control
Agreement providing for control of the Asset Sale Proceeds Account dated as of
the date hereof among Account Bank, Company and Secured Party.
"BENEFICIARY" means each Holder of the Notes.
"CASH RESERVE ACCOUNT" means the account established with Account Bank and
designated "NextWave Wireless LLC -Cash Reserve Acct", as more fully described
in Section 1 of the Cash Reserve Account Control Agreement, any replacement for
such account established with the written consent of the Required Holders and
any other account in which any investment of funds from such account may be
held.
"CASH RESERVE ACCOUNT CONTROL AGREEMENT" means the Account Control
Agreement providing for control of the Cash Reserve Account dated as of the date
hereof among Account Bank, Company and Secured Party.
"COLLATERAL" has the meaning set forth in Section 1 hereof.
"COLLATERAL ACCOUNT" means any or all of the Asset Sale Proceeds Account,
the Cash Reserve Account and the Spectrum Cash Account.
"COLLATERAL AGENCY AGREEMENT" means the Collateral Agency Agreement dated
as of July 17, 2006 by and among the Secured Party and the Holders of the Notes.
18
"COUNTERPART" means a counterpart to this Agreement in substantially the
form of Exhibit II hereto entered into by a Subsidiary of Company pursuant to
Section 16 hereof.
"EQUITY INTERESTS" means all shares of stock, partnership interests,
interests in joint ventures, limited liability company interests and all other
equity interests in a Person, whether such stock or interests are classified as
Investment Property or General Intangibles under the UCC.
"FACILITIES" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by the Company.
"FCC" means the Federal Communications Commission and any successor
thereto.
"FCC LICENSE" means any paging, mobile telephone, specialized mobile
radio, microwave, personal communications services or other license, permit,
consent, certificate of compliance, franchise, approval, waiver or authorization
granted or issued by the FCC, including authorizing or permitting the
acquisition, construction or operation of any Wireless Communications System.
"FOREIGN LICENSE" means any paging, mobile telephone, specialized mobile
radio, microwave, personal communications services or other license, permit,
consent, certificate of compliance, franchise, approval, waiver or authorization
granted or issued by any Governmental Authority other than the FCC, including
authorizing or permitting the acquisition, construction or operation of any
Wireless Communications System.
"FOREIGN SPECTRUM LEASE" means any lease, license, agreement or other
arrangement to which any Foreign Subsidiary of Company is now or may hereafter
become a party pursuant to which any such Foreign Subsidiary leases, licenses or
otherwise acquires or obtains any rights, whether exclusive or non-exclusive,
with respect to radiofrequency specified in a Foreign License issued to the
lessor or sublessor, in each case, as amended, restated, supplemented or
otherwise modified from time to time.
"GOVERNMENTAL AUTHORITY" means (a) the government of the United States of
America or any state or other political subdivision thereof, (b) any government
or political subdivision of any other jurisdiction in which the Company or any
of its Subsidiaries conducts business, or which properly asserts jurisdiction
over any Facilities, (c) any entity properly exercising executive, legislative,
judicial, regulatory or administrative functions of any such government or (d)
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities exchange
and any self-regulatory organization
"INVESTMENTS" means any property, including any Financial Asset or
Investment Property, credited to any Collateral Account, and any other property
acquired in exchange for, with proceeds from or distributions on, or otherwise
in respect of such property.
"MATERIAL SUBSIDIARY" means each of NextWave Broadband Inc., a Delaware
19
corporation, Packet Video Corporation, a Delaware Corporation, NW Spectrum Co.,
a Delaware Corporation, AWS Wireless, Inc., a Delaware corporation, each other
License Subsidiary, each Foreign Subsidiary that holds any Foreign Spectrum
Holdings and each other Subsidiary of the Company or Parent that constitutes a
"Significant Subsidiary" within the meaning of Regulation S-X promulgated by the
SEC.
"PLEDGED EQUITY" means all Equity Interests in a Material Subsidiary now
or hereafter owned by a Grantor, including all securities convertible into, and
rights, warrants, options and other rights to purchase or otherwise acquire, any
of the foregoing, including those owned on the date hereof and set forth on
Schedule 4 annexed hereto, the certificates or other instruments representing
any of the foregoing and any interest of such Grantor in the entries on the
books of any securities intermediary pertaining thereto and all distributions,
dividends and other property received, receivable or otherwise distributed in
respect of or exchanged therefor; provided that, with respect to Equity
Interests issued by a Foreign Subsidiary, such Equity Interests constituting
Pledged Equity shall be limited to 66% of the issued and outstanding Capital
Stock of such Foreign Subsidiary entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock
of such Foreign Subsidiary not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)).
"PLEDGE SUPPLEMENT" means a Pledge Supplement, in substantially the form
of Exhibit I annexed hereto, in respect of any additional Pledged Equity pledged
pursuant to this Agreement.
"PURCHASE AGREEMENT" has the meaning set forth in the Preliminary
Statements of this Agreement.
"SECURED OBLIGATIONS" has the meaning set forth in Section 2 hereof.
"SPECTRUM LEASE" means any lease, license, agreement or other arrangement
to which any Grantor is now or may hereafter become a party pursuant to which
any Grantor leases, licenses or otherwise acquires or obtains any rights,
whether exclusive or non-exclusive, with respect to radiofrequency specified in
an Underlying License, in each case, as amended, restated, supplemented or
otherwise modified from time to time.
"SPECTRUM CASH ACCOUNT" means the account established with the Account
Bank and designated "NextWave Wireless LLC -- Spectrum Cash Acct", as more fully
described in Section 1 of the Spectrum Cash Account Control Agreement, any
replacement for such account established with the written consent of the
Required Holders and any other account in which any investment of funds from
such account may be held.
"SPECTRUM CASH ACCOUNT CONTROL AGREEMENT" means the Account Control
Agreement providing for control of the Spectrum Cash Account dated as of the
date hereof among Account Bank, Company and Secured Party.
"UCC" means the Uniform Commercial Code, as it exists on the date of this
Agreement or as it may hereafter be amended, in the State of New York.
"UNDERLYING LICENSE" means any license granted by the FCC to a Person who
20
is the lessor to a Grantor under a Spectrum Lease or, in the case of a sublease,
to the Person who is the lessor to the applicable sublessor to the Grantor.
"WIRELESS COMMUNICATIONS SYSTEM" means any system to provide
telecommunications services, including, without limitation, specialized mobile
radio system, radio paging system, mobile telephone system, cellular radio
telecommunications system, conventional mobile telephone system, personal
communications system, EBS/ITFS-based system or BRS/MDS/MMDS-based system, data
transmission system or any other paging, mobile telephone, radio, microwave,
communications, broadband or data transmission system.
(c) The rules of construction set forth in subsection 1.3 of the Purchase
Agreement shall be applicable to this Agreement mutatis mutandis.
[Remainder of page intentionally left blank]
21
IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
GRANTORS: NEXTWAVE WIRELESS LLC,
-------- NEXTWAVE BROADBAND INC.,
NW SPECTRUM CO.,
AWS WIRELESS INC.,
Each By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: Executive Vice President
NOTICE ADDRESS: SEE SCHEDULE A ANNEXED HERETO.
THE BANK OF NEW YORK,
as Collateral Agent, as Secured Party
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
Address: The Bank of New York,
Asset Solutions Division
000 Xxxx Xxx Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Director of Agent Services,
Xxxxxxx Xxxxxx
SCHEDULE A
TO
SECURITY AGREEMENT
--------------------------------------------------------------------------------
NAME OF GRANTOR NOTICE ADDRESS
--------------------------------------------------------------------------------
NextWave Wireless LLC 00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
--------------------------------------------------------------------------------
NextWave Broadband Inc. 00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
--------------------------------------------------------------------------------
PacketVideo Corporation 00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
--------------------------------------------------------------------------------
NW Spectrum Co. 00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
--------------------------------------------------------------------------------
AWS Wireless Inc. 00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
--------------------------------------------------------------------------------
Schedule A-1
SCHEDULE 1
TO
SECURITY AGREEMENT
Filing Offices
--------------------------------------------------------------------------------
GRANTOR FILING OFFICE
--------------------------------------------------------------------------------
NextWave Wireless LLC Delaware Secretary of State
--------------------------------------------------------------------------------
NextWave Broadband Inc. Delaware Secretary of State
--------------------------------------------------------------------------------
PacketVideo Corporation Delaware Secretary of State
--------------------------------------------------------------------------------
NW Spectrum Co. Delaware Secretary of State
--------------------------------------------------------------------------------
AWS Wireless Inc. Delaware Secretary of State
--------------------------------------------------------------------------------
Schedule 1-1
SCHEDULE 2
TO
SECURITY AGREEMENT
Office Locations, Type and Jurisdiction of Organization
---------------------------------------------------------------------------------
NAME OF TYPE OF CHIEF EXECUTIVE OFFICE JURISDICTION ORGANIZATION
GRANTOR ORGANIZATION /PRINCIPAL PLACE OF OF NUMBER
BUSINESS ORGANIZATION
---------------------------------------------------------------------------------
NextWave Limited 12670 High Bluff Drive Delaware 2630032
Wireless LLC Liability Xxx Xxxxx, Xxxxxxxxxx 00000
Company
---------------------------------------------------------------------------------
NextWave Corporation 12670 High Bluff Drive Delaware 3886289
Broadband Xxx Xxxxx, Xxxxxxxxxx 00000
Inc.
---------------------------------------------------------------------------------
PacketVideo Corporation 10350 Science Center Delaware 2924300
Corporation Drive, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx
00000-0000
---------------------------------------------------------------------------------
NW Spectrum Corporation 12670 High Bluff Drive Delaware 4154858
Co. Xxx Xxxxx, Xxxxxxxxxx 00000
---------------------------------------------------------------------------------
AWS Wireless Corporation 12670 High Bluff Drive Delaware 4154827
Inc. Xxx Xxxxx, Xxxxxxxxxx 00000
---------------------------------------------------------------------------------
\
SCHEDULE 2-1
SCHEDULE 3
TO
SECURITY AGREEMENT
Other Names
--------------------------------------------------------------------------------
GRANTOR OTHER LEGAL NAMES
--------------------------------------------------------------------------------
NextWave Wireless LLC None.
--------------------------------------------------------------------------------
NextWave Broadband Inc. None.
--------------------------------------------------------------------------------
PacketVideo Corporation PVC Acquisition Corp.
--------------------------------------------------------------------------------
NW Spectrum Co. None.
--------------------------------------------------------------------------------
AWS Wireless Inc. None.
--------------------------------------------------------------------------------
Schedule 3-1
SCHEDULE 4
TO
SECURITY AGREEMENT
---------------------------------------------------------------------------------------------------------------
ISSUER'S PERCENTAGE OF
JURISDICTION CLASS EQUITY OUTSTANDING
OF OF PAR CERTIFICATE AMOUNT OF EQUITY
GRANTOR ISSUE ORGANIZATION EQUITY VALUE NOS. EQUITY INTERESTS PLEDGED
---------------------------------------------------------------------------------------------------------------
NextWave Wireless NextWave Broadband Delaware Common $0.01 2 1,000 Authorized 100%
LLC Inc. 1,000 Outstanding
---------------------------------------------------------------------------------------------------------------
NextWave Broadband PacketVideo Delaware Common $0.01 C-2 55,000,000 100%
Inc. Corporation Authorized
46,750,000
Outstanding
---------------------------------------------------------------------------------------------------------------
NextWave Broadband NW Spectrum Co. Delaware Common $0.01 1 1,000 Authorized 100%
Inc. 1,000 Outstanding
---------------------------------------------------------------------------------------------------------------
NextWave Broadband AWS Wireless Inc. Delaware Common $0.01 2 1,000 Authorized 100%
Inc. 1,000 Outstanding
---------------------------------------------------------------------------------------------------------------
Schedule 4-1
SCHEDULE 5
TO
SECURITY AGREEMENT
Collateral Accounts
---------------------------------------------------------------------------
ADDRESS OF
TYPE OF DEPOSITORY BANK OR DEPOSITORY BANK ACCOUNT NUMBER
ACCOUNT SECURITIES OR SECURITIES
INTERMEDIARY INTERMEDIARY
---------------------------------------------------------------------------
Securities UBS Financial UBS Financial 01373
account Services, Inc. Services Inc.
(Spectrum Cash 499 Washington
Account) Xxxxxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxx
Xxxxxx 00000
Attn: Legal
Verification Group
---------------------------------------------------------------------------
Securities UBS Financial UBS Financial 01374
account (Cash Services, Inc. Services Inc.
Reserve 499 Washington
Account) Xxxxxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxx
Xxxxxx 00000
Attn: Legal
Verification Group
---------------------------------------------------------------------------
Securities UBS Financial UBS Financial 01370
account (Asset Services, Inc. Services Inc.
Sale Proceeds 499 Washington
Account) Xxxxxxxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxx
Xxxxxx 00000
Attn: Legal
Verification Group
---------------------------------------------------------------------------
Schedule 5-1
EXHIBIT I TO
SECURITY AGREEMENT
PLEDGE SUPPLEMENT
This Pledge Supplement, dated as of ________________ is delivered
pursuant to the Security Agreement, dated as of July 17, 2006 between
____________________, a _______________ ("GRANTOR"), the other Grantors named
therein, and The Bank of New York, as Collateral Agent and Secured Party for the
benefit of Holders (said Security Agreement, as it may heretofore have been and
as it may hereafter be further amended, restated, supplemented or otherwise
modified from time to time, being the "SECURITY AGREEMENT"). Capitalized terms
used herein not otherwise defined herein shall have the meanings ascribed
thereto in the Security Agreement.
Grantor hereby agrees that the Pledged Equity set forth on Schedule
A annexed hereto shall be deemed to be part of the Pledged Equity and shall
become part of the Pledged Equity and shall secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be
duly executed and delivered by its duly authorized officer as of
---------------.
[GRANTOR]
By:
---------------------------
Title:
---------------------
SCHEDULE A
TO
PLEDGE SUPPLEMENT
EXHIBIT II TO
SECURITY AGREEMENT
[FORM OF COUNTERPART]
COUNTERPART (this "COUNTERPART"), dated as of _______________, is
delivered pursuant to Section 16 of the Security Agreement referred to below.
The undersigned hereby agrees that this Counterpart may be attached to the
Security Agreement, dated as of July 17, 2006 (said Security Agreement, as it
may heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time being the "SECURITY
AGREEMENT"; capitalized terms used herein not otherwise defined herein shall
have the meanings ascribed therein), among NextWave Wireless LLC, a Delaware
limited liability company, the other Grantors named therein, and The Bank of New
York, as Collateral Agent and Secured Party for the benefit of the Holders. The
undersigned by executing and delivering this Counterpart hereby becomes a
Grantor under the Security Agreement in accordance with Section 16 thereof and
agrees to be bound by all of the terms thereof. Without limiting the generality
of the foregoing, the undersigned hereby:
(i) authorizes the Secured Party to add the information set forth on
the Schedules to this Counterpart to the correlative Schedules attached to
the Security Agreement;
(ii) agrees that all Collateral of the undersigned, including the
items of property described on the Schedules hereto, shall become part of
the Collateral and shall secure all Secured Obligations; and
(iii) makes the representations and warranties set forth in the
Security Agreement, as amended hereby, to the extent relating to the
undersigned.
[NAME OF ADDITIONAL GRANTOR]
By:
---------------------------
Name:
----------------------
Title:
---------------------
