AMENDED AND RESTATED SECURITY AGREEMENT Dated June 16, 2006 From The Grantors referred to herein as Grantors to BANK OF AMERICA, N.A. as Collateral Agent
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Exhibit 10.2
AMENDED AND RESTATED SECURITY AGREEMENT
Dated June 16, 2006
From
The Grantors referred to herein
as Grantors
to
BANK OF AMERICA, N.A.
as Collateral Agent
TABLE
OF CONTENTS
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Schedules I
|
- | Name, Location, Chief Executive Office, Type Of Organization, Jurisdiction Of Organization And Organizational Identification Number | ||
Schedule II
|
- | Pledged Equity and Pledged Debt | ||
Schedule III
|
- | Assigned Agreements | ||
Schedule IV
|
- | Changes in Name, Location, Etc. | ||
Schedule V
|
- | Patents, Trademarks and Trade Names and Copyrights | ||
Schedule VI
|
- | IP Agreements | ||
Schedule VII
|
- | Account Collateral | ||
Schedule VIII
|
- | Account Collateral not Subject to Account Control Agreement | ||
Schedule IX
|
- | Commercial Tort Claims | ||
Schedule X
|
- | Letters of Credit | ||
Exhibits |
||||
Exhibit A
|
- | Form of Security Agreement Supplement | ||
Exhibit B
|
- | Form of Consent and Agreement | ||
Exhibit C
|
- | Form of Amended and Restated Intellectual Property Security Agreement | ||
Exhibit D
|
- | Form of Intellectual Property Security Agreement Supplement | ||
Exhibit E
|
- | Form of Consent to Assignment of Letter of Credit Rights |
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AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT dated June 16, 2006 made by CRICKET COMMUNICATIONS,
INC., a Delaware corporation (the “Borrower”), LEAP WIRELESS INTERNATIONAL, INC., a Delaware
corporation (“Holdings”), the other Persons listed on the signature pages hereof and the Additional
Grantors (as defined in Section 23) (the Borrower, Holdings, the Persons so listed and the
Additional Grantors being, collectively, the “Grantors”), to BANK OF AMERICA, N.A. (“Bank of
America”), as collateral agent (in such capacity, together with any successor collateral agent
appointed pursuant to Article IX of the Credit Agreement (as hereinafter defined), the “Collateral
Agent”) for the Secured Parties (as defined in the Credit Agreement).
PRELIMINARY STATEMENTS.
(1) The Borrower and Holdings were parties to that certain credit agreement dated as of
January 10, 2005 (as amended by that certain Amendment No. 1 dated as of July 22, 2005 and that
certain Amendment No. 2 dated as of July 22, 2005, the “Initial Credit Agreement”)) with certain
lenders from time to time party thereto and Bank of America, as administrative agent and L/C
issuer.
(2) Pursuant to the Initial Credit Agreement, the Grantors entered into that certain security
agreement dated January 10, 2005 (the “Initial Security Agreement”) in order to grant to Bank of
America, as collateral agent, for the ratable benefit of the secured parties (as such term is
defined in the Initial Security Agreement) a security interest in certain collateral.
(3) The Borrower and Holdings requested, and the Lenders agreed, to amend and restate the
Initial Credit Agreement, and therefore the Borrower and Holdings have entered into an Amended and
Restated Credit Agreement dated as of the date hereof (said Agreement, as it may hereafter be
amended, amended and restated, supplemented or otherwise modified from time to time, being the
“Credit Agreement”) with the Lenders and the Agents (each as defined therein).
(4) Pursuant to the Credit Agreement, the Grantors have agreed to amend and restate the
Initial Security Agreement and are therefore entering into this Agreement in order to grant to the
Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in the
Collateral (as hereinafter defined).
(5) Each Grantor is the owner of the shares of stock or other Equity Interests set forth
opposite such Grantor’s name on and as otherwise described in Part I of Schedule II hereto (the
“Initial Pledged Equity”) and in Part III of Schedule II hereto and issued by the Persons named
therein and of the indebtedness set forth opposite such Grantor’s name on and as otherwise
described in Part II of Schedule II hereto (the “Initial Pledged Debt”) and in Part IV of Schedule
II hereto and issued by the obligors named therein.
(6) The Borrower and Holdings have security entitlements (the “Pledged Security Entitlements”)
with respect to all the financial assets (the “Pledged Financial Assets”) credited from time to
time to the Borrower’s and Holdings’ accounts (other than
financial assets held in an Other Deposit Account), respectively, as described in Schedule VII hereto
(the “Securities Accounts”).
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(7) The Borrower has opened a l/c collateral deposit account, Account No. 1233304415 (the “L/C
Collateral Account”), with Bank of America at its office at 0000 Xxxxxxx Xxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxxxxxxx 00000, in the name of the Collateral Agent and under the sole control and dominion of
the Collateral Agent and subject to the terms of this Agreement.
(8) The Borrower has opened a collateral deposit account, Account No. 1233304434 (the
“Collateral Account”), with Bank of America at its office at 0000 Xxxxxxx Xxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxxxxxxx 00000, in the name of the Borrower but under the sole dominion and control of the
Collateral Agent and subject to the terms of this Agreement.
(9) The Borrower is the beneficiary under certain letters of credit as described in Schedule
X.
(10) It is a condition precedent to the making of Loans and the issuance of Letters of Credit
by the Lenders under the Credit Agreement and the entry into Secured Hedge Agreements by the Hedge
Banks from time to time that the Grantors shall have granted the assignment and security interest
and made the pledge and assignment contemplated by this Agreement.
(11) Each Grantor will derive substantial direct and indirect benefit from the transactions
contemplated by the Loan Documents.
(12) Terms defined in the Credit Agreement and not otherwise defined in this Agreement are
used in this Agreement as defined in the Credit Agreement. Further, unless otherwise defined in
this Agreement or in the Credit Agreement, terms defined in Article 8 or 9 of the UCC (as defined
below) and/or in the Federal Book Entry Regulations (as defined below) are used in this Agreement
as such terms are defined in such Article 8 or 9 and/or the Federal Book Entry Regulations. “UCC”
means the Uniform Commercial Code as in effect, from time to time, in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection or the priority of any
security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non-perfection or priority. The term “Federal Book Entry
Regulations” means (a) the federal regulations contained in Subpart B (“Treasury/Reserve Automated
Debt Entry System (TRADES)”) governing book-entry securities consisting of U.S. Treasury bills,
notes and bonds and Subpart D (“Additional Provisions”) of 31 C.F.R. Part 357, 31 C.F.R. § 357.2, §
357.10 through § 357.15 and § 357.40 through § 357.45 and (b) to the extent substantially identical
to the federal regulations referred to in clause (a) above (as in effect from time to time), the
federal regulations governing other book-entry securities.
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NOW, THEREFORE, in consideration of the premises and in order to induce the Lenders to make
Loans and issue Letters of Credit under the Credit Agreement and to induce the Hedge Banks to enter
into Secured Hedge Agreements from time to time, each Grantor hereby agrees with the Collateral
Agent for the ratable benefit of the Secured Parties as follows:
Section 1. Grant of Security. Each Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured
Parties, a security interest in, such Grantor’s right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or hereafter acquired
by such Grantor, wherever located, and whether now or hereafter existing or arising (collectively,
the “Collateral”), but excluding licenses, permits or authorizations issued by the Federal
Communications Commission (the “FCC”) (“Wireless Licenses”) to the extent that the grant of a
security interest in such Wireless Licenses is prohibited under applicable Federal Law, provided
that the Collateral shall include (x) the right to receive all proceeds derived from the sale,
assignment, transfer or transfer of control of Wireless Licenses, (y) proceeds of Wireless Licenses
and (z) any Wireless Licenses as to which the FCC has consented to the grant of a security interest
under this Agreement:
(a) all equipment in all of its forms, including, without limitation, all machinery,
tools, motor vehicles, vessels, aircraft, furniture and fixtures, and all parts thereof and
all accessions thereto and all software related thereto, including, without limitation,
software that is embedded in and is part of the equipment (any and all such property being
the “Equipment”);
(b) all inventory in all of its forms, including, without limitation, (i) all raw
materials, work in process, finished goods and materials used or consumed in the
manufacture, production, preparation or shipping thereof, (ii) goods in which such Grantor
has an interest in mass or a joint or other interest or right of any kind (including,
without limitation, goods in which such Grantor has an interest or right as consignee) and
(iii) goods that are returned to or repossessed or stopped in transit by such Grantor, and
all accessions thereto and products thereof and documents therefor, and all software related
thereto, including, without limitation, software that is embedded in and is part of the
inventory (any and all such property being the “Inventory”);
(c) all accounts (including, without limitation, health-care-insurance receivables),
chattel paper (including, without limitation, tangible chattel paper and electronic chattel
paper), instruments (including, without limitation, promissory notes), deposit accounts,
letter-of-credit rights, general intangibles (including, without limitation, payment
intangibles) and other obligations of any kind, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of services and whether or not
earned by performance, and all rights now or hereafter existing in and to all supporting
obligations and in and to all security agreements, mortgages, Liens, leases, letters of
credit and other contracts securing or otherwise relating to the foregoing property (any and
all of such accounts, chattel paper, instruments, deposit accounts, letter-of-credit rights,
general intangibles and other obligations, to the extent not referred to in clause (d), (e)
or (f) below, being the “Receivables”, and any and all such supporting
obligations, security agreements, mortgages, Liens, leases, letters of credit and other
contracts being the “Related Contracts”);
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(d) the following (the “Security Collateral”):
(i) the Initial Pledged Equity and the certificates, if any, representing the
Initial Pledged Equity, and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Initial Pledged
Equity and all subscription warrants, rights or options issued thereon or with
respect thereto;
(ii) the Initial Pledged Debt and the instruments, if any, evidencing the
Initial Pledged Debt, and all interest, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Initial Pledged Debt;
(iii) all additional shares of stock and other Equity Interests from time to
time acquired by such Grantor in any manner, (A) other than Equity Interests in the
Excluded Subsidiaries and (B) limited, in the case of Equity Interests in any entity
(other than the Excluded Subsidiaries) that is a “controlled foreign corporation”
under Section 957 of the Internal Revenue Code, to 66% of the capital stock of each
such entity to the extent that any material adverse tax consequences to the
applicable Grantor would otherwise result, (such shares and other Equity Interests,
together with the Initial Pledged Equity, being the “Pledged Equity”), and the
certificates, if any, representing such additional shares or other Equity Interests,
and all dividends, distributions, return of capital, cash, instruments and other
property from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such shares or other Equity Interests and all
subscription warrants, rights or options issued thereon or with respect thereto;
(iv) all additional indebtedness from time to time owed to such Grantor (such
indebtedness, together with the Initial Pledged Debt, being the “Pledged Debt”) and
the instruments, if any, evidencing such indebtedness, and all interest, cash,
instruments and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such indebtedness;
(v)
the Securities Accounts, all Pledged Security Entitlements with respect to
all Pledged Financial Assets from time to time credited to the Securities Account,
and all Pledged Financial Assets, and all dividends, distributions, return of
capital, interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of
such Pledged Security Entitlements or such Pledged Financial Assets and all
subscription warrants, rights or options issued thereon or with respect thereto;
(vi) except for property excluded in clause (iii)(A) or (iii)(B) above, all
other investment property (including, without limitation, all (A) securities,
whether certificated or uncertificated, (B) security entitlements, (C) securities
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accounts, (D) commodity contracts and (E) commodity accounts) in which such Grantor
has now, or acquires from time to time hereafter, any right, title or interest in
any manner, and the certificates or instruments, if any, representing or evidencing
such investment property, and all dividends, distributions, return of capital,
interest, distributions, value, cash, instruments and other property from time to
time received, receivable or otherwise distributed in respect of or in exchange for
any or all of such investment property and all subscription warrants, rights or
options issued thereon or with respect thereto;
(e) each of the agreements listed on Schedule III hereto, the IP Agreements (as
hereinafter defined), and each Hedge Agreement to which such Grantor is now or may hereafter
become a party, in each case as such agreements may be amended, amended and restated,
supplemented or otherwise modified from time to time (collectively, the “Assigned
Agreements”), including, without limitation, (i) all rights of such Grantor to receive
moneys due and to become due under or pursuant to the Assigned Agreements, (ii) all rights
of such Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty with
respect to the Assigned Agreements, (iii) claims of such Grantor for damages arising out of
or for breach of or default under the Assigned Agreements and (iv) the right of such Grantor
to terminate the Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder (all such Collateral being the “Agreement
Collateral”);
(f) the following (collectively, the “Account Collateral”):
(i) the Collateral Account, the L/C Collateral Account and the Other Deposit
Accounts and all funds and financial assets from time to time credited thereto
(including, without limitation, all Cash Equivalents), all interest, dividends,
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of
such funds and financial assets, and all certificates and instruments, if any, from
time to time representing or evidencing the Collateral Account, the L/C Collateral
Account and the Other Deposit Accounts;
(ii) all promissory notes, certificates of deposit, deposit accounts, checks
and other instruments from time to time delivered to or otherwise possessed by the
Collateral Agent for or on behalf of such Grantor, including, without limitation,
those delivered or possessed in substitution for or in addition to any or all of the
then existing Account Collateral; and
(iii) all interest, dividends, distributions, cash, instruments and other
property from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the then existing Account Collateral; and
(g) the following (collectively, the “Intellectual Property Collateral”):
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(i) all patents, patent applications, utility models and statutory invention
registrations, all inventions claimed or disclosed therein and all improvements
thereto (“Patents”);
(ii) all trademarks, service marks, domain names, trade dress, logos, designs,
slogans, trade names, business names, corporate names and other source identifiers,
whether registered or unregistered (provided that no security interest shall be
granted in United States intent-to-use trademark applications to the extent that,
and solely during the period in which, the grant of a security interest therein
would impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law), together, in each case, with the
goodwill symbolized thereby (“Trademarks”);
(iii) all copyrights, including, without limitation, copyrights in Computer
Software (as hereinafter defined), internet web sites and the content thereof,
whether registered or unregistered (“Copyrights”);
(iv) all computer software, programs and databases (including, without
limitation, source code, object code and all related applications and data files),
firmware and documentation and materials relating thereto, together with any and all
maintenance rights, service rights, programming rights, hosting rights, test rights,
improvement rights, renewal rights and indemnification rights and any substitutions,
replacements, improvements, error corrections, updates and new versions of any of
the foregoing (“Computer Software”);
(v) all confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production processes and
techniques, inventions, research and development information, databases and data,
including, without limitation, technical data, financial, marketing and business
data, pricing and cost information, business and marketing plans and customer and
supplier lists and information (collectively, “Trade Secrets”), and all other
intellectual, industrial and intangible property of any type, including, without
limitation, industrial designs and mask works;
(vi) all registrations and applications for registration for any of the
foregoing, including, without limitation, those registrations and applications for
registration set forth in Schedule V hereto (as such Schedule V may be supplemented
from time to time by supplements to this Agreement, each such supplement being
substantially in the form of Exhibit D hereto (an “IP Security Agreement
Supplement”) executed by such Grantor to the Collateral Agent from time to time),
together with all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations thereof;
(vii) all tangible embodiments of the foregoing, all rights in the foregoing
provided by international treaties or conventions, all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto;
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(viii) all agreements, permits, consents, orders and franchises relating to the
license, development, use or disclosure of any of the foregoing to which such
Grantor, now or hereafter, is a party or a beneficiary (“IP Agreements”), including,
without limitation, the agreements set forth in Schedule VI hereto; and
(ix) any and all claims for damages and injunctive relief for past, present and
future infringement, dilution, misappropriation, violation, misuse or breach with
respect to any of the foregoing, with the right, but not the obligation, to xxx for
and collect, or otherwise recover, such damages;
(h) all commercial tort claims described in Schedule IX hereto (collectively the
“Commercial Tort Claims Collateral”);
(i) all books and records (including, without limitation, customer lists, credit files,
printouts and other computer output materials and records) of such Grantor pertaining to any
of the Collateral; and
(j) all proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to, and supporting obligations relating to, any and
all of the Collateral (including, without limitation, proceeds, collateral and supporting
obligations that constitute property of the types described in clauses (a) through (i) of
this Section 1 and this clause (j)) and, to the extent not otherwise included, all (A)
payments under insurance (whether or not the Collateral Agent is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise
with respect to any of the foregoing Collateral, (B) tort claims, including, without
limitation, all commercial tort claims and (C) cash;
provided,
however, that notwithstanding anything to the contrary set forth
above, in no event shall the security interest granted under this
Agreement attach to (t) the C Block FCC License held by
Cricket Licensee (Reauction), Inc. for the Basic Trading Area of
Coffeyville, Kansas (BTA# 088) with the FCC Call Sign WPOK578,
(u) any of the assets, properties and rights of the Grantors
that pertain to PCS wireless telecommunications businesses or operations in the State of Oregon, (v) any of the Toledo/Sandusky Assets, (w) the D
Block FCC License held by Cricket Licensee II, Inc. for the Basic Trading Area of Grand Rapids,
Michigan (BTA# 169) with the FCC Call Sign KNLG664, (x) the E Block FCC License held by Cricket
Licensee (Reauction), Inc. for the Basic Trading Area of Fort Xxxxx, Indiana (BTA# 155) with the
FCC Call Sign WPOJ708, (y) any license, contract, property right or agreement (including any
collateral directly associated with any of the foregoing the grant of a Lien on which is permitted
under Section 7.01 of the Credit Agreement) to which any Grantor is a party or any of such
Grantor’s rights or interests thereunder if and for so long as (but only for so long as) the grant
of such security interest (I) gives any other party to such license, contract, property right or
agreement the right to terminate its obligations thereunder, (II) constitutes or results in the
abandonment, invalidation or unenforceability of any right, title or interest of any Grantor
therein or (III) constitutes or results in a breach or termination pursuant to the terms of, or a
default under, such license, contract, property right or agreement (other than to the extent that
any such terms referred to in any of clauses (I), (II) and (III) are rendered ineffective by the
terms of any of Sections 9-406, 9-407, 9-408 or 9-409 of the UCC or any similar statute or
successor provision or provisions) or (z) any leasehold interest in real property.
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Section 2. Security for Obligations. This Agreement secures, in the case of each Grantor, the payment of all Obligations of such
Grantor now or hereafter existing under the Loan Documents, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest, fees, premiums,
penalties, indemnifications, contract causes of action, costs, expenses or otherwise (all such
Obligations being the “Secured Obligations”).
Section 3. Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a) each Grantor shall remain liable under
the contracts and agreements included in such Grantor’s 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 the Collateral Agent of any of the rights hereunder shall
not release any Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) no Secured Party shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this Agreement or any other
Loan Document, nor shall any 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.
Section 4. Delivery and Control of Security Collateral. (a) All certificates or instruments representing or evidencing Security Collateral shall
be delivered to and held by or on behalf of the Collateral Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent.
Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall
have the right, at any time in its discretion and without notice to any Grantor, to transfer to or
to register in the name of the Collateral Agent or any of its nominees any or all of the Security
Collateral, subject only to the revocable rights specified in Section 15(a). In addition, upon the
occurrence and during the continuance of an Event of Default, the Collateral Agent shall have the
right at any time to exchange certificates or instruments representing or evidencing Security
Collateral for certificates or instruments of smaller or larger denominations. Upon the occurrence
and during the continuance of an Event of Default, the Collateral Agent shall also have the right
at any time to convert Security Collateral consisting of financial assets credited to the
Securities Account to Security Collateral consisting of financial assets held directly by the
Collateral Agent, and to convert Security Collateral consisting of financial assets held directly
by the Collateral Agent to Security Collateral consisting of financial assets credited to the
Securities Account.
(b) With respect to any Security Collateral in which any Grantor has any right, title or
interest and that constitutes an uncertificated security, such Grantor will cause the issuer
thereof (or, if the issuer thereof is not a Subsidiary of such Grantor, use commercially reasonable
efforts to cause the issuer thereof) either (i) to register the Collateral Agent as the registered
owner of such security or (ii) to agree in an authenticated record with such Grantor and the
Collateral Agent that such issuer will comply with instructions with respect to such
security originated by the Collateral Agent without further consent of such Grantor, such
authenticated record to be in form and substance satisfactory to the Collateral Agent. With
respect to any Security Collateral in which any Grantor has any right, title or interest and that
is not an uncertificated security, upon the request of the Collateral Agent upon the occurrence and
during the continuance of an Event of Default, such Grantor will notify each such issuer of Pledged
Equity that such Pledged Equity is subject to the security interest granted hereunder.
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(c) With respect to any Security Collateral in which any Grantor has any right, title or
interest and that constitutes a security entitlement in which the Collateral Agent is not the
entitlement holder, except for any such Security Collateral that is subject to a Lien permitted under any of
clauses (b), (e), (f), (h), (m), (n), (p) or (q) of Section 7.01 of the Credit Agreement, such
Grantor will cause the securities intermediary with respect to such security entitlement either (i)
to identify in its records the Collateral Agent as the entitlement holder of such security
entitlement against such securities intermediary or (ii) to agree in an authenticated record with
such Grantor and the Collateral Agent that such securities intermediary will comply with
entitlement orders (that is, notifications communicated to such securities intermediary directing
transfer or redemption of the financial asset to which such Grantor has a security entitlement)
originated by the Collateral Agent without further consent of such Grantor, such authenticated
record to be in form and substance satisfactory to the Collateral Agent (such agreement being a
“Securities Account Control Agreement”).
(d) No Grantor will change or add any securities intermediary or commodity intermediary that
maintains any securities account or commodity account in which any of the Collateral is credited or
carried, or change or add any such securities account or commodity account, in each case without
first complying with the above provisions of this Section 4 in order to perfect the security
interest granted hereunder in such Collateral.
(f) Upon the request of the Collateral Agent upon the occurrence and during the continuance of
an Event of Default, such Grantor will notify each such issuer of Pledged Debt that such Pledged
Debt is subject to the security interest granted hereunder.
Section 5. Maintaining the Account Collateral. So long as any Loan or any other Obligation of any Loan Party under any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be in
effect or any Lender shall have any Commitment:
(a) From and after the date which is 60 days after the date hereof (as such date may be
extended on the terms permitted by the Credit Agreement and provided that if such Grantor
has used commercially reasonable efforts to obtain the Account Control Agreement described
below, such Grantor shall have an additional 30 days to either (A) obtain such Account
Control Agreement or (B) move the applicable Account Collateral to a Pledge Account Bank
that is party to an Account Control Agreement), each Grantor will maintain all Account
Collateral only with the Collateral Agent or with banks (the “Pledged Account Banks”) that
have agreed, in a record authenticated by the
Grantor, the Collateral Agent and the Pledged Account Banks, to (i) comply with
instructions originated by the Collateral Agent directing the disposition of funds in the
Account Collateral without the further consent of the Grantor and (ii) waive or subordinate
in favor of the Collateral Agent all claims of the Pledged Account Banks (including, without
limitation, claims by way of a security interest, lien or right of setoff or right of
recoupment, except for debits by the Pledged Account Banks for fees, charges or returned
item amounts) to the Account Collateral, which authenticated record shall be in form and
substance satisfactory to the Collateral Agent (the “Account Control
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Agreement”);
and each deposit or securities account subject to an account control
agreement is referred to herein as a “Pledged
Account”) (and, in the case of any such Account Control
Agreement entered into prior to the date hereof, the Pledged Account
Banks shall have, within the timeframe specified above (as extended,
where applicable) acknowledged in an authenticated record in form and
substance satisfactory to the Collateral Agent the continued
effectiveness of such Account Control Agreement with respect to the
Secured Obligations under the Loan Documents); provided,
however, that this Section 5(a) shall not apply to (i) deposit
accounts permitted under clause (c) below and (ii) deposit
accounts subject to Liens permitted under Section 7.01(e), (f),
(h), (m), (n), (p) or (q) of the Credit Agreement to the extent
permitted thereunder (collectively, the deposit accounts referred
to in subclauses (i) and (ii) are referred to herein as
“Other Deposit Accounts”). Schedule VIII sets
forth a list as of the date hereof of all Other Deposit Accounts.
(b)
Each Grantor will deposit in a Pledged Account or the Collateral Account or
pay to the Collateral Agent for deposit in the Collateral Account, at the end of each
Business Day, all proceeds of Collateral and all other cash of such Grantor, other than (i)
xxxxx cash that in the ordinary course of business is kept at such
Grantor’s offices,
(ii) checks received at such Grantor’s offices that in the ordinary course of business are
not deposited into a deposit account on a daily basis but which are deposited at least once
per week and (iii) cash deposited into an Other Deposit Account
in compliance with clause (i) of the definition of Other Deposit
Account or related to a Lien granted as provided under
clause (ii) of the definition of Other Deposit Account.
(c) Each Grantor agrees that it will not add any bank that maintains a deposit account
for such Grantor or open any new deposit account with any then existing Pledged Account Bank
unless (except with respect to any new deposit account the individual balance of which does
not exceed $100,000 and does not exceed when aggregated with all other Other Deposit
Accounts, other than those referred to in subclause (a)(ii)
above, $500,000, and except with respect to deposit accounts referred
to in subclause (a)(ii) above) (i) the Collateral Agent shall have received at least
three Business Days’ prior written notice of such additional bank or such new deposit
account and (ii) the Collateral Agent shall have received, in the case of a bank or Pledged
Account Bank that is not the Collateral Agent, an Account Control Agreement authenticated by
such new bank and such Grantor, or a supplement to an existing Account Control Agreement
with such then existing Pledged Account Bank, covering such new deposit account (and, upon
the receipt by the Collateral Agent of such Account Control Agreement or supplement,
Schedule VII hereto shall be automatically amended to include such Other Deposit Account).
Each Grantor agrees that it will not terminate any bank as a Pledged Account Bank or
terminate any Account Collateral, except that the Grantor may
terminate a Pledged Account, and terminate a bank as a Pledged Account Bank with respect to a Pledged Account, if it gives the Collateral Agent at least three Business Days’ prior written notice
of such termination (and, upon such termination, Schedule VII hereto shall be automatically
amended to delete such Pledged Account).
(d)
Upon any termination by a Grantor of any Pledged Account by such Grantor, or
any Pledged Account Bank with respect thereto, such Grantor will immediately transfer all
funds and property held in such terminated Pledged
Account to another Pledged Account listed in Schedule VII or
otherwise permitted hereunder or to the Collateral
Account so that the Collateral Agent shall have a continuously perfected security interest
in such Account Collateral, funds and property. Each Grantor agrees to terminate any or all
Account Collateral and Account Control Agreements upon request by the Collateral Agent.
(e) The Collateral Agent shall have sole right in accordance with the Credit Agreement
to direct the disposition of funds with respect to the Collateral Account, the
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L/C
Collateral Account and, after the occurrence and during the continuance of an Event of
Default and the exercise by the Collateral Agent of its right to exclusive control over the
Pledged Accounts, the Pledged Accounts; and it shall be a term and condition of
each of the Collateral Account and the L/C Collateral Account, notwithstanding any term or
condition to the contrary in any other agreement relating to the Collateral Account or the
L/C Collateral Account, as the case may be, that no amount (including, without limitation,
interest on Cash Equivalents credited thereto) will be paid or released to or for the
account of, or withdrawn by or for the account of, the Borrower or any other Person from the
Collateral Account or the L/C Collateral Account; and it shall be a term and condition of
the Pledged Accounts that, after the exercise by the Collateral Agent of its right to
exclusive control over the Pledged Accounts, notwithstanding any term or condition to
the contrary in any other agreement relating to the Pledged Accounts, no amount
(including, without limitation, interest on Cash Equivalents credited thereto) will be paid
or released to or for the account of, or withdrawn by or for the account of, the Borrower or
any other Person from the Pledged Accounts.
(f) The Collateral Agent may, at any time, after the occurrence and during the
continuance of an Event of Default, and without notice to, or consent from, the Grantor, (i)
transfer, or direct the transfer of, funds from the Account Collateral to satisfy the
Grantor’s obligations under the Loan Documents (to the extent such obligations are due and
payable) if an Event of Default shall have occurred and be continuing and (ii) transfer, or
direct the transfer of, funds from the Pledged Accounts to the Collateral Account, in
each case, as permitted under the Credit Agreement.
Section 6. Investing of Amounts in the Collateral Account and the L/C Collateral
Account. The Collateral Agent will, subject to the provisions of Sections 5, 7 and 22, from time to
time (a) invest, or direct the applicable Pledged Account Bank to invest, amounts received with
respect to the Collateral Account and the L/C Collateral Account in such Cash Equivalents credited
to (A) the Collateral Account and the L/C Collateral Account, respectively, as the Collateral Agent
may select or (B) in the case of Cash Equivalents consisting of Securities Collateral, a securities
account in which the Collateral Agent is the securities intermediary or a securities account
subject to a Securities Account Control Agreement, and (b) invest interest paid on the Cash
Equivalents referred to in clause (a) above, and reinvest other proceeds of any such Cash
Equivalents that may mature or be sold, in each case in such Cash Equivalents credited in the same
manner. Interest and proceeds that are not invested or reinvested in Cash Equivalents as provided
above shall be deposited and held in the relevant Collateral Account or L/C
Collateral Account. In addition, the Collateral Agent shall have the right at any time to
exchange, or direct the applicable Pledged Account Bank at which the Collateral Account or the L/C
Collateral Account is held to exchange, such Cash Equivalents for similar Cash Equivalents of
smaller or larger determinations, or for other Cash Equivalents, credited to the Collateral Account
or the L/C Collateral Account, as the case may be.
Section 7. Release of Amounts. So long as no Default shall have occurred and be continuing, the Collateral Agent will pay
and release, or direct the applicable Pledged Account Bank to pay and release, to the Borrower or
at its order or, at the request of the Borrower, to the Administrative Agent to be applied to the
Obligations of the Borrower under the
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Loan Documents, such amount, if any, as is then on deposit in
the Collateral Account or the L/C Collateral Account, as the case may be, in each case to the
extent permitted to be released under the terms of the Credit Agreement.
Section 8. Maintaining Electronic Chattel Paper, Transferable Records and Letter-of-Credit
Rights and Giving Notice of Commercial Tort Claims. So long as any Loan or any other Obligation of any Loan Party under any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be in
effect or any Lender shall have any Commitment:
(a) Each Grantor will maintain all (i) electronic chattel paper so that the Collateral
Agent has control of the electronic chattel paper in the manner specified in Section 9-105
of the UCC and (ii) all transferable records so that the Collateral Agent has control of the
transferable records in the manner specified in Section 16 of the Uniform Electronic
Transactions Act, as in effect in the jurisdiction governing such transferable record
(“UETA” );
(b) Each Grantor will use commercially reasonable efforts to maintain all
letter-of-credit rights associated with the letters of credit described in Schedule X, so
that the Collateral Agent has control of such letter-of-credit rights in the manner
specified in Section 9-107 of the UCC; and
(c) Each Grantor will promptly give notice to the Collateral Agent of any material
commercial tort claim that such Grantor has from time to time and will promptly execute or
otherwise authenticate a supplement to this Agreement, and otherwise take all necessary
action, to subject such commercial tort claim to the first priority security interest
created under this Agreement, subject to Liens permitted under the Credit Agreement.
Section 9. Representations and Warranties. Each Grantor represents and warrants as follows:
(a) Such Grantor’s exact legal name, as defined in Section 9-503(a) of the UCC, is
correctly set forth in Schedule I hereto. Such Grantor has only the trade names and
registered trademarks listed on Schedule V hereto. Such Grantor is located (within
the meaning of Section 9-307 of the UCC) and has its chief executive office in the
state or jurisdiction set forth in Schedule I hereto. The information set forth in Schedule
I hereto with respect to such Grantor is true and accurate in all respects. Such Grantor
has not previously changed its name, location, chief executive office, type of organization,
jurisdiction of organization or organizational identification number from those set forth in
Schedule I hereto except as disclosed in Schedule IV hereto.
(b) All of the Equipment and Inventory of such Grantor are located at locations for
which financing statements in proper form for filing have been delivered to the
Administrative Agent pursuant to Section 4.01(a)(iii)(B) of the Credit Agreement. All
Security Collateral consisting of certificated securities and instruments have been
delivered to the Collateral Agent. None of the Receivables or Agreement Collateral is
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evidenced by a promissory note or other instrument with a face amount in excess of $50,000
that has not been delivered to the Collateral Agent.
(c) Such Grantor is the legal and beneficial owner of the Collateral of such Grantor
free and clear of any Lien, claim, option or right of others, except for the Lien created
under this Agreement or any Lien permitted under the Credit Agreement. To such Grantor’s
knowledge, no effective financing statement or other instrument similar in effect covering
all or any part of such Collateral or listing such Grantor or any trade name of such Grantor
as debtor is on file in any recording office, except such as may have been filed in favor of
the Collateral Agent relating to the Loan Documents or as otherwise permitted under the
Credit Agreement.
(d) Such Grantor, either individually or together with one or more other Grantors, has
exclusive possession and control of its Equipment and Inventory other than Inventory stored
at any leased premises or warehouse and except as a third party may have possession or
control of Equipment or Inventory in the ordinary course of such Grantor’s business. In the
case of Equipment and Inventory located on leased premises or in warehouses, no lessor or
warehouseman of any premises or warehouse upon or in which such Equipment or Inventory is
located has any Lien, claim or charge (based on contract, statute or otherwise) on such
Equipment and Inventory, other than any Lien permitted under the Credit Agreement.
(e) The Initial Pledged Equity pledged by such Grantor hereunder has been duly
authorized and validly issued and is fully paid and non-assessable. With respect to the
Pledged Equity that is an uncertificated security, such Grantor has caused (or, in the case
of any issuer that is not a Subsidiary of such Grantor, has used commercially reasonable
efforts to cause) the issuer thereof either (i) to register the Collateral Agent as the
registered owner of such security or (ii) to agree in an authenticated record with such
Grantor and the Collateral Agent that such issuer will comply with instructions with respect
to such security originated by the Collateral Agent without further consent of such Grantor.
If such Grantor is an issuer of Pledged Equity, such Grantor confirms that it has received
notice of such security interest. The Initial Pledged Debt pledged by such Grantor
hereunder has been duly authorized, authenticated or issued and delivered, is the legal,
valid and binding obligation of the issuers thereof, is evidenced by one or more
promissory notes (which notes have been delivered to the Collateral Agent) and is not
in default.
(f) As of April 30, 2006, the Initial Pledged Equity pledged by such Grantor
constitutes the percentage of the issued and outstanding Equity Interests of the issuers
thereof indicated on Schedule II hereto. As of April 30, 2006, the Initial Pledged Debt
constitutes all of the outstanding indebtedness owed to such Grantor by the issuers thereof
(other than with respect to indebtedness between the Loan Parties).
(g) All of the investment property owned by such Grantor as of April 30, 2006 is listed
on Schedule II hereto.
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(h)
Such Grantor has no deposit accounts, other than the Other Deposit
Accounts and the Account Collateral listed on
Schedule VII hereto, as such Schedule VII may be amended from time to time pursuant to
Section 5(d), and legal, binding and enforceable (subject to the effects of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally and general equitable principles (whether considered in a
proceeding in equity or at law)) Account Control Agreements are in effect for each deposit
account that constitutes Account Collateral (other than Account Collateral consisting of
deposit accounts maintained with the Collateral Agent), except to the extent such Account
Control Agreements are not required pursuant to the terms of Section 5(a).
(i) Such Grantor is not a beneficiary or assignee under any letter of credit, other
than (i) letters of credit with a face amount of less than $100,000 and (ii) the letters of
credit described in Schedule X hereto, as such Schedule X may be amended from time to time.
(j) (i) Except to the extent not required by the terms of the Loan Documents, all
actions necessary to obtain control of Collateral as provided in Sections 9-104, 9-105,
9-106 and 9-107 of the UCC and Section 16 of UETA and actions necessary to perfect the
Collateral Agent’s security interest with respect to Collateral evidenced by a certificate
of ownership have been duly taken, (ii) all UCC financing statements and United States
Patent and Trademark Office and United States Copyright Office filings required to be filed
in order to perfect the Collateral Agent’s security interest in the Collateral of such
Grantor have been delivered to the Administrative Agent in proper form for filing, and (iii)
this Agreement creates in favor of the Collateral Agent for the benefit of the Secured
Parties a valid and, together with such filings described in clause (ii) to the extent made
and such actions described in clause (i) to the extent taken, perfected first priority
(except to the extent of any Lien permitted under Section 7.01 of the Credit Agreement that
is prior to the Lien created under this Agreement) security interest in the Collateral of
such Grantor, securing the payment of the Secured Obligations.
(k) No authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for (i) the grant by such Grantor
of the security interest granted hereunder or for the execution, delivery or performance of
this Agreement by such Grantor, (ii) the perfection or maintenance of the
security interest created hereunder (including the first priority nature of such
security interest), except for the filing of financing statements referred to above and all
required continuation statements, the filing of financing statements
or similar documents with Governmental Authorities with respect to
motor vehicles with an aggregate value not in excess of $150,000, the recordation of the grant of security in the
Intellectual Property Collateral that is the subject of United States federal registrations
or applications with the U.S. Patent and Trademark Office and the U.S. Copyright Office, as
applicable, and the actions described in Section 4 with respect to Security Collateral, or
(iii) the exercise by the Collateral Agent of its voting rights provided for in this
Agreement, except as may be required (x) in connection with the disposition of any portion
of the Security Collateral by laws affecting the offering and sale of securities generally,
(y) by FCC rules and regulations in the case of any disposition of Equity Interests in a
Subsidiary that holds FCC Licenses and (z) in connection with any exercise of voting rights
with respect to Equity Interests of entities that are not Subsidiaries.
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(l) As to itself and its Intellectual Property Collateral:
(i) The operation of such Grantor’s business as currently conducted or as
contemplated to be conducted and the use of the Intellectual Property Collateral in
connection therewith do not conflict with, infringe, misappropriate, dilute, misuse
or otherwise violate the intellectual property rights of any third party, except as
could not reasonably be expected to have a Material Adverse Effect.
(ii) Such Grantor is the owner of all right, title and interest in and to the
Intellectual Property Collateral set forth on Schedule V. Such Grantor is entitled
to use all Intellectual Property Collateral as such Intellectual Property Collateral
is in use as of the date of this Agreement, except as could not reasonably be
expected to have a Material Adverse Effect.
(iii)
The Intellectual Property Collateral set forth on Schedule V hereto
includes all of the patents, patent applications, trademark registrations and
applications and copyright registrations and applications which
are material to such Grantor’s business and owned by such Grantor.
(iv) All registrations for the Intellectual Property Collateral set forth on
Schedule V are subsisting and have not been adjudged invalid or unenforceable in
whole or any material part, and to such Grantor’s knowledge, are valid and
enforceable, except as could not reasonably be expected to have a Material Adverse
Effect. Such Grantor does not have knowledge of any uses by such Grantor of any
item of Intellectual Property Collateral that could be expected to lead to such item
becoming invalid or unenforceable, except as could not reasonably be expected to
have a Material Adverse Effect.
(v) Except as could not reasonably be expected to have a Material Adverse
Effect, such Grantor has made or performed all filings, recordings and other acts
and has paid all required fees and taxes to maintain and protect its interest in the
Intellectual Property Collateral set forth on Schedule V in full force and effect
throughout the United States and to protect and maintain its interest therein
including, without limitation, recordations of any of its interests in the Patents
and Trademarks with the U.S. Patent and Trademark Office, and
recordation of any of its interests in the Copyrights with the U.S. Copyright
Office and in corresponding national and international copyright offices. Such
Grantor has used proper statutory notice in connection with its use of each material
patent, trademark and copyright in the Intellectual Property Collateral, except as
could not reasonably be expected to have a Material Adverse Effect.
(vi) As of the date hereof and except as could not reasonably be expected to
have a Material Adverse Effect, no claim, action, suit, investigation, litigation or
proceeding has been asserted or is pending or to such Grantor’s knowledge,
threatened against such Grantor (i) based upon or challenging or seeking to deny or
restrict the Grantor’s rights in or use of any of the Intellectual Property
Collateral, (ii) alleging that the Grantor’s rights in or use of the Intellectual
Property Collateral or that any services provided by, processes used
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by, or products
manufactured or sold by, such Grantor infringe, misappropriate, dilute, misuse or
otherwise violate any patent, trademark, copyright or any other proprietary right of
any third party, or (iii) alleging that the Intellectual Property Collateral is
being licensed or sublicensed in violation or contravention of the terms of any
license or other agreement. To such Grantor’s knowledge, no Person is engaging in
any activity that infringes, misappropriates, dilutes, misuses or otherwise violates
in any material respect the Intellectual Property Collateral or the Grantor’s rights
in or use thereof, except as could not reasonably be expected to have a Material
Adverse Effect. Such Grantor has not granted any license, release, covenant not to
xxx, non-assertion assurance, or other right to any Person with respect to any part
of the Intellectual Property Collateral, except as could not reasonably be expected
to have a Material Adverse Effect. The consummation of the transactions
contemplated by the Transaction Documents will not result in the termination or
impairment of any of the Intellectual Property Collateral in any material respect.
(vii) With respect to each IP Agreement and in each case, except as could not
reasonably be expected to have a Material Adverse Effect: (A) such IP Agreement is,
to such Grantor’s knowledge, valid and binding and in full force and effect; (B)
such IP Agreement will not cease to be valid and binding and in full force and
effect on terms identical to those currently in effect as a result of the rights and
interest granted herein, nor will the grant of such rights and interest constitute a
breach or default under such IP Agreement or otherwise give any party thereto a
right to terminate such IP Agreement; (C) such Grantor has not received any written
notice of termination or cancellation under such IP Agreement; (D) such Grantor has
not received any written notice of a breach or default under such IP Agreement,
which breach or default has not been cured; (E) such Grantor has not granted to any
other third party any rights, adverse or otherwise, under such IP Agreement; and (F)
neither such Grantor nor any other party to such IP Agreement is in breach or
default thereof in any material respect, and no event has occurred that, with notice
or lapse of time or both, would constitute such a breach or default or permit
termination, modification or acceleration under such IP Agreement.
(viii) To such Grantor’s knowledge, (A) none of the Trade Secrets of such
Grantor has been used, divulged, disclosed or appropriated to the detriment of such
Grantor for the benefit of any other Person other than such Grantor; (B) no
employee, independent contractor or agent of such Grantor has misappropriated any
trade secrets of any other Person in the course of the performance of his or her
duties as an employee, independent contractor or agent of such Grantor; and (C) no
employee, independent contractor or agent of such Grantor is in default or breach of
any material term of any employment agreement, non-disclosure agreement, assignment
of inventions agreement or similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of such Grantor’s Intellectual
Property Collateral, except, in each case, as could not reasonably be expected to
have a Material Adverse Effect.
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(ix) No Grantor or Intellectual Property Collateral is subject to any
outstanding consent, settlement, decree, order, injunction, judgment or ruling
restricting the use of any Intellectual Property Collateral or that would impair the
validity or enforceability of such Intellectual Property Collateral except as could
not reasonably be expected to have a Material Adverse Effect.
(m) The Grantor has no material commercial tort claims (as defined in Section 9-102(13)
of the UCC) other than those listed in Schedule IX hereto (as amended from time to time.
Section 10. Further Assurances. (a) Each Grantor agrees that from time to time, at the expense of such Grantor, such
Grantor will promptly execute and deliver, or otherwise authenticate, all further instruments and
documents, and take all further action that may be necessary or desirable, or that the Collateral
Agent may request, in order to perfect and protect any pledge or security interest granted or
purported to be granted by such Grantor hereunder or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral of such Grantor. Without
limiting the generality of the foregoing, each Grantor will promptly with respect to Collateral of
such Grantor: (i) if any such Collateral shall be evidenced by a promissory note or other
instrument or chattel paper, deliver and pledge to the Collateral Agent hereunder such note or
instrument or chattel paper with a face amount exceeding $50,000 duly indorsed and accompanied by
duly executed instruments of transfer or assignment, all in form and substance satisfactory to the
Collateral Agent; (ii) execute or authenticate and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or
as the Collateral Agent may request, in order to perfect and preserve the security interest granted
or purported to be granted by such Grantor hereunder; (iii) deliver and pledge to the Collateral
Agent for benefit of the Secured Parties certificates representing Security Collateral that
constitutes certificated securities, accompanied by undated stock or bond powers executed in blank;
(iv) take all action necessary to ensure that the Collateral Agent has control of Collateral
consisting of deposit accounts, electronic chattel paper, investment property, letter-of-credit
rights and transferable records as provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC
and in Section 16 of UETA, except as not
required by the terms of the Loan Documents; (v) take all action to ensure that the Collateral
Agent’s security interest is noted on any certificate of ownership related to any Collateral with a
value in excess of $100,000 that is evidenced by a certificate of ownership; (vi) use commercially
reasonable efforts to cause the Collateral Agent to be the beneficiary under all letters of credit
set forth on Schedule X, with the right to make all draws under such letters of credit, and with
all rights of a transferee under Section 5-114(e) of the UCC; and (vii) deliver to the Collateral
Agent evidence that all other action that the Collateral Agent may deem reasonably necessary or
desirable in order to perfect and protect the security interest created by such Grantor under this
Agreement has been taken.
(b) Each Grantor hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, including, without limitation, one or more
financing statements indicating that such financing statements cover all assets or all personal
property (or words of similar effect) of such Grantor, in each case without the signature of such
Grantor, and regardless of whether any particular asset described in such financing statements
falls within the scope of the UCC or the granting clause of this Agreement. A
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photocopy or other
reproduction of this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law. Each Grantor ratifies
its authorization for the Collateral Agent to have filed such financing statements, continuation
statements or amendments filed prior to the date hereof.
(c) Each Grantor will furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral of such Grantor and such other reports
in connection with such Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.
Section 11. As to Equipment and Inventory. Each Grantor will keep the Equipment and Inventory of such Grantor (other than Inventory
sold in the ordinary course of business) at the places therefor specified in Section 9(b) or, upon
30 days’ prior written notice to the Collateral Agent, at such other places designated by the
Grantor in such notice.
Section 12. Insurance. (a) Each insurance policy required to be maintained in accordance with Section 6.07 of the
Credit Agreement shall (i) name such Grantor and the Collateral Agent as insured parties thereunder
(without any representation or warranty by or obligation upon the Collateral Agent) as their
interests may appear, (ii) contain the agreement by the insurer that any loss thereunder shall be
payable to the Collateral Agent (jointly with such Grantor) notwithstanding any action, inaction or
breach of representation or warranty by such Grantor, (iii) provide that there shall be no recourse
against the Collateral Agent for payment of premiums or other amounts with respect thereto and (iv)
provide that at least 10 days’ prior written notice of cancellation or of lapse shall be given to
the Collateral Agent by the insurer. Each Grantor will, if so requested by the Collateral Agent,
deliver to the Collateral Agent original or duplicate policies of such insurance and, as often as
the Collateral Agent may reasonably request, a report of a reputable insurance broker with respect
to such insurance. Further, each Grantor will, at the
request of the Collateral Agent, duly execute and deliver instruments of assignment of such
insurance policies to comply with the requirements of this Section 12 and use commercially
reasonable efforts to cause the insurers to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance maintained by any Grantor pursuant to this
Section 12 may be paid directly to the Person who shall have incurred liability covered by such
insurance. In case of any loss involving damage to Equipment or Inventory, the applicable Grantor
will make or cause to be made the necessary repairs to or replacements of such Equipment or
Inventory, and any proceeds of insurance properly received by or released to such Grantor shall be
used by such Grantor, except as otherwise required hereunder or by the Credit Agreement, to pay or
as reimbursement for the costs of such repairs or replacements, except in each case where the
failure to do so could not reasonably be expected to have a Material Adverse Effect and provided
that nothing in this Section shall require the making of any repair or replacement of any Equipment
or Inventory where such repair or replacement would not be commercially reasonable.
(c) So long as no Default under Section 8.01(a) or (f) of the Credit Agreement or Event of
Default shall have occurred and be continuing, all insurance payments received by the Collateral
Agent in connection with any loss, damage or destruction of any Inventory or
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Equipment will be
released by the Collateral Agent to the applicable Grantor for application in accordance with
Section 12(b). To the extent that (i) the amount of any such insurance payments exceeds the cost
of any such repair, replacement or restoration, or (ii) such insurance payments are not otherwise
required by the applicable Grantor to complete any such repair, replacement or restoration required
hereunder, the amount of such excess shall be applied in the manner set forth in the Credit
Agreement. Upon the occurrence and during the continuance of any Event of Default, all insurance
payments in respect of such Equipment or Inventory shall be paid to the Collateral Agent and shall,
in the Collateral Agent’s sole discretion, (i) be released to the applicable Grantor to be applied
as set forth in the first sentence of this subsection (c) or (ii) be held as additional Collateral
hereunder or applied as specified in Section 22(b).
Section 13. Post-Closing Changes; Bailees; Collections on Assigned Agreements, Receivables
and Related Contracts. (a) No Grantor will change its name, type of organization, jurisdiction of organization,
organizational identification number or location from those set forth in Section 9(a) of this
Agreement without first giving at least 30 days’ prior written notice to the Collateral Agent and
taking all action reasonably required by the Collateral Agent for the purpose of perfecting or
protecting the security interest granted by this Agreement. No Grantor will change the location of
the Equipment and Inventory from the locations therefor specified in Section 9(b) without first
giving the Collateral Agent 30 days’ prior written notice of such change. No Grantor will become
bound by a security agreement authenticated by another Person (determined as provided in Section
9-203(d) of the UCC) without giving the Collateral Agent 30 days’ prior written notice thereof and
taking all action required by the Collateral Agent to ensure that the perfection and first priority
nature of the Collateral Agent’s security interest in the Collateral will be maintained, except as
permitted by the terms of the Loan Documents and subject to Liens permitted under the Credit
Agreement. Each Grantor will hold and preserve its records relating to the Collateral, including,
without limitation, the Assigned Agreements and Related Contracts,
and will permit representatives of the Collateral Agent at any time during normal business
hours to inspect and make abstracts from such records and other documents. If the Grantor does not
have an organizational identification number and later obtains one, it will forthwith notify the
Collateral Agent of such organizational identification number.
(b) If any Collateral of any Grantor is at any time in the possession or control of a
warehouseman, bailee or agent, and if the Collateral Agent so requests such Grantor will (i) notify
such warehouseman, bailee or agent of the security interest created hereunder, (ii) instruct such
warehouseman, bailee or agent to hold all such Collateral solely for the Collateral Agent’s account
subject only to the Collateral Agent’s instructions (which shall permit such Collateral to be
removed by such Grantor in the ordinary course of business until the Collateral Agent notifies such
warehouseman, bailee or agent that an Event of Default has occurred and is continuing), (iii) use
commercially reasonable efforts, to cause such warehouseman, bailee or agent to authenticate a
record acknowledging that it holds possession of such Collateral for the Collateral Agent’s benefit
and shall act solely on the instructions of the Collateral Agent as specified in clause (ii) above
without the further consent of the Grantor or any other Person, and (iv) if so obtained, make such
authenticated record available to the Collateral Agent.
(c) Except as otherwise provided in this subsection (c), each Grantor will continue to
collect, in the ordinary course of business and at its own expense, amounts due or to become due
such Grantor under the Assigned Agreements, Receivables and Related Contracts.
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In connection with such collections, such Grantor may take (and, at the Collateral
Agent’s direction, will take) such action as such Grantor or the Collateral Agent may reasonably
deem necessary or advisable to enforce collection of the Assigned Agreements, Receivables and
Related Contracts; provided, however, that the Collateral Agent shall have the right at any time,
upon the occurrence and during the continuance of an Event of Default and upon written notice to
such Grantor of its intention to do so, to notify the obligors (other than customers of any
Grantor) under any Assigned Agreements, Receivables and Related Contracts of the assignment of such
Assigned Agreements, Receivables and Related Contracts to the Collateral Agent and to direct such
obligors (other than customers of any Grantor) to make payment of all amounts due or to become due
to such Grantor thereunder directly to the Collateral Agent and, upon such notification and at the
expense of such Grantor, to enforce collection of any such Assigned Agreements, Receivables and
Related Contracts, to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Grantor might have done, and to otherwise exercise all rights
with respect to such Assigned Agreements, Receivables and Related Contracts, including, without
limitation, those set forth set forth in Section 9-607 of the UCC. After receipt by any Grantor of
the notice from the Collateral Agent referred to in the proviso to the preceding sentence, (i) all
amounts and proceeds (including, without limitation, instruments) received by such Grantor in
respect of the Assigned Agreements, Receivables and Related Contracts of such Grantor shall be
received in trust for the benefit of the Collateral Agent hereunder, shall be segregated from other
funds of such Grantor and shall be forthwith paid over to the Collateral Agent in the same form as
so received (with any necessary indorsement) to be deposited in the Collateral Account and either
(A) released to such Grantor on the terms set forth in Section 7 so long as no Event of Default
shall have occurred and be continuing or (B) if any Event of Default shall have occurred and be
continuing and the Collateral Agent so elects as provided in Section 22(b), applied as provided in
Section 22(b) and (ii) such Grantor will not adjust, settle or compromise the amount or payment of
any Receivable or amount due on any Assigned Agreement or Related Contract, release wholly or
partly any obligor thereof, or allow any credit or discount thereon, except in the ordinary course
of business or in connection with any settlement with the obligor thereof. No Grantor will consent
to the subordination of its right to payment under any of the Assigned Agreements, Receivables and
Related Contracts to any other indebtedness or obligations of the obligor thereof.
Section 14. As to Intellectual Property Collateral. (a) With respect to each item of its Intellectual Property Collateral, each Grantor agrees
to take, at its expense, all necessary steps, including, without limitation, in the U.S. Patent and
Trademark Office, the U.S. Copyright Office and any other governmental authority, to (i) maintain
the validity and enforceability of all material Intellectual Property Collateral and maintain such
Intellectual Property Collateral in full force and effect, and (ii) to the extent commercially
reasonable, pursue the registration and maintenance of each material patent, trademark, or
copyright registration or application, now or hereafter included in the Intellectual Property
Collateral of such Grantor, including, without limitation, the payment of required fees and taxes,
the filing of responses to office actions issued by the U.S. Patent and Trademark Office, the U.S.
Copyright Office or other governmental authorities, the filing of applications for renewal or
extension, the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing
of divisional, continuation, continuation-in-part, reissue and renewal applications or extensions,
the payment of maintenance fees and the participation in interference, reexamination, opposition, cancellation, infringement and misappropriation proceedings. No
Grantor shall, without the
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written consent of the Collateral Agent, discontinue use of or otherwise
abandon any Intellectual Property Collateral, or abandon any right to file an application for
patent, trademark, or copyright, unless such Grantor shall have previously determined that such use
or the pursuit or maintenance of such Intellectual Property Collateral is no longer desirable in
the conduct of such Grantor’s business and that the loss thereof would not be reasonably likely to
have a Material Adverse Effect.
(b) Each Grantor agrees promptly to notify the Collateral Agent if such Grantor has knowledge
(i) that any material item of the Intellectual Property Collateral may have become abandoned,
placed in the public domain, invalid or unenforceable, or of any adverse determination or
development regarding such Grantor’s ownership of any of the Intellectual Property Collateral or
its right to register the same or to keep and maintain and enforce the same, or (ii) of any adverse
determination or the institution of any proceeding (including, without limitation, the institution
of any proceeding in the U.S. Patent and Trademark Office or any court) regarding any item of the
Intellectual Property Collateral.
(c) In the event that any Grantor has knowledge that any item of the Intellectual Property
Collateral is being infringed or misappropriated by a third party, such Grantor shall (i) take such
actions, at its expense, as such Grantor deems reasonable and appropriate under the circumstances
to protect or enforce such Intellectual Property Collateral and (ii) if such Intellectual Property
Collateral is of material economic value and such infringement or misappropriation could reasonably
be expected to have a Material Adverse Effect, promptly notify the Collateral Agent after such
Grantor learns thereof and take such actions, at its expense, as such Grantor deems reasonable and
appropriate under the circumstances, which may include, without limitation, suing for infringement
or misappropriation and for an injunction against such infringement or misappropriation.
(d) Except as could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (i) each Grantor shall use proper statutory notice in connection with its
use of each material item of its Intellectual Property Collateral and (ii) no Grantor shall do or
permit any act or knowingly omit to do any act whereby any of its material Intellectual Property
Collateral may lapse or become invalid or unenforceable or placed in the public domain.
(e) Each Grantor shall take all steps which it reasonably deems appropriate under the
circumstances to preserve and protect each item of its Intellectual Property Collateral.
(f) With respect to its Intellectual Property Collateral, each Grantor agrees to execute or
otherwise authenticate an agreement, in substantially the form set forth in Exhibit C hereto or
otherwise in form and substance satisfactory to the Collateral Agent (an “Intellectual Property
Security Agreement”), for recording the security interest granted hereunder to the Collateral Agent
in such Intellectual Property Collateral with the U.S. Patent and Trademark Office, the U.S.
Copyright Office and any other governmental authorities necessary to perfect the security interest
hereunder in such Intellectual Property Collateral.
(g) Each Grantor agrees that should it obtain an ownership interest in any material property
of the type set forth in Section 1(g) that is not on the date hereof a part of the
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Intellectual Property Collateral (“After-Acquired Intellectual Property”) (i) the provisions of this Agreement
shall automatically apply thereto, and (ii) any such After-Acquired Intellectual Property and, in
the case of trademarks, the goodwill symbolized thereby, shall automatically become part of the
Intellectual Property Collateral subject to the terms and conditions of this Agreement with respect
thereto. Within 30 days after the end of each fiscal year of Holdings, each Grantor shall give
written notice to the Collateral Agent identifying the After-Acquired Intellectual Property
acquired during such fiscal year (other than After-Acquired Intellectual Property acquired from
third parties in the ordinary course of business that is not material to the business of the Loan
Parties), and such Grantor shall execute and deliver to the Collateral Agent with such written
notice, or otherwise authenticate, an agreement substantially in the form of Exhibit D hereto or
otherwise in form and substance satisfactory to the Collateral Agent (an “IP Security Agreement
Supplement”) covering such After-Acquired Intellectual Property which IP Security Agreement
Supplement shall be recorded, if reasonably deemed necessary by the Collateral Agent, with the U.S.
Patent and Trademark Office, the U.S. Copyright Office and any other governmental authorities
necessary to perfect the security interest hereunder in such After-Acquired Intellectual Property.
Section 15. Voting Rights; Dividends; Etc. (a) 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 Security Collateral of such Grantor or any part thereof for any
purpose; provided however, that such Grantor will not exercise or refrain from exercising
any such right if such action would have a material adverse effect on the value of the
Security Collateral or any material part thereof.
(ii) Each Grantor shall be entitled to receive and retain any and all dividends,
interest and other distributions paid in respect of the Security Collateral of such Grantor
if and to the extent that the payment thereof is not otherwise prohibited by the terms of
the Loan Documents; provided, however, that, except with respect to transactions between and
among Loan Parties but subject to the requirements of the Loan Documents with respect to
proceeds of Dispositions, any and all
(A) dividends, interest and other distributions paid or payable other than in
cash in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Security Collateral,
(B) dividends and other distributions paid or payable in cash in respect of any
Security Collateral in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in respect of principal of, or
in redemption of, or in exchange for, any Security Collateral
shall be, and shall be forthwith delivered to the Collateral Agent to hold as, Security
Collateral and shall, if received by such Grantor, be received in trust for the benefit of
the
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Collateral Agent, be segregated from the other property or funds of such Grantor and be
forthwith delivered to the Collateral Agent as Security Collateral in the same form as so
received (with any necessary indorsement).
(iii) The Collateral Agent will execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments as such Grantor may
reasonably request for the purpose of enabling such Grantor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain pursuant to
paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of Default:
(i) Except with respect to transactions between and among Loan Parties that are not by
the terms of the Credit Agreement prohibited from being consummated after the occurrence of
an Event of Default, all rights of each Grantor (x) to exercise or refrain from exercising
the voting and other consensual rights that it would otherwise be entitled to exercise
pursuant to Section 15(a)(i) shall, upon notice to such Grantor by the Collateral Agent,
cease and (y) to receive the dividends, interest and other distributions that it would
otherwise be authorized to receive and retain pursuant to Section 15(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights and to receive and hold as Security Collateral such
dividends, interest and other distributions.
(ii) All dividends, interest and other distributions that are received by any Grantor
contrary to the provisions of paragraph (i) of this Section 15(b) shall be received in trust
for the benefit of the Collateral Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent as Security Collateral in
the same form as so received (with any necessary indorsement).
(iii) The Collateral Agent shall be authorized to send to each Securities Intermediary
or Commodity Intermediary as defined in and under any Security Control Agreement a Notice of
Exclusive Control as defined in and under such Security Control Agreement.
Section 16. As to Letter-of-Credit Rights. Each Grantor, by granting a security interest in its Receivables consisting of
letter-of-credit rights to the Collateral Agent, intends to (and hereby does) assign to the
Collateral Agent its rights (including its contingent rights) to the proceeds of all Related
Contracts consisting of letters of credit of which it is or hereafter becomes a beneficiary or
assignee. Each Grantor will promptly use its commercially reasonable efforts to cause the issuer
of each letter of credit with a face amount in excess of $100,000 and each nominated person (if
any) with respect thereto to consent to such assignment of the proceeds thereof in substantially
the form of the Consent to Assignment of Letter of Credit Rights attached hereto as Exhibit E
or otherwise in form and substance satisfactory to the Collateral Agent and deliver written
evidence of such consent to the Collateral Agent.
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Section 17. As to the Denali Spectrum Manager Security Interests. Notwithstanding any other provision of this Agreement or any of the other Loan Documents, the
Collateral Agent, for itself and for each Secured Party, hereby acknowledges and agrees for the
benefit of Denali Spectrum Manager, LLC (“DSM”), that: (i) the Borrower and DSM are parties to that
certain Formation Agreement, dated as of May 10, 2006 (the “Formation Agreement”); (ii) in
recognition of the benefits that the transactions contemplated by the Formation Agreement will
provide to the Borrower, DSM shall be granted a first priority security interest in certain assets
of Denali Spectrum License, LLC (“Denali License”) and its Subsidiaries to secure the obligations
of Denali License and its Subsidiaries to purchase DSM’s membership interests in Denali Spectrum,
LLC; and (iii) if DSM and the Borrower enter into the definitive agreements contemplated by the
Formation Agreement (including the Interest Purchase Agreement and the DSM Security Agreement, each
as defined in the Formation Agreement) (collectively, the “Denali Agreements”), then the security
interests received by the Borrower from Denali License or any Subsidiary thereof (and any right or
interest that the Collateral Agent and/or the Secured Parties is granted or in the future may be
granted hereunder or otherwise with respect to such security interests of the Borrower) in (A) all
assets of Denali License, including all membership interests owned by Denali License in its
Subsidiaries (but excluding Denali License’s membership interests in each of its Subsidiaries that
does not hold FCC Licenses), (B) all assets of Denali License’s Subsidiaries, if any, now owned or
hereafter acquired, and (C) all proceeds and products of such assets, shall, as contemplated by
Section 8(g) of the Formation Agreement, be junior and subordinate in right to the security
interests in such assets and membership interests and proceeds and products thereof, to be granted
to DSM in connection with the execution of the Denali Agreements, pursuant to an intercreditor and
subordination agreement to be entered into by DSM and the Borrower, up to an aggregate amount of
$200,000,000 (for the avoidance of doubt, each reference to an agreement in this sentence shall be
to such agreement as the same may be amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof).
Section 18. Transfers and Other Liens; Additional Shares. (a) Each Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, other than sales, assignments and other
dispositions of Collateral, and options relating to Collateral, permitted under the terms of the
Credit Agreement, or (ii) create or suffer to exist any Lien upon or with respect to any of the
Collateral of such Grantor except for the pledge, assignment and security interest created under
this Agreement and Liens permitted to attach to such Collateral under Section 7.01 of the Credit
Agreement.
(b) Each Grantor agrees that it will (i) cause each Subsidiary that is an issuer of the
Pledged Equity pledged by such Grantor not to issue any Equity Interests or other securities in
addition to or in substitution for the Pledged Equity issued by such issuer, except to such
Grantor, and (ii) pledge hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all additional Equity Interests or other securities, subject to the
limitation set forth in Section 1(d)(iii).
Section 19. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints the Collateral Agent such Grantor’s
attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of
such Grantor or otherwise, from time to time in the Collateral Agent’s discretion, upon the
occurrence and during the
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continuance of an Event of Default, to take any action and to execute any
instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to the Collateral Agent,
(b) to ask for, demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of any of the
Collateral,
(c) to receive, indorse and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (a) or (b) above, and
(d) to file any claims or take any action or institute any proceedings that the
Collateral Agent may deem necessary or desirable for the collection of any of the Collateral
or otherwise to enforce compliance with the terms and conditions of any Assigned Agreement
or the rights of the Collateral Agent with respect to any of the Collateral.
Section 20. Collateral Agent May Perform. If any Grantor fails to perform any agreement contained herein, the Collateral Agent may,
as the Collateral Agent deems necessary to protect the security interest granted hereunder in the
Collateral or to protect the value thereof, but without any obligation to do so and without notice,
itself perform, or cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by such Grantor under the Loan Documents.
Section 21. The Collateral Agent’s Duties. (a) The powers conferred on the Collateral Agent hereunder are solely to protect the
Secured Parties’ interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its possession and the accounting
for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not any Secured Party
has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any Collateral. The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords its own property.
(b) Anything contained herein to the contrary notwithstanding, the Collateral Agent may from
time to time, when the Collateral Agent deems it to be necessary, appoint one or more subagents
(each a “Subagent”) for the Collateral Agent hereunder with respect to all or any part of the
Collateral (and shall notify the Borrower of such appointment; provided, that the failure to so
notify the Borrower shall not affect the provisions of this Section 21(b)). In the event that the
Collateral Agent so appoints any Subagent with respect to any Collateral, (i) the assignment and
pledge of such Collateral and the security interest granted in such Collateral by each Grantor
hereunder shall be deemed for purposes of this Amended and Restated Security Agreement to have been
made to such Subagent, in addition to the Collateral Agent, for the
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ratable benefit of the Secured
Parties, as security for the Secured Obligations of such Grantor, (ii) such Subagent shall
automatically be vested, in addition to the Collateral Agent, with all rights, powers, privileges,
interests, obligations and remedies of the Collateral Agent hereunder with respect to such
Collateral, and (iii) the term “Collateral Agent,” when used herein in relation to any rights,
powers, privileges, interests, obligations and remedies of the Collateral Agent with respect to
such Collateral, shall include such Subagent; provided, however, that no such Subagent shall be
authorized to take any action with respect to any such Collateral unless and except to the extent
expressly authorized in writing by the Collateral Agent.
Section 22. Remedies. If any Event of Default shall have occurred and be continuing and the Administrative Agent
shall have so instructed the Collateral Agent:
(a) The Collateral Agent may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party upon default under the UCC (whether or not the UCC applies
to the affected Collateral) and also may: (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of the Collateral Agent
forthwith, assemble all or part of the Collateral as directed by the Collateral Agent and
make it available to the Collateral Agent at a place and time to be designated by the
Collateral Agent that is reasonably convenient to both parties; (ii) without notice except
as specified below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Collateral Agent’s offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable; (iii) occupy any premises owned or leased by any of the Grantors
where the Collateral or any part thereof is assembled or located for a reasonable period in
order to effectuate its rights and remedies hereunder or under law, without obligation to
such Grantor in respect of such occupation; and (iv) exercise any and all rights and
remedies of any of the Grantors under or in connection with the Collateral, or otherwise in
respect of the Collateral, including, without limitation, (A) any and all rights of such
Grantor to demand or otherwise require payment of any amount under, or performance of any
provision of, the Assigned Agreements, the Receivables, the Related Contracts and the other
Collateral, (B) withdraw, or cause or direct the withdrawal, of all funds with respect to
the Account Collateral and (C) exercise all other rights and
remedies with respect to the Assigned Agreements, the Receivables, the Related
Contracts and the other Collateral, including, without limitation, those set forth in
Section 9-607 of the UCC. 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. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and place to which
it was so adjourned.
(b) Any cash held by or on behalf of the Collateral Agent and all cash proceeds
received by or on behalf of the Collateral Agent in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral may, in the
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discretion of the
Collateral Agent, be held by the Collateral Agent as collateral for, and/or then or at any
time thereafter applied (after payment of any amounts payable to the Collateral Agent
pursuant to the Loan Documents) in whole or in part by the Collateral Agent for the ratable
benefit of the Secured Parties against, all or any part of the Secured Obligations, in the
following manner:
(i) first, paid to the Agents for any amounts then owing to the Agents pursuant
to Section 8.04 of the Credit Agreement or otherwise under the Loan Documents,
ratably in accordance with such respective amounts then owing to the Agents; and
(ii) second, ratably (A) paid to the Lenders and the Hedge Banks, respectively,
for any amounts then owing to them, in their capacities as such, under the Loan
Documents ratably in accordance with such respective amounts then owing to such
Lenders and the Hedge Banks, provided that, for purposes of this Section 22, the
amount owing to any such Hedge Bank pursuant to any Secured Hedge Agreement to which
it is a party (other than any amount therefore accrued and unpaid) shall be deemed
to be equal to the Agreement Value therefor and (B) deposited as Collateral in the
L/C Collateral Account up to an amount equal to 105% of the aggregate Available
Amount of all outstanding Letters of Credit, provided that in the event that any
such Letter of Credit is drawn, the Collateral Agent shall pay to the Issuing Bank
that issued such Letter of Credit the amount held in the L/C Collateral Account in
respect of such Letter of Credit, provided further that, to the extent that any such
Letter of Credit shall expire or terminate undrawn and as a result thereof the
amount of the Collateral in the L/C Collateral Account shall exceed 105% of the
aggregate Available Amount of all then outstanding Letters of Credit, such excess
amount of such Collateral shall be applied in accordance with the remaining order of
priority set out in this Section 22(b).
Any surplus of such cash or cash proceeds held by or on the behalf of the Collateral Agent
and remaining after payment in full of all the Secured Obligations shall be paid
over to the applicable Grantor or to whomsoever may be lawfully entitled to receive such
surplus.
(c) All payments received by any Grantor under or in connection with any Assigned
Agreement or otherwise in respect of the Collateral shall be received in trust for the
benefit of the Collateral Agent, shall be segregated from other funds of such Grantor and
shall be forthwith paid over to the Collateral Agent in the same form as so received (with
any necessary indorsement).
(d) The Collateral Agent may, without notice to any Grantor except as required by law
and at any time or from time to time, charge, set-off and otherwise apply all or any part of
the Secured Obligations against any funds held with respect to the Account Collateral or in
any other deposit account.
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(e) In the event of any sale or other disposition of any of the Intellectual Property
Collateral of any Grantor, the goodwill symbolized by any Trademarks subject to such sale or
other disposition shall be included therein, and such Grantor shall supply to the Collateral
Agent or its designee such Grantor’s written know-how and written expertise, and documents
relating to any Intellectual Property Collateral subject to such sale or other disposition,
and such Grantor’s customer lists and other records and documents relating to such
Intellectual Property Collateral and to the manufacture, distribution, advertising and sale
of products and services of such Grantor.
(f) After the cure or waiver of all Events of Default theretofore existing, upon
request by the Borrower and at the Borrower’s expense, the Collateral Agent will deliver to
the Borrower appropriate evidence of revocation of any notice previously delivered to a
third party relating to the Collateral Agent’s exercise of its rights over the Collateral.
Section 23.
Amendments; Waivers; Additional Grantors; Supplements to Schedules, Etc. (a) No amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Collateral Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. No failure on the part of
any party to this Agreement to exercise, and no delay in exercising any right hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right.
(b) Upon the execution and delivery, or authentication, by any Person of a security agreement
supplement in substantially the form of Exhibit A hereto (each a “Security Agreement Supplement”),
(i) such Person shall be referred to as an “Additional Grantor” and shall be and become a Grantor
hereunder, and each reference in this Agreement and the other Loan Documents to “Grantor” shall
also mean and be a reference to such Additional Grantor, and each reference in this Agreement and
the other Loan Documents to “Collateral” shall also mean and be a reference to the Collateral of
such Additional Grantor, and (ii) the supplemental schedules I-X attached to each Security
Agreement Supplement shall be incorporated into and
become a part of and supplement Schedules I-X, respectively, hereto, and the Collateral Agent
may attach such supplemental schedules to such Schedules; and each reference to such Schedules
shall mean and be a reference to such Schedules as supplemented pursuant to each Security Agreement
Supplement.
(c) Upon the execution and delivery by any Grantor of a Security Agreement Supplement with
appropriate modifications to reflect such Grantor’s status as an existing Grantor, any supplemental
schedules to such Security Agreement Supplement shall be incorporated into and become a part of and
supplement the corresponding schedules to this Agreement, and the Collateral Agent may attach such
supplemental schedules to such Schedules; and each reference to such Schedules shall mean and be a
reference to such Schedules as supplemented pursuant to such Security Agreement Supplement;
provided that this clause (c) shall not apply to Schedule IV.
Section 24.
Notices, Etc. (a) Except in the case of notices and other communications expressly permitted to be given by
telephone (and except as provided in
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subsection (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier as follows, and all notices
and other communications expressly permitted hereunder to be given by telephone shall be made to
the applicable telephone number, as follows:
(i) if to the Borrower or the Collateral Agent, to the address, telecopier
number, electronic mail address or telephone number specified for such Person in the
Credit Agreement; and
(ii) if to Holdings or any other Grantor, to the address, telecopier number,
electronic mail address or telephone number specified as such Grantor’s chief
executive office on Schedule I hereto.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail,
shall be deemed to have been given when received; notices sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the next business day
for the recipient). Notices delivered through electronic communications to the extent provided in
subsection (b) below shall be effective as provided in such subsection (b).
(b) Electronic Communications. The Collateral Agent or any Grantor may, in its
discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of such
procedures may be limited to particular notices or communications.
Unless the Collateral Agent otherwise prescribes, notices and other communications sent to an
e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as available, return e-mail
or other written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such
notice or communication shall be deemed to have been sent at the opening of business on the
next business day for the recipient.
Section 25. Continuing Security Interest; Assignments under the Credit Agreement. This Agreement shall create a continuing security interest in the Collateral and shall (a)
remain in full force and effect until the latest of (i) the payment in full in cash of the Secured
Obligations, (ii) the Maturity Date and (iii) the termination or expiration of all Letters of
Credit and all Secured Hedge Agreements, (b) be binding upon each Grantor, its successors and
assigns and (c) inure, together with the rights and remedies of the Collateral Agent hereunder, to
the benefit of the Secured Parties and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitments, the Loans owing to it and the Note or
Notes, if any, held by it) subject to compliance with Section 10.06 of the Credit Agreement, and
such permitted assignee or transferee shall thereupon become vested with all the benefits in
respect
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thereof granted to such Lender herein or otherwise, in each case as provided in Section
10.06 of the Credit Agreement.
Section 26. Release; Termination. (a) Upon any sale, lease, transfer or other Disposition of any item of Collateral of any
Grantor in accordance with the terms of the Loan Documents (other than sales of Inventory in the
ordinary course of business as to which the assignment and security interest created hereunder
shall be automatically released), (i) (x) if the value of the assets so disposed of in any single
transaction or series of related transactions does not exceed $10,000,000 or (y) if the value of
assets so Disposed of in any transaction or series of related transactions exceeds $10,000,000 and
the Borrower notifies the Collateral Agent at least five Business Days in advance of such proposed
Disposition, then in each case with respect to clauses (x) and (y) such item of Collateral shall be
automatically released from the assignment and security interest created under this Agreement upon
consummation of such Disposition and (ii) if the value of assets so Disposed of in any transaction
or series of related transactions exceeds $10,000,000 and the Borrower does not notify the
Collateral Agent at least five Business Days in advance of such Disposition, then such item shall
not be released from the assignment and security interest created under this Agreement until such
time as the Collateral Agent shall have executed and delivered to such Grantor the release referred
to in the next succeeding sentence. The Collateral Agent agrees to execute and deliver (at such
Grantor’s expense) such documents as such Grantor shall reasonably request to evidence the release
of an item of Collateral from the assignment and security interest granted hereby to the extent
that (A) such Grantor shall have delivered to the Collateral Agent a written request for release
describing the item of Collateral and the terms of the sale, lease, transfer or other disposition
in reasonable detail, including, without limitation, the price thereof and an estimate of any
expenses in connection therewith, together with a form of release for execution by the Collateral
Agent and a certificate of such Grantor to the effect that the transaction is in compliance with
the Loan Documents and as to such other matters as the Collateral Agent may request and (B) the
proceeds of any such sale, lease, transfer or other disposition required to be applied, or any
payment to be made in connection therewith, in
accordance with Section 2.04 of the Credit Agreement shall, if and to the extent so required
as of the date of such certificate, have been paid or made to, or in accordance with the
instructions of, the Collateral Agent when and as required under Section 2.04 of the Credit
Agreement. Each Grantor agrees that it will notify the Collateral Agent within two Business Days
after any Disposition by such Grantor of a type referred to in subclause (x) of clause (i) above
involving assets with a fair market value of $1,000,000 or more.
(b) Upon the latest of (i) the payment in full in cash of the Secured Obligations, (ii) the
Maturity Date and (iii) the termination or expiration of all Letters of Credit and all Secured
Hedge Agreements, the pledge and security interest granted hereby shall terminate and all rights to
the Collateral shall revert to the applicable Grantor. Upon any such termination, the Collateral
Agent will, at the applicable Grantor’s expense, execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to evidence such termination and reversion.
Section 27. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement. Delivery of an
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33
executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of this Agreement.
Section 28. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State
of New York.
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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and delivered
by its officer thereunto duly authorized as of the date first above written.
| CRICKET COMMUNICATIONS, INC. | ||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||
| Title: Acting Chief Financial Officer | ||||||
| Address for Notices: | LEAP WIRELESS INTERNATIONAL, INC. | |||||
00000 Xxxxxxx Xxxxxx Xxxxx |
||||||
Xxx Xxxxx, XX 00000 |
||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||
| Title: Acting Chief Financial Officer | ||||||
Address for Notices:
|
XXXXXXXX.XXX, INC. | |
10307 Pacific Center Court
|
TELEPHONE ENTERTAINMENT NETWORK, INC. | |
Xxx Xxxxx, XX 00000
|
CHASETEL LICENSEE CORP. |
CRICKET LICENSEE (ALBANY), INC.
CRICKET LICENSEE (COLUMBUS), INC.
CRICKET LICENSEE (DENVER) INC.
CRICKET LICENSEE (LAKELAND) INC.
CRICKET LICENSEE (MACON), INC.
CRICKET LICENSEE (NORTH CAROLINA) INC.
CRICKET LICENSEE (PITTSBURGH) INC.
CRICKET LICENSEE (REAUCTION), INC.
CRICKET LICENSEE I, INC.
CRICKET LICENSEE II, INC.
CRICKET LICENSEE III, INC.
CRICKET LICENSEE IV, INC.
CRICKET LICENSEE V, INC.
CRICKET LICENSEE VI, INC.
CRICKET LICENSEE VII, INC.
CRICKET LICENSEE VIII, INC.
CRICKET LICENSEE IX, INC.
CRICKET LICENSEE X, INC.
CRICKET LICENSEE XII, INC.
CRICKET LICENSEE XIII, INC.
CRICKET LICENSEE (COLUMBUS), INC.
CRICKET LICENSEE (DENVER) INC.
CRICKET LICENSEE (LAKELAND) INC.
CRICKET LICENSEE (MACON), INC.
CRICKET LICENSEE (NORTH CAROLINA) INC.
CRICKET LICENSEE (PITTSBURGH) INC.
CRICKET LICENSEE (REAUCTION), INC.
CRICKET LICENSEE I, INC.
CRICKET LICENSEE II, INC.
CRICKET LICENSEE III, INC.
CRICKET LICENSEE IV, INC.
CRICKET LICENSEE V, INC.
CRICKET LICENSEE VI, INC.
CRICKET LICENSEE VII, INC.
CRICKET LICENSEE VIII, INC.
CRICKET LICENSEE IX, INC.
CRICKET LICENSEE X, INC.
CRICKET LICENSEE XII, INC.
CRICKET LICENSEE XIII, INC.
Table of Contents
CRICKET LICENSEE XIV, INC.
CRICKET LICENSEE XV, INC.
CRICKET LICENSEE XVI, INC.
CRICKET LICENSEE XVII, INC.
CRICKET LICENSEE XVIII, INC.
CRICKET LICENSEE XIX, INC.
CRICKET LICENSEE XX, INC.
CRICKET HOLDINGS DAYTON, INC.
MCG PCS LICENSEE CORPORATION, INC.
CHASETEL REAL ESTATE HOLDING COMPANY, INC.
CRICKET ALABAMA PROPERTY COMPANY
CRICKET ARIZONA PROPERTY COMPANY
CRICKET ARKANSAS PROPERTY COMPANY
CRICKET CALIFORNIA PROPERTY COMPANY
CRICKET COLORADO PROPERTY COMPANY
CRICKET FLORIDA PROPERTY COMPANY
CRICKET GEORGIA PROPERTY COMPANY, INC.
CRICKET IDAHO PROPERTY COMPANY
CRICKET ILLINOIS PROPERTY COMPANY
CRICKET INDIANA PROPERTY COMPANY
CRICKET KANSAS PROPERTY COMPANY
CRICKET KENTUCKY PROPERTY COMPANY
CRICKET MICHIGAN PROPERTY COMPANY
CRICKET MINNESOTA PROPERTY COMPANY
CRICKET MISSISSIPPI PROPERTY COMPANY
CRICKET NEBRASKA PROPERTY COMPANY
CRICKET NEVADA PROPERTY COMPANY
CRICKET NEW MEXICO PROPERTY COMPANY
CRICKET NEW YORK PROPERTY COMPANY, INC.
CRICKET NORTH CAROLINA PROPERTY COMPANY
CRICKET OHIO PROPERTY COMPANY
CRICKET OKLAHOMA PROPERTY COMPANY
CRICKET OREGON PROPERTY COMPANY
CRICKET PENNSYLVANIA PROPERTY COMPANY
CRICKET TEXAS PROPERTY COMPANY
CRICKET UTAH PROPERTY COMPANY
CRICKET WASHINGTON PROPERTY COMPANY
CRICKET WISCONSIN PROPERTY COMPANY
LEAP PCS MEXICO, INC.
CRICKET LICENSEE XV, INC.
CRICKET LICENSEE XVI, INC.
CRICKET LICENSEE XVII, INC.
CRICKET LICENSEE XVIII, INC.
CRICKET LICENSEE XIX, INC.
CRICKET LICENSEE XX, INC.
CRICKET HOLDINGS DAYTON, INC.
MCG PCS LICENSEE CORPORATION, INC.
CHASETEL REAL ESTATE HOLDING COMPANY, INC.
CRICKET ALABAMA PROPERTY COMPANY
CRICKET ARIZONA PROPERTY COMPANY
CRICKET ARKANSAS PROPERTY COMPANY
CRICKET CALIFORNIA PROPERTY COMPANY
CRICKET COLORADO PROPERTY COMPANY
CRICKET FLORIDA PROPERTY COMPANY
CRICKET GEORGIA PROPERTY COMPANY, INC.
CRICKET IDAHO PROPERTY COMPANY
CRICKET ILLINOIS PROPERTY COMPANY
CRICKET INDIANA PROPERTY COMPANY
CRICKET KANSAS PROPERTY COMPANY
CRICKET KENTUCKY PROPERTY COMPANY
CRICKET MICHIGAN PROPERTY COMPANY
CRICKET MINNESOTA PROPERTY COMPANY
CRICKET MISSISSIPPI PROPERTY COMPANY
CRICKET NEBRASKA PROPERTY COMPANY
CRICKET NEVADA PROPERTY COMPANY
CRICKET NEW MEXICO PROPERTY COMPANY
CRICKET NEW YORK PROPERTY COMPANY, INC.
CRICKET NORTH CAROLINA PROPERTY COMPANY
CRICKET OHIO PROPERTY COMPANY
CRICKET OKLAHOMA PROPERTY COMPANY
CRICKET OREGON PROPERTY COMPANY
CRICKET PENNSYLVANIA PROPERTY COMPANY
CRICKET TEXAS PROPERTY COMPANY
CRICKET UTAH PROPERTY COMPANY
CRICKET WASHINGTON PROPERTY COMPANY
CRICKET WISCONSIN PROPERTY COMPANY
LEAP PCS MEXICO, INC.
| By: | /s/ Xxxx X. Xxxxxx | |||||
| Title: Acting Chief Financial Officer |
