EXHIBIT 10.1.6
EXECUTION COPY
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AMENDED AND RESTATED
SECURITY AGREEMENT
DATED AS OF JANUARY 7, 1999
AMENDED AND RESTATED AS OF JUNE 19, 2003
MADE BY
CENTENNIAL CELLULAR OPERATING CO. LLC,
AS BORROWER,
AND
CENTENNIAL PUERTO RICO OPERATIONS CORP.,
AS PR BORROWER
AND
EACH OF THE GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO OR FROM
TIME TO TIME PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT,
AS GUARANTOR
IN FAVOR OF
BANK OF AMERICA, N.A.
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AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT (the "Agreement"), dated as of
January 7, 1999, amended and restated as of June 19, 2003, made by CENTENNIAL
CELLULAR OPERATING CO. LLC, a Delaware limited liability company having an
office at Corporate Office, 0000 Xxxxx 000, Xxxx, Xxx Xxxxxx 00000 ("Borrower"),
CENTENNIAL PUERTO RICO OPERATIONS CORP., a Delaware corporation having an office
at Corporate Office, 0000 Xxxxx 000, Xxxx, Xxx Xxxxxx 00000 and the successor to
Centennial Wireless PCS Operations Corp. ("PR Borrower"), and EACH OF THE
GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO OR FROM TIME TO TIME PARTY
HERETO BY EXECUTION OF A JOINDER AGREEMENT (collectively, the "Guarantors";
together with Borrower and the PR Borrower, the "Pledgors", and each, a
"Pledgor"), as pledgors, assignors and debtors, in favor of BANK OF AMERICA,
N.A., having an office at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000, in
its capacity as administrative agent, as pledgee, assignee and secured party (in
such capacity and together with any successors in such capacity, "Administrative
Agent") for the lending institutions (the "Lenders") from time to time party to
the Credit Agreement (as hereinafter defined).
RECITALS:
A. Pursuant to a certain credit agreement, dated as of January 7, 1999,
as amended and restated as of February 29, 2000 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"; capitalized terms used herein and not defined herein shall have the
meanings assigned to them in the Credit Agreement), among Borrower, PR Borrower,
Parent, as a Guarantor, each of the other Guarantors, the Lenders, Xxxxxxx Xxxxx
& Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as Lead Arranger,
Bank of America, N.A. (as successor to NationsBank, N.A.), as Co-Arranger and
Administrative Agent, JPMorgan Chase Bank (formerly The Chase Manhattan Bank),
as Co-Arranger and Co-Documentation Agent, The Bank of Nova Scotia, as
Co-Documentation Agent, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as
Syndication Agent, and Xxxxxx Xxxxxxx Senior Funding, Inc., as Senior Managing
Agent, the Lenders have agreed (i) to make to or for the account of Borrower
certain Term Loans up to an aggregate principal amount of $1,044,375,000 and
certain Revolving Credit Loans up to an aggregate principal amount of
$250,000,000 and (ii) to issue certain Letters of Credit for the account of
Borrower.
B. It is contemplated that one or more of the Pledgors may enter into
one or more Interest Rate Protection Agreements and Swap Contracts with one or
more of the Lenders or their respective Affiliates (collectively, "Interest Rate
Agreements") fixing the interest rates with respect to Loans under the Credit
Agreement (all obligations of the Pledgors now existing or hereafter arising
under such Interest Rate Agreements, collectively, the "Interest Rate
Obligations").
C. Each Pledgor is or will be the legal and beneficial owner of the
Pledged Collateral (as hereinafter defined) to be pledged by it hereunder.
D. The Pledgors have made and delivered that certain Security Agreement
dated as of January 7, 1999 (as amended, amended and restated, supplemented or
otherwise modified from time to time to the date hereof, the "Original Security
Agreement") in favor of the Administrative Agent for its benefit and the benefit
of the Lenders and the other Creditors (collectively, the "Secured Parties") to
secure the payment and performance of all of the Secured Obligations (as defined
in Section 2 hereof).
E. The parties hereto wish to enter into this Agreement to amend in
certain respects and restate the Original Security Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgors and Administrative Agent hereby agree as follows:
Section 1. Pledge. As collateral security for the payment and
performance when due of all the Secured Obligations, each Pledgor hereby
pledges, assigns, transfers and grants to the Administrative Agent for its
benefit and the benefit of the Secured Parties, a continuing first priority
security interest in and to all of the right, title and interest of such Pledgor
in, to and under all personal property and fixtures of every kind and nature,
wherever located, whether now existing or hereafter arising or acquired from
time to time (collectively, the "Pledged Collateral"). The Pledged Collateral
includes, without limitation:
(a) all "accounts", as such term is defined in the Uniform
Commercial Code as in effect from time to time in any applicable jurisdiction,
including, without limitation, Puerto Rico, (the "UCC"), and in any event
including, without limitation, all health-care-insurance receivables and all of
such Pledgor's rights to payment for goods sold or leased or services performed
by such Pledgor or any other party, and all rights evidenced by an account,
contract, security agreement, chattel paper (whether tangible or electronic),
guarantee (including a letter of credit) or other evidence of indebtedness or
security together with (i) all security pledged, assigned, hypothecated or
granted to or held by such Pledgor to secure the foregoing, (ii) general
intangibles arising out of such Pledgor's rights in any goods, the sale of which
gave rise thereto, (iii) all guarantees, endorsements and indemnifications on,
or of, any of the foregoing, (iv) all powers of attorney for the execution of
any evidence of indebtedness or security or other writing in connection
therewith and (v) all evidences of the filing of financing statements and other
statements and the registration of other instruments in connection therewith and
amendments thereto, notices to other creditors or secured parties and
certificates from filing or other registration offices (collectively, the
"Receivables");
(b) all "inventory", as such term is defined in the UCC, and, in
any event including, without limitation, all raw materials, work in process,
returned goods, finished goods, samples and consigned goods to the extent of the
consignee's interest therein, materials and supplies of any kind or nature which
are or might be used in connection with the manufacture, printing, publication,
packing, shipping, advertising, selling or finishing of any such goods and all
other products, goods, materials and supplies (collectively, the "Inventory");
(c) all books, records, ledgers, printouts, file materials and
other papers containing information relating to Receivables and any account
debtors in respect thereof;
(d) any and all sale, service, performance and equipment or real
property lease contracts (including, without limitation, all leases for cell
sites to which Pledgor is a party), agreements and grants (whether written or
oral), and any other contract (whether written or oral) between such Pledgor and
third parties, including, without limitation, the Merger Agreement and the
Facilities Agreement, but excluding any of the foregoing (i) which would be
terminable by the counterparty thereto if such Pledgor's interest therein were
subject to the security interest created hereby and (ii) for which such Pledgor
has not received a consent from such counterparty to the grant of a security
interest therein (collectively, the "Contracts");
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(e) all "equipment", as such term is defined in the UCC, and, in
any event including, without limitation, all machinery, equipment, office
machinery, furniture, conveyors, tools, materials, storage and handling
equipment, automotive equipment, motor vehicles, tractors, trailers and other
like property, whether or not the title thereto is governed by a certificate of
title or ownership, and all other equipment of every kind and nature owned by
such Pledgor or in which such Pledgor may have any interest (to the extent of
such interest), all modifications, alterations, repairs, substitutions,
additions and accessions thereto, all replacements and all parts therefor and
together with all substitutes for any of the foregoing (collectively, the
"Equipment");
(f) all "general intangibles", as such term is defined in the
UCC, and, in any event including, without limitation, all manuals, blueprints,
know-how, warranties and records in connection with the Equipment; all documents
of title or documents representing the Inventory and all records, files and
writings with respect thereto; any and all other rights, claims and causes of
action of such Pledgor against any other Person and the benefits of any and all
collateral or other security given by any other Person in connection therewith,
including, without limitation, all rights under any Contracts; all information,
customer lists, identification of suppliers, data, plans, blueprints,
specification designs, drawings, recorded knowledge, surveys, engineering
reports, test reports, manuals, materials, standards, processing standards,
performance standards, catalogs, research data, computer and automatic machinery
software and programs and the like pertaining to operations by such Pledgor, all
field repair data, sales data and other information relating to sales of
products now or hereafter manufactured, distributed or franchised by such
Pledgor; all accounting information pertaining to such Pledgor's operations or
any of the Equipment, Inventory, Receivables or Intangibles and all media in
which or on which any of the information or knowledge or data or records
relating to such operations or any of the Equipment, Inventory, Receivables,
Contracts or Intangibles may be recorded or stored and all computer programs
used for the compilation or printout of such information, knowledge, records or
data; all rights and goodwill of such Pledgor; all licenses, consents, permits,
variances, certifications and approvals of governmental agencies now or
hereafter held by such Pledgor pertaining to operations now or hereafter
conducted by such Pledgor or assets now or hereafter held by such Pledgor (other
than FCC Licenses, as hereinafter defined); all causes of action, claims and
warranties now or hereafter owned or acquired by such Pledgor, and any other
property consisting of a general intangible under the UCC applicable in such
other location where such Pledgor maintains its records relating to such
property (collectively, the "Intangibles");
(g) all present and future authorizations, permits, licenses and
franchises (collectively the "FCC Licenses") heretofore or hereafter granted or
assigned to such Pledgor by the Federal Communications Commission (the "FCC") or
any present and future authorizations, permits, licenses and franchises
(collectively "Governmental Licenses") heretofore or hereafter granted or
assigned to such Pledgor by any other public or governmental agency or
regulatory body for the operation or ownership of a wireless telecommunications
system; excluding, however, any such FCC Licenses or Governmental Licenses to
the extent, and only to the extent, that it is unlawful to grant a security
interest in the same, but including, to the maximum extent permitted by law, all
rights incident or appurtenant to such FCC Licenses or Governmental Licenses
(including, without limitation, the right to receive all proceeds derived or
arising from or in connection with the sale, assignment or transfer of such FCC
Licenses), whether now owned or hereafter acquired by such Pledgor, or in which
such Pledgor may now have or hereafter acquire an interest.
(h) all insurance policies held by such Pledgor or naming such
Pledgor as insured, additional insured or loss payee (including, without
limitation, casualty insurance, liability insurance, property insurance and
business interruption insurance), all such insurance policies entered into after
the date hereof other than insurance policies (or certificates of insurance
evidencing such insurance policies) relating to health and welfare insurance and
life insurance policies in which such Pledgor is not named as
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beneficiary (i.e., insurance policies that are not "Key Man" insurance policies)
and all rights, claims and recoveries relating thereto (including all dividends,
returned premiums and other rights to receive money in respect of any of the
foregoing) (collectively, the "Insurance Policies");
(i) such Pledgor's right to receive the surplus funds, if any,
which are payable to such Pledgor following the termination of any employee
pension plan and the satisfaction of all liabilities of participants and
beneficiaries under such plan in accordance with applicable law (collectively,
the "Pension Plan Reversions");
(j) the issued and outstanding shares of capital stock of each
Person described in Schedule I-A hereto and each other corporation hereafter
acquired or formed by such Pledgor (the "Pledged Shares") (which are and shall
remain at all times until this Agreement terminates, certificated shares),
including the certificates representing the Pledged Shares and any interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to the Pledged Shares; provided that such Pledgor shall not be
required to pledge shares possessing more than 65% of the voting power of all
classes of capital stock entitled to vote of any Subsidiary which is a
controlled foreign corporation (as defined in Section 957(a) of the Internal
Revenue Code of 1986, as amended from time to time (the "Tax Code")) and, in any
event, shall not be required to pledge the shares of stock of any Subsidiary
otherwise required to be pledged pursuant to this Section 1(j) to the extent
that such pledge would constitute an investment of earnings in United States
property under Section 956 (or a successor provision) of the Tax Code, which
investment would trigger an increase in the gross income of a United States
shareholder of such Pledgor pursuant to Section 951 (or a successor provision)
of the Tax Code; provided further, that if following a change in the relevant
sections of the Tax Code or the regulations, rules, rulings, notices or other
official pronouncements issued or promulgated thereunder which would permit a
pledge of 66-2/3% or more of the total combined voting power of all classes of
capital stock of any Foreign Subsidiary entitled to vote without causing the
undistributed earnings of such Foreign Subsidiary as determined for United
States Federal income taxes to be treated as a deemed dividend to the Pledgors
for United States Federal income tax purposes, then the 65% limitation set forth
above shall no longer be applicable and the Pledgors shall duly pledge and
deliver to the Administrative Agent such maximum additional percentage of the
capital stock not theretofore required to be pledged hereunder as will not cause
such a deemed dividend to have been made;
(k) subject to the proviso set forth in clause (j) above, all
additional shares of capital stock of whatever class of any issuer of the
Pledged Shares from time to time acquired by such Pledgor in any manner (which
are and shall remain at all times until this Agreement terminates, certificated
shares) (which shares shall be deemed to be part of the Pledged Shares),
including the certificates representing such additional shares and any interest
of such Pledgor in the entries on the books of any financial intermediary
pertaining to such additional shares;
(l) all membership interests and/or partnership interests, as
applicable, of each Person described in Schedule I-B hereto and each other
limited liability company or partnership hereafter acquired or formed by such
Pledgor, together with all rights, privileges, authority and powers of such
Pledgor in and to each such Person or under the membership or partnership
agreement of each such Person (the "Operative Agreements") (collectively, the
"Initial Pledged Interests"), and the certificates, instruments and agreements,
if any, representing the Initial Pledged Interests;
(m) all options, warrants, rights, agreements, additional
membership or partnership interests or other interests relating to each such
Person described in clause (l) above or any interest in any such Person,
including, without limitation, any right relating to the equity or membership or
partnership interests in any such Person or under the Operative Agreement of any
such Person (collectively, the "Additional Interests"; together with the Initial
Pledged Interests, the "Pledged
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Interests"; the Pledged Interests and the Pledged Shares, collectively, the
"Pledged Securities") from time to time acquired by such Pledgor in any manner
and the certificates, instruments and agreements, if any, representing the
Additional Interests;
(n) all intercompany notes described on Schedule II hereto (the
"Intercompany Notes") and all certificates or instruments evidencing such
Intercompany Notes and all proceeds thereof, all accessions thereto and
substitutions therefor;
(o) all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes (collectively, "Distributions");
(p) without affecting the obligations of such Pledgor under any
provision prohibiting such action hereunder or under the Credit Agreement, in
the event of any consolidation or merger in which any Person listed on Schedule
I-A or Schedule I-B hereto is not the surviving entity, all shares of each class
of the capital stock of the successor corporation or interests or certificates
of the successor limited liability company or partnership owned by such Pledgor
(unless such successor is such Pledgor itself) formed by or resulting from such
consolidation or merger;
(q) patents issued or assigned to and all patent applications
made by such Pledgor, including, without limitation, the patents and patent
applications listed on Schedule III hereto, along with any and all (i)
inventions and improvements described and claimed therein, (ii) reissues,
divisions, continuations, extensions and continuations-in-part thereof, (iii)
income, royalties, damages, claims and payments now and hereafter due and/or
payable thereunder and with respect thereto, including, without limitation,
damages and payments for past or future infringements thereof, and (iv) rights
to xxx for past, present and future infringements thereof (collectively, the
"Patents");
(r) trademarks (including service marks), logos, federal and
state trademark registrations and applications made by such Pledgor, common law
trademarks and trade names owned by or assigned to such Pledgor and all
registrations and applications for the foregoing, including, without limitation,
the registrations and applications listed on Schedule IV hereto, along with any
and all (i) renewals thereof, (ii) income, royalties, damages and payments now
and hereafter due and/or payable thereunder and with respect thereto, including,
without limitation, damages, claims and payments for past or future
infringements thereof, and (iii) rights to xxx for past, present and future
infringements thereof (collectively, the "Trademarks");
(s) copyrights owned by or assigned to such Pledgor, including,
without limitation, the registrations and applications listed on Schedule V
hereto, along with any and all (i) renewals and extensions thereof, (ii) income,
royalties, damages, claims and payments now and hereafter due and/or payable
thereunder and with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, and (iii) rights to
xxx for past, present and future infringements thereof (collectively, the
"Copyrights");
(t) license agreements and covenants not to xxx with any other
party with respect to any Patent, Trademark, or Copyright listed on Schedule VI
hereto, along with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, royalties, damages, claims and payments now
and hereafter due and/or payable thereunder and with respect thereto, including,
without limitation, damages and payments for past, present or future breaches
thereof, (iii) rights to xxx for past, present and
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future breaches thereof and (iv) any other rights to use, exploit or practice
any or all of the Patents, Trademarks or Copyrights (collectively, the
"Licenses");
(u) the entire goodwill and all product lines of such Pledgor's
business and other general intangibles, including, without limitation, know-how,
trade secrets, customer lists, proprietary information, inventions, methods,
procedures and formulae connected with the use of and symbolized by the
Trademarks of such Pledgor (collectively, the "Goodwill");
(v) all securities accounts, commodity accounts, investment
property (all as defined in the UCC) and financial accounts of such Pledgor,
including, without limitation, (i) the financial accounts, securities accounts
and commodity accounts maintained with the financial institutions, securities
intermediaries and commodity intermediaries (each as defined in the UCC and
each, a "Financial Intermediary") identified on Schedule VII hereto, (ii) all
moneys, financial assets (as defined in the UCC), checks, drafts, securities and
instruments deposited or required to be deposited in such accounts, (iii) all
investments and all certificates and instruments, if any, from time to time
representing or evidencing any other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing items listed under subclauses (i) and (ii), and (iv) each
consent or other agreement from time to time entered into by such Pledgor with
any financial institution at which any of the above accounts is maintained and
all rights of such Pledgor under each such consent or agreement;
(w) all "deposit accounts", as such term is defined in the UCC;
(x) all "documents", as such term is defined in the UCC,
including, without limitation, all receipts of such Pledgor covering, evidencing
or representing Inventory or Equipment (collectively, the "Documents");
(y) all "instruments", as such term is defined in the UCC,
including, without limitation, all promissory notes, drafts, bills of exchange
or acceptances (collectively, the "Instruments");
(z) all "commercial tort claims", as such term is defined in the
UCC. The Administrative Agent acknowledges that the attachment of its security
interest in any commercial tort claim as original collateral is subject to the
applicable Pledgor's compliance with Section 5(k) hereof;
(aa) all "letter-of-credit rights" , as such term is defined in
the UCC; and
(bb) all "proceeds", as such term is defined in the UCC or under
other relevant law, and in any event including, without limitation, any and all
(i) proceeds of any insurance (except payments made to a Person which is not a
party to this Agreement), indemnity, warranty or guaranty payable to the
Administrative Agent or to such Pledgor from time to time with respect to any of
the Pledged Collateral, (ii) payments (in any form whatsoever) made or due and
payable to such Pledgor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Pledged Collateral by any federal, state, local, foreign or other governmental
or administrative (including self-regulatory) body, instrumentality, department
or agency or any court, tribunal, administrative hearing body, arbitration
panel, commission or other similar dispute-resolving body including, without
limitation, those governing the regulation and protection of the environment
(each, a "Governmental Authority") (or any person acting on behalf of a
Governmental Authority), (iii) instruments representing obligations to pay
amounts in respect of the Pledged Collateral, (iv) products of the Pledged
Collateral and (v) other amounts from time to time paid or payable under or in
connection with any of the Pledged Collateral (collectively, the "Proceeds").
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Notwithstanding the foregoing, to the extent that the provision of any
agreement binding on any Pledgor that governs any intangible personal property
referred to in any of clauses (a) through (z) above expressly prohibits the
pledge, assignment or transfer thereof, or the grant of a security interest
therein, such Pledgor's right, title and interest in such property shall be
excluded from the foregoing pledge, assignment, transfer and grant for so long
as such prohibition continues, it being understood that upon request of the
Administrative Agent, such Pledgor will in good faith use reasonable efforts to
obtain consent for the pledge, assignment, transfer and creation of a security
interest in favor of the Administrative Agent in such Pledgor's right, title and
interest in such property.
The Pledged Securities, the Intercompany Notes, the Distributions and
the Proceeds relating thereto are collectively referred to as the "Securities
Collateral". The Patents, Trademarks, Copyrights, Licenses, Goodwill and the
Proceeds relating thereto are collectively referred to as the "Intellectual
Property Collateral". The property described in clause (v) above and the
Proceeds relating thereto are collectively referred to as the "Financial Account
Collateral". Any account containing Financial Account Collateral shall be
referred to as a "financial account". The Pledged Collateral other than the
Securities Collateral, the Intellectual Property Collateral and the Financial
Account Collateral is collectively referred to as the "General Collateral".
Section 2. Secured Obligations. This Agreement secures, and the Pledged
Collateral is collateral security for, the payment and performance in full when
due, whether at stated maturity, by acceleration or otherwise (including,
without limitation, the payment of interest and other amounts which would accrue
and become due but for the filing of a petition in bankruptcy or the operation
of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a)), of (i) all Obligations of the Pledgors now existing or
hereafter arising under or in respect of the Credit Agreement and all Interest
Rate Obligations of the Pledgors now existing or hereafter arising under or in
respect of any Interest Rate Agreement (including, without limitation, the
obligations of the Pledgors to pay principal, interest and all other charges,
fees, expenses, commissions, reimbursements, premiums, indemnities and other
payments related to or in respect of the Obligations contained in the Credit
Agreement and the obligations contained in any Interest Rate Agreement), and
(ii) without duplication of the amounts described in clause (i), all obligations
of the Pledgors now existing or hereafter arising under or in respect of this
Agreement or any other Credit Document, including, without limitation, all
charges, fees, expenses, commissions, reimbursements, premiums, indemnities and
other payments related to or in respect of the obligations contained in this
Agreement or in any other Credit Document, in each case whether in the regular
course of business or otherwise (the obligations described in clauses (i) and
(ii), collectively, the "Secured Obligations").
Section 3. FCC Approvals and Municipal Approvals. The provisions of
this Agreement shall be subject to this Section 3. The rights of the
Administrative Agent and the Secured parties under this Agreement are subject to
all applicable rules and regulations of the FCC. Notwithstanding anything to the
contrary contained herein, neither the Administrative Agent nor any Secured
Party will take any action pursuant to this Agreement which would constitute or
result in any assignment of any FCC License or any direct or indirect change of
control of Borrower or any Pledgor or any FCC License, or any Government
License, whether de jure or de facto, if such assignment or change of control
would require the prior approval of the FCC under the Communications Act of
1934, as amended (including the written rules and regulations promulgated by the
FCC) or any other public or governmental agency or regulatory body unless and
until each such approval has been obtained. Borrower and each Pledgor agrees to
take any action which the Administrative Agent may reasonably request in order
to obtain and enjoy to the fullest possible extent the rights and benefits
granted to the Administrative Agent and the Secured Parties by this Agreement
and each other agreement, instrument and document delivered to the
Administrative Agent for the benefit of the Secured Parties in connection
herewith or in any document evidencing or securing the Collateral, including
specifically, at the cost and expense of such Pledgor, the use of such
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Pledgor's best efforts to assist in obtaining approval of the FCC or any other
agency or government for any action or transaction contemplated by, and
consistent with the terms of, this Agreement which is then required by law, and
specifically, without limitation, upon request, to prepare, sign and file (or
cause to be filed) with the FCC or any other agency or government the assignor's
or transferor's portion of any application or applications for consent to the
assignment of any license, permit or franchise or change of control necessary or
appropriate under the rules and regulations of the FCC or any agency or
government for approval of (a) the assignment of any FCC license or transfer of
control thereof or of such Pledgor, (b) any sale or sales of property
constituting the Collateral by the Administrative Agent, or (c) any assumption
by the Administrative Agent or the Secured Parties of voting rights or
management rights in property constituting the Collateral which are being
effected in accordance with the terms of this Agreement. Furthermore,
notwithstanding anything to the contrary contained in this Agreement, the
Administrative Agent agrees on behalf of the Secured parties that (aa) voting
rights in any Pledged Securities shall remain with the issuer thereof even upon
an Event of Default unless all required prior approvals of the FCC to the
transfer of such voting rights shall have been obtained, (bb) upon an Event of
Default, and only if so permitted by this Agreement, the Agent or the Secured
Parties may dispose of such Pledged Securities, but only after all consents
required by the FCC or any other public or governmental agency or regulatory
body with respect to such sale have been obtained.
Section 4. No Release. Nothing set forth in this Agreement shall
relieve any Pledgor from the performance of any term, covenant, condition or
agreement on such Pledgor's part to be performed or observed under or in respect
of any of the Pledged Collateral or from any liability to any Person under or in
respect of any of the Pledged Collateral or shall impose any obligation on the
Administrative Agent or any Secured Party to perform or observe any such term,
covenant, condition or agreement on such Pledgor's part to be so performed or
observed or shall impose any liability on the Administrative Agent or any
Secured Party for any act or omission on the part of such Pledgor relating
thereto or for any breach of any representation or warranty on the part of such
Pledgor contained in this Agreement, any Interest Rate Agreement or any other
Credit Document, or under or in respect of the Pledged Collateral or made in
connection herewith or therewith. The obligations of each Pledgor contained in
this Section 4 shall survive the termination of this Agreement and the discharge
of such Pledgor's other obligations under this Agreement, any Interest Rate
Agreement and the other Credit Documents.
Section 5. Perfection; Supplements; Further Assurances; Use of Pledged
Collateral.
(a) Delivery of Certificated Securities Collateral. All
certificates, agreements or instruments representing or evidencing the
Securities Collateral, to the extent not previously delivered to the
Administrative Agent, shall immediately upon receipt thereof by any Pledgor be
delivered to and held by or on behalf of the Administrative Agent pursuant
hereto. All certificated Securities Collateral 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
Administrative Agent. The Administrative Agent shall have the right, at any time
upon the occurrence and during the continuance of any Event of Default and
without notice to any Pledgor, to endorse, assign or otherwise transfer to or to
register in the name of the Administrative Agent or any of its nominees or
endorse for negotiation any or all of the Securities Collateral, without any
indication that such Securities Collateral is subject to the security interest
hereunder. In addition, the Administrative Agent shall have the right at any
time to exchange certificates representing or evidencing Pledged Securities for
certificates of smaller or larger denominations.
(b) Perfection of Uncertificated Securities Collateral. If any
issuer of Pledged Securities is organized in a jurisdiction which does not
permit the use of certificates to evidence equity ownership, or if any of the
Pledged Securities are at any time not evidenced by certificates of ownership,
then each applicable Pledgor shall, to the extent permitted or required by
applicable law to perfect,
8
continue and maintain a valid, enforceable, first priority security interest in
the Pledged Securities, record such pledge on the equityholder register or the
books of the issuer, cause the issuer to execute and deliver to the
Administrative Agent an acknowledgment of the pledge of such Pledged Securities
substantially in the form of Exhibit 1 hereto, execute any customary pledge
forms or other documents necessary or appropriate to complete the pledge and
give the Administrative Agent the right to transfer such Pledged Securities
under the terms hereof and provide to the Administrative Agent an opinion of
counsel, in form and substance satisfactory to the Administrative Agent, as to
the perfection of such pledge.
(c) Financing Statements and Other Filings.
(i) Each Pledgor agrees that at any time and from
time to time, it will, at the sole cost and expense of the
Pledgors, file and refile, or authorize the Administrative Agent
to file and refile, such financing statements, continuation
statements and other documents (including, without limitation,
this Agreement), in form acceptable to the Administrative Agent,
in such offices (including, without limitation, the United States
Patent and Trademark Office and the United States Copyright
Office) as the Administrative Agent may reasonably deem necessary
or appropriate, wherever required or permitted by law in order to
perfect, continue and maintain a valid, enforceable, first
priority security interest in the Pledged Collateral as provided
herein and to preserve the other rights and interests granted to
the Administrative Agent hereunder, as against third parties,
with respect to any Pledged Collateral. Each Pledgor authorizes
the Administrative Agent to file any such financing or
continuation statement or other document without the signature of
such Pledgor where permitted by law.
(ii) Each Pledgor irrevocably authorizes the
Administrative Agent at any time and from time to time to file in
any jurisdiction in which the UCC has been adopted any initial
financing statements and amendments thereto that (A) indicate the
Pledged Collateral (I) as all assets of such Pledgor or words of
similar effect, regardless of whether any particular asset
comprised in the Collateral falls within the scope of Article 9
of the UCC, or (II) as being of an equal or lesser scope or with
greater detail, and (B) contain any other information required by
part 5 of Article 9 of the UCC for the sufficiency or filing
office acceptance of any initial financing statement or
amendment, including (I) whether such Pledgor is an organization,
the type of organization and any organization identification
number issued to such Pledgor and, (II) in the case of a
financing statement filed as a fixture filing or indicating
Pledged Collateral as timber to be cut or as-extracted
collateral, a sufficient description of real property to which
such Pledged Collateral relates. Each Pledgor agrees to furnish
any such information to the Administrative Agent promptly upon
request. Each Pledgor also ratifies its authorization for the
Administrative Agent to have filed in any UCC jurisdiction any
like initial financing statements or amendments thereto if filed
prior to the date hereof.
(d) Perfection in Financial Accounts. In addition to any other
actions required herein to be taken by any Pledgor, each applicable Pledgor
shall cause each Financial Intermediary to execute and deliver to the
Administrative Agent within thirty (30) days of the date hereof a financial
account control agreement substantially in the form of Exhibit 2 hereto
acknowledging the security interest and exclusive dominion and control of the
Administrative Agent in all Financial Account Collateral on deposit by such
Pledgor with such Financial Intermediary.
(e) Motor Vehicles. At any time after the occurrence and
during the continuance of an Event of Default, each Pledgor shall, upon the
request of the Administrative Agent, deliver to the Administrative Agent
originals of the certificates of title or ownership for the motor vehicles, and
any other Equipment covered by certificates of title or ownership owned by it,
with the Administrative Agent listed as lienholder.
9
(f) Supplements; Further Assurances. Each Pledgor agrees to do
such further acts and things, and to execute and deliver to the Administrative
Agent such additional assignments, agreements, supplements, powers and
instruments, as the Administrative Agent may reasonably deem necessary or
appropriate, wherever required or permitted by law, in order to perfect,
preserve and protect the security interest in the Pledged Collateral as provided
herein and the rights and interests granted to the Administrative Agent
hereunder, to carry into effect the purposes of this Agreement or better to
assure and confirm unto the Administrative Agent or permit the Administrative
Agent to exercise and enforce its respective rights, powers and remedies
hereunder with respect to any Pledged Collateral. Without limiting the
foregoing, each Pledgor shall make, execute, endorse, acknowledge, file or
refile and/or deliver to the Administrative Agent from time to time such lists,
descriptions and designations of the Pledged Collateral, copies of warehouse
receipts, receipts in the nature of warehouse receipts, bills of lading,
documents of title, vouchers, invoices, schedules, confirmatory assignments,
supplements, additional security agreements, conveyances, financing statements,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments, as the Administrative Agent shall reasonably request.
The Administrative Agent may institute and maintain, in its own name or in the
name of any Pledgor, such suits and proceedings as the Administrative Agent may
be advised by counsel shall be reasonably necessary or expedient to prevent any
impairment of the security interest in or perfection of the Pledged Collateral.
All of the foregoing shall be at the sole cost and expense of the Pledgors.
(g) Use and Pledge of Pledged Collateral. Unless an Event of
Default shall have occurred and be continuing, the Administrative Agent shall
from time to time execute and deliver, upon written request of any Pledgor and
at the sole cost and expense of the Pledgors, any and all instruments,
certificates or other documents, in a form reasonably requested by such Pledgor,
necessary or appropriate in the reasonable judgment of such Pledgor to enable
such Pledgor to continue to exploit, license, use, enjoy and protect the Pledged
Collateral in accordance with the terms of this Agreement. The Pledgors and the
Administrative Agent acknowledge that this Agreement is intended to grant to the
Administrative Agent for the benefit of the Secured Parties a security interest
in and Lien upon the Pledged Collateral and shall not constitute or create a
present assignment of any of the Pledged Collateral.
(h) Pledged Collateral in the Possession of a Bailee. If any
goods in an amount in excess of $1,000,000 in the aggregate are at any one time
in the possession of a bailee, the applicable Pledgor shall promptly notify the
Administrative Agent thereof and, if requested by the Administrative Agent,
shall promptly obtain an acknowledgement from such bailee, in form and substance
satisfactory to the Administrative Agent, that such bailee holds such Pledged
Collateral for the benefit of the Administrative Agent and shall act upon the
instructions of the Administrative Agent, without the further consent of the
Pledgor.
(i) Electronic Chattel Paper. If any Pledgor at any time holds
or acquires an interest in any electronic chattel paper, such Pledgor shall
promptly notify the Administrative Agent thereof and, at the request of the
Administrative Agent, shall take such action as the Administrative Agent may
reasonably request to vest in the Administrative Agent control, under Section
9-105 of the UCC, of such electronic chattel paper.
(j) Letter of Credit Rights. If any Pledgor is at any one time
a beneficiary under one or more letters of credit in an amount in excess of
$1,000,000 in the aggregate now or hereafter issued in favor of such Pledgor,
such Pledgor shall promptly notify the Administrative Agent thereof and, at the
reasonable request and option of the Administrative Agent, such Pledgor shall
either (i) arrange, for the issuer and any nominated person with respect to such
letter of credit to consent, pursuant to an agreement or other authenticated
record with and in form and substance satisfactory to the Administrative Agent,
to an assignment to the Administrative Agent of the proceeds of any drawing
under the letter of credit or (ii) arrange for the Administrative Agent to
become the transferee beneficiary of the letter of credit.
10
(k) Commercial Tort Claims. If any Pledgor shall at any time hold
or acquire a commercial tort claim in an amount in excess of $1,000,000, such
Pledgor shall immediately notify the Administrative Agent in a writing signed by
such Pledgor of the brief details thereof and grant to the Administrative Agent
in such writing a security interest therein and in the proceeds thereof, all
upon the terms of this Agreement, with such writing to be in form and substance
satisfactory to the Administrative Agent.
Section 6. Representations, Warranties and Covenants. Each Pledgor
represents, warrants and covenants as follows:
(a) Perfection Actions; Prior Liens. Upon the completion of the
deliveries, filings and other actions contemplated in Section 5 hereof, the
security interest granted to the Administrative Agent for the benefit of the
Secured Parties pursuant to this Agreement in and to the Pledged Collateral will
constitute a perfected security interest therein, superior and prior to the
rights of all other Persons therein other than with respect to (i) the Liens
identified on Annex A relating to the items of Pledged Collateral identified on
such annex, (ii) with respect to General Collateral acquired after the date
hereof, Liens of the type described in clauses (g), (h), (l), (n), (o), (p),
(q), (r) and (u) of the definition of Permitted Liens and (iii) Subordinate
Liens (as hereinafter defined) permitted hereunder which are created or
authorized under any law or regulation of any applicable Governmental Authority
and which are required under such law or regulation to be superior to the Lien
and security interest created and evidenced hereby (the Liens described in this
clause (iii), collectively, the "Governmental Prior Liens"; together with the
Liens described in clauses (i) and (ii) above, "Prior Liens").
(b) No Liens. Such Pledgor is as of the date hereof, and, as to
Pledged Collateral acquired by it from time to time after the date hereof, such
Pledgor will be, the sole direct and beneficial owner of all Pledged Collateral
pledged by it hereunder free from any Lien or other right, title or interest of
any Person other than (i) Prior Liens, (ii) the Lien and security interest
created by this Agreement and (iii) Subordinate Liens, and such Pledgor shall
defend the Pledged Collateral pledged by it hereunder against all claims and
demands of all Persons at any time claiming any interest therein adverse to the
Administrative Agent or any Secured Party other than the holders of such Liens.
There is no agreement, and no Pledgor shall enter into any agreement or take any
other action, that would result in the imposition of any other Lien, restrict
the transferability of any of the Pledged Collateral or otherwise impair or
conflict with such Pledgors' obligations or the rights of the Administrative
Agent hereunder except to the extent permitted by Credit Documents.
"Subordinate Liens" shall mean (A) with respect to the General
Collateral, Liens of the type described in clauses (b), (c), (g), (h), (k), (l),
(m), (n), (o), (p), (q), (r), (s) and (u) of the definition of Permitted Liens
and (B) with respect to all other Pledged Collateral, Liens of the type
described in clause (b) of the definition of Permitted Liens.
(c) Other Financing Statements. There is no financing statement
(or similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in the
Pledged Collateral other than financing statements relating to (i) Prior Liens
that do not constitute Governmental Prior Liens, (ii) this Agreement and (iii)
Subordinate Liens that do not constitute Governmental Prior Liens, and so long
as any of the Secured Obligations remain unpaid or the Commitments of the
Lenders to make any Loan or to issue any Letter of Credit shall not have expired
or been sooner terminated, no Pledgor shall execute, authorize or permit to be
filed in any public office any financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) or statements
relating to any Pledged Collateral, except, in each case, financing statements
filed or to be filed in respect of and covering the security interests granted
by such Pledgor pursuant to
11
this Agreement and financing statements relating to Prior Liens or Subordinate
Liens that in each such case do not constitute Governmental Prior Liens.
(d) Legal Status; Legal Name; Locations; Chief Executive Office.
Each Pledgor is an organization of the type, and is organized in the
jurisdiction, set forth in the Perfection Certificate (as hereinafter defined).
Such Perfection Certificate sets forth each Pledgor's organizational
identification number or states that such Pledgor has none. Each Pledgor's exact
legal name is that set forth on the Perfection Certificate and on the signature
pages hereof. Such Perfection Certificate sets forth each Pledgor's place of
business or (if it has more than one place of business) its chief executive
office, as well as its mailing address if different and the location of all
Inventory and Equipment. Each Pledgor's place of business or (if it has more
than one place of business) chief executive office is located in a jurisdiction
that has adopted the UCC or whose laws generally require that information
concerning the existence of nonpossessory security interests be made generally
available in a filing, recording or registration system as a condition or result
of the security interest obtaining priority over the rights of a lien creditor
with respect to the Pledged Collateral. Such Pledgor shall not move its chief
executive office or move any Inventory or Equipment to any location other than
those listed on such Perfection Certificate except to such new location as such
Pledgor may establish in accordance with the last sentence of this Section 6(d).
All tangible evidence of all Receivables, Pension Plan Reversions, Contracts,
Intangibles and Insurance Policies of such Pledgor and the only original books
of account and records of such Pledgor relating thereto are, and will continue
to be, kept at such chief executive office, or at such new location for such
chief executive office as such Pledgor may establish in accordance with the last
sentence of this Section 6(d). All Receivables, Pension Plan Reversions,
Contracts, Intangibles and Insurance Policies of such Pledgor are, and will
continue to be, controlled and monitored (including, without limitation, for
general accounting purposes) from such chief executive office location, or such
new location as such Pledgor may establish in accordance with the last sentence
of this Section 6(d). Such Pledgor shall not establish a new location for its
chief executive office, move any Inventory or Equipment to any location other
than those listed on Annex B, change its organizational identification number if
it has one or change its name, identity, type of organization, jurisdiction of
organization or other legal structure until (i) it shall have given the
Administrative Agent not less than 30 days' prior written notice of its
intention so to do, clearly describing such new location, organizational
identification number or name and providing such other information in connection
therewith as the Administrative Agent may request, (ii) with respect to such new
location or name, such Pledgor shall have taken all action satisfactory to the
Administrative Agent to maintain the perfection and priority of the security
interest of the Administrative Agent for the benefit of the Secured Parties in
the Pledged Collateral intended to be granted hereby, including, without
limitation, obtaining waivers of landlord's or warehouseman's liens with respect
to such new location, if applicable; and (iii) with respect to any Pledgor that
does not have an organizational identification number and later obtains one,
such Pledgor shall forthwith notify the Administrative Agent of such
organizational identification number.
(e) Due Authorization and Issuance. All of the Pledged Shares
have been, and to the extent hereafter issued will be upon such issuance, duly
authorized, validly issued and fully paid and nonassessable. All of the Initial
Pledged Interests have been fully paid for, and there is no amount or other
obligation due and owing by any Pledgor to any issuer of the Initial Pledged
Interests in exchange for or in connection with the issuance of the Initial
Pledged Interests or any Pledgor's status as a partner or a member of any issuer
of the Initial Pledged Interests.
(f) No Violations, etc. The pledge of the Pledged Securities
pursuant to this Agreement does not violate Regulation T, U or X of the Federal
Reserve Board.
(g) No Options, Warrants, etc. There are no options, warrants,
calls, rights, commitments or agreements of any character to which such Pledgor
is a party or by which it is bound
12
obligating such Pledgor to issue, deliver or sell or cause to be issued,
delivered or sold, additional Pledged Securities or obligating such Pledgor to
grant, extend or enter into any such option, warrant, call, right, commitment or
agreement. There are no voting trusts or other agreements or understandings to
which such Pledgor is a party with respect to the transfer, voting or exercise
of any other right of the equity interests of any issuer of the Pledged
Securities.
(h) No Claims. Such Pledgor owns or has rights to use all the
Pledged Collateral pledged by it hereunder and all rights with respect to any of
the foregoing used in, necessary for or material to such Pledgor's business as
currently conducted and as contemplated to be conducted pursuant to the Credit
Documents. The use by such Pledgor of such Pledged Collateral and all such
rights with respect to the foregoing do not infringe on the rights of any
Person. No claim has been made and remains outstanding that such Pledgor's use
of any Pledged Collateral does or may violate the rights of any third person.
(i) Authorization, Enforceability. Such Pledgor has the requisite
organizational power, authority and legal right to pledge and grant a security
interest in all the Pledged Collateral pledged by it pursuant to this Agreement,
and this Agreement constitutes the legal, valid and binding obligation of such
Pledgor, enforceable against such Pledgor in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
(j) No Conflicts, Consents, etc. Neither the execution and
delivery of this Agreement by each Pledgor nor the consummation of the
transactions herein contemplated nor the fulfillment of the terms hereof (i)
violates any charter or by-laws or other organizational document of such Pledgor
or any issuer of Pledged Securities, (ii) violates the terms of any agreement,
indenture, mortgage, deed of trust, equipment lease, instrument or other
document to which such Pledgor is a party, or by which it may be bound or to
which any of its properties or assets may be subject, (iii) conflicts with any
law, order, rule or regulation applicable to any such Pledgor of any
Governmental Authority having jurisdiction over such Pledgor or its property, or
(iv) results in or requires the creation or imposition of any Lien (other than
the Lien contemplated hereby) upon or with respect to any of the property now
owned or hereafter acquired by such Pledgor except with respect to each of the
foregoing which is not reasonably likely to have a Material Adverse Effect, or a
material adverse effect on the value of the Pledged Collateral or an adverse
effect on the security interests hereunder. No consent of any party (including,
without limitation, equityholders or creditors of such Pledgor or any account
debtor under a Receivable) and no consent, authorization, approval, license or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body or other Person is required for (x) the pledge by such Pledgor
of the Pledged Collateral pledged by it pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by such Pledgor, (y) except
as expressly recognized in Section 3 hereof, the exercise by the Administrative
Agent of the rights provided for in this Agreement or (z) except as expressly
recognized in Section 3 hereof, the exercise by the Administrative Agent of the
remedies in respect of the Pledged Collateral pursuant to this Agreement.
(k) Pledged Collateral. All information set forth herein,
including the schedules and annexes attached hereto, and all information
contained in any documents, schedules and lists heretofore delivered to any
Secured Party in connection with this Agreement, in each case, relating to the
Pledged Collateral, is accurate and complete in all material respects. The
Pledged Collateral described on the schedules attached hereto constitutes all of
the property of such type of Pledged Collateral owned or held by the Pledgors.
(l) Insurance. No Pledgor shall take any action that impairs the
rights of the Administrative Agent or any Secured Party in the Pledged
Collateral. Each Pledgor shall at all times keep
13
the Inventory and Equipment insured, at such Pledgor's own expense, to the
Administrative Agent's satisfaction against such risks to which the Pledged
Collateral may be subject, and in such amounts and with such deductibles as
would be maintained by operators of businesses similar to the business of such
Pledgor or as the Administrative Agent may otherwise require. Each policy or
certificate with respect to such insurance shall be endorsed to the
Administrative Agent's satisfaction for the benefit of the Administrative Agent
(including, without limitation, by naming the Administrative Agent as an
additional named insured and loss payee as the Administrative Agent may request)
and such policy or certificate shall be delivered to the Administrative Agent.
Each such policy shall state that it cannot be cancelled without 30 days' prior
written notice to the Administrative Agent. At least 30 days prior to the
expiration of any such policy of insurance, each Pledgor shall deliver to the
Administrative Agent an extension or renewal policy or an insurance certificate
evidencing renewal or extension of such policy. If any Pledgor shall fail to
insure such Pledged Collateral to the Administrative Agent's satisfaction, the
Administrative Agent shall have the right (but shall be under no obligation) to
advance funds to procure or renew or extend such insurance, and such Pledgor
agrees to reimburse the Administrative Agent for all costs and expenses thereof,
with interest on all such funds from the date advanced until paid in full at the
highest rate then in effect under the Credit Agreement.
(m) Insurance Proceeds. Any proceeds of insurance received by any
Pledgor shall be applied by it as provided in Section 2.10(a)(i) of the Credit
Agreement. In the event that any Pledgor is permitted to and elects to apply
such proceeds to the repair or replacement of any item of Pledged Collateral,
such Pledgor shall upon its receipt of such proceeds from the Administrative
Agent promptly commence and diligently continue to perform such repair or
promptly effect such replacement. Upon the occurrence and during the continuance
of any Event of Default, the Administrative Agent shall have the option to apply
any proceeds of insurance received by any Pledgor in respect of the Pledged
Collateral toward the payment of the Secured Obligations in accordance with
Section 14 hereof or to continue to hold such proceeds as additional collateral
to secure the performance by the Pledgors of the Secured Obligations.
(n) Payment of Taxes; Compliance with Laws; Claims. Each Pledgor
shall pay prior to the date on which material penalties would attach thereto all
property and other taxes, assessments and governmental charges or levies imposed
upon, and all claims (including claims for labor, materials and supplies)
against, the Pledged Collateral. Each Pledgor shall comply with all laws, rules
and regulations applicable to the Pledged Collateral the failure to comply with
which would have an adverse effect on the value or use of the Pledged Collateral
or the Lien on such Pledged Collateral granted to the Administrative Agent
hereunder. Notwithstanding the foregoing, each Pledgor may at its own expense
contest the amount or applicability of any of the obligations described in the
preceding sentences by appropriate legal or administrative proceedings,
prosecution of which operates to prevent the collection thereof and the sale or
forfeiture of the Pledged Collateral or any part thereof to satisfy the same;
provided, however, that in connection with such contest, such Pledgor shall (a)
have made provision for the payment of such contested amount on such Pledgor's
books if and to the extent required by generally accepted accounting principles,
and (b) at the option and upon the request of the Administrative Agent, have
deposited with the Administrative Agent a sum sufficient to pay and discharge
such obligation and the Administrative Agent's estimate of all interest and
penalties related thereto, such sum to be released as soon as all such
obligations have been satisfied or withdrawn.
(o) Inspection and Verification. Upon reasonable request to such
Pledgor, the Administrative Agent shall have full and free access during normal
business hours to all of the books, correspondence and records of such Pledgor
relating to the Pledged Collateral, and the Administrative Agent and its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and such Pledgor agrees to render to the Administrative
Agent, at such Pledgor's cost and
14
expense, such clerical and other assistance as may be reasonably requested by
the Administrative Agent with regard thereto.
(p) Perfection Certificate.
(i) Each Pledgor shall execute and deliver to the
Administrative Agent as soon as practicable, but in no event later than July 20,
2003, a duly completed perfection certificate (together with all attachments
thereto) in form and substance reasonably satisfactory to the Administrative
Agent (the "Perfection Certificate").
(ii) Upon delivery of the Perfection Certificate, the
representations and warranties set forth in this Agreement relating to the
information contained in the Perfection Certificate shall be true, correct and
complete in all respects with the same force and effect as if made on and as of
such date.
(q) Periodic Certification. Upon the request of the
Administrative Agent, but no more than once every 18 months, the Pledgor shall
deliver to the Administrative Agent a supplemental perfection certificate (each,
a "Perfection Supplement") executed by the Pledgors setting forth the
information required pursuant to the Perfection Certificate or confirming that
there has been no change in such information since the date of such certificate
or the date of the most recent certificate delivered pursuant to this Section
6(q). Notwithstanding the foregoing, upon the occurrence of an Event of Default,
the Pledgors shall deliver to the Administrative Agent a Perfection Supplement
at any time that a Perfection Supplement is reasonably requested by the
Administrative Agent.
Section 7. Special Provisions Concerning General Collateral.
(a) Special Representations and Warranties. As of the time when
each of its Receivables arises, each Pledgor shall be deemed to have represented
and warranted that such Receivable and all records, papers and documents
relating thereto (i) are genuine and correct and in all material respects what
they purport to be, (ii) represent the legal, valid and binding obligation of
the account debtor, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability, evidencing indebtedness unpaid and owed by such account debtor,
arising out of the performance of labor or services or the sale or lease and
delivery of the merchandise listed therein or out of an advance or a loan, not
subject to the fulfillment of any contract or condition whatsoever or to any
defenses, set-offs or counterclaims except with respect to refunds, returns and
allowances in the ordinary course of business, or stamp or other taxes, (iii)
will, in the case of a Receivable, except for the original or duplicate original
invoice sent to a purchaser evidencing such purchaser's account, be the only
original writings evidencing and embodying such obligation of the account debtor
named therein, and (iv) are in compliance and conform with all applicable
federal, state and local laws and applicable laws of any relevant foreign
jurisdiction.
(b) Maintenance of Records. Each Pledgor shall keep and maintain
at its own cost and expense complete records of each Receivable, in a manner
consistent with prudent business practice, including, without limitation,
records of all payments received, all credits granted thereon, all merchandise
returned and all other documentation relating thereto. Each Pledgor shall, at
such Pledgor's sole cost and expense, upon the Administrative Agent's demand
made at any time after the occurrence and during the continuance of any Event of
Default, deliver all tangible evidence of Receivables, including, without
limitation, all documents evidencing Receivables and any books and records
relating thereto to the Administrative Agent or to its representatives (copies
of which evidence and books and records may be retained by such Pledgor). Upon
the occurrence and during the continuance of any Event
15
of Default, the Administrative Agent may transfer a full and complete copy of
any Pledgor's books, records, credit information, reports, memoranda and all
other writings relating to the Receivables to and for the use by any Person that
has acquired or is contemplating acquisition of an interest in the Receivables
or the Administrative Agent's security interest therein without the consent of
any Pledgor.
(c) Legend. Each Pledgor shall legend, at the request of the
Administrative Agent made at any time after the occurrence of any Event of
Default and in form and manner satisfactory to the Administrative Agent, the
Receivables and the other books, records and documents of such Pledgor
evidencing or pertaining to the Receivables with an appropriate reference to the
fact that the Receivables have been assigned to the Administrative Agent for the
benefit of the Secured Parties and that the Administrative Agent has a security
interest therein.
(d) Modification of Terms, etc. No Pledgor shall rescind or
cancel any indebtedness evidenced by any Receivable or modify any term thereof
or make any adjustment with respect thereto except in the ordinary course of
business consistent with prudent business practice, or extend or renew any such
indebtedness except in the ordinary course of business consistent with prudent
business practice or compromise or settle any dispute, claim, suit or legal
proceeding relating thereto or sell any Receivable or interest therein without
the prior written consent of the Administrative Agent except in the ordinary
course of business consistent with prudent business practice. Each Pledgor shall
timely fulfill all obligations on its part to be fulfilled under or in
connection with the Receivables.
(e) Collection. Each Pledgor shall cause to be collected from the
account debtor of each of the Receivables, as and when due (including, without
limitation, Receivables that are delinquent, such Receivables to be collected in
accordance with generally accepted commercial collection procedures), any and
all amounts owing under or on account of such Receivable, and apply forthwith
upon receipt thereof all such amounts as are so collected to the outstanding
balance of such Receivable, except that any Pledgor may, with respect to a
Receivable, allow in the ordinary course of business (i) a refund or credit due
as a result of returned or damaged or defective merchandise and (ii) such
extensions of time to pay amounts due in respect of Receivables and such other
modifications of payment terms or settlements in respect of Receivables as shall
be commercially reasonable in the circumstances, all in accordance with such
Pledgor's ordinary course of business consistent with its collection practices
as in effect from time to time. The costs and expenses (including, without
limitation, attorneys' fees) of collection, in any case, whether incurred by any
Pledgor, the Administrative Agent or any Secured Party, shall be paid by the
Pledgors.
(f) Instruments. Each Pledgor shall deliver to the Administrative
Agent, within five days after receipt thereof by such Pledgor, any Instrument
evidencing Receivables which is in the principal amount of $100,000 or more. Any
Instrument delivered to the Administrative Agent pursuant to this Section 7(f)
shall be appropriately endorsed (if applicable) to the order of the
Administrative Agent, as agent for the Secured Parties, and shall be held by the
Administrative Agent as further security hereunder; provided, however, that so
long as no Default shall have occurred and be continuing, the Administrative
Agent shall, promptly upon request of such Pledgor, make appropriate
arrangements for making any Instrument pledged by such Pledgor available to such
Pledgor for purposes of presentation, collection or renewal (any such
arrangement to be effected, to the extent deemed appropriate by the
Administrative Agent, against trust receipt or like document).
(g) Cash Collateral. Upon the occurrence and during the
continuance of any Event of Default, if the Administrative Agent so directs,
each Pledgor shall cause all payments on account of the Receivables to be held
by the Administrative Agent as cash collateral in accordance with subsection
10(f) hereof. Without notice to or assent by any Pledgor, the Administrative
Agent may apply any or all amounts then or thereafter held as cash collateral in
the manner provided in Section 14 hereof. The costs
16
and expenses (including, without limitation, reasonable attorneys' fees) of
collection, whether incurred by the Administrative Agent or any Secured Party,
shall be paid by the Pledgors.
(h) Maintenance of Equipment. Each Pledgor shall cause the
Equipment to be maintained and preserved in the same condition, repair and
working order as when new, ordinary wear and tear excepted, and to the extent
consistent with current business practice in accordance with any manufacturer's
manual, and, subject as set forth in Section 2.10(a)(i) of the Credit Agreement,
shall forthwith, or in the case of any loss or damage which (individually or in
the aggregate) exceeds $100,000 to any of the Equipment (of which prompt notice
shall be given to the Administrative Agent) as quickly as commercially
practicable after the occurrence thereof, make or cause to be made all repairs,
replacements and other improvements in connection therewith which are necessary
or desirable in the conduct of such Pledgor's business.
(i) Warehouse Receipts Non-Negotiable. If any warehouse receipt
or receipt in the nature of a warehouse receipt is issued with respect to any of
the Inventory, the applicable Pledgor shall not permit such warehouse receipt or
receipt in the nature thereof to be "negotiable" (as such term is used in
Section 7-104 of the UCC or under other relevant law).
(j) Consents to Assignment of Contracts. To the extent that any
contract or other agreement of any Pledgor would constitute a Contract hereunder
but for the exclusions contained in clauses (i) and (ii) of the definition of
"Contracts" hereunder, such Pledgor shall in good faith use its reasonable
efforts to cause the counterparty thereto to deliver the consent contemplated in
clause (ii) of such definition.
(k) Fair Labor Standards Act. Any goods now or hereafter produced
by each Pledgor included in the Pledged Collateral have been and will be
produced in substantial compliance with the requirements of the Fair Labor
Standards Act of 1938, as amended.
Section 8. Special Provisions Concerning Securities Collateral.
(a) Pledge of Additional Securities. Each Pledgor shall, upon
obtaining any Pledged Securities or Intercompany Notes of any Person, accept the
same in trust for the benefit of the Administrative Agent and promptly (and in
any event within five Business Days) deliver to the Administrative Agent a
pledge amendment, duly executed by such Pledgor, in substantially the form of
Exhibit 3 hereto (each, a "Pledge Amendment"), and the certificates and other
documents required under subsections 5(a) and 5(b) hereof in respect of the
additional Pledged Securities or Intercompany Notes which are to be pledged
pursuant to this Agreement, and confirming the attachment of the Lien hereby
created on and in respect of such additional property. Each Pledgor hereby
authorizes the Administrative Agent to attach each Pledge Amendment to this
Agreement and agrees that all Pledged Securities or Intercompany Notes listed on
any Pledge Amendment delivered to the Administrative Agent shall for all
purposes hereunder be considered Pledged Collateral.
(b) Voting Rights; Distributions; etc.
(i) So long as no Event of Default shall have occurred and be
continuing:
(A) Each Pledgor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the
Securities Collateral or any part thereof for any purpose not
inconsistent with the terms or purposes of this Agreement or
any other Credit Document; provided, however, that no Pledgor
shall in any event exercise such rights in any manner which
may reasonably be expected to have an adverse effect on the
value of
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the Pledged Collateral or an adverse effect on the security
intended to be provided by this Agreement.
(B) Each Pledgor shall be entitled to receive and
retain, and to utilize free and clear of the Lien of this
Agreement, any and all Distributions, but only if and to the
extent made in accordance with the provisions of the Credit
Agreement; provided, however, that any and all such
Distributions consisting of rights or interests in the form of
securities shall be forthwith delivered to the Administrative
Agent to hold as Pledged Collateral and shall, if received by
any Pledgor, be received in trust for the benefit of the
Administrative Agent, be segregated from the other property or
funds of such Pledgor and be forthwith delivered to the
Administrative Agent as Pledged Collateral in the same form as
so received (with any necessary endorsement).
(C) The Administrative Agent shall be deemed without
further action or formality to have granted to each Pledgor
all necessary consents relating to voting rights and shall, if
necessary, upon written request of any Pledgor and at the sole
cost and expense of the Pledgors, from time to time execute
and deliver (or cause to be executed and delivered) to such
Pledgor all such instruments as such Pledgor may reasonably
request in order to permit such Pledgor to exercise the voting
and other rights which it is entitled to exercise pursuant to
Section 8(b)(i)(A) hereof and to receive the Distributions
which it is authorized to receive and retain pursuant to
Section 8(b)(i)(B) hereof.
(ii) Upon the occurrence and during the continuance of any
Event of Default and except as expressly recognized in Section 3
hereof:
(A) All rights of each Pledgor to exercise the voting
and other consensual rights it would otherwise be entitled to
exercise pursuant to Section 8(b)(i)(A) hereof shall , upon
notice from the Administrative Agent, cease, and all such
rights shall thereupon become vested in the Administrative
Agent, which shall thereupon have the sole right to exercise
such voting and other consensual rights.
(B) All rights of each Pledgor to receive
Distributions which it would otherwise be authorized to
receive and retain pursuant to Section 8(b)(i)(B) hereof shall
cease and all such rights shall thereupon become vested in the
Administrative Agent, which shall thereupon have the sole
right to receive and hold as Pledged Collateral such
Distributions.
(iii) Each Pledgor shall, at its sole cost and expense, from
time to time execute and deliver to the Administrative Agent
appropriate instruments as the Administrative Agent may reasonably
request in order to permit the Administrative Agent to exercise the
voting and other rights which it may be entitled to exercise pursuant
to Section 8(b)(ii)(A) hereof and to receive all Distributions which it
may be entitled to receive under Section 8(b)(ii)(B) hereof.
(iv) All Distributions which are received by any Pledgor
contrary to the provisions of Section 8(b)(ii)(B) hereof shall be
received in trust for the benefit of the Administrative Agent, shall be
segregated from other funds of such Pledgor and shall immediately be
paid over to the Administrative Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).
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(c) No New Securities. Each Pledgor shall cause each issuer of
the Pledged Securities not to issue any stock or other securities or equity
interests in addition to or in substitution for the Pledged Securities issued by
such issuer, except to a Pledgor.
(d) Operative Agreements. Each Pledgor has delivered to the
Administrative Agent true, correct and complete copies of the Operative
Agreements. The Operative Agreements are in full force and effect, have not as
of the date hereof been amended or modified, and, to such Pledgor's knowledge,
there is no existing default by any party thereunder or any event which, with
the giving of notice or passage of time or both, would constitute a default by
any party thereunder. Each Pledgor shall deliver to the Administrative Agent a
copy of any notice of default given or received by it under any Operative
Agreement within ten (10) days after such Pledgor gives or receives such notice.
No Pledgor will terminate or agree to terminate any Operative Agreement or make
any amendment or modification to any Operative Agreement which may reasonably be
expected to have a material adverse effect on the value of the Pledged Interests
or an adverse effect on the security intended to be provided by this Agreement.
(e) Defaults, etc. Such Pledgor is not in default in the payment
of any portion of any mandatory capital contribution, if any, required to be
made under any agreement to which such Pledgor is a party relating to the
Pledged Securities pledged by it, and such Pledgor is not in violation of any
other material provisions of any such agreement to which such Pledgor is a
party, or otherwise in default or violation thereunder. No Pledged Securities
pledged by such Pledgor is subject to any defense, offset or counterclaim, nor
have any of the foregoing been asserted or alleged against such Pledgor by any
Person with respect thereto, and as of the date hereof, there are no
certificates, instruments, documents or other writings (other than the Operative
Agreements and certificates, if any, delivered to the Administrative Agent)
which evidence any Pledged Securities of such Debtor.
Section 9. Special Provisions Concerning Intellectual Property
Collateral.
(a) Grant of License. For the purpose of enabling the
Administrative Agent, during the continuance of an Event of Default, to exercise
rights and remedies under Section 13 hereof at such time as the Administrative
Agent shall be lawfully entitled to exercise such rights and remedies, and for
no other purpose, each Pledgor hereby grants to the Administrative Agent, to the
extent assignable, an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to such Pledgor) to use, assign,
license or sublicense any of the Intellectual Property Collateral now owned or
hereafter acquired by such Pledgor, wherever the same may be located, including
in such license reasonable access to all media in which any of the licensed
items may be recorded or stored and to all computer programs used for the
compilation or printout hereof.
(b) Registrations. Except pursuant to licenses and other user
agreements entered into by any Pledgor in the ordinary course of business, that
are listed in Schedule VI hereto, on and as of the date hereof (i) each Pledgor
owns and possesses the right to use, and has done nothing to authorize or enable
any other Person to use, any Copyright, Patent or Trademark listed in said
Schedules III, IV and V, and (ii) all registrations listed in said Schedules
III, IV and V are valid and in full force and effect.
(c) No Violations or Proceedings. To each Pledgor's knowledge, on
and as of the date hereof, (i) except as set forth in Schedule VI hereto, there
is no violation by others of any right of such Pledgor with respect to any
Copyright, Patent or Trademark listed in Schedules III, IV and V hereto,
respectively, pledged by it under the name of such Pledgor, (ii) such Pledgor is
not infringing in any material respect upon any Copyright, Patent or Trademark
of any other Person and (iii) no proceedings have been instituted or are pending
against such Pledgor or, to such Pledgor's knowledge, threatened, and
19
no claim against such Pledgor has been received by such Pledgor, alleging any
such violation, except as may be set forth in said Schedule VI.
(d) Protection of Administrative Agent's Security. On a
continuing basis, each Pledgor shall, at its sole cost and expense, (i) promptly
following its becoming aware thereof, notify the Administrative Agent of (A) any
adverse determination in any proceeding in the United States Patent and
Trademark Office or the Untied States Copyright Office with respect to any
Patent, Trademark or Copyright or (B) the institution of any proceeding or any
adverse determination in any federal, state or local court or administrative
body regarding such Pledgor's claim of ownership in or right to use any of the
Intellectual Property Collateral, its right to register the Intellectual
Property Collateral or its right to keep and maintain such registration in full
force and effect, (ii) maintain and protect the Intellectual Property Collateral
necessary for the operation of such Pledgor's business, (iii) not permit to
lapse or become abandoned any Intellectual Property Collateral necessary for the
operation of such Pledgor's business, and not settle or compromise any pending
or future litigation or administrative proceeding with respect to the
Intellectual Property Collateral necessary for the operation of such Pledgor's
business, in each case, without the consent of the Administrative Agent, (iv)
upon such Pledgor obtaining knowledge thereof, promptly notify the
Administrative Agent in writing of any event which may reasonably be expected to
materially adversely affect the value or utility of the Intellectual Property
Collateral or any portion thereof necessary for the operation of such Pledgor's
business, the ability of such Pledgor or the Administrative Agent to dispose of
the Intellectual Property Collateral or any portion thereof or the rights and
remedies of the Administrative Agent in relation thereto, including, without
limitation, a levy or threat of levy or any legal process against the
Intellectual Property Collateral or any portion thereof, (v) not license the
Intellectual Property Collateral other than licenses entered into by such
Pledgor in, or incidental to, the ordinary course of business, or amend or
permit the amendment of any of the licenses in a manner that materially
adversely affects the right to receive payments thereunder, or in any manner
that would materially impair the value of the Intellectual Property Collateral
or the Lien on the Intellectual Property Collateral intended to be granted to
the Administrative Agent for the benefit of the Secured Parties, without the
consent of the Administrative Agent, (vi) until the Administrative Agent
exercises its rights to make collection, diligently keep adequate records
respecting the Intellectual Property Collateral and (vii) furnish to the
Administrative Agent from time to time statements and amended schedules further
identifying and describing the Intellectual Property Collateral and such other
materials evidencing or reports pertaining to the Intellectual Property
Collateral as the Administrative Agent may from time to time reasonably request,
all in reasonable detail.
(e) After-Acquired Property. If any Pledgor shall, at any time
before the Secured Obligations have been paid or the Commitments of the Lenders
to make any Loan or to issue any Letter of Credit have expired or been sooner
terminated (i) obtain any rights to any additional Intellectual Property
Collateral or (ii) become entitled to the benefit of any additional Intellectual
Property Collateral or any renewal or extension thereof, including any reissue,
division, continuation, or continuation-in-part of any Patent, or any
improvement on any Patent, the provisions of this Agreement shall automatically
apply thereto and any such item enumerated in clause (i) or (ii) with respect to
such Pledgor shall automatically constitute Intellectual Property Collateral if
such would have constituted Intellectual Property Collateral at the time of
execution of this Agreement and be subject to the Lien created by this Agreement
without further action by any party other than actions required to perfect such
Lien. Each Pledgor shall promptly provide to the Administrative Agent written
notice of any of the foregoing. Each Pledgor agrees, promptly following a
request by the Administrative Agent, to confirm the attachment of the Lien
created by this Agreement to any rights described in clauses (i) and (ii) above
if such would have constituted Intellectual Property Collateral at the time of
execution of this Agreement by execution of an instrument in form reasonably
acceptable to the Administrative Agent.
20
(f) Modifications. Each Pledgor authorizes the Administrative
Agent to modify this Agreement by amending Schedules III, IV, V and VI hereto to
include any future Intellectual Property Collateral of such Pledgor, including,
without limitation, any of the items listed in Section 9(e) hereof.
(g) Applications. Each Pledgor shall file and prosecute
diligently all applications for the Patents, the Trademarks or the Copyrights
now or hereafter pending that would be necessary to the business of such Pledgor
to which any such applications pertain, and shall do all acts necessary to
preserve and maintain all rights in the Intellectual Property Collateral
necessary for the operation of such Pledgor's business. Any and all costs and
expenses incurred in connection with any such actions shall be borne by the
Pledgors. No Pledgor shall abandon any right to file a Patent, Trademark or
Copyright application, or any pending Patent, Trademark or Copyright application
or any Patent, Trademark or Copyright necessary for the operation of such
Pledgor's business without the consent of the Administrative Agent.
(h) Litigation.
(i) Unless there shall occur and be continuing any
Event of Default, each Pledgor shall have the right to commence and
prosecute in its own name, as the party in interest, for its own
benefit and at the sole cost and expense of the Pledgors, such
applications for protection of the Intellectual Property Collateral and
suits, proceedings or other actions for infringement, counterfeiting,
unfair competition, dilution or other damage as are in its reasonable
business judgment necessary to protect the Intellectual Property
Collateral. Each Pledgor shall promptly notify the Administrative Agent
in writing as to the commencement and prosecution of any such actions,
or threat thereof (except where such action is not reasonably likely to
have a Material Adverse Effect) relating to the Intellectual Property
Collateral, and shall provide to the Administrative Agent such
information with respect thereto as may be reasonably requested by the
Administrative Agent. Each Pledgor shall indemnify and hold harmless
each Secured Party for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, expenses or
disbursements (including attorneys' fees and expenses) of any kind
whatsoever which may be imposed on, incurred by or asserted against
such Secured Party in connection with or in any way arising out of such
suits, proceedings or other actions.
(ii) Upon the occurrence and during the continuance
of any Event of Default, the Administrative Agent shall have the right
but shall in no way be obligated to file applications for protection of
the Intellectual Property Collateral and/or bring suit in the name of
any Pledgor, the Administrative Agent or the Secured Parties to enforce
the Intellectual Property Collateral and any license thereunder. In the
event of such suit, each Pledgor shall, at the request of the
Administrative Agent, do any and all lawful acts and execute any and
all documents requested by the Administrative Agent in aid of such
enforcement and the Pledgors shall promptly, upon demand, reimburse and
indemnify the Administrative Agent, as the case may be, for all costs
and expenses (including fees and expenses of counsel) incurred by the
Administrative Agent in the exercise of its rights under this Section
9(h). In the event that the Administrative Agent shall elect not to
bring suit to enforce the Intellectual Property Collateral, each
Pledgor agrees, at the request of the Administrative Agent, to use all
reasonable measures, whether by action, suit, proceeding or otherwise,
to prevent the infringement, counterfeiting or other diminution in
value of any of the Intellectual Property Collateral by others and for
that purpose agrees to diligently maintain any action, suit or
proceeding against any person so infringing necessary to prevent such
infringement unless such Pledgor has determined that such Intellectual
Property Collateral that is the subject of any pending or contemplated
infringement or enforcement action or proceeding does not contain or
represent any value or utility (other than of an immaterial nature),
consistent with prudent business practice.
21
Section 10. Special Provisions Concerning Financial Accounts. Each
Pledgor shall comply with the following covenants and makes the following
representations and warranties.
(a) Financial Accounts. Each Pledgor shall notify each Financial
Intermediary that any Financial Account Collateral maintained with such
Financial Intermediary by such Pledgor is under the exclusive dominion and
control of the Administrative Agent and that all moneys, instruments, securities
and other property deposited with such Financial Intermediary are to be held by
such Financial Intermediary for the benefit of the Administrative Agent. Each
Pledgor shall, within one Business Day of actual receipt thereof, deposit any
payment received by it into a financial account that is subject to a financial
account control agreement substantially in the form of Exhibit 2 hereto or into
the Concentration Account referred to in subsection (b) below. In addition, all
Persons that owe money to any Pledgor shall be directed to remit their payments
to a financial account that is subject to a financial account control agreement
substantially in the form of Exhibit 2 hereto or a deposit account. If any
Pledgor is unable to obtain such an agreement from any Financial Intermediary,
then such Pledgor shall terminate all financial accounts maintained with such
Financial Intermediary and transfer all moneys, instruments, securities and
other property deposited therein to another financial account maintained with a
Financial Intermediary that has executed such an agreement. Each Pledgor hereby
represents and warrants that it does not now maintain, and will not in the
future maintain, any other financial account with any Financial Intermediary or
any other banking or financial institution other than the accounts set forth on
Schedule VII; provided, however, that any Pledgor may establish and maintain
additional financial accounts with any Financial Intermediary or any new
Financial Intermediary if (i) in the case of an existing Financial Intermediary,
such Pledgor, the Financial Intermediary and the Administrative Agent shall have
entered into an amendment to the relevant financial account control agreement to
include such new financial account under such financial account control
agreement, such amendment to be in form and substance satisfactory to the
Administrative Agent, and (ii) in the case of a new Financial intermediary, (A)
the applicable Pledgor shall have given the Administrative Agent 30 days' prior
written notice of its intention to establish a new financial account with a new
Financial Intermediary, (B) such new Financial Intermediary shall be reasonably
acceptable to the Administrative Agent and (C) such new Financial Intermediary
shall enter into a financial account control agreement substantially in the form
of Exhibit 2 hereto.
(b) Concentration Account. The Pledgors will establish a
concentration account or subaccount (the "Concentration Account") with the
Administrative Agent into which all cash held in any financial account or
deposit account of the Pledgors in excess of $1.0 million in the aggregate shall
be deposited by 12:00 p.m. New York time on each Business Day, subject to the
provisions of subsection (c) below. Each Pledgor hereby agrees that the
Concentration Account is under the exclusive dominion and control of the
Administrative Agent and all moneys, instruments, securities and other property
received in the Concentration Account are to be held for the benefit of the
Administrative Agent on behalf of the Secured Parties. Each Pledgor hereby
transfers to the Administrative Agent the exclusive dominion and control over
the Concentration Account. Notwithstanding the foregoing, the Administrative
Agent shall be permitted to designate a Lender that agrees to be a collateral
sub-agent for the Administrative Agent to be the Financial Intermediary for the
Concentration Account.
(c) Dispositions from Concentration Account. Until an Event of
Default shall have occurred and be continuing, each Pledgor is hereby authorized
by the Administrative Agent to direct on any Business Day the disposition into
one or more financial accounts that is subject to a financial account control
agreement substantially in the form of Exhibit 2 hereto any and all moneys,
instruments, securities and other property deposited in the Concentration
Account for use by such Pledgor in a manner permitted by the Credit Agreement.
The Administrative Agent shall make such disposition by 2:00 p.m. New York time
on each such date.
22
(d) Revocation of Withdrawal Right. Upon the occurrence and
during the continuance of any Event of Default, the authorization of the
Pledgors under subsection (c) above shall be revoked and all deposits maintained
in the Concentration Account or with a Financial Intermediary, and any
additional moneys, instruments, securities and other property subsequently
maintained with a Financial Intermediary, shall, at the request of the
Administrative Agent, be transferred to a collateral account or sub-account
maintained by the Administrative Agent (or a Lender that agrees to be a
collateral sub-agent for the Administrative Agent) in its name as collateral
agent for the Secured Parties (the "Collateral Account"). All such deposits in
any such Collateral Account shall constitute "Pledged Collateral" for all
purposes of this Agreement and shall be held by the Administrative Agent as
Pledged Collateral for the Secured Obligations or applied to the payment of the
Secured Obligations in accordance with Section 14 hereof. The costs and expenses
(including attorney's fees) of collection, whether incurred by any Pledgor or
the Administrative Agent (or any sub-agent), shall be borne by the Pledgors.
(e) Deposits to Collateral Account. Each Pledgor shall deposit
into the Collateral Account from time to time (i) the cash proceeds (including
pursuant to any disposition thereof) of any of the Pledged Collateral, (ii) the
cash proceeds of any Taking or Destruction or loss of title with respect to any
Real Property that is subject to a Mortgage (including proceeds of casualty
events and proceeds of insurance covering the Pledged Collateral or any Real
Property that is subject to a Mortgage), (iii) any cash in respect of any
Pledged Collateral which the Administrative Agent is entitled to pursuant to
subsection 7(g) or subsection 8(b)(ii) hereof and (iv) any additional amounts
that such Pledgor desires to pledge to the Administrative Agent for the benefit
of the Secured Parties as additional collateral security hereunder or which such
Pledgor is required to pledge as additional collateral security hereunder
pursuant to the Credit Documents.
(f) Application of Amounts in Collateral Account. The balance
from time to time in the Collateral Account shall constitute part of the Pledged
Collateral hereunder and shall not constitute payment of the Secured Obligations
until applied as hereinafter provided. So long as no Event of Default has
occurred and is continuing or will result therefrom, the Administrative Agent
shall remit the collected balance outstanding to the credit of the Collateral
Account to or upon the order of the respective Pledgor, in periodic
installments, if applicable, upon submission of reasonable evidence that such
amount is to be applied as permitted by Section 2.10(a) of the Credit Agreement;
provided that any amounts deposited in the Collateral Account in respect of
prepayments or reductions of Loans or Commitments under Section 2.10(a) of the
Credit Agreement which are to be applied to LIBOR Loans as provided in the
penultimate sentence of Section 2.10(b) of the Credit Agreement shall be held by
the Administrative Agent until the end of the respective Interest Periods of
such LIBOR Loans at which time, whether or not an Event of Default has occurred,
the Administrative Agent shall cause such monies to be applied to such LIBOR
Loans. However, at any time following the occurrence and during the continuance
of an Event of Default, the Administrative Agent may (and, if instructed by the
Lenders as specified in the Credit Agreement, shall) in its (or their)
discretion apply or cause to be applied (subject to collection) the balance from
time to time outstanding to the credit of the Collateral Account to the payment
of the Secured Obligations in the manner specified in Section 14 hereof. The
balance from time to time in the Collateral Account shall be subject to
withdrawal only as provided herein.
(g) Investment of Balance in Collateral Account. Amounts on
deposit in the Collateral Account shall be invested from time to time in such
Permitted Investments as the respective Pledgor (or, after the occurrence and
during the continuance of an Event of Default, the Administrative Agent) shall
determine which Permitted Investments shall be held in the name and be under the
control of the Administrative Agent (or any sub-agent); provided, however, that
at any time after the occurrence and during the continuance of an Event of
Default, the Administrative Agent may (and, if instructed by the Lenders as
specified in the Credit Agreement, shall) in its (or their) discretion at any
time and from time
23
to time elect to liquidate any such Permitted Investments and to apply or cause
to be applied the proceeds thereof to the payment of the Secured Obligations in
the manner specified in Section 14 hereof.
(h) Cover for Letter of Credit Liabilities. Amounts deposited
into the Collateral Account as cover for liabilities in respect of Letters of
Credit under the Credit Agreement pursuant to Section 10 thereof shall be held
by the Administrative Agent in a separate sub-account (designated "Letter of
Credit Liabilities Sub-Account") and, notwithstanding any other provision of
this Agreement to the contrary, all amounts held in such sub-account shall
constitute collateral security first for the liabilities in respect of Letters
of Credit outstanding from time to time and second as collateral security for
the other Secured Obligations hereunder until such time as all Letters of Credit
shall have been terminated and all of the liabilities in respect of Letters of
Credit have been paid in full.
Section 11. Transfers and Other Liens. No Pledgor shall (a) sell,
convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral pledged by it hereunder except as permitted by the
Credit Agreement, (b) create or permit to exist any Lien upon or with respect to
any of the Pledged Collateral pledged by it hereunder other than (i) Prior
Liens, (ii) the Lien and security interest granted to the Administrative Agent
under this Agreement and (iii) Subordinate Liens or (c) except to the extent
otherwise permitted under the Credit Agreement, permit any issuer of the Pledged
Securities to merge, consolidate or change its legal form, unless all of the
outstanding equity interests of the surviving or resulting entity are, upon such
merger or consolidation, pledged hereunder and no cash, securities or other
property is distributed in respect of the outstanding equity interests of any
other entity that was merged into or consolidated with such issuer.
Section 12. Reasonable Care. The Administrative Agent's sole duty with
respect to the custody, safe keeping and physical preservation of the Pledged
Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall
be to deal with such Pledged Collateral in the same manner as the Administrative
Agent deals with similar property for its own account, it being understood that
neither the Administrative Agent nor any of the Secured Parties shall have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Securities Collateral, whether or not the Administrative Agent or any other
Secured Party has or is deemed to have knowledge of such matters, or (ii) taking
any necessary steps to preserve rights against any Person with respect to any
Pledged Collateral.
Section 13. Remedies upon Default; Obtaining the Pledged Collateral
upon Event of Default.
(a) If any Event of Default shall have occurred and be
continuing, the Pledgors shall, at the request of the Administrative Agent,
notify account debtors and other persons obligated on any of the Pledged
Collateral of the security interest of the Administrative Agent in any account,
chattel paper, general intangible, instrument or other Pledged Collateral and
that payment thereof is to be made directly to the Administrative Agent or to
any financial institution designated by the Administrative Agent as the
Administrative Agent's agent therefor, and the Administrative Agent may itself,
if an Event of Default shall have occurred and be continuing, without notice to
or demand upon the Pledgors, so notify account debtors and other persons
obligated on Pledged Collateral. After the making of such a request or the
giving of any such notification, each Pledgor shall hold any proceeds of
collection of accounts, chattel paper, general intangibles, instruments and
other Pledged Collateral received by such Pledgor as trustee for the
Administrative Agent without commingling the same with other funds of such
Pledgor and shall turn the same over to the Administrative Agent in the
identical form received, together with any necessary endorsements or
assignments. The Administrative Agent may apply the proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Pledged
Collateral received by the Administrative Agent to the Secured Obligations or
hold such proceeds as additional Pledged Collateral, at the option of the
Administrative Agent.
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(b) If any Event of Default shall have occurred and be
continuing, then and in every such case, the Administrative Agent may:
(i) Personally, or by agents or attorneys, immediately take
possession of the Pledged Collateral or any part thereof, from any
Pledgor or any other Person who then has possession of any part thereof
with or without notice or process of law, and for that purpose may
enter upon any Pledgor's premises where any of the Pledged Collateral
is located, remove such Pledged Collateral, remain present at such
premises to receive copies of all communications and remittances
relating to the Pledged Collateral and use in connection with such
removal and possession any and all services, supplies, aids and other
facilities of any Pledgor;
(ii) Demand, xxx for, collect or receive any money or property
at any time payable or receivable in respect of the Pledged Collateral,
including, without limitation, instructing the obligor or obligors on
any agreement, instrument or other obligation (including, without
limitation, the Receivables and Contracts) constituting part of the
Pledged Collateral to make any payment required by the terms of such
instrument or agreement directly to the Administrative Agent, and in
connection with any of the foregoing, compromising, settling, extending
the time for payment and making other modifications with respect
thereto; provided, however, that in the event that any such payments
are made directly to any Pledgor, prior to receipt by any such obligor
of such instruction, such Pledgor shall segregate all amounts received
pursuant thereto in a separate account and pay the same promptly to the
Administrative Agent;
(iii) Sell, assign or otherwise liquidate, or direct any
Pledgor to sell, assign or otherwise liquidate, any or all investments
made in whole or in part with the Pledged Collateral or any part
thereof, and take possession of the proceeds of any such sale,
assignment or liquidation;
(iv) Take possession of the Pledged Collateral or any part
thereof, by directing any Pledgor in writing to deliver the same to the
Administrative Agent at any place or places so designated by the
Administrative Agent, in which event such Pledgor shall at its own
expense: (A) forthwith cause the same to be moved to the place or
places designated by the Administrative Agent and there delivered to
the Administrative Agent, (B) store and keep any Pledged Collateral so
delivered to the Administrative Agent at such place or places pending
further action by the Administrative Agent; and (C) while the Pledged
Collateral shall be so stored and kept, provide such security and
maintenance services as shall be necessary to protect the same and to
preserve and maintain them in good condition. Each Pledgor's obligation
to deliver the Pledged Collateral is of the essence of this Agreement;
(v) Withdraw all moneys, instruments, securities and other
property in any financial account of any Pledgor for application to the
Secured Obligations as provided in Section 14 hereof;
(vi) Retain and apply the Distributions to the Secured
Obligations as provided in Section 14 hereof; and
(vii) Exercise any and all rights as beneficial and legal
owner of the Pledged Collateral, including, without limitation,
perfecting assignment of and exercising any and all voting, consensual
and other rights and powers with respect to any Pledged Collateral.
Upon application to a court of equity having jurisdiction, the Administrative
Agent shall be entitled to a decree requiring specific performance by any
Pledgor of such obligation.
25
(c) Remedies; Disposition of the Pledged Collateral.
(i) Upon the occurrence and during the continuance of
any Event of Default, the Administrative Agent may from time to time
exercise in respect of the Pledged Collateral, in addition to the other
rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default under the
UCC, and the Administrative Agent may also in its sole discretion,
without notice except as specified below, sell, assign or grant a
license to use the Pledged Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange, broker's board
or at any of the Administrative Agent's offices or elsewhere, for cash,
on credit or for future delivery, and at such price or prices and upon
such other terms as the Administrative Agent may deem commercially
reasonable. The Administrative Agent or any other Secured Party or any
of their respective Affiliates may be the purchaser, licensee, assignee
or recipient of any or all of the Pledged Collateral at any such sale
and shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Pledged
Collateral sold, assigned or licensed at such sale, to use and apply
any of the Secured Obligations owed to such Person as a credit on
account of the purchase price of any Pledged Collateral payable by such
Person at such sale. Each purchaser, assignee, licensee or recipient at
any such sale shall acquire the property sold, assigned or licensed
absolutely free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives, to the fullest extent permitted by law, all
rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now
existing or hereafter enacted. The Administrative Agent shall not be
obligated to make any sale of Pledged Collateral regardless of notice
of sale having been given. The Administrative Agent may adjourn any
public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. Each Pledgor
hereby waives, to the fullest extent permitted by law, any claims
against the Administrative Agent arising by reason of the fact that the
price at which any Pledged Collateral may have been sold, assigned or
licensed at such a private sale was less than the price which might
have been obtained at a public sale, even if the Administrative Agent
accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree.
(ii) Each Pledgor acknowledges and agrees that, to
the extent notice of sale shall be required by law, ten days' notice to
such Pledgor of the time and place of any public sale or of the time
after which any private sale or other intended disposition is to take
place shall be commercially reasonable notification of such matters. No
notification need be given to any Pledgor if it has signed, after the
occurrence of an Event of Default, a statement renouncing or modifying
any right to notification of sale or other intended disposition.
(iii) Notwithstanding anything contained to the
contrary herein, the Administrative Agent hereby agrees that,
consistent with the provisions of Section 22.937(f) of the FCC's Rules
(47 C.F.R. 22.937(f)), and to the extent then required by such rule or
any successor regulation, the Administrative Agent shall provide the
applicable Pledgor and the FCC with at least ten (10) days' prior
written notification before any Pledged Collateral constituting
equipment utilized in any cellular system operated by a Pledgor will be
repossessed.
(d) Waiver of Notice and Claims. Each Pledgor hereby waives, to
the fullest extent permitted by applicable law, notice or judicial hearing in
connection with the Administrative Agent's taking possession or the
Administrative Agent's disposition of any of the Pledged Collateral, including,
without limitation, any and all prior notice and hearing for any prejudgment
remedy or remedies and any such right which such Pledgor would otherwise have
under law, and each Pledgor hereby further waives,
26
to the fullest extent permitted by applicable law: (i) all damages occasioned by
such taking of possession, (ii) all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement of the
Administrative Agent's rights hereunder, and (iii) all rights of redemption,
appraisal, valuation, stay, extension or moratorium now or hereafter in force
under any applicable law. The Administrative Agent shall not be liable for any
incorrect or improper payment made pursuant to this Section 13 in the absence of
gross negligence or willful misconduct. Any sale of, or the grant of options to
purchase, or any other realization upon, any Pledged Collateral shall operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of the applicable Pledgor therein and thereto, and shall be a perpetual bar both
at law and in equity against such Pledgor and against any and all Persons
claiming or attempting to claim the Pledged Collateral so sold, optioned or
realized upon, or any part thereof, from, through or under such Pledgor.
(e) Certain Sales of Pledged Collateral.
(i) Each Pledgor recognizes that, by reason of
certain prohibitions contained in law, rules, regulations or orders of
any foreign Governmental Authority, the Administrative Agent may be
compelled, with respect to any sale of all or any part of the Pledged
Collateral, to limit purchasers to those who meet the requirements of
such foreign Governmental Authority. Each Pledgor acknowledges that any
such sales may be at prices and on terms less favorable to the
Administrative Agent than those obtainable through a public sale
without such restrictions, and, notwithstanding such circumstances,
agrees that any such restricted sale shall be deemed to have been made
in a commercially reasonable manner and that, except as may be required
by applicable law, the Administrative Agent shall have no obligation to
engage in public sales.
(ii) Each Pledgor recognizes that, by reason of
certain prohibitions contained in the Securities Act of 1933, as
amended (the "Securities Act"), and applicable state securities laws,
the Administrative Agent may be compelled, with respect to any sale of
all or any part of the Securities Collateral, to limit purchasers to
Persons who will agree, among other things, to acquire such Securities
Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. Each Pledgor acknowledges that any
such private sales may be at prices and on terms less favorable to the
Administrative Agent than those obtainable through a public sale
without such restrictions (including, without limitation, a public
offering made pursuant to a registration statement under the Securities
Act), and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially
reasonable manner and that the Administrative Agent shall have no
obligation to engage in public sales and no obligation to delay the
sale of any Securities Collateral for the period of time necessary to
permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable
state securities laws, even if such issuer would agree to do so.
(iii) Notwithstanding the foregoing, each Pledgor
shall, upon the occurrence and during the continuance of any Event of
Default, at the request of the Administrative Agent, for the benefit of
the Administrative Agent, cause any registration, qualification under
or compliance with any federal or state securities law or laws to be
effected with respect to all or any part of the Securities Collateral
as soon as practicable and at the sole cost and expense of the
Pledgors. Each Pledgor will use its best efforts to cause such
registration to be effected (and be kept effective) and will use its
best efforts to cause such qualification and compliance to be effected
(and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral,
including, without limitation, registration under the Securities Act
(or any similar statute then in effect), appropriate qualifications
under applicable blue sky or other state securities laws and
appropriate compliance with any other government
27
requirements. Each Pledgor shall cause the Administrative Agent to be
kept advised in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, shall
furnish to the Administrative Agent such number of prospectuses,
offering circulars or other documents incident thereto as the
Administrative Agent from time to time may request, and shall indemnify
and shall cause the issuer of the Securities Collateral to indemnify
the Administrative Agent and all others participating in the
distribution of such Securities Collateral against all claims, losses,
damages and liabilities caused by any untrue statement (or alleged
untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any
omission (or alleged omission) to state therein (or in any related
registration statement, notification or the like) a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(iv) If the Administrative Agent determines to
exercise its right to sell any or all of the Securities Collateral,
upon written request, the applicable Pledgor shall from time to time
furnish to the Administrative Agent all such information as the
Administrative Agent may request in order to determine the number of
securities included in the Securities Collateral which may be sold by
the Administrative Agent as exempt transactions under the Securities
Act and the rules of the Securities and Exchange Commission thereunder,
as the same are from time to time in effect.
Section 14. Application of Proceeds. The proceeds received by the
Administrative Agent in respect of any sale of, collection from or other
realization upon all or any part of the Pledged Collateral pursuant to the
exercise by the Administrative Agent of its remedies as a secured creditor as
provided in Section 13 hereof shall be applied, together with any other sums
then held by the Administrative Agent pursuant to this Agreement, promptly by
the Administrative Agent as follows:
First, to the payment of all costs and expenses,
fees, commissions and taxes of such sale, collection or other
realization, including, without limitation, compensation to
the Administrative Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by the
Administrative Agent in connection therewith, together with
interest on each such amount at the highest rate then in
effect under the Credit Agreement from and after the date such
amount is due, owing or unpaid until paid in full;
Second, to the payment of all other costs and
expenses of such sale, collection or other realization,
including, without limitation, compensation to the Lenders and
their agents and counsel and all costs, liabilities and
advances made or incurred by the Lenders in connection
therewith, together with interest on each such amount at the
highest rate then in effect under the Credit Agreement from
and after the date such amount is due, owing or unpaid until
paid in full;
Third, without duplication of amounts applied
pursuant to clauses First and Second above, to the
indefeasible payment in full in cash, pro rata, of (i)
interest, principal and other amounts constituting Secured
Obligations (other than Interest Rate Obligations) in
accordance with the terms of the Credit Agreement and (ii) the
Interest Rate Obligations in accordance with the terms of the
Interest Rate Agreements; and
Fourth, the balance, if any, to the Person lawfully
entitled thereto (including the Pledgors or their respective
successors or assigns).
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In the event that any such proceeds are insufficient to pay in full the items
described in clauses First through Third of this Section 14, the Pledgors shall
remain liable for any deficiency.
Section 15. Expenses. Each Pledgor will upon demand pay to the
Administrative Agent the amount of any and all expenses, including the fees and
expenses of its counsel and the fees and expenses of any experts and agents
which the Administrative Agent may incur in connection with (a) the collection
of the Secured Obligations, (b) the enforcement and administration of this
Agreement, (c) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (d) the exercise or
enforcement of any of the rights of the Administrative Agent or any Secured
Party hereunder or (e) the failure by any Pledgor to perform or observe any of
the provisions hereof. All amounts payable by any Pledgor under this Section 15
shall be due upon demand and shall be part of the Secured Obligations. Each
Pledgor's obligations under this Section 15 shall survive the termination of
this Agreement and the discharge of such Pledgor's other obligations hereunder.
Section 16. No Waiver; Cumulative Remedies.
(a) No failure on the part of the Administrative Agent to
exercise, no course of dealing with respect to, and no delay on the part of the
Administrative Agent in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy; nor shall the
Administrative Agent be required to look first to, enforce or exhaust any other
security, collateral or guaranties. The remedies herein provided are cumulative
and are not exclusive of any remedies provided by law.
(b) In the event that the Administrative Agent shall have
instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Administrative Agent, then and in every such case, the
Pledgors, the Administrative Agent and each Secured Party shall be restored to
their respective former positions and rights hereunder with respect to the
Pledged Collateral, and all rights, remedies and powers of the Administrative
Agent and the Secured Parties shall continue as if no such proceeding had been
instituted.
Section 17. Administrative Agent. The Administrative Agent has been
appointed as collateral agent pursuant to the Credit Agreement. The actions of
the Administrative Agent hereunder are subject to the provisions of the Credit
Agreement. The Administrative Agent shall have the right hereunder to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking action (including, without limitation, the
release or substitution of Pledged Collateral), in accordance with this
Agreement and the Credit Agreement. The Administrative Agent may employ agents
and attorneys-in-fact in connection herewith and shall not be liable for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith. The Administrative Agent may resign and a successor
Administrative Agent may be appointed in the manner provided in the Credit
Agreement. Upon the acceptance of any appointment as Administrative Agent by a
successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent under this Agreement, and the
retiring Administrative Agent shall thereupon be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation, the provisions of this Agreement shall inure to its benefit as to
any actions taken or omitted to be taken by it under this Agreement while it was
the Administrative Agent.
Section 18. Administrative Agent May Perform; Administrative Agent
Appointed Attorney-in-Fact. If any Pledgor shall fail to do any act or thing
that it has covenanted to do hereunder or if any
29
warranty on the part of any Pledgor contained herein shall be breached, the
Administrative Agent may (but shall not be obligated to) do the same or cause it
to be done or remedy any such breach, and may expend funds for such purpose. Any
and all amounts so expended by the Administrative Agent shall be paid by the
Pledgors promptly upon demand therefor, with interest at the highest rate then
in effect under the Credit Agreement during the period from and including the
date on which such funds were so expended to the date of repayment. Each
Pledgor's obligations under this Section 18 shall survive the termination of
this Agreement and the discharge of such Pledgor's other obligations under this
Agreement, the Credit Agreement, any Interest Rate Agreement and the other
Credit Documents. Each Pledgor hereby appoints the Administrative Agent its
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor, or otherwise, from time to time in the
Administrative Agent's discretion to take any action and to execute any
instrument consistent with the terms of this Agreement and the other Credit
Documents which the Administrative Agent may deem necessary or advisable to
accomplish the purposes of this Agreement. The foregoing grant of authority is a
power of attorney coupled with an interest and such appointment shall be
irrevocable for the term of this Agreement. Each Pledgor hereby ratifies all
that such attorney shall lawfully do or cause to be done by virtue hereof.
Section 19. Indemnity.
(a) Indemnity. Each Pledgor agrees to indemnify, pay and hold
harmless the Administrative Agent and each of the other Secured Parties and the
officers, directors, employees, agents and Affiliates of the Administrative
Agent and each of the other Secured Parties (collectively, the "Indemnitees")
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs (including, without
limitation, settlement costs), expenses or disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of counsel
for such indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) which may be imposed on, incurred by, or
asserted against that Indemnitee, in any manner relating to or arising out of
this Agreement, any Interest Rate Agreement or any other Credit Document
(including, without limitation, any misrepresentation by any Pledgor in this
Agreement, any Interest Rate Agreement or any other Credit Document) (the
"indemnified liabilities"); provided that no Pledgor shall have any obligation
to an Indemnitee hereunder with respect to indemnified liabilities if it has
been determined by a final decision (after all appeals and the expiration of
time to appeal) of a court of competent jurisdiction that such indemnified
liability arose from the gross negligence or willful misconduct of that
Indemnitee. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any Law or public policy, each Pledgor shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them.
(b) Survival. The obligations of the Pledgors contained in this
Section 19 shall survive the termination of this Agreement and the discharge of
the Pledgors' other obligations under this Agreement, any Interest Rate
Agreement and under the other Credit Documents.
(c) Reimbursement. Any amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement shall constitute Secured
Obligations secured by the Pledged Collateral.
Section 20. Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision of this Agreement, nor
consent to any departure by any Pledgor therefrom, shall be effective unless the
same shall be made in accordance with the terms of the Credit Agreement and
unless in writing and signed by the Administrative Agent. Any amendment,
modification
30
or supplement of or to any provision of this Agreement, any waiver of any
provision of this Agreement and any consent to any departure by any Pledgor from
the terms of any provision of this Agreement shall be effective only in the
specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement or any other Credit
Document, no notice to or demand on any Pledgor in any case shall entitle any
Pledgor to any other or further notice or demand in similar or other
circumstances.
Section 21. Termination; Release. When all the Secured Obligations have
been paid in full and the Commitments of the Lenders to make any Loan or to
issue any Letter of Credit under the Credit Agreement shall have expired or been
sooner terminated, this Agreement shall terminate. Upon termination of this
Agreement or any release of Pledged Collateral in accordance with the provisions
of the Credit Agreement, the Administrative Agent shall, upon the request and at
the sole cost and expense of the Pledgors, forthwith assign, transfer and
deliver to Pledgor, against receipt and without recourse to or warranty by the
Administrative Agent, such of the Pledged Collateral to be released (in the case
of a release) as may be in possession of the Administrative Agent and as shall
not have been sold or otherwise applied pursuant to the terms hereof, and, with
respect to any other Pledged Collateral, proper documents and instruments
(including UCC-3 termination statements or releases) acknowledging the
termination of this Agreement or the release of such Pledged Collateral, as the
case may be.
Section 22. Notices. Unless otherwise provided herein or in the Credit
Agreement, any notice or other communication herein required or permitted to be
given shall be given in the manner set forth in the Credit Agreement, as to any
Pledgor, addressed to it at the address of Borrower set forth in the Credit
Agreement and as to the Administrative Agent, addressed to it at the address set
forth in the Credit Agreement, or in each case at such other address as shall be
designated by such party in a written notice to the other party complying as to
delivery with the terms of this Section 22; provided that notices to the
Administrative Agent shall not be effective until received by the Administrative
Agent.
Section 23. Continuing Security Interest; Assignment. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(i) be binding upon the Pledgors, their respective successors and assigns and
(ii) inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of the Administrative Agent and the other Secured
Parties and each of their respective successors, transferees and assigns; no
other Persons (including, without limitation, any other creditor of any Pledgor)
shall have any interest herein or any right or benefit with respect hereto.
Without limiting the generality of the foregoing clause (ii), any Lender may
assign or otherwise transfer any indebtedness held by it secured by this
Agreement to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Lender, herein
or otherwise, subject however, to the provisions of the Credit Agreement and any
applicable Interest Rate Agreement. Each Affiliate of Borrower which from time
to time after the initial date of this Agreement is required under the Credit
Agreement to pledge any assets to the Administrative Agent for the benefit of
the Secured Parties may become a party hereto upon execution and delivery to the
Administrative Agent of a joinder agreement substantially in the form attached
hereto as Exhibit 4, and upon such execution and delivery shall be deemed to be
a "Guarantor" and a "Pledgor" for all purposes hereunder.
Section 24. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, EXCLUDING (TO THE GREATEST EXTENT PERMITTED BY LAW) ANY RULE OF LAW THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES
31
HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL, ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
Section 25. CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF
JURY TRIAL. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR WITH RESPECT TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH PLEDGOR DESIGNATES AND APPOINTS
CORPORATION SERVICES COMPANY, WITH AN ADDRESS AT 00 XXXXX XXXXXX, XXXXXX, XXX
XXXX 00000 AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY SUCH PLEDGOR
IRREVOCABLY AGREEING IN WRITING TO SO SERVE, AS ITS AGENT TO RECEIVE ON ITS
BEHALF, SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY SUCH PLEDGOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO
EACH PLEDGOR AT THE ADDRESS OF BORROWER PROVIDED FOR IN THE CREDIT AGREEMENT
EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL
SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT
APPOINTED BY ANY PLEDGOR REFUSES TO ACCEPT SERVICE, SUCH PLEDGOR HEREBY AGREES
THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN
SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT OF COLLATERAL AGENT TO BRING PROCEEDINGS AGAINST ANY
PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION. THE PLEDGORS AND COLLATERAL
AGENT HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 26. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 27. Execution in Counterparts. This Agreement and any
amendments, waiver, consents or supplements hereto may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original, but
all such counterparts together shall constitute one and the same agreement.
Section 28. Headings. The Section headings used in this Agreement are
for convenience of reference only and shall not affect the construction of this
Agreement.
Section 29. Obligations Absolute. All obligations of each Pledgor
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Pledgor or any other
Credit Party
32
(ii) any lack of validity or enforceability of the Credit
Agreement, any Interest Rate Agreement, any Letter of Credit or any other Credit
Document, or any other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any Interest Rate Agreement, any Letter of Credit or any other Credit
Document, or any other agreement or instrument relating thereto;
(iv) any pledge, exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any departure
from any guarantee, for all or any of the Secured Obligations;
(v) any exercise, non-exercise or waiver of any right, remedy,
power or privilege under or in respect of this Agreement, any Interest Rate
Agreement or any other Credit Document except as specifically set forth in a
waiver granted pursuant to the provisions of Section 20 hereof; or
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, any Pledgor other than the defense that
no Event of Default has occurred and is continuing.
Section 30. Administrative Agent's Right to Sever indebtedness.
(a) Each Pledgor acknowledges that (i) the Pledged Collateral
does not constitute the sole source of security for the payment and performance
of the Secured Obligations and that the Secured Obligations are also secured by
other types of property of the Pledgors in other jurisdictions (all such
property, collectively, the "Collateral"), (ii) the number of such jurisdictions
and the nature of the transaction of which this instrument is a part are such
that it would have been impracticable for the parties to allocate to each item
of Collateral a specific loan amount and to execute in respect of such item a
separate credit agreement and (iii) each Pledgor intends that the Administrative
Agent have the same rights with respect to the Pledged Collateral, in any
judicial proceeding relating to the exercise of any right or remedy hereunder or
otherwise, that the Administrative Agent would have had if each item of
Collateral had been pledged or encumbered pursuant to a separate credit
agreement and security instrument. In furtherance of such intent, each Pledgor
agrees to the greatest extent permitted by law that the Administrative Agent may
at any time by notice (an "Allocation Notice") to such Pledgor allocate a
portion of the Secured Obligations (the "Allocated Indebtedness") to all or a
specified portion of the Pledged Collateral and sever from the remaining Secured
Obligations the Allocated Indebtedness. From and after the giving of an
Allocation Notice with respect to any of the Pledged Collateral, the Secured
Obligations hereunder shall be limited to the extent set forth in the Allocation
Notice and (as so limited) shall, for all purposes, be construed as a separate
credit obligation of such Pledgor unrelated to the other transactions
contemplated by the Credit Agreement, any Interest Rate Agreement, any other
Credit Document or any document related to any thereof. To the extent that the
proceeds of any judicial proceeding relating to the exercise of any right or
remedy hereunder of the Pledged Collateral shall exceed the Allocated
Indebtedness, such proceeds shall belong to such Pledgor and shall not be
available hereunder to satisfy any Secured Obligations of such Pledgor other
than the Allocated Indebtedness. In any action or proceeding to exercise any
right or remedy under this Agreement which is commenced after the giving by the
Administrative Agent of an Allocation Notice, the Allocation Notice shall be
conclusive proof of the limits of the Secured Obligations hereby secured, and
such Pledgor may introduce, by way of defense or counterclaim, evidence thereof
in any such action or proceeding. Notwithstanding any provision of this Section
30, the proceeds received by the Administrative Agent pursuant to this
33
Agreement shall be applied by the Administrative Agent in accordance with the
provisions of Section 14 hereof.
(b) Each Pledgor hereby waives to the greatest extent permitted
under law the right to a discharge of any of the Secured Obligations under any
statute or rule of law now or hereafter in effect which provides that the
exercise of any particular right or remedy as provided for herein (by judicial
proceedings or otherwise) constitutes the exclusive means for satisfaction of
the Secured Obligations or which makes unavailable any further judgment or any
other right or remedy provided for herein because the Administrative Agent
elected to proceed with the exercise of such initial right or remedy or because
of any failure by the Administrative Agent to comply with laws that prescribe
conditions to the entitlement to such subsequent judgment or the availability of
such subsequent right or remedy. In the event that, notwithstanding the
foregoing waiver, any court shall for any reason hold that such subsequent
judgment or action is not available to the Administrative Agent, no Pledgor
shall (i) introduce in any other jurisdiction any judgment so holding as a
defense to enforcement against such Pledgor of any remedy in the Credit
Agreement, any Interest Rate Agreement or any other Credit Document or (ii) seek
to have such judgment recognized or entered in any other jurisdiction, and any
such judgment shall in all events be limited in application only to the state or
jurisdiction where rendered and only with respect to the collateral referred to
in such judgment.
(c) In the event any instrument in addition to the Allocation
Notice is necessary to effectuate the provisions of this Section 30, including,
without limitation, any amendment to this Agreement, any substitute promissory
note or affidavit or certificate of any kind, the Administrative Agent may
execute and deliver such instrument as the attorney-in-fact of any Pledgor. Such
power of attorney is coupled with an interest and is irrevocable.
(d) Notwithstanding anything set forth herein to the contrary,
the provisions of this Section 30 shall be effective only to the maximum extent
permitted by law.
Section 31. Future Advances. This Agreement shall secure the payment of
any amounts advanced from time to time pursuant to the Credit Agreement.
IN WITNESS WHEREOF, the Pledgors and the Administrative Agent have
caused this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
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IN WITNESS WHEREOF, the Pledgors and Administrative Agent have caused
this Agreement to be duly executed and delivered by their duly authorized
officers as of the day and the year first above written.
CENTENNIAL CELLULAR OPERATING CO. LLC,
as Borrower and Pledgor
By: /s/ XXXX X. XXXX
--------------------------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President, General Counsel
CENTENNIAL PUERTO RICO OPERATIONS CORP.,
as PR Borrower and Pledgor
By: /s/ XXXX X. XXXX
--------------------------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President, General Counsel
CENTENNIAL COMMUNICATIONS CORP. (formerly known as
Centennial Cellular Corp.),
as Guarantor and Pledgor
By: /s/ XXXX X. XXXX
--------------------------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President, General Counsel
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ XXXX X. WOODIELL III
--------------------------------------------------
Name: Xxxx X. Woodiell III
Title: Managing Director
