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EXHIBIT 4.15
COMPANY SENIOR NOTE SECURITY AND PLEDGE AGREEMENT
THIS COMPANY SENIOR NOTE SECURITY AND PLEDGE AGREEMENT (the "Security
Agreement") is made and entered into as of May 31, 1996 by PETERSBURG LONG
DISTANCE INC., an Ontario corporation (the "Company"), in favor of THE BANK OF
NEW YORK, a New York banking corporation, as trustee (in such capacity, the
"Senior Note Trustee") under the Senior Note Indenture (as defined herein), for
the holders of the Senior Notes (as hereinafter defined), THE BANK OF NEW YORK,
a New York banking corporation, as trustee (in such capacity, the "Convertible
Note Trustee") under the Convertible Note Indenture (as defined herein) for the
holders of the Convertible Notes (as hereinafter defined), and THE BANK OF NEW
YORK, as collateral agent (in such capacity, the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, the Company, as issuer, the Senior Note Trustee, and NWE Capital
(Cyprus) Limited, a Cypriot corporation ("NWE Cyprus"), PLD Asset Leasing
Limited, a Cypriot corporation ("PLD Leasing"), PLD Capital Limited, a Cypriot
corporation ("PLD Capital", together with PLD Leasing, the "Leasing Companies"),
Wireless Technology Corporations Limited, a British Virgin Islands company
("WTC"), and Baltic Communications Limited, a Russian joint stock company of the
closed type ("BCL"), as guarantors (the "Senior Note Guarantors"), have entered
into an indenture dated as of May 31, 1996 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Senior Note
Indenture") pursuant to which the Company is issuing $123,000,000 in aggregate
principal amount at Stated Maturity of its 14% Senior Discount Notes due 2004
(the "Senior Notes"); and
WHEREAS, the Company, as issuer, the Convertible Note Trustee, and NWE
Cyprus, the Leasing Companies, WTC and BCL, as guarantors (the "Convertible Note
Guarantors" and, together with the Senior Note Guarantor, the "Guarantors"),
have entered into an indenture dated as of May 31, 1996 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Convertible
Note Indenture") pursuant to which the Company is issuing $26,500,000 in
aggregate principal amount of its 9% Convertible Subordinated Notes due 2006
(the "Convertible Notes"); and
WHEREAS, to secure its obligations under the Senior Note Indenture and the
Senior Notes and the other Senior Note Collateral Documents (as defined in the
Convertible Note Indenture) (together with the Senior Note Guarantors'
obligations under the Senior Note Indenture, the Guarantees contained therein
(the "Senior Note Guarantees") and the Senior Note Collateral Documents, the
"Senior Note Obligations") and to secure its obligations under the Convertible
Note Indenture and the Convertible Notes and the other Convertible Note
Collateral Documents (as defined in the Senior Note Indenture) (together with
the Convertible Note Guarantors' obligations under the Convertible Note
Indenture, the guarantees contained therein (the "Convertible Note Guarantees")
and the Convertible Note Collateral Documents, the "Convertible Note
Obligations"), the Company has agreed (i) to grant to the Collateral Agent for
the benefit of the Senior Note Trustee and the equal and ratable benefit of the
Holders of the
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Senior Notes and for the benefit of the Convertible Note Trustee and for the
equal and ratable benefit of the Holders of the Convertible Notes Liens and
security interests in and to the Collateral (as defined herein) and (ii) to
execute and deliver this Security Agreement in order to secure the payment and
performance by the Company and the Guarantors of the Senior Note Obligations and
the Convertible Note Obligations (collectively, the "Obligations").
AGREEMENT
NOW, THEREFORE, in consideration of the premises and in order to induce
the Holders of the Senior Notes to purchase the Senior Notes and the Holders of
the Convertible Notes to purchase the Convertible Notes, the Company hereby
agrees with the Collateral Agent, with the Senior Note Trustee for its benefit
and the equal and ratable benefit of the Holders of the Senior Notes and with
the Convertible Note Trustee for its benefit and the equal and ratable benefit
of the Holders of the Convertible Notes as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning given to such terms in the Senior Note
Indenture. In addition to any other defined terms used herein, the following
terms shall constitute defined terms for the purposes of this Security
Agreement:
"Default" means a "Default" as defined in Section 1.1 of the Senior
Note Indenture until the Senior Notes are no longer outstanding and the
Senior Note Indenture has been satisfied and discharged, in which case a
"Default" means a "Default" as defined in Section 1.1 of the Convertible
Note Indenture.
"Event of Default" means an "Event of Default" as defined in Section
1.1 of the Senior Note Indenture until the Senior Notes are no longer
outstanding and the Senior Note Indenture has been satisfied and
discharged, in which case "Event of Default" means an "Event of Default"
as defined in Section 1.1 of the Convertible Note Indenture.
"Permitted Liens" means "Permitted Liens" as defined in Section 1.1
of the Senior Note Indenture until the Senior Notes are no longer
outstanding and the Senior Note Indenture has been satisfied and
discharged, in which case "Permitted Liens" means "Permitted Liens" as
defined in Section 1.1 of the Convertible Note Indenture.
"Trustees" means, collectively, the Senior Note Trustee and the
Convertible Note Trustee.
SECTION 2. CREATION OF SECURITY INTEREST. The Company hereby grants to the
Collateral Agent for the benefit of the Senior Note Trustee and for the equal
and ratable benefit of the Holders of the Senior Notes and for the benefit of
the Convertible Note Trustee and for the equal and ratable benefit of the
Holders of the Convertible Notes Liens and a continuing security interest in and
to the collateral described in Section 3 hereof (the "Collateral") in order to
secure the payment and performance of all Obligations.
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SECTION 3. COLLATERAL. The Collateral is:
(a) Qualified Investments. All Qualified Investments, whether now or
hereafter acquired by the Company, including those Qualified Investments listed
on Schedule A attached hereto (or substitutions, replacements and proceeds
thereof) but excluding any Qualified Investments made with the dividends,
distributions, payments and products and proceeds of Technocom Preferred Stock
and the funds and Eligible Cash Equivalents in the Company Convertible Note
Escrow Account (collectively, the "Excluded Qualified Investments"), and the
certificates, agreements, documents, notes, collateral documents and instruments
representing or relating to such Qualified Investments, all contract rights,
instruments, general intangibles and other obligations or other receivables of
any kind relating to such Qualified Investments, all Liens relating to or
securing such Qualified Investments and the related collateral documents which
grant such Liens and all products and proceeds of such Qualified Investments,
including, without limitation, all dividends, options, warrants, rights,
subscriptions, all interest and principal payments, and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Qualified Investments;
(b) Pledged Stock. All Capital Stock of NWE Cyprus, the Leasing Companies,
BCL and any other future Wholly-Owned Subsidiary of the Company or any future
Guarantor (the "Issuers"), whether now owned or hereafter acquired, including
those shares of Capital Stock of NWE Cyprus, the Leasing Companies, and BCL
listed on Schedule B attached hereto (the "Pledged Stock"), and the certificates
representing the Pledged Stock, and, except as otherwise provided herein, all
products and proceeds of any of the Pledged Stock, including, without
limitation, all dividends, cash, options, warrants, rights, instruments,
subscriptions and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Stock; and all additional shares of, and all securities
convertible into, and warrants, options or other rights to purchase, stock of,
or equity interest in, any of the Issuers from time to time acquired by the
Company in any manner, and the certificates representing such additional shares
(any such additional shares shall constitute part of the Pledged Stock under and
as defined in this Security Agreement), and, except as otherwise provided in
Section 7(c) or elsewhere herein, all products and proceeds of any of such
additional Pledged Stock, including, without limitation, all dividends, cash,
options, warrants, rights, instruments, subscriptions, and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such additional Pledged Stock
including all proceeds received or receivable by the Company from any
recapitalization, reclassification, merger, dissolution, liquidation or other
termination of the existence of the Issuers;
(c) Company Senior Note Escrow Account. The Company Senior Note Escrow
Account and all funds contained therein and all Investments made by the Escrow
Agent (as defined in the Company Senior Note Escrow Account Agreement) therewith
(whether or not constituting Eligible Cash Equivalents) and all proceeds
thereto;
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(d) Intercompany Notes. All Intercompany Notes, whether executed on the
Issue Date or thereafter, from any Restricted Subsidiary, excluding, however,
any Intercompany Notes (or substitutes, replacements and proceeds thereof,
including the funds and Eligible Cash Equivalents in the Company Convertible
Note Escrow Agreement) evidencing loans or advances made by the Company with
dividends, distributions, payments and products or proceeds of Technocom
Preferred Stock (the "Excluded Intercompany Notes"), all Liens securing such
Intercompany Notes and the related collateral documents (including, with regard
to any Intercompany Notes representing loans or advances to, or other
Investments in, any Leasing Company of any proceeds of the Senior Notes, the
related collateral documents which grant Liens on the Telecommunications Asset
Leases and Qualified Investments securing such Intercompany Notes and such
Liens), and the instruments representing such Intercompany Notes, and, except as
otherwise provided herein, all products and proceeds of such Intercompany Notes,
including, without limitation, all interest and principal payments, instruments,
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for the Intercompany Notes; and
(e) After-acquired Collateral and Proceeds. All items described in this
Section 3 (other than those items specifically excluded), whether now owned or
hereafter at any time acquired by the Company and wherever located, including
(except as otherwise provided herein) all replacements, additions, accessions,
substitutions, repairs, proceeds and products relating thereto or therefrom, and
all documents, ledger sheets, files, books and records of the Company relating
thereto. Proceeds hereunder include (i) whatever is now or hereafter received by
the Company upon the sale, exchange, collection or other disposition of any item
of Collateral; (ii) any property of the type or types described in subsections
(a), (b) or (d) now or hereafter acquired by the Company with any proceeds of
Collateral hereunder; and (iii) any payments under any insurance or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral.
SECTION 4. DELIVERY OF COLLATERAL. All certificates or instruments
representing or evidencing the Collateral shall be delivered to and held by or
on behalf of the Collateral Agent pursuant hereto and shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance satisfactory to
the Collateral Agent, and shall be accompanied by any required transfer tax
stamps. Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right, at any time in its discretion and
without notice to the Company, but subject to its compliance with the
requirements of applicable law, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Collateral. In
addition, upon the occurrence and during the continuance of an Event of Default,
but subject to its compliance with the requirements of applicable law, the
Collateral Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Qualified Investments or Pledged Stock
for certificates or instruments of smaller or larger denominations.
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SECTION 5. REPRESENTATIONS AND WARRANTIES. The Company hereby represents
and warrants to the Collateral Agent and the Trustees that, except as specified
in Schedule C attached hereto:
(a) Legal Power. The execution, delivery and performance by the Company of
this Security Agreement are within the Company's legal powers, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with (except for any filings provided for hereunder), any
governmental authority, require no consent of any other Person and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the articles of incorporation or bylaws of the Company or of
any agreement (after giving effect to the use of proceeds of the issuance of the
Senior Notes), judgment, injunction, order, decree or other instrument binding
upon the Company or result in the creation or imposition of any Lien on any
asset of the Company (other than the Liens created by this Security Agreement,
the Company Senior Note Escrow Account Agreement and the other Senior Note
Collateral Documents) and the Liens created by the Convertible Note Indenture
and the Convertible Note Collateral Documents.
(b) Capital Stock; Enforceability of Collateral. All of the Capital Stock
of NWE Cyprus, the Leasing Companies and BCL (the "Existing Pledged Stock") has
been duly authorized and validly issued and is fully paid and non-assessable.
The Existing Pledged Stock represents 100% of the issued and outstanding Capital
Stock of NWE Cyprus, the Leasing Companies and BCL. The Pledged Stock
constitutes and will at all times constitute all of the authorized issued and
outstanding capital stock of the respective Issuers beneficially owned by the
Company.
(c) Title to Collateral. The Company is the legal, record and beneficial
owner of the Existing Pledged Stock, and any Intercompany Notes existing on the
Issue Date (the "Existing Collateral"), free and clear of any Lien or claims of
any person except for the Liens listed on Schedule D attached hereto and the
Liens created by this Security Agreement, the Company Senior Note Escrow Account
Agreement and any of the other Senior Note Collateral Documents.
(d) Enforceability. This Security Agreement has been duly executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or general principles of equity and
commercial reasonableness and except that a Canadian court will only render
judgment in Canadian currency.
(e) Perfection; Priority. Upon the execution and delivery of the Company
Senior Note Escrow Account Agreement, which is being done contemporaneously with
the execution and delivery of this Security Agreement, the delivery to the
Collateral Agent of the Existing Collateral and the filing of the Senior Note
Collateral Documents relating to the Existing
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Collateral and the documents listed on Schedule E attached hereto, to the extent
such security interests are created under applicable federal and New York laws,
the security interests in the Collateral created pursuant to this Security
Agreement and the Company Senior Note Escrow Account Agreement are valid and
perfected first priority security interests, subject to the Liens listed on
Schedule D attached hereto in the Existing Collateral, securing the payment of
the Obligations for the benefit of the Senior Note Trustee and the Holders of
the Senior Notes and the Convertible Note Trustee and the Holders of the
Convertible Notes, and enforceable as such against all creditors of the Company
and any Persons purporting to purchase any of the Existing Collateral from the
Company other than as permitted by the Senior Note Indenture; as of the date
hereof (and after giving effect to the use of proceeds of the issuance of the
Senior Notes), there are no other security interests in or Liens on the Existing
Collateral or any portion thereof, and no financing statement, pledge, notice of
Lien, assignment or collateral assignment, mortgage or deed of trust covering
the Existing Collateral or any portion thereof ("Lien Notice") exists or is on
file in any public office, except with respect to Liens listed on Schedule D
attached hereto, the Liens created by this Security Agreement and the other
Senior Note Collateral Documents and Liens to be released in connection with the
use of proceeds of the issuance of the Senior Notes.
(f) Offices. The Company's chief executive offices are located at the
address shown as the chief executive office in Schedule F attached hereto
("Chief Executive Office"), and the Company has no places of business other than
those set forth in such Schedule F, except as permitted hereafter by Section
6(c) hereof.
(g) Business Names. The Company has not conducted its businesses under any
corporate, partnership or fictitious name during the five (5) years preceding
the date hereof, other than those names set forth on Schedule G attached hereto.
(h) No Consents. No consent of any other person and no consent,
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required either (i) for the
granting of the Liens by the Company on the Collateral pursuant to this Security
Agreement or for the execution, delivery or performance of this Security
Agreement by the Company (except for filings listed on Schedule E attached
hereto, the filings and/or other actions necessary to maintain the perfection of
the Liens on the Existing Collateral and perfect Liens on after-acquired
Collateral or the proceeds of the Collateral) or (ii) for the exercise by the
Collateral Agent of the voting or other rights provided for in this Security
Agreement or the remedies in respect of the Collateral pursuant to this Security
Agreement, except, in each case, as may be required in connection with any such
disposition by laws affecting the offering and sale of the Pledged Stock and the
Qualified Investments constituting Collateral.
(i) Litigation. No litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the knowledge of the
Company, threatened by or against the Company with respect to this Security
Agreement or any of the transactions contemplated hereby.
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(j) Accurate Information. As of the date hereof, all information set forth
herein relating to the Existing Collateral is accurate and complete in all
respects.
SECTION 6. COVENANTS.
(a) Lien Notices. The Company will defend its interest in the Collateral
against all claims and demands of all persons at any time claiming the same or
any interest therein, and the Company will not permit any Lien Notices with
respect to the Collateral or any portion thereof to exist or be on file in any
public office for more than 30 days after the Company shall have notice thereof,
except with respect to Permitted Liens or Liens otherwise permitted by Section
4.11 of the Senior Note Indenture. The Company will advise the Collateral Agent
and the Trustees promptly, in reasonable detail, at the addresses as specified
in Section 17(a) of this Agreement, of any Lien (other than Permitted Liens) on,
or claim asserted against, any of the Collateral.
(b) Location of Collateral. The Company will keep all of its Collateral
now held or subsequently acquired by it at the locations specified on Schedule H
hereto, or at locations hereafter established in compliance with Section 6(c)
hereof (except for Collateral held by the Collateral Agent, a Trustee or the
Escrow Agent), unless the Company shall have given the Collateral Agent and the
Trustees prior written notice thereof and shall have in advance executed and
caused to be filed and/or delivered to the Collateral Agent and the Trustees any
financing statements or other documents required by the Trustees or the
Collateral Agent in order to perfect, protect and preserve the Liens and
security interest created hereby, all in form and substance satisfactory to the
Collateral Agent and the Trustees.
(c) Location of Offices; Corporation Name; Legal Structure. The Company
will not change the location of its chief executive office or establish any
place of business other than those set forth on Schedule F attached hereto, or
voluntarily or involuntarily change its name, identity or legal structure,
including without limitation any continuance, amalgamation, merger,
consolidation or sale of substantially all of its assets, unless the Company
shall have given the Collateral Agent and the Trustees at least 30 days prior
written notice thereof and shall have in advance executed and caused to be filed
and or delivered to the Collateral Agent and the Trustees any financing
statements or other Senior Note Collateral Documents required by the Collateral
Agent and the Trustees in order to perfect, protect and preserve the Liens and
security interest created hereby, all in form and substance satisfactory to the
Trustees and the Collateral Agent. Each Trustee and the Collateral Agent waives
such notice of the proposed name change of the Company to PLD Telekom Inc. to be
put to a vote of shareholders on June 26, 1996. The Company will promptly give
notice to the Trustees and the Collateral Agent of a favorable vote of its
shareholders to such proposed name change.
(d) Additional Collateral; Further Assurances. The Company agrees that
immediately upon becoming the beneficial owner of any additional shares of
Capital Stock of any of the Issuers, additional Qualified Investments
constituting Collateral or additional Intercompany Notes constituting
Collateral, it will pledge and deliver to the Collateral Agent for
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the benefit of the Senior Note Trustee and the equal and ratable benefit of the
Holders of the Senior Notes and for the benefit of the Convertible Note Trustee
and for the equal and ratable benefit of the Holders of the Convertible Notes,
the certificates, instruments and documents representing such Capital Stock,
Qualified Investments and Intercompany Notes (as well as duly executed
instruments of transfer or assignment in blank), and grant to the Collateral
Agent for the benefit of the Senior Note Trustee and the equal and ratable
benefit of the Holders of the Senior Notes and for the benefit of the
Convertible Note Trustee and for the equal and ratable benefit of the Holders of
the Convertible Notes pursuant to appropriate and necessary Senior Note
Collateral Documents, a continuing first priority security interest in and Liens
on such Capital Stock, Qualified Investments or Intercompany Notes, all in form
and substance satisfactory to the Trustees. The Company shall also promptly (and
in any event within five (5) Business Days after receipt thereof), subject to
its compliance with the requirements of applicable law, deliver to the
Collateral Agent any other documents of title, promissory notes, certificates or
instruments representing Collateral which it holds. The Company further agrees
that it will promptly (and in any event within 5 Business Days after such
acquisition) deliver to the Collateral Agent and the Trustees an amendment, duly
executed by the Company, in substantially the form of Schedule I hereto (an
"Additional Collateral Amendment"), with respect to the additional Collateral
that is to be pledged pursuant to this Security Agreement. The Company hereby
authorizes the Collateral Agent and the Trustees to attach each Additional
Collateral Amendment to this Security Agreement and agrees that any stock, notes
or other forms of Investment listed on any Additional Collateral Amendment
delivered to the Collateral Agent or the Trustees shall for all purposes
hereunder be considered Collateral. The Company will promptly (i) execute and
deliver, cause to be executed and filed, or use its best efforts to give any
notices, in all appropriate jurisdictions (including Canada, Cyprus, the Russian
Federation and Kazakstan) or procure any financing statements, assignments,
pledges or other documents, (ii) xxxx any chattel paper constituting Collateral
and deliver any certificates, chattel paper or instruments constituting
Collateral to the Collateral Agent or the Trustees, (iii) execute and deliver or
cause to be executed and delivered all stock powers, proxies, assignments,
instruments and other documents, and (iv) take any other actions, in each such
case as necessary or, in the reasonable opinion of the Collateral Agent and the
Trustees, desirable to perfect or continue the perfection and the priority of
the Collateral Agent's security interest and Liens in the Collateral, to protect
the Collateral against the rights, claims, or interests of third Persons other
than holders of Permitted Liens or Liens otherwise permitted by Section 4.11 of
the Senior Note Indenture or to effect the purposes of this Security Agreement.
The Company also hereby authorizes the Collateral Agent to file any financing or
continuation statements with respect to the Collateral without the signature of
the Company to the extent permitted by applicable law.
(e) Disposition of Collateral. The Company will not sell, transfer,
assign, pledge, collaterally assign, exchange or otherwise dispose of, or grant
any option or warrant with respect to, any of the Collateral except as permitted
by the Senior Note Indenture and the Convertible Note Indenture. If the proceeds
of any sale of any Collateral are notes, instruments, documents of title,
standby letters of credit or chattel paper, such proceeds shall be promptly
delivered to the Collateral Agent to be held as Collateral hereunder. If the
Collateral, or any part thereof, is sold, transferred, assigned, exchanged, or
otherwise disposed of in violation of these
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provisions, the security interest and Liens of the Collateral Agent shall
continue in such Collateral or part thereof notwithstanding such sale, transfer,
assignment, exchange or other disposition, and the Company will hold the
proceeds thereof in an separate account for the benefit of the Senior Note
Trustee and the Holders of the Senior Notes and the benefit of the Convertible
Note Trustee and the Holders of the Convertible Notes and transfer such proceeds
to the Collateral Agent or the applicable Trustee in kind to be held as
Collateral hereunder.
(f) Restrictive Agreements. The Company agrees that, except for existing
agreements set forth on Schedule J attached hereto, it will not (i) enter into
any agreement or understanding that purports to or may restrict or inhibit the
Collateral Agent's or the Trustees' rights or remedies hereunder, including,
without limitation, the Collateral Agent's or the Trustees' right to sell or
otherwise dispose of the Collateral or amend or modify in any manner materially
adverse to the Trustees the existing agreements set forth as Schedule J attached
hereto, (ii) permit any Issuer to continue, merge, amalgamate or consolidate,
unless all outstanding Capital Stock owned by the Company of the surviving
corporation is, upon such continuance, merger, amalgamation or consolidation,
pledged hereunder to the Collateral Agent or (iii) fail to pay or discharge any
tax, assessment or levy of any nature not later than five days prior to the date
of any proposed sale under any judgment, writ or warrant of attachment with
regard to the Collateral.
(g) Rights of Collateral Agent and Trustees. Upon the occurrence and
during the continuance of an Event of Default, the Collateral Agent and the
Senior Note Trustee (or the Convertible Note Trustee if the Senior Notes are no
longer outstanding and the Senior Note Indenture has been satisfied and
discharged) shall have the right at any time to make any payments and do any
other acts as the Collateral Agent or the applicable Trustee may deem necessary
to protect the Liens and security interest of the Collateral Agent in the
Collateral, including, without limitation, the rights to pay, purchase, contest
or compromise any Lien which, in the judgment of the Collateral Agent or such
Trustee, appears to be prior to or superior to the Liens and security interest
granted hereunder, and challenge any action or proceeding purporting to affect
its Liens and security interest in the Collateral. The Company hereby agrees to
reimburse the Collateral Agent and the Trustees for all payments made and
expenses incurred under this Security Agreement including reasonable fees,
expenses and disbursements of attorneys and paralegals acting for the Trustees,
including any of the foregoing payments under or acts taken to perfect or
protect its Liens and security interest in the Collateral, which amounts shall
be secured under this Security Agreement, and agrees that it shall be bound by
any payment made or act taken by the Collateral Agent or the Trustees hereunder.
Neither the Collateral Agent nor the Trustees shall have any obligation to make
any of the foregoing payments or perform any of the foregoing acts.
(h) Records. The Company will keep and maintain at its own cost and
expense satisfactory and complete records of the Collateral.
(i) Access. On reasonable notice to the Company, except at any time during
the continuation of a Default or an Event of Default, both the Collateral Agent
and the Trustees shall
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at all times have full and free access during normal business hours to all the
books, correspondence and records of the Company relating to the Collateral, and
the Collateral Agent and its representatives, and the Trustees and their
respective representatives, may examine the same, take extracts therefrom and
make photocopies thereof, and the Company agrees to render to the Collateral
Agent and/or the applicable Trustee, at the Company's cost and expense, such
clerical and other assistance, at all times and in such manner as may be
requested with regard thereto. On reasonable notice to the Company, except at
any time during the continuation of a Default or an Event of Default, the
Collateral Agent and its representatives, and the Trustees and their respective
representatives, shall at all times also have the right to enter, during normal
business hours, into and upon any premises where any of the Collateral is
located for the purpose of inspecting the same, observing its use or otherwise
protecting its interests therein.
(j) Taxes. The Company shall pay all taxes, assessments and government
charges and all claims as and to the extent required by Section 4.6 of each of
the Senior Note Indenture and the Convertible Note Indenture; provided that the
Company shall in any event pay such taxes, assessments or levies not later than
five days prior to the date of any proposed sale under any judgment, writ or
warrant of attachment with regard to any Collateral of the Company entered or
filed against the Company as a result of the failure to make such payment.
(k) Demand Obligations. The Company agrees that it will cause each of the
Restricted Subsidiaries that is obligated on any Intercompany Note constituting
Collateral that constitutes a demand obligation, within the meaning of Section
3-108 of the Uniform Commercial Code of the State of New York, to execute and
deliver to the Collateral Agent and/or either Trustee a new instrument
extending, renewing and replacing such demand obligation not later than the
second anniversary of the date of original issue thereon and on each succeeding
second anniversary thereof.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred and be continuing,
the Company shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Stock and the Qualified Investments
constituting Collateral or any part thereof for any purpose not inconsistent
with the terms of this Security Agreement, the Senior Note Indenture or any
other Senior Note Collateral Document or the Convertible Note Indenture or any
Convertible Note Collateral Document; provided that the Company shall not
exercise or shall refrain from exercising any such right if such action would be
inconsistent with or violate any provisions of this Security Agreement, the
Senior Note Indenture or any other Senior Note Collateral Document or the
Convertible Note Indenture or any Convertible Note Collateral Document.
(b) All payments made from time to time on, or with respect to, Pledged
Stock constituting Capital Stock of Leasing Companies and Qualified Investments
constituting Collateral and Intercompany Notes constituting a loan or advance
made by the Company from the net proceeds of the Senior Notes and any other
Intercompany Notes constituting loans or
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advances made by the Company to the Leasing Companies and constituting
Collateral, whether interest, principal, dividends, distributions or otherwise,
shall be delivered to the applicable Trustee for deposit in the Company Senior
Note Escrow Account or the Convertible Note Escrow Account if the Company Senior
Note Escrow Account Agreement has been terminated.
(c) So long as no Event of Default shall have occurred and be continuing,
and subject to the other terms and conditions hereof and of the Senior Note
Indenture or of the Convertible Note Indenture if the Senior Notes are no longer
outstanding and the Senior Note Indenture has been satisfied and discharged, the
Company shall be entitled to receive, and to utilize free and clear of the
security interest and Liens of this Security Agreement, all payments
("Unrestricted Payments") made from time to time on or with respect to Pledged
Stock not described in Section 7(b) above and Intercompany Notes not described
in Section 7(b) above ("Unrestricted Collateral"), whether interest, principal,
dividends, distributions or otherwise.
(d) The Collateral Agent and/or the Senior Note Trustee (or the
Convertible Note Trustee if the Senior Notes are no longer outstanding and the
Senior Note Indenture has been satisfied and discharged) shall execute and
deliver (or cause to be executed and delivered) to the Company all such proxies
and other instruments as the Company may reasonably request for the purpose of
enabling the Company to exercise the voting and other rights that it is entitled
to exercise pursuant to Sections 7(a) and (c) above.
(e) Upon the occurrence and during the continuance of an Event of Default,
(i) all rights of the Company to exercise the voting and other consensual rights
that it would otherwise be entitled to exercise pursuant to Section 7(a) shall
cease, and all such rights shall thereupon become vested in the Collateral Agent
on behalf of, or if necessary, directly in, the Senior Note Trustee (or the
Convertible Note Trustee if the Senior Notes are no longer outstanding and the
Senior Note Indenture has been satisfied and discharged), which shall thereupon
have the sole right to exercise such voting and other consensual rights, and
(ii) all Unrestricted Payments shall constitute Collateral and shall be paid
directly to the Collateral Agent and the Company's right to receive such
payments pursuant to Section 7(c) hereof shall immediately cease and all such
Unrestricted Payments shall be deposited in the Company Senior Note Escrow
Account or the Convertible Note Escrow Account, if the Company Senior Note
Escrow Account Agreement has been terminated.
(f) Upon the occurrence and during the continuance of an Event of Default,
the Company shall execute and deliver (or cause to be executed and delivered) to
the Collateral Agent and/or the Senior Note Trustee (or the Convertible Note
Trustee if the Senior Notes are no longer outstanding and the Senior Note
Indenture has been satisfied and discharged) all such proxies and other
instruments as the Collateral Agent and/or the applicable Trustee may reasonably
request for the purpose of enabling the Collateral Agent and/or the applicable
Trustee to exercise or cause the exercise of the voting and other rights that it
is entitled to exercise pursuant to Section 7(e) above.
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(g) All interest and principal payments, all dividends and distributions
and all other payments that are received by the Company contrary to the
provisions of this Section 7 shall be received in trust for the Collateral Agent
for the benefit of the Senior Note Trustee and the equal and ratable benefit of
the Holders of the Senior Notes and for the benefit of the Convertible Note
Trustee and the equal and ratable benefit of the Holders of the Convertible
Notes, shall be segregated from the other property or funds of the Company and
be forthwith delivered to the Collateral Agent as Collateral in the same form as
so received (with any necessary endorsements or other instruments of transfer or
assignment in blank), and all such payments shall be deposited in the Company
Senior Note Escrow Account or the Company Convertible Note Escrow Account if the
Company Senior Note Escrow Account Agreement has been terminated.
(h) So long as no Event of Default shall have occurred and be continuing,
neither the Collateral Agent nor the Trustees shall be under any obligation to
collect, attempt to collect, protect or enforce the Collateral, which the
Company agrees and undertakes to do at the Company's expense; provided that the
Collateral Agent and the Trustees shall cooperate with the Company and take all
such action as the Company may reasonably request to permit the Company to
collect, protect or enforce the Collateral. All reasonable expenses (including,
without limitation, attorneys' fees and legal expenses) actually incurred or
paid by the Collateral Agent and the Trustees in connection with or incident to
any such collection or attempt to collect, protect or enforce the Collateral
shall be borne by the Company or reimbursed by the Company to the Collateral
Agent or the applicable Trustee upon demand.
(i) At the Collateral Agent's or the applicable Trustee's option,
exercisable upon and during the continuance of any Event of Default, either the
Collateral Agent or the Senior Note Trustee (or the Convertible Note Trustee if
the Senior Notes are no longer outstanding and the Senior Note Indenture has
been satisfied and discharged) may notify the obligors of the Intercompany Notes
constituting Collateral (including Unrestricted Collateral), the Issuers and the
issuers or other obligors of the Qualified Investments constituting Collateral
that any and all payments and distributions to be made on such Intercompany
Notes, the Pledged Stock and such Qualified Investments, whether constituting
Unrestricted Collateral or otherwise, shall be made directly to the Collateral
Agent or the applicable Trustee, and the Company hereby directs the obligors of
such Intercompany Notes, the issuers or other obligors of such Qualified
Investments to pay and deliver over to the Collateral Agent or the Senior Note
Trustee (or the Convertible Note Trustee if the Senior Notes are no longer
outstanding and the Senior Note Indenture has been satisfied and discharged) all
payments and distributions to be made on such Intercompany Notes, the Pledged
Stock and such Qualified Investments, until such obligors or issuers are
notified in writing by the applicable Trustee or the Collateral Agent to
discontinue making such payments to it; and such obligors and issuers shall not
be required to see to the application of said proceeds by the Trustees or the
Collateral Agent. All such payments shall be deposited by such Trustee or the
Collateral Agent into the Company Senior Note Escrow Account (or the Company
Convertible Note Escrow Account if the Company Senior Note Escrow Account
Agreement has been terminated) and held as additional Collateral for the
Obligations. If at any time the Collateral Agent or a Trustee shall have
notified the obligors of the Intercompany Notes constituting Unrestricted
Collateral or the Issuers of Pledged Stock constituting Unrestricted
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Collateral to make all payments directly to the Collateral Agent and if any at
any time thereafter all Events of Default shall have been cured or waived in
accordance with the terms of the Senior Note Indenture (or the Convertible Note
Indenture if the Senior Notes are no longer outstanding and the Senior Note
Indenture has been satisfied and discharged), the Collateral Agent or a Trustee
shall notify such obligors and issuers to make all such payments directly to the
Company or as the Company may otherwise direct.
SECTION 8. POWER OF ATTORNEY. In addition to all of the powers granted to
the Senior Note Trustee pursuant to Article VI of the Senior Note Indenture and
to the Convertible Note Trustee pursuant to Article VI of the Convertible Note
Indenture, the Company hereby appoints and constitutes the Collateral Agent and
the Trustees, whether acting separately or jointly, as the Company's
attorneys-in-fact to exercise all of the following powers upon and at any time
after the occurrence and during the continuance of an Event of Default: (i)
collection of proceeds of any Collateral; (ii) conveyance of any item of
Collateral to any purchaser thereof; (iii) giving of any notices or recording of
the security interest and the Liens under Section 6(d) hereof; (iv) making of
any payments or taking any acts under Section 9 hereof and (v) paying or
discharging taxes or Liens levied or placed upon the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be
determined by the Collateral Agent in its sole discretion, and such payments
made by the Collateral Agent to become the Obligations of the Company to the
Collateral Agent, due and payable immediately upon demand. The Collateral
Agent's authority hereunder shall include, without limitation, the authority to
endorse and negotiate any checks or instruments representing proceeds of
Collateral in the name of the Company, to execute and give receipt for any
certificate of ownership or any document constituting Collateral, to transfer
title to any item of Collateral, to sign the Company's name on all financing
statements (to the extent permitted by applicable law) or any other Senior Note
Collateral Documents or other documents deemed necessary or appropriate by the
Collateral Agent to preserve, protect or perfect the Liens in the Collateral and
to file the same, to prepare, file and sign the Company's name on any notice of
Lien, and to prepare, file and sign the Company's name on a proof of claim in
bankruptcy or similar document against any customer of, or person obligated upon
any Collateral to, the Company, and to take any other actions arising from or
incident to the powers granted to the Collateral Agent in this Security
Agreement. This power of attorney is coupled with an interest in the Trustees
and in the Collateral Agent as agent on behalf of the Trustees, and is
irrevocable by the Company.
SECTION 9. COLLATERAL AGENT OR TRUSTEES MAY PERFORM. If the Company fails
to perform any covenant or agreement contained herein, the Collateral Agent or
either Trustee may, but shall not be obligated to, itself perform, or cause
performance of, such covenant or agreement, and the reasonable expenses of the
Collateral Agent or the Trustees incurred in connection therewith shall be
payable by the Company under Section 17(p) hereof.
SECTION 10. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and
powers granted to the Collateral Agent or the Trustees hereunder are being
granted in order to preserve and protect the Collateral Agent's Liens and
security interest in and to the Collateral granted hereby and shall not be
interpreted to, and shall not, impose any duties on the Collateral
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Agent or the Trustees in connection therewith. Each of the Collateral Agent and
the Trustees shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which the Collateral Agent or
such Trustee accords similar property in similar situations, it being understood
that the Collateral Agent and the Trustees shall not have any responsibility for
(i) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
the Collateral Agent or either Trustee has or is deemed to have knowledge of
such matters, (ii) taking any necessary steps to preserve rights against any
parties with respect to any Collateral, or (iii) inquiring into or verifying
that the Company has complied or will comply with its duty to furnish additional
items of Collateral to the Collateral Agent and/or the Trustees pursuant to
Section 6(d) hereof. Absent knowledge to the contrary, the Collateral Agent and
the Trustees may assume that the items of Collateral actually delivered to it
are all items required to be so delivered and may assume that no other such
items need be so delivered.
SECTION 11. SUBSEQUENT CHANGES AFFECTING COLLATERAL. The Company
represents to the Collateral Agent, the Senior Note Trustee and the Holders of
the Senior Notes, and the Convertible Note Trustee and the Holders of the
Convertible Notes that the Company has made its own arrangements for keeping
informed of changes or potential changes affecting the Collateral (including,
but not limited to, rights to convert, rights to subscribe, payment of
dividends, payments of interest and/or principal, reorganization or other
exchanges, tender offers and voting rights), and the Company agrees that the
Collateral Agent, the Senior Note Trustee and the Holders of the Senior Notes,
and the Convertible Note Trustee and the Holders of the Convertible Notes shall
have no responsibility or liability for informing the Company of any such
changes or potential changes or for taking any action or omitting to take any
action with respect thereof. Except as not prohibited by the Senior Note
Indenture or, if the Senior Notes are no longer outstanding and the Senior Note
Indenture has been satisfied and discharged, the Convertible Note Indenture, the
Company covenants that it will not, without the prior written consent of the
applicable Trustee, vote to enable, or take any other action to permit, any
Issuer to issue any Capital Stock or other securities or to sell or otherwise
dispose of, or grant any option with respect to, any of the Collateral or create
or permit to exist any Lien upon or with respect to any of the Collateral,
except for Liens permitted by Section 4.11 of the Senior Note Indenture,
Permitted Liens and the Liens granted under this Security Agreement and the
other Senior Note Collateral Documents. The Company will defend the right, title
and interest of the Collateral Agent, the Senior Note Trustee and the Holders of
the Senior Notes, and the Convertible Note Trustee and the Holders of the
Convertible Notes in and to the Collateral against the claims and demands of all
persons.
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SECTION 12. REMEDIES UPON AN EVENT OF DEFAULT.
(a) Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent may, subject to the provisions of the Senior Note Indenture
(or of the Convertible Note Indenture if the Senior Notes are no longer
outstanding and the Senior Note Indenture has been satisfied and discharged),
this Security Agreement, and the Collateral Agent's and the Trustees' compliance
with any requirements of law (including, without limitation, the applicable
Uniform Commercial Code and the Personal Property Security Act (Ontario))
applicable to the action to be taken, without notice to or demand upon the
Company except as required by the Senior Note Indenture, the Convertible Note
Indenture, this Agreement or applicable law, do any one or more of the
following:
(i) exercise any or all of the rights and remedies provided for by
the applicable Uniform Commercial Code and the Personal Property Security Act
(Ontario), specifically including, without limitation, the right to recover the
reasonable fees and expenses incurred by the Collateral Agent or the Trustees in
the enforcement of this Security Agreement or in connection with the Company's
redemption of the Collateral, including reasonable fees, expenses and
disbursements of attorneys, paralegals and agents;
(ii) at its option, transfer or register, and the Company shall
register or cause to be registered upon request therefor by the Collateral Agent
or the Trustees, the Collateral or any part thereof on the books of the
Restricted Subsidiaries to which an intercompany loan evidenced by an
Intercompany Note has been made, the Issuers or the Persons in whom Qualified
Investments are made, into the name of the Collateral Agent or the Collateral
Agent's nominee(s);
(iii) personally, or by agents or attorneys, immediately retake
possession of the Collateral, or any part thereof, from the Company 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 the Company's premises where
any of the Collateral is located and remove the same and use in connection with
such removal any and all services, supplies, aids and other facilities of the
Company;
(iv) sell, assign or otherwise liquidate, or direct the Company to
sell, assign or otherwise liquidate, any or all of the Collateral or any part
thereof, and take possession of the proceeds of any such sale or liquidation;
(v) require the Company to assemble the Collateral or any part
thereof and make it available at one or more places as the Collateral Agent or
the Trustees may designate and to deliver possession of the Collateral or any
part thereof to the Collateral Agent or the Trustees;
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(vi) use, in connection with any assembly, use or disposition of the
Collateral, any intellectual property, intangibles or other technical knowledge
or process used or utilized from time to time by the Company;
(vii) sell or cause the same to be sold at any broker's board or at
public or private sale, in one or more sales or lots, at such price or prices as
the Collateral Agent may deem best, for cash or on credit or for future
delivery, without assumption of any credit; and the purchaser of any or all
Collateral so sold shall thereafter hold the same absolutely, free from any
claim, encumbrance or right of any kind whatsoever;
(viii) enforce one or more remedies hereunder, successively or
concurrently, and such action shall not operate to estop or prevent the
Collateral Agent from pursuing any other or further remedy which it may have,
and any repossession or retaking or sale of the Collateral pursuant to the terms
hereof shall not operate to release the Company until full and final payment of
any deficiency has been made in cash;
(ix) in connection with any public or private sale under the
applicable Uniform Commercial Code, the Personal Property Security Act (Ontario)
or other applicable legislation, the Collateral Agent shall give the Company at
least fifteen (15) Business Days' prior written notice of the time and place of
any public sale of its Collateral or of the time after which any private sale or
other intended disposition thereof may be made, which shall be deemed to be
reasonable notice of such sale or other disposition. Such notice may be given to
the Company in accordance with the provisions of Section 17(a) hereof;
(x) proceed by an action or actions at law or in equity to recover
the Obligations or to foreclose this Security Agreement and sell the Collateral,
or any portion thereof, pursuant to a judgment or decree of a court or courts of
competent jurisdiction;
(xi) exercise any other rights and remedies provided by applicable
law and the other Senior Note Collateral Documents; and
(xii) if the Collateral Agent recovers possession of all or any part
of the Collateral pursuant to a writ of possession or other judicial process,
whether prejudgment or otherwise, the Collateral Agent may thereafter retain,
sell or otherwise dispose of such Collateral in accordance with this Security
Agreement or the applicable Uniform Commercial Code, the Personal Property
Security Act (Ontario) or other applicable legislation, and following such
retention, sale or other disposition, the Collateral Agent may voluntarily
dismiss without prejudice the judicial action in which such writ of possession
or other judicial process was issued. The Company hereby consents to the
voluntary dismissal by the Collateral Agent of such judicial action, and the
Company further consents to the exoneration of any bond that the Collateral
Agent files in such action.
(b) If the Collateral Agent shall determine, or shall be directed by the
Senior Note Trustee (or the Convertible Note Trustee if the Senior Notes are no
longer outstanding and the
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Senior Note Indenture has been satisfied and discharged), to exercise its right
to sell any or all of the Pledged Stock or Qualified Investments constituting
Collateral pursuant to Section 12(a) above, and if in the opinion of counsel for
the Collateral Agent it is necessary, or if in the opinion of the Collateral
Agent or such Trustee it is advisable, after such consultation with investment
bank(s), broker-dealer(s) or other experts selected by them, as the Collateral
Agent or such Trustee deems advisable or appropriate, to have the Pledged Stock
or Qualified Investments constituting Collateral or that portion thereof to be
sold, registered under the provisions of the Securities Act of 1933, as amended
(the "Securities Act"), the Company will (i) use its best efforts to cause such
Issuer or other issuer or obligor to execute and deliver, and to cause such
Person's directors and officers to execute and deliver, all at the Company's own
expense, all such instruments and documents, and to do or cause to be done all
such other acts and things as may be necessary or, in the opinion of the
Collateral Agent or such Trustee, after such consultation with investment
bank(s), broker-dealer(s) or other experts selected by them as the Collateral
Agent or such Trustee deems advisable or appropriate, advisable to register such
Pledged Stock or Qualified Investments constituting Collateral under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of 180 days from the date of the first public offering of
such Pledged Shares or Qualified Investments, or that portion thereof to be sold
and (iii) make all amendments thereto and/or to the related prospectus that are
necessary or, in the opinion of the Collateral Agent or such Trustee, advisable,
all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. The
Company agrees to use its best efforts to cause the applicable Issuer or other
issuer or obligor to comply with the provisions of the securities or "Blue Sky"
laws of any jurisdiction that the Collateral Agent or the Senior Note Trustee
(or the Convertible Note Trustee if the Senior Notes are no longer outstanding
and the Senior Note Indenture has been satisfied and discharged) shall designate
for the sale of such Pledged Stock or Qualified Investments and to make
available to the security holders of such Issuer such issuer or obligor, as the
case by be, as soon as practicable, an earnings statement (which need not be
audited) that will satisfy the provisions of Section 11(a) of the Securities
Act. The Company will cause the Issuer or other issuer or obligor, as the case
may be, to furnish to the Collateral Agent and the Trustees such number of
copies as the Collateral Agent and the Trustees may reasonably request of each
preliminary prospectuses and prospectuses, to notify promptly the Collateral
Agent and the Trustees of the happening of any event as a result of which any
then effective prospectus includes an untrue statement of any material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of then existing
circumstances and cause the Collateral Agent and the Trustees to be furnished
with such number of copies as the Collateral Agent or the Trustees may request
of such supplement to or amendment of such prospectus as is necessary to
eliminate such untrue statement or supply such omission. The Company will cause
the Issuer or such other issuer or obligor, as the case may be, to the extent
permitted by law, to indemnify, defend and hold harmless the Collateral Agent
and the Senior Note Trustee and the Holders of the Senior Notes, and the
Convertible Note Trustee and the Holders of the Convertible Notes from and
against all losses, liabilities, expenses or claims (including reasonable costs
of investigation) that the Collateral Agent, the Senior Note Trustee and the
Holders of the Senior Notes, and the
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Convertible Note Trustee and the Holders of the Convertible Notes may incur
under the Securities Act or otherwise, insofar as such losses, liabilities,
expenses or claims arise out of or are based upon any alleged untrue statement
of a material fact contained in such registration statement (or any amendment
thereto) or in any preliminary prospectus or prospectus (or any amendment or
supplement thereto), or arise out of or are based upon any alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, except to the extent that any such losses,
liabilities, expenses or claims arise solely out of or are based solely upon any
such alleged untrue statement made or such alleged omission to state a material
fact included or excluded on the written direction of the Collateral Agent or
such Trustee. The Company will bear, or will cause the Issuer or such other
issuer or obligor, as the case may be, to bear, all costs and expenses of
carrying out its or their obligations hereunder. The provisions of this Section
12(b) shall in no way impose upon the Trustee or the Collateral Agent any duty
to execute any registration statement under the Securities Act with respect to
any Pledged Stock or Qualified Investments.
(c) In view of the fact that federal, state and foreign securities laws
may impose certain restrictions on the method by which a sale of the Collateral
may be effected after an Event of Default, the Company agrees that upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent may cause, from time to time, the sale of all or any part of the
Collateral by means of a private placement, restricting the prospective
purchasers to those who will represent and agree that they are purchasing for
investment only and not for distribution. In so doing, the Collateral Agent may
solicit, or may cause an investment manager to solicit, offers to buy the
Collateral, or any part of it, for cash, from a limited number of investors who
might be interested in purchasing the Collateral. The Company acknowledges and
agrees that any such private sale may result in prices and terms less favorable
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Collateral Agent shall be under no
obligation to delay a sale of any of the Collateral for the period of time
necessary to permit the Company to cause an applicable Issuer or other such
issuer or obligor to register such securities for public sale under the
Securities Act, or under applicable state or foreign securities laws, even if
the Company could cause the Issuer or such other issuer or obligor, as the case
may be, to do so.
(d) The Company further agrees to use its best efforts to do or cause to
be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Collateral pursuant to this Section 12 valid and
binding and in compliance with any and all other applicable requirements of
applicable law. The Company further agrees that a breach of any of the covenants
contained in this Section 12 will cause irreparable injury to the Senior Note
Trustee and the Holders of the Senior Notes, and the Convertible Note Trustee
and the Holders of the Convertible Notes, that the Collateral Agent, the Senior
Note Trustee and the Holders of the Senior Notes, and the Convertible Note
Trustee and the Holders of the Convertible Notes have no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant
contained in this Section 12 shall be specifically enforceable against the
Company, and the Company hereby waives and agrees not to assert any defenses
against an
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action for specific performance of such covenants except for a defense that no
Event of Default has occurred and is continuing.
(e) Any cash held by the Collateral Agent as Collateral and all cash
proceeds received by the Collateral Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral shall be
applied by the Collateral Agent:
First, to the payment of the costs and expenses of such sale,
including, without limitation, reasonable expenses of the Collateral Agent
and its agents including the fees and expenses of its counsel, and all
expenses, liabilities and advances made or incurred by the Collateral
Agent in connection therewith or pursuant to Section 17(p) hereof;
Next, to the Senior Note Trustee, for the payment in full of all
amounts due under Section 7.7 of the Senior Note Indenture;
Next, to the Senior Note Trustee, for distribution to the Holders of
the Senior Notes for the payment in full of the remaining Senior Note
Obligations;
Next, to the Convertible Note Trustee, for the payment in full of
all amounts due under Section 7.7 of the Convertible Note Indenture;
Next, to the Convertible Note Trustee, for distribution to the
Holders of the Convertible Notes for the payment in full of the remaining
Convertible Note Obligations; and
Finally, after payment in full of all of the Obligations, to the
payment to the Company, or its successors or assigns, or to whomsoever may
be lawfully entitled to receive the same as a court of competent
jurisdiction may direct.
(f) If any sale or other disposition of Collateral by the Collateral Agent
or any other action of the Collateral Agent or the Trustees hereunder results in
reduction of the Obligations, such action will not release the Company from its
liability for any unpaid Obligations, including costs, charges and expenses
incurred in the liquidation of Collateral, together with interest thereon, and
the same shall be immediately due and payable to the Collateral Agent, the
Senior Note Trustee and the Holders of the Senior Notes as provided for in the
Senior Note Indenture, or, if applicable, the Convertible Note Trustee and the
Holders of the Convertible Notes as provided for in the Convertible Note
Indenture.
(g) The Collateral Agent may enforce its rights hereunder without prior
judicial process or judicial hearing, and to the extent permitted by law the
Company expressly waives any and all legal rights which might otherwise require
the Collateral Agent to enforce its right by judicial process.
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(h) The existence and/or exercise of any or all of the rights and remedies
given to the Collateral Agent and/or either Trustee under this Section 12 shall
be subject in all cases to compliance with any mandatory requirements of
applicable law, particularly the laws of jurisdictions other than the United
States.
SECTION 13. IRREVOCABLE AUTHORIZATION AND INSTRUCTIONS TO THE APPLICABLE
ISSUER. The Company hereby authorizes and instructs the Issuers or other
applicable issuer or obligor to comply with any instructions received by the
Issuers or such other issuer or obligor, as the case may be, from the Collateral
Agent or the Senior Note Trustee (or the Convertible Note Trustee if the Senior
Notes are no longer outstanding and the Senior Note Indenture has been satisfied
and discharged) that (i) states than an Event of Default has occurred and (ii)
is otherwise in accordance with the terms of this Security Agreement, without
any other or further instructions from the Company, and the Company agrees that
the Issuers and the other applicable issuers and obligors shall be fully
protected in so complying.
SECTION 14. ESCROW ACCOUNTS. All money received by the Company and
required to be deposited in the Company Senior Note Escrow Account, or the
Convertible Note Escrow Account if the Company Senior Note Escrow Account
Agreement has been terminated, shall be promptly and without commingling
remitted to the Collateral Agent or the Senior Note Trustee (or the Convertible
Note Trustee if the Senior Notes are no longer outstanding and the Senior Note
Indenture has been satisfied and discharged) for deposit therein. Amounts held
in the Company Senior Note Escrow Account shall be applied or disposed of only
in a manner not prohibited by the Senior Note Indenture.
SECTION 15. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent, the Senior Note Trustee and the Holders of the Senior Notes, and the
Convertible Note Trustee and the Holders of the Convertible Notes and the Liens
or security interests hereunder, and all obligations of the Company hereunder,
shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Senior Note Indenture,
any Senior Note Collateral Document, any Senior Note Guarantee, the Convertible
Note Indenture, any Convertible Note Collateral Document, any Convertible Note
Guarantee or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Senior Note Indenture or the Senior Note
Collateral Documents or from the Convertible Note Indenture or the Convertible
Note Collateral Documents;
(c) any exchange, surrender, release or non-perfection of any Liens on any
other collateral, or any release or amendment or waiver of or consent to
departure from any Senior Note Guarantee, any Convertible Note Guarantee or
other guarantee, for all or any of the Obligations; or
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(d) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Company in respect of the Obligations or of
this Security Agreement.
SECTION 16. WAIVERS.
(a) Except as may be required under the provisions of the Senior Note
Indenture (or of the Convertible Note Indenture if the Senior Notes are no
longer outstanding and the Senior Note Indenture has been satisfied and
discharged) and to the fullest extent permitted under applicable law, neither
the Collateral Agent nor the Senior Note Trustee (or the Convertible Note
Trustee if the Senior Notes are no longer outstanding and the Senior Note
Indenture has been satisfied and discharged) shall be under any duty whatsoever
to make or give any presentment, notice of dishonor, protest, demand for
performance, notice of non-performance, notice of intent to accelerate, notice
of acceleration, or other notice or demand in connection with any Collateral or
the Obligations, or to take any steps reasonably necessary to preserve any
rights against any Obligor or other Person. The Company waives to the fullest
extent permitted under applicable law any right of marshalling in respect of any
and all Collateral, and waives to the fullest extent permitted under applicable
law any right to require the Collateral Agent or the applicable Trustee to
proceed against any Obligor or other Person, exhaust any Collateral or enforce
any other remedy which the Collateral Agent or the applicable Trustee now has or
may hereafter have against any Obligor or other Person.
(b) The Company waives to the fullest extent permitted under applicable
law (i) any and all notices of acceptance, creation, modification,
rearrangement, renewal or extension for any period of any instrument executed by
any obligor in connection with the Obligations and (ii) any defense of any
Obligor by reason of disability, lack of authorization, cessation of the
liability of any Obligor or for any other reason. The Company authorizes the
Collateral Agent to the fullest extent permitted under applicable law, without
notice or demand and without any reservation of rights against the Company and
without affecting the Company's liability hereunder or on the Obligations, from
time to time to (w) take and hold other Property, other than the Collateral, as
security for the Obligations, and exchange, enforce, waive and release any or
all of the Collateral, (x) after the occurrence and during the continuance of an
Event of Default and the acceleration of the Senior Notes, apply the Collateral
in the manner permitted by this Security Agreement or the Senior Note Indenture,
(y) after the occurrence and during the continuance of an Event of Default and
the acceleration of the Convertible Notes if the Senior Notes are no longer
outstanding and the Senior Note Indenture has been satisfied and discharged,
apply the Collateral in the manner permitted by this Security Agreement or the
Convertible Note Indenture and (z) after the occurrence and during the
continuance of an Event of Default renew, extend for any period, accelerate,
amend or modify, supplement, enforce, compromise, settle, waive or release the
obligations of any obligor on, or any instrument or agreement of such other
Person with respect to any or all of, the Collateral.
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SECTION 17. MISCELLANEOUS PROVISIONS.
(a) Notices. All notices, approvals, consents or other communications
required or desired to be given hereunder shall be in the form and manner, and
delivered to the Company at its address as set forth in Section 13.2 of the
Senior Note Indenture and Section 15.2 of the Convertible Note Indenture, to the
Senior Note Trustee at its address as set forth in Section 13.2 of the Senior
Note Indenture, to the Convertible Note Trustee at its address as set forth in
Section 15.2 of the Convertible Note Indenture and to the Collateral Agent at
The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx, Xxx Xxxx, Xxx Xxxx
00000.
(b) Sales of Collateral. No sales of Collateral may be made in
contravention of the terms of the Senior Note Indenture or the Convertible Note
Indenture and the cash proceeds of the sale of any Collateral shall be promptly
and without commingling remitted to the Collateral Agent or the Senior Note
Trustee for deposit in the Company Senior Note Escrow Account or the Convertible
Note Trustee for deposit in the Company Convertible Note Escrow Account, if the
Company Senior Note Escrow Account Agreement has been terminated.
(c) No Adverse Interpretation of Other Agreements. This Security Agreement
may not be used to interpret another pledge, security or debt agreement of the
Company or any Subsidiary of the Company. No such pledge, security or debt
agreement may be used to interpret this Security Agreement.
(d) Severability. The provisions of this Security Agreement are severable,
and if any clause or provision shall be held invalid, illegal or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Security Agreement in any jurisdiction.
(e) Headings. The headings in this Security Agreement have been inserted
for convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms or provisions hereof.
(f) Counterpart Originals. This Security Agreement may be signed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall together constitute one and the same agreement.
(g) Benefits of Security Agreement. Nothing in this Security Agreement,
express or implied, shall give to any person, other than the parties hereto and
their successors hereunder and the Holders of the Senior Notes and the Senior
Note Guarantors and the Holders of the Convertible Notes and the Convertible
Note Guarantors, any benefit or any legal or equitable right, remedy or claim
under this Security Agreement.
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23
(h) Amendments, Waivers and Consents. Any amendment or waiver of any
provision of this Security Agreement and any consent to any departure by the
Company from any provision of this Security Agreement shall be effective only if
made or given in compliance with all of the terms and provisions of the Senior
Note Indenture and the Convertible Note Indenture and neither the Collateral
Agent or the Senior Note Trustee nor any Holder of any Senior Note or the
Convertible Note Trustee or any Holder of a Convertible Note shall be deemed, by
any act, delay, indulgence, omission or otherwise, to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. Failure of the Collateral
Agent or the Trustees to exercise, or delay in exercising, any right, power or
privilege hereunder shall not operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Collateral Agent, the Senior Note Trustee or any Holder of a
Senior Note or the Convertible Note Trustee or any Holder of a Convertible Note
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy that the Collateral Agent, either Trustee or any such
Holder would otherwise have on any future occasion. The right and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.
(i) Interpretation of Security Agreement. All terms not defined herein or
in the Senior Note Indenture shall have the meaning set forth in the applicable
Uniform Commercial Code of the State of New York, except where the context
otherwise requires. To the extent a term or provision of this Security Agreement
conflicts with the Senior Note Indenture, the Senior Note Indenture shall
control with respect to the subject matter of such term or provision. Acceptance
of or acquiescence in a course of performance rendered under this Security
Agreement shall not be relevant in determining the meaning of this Security
Agreement even though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.
(j) Continuing Security Interest; Transfer of Collateral. This Security
Agreement shall create a continuing Lien and security interest in the Collateral
and shall (i) unless otherwise provided in the Senior Note Indenture, the
Convertible Note Indenture or this Security Agreement, remain in full force and
effect until payment in full of (A) the Senior Notes under the terms of the
Senior Note Indenture, (B) all Obligations then due and owing under the Senior
Note Indenture, the Senior Note Guarantees and the Senior Note Collateral
Documents, (C) the Convertible Notes under the terms of the Convertible Note
Indenture and (D) all Obligations then due and owing under the Convertible Note
Indenture, the Convertible Note Guarantees and the Convertible Note Collateral
Documents; provided, however, that after receipt from the Company by the
Collateral Agent of a request for a release of any Collateral permitted under
the Senior Note Indenture and the Convertible Note Indenture upon the sale,
transfer, assignment, exchange or other disposition of such Collateral not
prohibited by the Senior Note Indenture and the Convertible Note Indenture and
upon receipt by the Collateral Agent of all proceeds of such sale, transfer,
assignment, exchange or other disposition required to be remitted to the
Collateral Agent or the Senior Note Trustee (or the Convertible Note Trustee if
the Senior
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24
Notes are no longer outstanding and the Senior Note Indenture has been satisfied
and discharged) or the Collateral constituting the proceeds of such sale,
transfer, assignment, exchange or other disposition being made subject to a Lien
and security interest in favor of the Collateral Agent for the benefit of the
Senior Note Trustee and the equal and ratable benefit of the Holders of the
Senior Notes and for the benefit of the Convertible Note Trustee and the equal
and ratable benefit of the Holders of the Convertible Notes, which Lien has the
same priority as had the Lien on the Collateral being sold, assigned or
otherwise disposed of, such Collateral shall be released from the Lien and
security interest created hereunder and no longer constitute Collateral. Upon
the payment in full of (A) the Senior Notes under the terms of the Senior Note
Indenture, (B) all Obligations then due and owing under the Senior Note
Indenture, the Senior Note Guarantees and the Senior Note Collateral Documents,
(C) the Convertible Notes under the terms of the Convertible Note Indenture and
(D) all Obligations then due and owing under the Convertible Note Indenture, the
Convertible Note Guarantees and the Convertible Note Collateral Documents, the
Company shall be entitled to the return, upon its request and at its expense, of
such of the Collateral pledged by it as shall not have been sold or otherwise
applied pursuant to the terms hereof. This Security Agreement shall be binding
upon the Company, its successors and assigns, and inure, together with the
rights and remedies of the Trustees hereunder, to the benefit of the Collateral
Agent, the Senior Note Trustee, and the Holders of the Senior Notes, and the
Convertible Note Trustee and the Holders of the Convertible Notes and their
respective successors, transferees and assigns.
(k) Reinstatement. This Security Agreement shall continue to be effective
or be reinstated, as the case may be, if at any time any amount received by the
Collateral Agent, the Senior Note Trustee or any Holder of a Senior Note or the
Convertible Note Trustee or any Holder of a Convertible Note in respect of the
Obligations is rescinded or must otherwise be restored or returned by the
Collateral Agent, the Senior Note Trustee or any Holder of a Senior Note or the
Convertible Note Trustee or any Holder of a Convertible Note upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization or the
Company or upon the appointment of any receiver, intervenor, conservator,
trustee or similar official for the Company or upon the appointment of any
receiver, intervenor, conservator, trustee or similar official for the Company
or any substantial part of its assets, or otherwise, all as though such payments
had not been made.
(l) Survival of Provisions. All representations, warranties and covenants
of the Company contained herein shall survive the execution and delivery of this
Security Agreement, and shall terminate only upon the full and final payment and
performance by the Company of the Obligations.
(m) Authority of Collateral Agent and Trustees. Both the Collateral Agent
and the Trustees shall have and be entitled to exercise all powers hereunder
that are specifically granted to the Collateral Agent and the Trustees by the
terms hereof, together with such powers as are reasonably incident thereto. The
Collateral Agent and the Trustees may perform any of their respective duties
hereunder or in connection with the Collateral by or through agents or employees
and shall be entitled to retain counsel and to act in reliance upon the advice
of
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25
counsel concerning all such matters. None of the Collateral Agent, any director,
officer, any attorney or agent of the Collateral Agent, the Senior Note Trustee,
any director, officer, employee, attorney or agent of the Senior Note Trustee,
the Holders of the Senior Notes, the Convertible Note Trustee, any director,
officer, employee, attorney or agent of the Convertible Note Trustee and the
Holders of the Convertible Notes shall be liable to the Company for any action
taken or omitted to be taken by it or them hereunder, except for its or their
own negligence or willful misconduct, nor shall the Collateral Agent or the
Trustees be responsible for the validity, effectiveness or sufficiency hereof or
of any document or security furnished pursuant hereto. The Collateral Agent and
its directors, officers, employees, attorneys and agents, the Senior Note
Trustee and its directors, officers, employees, attorneys and agents and the
Convertible Note Trustee and its directors, officers, employees, attorneys and
agents shall be entitled to rely on any communication, instrument or document
believed by it or them to be genuine and correct and to have been signed or sent
by the proper person or persons. Neither the Collateral Agent nor the Trustees
shall be required to, and shall not, expend or risk any of its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder.
The Company acknowledges that the rights and responsibilities of the
Collateral Agent and the Trustees under this Security Agreement with respect to
any action taken by the Collateral Agent and the Trustees or the exercise or
non-exercise by the Collateral Agent and/or the Trustees of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Security Agreement shall, as among the Collateral Agent, the
Senior Note Trustee, the Holders of the Senior Notes, the Convertible Note
Trustee and the Holders of the Convertible Notes, be governed by the Senior Note
Indenture or the Convertible Note Indenture, as applicable, and by such other
applicable agreements with respect thereto as may exist from time to time among
them, but, as among the Collateral Agent, the Trustees and the Company, the
Collateral Agent and the Trustees shall be conclusively presumed to be acting as
agent for the Holders of the Senior Notes or Holders of the Convertible Notes,
as the case may be, with full and valid authority so to act or refrain from
acting, and the Company shall not be obligated or entitled to make any inquiry
respecting such authority.
In any case in which the Collateral Agent shall be required or
permitted to make any determination as to the extent to which the security
interest or Liens under this Security Agreement secures any obligations, the
Collateral Agent is authorized, without any direction from, or requirement for
consent of or authorization by, the Senior Note Trustee (or the Convertible Note
Trustee if the Senior Notes are no longer outstanding and the Senior Note
Indenture has been satisfied and discharged), to institute proceedings in a
court of competent jurisdiction for the obtaining of any authoritative
determination of such matter. If the Collateral Agent institutes any such
proceeding, it shall give prompt written notice thereof to the Trustees and
shall afford each of them the opportunity to participate in such proceeding.
(n) Limitation by Law. All rights, remedies and powers provided herein may
be exercised only to the extent that they will not render this Security
Agreement not entitled to be recorded, registered or filed under provisions of
any applicable law.
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26
(o) Release; Termination of Security Agreement.
(i) Subject to the provisions of Section 17(k) hereof, this Security
Agreement shall terminate upon payment in full of (A) the Senior Notes under the
terms of the Senior Note Indenture, (B) all Obligations then due and owing under
the Senior Note Indenture, the Senior Note Guarantees, and the Senior Note
Collateral Documents, (C) the Convertible Notes under the terms of the
Convertible Note Indenture and (D) all Obligations then due and owing under the
Convertible Note Indenture, the Convertible Note Guarantees and the Convertible
Note Collateral Documents, except that the provisions of Section 17(p) hereof
shall survive.
(ii) The Company agrees that it will not sell or dispose of any of
the Collateral in violation of the Senior Note Indenture or the Convertible Note
Indenture; provided, however, that if the Company shall sell or otherwise
dispose of any of the Collateral in accordance with the terms of the Senior Note
Indenture and/or the Convertible Note Indenture, the Collateral Agent shall, and
the Trustees shall cause, at the request of the Company, release or cause to be
released the Collateral subject to such sale or disposition free and clear of
the Liens and security interest under this Security Agreement.
(iii) Upon any termination of this Security Agreement or release of
any Collateral as permitted by the Senior Note Indenture (or the Convertible
Note Indenture if the Senior Notes are no longer outstanding and the Senior Note
Indenture has been satisfied and discharged), the Collateral Agent and the
Trustees will, at the expense of the Company, execute and deliver to the Company
such documents and take such other actions as the Company shall reasonably
request to evidence the termination of this Security Agreement or the release of
such Collateral, as the case may be. Any such action taken by the Collateral
Agent or the Trustees shall be without warranty by or recourse to the Collateral
Agent or the Trustees, except as to the absence of any prior assignments by the
Collateral Agent or the Trustees of its interests in the Collateral, and shall
be at the expense of the Company. The Collateral Agent and the Trustees may
conclusively rely on any certificate delivered to it by the Company stating that
the execution of such documents and release of the Collateral is in accordance
with and permitted by the terms of this Security Agreement and the Senior Note
Indenture (or the Convertible Note Indenture if the Senior Notes are no longer
outstanding and the Senior Note Indenture has been satisfied and discharged).
(p) Payment of Fees and Expenses and Indemnity. The Company will upon
demand pay to the Collateral Agent and the Trustees, without duplication, the
amount of any and all fees and expenses, including, without duplication, the
fees and disbursements of its counsel and of any experts and agents, that the
Collateral Agent and the Trustees may incur in connection with (i)
administration of this Security Agreement, (ii) the custody, preservation, use
or operation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent and the Trustees hereunder or (iv) the failure by the Company
to perform or observe any of the provisions hereof. The Company shall be liable
for and shall reimburse and indemnify both Trustees and the Collateral Agent and
hold both Trustees and the Collateral Agent harmless from and against any
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27
and all claims, losses, liabilities, costs, damages or expenses (including
reasonable attorneys' fees and expenses) (collectively, "Losses") arising from
or in connection with or related to this Agreement or being a Trustee and
Collateral Agent hereunder (including but not limited to Losses incurred by such
Trustees and Collateral Agent in connection with its successful defense, in
whole or in part, of any claim of negligence or willful misconduct on its part),
provided, however, that nothing contained herein shall require the Trustees and
the Collateral Agent to be indemnified for Losses caused by their respective
negligence or willful misconduct.
(q) Final Expression. This Security Agreement, together with the Senior
Note Indenture, the Convertible Note Indenture and any other agreement executed
in connection herewith or therewith, is intended by the parties as a final
expression of this Security Agreement and is intended as a complete and
exclusive statement of the terms and conditions hereof.
(r) Company Remain Liable. Anything herein to the contrary
notwithstanding, (a) the Company shall remain liable under any contracts and
agreements included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Security Agreement had not been executed, (b) the exercise by the
Collateral Agent or the Trustees of any of the rights hereunder shall not
release the Company from any of its duties or obligations under the contracts
and agreements included in the Collateral and (c) the Collateral Agent and the
Trustees shall not have any obligation or liability under any contracts and
agreements included in the Collateral by reason of this Security Agreement, nor
shall the Collateral Agent or the Trustees be obligated to perform any of the
obligations or duties of the Company thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
(s) Indentures. This Security Agreement is subject to the terms,
conditions and provisions of the Senior Note Indenture or, if the Senior Notes
are no longer outstanding and the Senior Note Indenture has been satisfied and
discharged, of the Convertible Note Indenture. Where there is a conflict between
the provisions of this Security Agreement and the Senior Note Indenture, the
provisions of the Senior Note Indenture shall prevail; and if the Senior Note
Indenture has been satisfied and discharged, where there is a conflict between
the provisions of this Security Agreement and the Convertible Note Indenture,
the provisions of the Convertible Note Indenture shall prevail.
(t) Rights of Holders. No Holder of a Senior Note or of a Convertible Note
shall have any independent rights hereunder other than those rights granted to
individual Holders pursuant to Section 6.7 of the Senior Note Indenture or
Section 6.7 of the Convertible Note Indenture, as the case may be; provided that
nothing in this subsection (t) shall limit any rights granted to the Senior Note
Trustee under the Senior Notes, the Senior Note Indenture or the Senior Note
Collateral Documents or the Convertible Note Trustee under the Convertible
Notes, the Convertible Note Indenture or the Convertible Note Collateral
Documents.
(u) No Personal Liability of Directors, Officers, Employees and
Stockholders. No past, present or future director, officer, employee,
incorporator or stockholder of the Company
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28
or of any subsidiary of the Company, as such, shall have any liability for any
obligations of the Company under this Security Agreement or for any claim based
on, in respect of, or by reason of, such obligations or their creation.
(v) GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
WAIVER OF DAMAGES.
(i) THIS SECURITY AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
UNDER THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE COMPANY, THE COLLATERAL AGENT, THE SENIOR NOTE TRUSTEE AND THE
HOLDERS OF THE SENIOR NOTES AND THE CONVERTIBLE NOTE TRUSTEE AND THE HOLDERS OF
THE CONVERTIBLE NOTES IN CONNECTION WITH THIS SECURITY AGREEMENT, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND
DECISIONS OF THE STATE OF NEW YORK.
(ii) THE COMPANY AGREES THAT THE COLLATERAL AGENT SHALL, IN ITS
CAPACITY AS COLLATERAL AGENT OR IN THE NAME AND ON BEHALF OF THE SENIOR NOTE
TRUSTEE AND ANY HOLDERS OF SENIOR NOTES AND THE CONVERTIBLE NOTE TRUSTEE AND ANY
HOLDERS OF CONVERTIBLE NOTES, AND THE SENIOR NOTE TRUSTEE SHALL, IN ITS CAPACITY
AS SENIOR NOTE TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDERS OF SENIOR
NOTES AND THE CONVERTIBLE NOTE TRUSTEE SHALL, IN ITS CAPACITY AS CONVERTIBLE
NOTE TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDERS OF CONVERTIBLE NOTES,
HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST
THE COMPANY OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN
GOOD FAITH TO ENABLE THE COLLATERAL AGENT OR THE TRUSTEES TO REALIZE ON SUCH
PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE
COLLATERAL AGENT OR EITHER TRUSTEE. THE COMPANY AGREES THAT IT WILL NOT ASSERT
ANY COUNTERCLAIMS, SETOFFS OR CROSS-CLAIMS IN ANY PROCEEDING BROUGHT BY THE
COLLATERAL AGENT OR EITHER TRUSTEE TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE COLLATERAL AGENT OR SUCH TRUSTEE.
THE COMPANY WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
IN WHICH EITHER TRUSTEE HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
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29
(iii) TO, THE EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY, THE
COLLATERAL AGENT AND THE TRUSTEES EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS SECURITY
AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
(iv) THE COMPANY AGREES THAT NONE OF THE COLLATERAL AGENT, THE
SENIOR NOTE TRUSTEE, ANY HOLDER OF A SENIOR NOTE, THE CONVERTIBLE NOTE TRUSTEE
AND ANY HOLDER OF A CONVERTIBLE NOTE SHALL HAVE ANY LIABILITY TO THE COMPANY
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE
COMPANY IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS SECURITY
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH,
UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS
BINDING ON THE COLLATERAL AGENT, SUCH TRUSTEE OR SUCH NOTEHOLDER, AS THE CASE
MAY BE, THAT SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE
COLLATERAL AGENT, THE SENIOR NOTE TRUSTEE OR SUCH HOLDER OF A SENIOR NOTE, OR
THE CONVERTIBLE NOTE TRUSTEE OR SUCH HOLDER OF A CONVERTIBLE NOTE AS THE CASE
MAY BE, CONSTITUTING NEGLIGENCE OR WILLFUL MISCONDUCT.
(v) THE COMPANY WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY KIND
PRIOR TO THE EXERCISE BY THE SENIOR NOTE TRUSTEE OR ANY HOLDER OF A SENIOR NOTE
OR THE CONVERTIBLE NOTE TRUSTEE OR ANY HOLDER OF A CONVERTIBLE NOTE OF ITS
RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS THE COLLATERAL
WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL OR OTHER
SECURITY FOR THE OBLIGATIONS. THE COMPANY WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF THE COLLATERAL AGENT, THE SENIOR NOTE TRUSTEE OR ANY
HOLDER OF A SENIOR NOTE OR THE CONVERTIBLE NOTE TRUSTEE OR ANY HOLDER OF A
CONVERTIBLE NOTE IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN
POSSESSION OF, REPLEVY, ATTACH OR LEVY UPON COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE COLLATERAL AGENT, THE SENIOR NOTE TRUSTEE OR ANY HOLDER OF A SENIOR NOTE OR
THE CONVERTIBLE NOTE TRUSTEE OR ANY HOLDER OF A CONVERTIBLE NOTE, OR TO ENFORCE
BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT
INJUNCTION THIS SECURITY AGREEMENT OR ANY
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OTHER AGREEMENT OR DOCUMENT AMONG THE COMPANY ON THE ONE HAND AND THE COLLATERAL
AGENT, THE SENIOR NOTE TRUSTEE AND/OR THE HOLDERS OF THE SENIOR NOTES OR THE
CONVERTIBLE NOTE TRUSTEE AND/OR ANY HOLDER OF A CONVERTIBLE NOTE ON THE OTHER
HAND.
(w) Appointment of Collateral Agent. Pursuant to, and subject to the
provisions of, Section 7.12 of the Senior Note Indenture and of Section 7.12 of
the Convertible Note Indenture, the Trustees hereby appoint the Collateral
Agent, and the Collateral Agent accepts appointment, as collateral agent under
the terms of this Security Agreement. The Collateral Agent may resign at any
time by giving written notice thereof to the Trustees and may be removed at any
time with or without cause by the Trustees acting together. Prior to the
effectiveness of any such resignation or removal, the Trustees acting together
shall have the right to appoint a successor Collateral Agent which shall be a
commercial bank organized or chartered under the laws of the United States of
America or any state thereof having combined capital and surplus of at least
$50,000,000. If no successor Collateral Agent shall have been so appointed by
the Trustees acting together, and shall have accepted such appointment within 30
days after the retiring Collateral Agent's giving of notice of resignation or
the Trustees' removal of the retiring Collateral Agent, then the retiring
Collateral Agent shall, prior to the effectiveness of its resignation or
removal, on behalf of the Senior Note Trustee, the Holders of the Senior Notes,
the Convertible Note Trustee and the Holders of the Convertible Notes, appoint a
successor Collateral Agent, which shall be a commercial bank organized under the
laws of the United States of America or any State thereof having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor Collateral Agent, such
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent, and
the retiring Collateral Agent shall be discharged from its duties and
obligations under this Security Agreement. After any retiring Collateral Agent's
resignation or removal hereunder as Collateral Agent, the provisions of this
Security Agreement shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Collateral Agent under this Security Agreement.
Any corporation into which the Collateral Agent may be merged, or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Collateral Agent shall be a party, shall be
Collateral Agent under this Security Agreement without the execution or filing
of any paper or any further act on the part of the parties hereto.
[SIGNATURE PAGE FOLLOWS]
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31
IN WITNESS WHEREOF, the Company has caused this Security Agreement to be
duly executed and delivered as of the day and year first above written.
PETERSBURG LONG DISTANCE INC.
By: /s/ Xxxxx Xxxx
-------------------------
Name: Xxxxx Xxxx
Title: Chairman
The undersigned, as nominee of the Company to hold as of record the
Company's beneficial interest in one share of CY (pound)1 each of NWE Capital
(Cyprus) Limited (the "Nominee Collateral") for the sole purpose of compliance
with the requirement under Cypriot law that a corporation have two shareholders
of record, does hereby join in this Security Agreement solely for the purpose of
pledging the Nominee Collateral as security in order to secure the payment and
performance of all Obligations by the Company.
The undersigned hereby grants to the Collateral Agent for the benefit of
the Senior Note Trustee and for the equal and ratable benefit of the Holders of
the Senior Notes and for the benefit of the Convertible Note Trustee and for the
equal and ratable benefit of the Holders of the Convertible Notes (i) Liens and
a continuing security interest in and to the Nominee Collateral in order to
secure the payment and performance of all Obligations by the Company and (ii)
all rights and remedies, whether arising before or after an Event of Default,
with respect to the Nominee Collateral as otherwise granted in this Security
Agreement with respect to the Collateral; provided, however, that the Collateral
Agent, the Senior Note Trustee and the Convertible Note Trustee agree that,
notwithstanding anything contained in this Security Agreement to the contrary,
the undersigned shall have no personal liability under, arising out of or
related to this Security Agreement beyond the Nominee Collateral pledged
hereunder.
/s/ Xxxxxxx X. Xxxxx
------------------------
Xxxxxxx X. Xxxxx
32
The undersigned, as nominee of the Company to hold as of record the
Company's beneficial interest in one share of CY (pound)1 each of PLD Asset
Leasing Limited and one share of CY (pound)1 each of PLD Capital Limited
(collectively, the "Nominee Collateral") for the sole purpose of compliance with
the requirement under Cypriot law that a corporation have two shareholders of
record, does hereby join in this Security Agreement solely for the purpose of
pledging the Nominee Collateral as security in order to secure the payment and
performance of all Obligations by the Company.
The undersigned hereby grants to the Collateral Agent for the benefit of
the Senior Note Trustee and for the equal and ratable benefit of the Holders of
the Senior Notes and for the benefit of the Convertible Note Trustee and for the
equal and ratable benefit of the Holders of the Convertible Notes (i) Liens and
a continuing security interest in and to the Nominee Collateral in order to
secure the payment and performance of all Obligations by the Company and (ii)
all rights and remedies, whether arising before or after an Event of Default,
with respect to the Nominee Collateral as otherwise granted in this Security
Agreement with respect to the Collateral; provided, however, that the Collateral
Agent, the Senior Note Trustee and the Convertible Note Trustee agree that,
notwithstanding anything contained in this Security Agreement to the contrary,
the undersigned shall have no liability under, arising out of or related to this
Security Agreement beyond the Nominee Collateral pledged hereunder.
APROPOS INVESTMENTS LTD.
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
- 32 -
33
By its acceptance hereof, as of the day and year first above written, the
Collateral Agent, the Senior Note Trustee and the Convertible Note Trustee agree
to be bound by the provisions hereof.
THE BANK OF NEW YORK, as Collateral Agent,
Senior Note Trustee and Convertible Note Trustee
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
34
SCHEDULE A
to Company Senior
Note Security and
Pledge Agreement
QUALIFIED INVESTMENTS
None.
35
SCHEDULE B
to Company Senior
Note Security and
Pledge Agreement
PLEDGED STOCK
1. 999 shares of CY(pound)1 each of NWE Capital (Cyprus) Limited.
2. 999 shares of CY(pound)1 each of PLD Asset Leasing Limited.
3. 999 shares of CY(pound)1 each of PLD Capital Limited.
4. 72,540 shares with a nominal value of 100 rubles of Baltic Communications
Limited.
5. Xxxxxxx Xxxxx, as the Company's nominee, has pledged 1 share of CY
(pound)1 each of NWE Capital (Cyprus) Limited pursuant to the terms of a
joinder to this Security Agreement contained in the signature pages
hereto.
6. Apropos Investments Ltd., as the Company's nominee, has pledged 1 share of
CY (pound)1 each of PLD Asset Leasing Limited pursuant to the terms of a
joinder to this Security Agreement contained in the signature pages
hereto.
7. Apropos Investments Ltd., as the Company's nominee, has pledged 1 share of
CY (pound)1 each of PLD Capital Limited pursuant to the terms of a joinder
to this Security Agreement contained in the signature pages hereto.
36
SCHEDULE C
to Company Senior
Note Security and
Pledge Agreement
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
None.
37
SCHEDULE D
to Company Senior
Note Security and
Pledge Agreement
LIENS ON EXISTING COLLATERAL
None.
38
SCHEDULE E
to Company Senior
Note Security and
Pledge Agreement
FILINGS
1. UCC-1 financing statements filed with the Secretary of State of the State
of New York.
2. UCC-1 financing statements filed with the City Registers Office, New York
County, New York.
3. Financing statements filed in Ontario under the Personal Property Security
Act (Ontario).
4. Each of the following agreements will, within seven days of the Issue
Date, be registered with both the Secretary of the Companies of Cyprus and
the Cyprus Official Register:
a. This Security Agreement.
b. Leasing Company Security and Pledge Agreement of even date herewith
entered into by PLD Asset Leasing Limited in favor of the Senior
Note Trustee, the Convertible Note Trustee and the collateral agent
named therein.
c. Leasing Company Security and Pledge Agreement of even date herewith
entered into by PLD Capital Limited in favor of the Senior Note
Trustee, the Convertible Note Trustee and the collateral agent named
therein.
d. NWE Cyprus Senior Note Security and Pledge Agreement of even date
herewith entered into by NWE Capital (Cyprus) Limited in favor of
the Senior Note Trustee, the Convertible Note Trustee and the
collateral agent named therein.
e. Leasing Company Escrow Account Agreement of even date herewith among
The Bank of New York, as escrow agent, the Senior Note Trustee, the
Convertible Note Trustee and PLD Asset Leasing Limited.
f. Leasing Company Escrow Account Agreement of even date herewith among
The Bank of New York, as escrow agent, the Senior Note Trustee, the
Convertible Note Trustee and PLD Capital Limited.
5. The Pledge Agreement governing shares of BCL pledged hereunder must be
duly noted on the shareholders' register of BCL.
39
SCHEDULE F
to Company Senior
Note Security and
Pledge Agreement
CHIEF EXECUTIVE OFFICES
Petersburg Long Distance Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
40
SCHEDULE G
to Company Senior
Note Security and
Pledge Agreement
BUSINESS NAMES
1. Ventech Healthcare Corporation Inc.
2. NWE Capital Corp.
41
SCHEDULE H
to Company Senior
Note Security and
Pledge Agreement
LOCATION OF COLLATERAL
The Company's chief executive offices (see Schedule F).
42
SCHEDULE I
to Company Senior
Note Security and
Pledge Agreement
FORM OF ADDITIONAL COLLATERAL AMENDMENT
This Additional Collateral Amendment, dated _____________, 19__, is
delivered pursuant to Section 6(a) of the Security Agreement referred to below.
The undersigned hereby pledges to the Collateral Agent for the benefit of the
Senior Note Trustee and the equal and ratable benefit of the Holders of the
Senior Notes and for the benefit of the Convertible Note Trustee and the equal
and ratable benefit of the Holders of the Convertible Notes, and grants to the
Collateral Agent for the benefit of the Senior Note Trustee and the equal and
ratable benefit of the Holders of the Senior Notes and for the benefit of the
Convertible Note Trustee and the equal and ratable benefit of the Holders of the
Convertible Notes, continuing Liens and security interest in all of its rights,
title and interest in the Collateral listed below.
The undersigned hereby agrees that this Additional Collateral Amendment
may be attached to the Company Senior Note Security and Pledge Agreement, dated
as of May 31, 1996, between the undersigned and The Bank of New York, as Senior
Note Trustee, as Convertible Note Trustee and as Collateral Agent (the "Security
Agreement"); capitalized terms used herein and not otherwise defined herein
shall have the meanings given to such terms in the Security Agreement; and the
Collateral listed on this Additional Collateral Amendment shall be deemed to be
part of the Collateral, and shall become part of the Collateral and shall secure
all Obligations.
PETERSBURG LONG DISTANCE INC.
By:
Name:
Title:
43
INTERCOMPANY NOTES:
Description Name of Restricted Original
Item of Subsidiary Principal
Number Indebtedness (Obligor) Date Amount
======== ============== ==================== ====== ===========
PLEDGED STOCK:
Number of Share Percentage
Name of Shares Certificate of Shares
Guarantor Pledged Number Outstanding
=========== ========== ============ ============
44
OTHER COLLATERAL:
Description of
Qualified Investment
or other Collateral Evidenced By Obligor Date
====================== ============== ========= ======
45
SCHEDULE J
to Company Senior
Note Security and
Pledge Agreement
RESTRICTIVE AGREEMENTS
1. The BECET charter and joint venture agreement provide that a joint venture
partner may not sell, assign, pledge or otherwise transfer its shares
without the written consent of the other partner prior to February 4,
1999. After February 4, 1999, such interest may be transferred provided
that the transferee agrees to be bound by the terms of the joint venture
agreement creating BECET.
2. The BECET charter provides that dividends may be established at a meeting
of the General Assembly (as defined therein). To the extent that WTC owns
a 50 percent equity interest in BECET, its ability to cause BECET to
declare dividends may be restricted.
3. The BECET charter provides a right of first refusal for newly issued
shares.
4. The PeterStar charter and foundation agreement provide a right of first
refusal on newly issued shares and a right of first refusal in the event
of a transfer of shares.
