Exhibit 10.3
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Agreement"), dated as of August 31,
2000 is made between each entity set forth on the signature pages hereto as a
grantor (each such entity and each entity which hereafter executes and delivers
a Borrower Joinder in substantially the form of Exhibit E to the Credit
Agreement or a Subsidiary Joinder in substantially the form of Attachment 1 to
the Guaranty (as defined below) to be referred to herein as a "Grantor", and
collectively as, the "Grantors") and BARCLAYS BANK PLC ("Bank").
RECITALS
A. Bank is entering into a Credit Agreement, dated as of August 31,
2000 (such agreement, as it may hereafter be amended or modified, the "Credit
Agreement" with Chadmoore Wireless Group, Inc. ("Chadmoore") and a Guaranty of
even date herewith with the subsidiaries of Chadmoore (collectively, the
"Subsidiaries").
B. It is a condition precedent to the extension of credit by Bank under
the Credit Agreement that each Grantor shall have executed and delivered this
Agreement and shall have granted a security interest in all of its assets to
Bank in accordance herewith.
C. Terms defined in the Credit Agreement and not otherwise defined
herein have the same respective meanings when used herein.
AGREEMENT
NOW, THEREFORE, in order to induce Bank to enter into the
Credit Agreement and for other good and valuable consideration, the receipt and
adequacy of which hereby is acknowledged, each Grantor hereby represents,
warrants, covenants, agrees and grants as follows:
1. Definitions. Unless the context otherwise requires, terms defined in
the Uniform Commercial Code of the State of New York (the "Uniform Commercial
Code") and not otherwise defined in this Agreement or in the Credit Agreement
shall have the meanings defined for those terms in the Uniform Commercial Code.
In addition, the following terms shall have the meanings respectively set forth
after each:
"Certificates" means all certificates, instruments and other
documents now or hereafter representing or evidencing any Pledged Securities or
Pledged Limited Liability Company Interests.
"Closing Date" shall mean the date of this Agreement.
"Collateral" means and includes all present and future right,
title, interest, claims and demands of each Grantor in or to any personal
property or assets whatsoever, whether now
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owned or existing or hereafter arising or acquired and wheresoever located, and
all hereafter arising or acquired and wheresoever located, and all rights and
powers of such Grantor to transfer any interest in or to any personal property
or assets whatsoever, including without limitation, any and all of the following
personal property:
(a) All present and future acounts, accounts receivable, agreements,
guaranties, contracts (including without limitation management agreements,
leases, contract rights and rights to payment (collectively, the "Accounts"),
together with all instruments, documents, chattel paper, security agreements,
guaranties, undertakings, surety bonds, insurance policies, notes and drafts,
and all forms of obligations owing to such Grantor or to which such Grantor may
have an interest, however created or arising;
(b) All present and future general intangibles, including without
limitation, (i) each FCC License and each Other Authorization described on
Schedules 1.01(a)(1), 1.01(a)(2) and 1.01(a)(3) of the Nextel Agreement and
including without limitation, all of such Grantor's rights under or relating to
any FCC License or any Other Authorization and the proceeds of any FCC License
or Other Authorization; provided, however, that the Collateral does not include
at any time any FCC License to the extent, but only to the extent, that such
Grantor is prohibited at that time from granting a security interest therein
pursuant to the Communications Act and the FCC Rules, but includes, to the
maximum extent permitted by law, all of such Grantor's proprietary rights
vis-a-vis third parties under or relating to any FCC License and the rights to
receive all proceeds derived from or in connection with the sale, assignment or
transfer of such FCC License, (ii) all tax refunds of every kind and nature to
which such Grantor now or hereafter may become entitled, however arising, (iii)
all other refunds, (iv) all commitments to extend financing to such Grantor, (v)
all deposits, (vi) all goodwill, (vii) all choses in action, (viii) all
insurance proceeds, and (ix) all trade secrets, computer programs, software,
customer lists, trademarks, trade names, patents, licenses, copyrights,
tecnology, processes and proprietary information, including without limitation,
the Copyrights, the Patents and the Marks and the goodwill of such Grantor's
business connected with and symbolized by the Marks;
(c) All present and future demand, time, savings, passbook, deposit and
like accounts (general or special) (collectively, the "Deposit Accounts") in
which such Grantor has any interest which is maintained with any bank, savings
and loan association, credit union or like organization and all money, cash and
cash equivalents of such Grantor, whether or not deposited in any Deposit
Account;
(d) All present and future books and records, including without
limitation, books of account and ledgers of every kind and nature, all
electronically recorded data relating to such Grantor, all receptacles and
containers for such records, and all files and correspondence;
(e) All present and future goods, including without limitation, all
equipment, machinery, audio and/or video recording equipment, transmitting
towers, transmitters, broadcasting equipment, videotapes, audio tapes, DAT tapes
and other recorded media, tools, molds, dies, furniture, furnishings, fixtures,
trade fixtures and all other goods used in connection with or in
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the conduct of such Grantor's business, including without limitation, all goods
as defined in Section 9101(2) of the Uniform Commercial Code (collectively, the
"Equipment");
(f) All present and future inventory and merchandise, including without
limitation, all present and future goods held for sale or lease or to be
furnished under a contract of service, all recorded media, all raw materials,
work in process and finished goods, all packing materials, supplies and
containers relating to or used in connection with any of the foregoing, and all
bills of lading, warehouse receipts and documents of title relating to any of
the foregoing (collectively, the "Inventory");
(g) All present and future stocks, bonds, debentures, certificated and
uncertificated securities, security entitlements, subscription rights, options,
warrants, puts, calls, certificates, security accounts, commodity accounts,
commodity contracts, partnership interests, limited liability compnay interests,
joint venture interests and investment and/or brokerage accounts, and all other
investment properties, including without limitation, the Certificates, the
Pledged Securities, the Pledged Partnership Interests, the Pledged Limited
Liability Company Interests and all rights, preferences, privileges, dividends,
distributions (in cash or in kind), redemption payments or liquidation payments
with respect thereto;
(h) All present and future accessions, appurtenances, components,
repairs, repair parts, spare parts, replacements, substitutions, additions,
issue and/or improvements to or of or with respect to any of the foregoing;
(i) All other tangible and intangible personal property of such
Grantor;
(j) All rights, remedies, powers and/or privileges of such Grantor with
respect to any of the foregoing; and
() Any and all proceeds and products of the foregoing, including
without limitation, all money, accounts, general intangibles, deposit accounts,
documents, instruments, chattel paper, goods, insurance proceeds and any other
tangible or intangible property received upon the sale or disposition of any of
the foregoing.
"Communications Act" has the meaning given to that term in the
Credit Agreement.
"Copyright" means all:
(a) Copyrights, whether or not published or registered under the Copyright Act
of 1976, 17 U.S.C. Section 101 et seq., as the same shall be amended from time
to time and any predecessor or successor statute thereto (the "Copyright Act"),
and applications for registration of copyrights, and all works of authorship and
other intellectual property rights therein, including without limitation,
copyrights for computer programs, source code and object code databases and
related materials and documentation, and (i) all renewals, revisions, derivative
works,
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enhancements, modifications, updates, new releases and other revisions thereof,
(ii) all income, royalties, damages and payments now and hereafter due and/or
payable with respect thereto, including without limitation, payments under all
licenses entered into in connection therewith and damages and payments for past
or future infringements thereof, (iii) the right to xxx for past, present and
future infringemens thereof and (iv) all of such Grantor's rights corresponding
thereto throughout the world;
(b) Rights under or interests in any copyright license agreements with
any other party, whether Grantors are a licensee or licensor under any such
license agreement and the right to use the foregoing in connnection with the
enforcement of the Bank's rights under the Operative Documents; and
(c) Copyrightable materials now or hereafter owned by such Grantor,
including without limitation, all tangible property embodying the copyright
described in clause (a) hereof or such copyrightable materials, and all tangible
property covered by the licenses described in clause (b) hereof.
"Disclosure Schedule"has the meaning given to that term in the
Credit Agreement.
"FCC" has the meaning given to that term in the Credit
Agreement.
"FCC License" has the meaning given to that term in the Credit
Agreement.
"FCC Rules" has the meaning given to that term in the Credit
Agreement.
"Governmental Authority" has the meaning given to that term in
the Credit Agreement.
"Guaranty" has the meaning given to that term in the Credit
Agreement.
"Issuer Acknowledgement" has the meaning given to that term in
Section 3(b) of this Agreement.
"Liens" has the meaning given to that term in the Credit
Agreement.
"Limited Liability Company Interests" means the entire limited
liability company interest at any time owned by the Grantors in any Pledged
Entity.
"Loans" has the meaning given to that term in the Credit
Agreement.
"Marks" means all (a) trademarks, trademark registrations,
interest under trademark license agreements, trade names, trademark
applications, service marks, business names, trade styles, designs, logos and
other source or business identifiers for which registrations have been issued or
applied for in the United States Patent and Trademark Office or in any other
office or with any other official anywhere in the world or which are used in the
United States or
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any state, territory or possession thereof, or in any other place, nation or
jurisdicion anywhere in the world, (b) licenses pertaining to any such xxxx
whether such Grantor is licensor or licensee, (c) all income, royalties, damages
and payments for past, present or future infringements thereof, (d) rights to
xxx for past, present and future infringements thereof, (e) rights corresponding
thereto throughout the world, (f) all product specification documents and
production and quality control manuals used in the manufacture of products sold
under or in connection with such marks, (g) all documents that reveal the name
and address of all sources of supply of, and all terms of purchase and delivery
for, all materials and components used in the production of products sold under
or in connection with such marks, (h) all documents constituting or concerning
the then current or proposed advertising and promotion by such Grantor, their
subsidiaries or licensees of products sold under or in connection with such
marks, including without limitation, all documents that reveal the media used or
to be used and the cost for all such advertising conducted within the described
period or planned for such products and (i) renewals and proceeds of any of the
foregoing.
"Material Adverse Effect" has the meaning given to that term
in the Credit Agreement.
"Obligations" has the meaning given to that term in the Credit
Agreement.
"Operative Documents" has the meaning given to that term in
the Credit Agreement.
"Other Authorization" has the meaning given to that term in
the Credit Agreement.
"Patents" means all (a) letters patent, design patents,
utility patents, inventions and trade secrets, all patents and patent
applications in the United States Patent and Trademark Office, and interests
under patent license agreements, including without limitation, the inventions
and improvements described and claimed therein, (b) licenses pertaining to any
patent whether such Grantor is licensor or licensee, (c) income, royalties,
damges and payments now and hereafter due and /or payable under and with respect
thereto, including without limitation, damages and payments for past, present or
future infringements, (d) rights to xxx for past, present and future
infringements thereof, (e) rights corresponding thereto throughout the world in
all jurisdictions in which such patents have been issud or applied for and (f)
the reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any of the foregoing.
"Permitted Liens" has the meaning given to that term in the
Credit Agreement.
"Person" has the meaning given to that term in the Credit
Agreement.
"Partnership Interests" means the entire partnership interest
at any time owned by the Grantors in any Pledged Partnership Entity.
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"Pledge Notice" shall have the meaning ascribed to it in
Section 3(b) of this Agreement.
"Pledged Collateral" means the Certificates, the Pledged
Securities, the Pledged Partnership Interests and the Pledged Limited Liability
Company Interests.
"Pledged Entity" means each limited liability company set
forth in Schedule 1 attached hereto, together with any other limited liability
company in which any Grantor may have an interest at any time.
"Pledged Limited Liability Company Interests" means all
limited liability company interests held by each Grantor, including, but not
limited to those limited liability company interests set forth in Schedule 1
attached hereto, as such Schedule may be supplemented from time to time in
accordance with the terms of this Agreement and all capital, limited liability
company assets, dividends, cash, instruments and other properties from time to
time received, to be received or otherwise distributed in respect of or in
exchange for any or all of such interests and all certificates and instruments
representing or evidencing such other property received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof.
"Pledged Partnership Entity" means each partnership interest
set forth in Schedule 1 attached hereto, together with any other partnership
interest in which any Grantor may have an interest at any time.
"Pledged Partnership Interests" means all interests in any
partnership or joint venture held by each Grantor, including, but not limited to
those partnership interests set forth in Schedule 1 attached hereto, as such
Schedule may be supplemented from time to time in accordance with the terms of
this Agreement, and all dividends, cash, instruments and other properties from
time to time received, to be received or otherwise distributed in respect of or
in exchange for any or all of such interests.
"Pledged Securities" means all shares of capital stock of each
issuer in which each Grantor has an interest, including, but not limited to
those shares of capital stock set forth in Schedule 1 attached hereto, as such
Schedule may be supplemented from time to time in accordance with the terms of
this Agreement, and all dividends, cash, instruments and other properties from
time to time received, to be received or otherwise distributed in respect of or
in exchange for any or all of such shares.
"Term" has the meaning given to that term in the Credit
Agreement.
2. Creation of Security Interest. Each Grantor, in order to secure the
Obligations, does hereby grant and pledge to Bank to the extent permitted by law
a security interest in and to, all right, title and interest of such Grantor in
and to all presently existing and hereafter acquired Collateral. The security
interest and pledge created by this Section 2 shall continue in effect so long
as any Obligation remains outstanding or Bank has any obligation to make Loans
under the
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Credit Agreement. Notwithstanding the foregoing provisions of this Section 2,
such grant of a security interest shall not extend to, and the term "Collateral"
shall not include, any general intangibles of the Grantors to the extent that
(but only to the extent that) (i) such general intangibles are not assignable or
capable of being encumbered as a matter of law or under the terms of the license
or other agreement applicable thereto (but solely to the extent that any such
restriction shall be enforceable under applicable law), without the consent of
the licensor thereof or other applicable party thereto and (ii) such consent has
not been obtained; provided, however, that the foregoing grant of a security
interest shall extend to, and the term "Collateral" shall include, (A) any
general intangible which is in the nature of an account receivable or a right to
the payment of money or a proceed of, or otherwise related to the enforcement or
collection of, any account receivable or right to the payment of money, or goods
which are the subject of any account receivable or right to the payment of
money, (B) any and all proceeds of any general intangibles which are otherwise
excluded to the extent that the assignment or encumbrance of such proceeds is
not so restricted, and (C) upon obtaining the consent of any such licensor or
other applicable party's consent with respect to any such otherwise excluded
general intangibles, such general intangibles as well as any and all proceeds
thereof that might have theretofor have been excluded from such grant of a
security interest and the term "Collateral".
3. Delivery of Pledged Collateral.
(a) With respect to each Certificate on (i) the Closing Date and (ii)
the day on which such Certificate shall be received or acquired by a Grantor
(with respect to any Certificate received or acquired after the Closing Date
that is not delivered to Senior Lender), and (iii) the day on which any such
Certificate is delivered to Senior Lender, Grantor shall deliver to Bank a
letter, countersigned by Senior Lender, in the form set forth in Exhibit A-1A
attached hereto (the "Pledge Letter") or, if Senior Lender does not have
possession of such Certificates, Grantor shall deliver to Bank the Certificates,
accompanied by instruments of transfer in blank, in form and substance
reasonably satisfactory to Bank.
(b) With respect to each uncertificated Limited Liability Company
Interest and each uncertificated Partnership Interest, on (i) the Closing Date
(with respect to such Limited Liability Company Interests and such Partnership
Interests existing on such date) and (ii) the day on which any such Limited
Liability Company Interest and any such Partnership Interest shall be acquired
by a Grantor (with respect to such Limited Liability Company Interests and such
Partnership Interests acquired after the Closing Date), a notice in the form set
forth in Exhibit A-1 attached hereto (the "Pledge Notice") shall be
appropriately completed and delivered to each Pledged Entity and each Pledged
Partnership Entity, notifying each Pledged Entity and each Pledged Partnership
Entity of the existence of this Agreement, a certified copy of this Agreement
shall be delivered by the Grantor to the relevant Pledged Entity and relevant
Pledged Partnership Entity, and such Grantor shall have received and delivered
to Bank a copy of such Pledge Notice, along with an acknowledgment in the form
set forth in Exhibit A-2 attached hereto (the "Issuer Acknowledgment"), duly
executed by the relevant Pledged Entity.
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(c) Subject to receipt of any and all necessary prior approvals
required under the Communications Act and the FCC Rules, Bank shall have the
right, upon the occurrence and during the continuance of an Event of Default,
without notice to any of the Grantors, in connection with a commercially
reasonable foreclosure sale, to transfer to, or to direct the applicable Grantor
or any nominee of such Grantor to register or cause to be registered in the name
of, Bank or any of its nominees any or all of the Pledged Securities, Pledged
Partnership Interests or Pledged Limited Liability Company Interests. In
addition, Bank shall have the right at any time to exchange certificates or
instruments representing or evidencing Pledged Securities for certificates or
instruments of smaller or larger denominations.
4. Further Assurances.
(a) At any time and from time to time at the reasonable written request
of Bank, each Grantor shall execute and deliver to Bank, at such Grantor's
expense, all such financing statements and other instruments, certificates and
documents (including notices to financial institutions holding deposit accounts
of any Grantor as to the security interest granted hereby) in form and substance
reasonably satisfactory to Bank, and perform all such other acts as shall be
necessary or reasonably desirable to fully perfect or protect or maintain, when
filed, recorded, delivered or performed, Bank's security interests granted
pursuant to this Agreement or to enable Bank to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Grantor shall: (i) at the request of the Bank,
xxxx conspicuously each document included in the Inventory and each other
contract relating to the Accounts, and all chattel paper, instruments and other
documents and each of its records pertaining to the Collateral with a legend, in
form and substance satisfactory to Bank, indicating that such document,
contract, chattel paper, instrument or Collateral is subject to the security
interest granted hereby, (ii) at the request of Bank, if any Account or contract
or other writing relating thereto shall be evidenced by a promissory note or
other instrument, deliver and pledge to the Bank, such note or other instrument
duly endorsed and accompanied by duly executed undated instruments of transfer
or assignment, all in form and substance reasonably satisfactory to the Bank;
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Bank may reasonably request, in order to perfect and preserve,
with the required priority, the security interests granted, or purported to be
granted hereby, (iv) upon any Grantor's registration or application of any
copyright under the Copyright Act, execute and deliver immediately to Bank for
recordation and filing in the United States Copyright Office a Grant of Security
Interest, in the form of Exhibit B attached hereto, (v) upon any Grantor's
registration or application of any Patent or Xxxx, execute and deliver
immediately to Bank for recordation and filing in the United States Patent and
Trademark Office a Grant of Security Interest, in the form of Exhibit B attached
hereto, and (vi) with respect to any license or agreement in which any Grantor
now has or hereafter acquires an interest which by its terms prohibits
assignment, such Grantor will use its best efforts to procure the consent of the
counterpart party thereto.
(b) At any time and from time to time, Bank shall be entitled to file
and/or record any or all such financing statements, instruments and documents
held by it, and any or all such
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further financing statements, documents and instruments, relative to the
Collateral or any part thereof in each instance, and to take all such other
actions as Bank may reasonably deem appropriate to perfect and to maintain
perfected the security interests granted herein.
(c) Each Grantor hereby authorizes Bank to file one or more financing
or continuation statements, and amendments thereto, relative to all or any part
of the Collateral without the signature of such Grantor where permitted by law.
A carbon, photographic or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(d) With respect to any Collateral consisting of securities,
instruments, partnership or joint venture interests, limited liability company
interests, or the like, each Grantor hereby consents and agrees that, upon the
occurrence and during the continuance of an Event of Default, subject to receipt
of any and all necessary prior approvals required under the Communications Act
and the FCC Rules, the issuers of, or obligors on, any such Collateral, or any
registrar or transfer agent or trustee for any such Collateral, shall be
entitled to accept the provisions of this Agreement as conclusive evidence of
the right of Bank to effect any transfer or exercise any right hereunder or with
respect to any such Collateral subject to the terms hereof, notwithstanding any
other notice or direction to the contrary heretofore or hereafter given by any
Grantor or any other Person to such issuers or such obligors or to any such
registrar or transfer agent or trustee.
5. Voting Rights; Dividends; etc. Subject to receipt of any and all
necessary prior approvals required under the Communications Act and the FCC
Rules, so long as no Event of Default shall have occurred and be continuing:
(a) Voting Rights. Each Grantor shall be entitled to exercise any and
all voting and other consensual rights pertaining to its Pledged Securities, its
Pledged Partnership Interests and its Pledged Limited Liability Company
Interests, or any part thereof, for any purpose not inconsistent with the terms
of this Agreement, the Credit Agreement or the other Operative Documents;
provided, however, that each Grantor shall not exercise, or shall refrain from
exercising, any such right if it would result in a Default.
(b) Dividend and Distribution Rights. Subject to the terms of the
Credit Agreement, each Grantor shall be entitled to receive and to retain and
use any and all dividends or distributions paid in respect of its Pledged
Securities, its Pledged Partnership Interests or its Pledged Limited Liability
Company Interests; provided, however, that any and all:
(i) non-cash dividends or distributions in the form of capital
stock, certificated limited liability company interests, instruments or other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Securities, Pledged Partnership Interests, Pledged
Limited Liability Company Interests,
(ii) dividends and other distributions paid or payable in cash in
respect of any Pledged Securities, Pledged Partnership Interests or Pledged
Limited Liability Company
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Interests in connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in-surplus, and
(iii) cash paid, payable or otherwise distributed in redemption of,
or in exchange for, any Pledged Securities, Pledged Partnership Interests or
Pledged Limited Liability Company Interests,
shall, except as otherwise provided for in the Credit Agreement or the
other Operative Documents, forthwith be delivered to Bank, in the case of (i)
above, to be held as Collateral and shall, if received by such Grantor, be
received in trust for the benefit of Bank, be segregated from the other property
of such Grantor and forthwith be delivered to Bank as Collateral in the same
form as so received (with any necessary endorsements), and in the case of (ii)
and (iii) above, to be applied to the Obligations to the extent permitted by the
Credit Agreement or otherwise to be held as Collateral.
6. Rights as to Pledged Collateral During Event of Default. When an
Event of Default has occurred and is continuing, subject to receipt of any and
all necessary prior approvals required under the Communications Act and the FCC
Rules:
(a) Voting, Dividend and Distribution Rights. At the option of Bank,
all rights of each Grantor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to Section 5(a) above,
and to receive the dividends and distributions which it would otherwise be
authorized to receive and retain pursuant to Section 5(b) above, shall cease,
and all such rights shall thereupon become vested in Bank who shall thereupon
have the sole right to exercise such voting and other consensual rights and to
receive and to hold as Pledged Collateral such dividends and distributions
during the continuance of such Event of Default.
(b) Dividends and Distributions Held in Trust. All dividends and other
distributions which are received by any Grantor contrary to the provisions of
Section 6(a) of this Agreement shall be received in trust for the benefit of
Bank, shall be segregated from other funds of such Grantor and forthwith shall
be paid over to Bank as Collateral in the same form as so received (with any
necessary endorsements).
7. Irrevocable Proxy. Except for the proxy granted to Senior Lender,
each Grantor hereby revokes all previous proxies with regard to its Pledged
Securities, its Pledged Partnership Interests and its Pledged Limited Liability
Company Interests and, subject to receipt of any and all necessary prior
approvals required under the Communications Act and the FCC Rules, appoints Bank
as its respective proxyholder to (a) attend and vote at any and all meetings of
the shareholders of the corporation(s) which issued the Pledged Securities, and
any adjournments thereof, held on or after the date of the giving of this proxy
and prior to the termination of this proxy and to execute any and all written
consents of shareholders of such corporation(s) executed on or after the date of
the giving of this proxy and prior to the termination of this proxy, with the
same effect as if such Grantor had personally attended the meetings or had
personally
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voted its shares or had personally signed the written consents, waivers or
ratification, and (b) to attend and vote at any and all meetings of the members
of the Pledged Entities or partners of the Pledged Partnership Entities (whether
or not such Pledged Limited Liability Company Interests or Pledged Partnership
Interests are transferred into the name of Bank), and any adjournments thereof,
held on or after the date of the giving of this proxy and to execute any and all
written consents, waivers and ratifications of the Pledged Entities or Pledged
Partnership Entities executed on or after the date of the giving of this proxy
and prior to the termination of this proxy with the same effect as if such
Grantor had personally attended the meetings or had personally voted on their
respective Limited Liability Company Interests or Partnership Interests or had
personally signed the consents, waivers or ratifications; provided, however,
that Bank as proxyholder shall have rights hereunder only upon the occurrence
and during the continuance of an Event of Default and subject to Section 13(j)
hereof. Each Grantor hereby authorizes Bank to substitute another Person (which
Person shall be a successor to the rights of Bank hereunder, a nominee appointed
by Bank to serve as proxyholder, or otherwise as approved by such Grantor in
writing, such approval not to be unreasonably withheld) as the proxyholder and,
upon the occurrence or during the continuance of any Event of Default, hereby
authorizes and directs the proxyholder to file this proxy and the substitution
instrument with the secretary of the appropriate corporation. This proxy
is-coupled with an interest and is irrevocable until such time as no part of any
commitment to make Loans pursuant to the Credit Agreement remains outstanding
and all Obligations have been indefeasibly paid in full.
8. The Grantors' Representations and Warranties. Each Grantor
represents and warrants as follows:
(a) (i) The locations listed on the Schedule 2 constitute all locations
at which Collateral owned by such Grantor is located; (ii) the chief executive
office of such Grantor, where such Grantor keeps its records concerning the
Collateral, is located at the address set forth for such Grantor on Schedule 3;
and (iii) such Grantor has exclusive possession and control of the Collateral
owned by such Grantor.
(b) Such Grantor currently conducts business only under its own name
and the trade names listed on Schedule 4. Neither such Grantor nor any corporate
predecessor has, during the preceding five years, been known as or used any
other corporate or fictitious name, except the names disclosed on Schedule 4.
(c) Such Grantor is the legal and beneficial owner of the Collateral
free and clear of all Liens except for Permitted Liens and restrictions imposed
by the FCC Rules. Such Grantor has the power, authority and legal right to grant
the security interests in the Collateral purported to be granted hereby, and to
execute, deliver and perform this Agreement. The pledge of the Collateral
pursuant to this Agreement creates a valid first priority security interest in
the Collateral (except for any Permitted Liens).
(d) Except as set forth on Schedule 1, the Pledged Securities described
on Schedule 1 attached hereto constitute (i) all of the shares of capital stock
of any Person owned by such
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Grantor and (ii) that percentage of the issued and outstanding shares of the
respective issuers thereof indicated on Schedule 1 attached hereto, and there is
no other class of shares issued and outstanding of the respective issuers
thereof except as set forth on Schedule 1 attached hereto. Except as set forth
in Schedule 1, the Pledged Partnership Interests described on Schedule 1
attached hereto constitute all of the partnerships or joint ventures in which
each Grantor has an interest, and such Grantor's percentage interest in each
such partnership or joint venture is as set forth on such Schedule 1 attached
hereto. Except as set forth in Schedule 1, the Pledged Limited Liability Company
Interests described on Schedule 1 attached hereto constitute all of the Limited
Liability Company Interests of each Grantor and such Grantor's percentage
interest in each such Pledged Entity is as set forth on Schedule 1 attached
hereto.
(e) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority (other than such authorizations,
approvals and other actions as have already been taken and are in full force and
effect) is required (A) for the pledge of the Collateral or the grant of the
security interest in the Collateral by any of the Grantors hereby or for the
execution, delivery or, subject to approvals described in Section 13(j)(ii)
hereof, performance of this Agreement by any of the Grantors, or (B) for the
exercise by Bank of the voting rights in the Pledged Securities, the Pledged
Partnership Interest or the Pledged Limited Liability Company Interests or of
any other rights or remedies in respect of the Collateral hereunder except (1)
as may be required in connection with any disposition of Collateral consisting
of securities by laws affecting the offering and sale of securities generally,
and (2) as may be required by the FCC Rules and the Comunications Act.
9. Copyrights.
(a) Royalties. Each Grantor hereby agrees that the use by Bank of the
Copyrights as authorized hereunder in connection with Bank's exercise of their
rights and remedies hereunder shall be without any liability for royalties or
other related charges from Bank to Grantors.
(b) Restrictions on Future Agreements. Subject to the terms hereof and
of the Credit Agreement, each Grantor shall be permitted to manage, license and
administer its Copyrights in such manner as such Grantor in its reasonable
business judgment deems desirable, provided, however, that such Grantor will
not, without the Bank's prior written consent, such consent not to be
unreasonably withheld, (i) enter into any copyright license agreements except
license agreements entered into in the ordinary course of its business
consistent with past practices and containing such additional provisions to
protect Bank's interest hereunder as Bank may from time to time reasonably
request or (ii) take any action, or permit any action to be taken by others,
including, without limitation, licensees, or fail to take any action, which
would customarily be taken by a Person in the same business and in similar
circumstances as such Grantor, which could in any respect reasonably be expected
to have a Material Adverse Effect.
(c) Duties of Grantors. Each Grantor shall have the duty to:
(i) prosecute diligently any copyright application included in the
Copyrights,
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(ii) upon the occurrence and during the continuance of an Event of
Default, at the request of Bank, make application for registration of such
uncopyrighted but copyrightable material owned by such Grantor as Bank
reasonably deems appropriate if the failure to do so could reasonably be
expected to have a Material Adverse Effect,
(iii) place notices of copyright on all copyrightable property
produced or owned by such Grantor embodying the Copyrights and use diligent
reasonable efforts to have its licensees do the same and
(iv) take all reasonable action necessary in such Grantor's
reasonable business judgment consistent with past practices to preserve and
maintain all of Grantor's rights in the Copyrights that are or shall be
necessary in the operation of Grantor's business, including, without limitation,
making timely filings for renewals and extensions of registered Copyrights and
diligently monitoring unauthorized use thereof, unless the failure to do so
could not reasonably be expected to have a Material Adverse Effect. Any expenses
incurred in connection with the foregoing shall be borne by Grantors. Bank shall
have no duty with respect to the Copyrights other than to act lawfully and
without gross negligence or willful misconduct. Without limiting the generality
of the foregoing, Bank shall not be under any obligation to take any steps
necessary to preserve rights in the Copyrights against any other parties, but
Bank may do so at its option upon the occurrence and during the continuance of
an Event of Default, and all reasonable expenses incurred in connection
therewith shall be for the sole account of Grantors and shall be added to the
Obligations.
10. Patents and Marks.
(a) Royalties. Each Grantor hereby agrees that any rights granted
hereunder to Bank with respect to Patents and Marks shall be applicable to all
jurisdictions in which such Grantor has the right to use such Patents and Marks,
from time to time, and without any liability for royalties or other related
charges from Bank to Grantors.
(b) Restrictions on Future Agreements. Each Grantor will not, without
Bank's prior written consent, such consent not to be unreasonably withheld,
abandon any Patent or Xxxx in which such Grantor now owns or hereafter acquires
any rights or interests if such abandonment could reasonably be expected to have
a Material Adverse Effect or enter into any agreement, including, without
limitation, any license agreement, which is inconsistent with such Grantor's
obligations under this Agreement, if such actions could reasonably be expected
to have a Material Adverse Effect. Each Grantor further agrees that it will not
take any action, or permit any action to be taken by others subject to its
control, including licensees, or fail to take any action which would customarily
be taken by a Person in the same business and in similar circumstances as such
Grantor, which could reasonably be expected to have a Material Adverse Effect.
(c) Duties of Grantors. Each Grantor shall have the duty to
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(i) prosecute diligently any patent application or trademark
application pending as of the date hereof or thereafter until the Obligations
shall have been indefeasibly paid in full and Bank has no obligation to make any
Loans under the Credit Agreement,
(ii) upon the occurrence and during the continuance of an Event of
Default, make application on unpatented but patentable inventions owned by such
Grantor and on Marks, as the case may be, as Bank reasonably deems appropriate,
(iii) file and prosecute opposition and cancellation proceedings if
the failure to do so could reasonably be expected to have a Material Adverse
Effect and
(iv) take all reasonable action necessary in such Grantor's
reasonable business judgment consistent with past practices to preserve and
maintain all rights in patent applications of the Patents and in applications
for registrations of the Marks unless the failure so to do could not reasonably
be expected to have a Material Adverse Effect. Any expenses incurred in
connection with such applications shall be borne by Grantors. Each Grantor shall
not abandon any right to file a Patent application or Xxxx application without
the consent of Bank (which consent shall not be unreasonably withhold) if such
abandonment could reasonably be expected to have a Material Adverse Effect. Each
Grantor shall give proper statutory notice in connection with its use of each of
the Marks to the extent necessary for the protection of each of the Marks.
Grantors shall notify the Bank of any suits it commences to enforce the Patents
and Marks and shall provide Bank with copies of any documents reasonably
requested by Bank relating to such suits.
11. Grantors' Covenants. In addition to the other covenants and
agreements set forth herein and in the other Operative Documents, each Grantor
covenants and agrees as follows:
(a) Such Grantor will pay, prior to delinquency, all taxes, charges,
Liens and assessments against the Collateral owned by it, except those with
respect to which the amount or validity is being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of such Grantor and except those which
could not reasonably be expected to have a Material Adverse Effect.
(b) The Collateral will not be used in violation of any material law,
regulation or ordinance or any applicable laws (including without limitation,
all applicable regulations, rules and orders), nor used in any way that will
void or impair any insurance required to be carried in connection therewith.
(c) Such Grantor will keep the Collateral in reasonably good repair,
working order and operating condition (normal wear and tear excluded), and from
time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto and, as appropriate and applicable, will
otherwise deal with the Collateral in all such ways as are considered customary
practice by owners of like property.
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(d) Such Grantor will take all reasonable steps to preserve and protect
the Collateral except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(e) Such Grantor will maintain all insurance coverage required pursuant
to Section 6.01 of the Credit Agreement.
(f) Such Grantor will promptly notify Bank in writing in the event of
any material damage to the Collateral from any source whatsoever.
(g) Such Grantor will not (i) establish any location of Collateral not
listed in Schedule 2, (ii) move its principal place of business, chief executive
offices or any other office listed in Schedule 3 or (iii) adopt, use or conduct
business under any trade name or other corporate or fictitious name not
disclosed in Schedule 4, except upon not less than 30 days prior written notice
to Bank and such Grantor's prior compliance with all applicable requirements of
Section 4 hereof necessary to perfect Bank's security interest hereunder.
(h) Subject to the provisions of Section 15(j) hereof, such Grantor
agrees to take any action which Bank may reasonably request in order to obtain
from the FCC such approval as may be necessary to enable Bank to exercise and
enjoy the full rights and benefits granted to them by this Agreement, including
the use of such Grantor's best efforts to assist in obtaining the approval of
the FCC for any action or transaction contemplated by this Agreement or any
other Operative Document for which such approval is required by law.
(i) Such Grantor shall cause all of its equipment constituting
Collateral to be operated and maintained in accordance with any applicable
manufacturer's manuals or instructions and the requirements of its insurance
policies. Such Grantor, at its expense, shall maintain such equipment in good
condition, reasonable wear and tear excepted, and will comply with all laws,
ordinances and regulations to which the use and operation of such equipment may
be or become subject. Such obligation shall extend to repair and replacement of
any partial loss or damage to such equipment, regardless of the cause. If
maintenance is mandated by the manufacturer, such Grantor shall obtain and keep
in effect at all times during the Term maintenance service contracts with the
vendor of such equipment or suppliers approved by Lessor, such approval not to
be unreasonably withheld. All parts furnished in connection with such
maintenance or repair shall immediately become part of such equipment. All such
maintenance, repair and replacement services shall be immediately paid for and
discharged by such Grantor with the result that no lien will attach to such
equipment. Only qualified personnel of such Grantor or qualified contract
personnel shall operate such equipment. Such equipment shall be used only for
the purposes for which it was designed. Upon prior written notice to Lessor,
such Grantor may make improvements, modifications or additions to such
equipment; provided, that if such improvements, modifications or additions are
not capable of being removed without causing material damage to such equipment,
then Lessor's prior written consent shall be required. Upon the return of such
equipment, such Grantor shall, at its expense, restore such equipment to the
original configuration in accordance with the manufacturer's
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specifications; provided, that, with Lessor's prior written consent, such
Grantor may return such equipment as so improved, modified or added to.
12. Bank's Rights Regarding Collateral. At any time and from time to
time, Bank may, to the extent necessary or desirable to protect the security
hereunder, but Bank shall not be obligated to: (a) (whether or not a Default has
occurred) itself or through its representatives, at its own expense, upon
reasonable notice and at such reasonable times during usual business hours,
visit and inspect any of the Grantors' properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired and discuss the business, operations, properties and
financial and other condition of any of the Grantors with officers of such
Grantors and with their accountants or (b) if an Event of Default has occurred
and is continuing, at the expense of the Grantors, perform any obligation of any
of the Grantors under this Agreement. At any time and from time to time, at the
expense of the Grantors, Bank may, to the extent necessary or desirable to
protect the security hereunder, but Bank shall not be obligated to: (i) notify
obligors of the Collateral that the Collateral has been pledged as security to
Bank; (ii) after an Event of Default has occurred and is continuing, at any time
and from time to time request from obligors of the Collateral, in the name of
the applicable Grantor or in the name of Bank, information concerning the
Collateral and the amounts owing thereon; and (iii) after an Event of Default
has occurred and is continuing, direct obligors under the contracts included in
the Collateral to direct their performance to Bank. Each Grantor shall keep
proper books and records and accounts in which full, true and correct entries in
conformity with GAAP and all applicable laws (including without limitation, all
applicable regulations, rules and orders) shall be made of all material dealings
and transactions pertaining to the Collateral. Bank shall at all reasonable
times on reasonable notice have full access to and the right to audit any and
all of Grantors' books and records pertaining to the Collateral, and to confirm
and verify the value of the Collateral. Bank shall not be under any duty or
obligation whatsoever to take any action to preserve any rights of or against
any prior or other parties in connection with the Collateral, to exercise any
voting rights or managerial rights with respect to any Collateral or to make or
give any presentments for payment, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor or notices of
any other nature whatsoever in connection with the Collateral or the
Obligations. Bank shall not be under any duty or obligation whatsoever to take
any action to protect or preserve the Collateral or any rights of the Grantors'
therein, or to make collections or enforce payment thereon, or to participate in
any foreclosure or other proceeding in connection therewith. Nothing contained
herein or in any consent shall constitute an assumption by Bank of any of the
Grantors' obligations under the contracts assigned hereunder unless Bank shall
have given written notice to the counterpart to such assigned contract of Bank's
intention to assume such contract. Each Grantor shall continue to be liable for
performance of its obligations under such contracts.
13. Collections on the Collateral. Except as provided to the contrary
in the Credit Agreement, each Grantor shall have the right to use and to
continue to make collections on and receive dividends and other proceeds of all
of the Collateral in the ordinary course of business so long as no Event of
Default shall have occurred and be continuing. Upon the occurrence and during
the continuance of an Event of Default, at the option of Bank, each Grantor's
right to make collections on and receive dividends and other proceeds of the
Collateral and to use or
-16-
dispose of such collections and proceeds shall terminate, and any and all
dividends, proceeds and collections, including all partial or total prepayments,
then held or thereafter received on or on account of the Collateral will be held
or received by such Grantor in trust for Bank and immediately delivered in kind
to Bank (duly endorsed to Bank, if required), to be applied to the obligations
or held as Collateral, as Bank shall elect. Upon the occurrence and during the
continuance of an Event of Default, Bank shall have the right at all times to
receive, receipt for, endorse, assign, deposit and deliver, in the name of any
of the Grantors, any and all checks, notes, drafts and other instruments for the
payment of money constituting proceeds of or otherwise relating to the
Collateral; and each Grantor hereby authorizes Bank to affix, by facsimile
signature or otherwise, the general or special endorsement of such Grantor, in
such manner as Bank shall deem advisable, to any such instrument in the event
the same has been delivered to or obtained by Bank without appropriate
endorsement, and Bank and any collecting bank are hereby authorized to consider
such endorsement to be a sufficient, valid and effective endorsement by such
Grantor, to the same extent as though it were manually executed by the duly
authorized representative of such Grantor, regardless of by whom or under what
circumstances or by what authority such endorsement actually is affixed, without
duty of inquiry or responsibility as to such matters, and such Grantor hereby
expressly waives demand, presentment, protest and notice of protest or dishonor
and all other notices of every kind and nature with respect to any such
instrument.
14. Possession of Collateral by Bank. All the Collateral now,
heretofore or hereafter delivered to Bank shall be held by Bank in its
possession, custody and control. Upon the occurrence and during the continuance
of an Event of Default, whenever any of the Collateral is in Bank's possession,
custody or control, Bank may use, operate and consume the Collateral, whether
for the purpose of preserving and/or protecting the Collateral, or for the
purpose of performing any of the Grantors' obligations with respect thereto, or
otherwise so long as consistent with the Operative Documents or transactions
contemplated thereby. Bank may at any time deliver or redeliver the Collateral
or any part thereof to the Grantors, and the receipt of any of the same by the
Grantors shall be complete and full acquittance for the Collateral so delivered,
and Bank thereafter shall be discharged from any liability or responsibility
arising after such delivery to the Grantors. So long as Bank exercises
reasonable care and complies with Section 9207 of the UCC with respect to any
Collateral in its possession, custody or control, Bank shall have no liability
for any loss of or damage to any Collateral, and in no event shall Bank have
liability for any diminution in value of Collateral occasioned by economic or
market conditions or events.
15. Remedies. Provided that nothing contained in this Agreement shall
be construed to give Bank or any purchaser of the Collateral the right to
operate or control any aspect of the business of any of the Grantors that
requires an FCC License without the prior consent of the FCC, to the extent
required by law or the terms of any FCC License or the FCC Rules:
(a) Rights Upon Event of Default. Upon the occurrence and during the
continuance of an Event of Default, the Grantors shall be in default hereunder
and, subject to applicable law, Bank shall have, in any jurisdiction where
enforcement is sought, in addition to all other rights
and remedies that Bank
-17-
may have under this Agreement and under applicable laws or in equity, all rights
and remedies of a secured party under the Uniform Commercial Code as enacted in
any such jurisdiction in effect at that time, and in addition the following
rights and remedies, all of which may be exercised with or without further
notice to the Grantors except such notice as may be specifically required by
applicable law: (i) to foreclose the Liens and security interests created
hereunder or under any other Operative Document by any available judicial
procedure or without judicial process; (ii) to enter any premises where any
Collateral may be located for the purpose of securing, protecting, inventorying,
appraising, inspecting, repairing, preserving, storing, preparing, processing,
taking possession of or removing the same; (iii) to sell, assign, lease or
otherwise dispose of any Collateral or any part thereof, either at public or
private sale or at any broker's board, in lot or in bulk, for cash, on credit or
otherwise, with or without representations or warranties and upon such terms as
shall be commercially reasonable; (iv) to notify obligors on the Collateral that
the Collateral has been assigned to Bank and that all payments thereon, or
performance with respect thereto, are to be made directly and exclusively to
Bank; (v) to collect by legal proceedings or otherwise all dividends,
distributions, interest, principal or other sums now or hereafter payable upon
or on account of the Collateral; (vi) to enter into any extension,
reorganization, disposition, merger or consolidation agreement, or any other
agreement relating to or affecting the Collateral, and in connection therewith
Bank may deposit or surrender control of the Collateral and/or accept other
property in exchange for the Collateral as Bank reasonably deems appropriate and
is commercially reasonable; (vii) to settle, compromise or release, on terms
acceptable to Bank, in whole or in part, any amounts owing on the Collateral
and/or any disputes with respect thereto; (viii) to extend the time of payment,
make allowances and adjustments and issue credits in connection with the
Collateral in the name of the applicable Grantor for the benefit of Bank; (ix)
to enforce payment and prosecute any action or proceeding with respect to any or
all of the Collateral and take or bring, on behalf of itself or in the name of
the applicable Grantor, any and all steps, actions, suits or proceedings deemed
necessary or reasonably desirable by Bank to effect collection of or to realize
upon the Collateral, including any judicial or nonjudicial foreclosure thereof
or thereon, and each Grantor specifically consents to any nonjudicial
foreclosure of any or all of the Collateral or any other action taken by Bank
which may release any obligor from personal liability on any of the Collateral,
and each Grantor waives, to the extent permitted by applicable law, any right to
receive notice of any public or private judicial or nonjudicial sale or
foreclosure of any security or any of the Collateral, and any money or other
property received by Bank in exchange for or on account of the Collateral,
whether representing collections or proceeds of Collateral, and whether
resulting from voluntary payments or foreclosure proceedings or other legal
action taken by Bank or any of the Grantors, may be applied by Bank, without
notice to the Grantors, to the Obligations in such order and manner as Bank in
their sole discretion shall determine; (x) to insure, protect and preserve the
Collateral; (xi) to exercise all rights, remedies, powers or privileges provided
under any of the Operative Documents; and (xii) to remove, from any premises
where the same may be located, the Collateral and any and all documents,
instruments, files and records, and any receptacles and cabinets containing the
same, relating to the Collateral, and Bank may, at the cost and expense of the
Grantors, use such of its supplies, equipment, facilities and space at its
places of business as may be necessary or appropriate to properly administer,
process, store, control, prepare for sale or disposition and/or sell or dispose
of the Collateral or to properly administer and control the handling of
collections and realizations thereon, and Bank shall be deemed to have a
rent-free
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tenancy of any premises of the Grantors for such purposes and for such
periods of time as reasonably required by Bank. So long as an Event of Default
has occurred and is continuing, each Grantor will, at Bank's request, assemble
the Collateral and make it available to Bank at places which Bank may designate,
whether at the premises of such Grantor or elsewhere, and will make available to
Bank, free of cost, all premises, equipment and facilities of such Grantor for
the purpose of Bank's taking possession of the Collateral or storing the same or
removing or putting the Collateral in salable form or selling or disposing of
the same.
(b) Possession by Bank. Upon the occurrence and during the continuance
of an Event of Default, Bank also shall have the right, without notice or
demand, either in person, by Bank or by a receiver to be appointed by a court in
accordance with the provisions of applicable law (and each Grantor hereby
expressly consents, to the fullest extent permitted by applicable law, upon the
occurrence and during the continuance of an Event of Default to the appointment
of such a receiver), and, to the extent permitted by applicable law, without
regard to the adequacy of any security for the Obligations, to take possession
of the Collateral or any part thereof and to collect and receive the rents,
issues, profits, income and proceeds thereof. The taking possession of the
Collateral by Bank shall not cure or waive any Event of Default or notice
thereof or invalidate any act done pursuant to such notice. The rights, remedies
and powers of any receiver appointed by a court shall be as ordered by said
court.
(c) Sale of Collateral. Any public or private sale or other disposition
of the Collateral may be held at any office of Bank, or at the Grantors' places
of business, or at any other place permitted by applicable law, and without the
necessity of the Collateral being within the view of prospective purchasers.
Bank may direct the order and manner of sale of the Collateral, or portions
thereof, as it in its sole and absolute discretion may determine provided such
sale is commercially reasonable, and each Grantor expressly waives, to the
extent permitted by applicable law, any right to direct the order and manner of
sale of any Collateral. Bank or any Person acting on Bank's behalf may bid and
purchase at any such sale or other disposition. In furtherance of Bank's rights
hereunder, each Grantor hereby grants to Bank an irrevocable, non-exclusive
license (exercisable without royalty or other payment by Bank) to use, license
or sublicense any patent, trademark, trade name, copyright or other intellectual
property in which Grantor now or hereafter has any right, title or interest
together with the right of access to all media in which any of the foregoing may
be recorded or stored; provided, however, that such license shall only be
exercisable in connection with the disposition of Collateral upon Bank's
exercise of its remedies hereunder.
(d) Notice of Sale. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Bank will give the Grantors reasonable notice of the time and place of
any public sale thereof or of the time on or after which any private sale
thereof is to be made. The requirement of reasonable notice conclusively shall
be met if: (i) such notice is mailed, certified mail, postage prepaid, to the
Grantors at their addresses set forth on the signature page hereto or delivered
or otherwise sent to the Grantors, at least five (5) Business Days before the
date of the sale or (ii) if Grantors have previously executed any applications
for consent to the assignment of any FCC Licenses or for consent to the transfer
of control of any holder of such licenses. Each Grantor expressly waives, to the
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fullest extent permitted by applicable law, any right to receive notice of any
public or private sale of any Collateral or other security for the Obligations
except as expressly provided for in this paragraph. Bank shall not be obligated
to make any sale of the Collateral if it shall determine not to do so regardless
of the fact that notice of sale of the Collateral may have been given. Bank may,
without notice or publication, except as required by applicable law, adjourn the
sale from time to time by announcement at the time and place fixed for sale, and
such sale may, without further notice (except as required by applicable law), be
made at the time and place to which the same was so adjourned.
(e) Private Sales. With respect to any Collateral consisting of
securities, partnership interests, limited liability company interests, joint
venture interests or the like, and whether or not any of such Collateral has
been effectively registered under the Securities Act of 1933, as amended, or
other applicable laws, Bank may, in its sole and absolute discretion, sell all
or any part of such Collateral at private sale in such manner and under such
circumstances as Bank may deem necessary or advisable in order that the sale may
be lawfully conducted in a commercially reasonable manner. Without limiting the
foregoing, Bank may (i) approach and negotiate with a limited number of
potential purchasers, and (ii) restrict the prospective bidders or purchasers to
persons who will represent and agree that they are purchasing such Collateral
for their own account for investment and not with a view to the distribution or
resale thereof. In the event that any such Collateral is sold at private sale,
each Grantor agrees to the extent permitted by applicable law that if such
Collateral is sold for a price which is commercially reasonable, then (A) the
Grantors shall not be entitled to a credit against the Obligations in an amount
in excess of the purchase price, and (B) Bank shall not incur any liability or
responsibility to the Grantors in connection therewith, notwithstanding the
possibility that a substantially higher price might have been realized at a
public sale. Each Grantor recognizes that a ready market may not exist for such
Collateral if it is not regularly traded on a recognized securities exchange,
and that a sale by Bank of any such Collateral for an amount substantially less
than a pro rata share of the fair market value of the issuer's assets minus
liabilities may be commercially reasonable in view of the difficulties that may
be encountered in attempting to sell a large amount of such Collateral or
Collateral that is privately traded.
(f) Title of Purchasers. Upon consummation of any sale of Collateral
hereunder, Bank shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the Collateral so sold absolutely free from any claim
or right upon the part of any Grantor or any other Person claiming through any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
laws) all rights of redemption, stay and appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. If the sale of all or any part of the Collateral is made on
credit or for future delivery, Bank shall not be required to apply any portion
of the sale price to the Obligations until such amount actually is received by
Bank, and any Collateral so sold may be retained by Bank until the sale price is
paid in full by the purchaser or purchasers thereof. Bank shall not incur any
liability in case any such purchaser or purchasers shall fail to pay for the
Collateral so sold, and, in case of any such failure, the Collateral may be sold
again.
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(g) Disposition of Proceeds of Sale. The proceeds resulting from the
collection, liquidation, sale or other disposition of the Collateral shall be
applied, first, to the reasonable costs and expenses (including reasonable
attorneys' fees) of retaking, holding, storing, processing and preparing for
sale, selling, collecting and liquidating the Collateral, and the like; second,
to the satisfaction of all Obligations; and third, any surplus remaining after
the satisfaction of all Obligations, to be paid over to the Grantors or to
whomsoever may be lawfully entitled to receive such surplus.
(h) Certain Waivers. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands against Bank arising out of the
repossession, retention or sale of the Collateral, or any part or parts thereof,
except to the extent any such claims, damages and awards arise out of the gross
negligence or willful misconduct of Bank.
(i) Remedies Cumulative. The rights and remedies provided under this
Agreement are cumulative and may be exercised singly or concurrently, and are
not exclusive of any other rights and remedies provided by law or equity.
(j) Compliance with Communications Act and FCC Rules and Regulations.
(i) Notwithstanding any other provision of this Agreement, any
foreclosure on, sale, transfer or other disposition of, or the exercise of any
right to vote or consent with respect to, any of the Collateral as provided
herein or any other action taken or proposed to be taken by Bank hereunder which
would affect the operational, voting or other control of any entity holding an
FCC License shall be made in accordance with the Communications Act, the terms
of each FCC License, and any applicable FCC Rules, including any requirement
that there be a public or private sale.
(ii) If an Event of Default shall have occurred and be continuing,
each Grantor shall take any action which Bank may request in the exercise of its
rights and remedies under this Agreement, including, but not limited to, the
execution and delivery of any documents requested by Bank, in order to transfer
and assign to Bank or to one or more third parties as Bank may designate,
including, but not limited to, a receiver or trustee or to a combination of the
foregoing, the Collateral for the purposes of a public or private sale. Upon the
occurrence and during the continuance of an Event of Default, each Grantor shall
further use its best efforts to assist in obtaining the approval of the FCC (and
that required by any other Governmental Authority) for any action or transaction
contemplated by this Agreement, including without limitation, the preparation,
execution and filing with the FCC of the assignor's or transferor's portion of
any application or applications for consent to the assignment of any FCC License
or transfer of control of any entity holding or controlling any FCC License as
may be necessary or appropriate under the FCC Rules. Each Grantor further agrees
that, because of the unique nature of its undertaking in this Section 13(j), the
same may be specifically enforced, and it hereby waives, and agrees to waive,
any claim or defense that Bank would have an adequate remedy at law for the
breach of this undertaking and any requirement for the posting of bond or other
security. Each Grantor hereby agrees that in the event that such Grantor has
been given five Business
-21-
Days' prior written notice telecopied to its telecopier number set forth on the
signature page hereto and such Grantor has not responded by executing any such
applications or other instruments, the clerk of the court of any court of
competent jurisdiction may execute in the place of such Grantor any application
or other instrument necessary or appropriate for the obtaining of such consent.
This Section 13(j) shall not be deemed to limit any other rights of Bank
available under applicable law and consistent with the Communications Act and
the applicable FCC Rules.
16. Notice. Bank shall use reasonable efforts to give the Grantors
prior written notice of the exercise of any remedy provided for herein, provided
that the failure to give such notice shall not subject Bank to liability and
shall not affect the validity or exercise of any remedy hereunder.
17. Bank Appointed Attorney-in-Fact. To the full extent permitted by
applicable law, including the Communications Act and FCC Rules, each Grantor
hereby irrevocably appoints Bank as such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor, and in the name of such
Grantor, or otherwise, from time to time, in Bank's sole and absolute discretion
to do any of the following acts or things upon the occurrence and during the
continuance of an Event of Default: (a) to do all acts and things and to execute
all documents necessary or advisable to perfect and continue perfected the
security interests created by this Agreement and to preserve, maintain and
protect the Collateral; (b) to do any and every act which such Grantor is
obligated to do under this Agreement; (c) to prepare, sign, file and record, in
such Grantor's name, any financing statement covering the Collateral; (d) to
endorse and transfer the Collateral upon foreclosure by Bank; and (e) to file
any claims or take any action or institute any proceedings which Bank may
reasonably deem necessary or desirable for the protection or enforcement of any
of the rights of Bank with respect to any of the Collateral; provided, however,
that Bank shall be under no obligation whatsoever to take any of the foregoing
actions, and Bank shall have no liability or responsibility for any act or
omission (other than Bank's own gross negligence or willful misconduct) taken
with respect thereto.
18. Costs and Expenses. Each Grantor shall pay on demand (i) all
reasonable fees and expenses, including reasonable attorneys' fees and expenses,
incurred by Bank in connection with the preparation, execution and delivery of,
and the exercise of its duties under, this Agreement (not to exceed $50,000),
(ii) all reasonable fees and expenses, including reasonable attorneys' fees and
expenses, incurred by Bank in connection with the preparation, execution and
delivery of amendments and waivers hereunder and (iii) all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by Bank in
connection with the enforcement or attempted enforcement of this Agreement or
any of the Obligations or in preserving any of Bank's rights and remedies
(including, without limitation, all such fees and expenses incurred in
connection with any "workout" or restructuring affecting the Operative Documents
or the Obligations or any bankruptcy or similar proceeding involving such
Grantor, any other Grantor, Borrower or any of their Affiliates).
-22-
19. Transfers and Other Liens. Each Grantor agrees that, except as
specifically permitted under the Credit Agreement or any other Operative
Document, it will not (a) sell, assign, exchange, transfer or otherwise dispose
of, or contract to sell, assign, exchange, transfer or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (b) create or permit
to exist any Lien upon or with respect to any of the Collateral, except for
legally permissible Liens in favor of Bank or otherwise permitted under the
Credit Agreement or any other Operative Document.
20. Other Agreements; Governing Agreement. Nothing herein shall in any
way modify or limit the effect of terms or conditions set forth in any other
Operative Document executed by the Grantors or any other Person in connection
with the Obligations, but each and every term and condition hereof shall be in
addition thereto; provided, however, that in the event of inconsistency between
this Agreement and the Credit Agreement, the Credit Agreement shall govern.
21. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
22. Understandings With Respect to Waivers and Consents. Each Grantor
warrants and agrees that each of the waivers and consents set forth herein are
made with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which such Grantor
otherwise may have against Bank or others, or against any Collateral. If any of
the waivers or consents herein are determined to be unenforceable under
applicable law, such waivers and consents shall be effective to the maximum
extent permitted by law.
23. Indemnity. Each Grantor shall indemnify, reimburse and hold Bank,
each of Bank's members, and each of their respective successors, assigns,
agents, officers, directors, shareholders, servants, agents and employees
harmless from and against all liabilities, losses, damages, actions, suits,
demands, claims of any kind and nature (including claims relating to
environmental discharge, cleanup or compliance), all costs and expenses
whatsoever to the extent they may be incurred or suffered by such indemnified
party in connection therewith (including reasonable attorneys' fees and
expenses), fines, penalties (and other charges of applicable governmental
authorities), licensing fees relating to any item of Collateral, damage to or
loss of use of property (including consequential or special damages to third
parties or damages to Borrower's property), or bodily injury to or death of any
person (including any agent or employee of Borrower) (each, a "Claim"), directly
or indirectly relating to or arising out of the use of the proceeds of the Loan,
the falsity of any representation or warranty of such Grantor or such Grantor's
failure to comply with the terms of this Agreement or any other Operative
Document during the Term. The foregoing indemnity shall cover, without
limitation, (i) any Claim in connection with a design or other defect (latent or
patent) in any item of equipment included in the Collateral, (ii) any Claim for
infringement of any patent, copyright, trademark or other intellectual property
right, (iii) any Claim resulting from the presence on or under or
-23-
the escape, seepage, leakage, spillage, discharge, emission or release of any
Hazardous Materials on the premises of such Grantor, including any Claims
asserted or arising under any Environmental Law, or (iv) any Claim for
negligence or strict or absolute liability in tort; provided, however, that such
Grantor shall not indemnify Bank for any liability incurred by Bank as a result
of Bank's gross negligence or willful misconduct. Such indemnities shall
continue in full force and effect, notwithstanding the expiration or termination
of this Agreement. Upon an indemnitee's written demand, such Grantor shall
assume and diligently conduct, at its sole cost and expense, the entire defense
of Bank, each of its members, and each of their respective agents, employees,
directors, officers, shareholders, successors and assigns, using counsel
reasonably acceptable to such indemnitee against any indemnified Claim. Such
Grantor shall not settle or compromise any Claim against or involving Bank
without first obtaining Bank's written consent thereto, which consent shall not
be unreasonably withheld. If Bank elects to assume its own defense in connection
with an indemnified Claim, then Bank shall not settle or compromise such Claim
without first obtaining such Grantor's written consent thereto, which consent
shall not be unreasonably withheld, provided that if such Grantor does not
consent thereto, then Borrower shall post security or a bond in the amount of
such Claim for the benefit of the Bank.
24. Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by the Grantors herefrom (other than
supplements to the Schedules hereto in accordance with the terms of this
Agreement) shall in any event be effective unless the same shall be in writing
and made in accordance with of the Credit Agreement, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
25. Notices. All notices and other communications provided for
hereunder shall be given in the manner and to the addresses set forth either in
the Credit Agreement or in the Guaranty dated as of even date herewith made by
the Grantors.
26. Continuing Security Interest: Transfer of Notes; Termination. This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until indefeasible payment in full of
the Obligations and the termination or expiration of Bank's obligation to make
Loans under the Credit Agreement, (ii) be binding upon each Grantor, their
successors and assigns and (iii) inure, together with the rights and remedies of
Bank hereunder, to the benefit of Bank and any successor Bank, subject to the
terms and conditions of the Credit Agreement. Subject to the terms of the Credit
Agreement, any Bank may assign or otherwise transfer any Loan, or any rights in
Collateral held by it to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Bank or
Bank herein or otherwise. Nothing set forth herein or in any other Operative
Document is intended or shall be construed to give to any other party any right,
remedy or claim under, to or in respect of this Agreement or any other Operative
Document or any Collateral. The Grantors' successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession thereof or
therefor, provided that, except as otherwise permitted under the Credit
Agreement or any other Operative Document, none of the rights or
-24-
obligations of the Grantors hereunder may be assigned or otherwise transferred
without the prior written consent of Bank.
27. Release of the Grantors. This Agreement and all obligations of each
Grantor hereunder and all security interests granted hereby shall be released
and terminated when all Obligations have been paid in full in cash and when
Bank's obligation to make Loans under the Credit Agreement has expired or have
otherwise been terminated. Upon such release and termination of all Obligations
and the security interest hereunder, all rights in and to the Collateral granted
or pledged by the Grantors hereunder shall automatically revert to the Grantors,
and Bank shall return any pledged Collateral in their possession to the
Grantors, or to the Person or Persons legally entitled thereto, and shall
endorse, execute, deliver, record and file all instruments and documents, and do
all other acts and things, reasonably required for the return of the Collateral
to the Grantors, or to the Person or Persons legally entitled thereto, and to
evidence or document the release of the interests of Bank arising under this
Agreement, all as reasonably requested by, and at the sole expense of, the
Grantors.
28. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS OTHERWISE REQUIRED
BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED
BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA ARE GOVERNED BY
THE LAWS OF SUCH JURISDICTION.
29. Jury Trial. EACH GRANTOR AND BANK, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO
ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT.
30. Limitation of Liability. NO CLAIM MAY BE MADE BY ANY GRANTOR
AGAINST BANK OR THE MEMBERS, AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES,
ATTORNEYS OF BANK FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES
IN RESPECT OF ANY CLAIM (WHETHER BASED UPON ANY BREACH OF CONTRACT, TORT, BREACH
OF STATUTORY DUTY OR ANY OTHER THEORY OF LIABILITY) ARISING OUT OF OR RELATED TO
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH AND EACH GRANTOR HEREBY WAIVES, RELEASES AND
AGREES NOT TO XXX UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT NOW
ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
31. Covenant Not to Issue Uncertificated Securities. Each Grantor
covenants to Bank that any Pledged Securities held by them shall be in
certificated form (as contemplated by Article 8 of the Uniform Commercial Code),
and that it will not seek to convert all or any part of
-25-
any Pledged Securities into uncertificated form (as contemplated by Article 8 of
the Uniform Commercial Code).
32. Covenant Not to Dilute Interests of Secured Party in Securities.
Each Grantor represents, warrants and covenants to Bank that it will (a) not at
any time cause or permit any Subsidiary that is an issuer of Pledged Securities
to issue any capital stock or any warrant options or other rights to acquire any
capital stock, other than to such Grantor or as otherwise permitted under the
Credit Agreement and (b) pledge to Bank in accordance with the terms hereof,
immediately upon its acquisition (directly or indirectly) thereof, any and all
shares of stock or other securities of each issuer of Pledged Securities.
33. Pledged Limited Liability Company Interests/Covenant Not to Dilute.
Each Grantor represents, warrants and covenants to Bank that it will (a) not at
any time cause or permit any Pledged Entities to issue any additional membership
interests or any other rights or options to acquire any additional limited
liability company interests, other than to the Grantors or as otherwise
permitted under the Credit Agreement, and (b) pledge to Bank in accordance with
the terms hereof, immediately upon its acquisition (directly or indirectly)
thereof, any and all additional Limited Liability Company Interests of each
Pledged Entity.
34. Pledged Partnership Interests/Covenant Not to Dilute. Each Grantor
represents, warrants and covenants to Bank that it will (a) not at any time
cause or permit any Pledged Partnership Entities to issue any additional
partnership interests or any other rights or options to acquire any additional
partnership interests, other than to the Grantors or as otherwise permitted
under the Credit Agreement, and (b) pledge to Bank in accordance with the terms
hereof, immediately upon its acquisition (directly or indirectly) thereof, any
and all additional Partnership Interests of each Pledged Partnership Entity.
-26-
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement as of the day and year
first above written.
CHADMOORE WIRELESS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
CHADMOORE COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT BEACON HILL, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
-27-
PTT OF NEVADA, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
CMRS SYSTEMS, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
CHADMOORE COMMUNICATIONS OF TENNESSEE, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT COMMUNICATIONS OF RICHMOND, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT MAPLE, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
-00-
XXX XXXXXXXXXXXXXX XX XXXXXXXXXX, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT XXXXXX, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT COMMUNICATIONS OF FORT XXXXX, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF ROANOKE, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT TRISTAN, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
-00-
XXX XXXXXXXXXXXXXX XX XXXXXX, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF JACKSONVILLE, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF VIRGINIA BEACH,LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT ROSELAND, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT XXXXXX, INC.
-30-
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT FRANKLIN, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT CHACO, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
800 SMR NETWORK, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT COMMUNICATIONS OF BATON ROUGE
LIMITED
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF LAKE XXXXXXX, LLC
-31-
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF BAY CITY, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
BARCLAYS BANK PLC
By: /s/Xxxxxx Capparis
Name: Xxxxxx Capparis
Title: Director
-00-
Xxxxxxx X-0
-----------
To Security Agreement
FORM OF PLEDGE NOTICE
[Letterhead of Grantor]
[Date]
TO: [Name of Pledged Entity]
Notice is hereby given that, pursuant to the Security Agreement (a true
and correct copy of which is attached hereto), dated as of [Date] (as amended,
modified or supplemented from time to time in accordance with the terms thereof,
the "Security Agreement"), among [NAME OF GRANTOR] (the "Grantor"), the other
pledgors from time to time party thereto and BARCLAYS BANK PLC(the "Bank"), the
Grantor has pledged and assigned to the Bank, and granted to the Bank a
continuing security interest in, all right, title and interest of the Grantor,
whether now existing or hereafter arising or acquired, as a [[limited partner]
[general partner]] [member] in [NAME OF PLEDGED ENTITY] (the ["Partnership"]
["LLC"]), and in, to and under the [TITLE OF APPLICABLE AGREEMENT] (the
"[Partnership] [LLC] Agreement"), including, without limitation:
(i) all the capital of the [Partnership] [LLC] and the Grantor's
interest in all profits, income, surplus, losses, [Partnership] [LLC] assets and
other distributions to which the Grantor shall at any time be entitled in
respect of such [Partnership] [Membership] interest;
(ii) all other payments due or to become due to the Grantor in respect
of such [partnership [limited liability company] interest, whether under the
[Partnership] [LLC] Agreement or otherwise, whether as contractual obligations,
damages, insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under the [Partnership]
[LLC] Agreement or at law or otherwise in respect of such [Partnership]
[Membership] Interest;
-33-
(iv) all present and future claims, if any, of the Grantor against the
[Partnership [LLC] for moneys loaned or advanced, for services rendered or
otherwise;
(v) all of the Grantor's rights under the [Partnership] [LLC] Agreement
or at law to exercise and enforce every right, power, remedy, authority, option
and privilege of the Grantor relating to the [Partnership] [Membership]
Interest, including any power to terminate, cancel or modify the [Partnership]
[LLC] Agreement, to execute any instruments and to take any and all other action
on behalf of and in the name of the Grantor in respect of the [Partnership]
[Membership] Interest and the [Partnership] [LLC], to make determinations, to
exercise any election (including, but not limited, election of remedies) or
option or to give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce, collect or
receipt for any of the foregoing, to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action in connection
with any of the foregoing;
(vi) all other property hereafter delivered in substitution for or in
addition to any of the foregoing, all certificates and instruments representing
or evidencing such other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all thereof;
and
(vii) to the extent not otherwise included, all proceeds of any or all
of the foregoing.
Pursuant to the Security Agreement, the [Partnership] [LLC] is hereby
authorized and directed to register the Grantor's pledge to the Bank of the
interest of the Grantor on the [Partnership's] [LLC's] books.
The Grantor hereby requests the [Partnership] [LLC] to indicate the
[Partnership's] [LLC's] acceptance of this Notice and consent to and
confirmation of its terms and provisions by signing a copy hereof where
indicated on the attached page and returning the same to the Bank.
[NAME OF GRANTOR]
By
--------------------------------------
Name:
Title:
-00-
Xxxxxxx X-0
-----------
To Security Agreement
FORM OF ISSUER ACKNOWLEDGMENT
-----------------------------
[NAME OF PLEDGED ENTITY] (the ["Partnership"] ["LLC"]) hereby
acknowledges receipt of a copy of the assignment by [NAME OF GRANTOR]
("Grantor") of its interest under the [TITLE OF APPLICABLE AGREEMENT] (the
"[Partnership] [LLC] Agreement") pursuant to the terms of the Security
Agreement, dated as of [Date] (as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "Security Agreement"), among the
Grantor, the other grantors from time to time party thereto, and BARCLAYS BANK
PLC (the "Bank"). The undersigned hereby further confirms (i) the registration
of the Grantor's pledge of its interest to the Bank on behalf of the Secured
Creditors on the [Partnership's] [LLC's] books and (ii) upon receipt from the
Bank of a notice stating that an "Event of Default" has occurred and is
continuing, subject to applicable law, including the Communications Act and the
FCC Rulees, the undersigned shall only comply with instructions originated by
the Bank with respect to the pledge of the interest referred to above
notwithstanding contrary instructions given by any other person or entity,
including the Grantor until such time as otherwise notified by the Bank.
Dated: _______, ____
[NAME OF PLEDGED ENTITY]
BY
-------------------------------------
Name:
Title:
Exhibit B
---------
To Security Agreement
---------------------
[SEPARATE INSTRUMENT FOR
EACH FORM OF COLLATERAL]
GRANT OF SECURITY INTEREST
[PATENTS][TRADEMARKS][COPYRIGHTS]
THIS GRANT OF SECURITY INTEREST, dated as of ________________, 199_, is executed
by [GRANTOR], a [state of incorporation] corporation ("Grantor"), in favor of
BARCLAYS BANK PLC ("Secured Party").
A. Pursuant to a Senior Secured Credit Agreement, dated as of [Date]
(the "Credit Agreement"), among Chadmoore Wireless Group, Inc. ("Chadmoore"),
the subsidiaries of Chadmoore party thereto (collectively, the "Subsidiaries,"
and together with Chadmoore, the "Borrowers") and Secured Party, Secured Party
has agreed to extend certain credit facilities to Borrowers upon the terms and
subject to the conditions set forth therein.
[B. Grantor owns the letters patent, and/or applications for letters
patent, of the United States, more particularly described on Schedules 1-A and
1-B annexed hereto as part hereof (collectively, the "Patents");]
[B. Grantor has adopted, used and is using the trademarks, more
particularly described on Schedules 1-A and 1-B annexed hereto as part hereof,
which trademarks are registered or subject to an application for registration in
the United States Patent and Trademark Office (collectively, the "Trademarks");]
[B. Grantor owns the copyrights registered in the United States
Copyright Office, more particularly described on Schedule 1-A annexed hereto as
part hereof (collectively, the "Copyrights");]
C. Grantor has entered into a Security Agreement dated the date hereof
(the "Security Agreement") in favor of Secured Party; and
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Patents, together with any reissue, continuation, continuation-in-part or
extension thereof, and all proceeds thereof, including any and all causes of
action which may exist by reason of infringement thereof for the full term of
the Patents (the "Collateral"), to secure the prompt payment, performance and
observance of the Obligations, as defined in the Security Agreement;
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Trademarks, together with the goodwill of the business symbolized by the
Trademarks and the customer lists and records related to the Trademarks
and the applications and registrations thereof, and all proceeds thereof,
including any and all causes of action which may exist by reason of infringement
thereof (the "Collateral"), to secure the payment, performance and observance of
the Obligations, as defined in the Security Agreement;]
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Copyrights and the registrations thereof, together with any renewals or
extensions thereof, and all proceeds thereof, including any and all causes of
action which may exist by reason of infringement thereof for the full term of
the Copyrights (the "Collateral"), to secure the prompt payment, performance and
observance of the Obligations, as defined in the Security Agreement;]
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, Grantor does hereby further grant to Secured Party a
security interest in the Collateral to secure the prompt payment, performance
and observance of the Obligations.
Grantor does hereby further acknowledge and affirm that the rights and remedies
of Secured Party with respect to the security interest in the Collateral granted
hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are hereby incorporated herein by reference as if fully set
forth herein.
Secured Party's address is: BARCLAYS BANK PLC
000 Xxxxxxxx
Xxx Xxxx, XX 00000
IN WITNESS WHEREOF, Grantor has caused this instrument to be executed as of the
day and year first above written.
[GRANTOR]
By:
Name:
---------------------------------------
Title:
--------------------------------------
STATE OF NEVADA )
)
COUNTY OF )
--------------------------
On _______________________________ __________, 199___ before me,
_________________________, personally appeared , personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in her/her/their authorized capacity(ies), and
that by his/her/their signature(s) on such instrument the person or entity on
behalf of which the person(s) acted executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
----------------------------------
Exhibit 10.3
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Agreement"), dated as of August 31,
2000 is made between each entity set forth on the signature pages hereto as a
grantor (each such entity and each entity which hereafter executes and delivers
a Borrower Joinder in substantially the form of Exhibit E to the Credit
Agreement or a Subsidiary Joinder in substantially the form of Attachment 1 to
the Guaranty (as defined below) to be referred to herein as a "Grantor", and
collectively as, the "Grantors") and BARCLAYS BANK PLC ("Bank").
RECITALS
A. Bank is entering into a Credit Agreement, dated as of August 31,
2000 (such agreement, as it may hereafter be amended or modified, the "Credit
Agreement" with Chadmoore Wireless Group, Inc. ("Chadmoore") and a Guaranty of
even date herewith with the subsidiaries of Chadmoore (collectively, the
"Subsidiaries").
B. It is a condition precedent to the extension of credit by Bank under
the Credit Agreement that each Grantor shall have executed and delivered this
Agreement and shall have granted a security interest in all of its assets to
Bank in accordance herewith.
C. Terms defined in the Credit Agreement and not otherwise defined
herein have the same respective meanings when used herein.
AGREEMENT
NOW, THEREFORE, in order to induce Bank to enter into the
Credit Agreement and for other good and valuable consideration, the receipt and
adequacy of which hereby is acknowledged, each Grantor hereby represents,
warrants, covenants, agrees and grants as follows:
1. Definitions. Unless the context otherwise requires, terms defined in
the Uniform Commercial Code of the State of New York (the "Uniform Commercial
Code") and not otherwise defined in this Agreement or in the Credit Agreement
shall have the meanings defined for those terms in the Uniform Commercial Code.
In addition, the following terms shall have the meanings respectively set forth
after each:
"Certificates" means all certificates, instruments and other
documents now or hereafter representing or evidencing any Pledged Securities or
Pledged Limited Liability Company Interests.
"Closing Date" shall mean the date of this Agreement.
"Collateral" means and includes all present and future right,
title, interest, claims and demands of each Grantor in or to any personal
property or assets whatsoever, whether now
-1-
owned or existing or hereafter arising or acquired and wheresoever located, and
all hereafter arising or acquired and wheresoever located, and all rights and
powers of such Grantor to transfer any interest in or to any personal property
or assets whatsoever, including without limitation, any and all of the following
personal property:
(a) All present and future acounts, accounts receivable, agreements,
guaranties, contracts (including without limitation management agreements,
leases, contract rights and rights to payment (collectively, the "Accounts"),
together with all instruments, documents, chattel paper, security agreements,
guaranties, undertakings, surety bonds, insurance policies, notes and drafts,
and all forms of obligations owing to such Grantor or to which such Grantor may
have an interest, however created or arising;
(b) All present and future general intangibles, including without
limitation, (i) each FCC License and each Other Authorization described on
Schedules 1.01(a)(1), 1.01(a)(2) and 1.01(a)(3) of the Nextel Agreement and
including without limitation, all of such Grantor's rights under or relating to
any FCC License or any Other Authorization and the proceeds of any FCC License
or Other Authorization; provided, however, that the Collateral does not include
at any time any FCC License to the extent, but only to the extent, that such
Grantor is prohibited at that time from granting a security interest therein
pursuant to the Communications Act and the FCC Rules, but includes, to the
maximum extent permitted by law, all of such Grantor's proprietary rights
vis-a-vis third parties under or relating to any FCC License and the rights to
receive all proceeds derived from or in connection with the sale, assignment or
transfer of such FCC License, (ii) all tax refunds of every kind and nature to
which such Grantor now or hereafter may become entitled, however arising, (iii)
all other refunds, (iv) all commitments to extend financing to such Grantor, (v)
all deposits, (vi) all goodwill, (vii) all choses in action, (viii) all
insurance proceeds, and (ix) all trade secrets, computer programs, software,
customer lists, trademarks, trade names, patents, licenses, copyrights,
tecnology, processes and proprietary information, including without limitation,
the Copyrights, the Patents and the Marks and the goodwill of such Grantor's
business connected with and symbolized by the Marks;
(c) All present and future demand, time, savings, passbook, deposit and
like accounts (general or special) (collectively, the "Deposit Accounts") in
which such Grantor has any interest which is maintained with any bank, savings
and loan association, credit union or like organization and all money, cash and
cash equivalents of such Grantor, whether or not deposited in any Deposit
Account;
(d) All present and future books and records, including without
limitation, books of account and ledgers of every kind and nature, all
electronically recorded data relating to such Grantor, all receptacles and
containers for such records, and all files and correspondence;
(e) All present and future goods, including without limitation, all
equipment, machinery, audio and/or video recording equipment, transmitting
towers, transmitters, broadcasting equipment, videotapes, audio tapes, DAT tapes
and other recorded media, tools, molds, dies, furniture, furnishings, fixtures,
trade fixtures and all other goods used in connection with or in
-2-
the conduct of such Grantor's business, including without limitation, all goods
as defined in Section 9101(2) of the Uniform Commercial Code (collectively, the
"Equipment");
(f) All present and future inventory and merchandise, including without
limitation, all present and future goods held for sale or lease or to be
furnished under a contract of service, all recorded media, all raw materials,
work in process and finished goods, all packing materials, supplies and
containers relating to or used in connection with any of the foregoing, and all
bills of lading, warehouse receipts and documents of title relating to any of
the foregoing (collectively, the "Inventory");
(g) All present and future stocks, bonds, debentures, certificated and
uncertificated securities, security entitlements, subscription rights, options,
warrants, puts, calls, certificates, security accounts, commodity accounts,
commodity contracts, partnership interests, limited liability compnay interests,
joint venture interests and investment and/or brokerage accounts, and all other
investment properties, including without limitation, the Certificates, the
Pledged Securities, the Pledged Partnership Interests, the Pledged Limited
Liability Company Interests and all rights, preferences, privileges, dividends,
distributions (in cash or in kind), redemption payments or liquidation payments
with respect thereto;
(h) All present and future accessions, appurtenances, components,
repairs, repair parts, spare parts, replacements, substitutions, additions,
issue and/or improvements to or of or with respect to any of the foregoing;
(i) All other tangible and intangible personal property of such
Grantor;
(j) All rights, remedies, powers and/or privileges of such Grantor with
respect to any of the foregoing; and
() Any and all proceeds and products of the foregoing, including
without limitation, all money, accounts, general intangibles, deposit accounts,
documents, instruments, chattel paper, goods, insurance proceeds and any other
tangible or intangible property received upon the sale or disposition of any of
the foregoing.
"Communications Act" has the meaning given to that term in the
Credit Agreement.
"Copyright" means all:
(a) Copyrights, whether or not published or registered under the Copyright Act
of 1976, 17 U.S.C. Section 101 et seq., as the same shall be amended from time
to time and any predecessor or successor statute thereto (the "Copyright Act"),
and applications for registration of copyrights, and all works of authorship and
other intellectual property rights therein, including without limitation,
copyrights for computer programs, source code and object code databases and
related materials and documentation, and (i) all renewals, revisions, derivative
works,
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enhancements, modifications, updates, new releases and other revisions thereof,
(ii) all income, royalties, damages and payments now and hereafter due and/or
payable with respect thereto, including without limitation, payments under all
licenses entered into in connection therewith and damages and payments for past
or future infringements thereof, (iii) the right to xxx for past, present and
future infringemens thereof and (iv) all of such Grantor's rights corresponding
thereto throughout the world;
(b) Rights under or interests in any copyright license agreements with
any other party, whether Grantors are a licensee or licensor under any such
license agreement and the right to use the foregoing in connnection with the
enforcement of the Bank's rights under the Operative Documents; and
(c) Copyrightable materials now or hereafter owned by such Grantor,
including without limitation, all tangible property embodying the copyright
described in clause (a) hereof or such copyrightable materials, and all tangible
property covered by the licenses described in clause (b) hereof.
"Disclosure Schedule"has the meaning given to that term in the
Credit Agreement.
"FCC" has the meaning given to that term in the Credit
Agreement.
"FCC License" has the meaning given to that term in the Credit
Agreement.
"FCC Rules" has the meaning given to that term in the Credit
Agreement.
"Governmental Authority" has the meaning given to that term in
the Credit Agreement.
"Guaranty" has the meaning given to that term in the Credit
Agreement.
"Issuer Acknowledgement" has the meaning given to that term in
Section 3(b) of this Agreement.
"Liens" has the meaning given to that term in the Credit
Agreement.
"Limited Liability Company Interests" means the entire limited
liability company interest at any time owned by the Grantors in any Pledged
Entity.
"Loans" has the meaning given to that term in the Credit
Agreement.
"Marks" means all (a) trademarks, trademark registrations,
interest under trademark license agreements, trade names, trademark
applications, service marks, business names, trade styles, designs, logos and
other source or business identifiers for which registrations have been issued or
applied for in the United States Patent and Trademark Office or in any other
office or with any other official anywhere in the world or which are used in the
United States or
-4-
any state, territory or possession thereof, or in any other place, nation or
jurisdicion anywhere in the world, (b) licenses pertaining to any such xxxx
whether such Grantor is licensor or licensee, (c) all income, royalties, damages
and payments for past, present or future infringements thereof, (d) rights to
xxx for past, present and future infringements thereof, (e) rights corresponding
thereto throughout the world, (f) all product specification documents and
production and quality control manuals used in the manufacture of products sold
under or in connection with such marks, (g) all documents that reveal the name
and address of all sources of supply of, and all terms of purchase and delivery
for, all materials and components used in the production of products sold under
or in connection with such marks, (h) all documents constituting or concerning
the then current or proposed advertising and promotion by such Grantor, their
subsidiaries or licensees of products sold under or in connection with such
marks, including without limitation, all documents that reveal the media used or
to be used and the cost for all such advertising conducted within the described
period or planned for such products and (i) renewals and proceeds of any of the
foregoing.
"Material Adverse Effect" has the meaning given to that term
in the Credit Agreement.
"Obligations" has the meaning given to that term in the Credit
Agreement.
"Operative Documents" has the meaning given to that term in
the Credit Agreement.
"Other Authorization" has the meaning given to that term in
the Credit Agreement.
"Patents" means all (a) letters patent, design patents,
utility patents, inventions and trade secrets, all patents and patent
applications in the United States Patent and Trademark Office, and interests
under patent license agreements, including without limitation, the inventions
and improvements described and claimed therein, (b) licenses pertaining to any
patent whether such Grantor is licensor or licensee, (c) income, royalties,
damges and payments now and hereafter due and /or payable under and with respect
thereto, including without limitation, damages and payments for past, present or
future infringements, (d) rights to xxx for past, present and future
infringements thereof, (e) rights corresponding thereto throughout the world in
all jurisdictions in which such patents have been issud or applied for and (f)
the reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any of the foregoing.
"Permitted Liens" has the meaning given to that term in the
Credit Agreement.
"Person" has the meaning given to that term in the Credit
Agreement.
"Partnership Interests" means the entire partnership interest
at any time owned by the Grantors in any Pledged Partnership Entity.
-5-
"Pledge Notice" shall have the meaning ascribed to it in
Section 3(b) of this Agreement.
"Pledged Collateral" means the Certificates, the Pledged
Securities, the Pledged Partnership Interests and the Pledged Limited Liability
Company Interests.
"Pledged Entity" means each limited liability company set
forth in Schedule 1 attached hereto, together with any other limited liability
company in which any Grantor may have an interest at any time.
"Pledged Limited Liability Company Interests" means all
limited liability company interests held by each Grantor, including, but not
limited to those limited liability company interests set forth in Schedule 1
attached hereto, as such Schedule may be supplemented from time to time in
accordance with the terms of this Agreement and all capital, limited liability
company assets, dividends, cash, instruments and other properties from time to
time received, to be received or otherwise distributed in respect of or in
exchange for any or all of such interests and all certificates and instruments
representing or evidencing such other property received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof.
"Pledged Partnership Entity" means each partnership interest
set forth in Schedule 1 attached hereto, together with any other partnership
interest in which any Grantor may have an interest at any time.
"Pledged Partnership Interests" means all interests in any
partnership or joint venture held by each Grantor, including, but not limited to
those partnership interests set forth in Schedule 1 attached hereto, as such
Schedule may be supplemented from time to time in accordance with the terms of
this Agreement, and all dividends, cash, instruments and other properties from
time to time received, to be received or otherwise distributed in respect of or
in exchange for any or all of such interests.
"Pledged Securities" means all shares of capital stock of each
issuer in which each Grantor has an interest, including, but not limited to
those shares of capital stock set forth in Schedule 1 attached hereto, as such
Schedule may be supplemented from time to time in accordance with the terms of
this Agreement, and all dividends, cash, instruments and other properties from
time to time received, to be received or otherwise distributed in respect of or
in exchange for any or all of such shares.
"Term" has the meaning given to that term in the Credit
Agreement.
2. Creation of Security Interest. Each Grantor, in order to secure the
Obligations, does hereby grant and pledge to Bank to the extent permitted by law
a security interest in and to, all right, title and interest of such Grantor in
and to all presently existing and hereafter acquired Collateral. The security
interest and pledge created by this Section 2 shall continue in effect so long
as any Obligation remains outstanding or Bank has any obligation to make Loans
under the
-6-
Credit Agreement. Notwithstanding the foregoing provisions of this Section 2,
such grant of a security interest shall not extend to, and the term "Collateral"
shall not include, any general intangibles of the Grantors to the extent that
(but only to the extent that) (i) such general intangibles are not assignable or
capable of being encumbered as a matter of law or under the terms of the license
or other agreement applicable thereto (but solely to the extent that any such
restriction shall be enforceable under applicable law), without the consent of
the licensor thereof or other applicable party thereto and (ii) such consent has
not been obtained; provided, however, that the foregoing grant of a security
interest shall extend to, and the term "Collateral" shall include, (A) any
general intangible which is in the nature of an account receivable or a right to
the payment of money or a proceed of, or otherwise related to the enforcement or
collection of, any account receivable or right to the payment of money, or goods
which are the subject of any account receivable or right to the payment of
money, (B) any and all proceeds of any general intangibles which are otherwise
excluded to the extent that the assignment or encumbrance of such proceeds is
not so restricted, and (C) upon obtaining the consent of any such licensor or
other applicable party's consent with respect to any such otherwise excluded
general intangibles, such general intangibles as well as any and all proceeds
thereof that might have theretofor have been excluded from such grant of a
security interest and the term "Collateral".
3. Delivery of Pledged Collateral.
(a) With respect to each Certificate on (i) the Closing Date and (ii)
the day on which such Certificate shall be received or acquired by a Grantor
(with respect to any Certificate received or acquired after the Closing Date
that is not delivered to Senior Lender), and (iii) the day on which any such
Certificate is delivered to Senior Lender, Grantor shall deliver to Bank a
letter, countersigned by Senior Lender, in the form set forth in Exhibit A-1A
attached hereto (the "Pledge Letter") or, if Senior Lender does not have
possession of such Certificates, Grantor shall deliver to Bank the Certificates,
accompanied by instruments of transfer in blank, in form and substance
reasonably satisfactory to Bank.
(b) With respect to each uncertificated Limited Liability Company
Interest and each uncertificated Partnership Interest, on (i) the Closing Date
(with respect to such Limited Liability Company Interests and such Partnership
Interests existing on such date) and (ii) the day on which any such Limited
Liability Company Interest and any such Partnership Interest shall be acquired
by a Grantor (with respect to such Limited Liability Company Interests and such
Partnership Interests acquired after the Closing Date), a notice in the form set
forth in Exhibit A-1 attached hereto (the "Pledge Notice") shall be
appropriately completed and delivered to each Pledged Entity and each Pledged
Partnership Entity, notifying each Pledged Entity and each Pledged Partnership
Entity of the existence of this Agreement, a certified copy of this Agreement
shall be delivered by the Grantor to the relevant Pledged Entity and relevant
Pledged Partnership Entity, and such Grantor shall have received and delivered
to Bank a copy of such Pledge Notice, along with an acknowledgment in the form
set forth in Exhibit A-2 attached hereto (the "Issuer Acknowledgment"), duly
executed by the relevant Pledged Entity.
-7-
(c) Subject to receipt of any and all necessary prior approvals
required under the Communications Act and the FCC Rules, Bank shall have the
right, upon the occurrence and during the continuance of an Event of Default,
without notice to any of the Grantors, in connection with a commercially
reasonable foreclosure sale, to transfer to, or to direct the applicable Grantor
or any nominee of such Grantor to register or cause to be registered in the name
of, Bank or any of its nominees any or all of the Pledged Securities, Pledged
Partnership Interests or Pledged Limited Liability Company Interests. In
addition, Bank shall have the right at any time to exchange certificates or
instruments representing or evidencing Pledged Securities for certificates or
instruments of smaller or larger denominations.
4. Further Assurances.
(a) At any time and from time to time at the reasonable written request
of Bank, each Grantor shall execute and deliver to Bank, at such Grantor's
expense, all such financing statements and other instruments, certificates and
documents (including notices to financial institutions holding deposit accounts
of any Grantor as to the security interest granted hereby) in form and substance
reasonably satisfactory to Bank, and perform all such other acts as shall be
necessary or reasonably desirable to fully perfect or protect or maintain, when
filed, recorded, delivered or performed, Bank's security interests granted
pursuant to this Agreement or to enable Bank to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Grantor shall: (i) at the request of the Bank,
xxxx conspicuously each document included in the Inventory and each other
contract relating to the Accounts, and all chattel paper, instruments and other
documents and each of its records pertaining to the Collateral with a legend, in
form and substance satisfactory to Bank, indicating that such document,
contract, chattel paper, instrument or Collateral is subject to the security
interest granted hereby, (ii) at the request of Bank, if any Account or contract
or other writing relating thereto shall be evidenced by a promissory note or
other instrument, deliver and pledge to the Bank, such note or other instrument
duly endorsed and accompanied by duly executed undated instruments of transfer
or assignment, all in form and substance reasonably satisfactory to the Bank;
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Bank may reasonably request, in order to perfect and preserve,
with the required priority, the security interests granted, or purported to be
granted hereby, (iv) upon any Grantor's registration or application of any
copyright under the Copyright Act, execute and deliver immediately to Bank for
recordation and filing in the United States Copyright Office a Grant of Security
Interest, in the form of Exhibit B attached hereto, (v) upon any Grantor's
registration or application of any Patent or Xxxx, execute and deliver
immediately to Bank for recordation and filing in the United States Patent and
Trademark Office a Grant of Security Interest, in the form of Exhibit B attached
hereto, and (vi) with respect to any license or agreement in which any Grantor
now has or hereafter acquires an interest which by its terms prohibits
assignment, such Grantor will use its best efforts to procure the consent of the
counterpart party thereto.
(b) At any time and from time to time, Bank shall be entitled to file
and/or record any or all such financing statements, instruments and documents
held by it, and any or all such
-8-
further financing statements, documents and instruments, relative to the
Collateral or any part thereof in each instance, and to take all such other
actions as Bank may reasonably deem appropriate to perfect and to maintain
perfected the security interests granted herein.
(c) Each Grantor hereby authorizes Bank to file one or more financing
or continuation statements, and amendments thereto, relative to all or any part
of the Collateral without the signature of such Grantor where permitted by law.
A carbon, photographic or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(d) With respect to any Collateral consisting of securities,
instruments, partnership or joint venture interests, limited liability company
interests, or the like, each Grantor hereby consents and agrees that, upon the
occurrence and during the continuance of an Event of Default, subject to receipt
of any and all necessary prior approvals required under the Communications Act
and the FCC Rules, the issuers of, or obligors on, any such Collateral, or any
registrar or transfer agent or trustee for any such Collateral, shall be
entitled to accept the provisions of this Agreement as conclusive evidence of
the right of Bank to effect any transfer or exercise any right hereunder or with
respect to any such Collateral subject to the terms hereof, notwithstanding any
other notice or direction to the contrary heretofore or hereafter given by any
Grantor or any other Person to such issuers or such obligors or to any such
registrar or transfer agent or trustee.
5. Voting Rights; Dividends; etc. Subject to receipt of any and all
necessary prior approvals required under the Communications Act and the FCC
Rules, so long as no Event of Default shall have occurred and be continuing:
(a) Voting Rights. Each Grantor shall be entitled to exercise any and
all voting and other consensual rights pertaining to its Pledged Securities, its
Pledged Partnership Interests and its Pledged Limited Liability Company
Interests, or any part thereof, for any purpose not inconsistent with the terms
of this Agreement, the Credit Agreement or the other Operative Documents;
provided, however, that each Grantor shall not exercise, or shall refrain from
exercising, any such right if it would result in a Default.
(b) Dividend and Distribution Rights. Subject to the terms of the
Credit Agreement, each Grantor shall be entitled to receive and to retain and
use any and all dividends or distributions paid in respect of its Pledged
Securities, its Pledged Partnership Interests or its Pledged Limited Liability
Company Interests; provided, however, that any and all:
(i) non-cash dividends or distributions in the form of capital
stock, certificated limited liability company interests, instruments or other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Securities, Pledged Partnership Interests, Pledged
Limited Liability Company Interests,
(ii) dividends and other distributions paid or payable in cash in
respect of any Pledged Securities, Pledged Partnership Interests or Pledged
Limited Liability Company
-9-
Interests in connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in-surplus, and
(iii) cash paid, payable or otherwise distributed in redemption of,
or in exchange for, any Pledged Securities, Pledged Partnership Interests or
Pledged Limited Liability Company Interests,
shall, except as otherwise provided for in the Credit Agreement or the
other Operative Documents, forthwith be delivered to Bank, in the case of (i)
above, to be held as Collateral and shall, if received by such Grantor, be
received in trust for the benefit of Bank, be segregated from the other property
of such Grantor and forthwith be delivered to Bank as Collateral in the same
form as so received (with any necessary endorsements), and in the case of (ii)
and (iii) above, to be applied to the Obligations to the extent permitted by the
Credit Agreement or otherwise to be held as Collateral.
6. Rights as to Pledged Collateral During Event of Default. When an
Event of Default has occurred and is continuing, subject to receipt of any and
all necessary prior approvals required under the Communications Act and the FCC
Rules:
(a) Voting, Dividend and Distribution Rights. At the option of Bank,
all rights of each Grantor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to Section 5(a) above,
and to receive the dividends and distributions which it would otherwise be
authorized to receive and retain pursuant to Section 5(b) above, shall cease,
and all such rights shall thereupon become vested in Bank who shall thereupon
have the sole right to exercise such voting and other consensual rights and to
receive and to hold as Pledged Collateral such dividends and distributions
during the continuance of such Event of Default.
(b) Dividends and Distributions Held in Trust. All dividends and other
distributions which are received by any Grantor contrary to the provisions of
Section 6(a) of this Agreement shall be received in trust for the benefit of
Bank, shall be segregated from other funds of such Grantor and forthwith shall
be paid over to Bank as Collateral in the same form as so received (with any
necessary endorsements).
7. Irrevocable Proxy. Except for the proxy granted to Senior Lender,
each Grantor hereby revokes all previous proxies with regard to its Pledged
Securities, its Pledged Partnership Interests and its Pledged Limited Liability
Company Interests and, subject to receipt of any and all necessary prior
approvals required under the Communications Act and the FCC Rules, appoints Bank
as its respective proxyholder to (a) attend and vote at any and all meetings of
the shareholders of the corporation(s) which issued the Pledged Securities, and
any adjournments thereof, held on or after the date of the giving of this proxy
and prior to the termination of this proxy and to execute any and all written
consents of shareholders of such corporation(s) executed on or after the date of
the giving of this proxy and prior to the termination of this proxy, with the
same effect as if such Grantor had personally attended the meetings or had
personally
-10-
voted its shares or had personally signed the written consents, waivers or
ratification, and (b) to attend and vote at any and all meetings of the members
of the Pledged Entities or partners of the Pledged Partnership Entities (whether
or not such Pledged Limited Liability Company Interests or Pledged Partnership
Interests are transferred into the name of Bank), and any adjournments thereof,
held on or after the date of the giving of this proxy and to execute any and all
written consents, waivers and ratifications of the Pledged Entities or Pledged
Partnership Entities executed on or after the date of the giving of this proxy
and prior to the termination of this proxy with the same effect as if such
Grantor had personally attended the meetings or had personally voted on their
respective Limited Liability Company Interests or Partnership Interests or had
personally signed the consents, waivers or ratifications; provided, however,
that Bank as proxyholder shall have rights hereunder only upon the occurrence
and during the continuance of an Event of Default and subject to Section 13(j)
hereof. Each Grantor hereby authorizes Bank to substitute another Person (which
Person shall be a successor to the rights of Bank hereunder, a nominee appointed
by Bank to serve as proxyholder, or otherwise as approved by such Grantor in
writing, such approval not to be unreasonably withheld) as the proxyholder and,
upon the occurrence or during the continuance of any Event of Default, hereby
authorizes and directs the proxyholder to file this proxy and the substitution
instrument with the secretary of the appropriate corporation. This proxy
is-coupled with an interest and is irrevocable until such time as no part of any
commitment to make Loans pursuant to the Credit Agreement remains outstanding
and all Obligations have been indefeasibly paid in full.
8. The Grantors' Representations and Warranties. Each Grantor
represents and warrants as follows:
(a) (i) The locations listed on the Schedule 2 constitute all locations
at which Collateral owned by such Grantor is located; (ii) the chief executive
office of such Grantor, where such Grantor keeps its records concerning the
Collateral, is located at the address set forth for such Grantor on Schedule 3;
and (iii) such Grantor has exclusive possession and control of the Collateral
owned by such Grantor.
(b) Such Grantor currently conducts business only under its own name
and the trade names listed on Schedule 4. Neither such Grantor nor any corporate
predecessor has, during the preceding five years, been known as or used any
other corporate or fictitious name, except the names disclosed on Schedule 4.
(c) Such Grantor is the legal and beneficial owner of the Collateral
free and clear of all Liens except for Permitted Liens and restrictions imposed
by the FCC Rules. Such Grantor has the power, authority and legal right to grant
the security interests in the Collateral purported to be granted hereby, and to
execute, deliver and perform this Agreement. The pledge of the Collateral
pursuant to this Agreement creates a valid first priority security interest in
the Collateral (except for any Permitted Liens).
(d) Except as set forth on Schedule 1, the Pledged Securities described
on Schedule 1 attached hereto constitute (i) all of the shares of capital stock
of any Person owned by such
-11-
Grantor and (ii) that percentage of the issued and outstanding shares of the
respective issuers thereof indicated on Schedule 1 attached hereto, and there is
no other class of shares issued and outstanding of the respective issuers
thereof except as set forth on Schedule 1 attached hereto. Except as set forth
in Schedule 1, the Pledged Partnership Interests described on Schedule 1
attached hereto constitute all of the partnerships or joint ventures in which
each Grantor has an interest, and such Grantor's percentage interest in each
such partnership or joint venture is as set forth on such Schedule 1 attached
hereto. Except as set forth in Schedule 1, the Pledged Limited Liability Company
Interests described on Schedule 1 attached hereto constitute all of the Limited
Liability Company Interests of each Grantor and such Grantor's percentage
interest in each such Pledged Entity is as set forth on Schedule 1 attached
hereto.
(e) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority (other than such authorizations,
approvals and other actions as have already been taken and are in full force and
effect) is required (A) for the pledge of the Collateral or the grant of the
security interest in the Collateral by any of the Grantors hereby or for the
execution, delivery or, subject to approvals described in Section 13(j)(ii)
hereof, performance of this Agreement by any of the Grantors, or (B) for the
exercise by Bank of the voting rights in the Pledged Securities, the Pledged
Partnership Interest or the Pledged Limited Liability Company Interests or of
any other rights or remedies in respect of the Collateral hereunder except (1)
as may be required in connection with any disposition of Collateral consisting
of securities by laws affecting the offering and sale of securities generally,
and (2) as may be required by the FCC Rules and the Comunications Act.
9. Copyrights.
(a) Royalties. Each Grantor hereby agrees that the use by Bank of the
Copyrights as authorized hereunder in connection with Bank's exercise of their
rights and remedies hereunder shall be without any liability for royalties or
other related charges from Bank to Grantors.
(b) Restrictions on Future Agreements. Subject to the terms hereof and
of the Credit Agreement, each Grantor shall be permitted to manage, license and
administer its Copyrights in such manner as such Grantor in its reasonable
business judgment deems desirable, provided, however, that such Grantor will
not, without the Bank's prior written consent, such consent not to be
unreasonably withheld, (i) enter into any copyright license agreements except
license agreements entered into in the ordinary course of its business
consistent with past practices and containing such additional provisions to
protect Bank's interest hereunder as Bank may from time to time reasonably
request or (ii) take any action, or permit any action to be taken by others,
including, without limitation, licensees, or fail to take any action, which
would customarily be taken by a Person in the same business and in similar
circumstances as such Grantor, which could in any respect reasonably be expected
to have a Material Adverse Effect.
(c) Duties of Grantors. Each Grantor shall have the duty to:
(i) prosecute diligently any copyright application included in the
Copyrights,
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(ii) upon the occurrence and during the continuance of an Event of
Default, at the request of Bank, make application for registration of such
uncopyrighted but copyrightable material owned by such Grantor as Bank
reasonably deems appropriate if the failure to do so could reasonably be
expected to have a Material Adverse Effect,
(iii) place notices of copyright on all copyrightable property
produced or owned by such Grantor embodying the Copyrights and use diligent
reasonable efforts to have its licensees do the same and
(iv) take all reasonable action necessary in such Grantor's
reasonable business judgment consistent with past practices to preserve and
maintain all of Grantor's rights in the Copyrights that are or shall be
necessary in the operation of Grantor's business, including, without limitation,
making timely filings for renewals and extensions of registered Copyrights and
diligently monitoring unauthorized use thereof, unless the failure to do so
could not reasonably be expected to have a Material Adverse Effect. Any expenses
incurred in connection with the foregoing shall be borne by Grantors. Bank shall
have no duty with respect to the Copyrights other than to act lawfully and
without gross negligence or willful misconduct. Without limiting the generality
of the foregoing, Bank shall not be under any obligation to take any steps
necessary to preserve rights in the Copyrights against any other parties, but
Bank may do so at its option upon the occurrence and during the continuance of
an Event of Default, and all reasonable expenses incurred in connection
therewith shall be for the sole account of Grantors and shall be added to the
Obligations.
10. Patents and Marks.
(a) Royalties. Each Grantor hereby agrees that any rights granted
hereunder to Bank with respect to Patents and Marks shall be applicable to all
jurisdictions in which such Grantor has the right to use such Patents and Marks,
from time to time, and without any liability for royalties or other related
charges from Bank to Grantors.
(b) Restrictions on Future Agreements. Each Grantor will not, without
Bank's prior written consent, such consent not to be unreasonably withheld,
abandon any Patent or Xxxx in which such Grantor now owns or hereafter acquires
any rights or interests if such abandonment could reasonably be expected to have
a Material Adverse Effect or enter into any agreement, including, without
limitation, any license agreement, which is inconsistent with such Grantor's
obligations under this Agreement, if such actions could reasonably be expected
to have a Material Adverse Effect. Each Grantor further agrees that it will not
take any action, or permit any action to be taken by others subject to its
control, including licensees, or fail to take any action which would customarily
be taken by a Person in the same business and in similar circumstances as such
Grantor, which could reasonably be expected to have a Material Adverse Effect.
(c) Duties of Grantors. Each Grantor shall have the duty to
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(i) prosecute diligently any patent application or trademark
application pending as of the date hereof or thereafter until the Obligations
shall have been indefeasibly paid in full and Bank has no obligation to make any
Loans under the Credit Agreement,
(ii) upon the occurrence and during the continuance of an Event of
Default, make application on unpatented but patentable inventions owned by such
Grantor and on Marks, as the case may be, as Bank reasonably deems appropriate,
(iii) file and prosecute opposition and cancellation proceedings if
the failure to do so could reasonably be expected to have a Material Adverse
Effect and
(iv) take all reasonable action necessary in such Grantor's
reasonable business judgment consistent with past practices to preserve and
maintain all rights in patent applications of the Patents and in applications
for registrations of the Marks unless the failure so to do could not reasonably
be expected to have a Material Adverse Effect. Any expenses incurred in
connection with such applications shall be borne by Grantors. Each Grantor shall
not abandon any right to file a Patent application or Xxxx application without
the consent of Bank (which consent shall not be unreasonably withhold) if such
abandonment could reasonably be expected to have a Material Adverse Effect. Each
Grantor shall give proper statutory notice in connection with its use of each of
the Marks to the extent necessary for the protection of each of the Marks.
Grantors shall notify the Bank of any suits it commences to enforce the Patents
and Marks and shall provide Bank with copies of any documents reasonably
requested by Bank relating to such suits.
11. Grantors' Covenants. In addition to the other covenants and
agreements set forth herein and in the other Operative Documents, each Grantor
covenants and agrees as follows:
(a) Such Grantor will pay, prior to delinquency, all taxes, charges,
Liens and assessments against the Collateral owned by it, except those with
respect to which the amount or validity is being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of such Grantor and except those which
could not reasonably be expected to have a Material Adverse Effect.
(b) The Collateral will not be used in violation of any material law,
regulation or ordinance or any applicable laws (including without limitation,
all applicable regulations, rules and orders), nor used in any way that will
void or impair any insurance required to be carried in connection therewith.
(c) Such Grantor will keep the Collateral in reasonably good repair,
working order and operating condition (normal wear and tear excluded), and from
time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto and, as appropriate and applicable, will
otherwise deal with the Collateral in all such ways as are considered customary
practice by owners of like property.
-14-
(d) Such Grantor will take all reasonable steps to preserve and protect
the Collateral except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(e) Such Grantor will maintain all insurance coverage required pursuant
to Section 6.01 of the Credit Agreement.
(f) Such Grantor will promptly notify Bank in writing in the event of
any material damage to the Collateral from any source whatsoever.
(g) Such Grantor will not (i) establish any location of Collateral not
listed in Schedule 2, (ii) move its principal place of business, chief executive
offices or any other office listed in Schedule 3 or (iii) adopt, use or conduct
business under any trade name or other corporate or fictitious name not
disclosed in Schedule 4, except upon not less than 30 days prior written notice
to Bank and such Grantor's prior compliance with all applicable requirements of
Section 4 hereof necessary to perfect Bank's security interest hereunder.
(h) Subject to the provisions of Section 15(j) hereof, such Grantor
agrees to take any action which Bank may reasonably request in order to obtain
from the FCC such approval as may be necessary to enable Bank to exercise and
enjoy the full rights and benefits granted to them by this Agreement, including
the use of such Grantor's best efforts to assist in obtaining the approval of
the FCC for any action or transaction contemplated by this Agreement or any
other Operative Document for which such approval is required by law.
(i) Such Grantor shall cause all of its equipment constituting
Collateral to be operated and maintained in accordance with any applicable
manufacturer's manuals or instructions and the requirements of its insurance
policies. Such Grantor, at its expense, shall maintain such equipment in good
condition, reasonable wear and tear excepted, and will comply with all laws,
ordinances and regulations to which the use and operation of such equipment may
be or become subject. Such obligation shall extend to repair and replacement of
any partial loss or damage to such equipment, regardless of the cause. If
maintenance is mandated by the manufacturer, such Grantor shall obtain and keep
in effect at all times during the Term maintenance service contracts with the
vendor of such equipment or suppliers approved by Lessor, such approval not to
be unreasonably withheld. All parts furnished in connection with such
maintenance or repair shall immediately become part of such equipment. All such
maintenance, repair and replacement services shall be immediately paid for and
discharged by such Grantor with the result that no lien will attach to such
equipment. Only qualified personnel of such Grantor or qualified contract
personnel shall operate such equipment. Such equipment shall be used only for
the purposes for which it was designed. Upon prior written notice to Lessor,
such Grantor may make improvements, modifications or additions to such
equipment; provided, that if such improvements, modifications or additions are
not capable of being removed without causing material damage to such equipment,
then Lessor's prior written consent shall be required. Upon the return of such
equipment, such Grantor shall, at its expense, restore such equipment to the
original configuration in accordance with the manufacturer's
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specifications; provided, that, with Lessor's prior written consent, such
Grantor may return such equipment as so improved, modified or added to.
12. Bank's Rights Regarding Collateral. At any time and from time to
time, Bank may, to the extent necessary or desirable to protect the security
hereunder, but Bank shall not be obligated to: (a) (whether or not a Default has
occurred) itself or through its representatives, at its own expense, upon
reasonable notice and at such reasonable times during usual business hours,
visit and inspect any of the Grantors' properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired and discuss the business, operations, properties and
financial and other condition of any of the Grantors with officers of such
Grantors and with their accountants or (b) if an Event of Default has occurred
and is continuing, at the expense of the Grantors, perform any obligation of any
of the Grantors under this Agreement. At any time and from time to time, at the
expense of the Grantors, Bank may, to the extent necessary or desirable to
protect the security hereunder, but Bank shall not be obligated to: (i) notify
obligors of the Collateral that the Collateral has been pledged as security to
Bank; (ii) after an Event of Default has occurred and is continuing, at any time
and from time to time request from obligors of the Collateral, in the name of
the applicable Grantor or in the name of Bank, information concerning the
Collateral and the amounts owing thereon; and (iii) after an Event of Default
has occurred and is continuing, direct obligors under the contracts included in
the Collateral to direct their performance to Bank. Each Grantor shall keep
proper books and records and accounts in which full, true and correct entries in
conformity with GAAP and all applicable laws (including without limitation, all
applicable regulations, rules and orders) shall be made of all material dealings
and transactions pertaining to the Collateral. Bank shall at all reasonable
times on reasonable notice have full access to and the right to audit any and
all of Grantors' books and records pertaining to the Collateral, and to confirm
and verify the value of the Collateral. Bank shall not be under any duty or
obligation whatsoever to take any action to preserve any rights of or against
any prior or other parties in connection with the Collateral, to exercise any
voting rights or managerial rights with respect to any Collateral or to make or
give any presentments for payment, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor or notices of
any other nature whatsoever in connection with the Collateral or the
Obligations. Bank shall not be under any duty or obligation whatsoever to take
any action to protect or preserve the Collateral or any rights of the Grantors'
therein, or to make collections or enforce payment thereon, or to participate in
any foreclosure or other proceeding in connection therewith. Nothing contained
herein or in any consent shall constitute an assumption by Bank of any of the
Grantors' obligations under the contracts assigned hereunder unless Bank shall
have given written notice to the counterpart to such assigned contract of Bank's
intention to assume such contract. Each Grantor shall continue to be liable for
performance of its obligations under such contracts.
13. Collections on the Collateral. Except as provided to the contrary
in the Credit Agreement, each Grantor shall have the right to use and to
continue to make collections on and receive dividends and other proceeds of all
of the Collateral in the ordinary course of business so long as no Event of
Default shall have occurred and be continuing. Upon the occurrence and during
the continuance of an Event of Default, at the option of Bank, each Grantor's
right to make collections on and receive dividends and other proceeds of the
Collateral and to use or
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dispose of such collections and proceeds shall terminate, and any and all
dividends, proceeds and collections, including all partial or total prepayments,
then held or thereafter received on or on account of the Collateral will be held
or received by such Grantor in trust for Bank and immediately delivered in kind
to Bank (duly endorsed to Bank, if required), to be applied to the obligations
or held as Collateral, as Bank shall elect. Upon the occurrence and during the
continuance of an Event of Default, Bank shall have the right at all times to
receive, receipt for, endorse, assign, deposit and deliver, in the name of any
of the Grantors, any and all checks, notes, drafts and other instruments for the
payment of money constituting proceeds of or otherwise relating to the
Collateral; and each Grantor hereby authorizes Bank to affix, by facsimile
signature or otherwise, the general or special endorsement of such Grantor, in
such manner as Bank shall deem advisable, to any such instrument in the event
the same has been delivered to or obtained by Bank without appropriate
endorsement, and Bank and any collecting bank are hereby authorized to consider
such endorsement to be a sufficient, valid and effective endorsement by such
Grantor, to the same extent as though it were manually executed by the duly
authorized representative of such Grantor, regardless of by whom or under what
circumstances or by what authority such endorsement actually is affixed, without
duty of inquiry or responsibility as to such matters, and such Grantor hereby
expressly waives demand, presentment, protest and notice of protest or dishonor
and all other notices of every kind and nature with respect to any such
instrument.
14. Possession of Collateral by Bank. All the Collateral now,
heretofore or hereafter delivered to Bank shall be held by Bank in its
possession, custody and control. Upon the occurrence and during the continuance
of an Event of Default, whenever any of the Collateral is in Bank's possession,
custody or control, Bank may use, operate and consume the Collateral, whether
for the purpose of preserving and/or protecting the Collateral, or for the
purpose of performing any of the Grantors' obligations with respect thereto, or
otherwise so long as consistent with the Operative Documents or transactions
contemplated thereby. Bank may at any time deliver or redeliver the Collateral
or any part thereof to the Grantors, and the receipt of any of the same by the
Grantors shall be complete and full acquittance for the Collateral so delivered,
and Bank thereafter shall be discharged from any liability or responsibility
arising after such delivery to the Grantors. So long as Bank exercises
reasonable care and complies with Section 9207 of the UCC with respect to any
Collateral in its possession, custody or control, Bank shall have no liability
for any loss of or damage to any Collateral, and in no event shall Bank have
liability for any diminution in value of Collateral occasioned by economic or
market conditions or events.
15. Remedies. Provided that nothing contained in this Agreement shall
be construed to give Bank or any purchaser of the Collateral the right to
operate or control any aspect of the business of any of the Grantors that
requires an FCC License without the prior consent of the FCC, to the extent
required by law or the terms of any FCC License or the FCC Rules:
(a) Rights Upon Event of Default. Upon the occurrence and during the
continuance of an Event of Default, the Grantors shall be in default hereunder
and, subject to applicable law, Bank shall have, in any jurisdiction where
enforcement is sought, in addition to all other rights
and remedies that Bank
-17-
may have under this Agreement and under applicable laws or in equity, all rights
and remedies of a secured party under the Uniform Commercial Code as enacted in
any such jurisdiction in effect at that time, and in addition the following
rights and remedies, all of which may be exercised with or without further
notice to the Grantors except such notice as may be specifically required by
applicable law: (i) to foreclose the Liens and security interests created
hereunder or under any other Operative Document by any available judicial
procedure or without judicial process; (ii) to enter any premises where any
Collateral may be located for the purpose of securing, protecting, inventorying,
appraising, inspecting, repairing, preserving, storing, preparing, processing,
taking possession of or removing the same; (iii) to sell, assign, lease or
otherwise dispose of any Collateral or any part thereof, either at public or
private sale or at any broker's board, in lot or in bulk, for cash, on credit or
otherwise, with or without representations or warranties and upon such terms as
shall be commercially reasonable; (iv) to notify obligors on the Collateral that
the Collateral has been assigned to Bank and that all payments thereon, or
performance with respect thereto, are to be made directly and exclusively to
Bank; (v) to collect by legal proceedings or otherwise all dividends,
distributions, interest, principal or other sums now or hereafter payable upon
or on account of the Collateral; (vi) to enter into any extension,
reorganization, disposition, merger or consolidation agreement, or any other
agreement relating to or affecting the Collateral, and in connection therewith
Bank may deposit or surrender control of the Collateral and/or accept other
property in exchange for the Collateral as Bank reasonably deems appropriate and
is commercially reasonable; (vii) to settle, compromise or release, on terms
acceptable to Bank, in whole or in part, any amounts owing on the Collateral
and/or any disputes with respect thereto; (viii) to extend the time of payment,
make allowances and adjustments and issue credits in connection with the
Collateral in the name of the applicable Grantor for the benefit of Bank; (ix)
to enforce payment and prosecute any action or proceeding with respect to any or
all of the Collateral and take or bring, on behalf of itself or in the name of
the applicable Grantor, any and all steps, actions, suits or proceedings deemed
necessary or reasonably desirable by Bank to effect collection of or to realize
upon the Collateral, including any judicial or nonjudicial foreclosure thereof
or thereon, and each Grantor specifically consents to any nonjudicial
foreclosure of any or all of the Collateral or any other action taken by Bank
which may release any obligor from personal liability on any of the Collateral,
and each Grantor waives, to the extent permitted by applicable law, any right to
receive notice of any public or private judicial or nonjudicial sale or
foreclosure of any security or any of the Collateral, and any money or other
property received by Bank in exchange for or on account of the Collateral,
whether representing collections or proceeds of Collateral, and whether
resulting from voluntary payments or foreclosure proceedings or other legal
action taken by Bank or any of the Grantors, may be applied by Bank, without
notice to the Grantors, to the Obligations in such order and manner as Bank in
their sole discretion shall determine; (x) to insure, protect and preserve the
Collateral; (xi) to exercise all rights, remedies, powers or privileges provided
under any of the Operative Documents; and (xii) to remove, from any premises
where the same may be located, the Collateral and any and all documents,
instruments, files and records, and any receptacles and cabinets containing the
same, relating to the Collateral, and Bank may, at the cost and expense of the
Grantors, use such of its supplies, equipment, facilities and space at its
places of business as may be necessary or appropriate to properly administer,
process, store, control, prepare for sale or disposition and/or sell or dispose
of the Collateral or to properly administer and control the handling of
collections and realizations thereon, and Bank shall be deemed to have a
rent-free
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tenancy of any premises of the Grantors for such purposes and for such
periods of time as reasonably required by Bank. So long as an Event of Default
has occurred and is continuing, each Grantor will, at Bank's request, assemble
the Collateral and make it available to Bank at places which Bank may designate,
whether at the premises of such Grantor or elsewhere, and will make available to
Bank, free of cost, all premises, equipment and facilities of such Grantor for
the purpose of Bank's taking possession of the Collateral or storing the same or
removing or putting the Collateral in salable form or selling or disposing of
the same.
(b) Possession by Bank. Upon the occurrence and during the continuance
of an Event of Default, Bank also shall have the right, without notice or
demand, either in person, by Bank or by a receiver to be appointed by a court in
accordance with the provisions of applicable law (and each Grantor hereby
expressly consents, to the fullest extent permitted by applicable law, upon the
occurrence and during the continuance of an Event of Default to the appointment
of such a receiver), and, to the extent permitted by applicable law, without
regard to the adequacy of any security for the Obligations, to take possession
of the Collateral or any part thereof and to collect and receive the rents,
issues, profits, income and proceeds thereof. The taking possession of the
Collateral by Bank shall not cure or waive any Event of Default or notice
thereof or invalidate any act done pursuant to such notice. The rights, remedies
and powers of any receiver appointed by a court shall be as ordered by said
court.
(c) Sale of Collateral. Any public or private sale or other disposition
of the Collateral may be held at any office of Bank, or at the Grantors' places
of business, or at any other place permitted by applicable law, and without the
necessity of the Collateral being within the view of prospective purchasers.
Bank may direct the order and manner of sale of the Collateral, or portions
thereof, as it in its sole and absolute discretion may determine provided such
sale is commercially reasonable, and each Grantor expressly waives, to the
extent permitted by applicable law, any right to direct the order and manner of
sale of any Collateral. Bank or any Person acting on Bank's behalf may bid and
purchase at any such sale or other disposition. In furtherance of Bank's rights
hereunder, each Grantor hereby grants to Bank an irrevocable, non-exclusive
license (exercisable without royalty or other payment by Bank) to use, license
or sublicense any patent, trademark, trade name, copyright or other intellectual
property in which Grantor now or hereafter has any right, title or interest
together with the right of access to all media in which any of the foregoing may
be recorded or stored; provided, however, that such license shall only be
exercisable in connection with the disposition of Collateral upon Bank's
exercise of its remedies hereunder.
(d) Notice of Sale. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Bank will give the Grantors reasonable notice of the time and place of
any public sale thereof or of the time on or after which any private sale
thereof is to be made. The requirement of reasonable notice conclusively shall
be met if: (i) such notice is mailed, certified mail, postage prepaid, to the
Grantors at their addresses set forth on the signature page hereto or delivered
or otherwise sent to the Grantors, at least five (5) Business Days before the
date of the sale or (ii) if Grantors have previously executed any applications
for consent to the assignment of any FCC Licenses or for consent to the transfer
of control of any holder of such licenses. Each Grantor expressly waives, to the
-19-
fullest extent permitted by applicable law, any right to receive notice of any
public or private sale of any Collateral or other security for the Obligations
except as expressly provided for in this paragraph. Bank shall not be obligated
to make any sale of the Collateral if it shall determine not to do so regardless
of the fact that notice of sale of the Collateral may have been given. Bank may,
without notice or publication, except as required by applicable law, adjourn the
sale from time to time by announcement at the time and place fixed for sale, and
such sale may, without further notice (except as required by applicable law), be
made at the time and place to which the same was so adjourned.
(e) Private Sales. With respect to any Collateral consisting of
securities, partnership interests, limited liability company interests, joint
venture interests or the like, and whether or not any of such Collateral has
been effectively registered under the Securities Act of 1933, as amended, or
other applicable laws, Bank may, in its sole and absolute discretion, sell all
or any part of such Collateral at private sale in such manner and under such
circumstances as Bank may deem necessary or advisable in order that the sale may
be lawfully conducted in a commercially reasonable manner. Without limiting the
foregoing, Bank may (i) approach and negotiate with a limited number of
potential purchasers, and (ii) restrict the prospective bidders or purchasers to
persons who will represent and agree that they are purchasing such Collateral
for their own account for investment and not with a view to the distribution or
resale thereof. In the event that any such Collateral is sold at private sale,
each Grantor agrees to the extent permitted by applicable law that if such
Collateral is sold for a price which is commercially reasonable, then (A) the
Grantors shall not be entitled to a credit against the Obligations in an amount
in excess of the purchase price, and (B) Bank shall not incur any liability or
responsibility to the Grantors in connection therewith, notwithstanding the
possibility that a substantially higher price might have been realized at a
public sale. Each Grantor recognizes that a ready market may not exist for such
Collateral if it is not regularly traded on a recognized securities exchange,
and that a sale by Bank of any such Collateral for an amount substantially less
than a pro rata share of the fair market value of the issuer's assets minus
liabilities may be commercially reasonable in view of the difficulties that may
be encountered in attempting to sell a large amount of such Collateral or
Collateral that is privately traded.
(f) Title of Purchasers. Upon consummation of any sale of Collateral
hereunder, Bank shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the Collateral so sold absolutely free from any claim
or right upon the part of any Grantor or any other Person claiming through any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
laws) all rights of redemption, stay and appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. If the sale of all or any part of the Collateral is made on
credit or for future delivery, Bank shall not be required to apply any portion
of the sale price to the Obligations until such amount actually is received by
Bank, and any Collateral so sold may be retained by Bank until the sale price is
paid in full by the purchaser or purchasers thereof. Bank shall not incur any
liability in case any such purchaser or purchasers shall fail to pay for the
Collateral so sold, and, in case of any such failure, the Collateral may be sold
again.
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(g) Disposition of Proceeds of Sale. The proceeds resulting from the
collection, liquidation, sale or other disposition of the Collateral shall be
applied, first, to the reasonable costs and expenses (including reasonable
attorneys' fees) of retaking, holding, storing, processing and preparing for
sale, selling, collecting and liquidating the Collateral, and the like; second,
to the satisfaction of all Obligations; and third, any surplus remaining after
the satisfaction of all Obligations, to be paid over to the Grantors or to
whomsoever may be lawfully entitled to receive such surplus.
(h) Certain Waivers. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands against Bank arising out of the
repossession, retention or sale of the Collateral, or any part or parts thereof,
except to the extent any such claims, damages and awards arise out of the gross
negligence or willful misconduct of Bank.
(i) Remedies Cumulative. The rights and remedies provided under this
Agreement are cumulative and may be exercised singly or concurrently, and are
not exclusive of any other rights and remedies provided by law or equity.
(j) Compliance with Communications Act and FCC Rules and Regulations.
(i) Notwithstanding any other provision of this Agreement, any
foreclosure on, sale, transfer or other disposition of, or the exercise of any
right to vote or consent with respect to, any of the Collateral as provided
herein or any other action taken or proposed to be taken by Bank hereunder which
would affect the operational, voting or other control of any entity holding an
FCC License shall be made in accordance with the Communications Act, the terms
of each FCC License, and any applicable FCC Rules, including any requirement
that there be a public or private sale.
(ii) If an Event of Default shall have occurred and be continuing,
each Grantor shall take any action which Bank may request in the exercise of its
rights and remedies under this Agreement, including, but not limited to, the
execution and delivery of any documents requested by Bank, in order to transfer
and assign to Bank or to one or more third parties as Bank may designate,
including, but not limited to, a receiver or trustee or to a combination of the
foregoing, the Collateral for the purposes of a public or private sale. Upon the
occurrence and during the continuance of an Event of Default, each Grantor shall
further use its best efforts to assist in obtaining the approval of the FCC (and
that required by any other Governmental Authority) for any action or transaction
contemplated by this Agreement, including without limitation, the preparation,
execution and filing with the FCC of the assignor's or transferor's portion of
any application or applications for consent to the assignment of any FCC License
or transfer of control of any entity holding or controlling any FCC License as
may be necessary or appropriate under the FCC Rules. Each Grantor further agrees
that, because of the unique nature of its undertaking in this Section 13(j), the
same may be specifically enforced, and it hereby waives, and agrees to waive,
any claim or defense that Bank would have an adequate remedy at law for the
breach of this undertaking and any requirement for the posting of bond or other
security. Each Grantor hereby agrees that in the event that such Grantor has
been given five Business
-21-
Days' prior written notice telecopied to its telecopier number set forth on the
signature page hereto and such Grantor has not responded by executing any such
applications or other instruments, the clerk of the court of any court of
competent jurisdiction may execute in the place of such Grantor any application
or other instrument necessary or appropriate for the obtaining of such consent.
This Section 13(j) shall not be deemed to limit any other rights of Bank
available under applicable law and consistent with the Communications Act and
the applicable FCC Rules.
16. Notice. Bank shall use reasonable efforts to give the Grantors
prior written notice of the exercise of any remedy provided for herein, provided
that the failure to give such notice shall not subject Bank to liability and
shall not affect the validity or exercise of any remedy hereunder.
17. Bank Appointed Attorney-in-Fact. To the full extent permitted by
applicable law, including the Communications Act and FCC Rules, each Grantor
hereby irrevocably appoints Bank as such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor, and in the name of such
Grantor, or otherwise, from time to time, in Bank's sole and absolute discretion
to do any of the following acts or things upon the occurrence and during the
continuance of an Event of Default: (a) to do all acts and things and to execute
all documents necessary or advisable to perfect and continue perfected the
security interests created by this Agreement and to preserve, maintain and
protect the Collateral; (b) to do any and every act which such Grantor is
obligated to do under this Agreement; (c) to prepare, sign, file and record, in
such Grantor's name, any financing statement covering the Collateral; (d) to
endorse and transfer the Collateral upon foreclosure by Bank; and (e) to file
any claims or take any action or institute any proceedings which Bank may
reasonably deem necessary or desirable for the protection or enforcement of any
of the rights of Bank with respect to any of the Collateral; provided, however,
that Bank shall be under no obligation whatsoever to take any of the foregoing
actions, and Bank shall have no liability or responsibility for any act or
omission (other than Bank's own gross negligence or willful misconduct) taken
with respect thereto.
18. Costs and Expenses. Each Grantor shall pay on demand (i) all
reasonable fees and expenses, including reasonable attorneys' fees and expenses,
incurred by Bank in connection with the preparation, execution and delivery of,
and the exercise of its duties under, this Agreement (not to exceed $50,000),
(ii) all reasonable fees and expenses, including reasonable attorneys' fees and
expenses, incurred by Bank in connection with the preparation, execution and
delivery of amendments and waivers hereunder and (iii) all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by Bank in
connection with the enforcement or attempted enforcement of this Agreement or
any of the Obligations or in preserving any of Bank's rights and remedies
(including, without limitation, all such fees and expenses incurred in
connection with any "workout" or restructuring affecting the Operative Documents
or the Obligations or any bankruptcy or similar proceeding involving such
Grantor, any other Grantor, Borrower or any of their Affiliates).
-22-
19. Transfers and Other Liens. Each Grantor agrees that, except as
specifically permitted under the Credit Agreement or any other Operative
Document, it will not (a) sell, assign, exchange, transfer or otherwise dispose
of, or contract to sell, assign, exchange, transfer or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (b) create or permit
to exist any Lien upon or with respect to any of the Collateral, except for
legally permissible Liens in favor of Bank or otherwise permitted under the
Credit Agreement or any other Operative Document.
20. Other Agreements; Governing Agreement. Nothing herein shall in any
way modify or limit the effect of terms or conditions set forth in any other
Operative Document executed by the Grantors or any other Person in connection
with the Obligations, but each and every term and condition hereof shall be in
addition thereto; provided, however, that in the event of inconsistency between
this Agreement and the Credit Agreement, the Credit Agreement shall govern.
21. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
22. Understandings With Respect to Waivers and Consents. Each Grantor
warrants and agrees that each of the waivers and consents set forth herein are
made with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which such Grantor
otherwise may have against Bank or others, or against any Collateral. If any of
the waivers or consents herein are determined to be unenforceable under
applicable law, such waivers and consents shall be effective to the maximum
extent permitted by law.
23. Indemnity. Each Grantor shall indemnify, reimburse and hold Bank,
each of Bank's members, and each of their respective successors, assigns,
agents, officers, directors, shareholders, servants, agents and employees
harmless from and against all liabilities, losses, damages, actions, suits,
demands, claims of any kind and nature (including claims relating to
environmental discharge, cleanup or compliance), all costs and expenses
whatsoever to the extent they may be incurred or suffered by such indemnified
party in connection therewith (including reasonable attorneys' fees and
expenses), fines, penalties (and other charges of applicable governmental
authorities), licensing fees relating to any item of Collateral, damage to or
loss of use of property (including consequential or special damages to third
parties or damages to Borrower's property), or bodily injury to or death of any
person (including any agent or employee of Borrower) (each, a "Claim"), directly
or indirectly relating to or arising out of the use of the proceeds of the Loan,
the falsity of any representation or warranty of such Grantor or such Grantor's
failure to comply with the terms of this Agreement or any other Operative
Document during the Term. The foregoing indemnity shall cover, without
limitation, (i) any Claim in connection with a design or other defect (latent or
patent) in any item of equipment included in the Collateral, (ii) any Claim for
infringement of any patent, copyright, trademark or other intellectual property
right, (iii) any Claim resulting from the presence on or under or
-23-
the escape, seepage, leakage, spillage, discharge, emission or release of any
Hazardous Materials on the premises of such Grantor, including any Claims
asserted or arising under any Environmental Law, or (iv) any Claim for
negligence or strict or absolute liability in tort; provided, however, that such
Grantor shall not indemnify Bank for any liability incurred by Bank as a result
of Bank's gross negligence or willful misconduct. Such indemnities shall
continue in full force and effect, notwithstanding the expiration or termination
of this Agreement. Upon an indemnitee's written demand, such Grantor shall
assume and diligently conduct, at its sole cost and expense, the entire defense
of Bank, each of its members, and each of their respective agents, employees,
directors, officers, shareholders, successors and assigns, using counsel
reasonably acceptable to such indemnitee against any indemnified Claim. Such
Grantor shall not settle or compromise any Claim against or involving Bank
without first obtaining Bank's written consent thereto, which consent shall not
be unreasonably withheld. If Bank elects to assume its own defense in connection
with an indemnified Claim, then Bank shall not settle or compromise such Claim
without first obtaining such Grantor's written consent thereto, which consent
shall not be unreasonably withheld, provided that if such Grantor does not
consent thereto, then Borrower shall post security or a bond in the amount of
such Claim for the benefit of the Bank.
24. Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by the Grantors herefrom (other than
supplements to the Schedules hereto in accordance with the terms of this
Agreement) shall in any event be effective unless the same shall be in writing
and made in accordance with of the Credit Agreement, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
25. Notices. All notices and other communications provided for
hereunder shall be given in the manner and to the addresses set forth either in
the Credit Agreement or in the Guaranty dated as of even date herewith made by
the Grantors.
26. Continuing Security Interest: Transfer of Notes; Termination. This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until indefeasible payment in full of
the Obligations and the termination or expiration of Bank's obligation to make
Loans under the Credit Agreement, (ii) be binding upon each Grantor, their
successors and assigns and (iii) inure, together with the rights and remedies of
Bank hereunder, to the benefit of Bank and any successor Bank, subject to the
terms and conditions of the Credit Agreement. Subject to the terms of the Credit
Agreement, any Bank may assign or otherwise transfer any Loan, or any rights in
Collateral held by it to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Bank or
Bank herein or otherwise. Nothing set forth herein or in any other Operative
Document is intended or shall be construed to give to any other party any right,
remedy or claim under, to or in respect of this Agreement or any other Operative
Document or any Collateral. The Grantors' successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession thereof or
therefor, provided that, except as otherwise permitted under the Credit
Agreement or any other Operative Document, none of the rights or
-24-
obligations of the Grantors hereunder may be assigned or otherwise transferred
without the prior written consent of Bank.
27. Release of the Grantors. This Agreement and all obligations of each
Grantor hereunder and all security interests granted hereby shall be released
and terminated when all Obligations have been paid in full in cash and when
Bank's obligation to make Loans under the Credit Agreement has expired or have
otherwise been terminated. Upon such release and termination of all Obligations
and the security interest hereunder, all rights in and to the Collateral granted
or pledged by the Grantors hereunder shall automatically revert to the Grantors,
and Bank shall return any pledged Collateral in their possession to the
Grantors, or to the Person or Persons legally entitled thereto, and shall
endorse, execute, deliver, record and file all instruments and documents, and do
all other acts and things, reasonably required for the return of the Collateral
to the Grantors, or to the Person or Persons legally entitled thereto, and to
evidence or document the release of the interests of Bank arising under this
Agreement, all as reasonably requested by, and at the sole expense of, the
Grantors.
28. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS OTHERWISE REQUIRED
BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED
BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA ARE GOVERNED BY
THE LAWS OF SUCH JURISDICTION.
29. Jury Trial. EACH GRANTOR AND BANK, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO
ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT.
30. Limitation of Liability. NO CLAIM MAY BE MADE BY ANY GRANTOR
AGAINST BANK OR THE MEMBERS, AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES,
ATTORNEYS OF BANK FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES
IN RESPECT OF ANY CLAIM (WHETHER BASED UPON ANY BREACH OF CONTRACT, TORT, BREACH
OF STATUTORY DUTY OR ANY OTHER THEORY OF LIABILITY) ARISING OUT OF OR RELATED TO
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH AND EACH GRANTOR HEREBY WAIVES, RELEASES AND
AGREES NOT TO XXX UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT NOW
ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
31. Covenant Not to Issue Uncertificated Securities. Each Grantor
covenants to Bank that any Pledged Securities held by them shall be in
certificated form (as contemplated by Article 8 of the Uniform Commercial Code),
and that it will not seek to convert all or any part of
-25-
any Pledged Securities into uncertificated form (as contemplated by Article 8 of
the Uniform Commercial Code).
32. Covenant Not to Dilute Interests of Secured Party in Securities.
Each Grantor represents, warrants and covenants to Bank that it will (a) not at
any time cause or permit any Subsidiary that is an issuer of Pledged Securities
to issue any capital stock or any warrant options or other rights to acquire any
capital stock, other than to such Grantor or as otherwise permitted under the
Credit Agreement and (b) pledge to Bank in accordance with the terms hereof,
immediately upon its acquisition (directly or indirectly) thereof, any and all
shares of stock or other securities of each issuer of Pledged Securities.
33. Pledged Limited Liability Company Interests/Covenant Not to Dilute.
Each Grantor represents, warrants and covenants to Bank that it will (a) not at
any time cause or permit any Pledged Entities to issue any additional membership
interests or any other rights or options to acquire any additional limited
liability company interests, other than to the Grantors or as otherwise
permitted under the Credit Agreement, and (b) pledge to Bank in accordance with
the terms hereof, immediately upon its acquisition (directly or indirectly)
thereof, any and all additional Limited Liability Company Interests of each
Pledged Entity.
34. Pledged Partnership Interests/Covenant Not to Dilute. Each Grantor
represents, warrants and covenants to Bank that it will (a) not at any time
cause or permit any Pledged Partnership Entities to issue any additional
partnership interests or any other rights or options to acquire any additional
partnership interests, other than to the Grantors or as otherwise permitted
under the Credit Agreement, and (b) pledge to Bank in accordance with the terms
hereof, immediately upon its acquisition (directly or indirectly) thereof, any
and all additional Partnership Interests of each Pledged Partnership Entity.
-26-
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement as of the day and year
first above written.
CHADMOORE WIRELESS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
CHADMOORE COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT BEACON HILL, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
-27-
PTT OF NEVADA, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
CMRS SYSTEMS, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
CHADMOORE COMMUNICATIONS OF TENNESSEE, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT COMMUNICATIONS OF RICHMOND, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT MAPLE, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
-00-
XXX XXXXXXXXXXXXXX XX XXXXXXXXXX, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT XXXXXX, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT COMMUNICATIONS OF FORT XXXXX, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF ROANOKE, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT TRISTAN, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
-00-
XXX XXXXXXXXXXXXXX XX XXXXXX, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF JACKSONVILLE, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF VIRGINIA BEACH,LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT ROSELAND, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT XXXXXX, INC.
-30-
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT FRANKLIN, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT CHACO, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
800 SMR NETWORK, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT COMMUNICATIONS OF BATON ROUGE
LIMITED
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF LAKE XXXXXXX, LLC
-31-
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF BAY CITY, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
BARCLAYS BANK PLC
By: /s/Xxxxxx Capparis
Name: Xxxxxx Capparis
Title: Director
-00-
Xxxxxxx X-0
-----------
To Security Agreement
FORM OF PLEDGE NOTICE
[Letterhead of Grantor]
[Date]
TO: [Name of Pledged Entity]
Notice is hereby given that, pursuant to the Security Agreement (a true
and correct copy of which is attached hereto), dated as of [Date] (as amended,
modified or supplemented from time to time in accordance with the terms thereof,
the "Security Agreement"), among [NAME OF GRANTOR] (the "Grantor"), the other
pledgors from time to time party thereto and BARCLAYS BANK PLC(the "Bank"), the
Grantor has pledged and assigned to the Bank, and granted to the Bank a
continuing security interest in, all right, title and interest of the Grantor,
whether now existing or hereafter arising or acquired, as a [[limited partner]
[general partner]] [member] in [NAME OF PLEDGED ENTITY] (the ["Partnership"]
["LLC"]), and in, to and under the [TITLE OF APPLICABLE AGREEMENT] (the
"[Partnership] [LLC] Agreement"), including, without limitation:
(i) all the capital of the [Partnership] [LLC] and the Grantor's
interest in all profits, income, surplus, losses, [Partnership] [LLC] assets and
other distributions to which the Grantor shall at any time be entitled in
respect of such [Partnership] [Membership] interest;
(ii) all other payments due or to become due to the Grantor in respect
of such [partnership [limited liability company] interest, whether under the
[Partnership] [LLC] Agreement or otherwise, whether as contractual obligations,
damages, insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under the [Partnership]
[LLC] Agreement or at law or otherwise in respect of such [Partnership]
[Membership] Interest;
-33-
(iv) all present and future claims, if any, of the Grantor against the
[Partnership [LLC] for moneys loaned or advanced, for services rendered or
otherwise;
(v) all of the Grantor's rights under the [Partnership] [LLC] Agreement
or at law to exercise and enforce every right, power, remedy, authority, option
and privilege of the Grantor relating to the [Partnership] [Membership]
Interest, including any power to terminate, cancel or modify the [Partnership]
[LLC] Agreement, to execute any instruments and to take any and all other action
on behalf of and in the name of the Grantor in respect of the [Partnership]
[Membership] Interest and the [Partnership] [LLC], to make determinations, to
exercise any election (including, but not limited, election of remedies) or
option or to give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce, collect or
receipt for any of the foregoing, to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action in connection
with any of the foregoing;
(vi) all other property hereafter delivered in substitution for or in
addition to any of the foregoing, all certificates and instruments representing
or evidencing such other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all thereof;
and
(vii) to the extent not otherwise included, all proceeds of any or all
of the foregoing.
Pursuant to the Security Agreement, the [Partnership] [LLC] is hereby
authorized and directed to register the Grantor's pledge to the Bank of the
interest of the Grantor on the [Partnership's] [LLC's] books.
The Grantor hereby requests the [Partnership] [LLC] to indicate the
[Partnership's] [LLC's] acceptance of this Notice and consent to and
confirmation of its terms and provisions by signing a copy hereof where
indicated on the attached page and returning the same to the Bank.
[NAME OF GRANTOR]
By
--------------------------------------
Name:
Title:
-00-
Xxxxxxx X-0
-----------
To Security Agreement
FORM OF ISSUER ACKNOWLEDGMENT
-----------------------------
[NAME OF PLEDGED ENTITY] (the ["Partnership"] ["LLC"]) hereby
acknowledges receipt of a copy of the assignment by [NAME OF GRANTOR]
("Grantor") of its interest under the [TITLE OF APPLICABLE AGREEMENT] (the
"[Partnership] [LLC] Agreement") pursuant to the terms of the Security
Agreement, dated as of [Date] (as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "Security Agreement"), among the
Grantor, the other grantors from time to time party thereto, and BARCLAYS BANK
PLC (the "Bank"). The undersigned hereby further confirms (i) the registration
of the Grantor's pledge of its interest to the Bank on behalf of the Secured
Creditors on the [Partnership's] [LLC's] books and (ii) upon receipt from the
Bank of a notice stating that an "Event of Default" has occurred and is
continuing, subject to applicable law, including the Communications Act and the
FCC Rulees, the undersigned shall only comply with instructions originated by
the Bank with respect to the pledge of the interest referred to above
notwithstanding contrary instructions given by any other person or entity,
including the Grantor until such time as otherwise notified by the Bank.
Dated: _______, ____
[NAME OF PLEDGED ENTITY]
BY
-------------------------------------
Name:
Title:
Exhibit B
---------
To Security Agreement
---------------------
[SEPARATE INSTRUMENT FOR
EACH FORM OF COLLATERAL]
GRANT OF SECURITY INTEREST
[PATENTS][TRADEMARKS][COPYRIGHTS]
THIS GRANT OF SECURITY INTEREST, dated as of ________________, 199_, is executed
by [GRANTOR], a [state of incorporation] corporation ("Grantor"), in favor of
BARCLAYS BANK PLC ("Secured Party").
A. Pursuant to a Senior Secured Credit Agreement, dated as of [Date]
(the "Credit Agreement"), among Chadmoore Wireless Group, Inc. ("Chadmoore"),
the subsidiaries of Chadmoore party thereto (collectively, the "Subsidiaries,"
and together with Chadmoore, the "Borrowers") and Secured Party, Secured Party
has agreed to extend certain credit facilities to Borrowers upon the terms and
subject to the conditions set forth therein.
[B. Grantor owns the letters patent, and/or applications for letters
patent, of the United States, more particularly described on Schedules 1-A and
1-B annexed hereto as part hereof (collectively, the "Patents");]
[B. Grantor has adopted, used and is using the trademarks, more
particularly described on Schedules 1-A and 1-B annexed hereto as part hereof,
which trademarks are registered or subject to an application for registration in
the United States Patent and Trademark Office (collectively, the "Trademarks");]
[B. Grantor owns the copyrights registered in the United States
Copyright Office, more particularly described on Schedule 1-A annexed hereto as
part hereof (collectively, the "Copyrights");]
C. Grantor has entered into a Security Agreement dated the date hereof
(the "Security Agreement") in favor of Secured Party; and
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Patents, together with any reissue, continuation, continuation-in-part or
extension thereof, and all proceeds thereof, including any and all causes of
action which may exist by reason of infringement thereof for the full term of
the Patents (the "Collateral"), to secure the prompt payment, performance and
observance of the Obligations, as defined in the Security Agreement;
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Trademarks, together with the goodwill of the business symbolized by the
Trademarks and the customer lists and records related to the Trademarks
and the applications and registrations thereof, and all proceeds thereof,
including any and all causes of action which may exist by reason of infringement
thereof (the "Collateral"), to secure the payment, performance and observance of
the Obligations, as defined in the Security Agreement;]
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Copyrights and the registrations thereof, together with any renewals or
extensions thereof, and all proceeds thereof, including any and all causes of
action which may exist by reason of infringement thereof for the full term of
the Copyrights (the "Collateral"), to secure the prompt payment, performance and
observance of the Obligations, as defined in the Security Agreement;]
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, Grantor does hereby further grant to Secured Party a
security interest in the Collateral to secure the prompt payment, performance
and observance of the Obligations.
Grantor does hereby further acknowledge and affirm that the rights and remedies
of Secured Party with respect to the security interest in the Collateral granted
hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are hereby incorporated herein by reference as if fully set
forth herein.
Secured Party's address is: BARCLAYS BANK PLC
000 Xxxxxxxx
Xxx Xxxx, XX 00000
IN WITNESS WHEREOF, Grantor has caused this instrument to be executed as of the
day and year first above written.
[GRANTOR]
By:
Name:
---------------------------------------
Title:
--------------------------------------
STATE OF NEVADA )
)
COUNTY OF )
--------------------------
On _______________________________ __________, 199___ before me,
_________________________, personally appeared , personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in her/her/their authorized capacity(ies), and
that by his/her/their signature(s) on such instrument the person or entity on
behalf of which the person(s) acted executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
----------------------------------
Exhibit 10.3
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Agreement"), dated as of August 31,
2000 is made between each entity set forth on the signature pages hereto as a
grantor (each such entity and each entity which hereafter executes and delivers
a Borrower Joinder in substantially the form of Exhibit E to the Credit
Agreement or a Subsidiary Joinder in substantially the form of Attachment 1 to
the Guaranty (as defined below) to be referred to herein as a "Grantor", and
collectively as, the "Grantors") and BARCLAYS BANK PLC ("Bank").
RECITALS
A. Bank is entering into a Credit Agreement, dated as of August 31,
2000 (such agreement, as it may hereafter be amended or modified, the "Credit
Agreement" with Chadmoore Wireless Group, Inc. ("Chadmoore") and a Guaranty of
even date herewith with the subsidiaries of Chadmoore (collectively, the
"Subsidiaries").
B. It is a condition precedent to the extension of credit by Bank under
the Credit Agreement that each Grantor shall have executed and delivered this
Agreement and shall have granted a security interest in all of its assets to
Bank in accordance herewith.
C. Terms defined in the Credit Agreement and not otherwise defined
herein have the same respective meanings when used herein.
AGREEMENT
NOW, THEREFORE, in order to induce Bank to enter into the
Credit Agreement and for other good and valuable consideration, the receipt and
adequacy of which hereby is acknowledged, each Grantor hereby represents,
warrants, covenants, agrees and grants as follows:
1. Definitions. Unless the context otherwise requires, terms defined in
the Uniform Commercial Code of the State of New York (the "Uniform Commercial
Code") and not otherwise defined in this Agreement or in the Credit Agreement
shall have the meanings defined for those terms in the Uniform Commercial Code.
In addition, the following terms shall have the meanings respectively set forth
after each:
"Certificates" means all certificates, instruments and other
documents now or hereafter representing or evidencing any Pledged Securities or
Pledged Limited Liability Company Interests.
"Closing Date" shall mean the date of this Agreement.
"Collateral" means and includes all present and future right,
title, interest, claims and demands of each Grantor in or to any personal
property or assets whatsoever, whether now
-1-
owned or existing or hereafter arising or acquired and wheresoever located, and
all hereafter arising or acquired and wheresoever located, and all rights and
powers of such Grantor to transfer any interest in or to any personal property
or assets whatsoever, including without limitation, any and all of the following
personal property:
(a) All present and future acounts, accounts receivable, agreements,
guaranties, contracts (including without limitation management agreements,
leases, contract rights and rights to payment (collectively, the "Accounts"),
together with all instruments, documents, chattel paper, security agreements,
guaranties, undertakings, surety bonds, insurance policies, notes and drafts,
and all forms of obligations owing to such Grantor or to which such Grantor may
have an interest, however created or arising;
(b) All present and future general intangibles, including without
limitation, (i) each FCC License and each Other Authorization described on
Schedules 1.01(a)(1), 1.01(a)(2) and 1.01(a)(3) of the Nextel Agreement and
including without limitation, all of such Grantor's rights under or relating to
any FCC License or any Other Authorization and the proceeds of any FCC License
or Other Authorization; provided, however, that the Collateral does not include
at any time any FCC License to the extent, but only to the extent, that such
Grantor is prohibited at that time from granting a security interest therein
pursuant to the Communications Act and the FCC Rules, but includes, to the
maximum extent permitted by law, all of such Grantor's proprietary rights
vis-a-vis third parties under or relating to any FCC License and the rights to
receive all proceeds derived from or in connection with the sale, assignment or
transfer of such FCC License, (ii) all tax refunds of every kind and nature to
which such Grantor now or hereafter may become entitled, however arising, (iii)
all other refunds, (iv) all commitments to extend financing to such Grantor, (v)
all deposits, (vi) all goodwill, (vii) all choses in action, (viii) all
insurance proceeds, and (ix) all trade secrets, computer programs, software,
customer lists, trademarks, trade names, patents, licenses, copyrights,
tecnology, processes and proprietary information, including without limitation,
the Copyrights, the Patents and the Marks and the goodwill of such Grantor's
business connected with and symbolized by the Marks;
(c) All present and future demand, time, savings, passbook, deposit and
like accounts (general or special) (collectively, the "Deposit Accounts") in
which such Grantor has any interest which is maintained with any bank, savings
and loan association, credit union or like organization and all money, cash and
cash equivalents of such Grantor, whether or not deposited in any Deposit
Account;
(d) All present and future books and records, including without
limitation, books of account and ledgers of every kind and nature, all
electronically recorded data relating to such Grantor, all receptacles and
containers for such records, and all files and correspondence;
(e) All present and future goods, including without limitation, all
equipment, machinery, audio and/or video recording equipment, transmitting
towers, transmitters, broadcasting equipment, videotapes, audio tapes, DAT tapes
and other recorded media, tools, molds, dies, furniture, furnishings, fixtures,
trade fixtures and all other goods used in connection with or in
-2-
the conduct of such Grantor's business, including without limitation, all goods
as defined in Section 9101(2) of the Uniform Commercial Code (collectively, the
"Equipment");
(f) All present and future inventory and merchandise, including without
limitation, all present and future goods held for sale or lease or to be
furnished under a contract of service, all recorded media, all raw materials,
work in process and finished goods, all packing materials, supplies and
containers relating to or used in connection with any of the foregoing, and all
bills of lading, warehouse receipts and documents of title relating to any of
the foregoing (collectively, the "Inventory");
(g) All present and future stocks, bonds, debentures, certificated and
uncertificated securities, security entitlements, subscription rights, options,
warrants, puts, calls, certificates, security accounts, commodity accounts,
commodity contracts, partnership interests, limited liability compnay interests,
joint venture interests and investment and/or brokerage accounts, and all other
investment properties, including without limitation, the Certificates, the
Pledged Securities, the Pledged Partnership Interests, the Pledged Limited
Liability Company Interests and all rights, preferences, privileges, dividends,
distributions (in cash or in kind), redemption payments or liquidation payments
with respect thereto;
(h) All present and future accessions, appurtenances, components,
repairs, repair parts, spare parts, replacements, substitutions, additions,
issue and/or improvements to or of or with respect to any of the foregoing;
(i) All other tangible and intangible personal property of such
Grantor;
(j) All rights, remedies, powers and/or privileges of such Grantor with
respect to any of the foregoing; and
() Any and all proceeds and products of the foregoing, including
without limitation, all money, accounts, general intangibles, deposit accounts,
documents, instruments, chattel paper, goods, insurance proceeds and any other
tangible or intangible property received upon the sale or disposition of any of
the foregoing.
"Communications Act" has the meaning given to that term in the
Credit Agreement.
"Copyright" means all:
(a) Copyrights, whether or not published or registered under the Copyright Act
of 1976, 17 U.S.C. Section 101 et seq., as the same shall be amended from time
to time and any predecessor or successor statute thereto (the "Copyright Act"),
and applications for registration of copyrights, and all works of authorship and
other intellectual property rights therein, including without limitation,
copyrights for computer programs, source code and object code databases and
related materials and documentation, and (i) all renewals, revisions, derivative
works,
-3-
enhancements, modifications, updates, new releases and other revisions thereof,
(ii) all income, royalties, damages and payments now and hereafter due and/or
payable with respect thereto, including without limitation, payments under all
licenses entered into in connection therewith and damages and payments for past
or future infringements thereof, (iii) the right to xxx for past, present and
future infringemens thereof and (iv) all of such Grantor's rights corresponding
thereto throughout the world;
(b) Rights under or interests in any copyright license agreements with
any other party, whether Grantors are a licensee or licensor under any such
license agreement and the right to use the foregoing in connnection with the
enforcement of the Bank's rights under the Operative Documents; and
(c) Copyrightable materials now or hereafter owned by such Grantor,
including without limitation, all tangible property embodying the copyright
described in clause (a) hereof or such copyrightable materials, and all tangible
property covered by the licenses described in clause (b) hereof.
"Disclosure Schedule"has the meaning given to that term in the
Credit Agreement.
"FCC" has the meaning given to that term in the Credit
Agreement.
"FCC License" has the meaning given to that term in the Credit
Agreement.
"FCC Rules" has the meaning given to that term in the Credit
Agreement.
"Governmental Authority" has the meaning given to that term in
the Credit Agreement.
"Guaranty" has the meaning given to that term in the Credit
Agreement.
"Issuer Acknowledgement" has the meaning given to that term in
Section 3(b) of this Agreement.
"Liens" has the meaning given to that term in the Credit
Agreement.
"Limited Liability Company Interests" means the entire limited
liability company interest at any time owned by the Grantors in any Pledged
Entity.
"Loans" has the meaning given to that term in the Credit
Agreement.
"Marks" means all (a) trademarks, trademark registrations,
interest under trademark license agreements, trade names, trademark
applications, service marks, business names, trade styles, designs, logos and
other source or business identifiers for which registrations have been issued or
applied for in the United States Patent and Trademark Office or in any other
office or with any other official anywhere in the world or which are used in the
United States or
-4-
any state, territory or possession thereof, or in any other place, nation or
jurisdicion anywhere in the world, (b) licenses pertaining to any such xxxx
whether such Grantor is licensor or licensee, (c) all income, royalties, damages
and payments for past, present or future infringements thereof, (d) rights to
xxx for past, present and future infringements thereof, (e) rights corresponding
thereto throughout the world, (f) all product specification documents and
production and quality control manuals used in the manufacture of products sold
under or in connection with such marks, (g) all documents that reveal the name
and address of all sources of supply of, and all terms of purchase and delivery
for, all materials and components used in the production of products sold under
or in connection with such marks, (h) all documents constituting or concerning
the then current or proposed advertising and promotion by such Grantor, their
subsidiaries or licensees of products sold under or in connection with such
marks, including without limitation, all documents that reveal the media used or
to be used and the cost for all such advertising conducted within the described
period or planned for such products and (i) renewals and proceeds of any of the
foregoing.
"Material Adverse Effect" has the meaning given to that term
in the Credit Agreement.
"Obligations" has the meaning given to that term in the Credit
Agreement.
"Operative Documents" has the meaning given to that term in
the Credit Agreement.
"Other Authorization" has the meaning given to that term in
the Credit Agreement.
"Patents" means all (a) letters patent, design patents,
utility patents, inventions and trade secrets, all patents and patent
applications in the United States Patent and Trademark Office, and interests
under patent license agreements, including without limitation, the inventions
and improvements described and claimed therein, (b) licenses pertaining to any
patent whether such Grantor is licensor or licensee, (c) income, royalties,
damges and payments now and hereafter due and /or payable under and with respect
thereto, including without limitation, damages and payments for past, present or
future infringements, (d) rights to xxx for past, present and future
infringements thereof, (e) rights corresponding thereto throughout the world in
all jurisdictions in which such patents have been issud or applied for and (f)
the reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any of the foregoing.
"Permitted Liens" has the meaning given to that term in the
Credit Agreement.
"Person" has the meaning given to that term in the Credit
Agreement.
"Partnership Interests" means the entire partnership interest
at any time owned by the Grantors in any Pledged Partnership Entity.
-5-
"Pledge Notice" shall have the meaning ascribed to it in
Section 3(b) of this Agreement.
"Pledged Collateral" means the Certificates, the Pledged
Securities, the Pledged Partnership Interests and the Pledged Limited Liability
Company Interests.
"Pledged Entity" means each limited liability company set
forth in Schedule 1 attached hereto, together with any other limited liability
company in which any Grantor may have an interest at any time.
"Pledged Limited Liability Company Interests" means all
limited liability company interests held by each Grantor, including, but not
limited to those limited liability company interests set forth in Schedule 1
attached hereto, as such Schedule may be supplemented from time to time in
accordance with the terms of this Agreement and all capital, limited liability
company assets, dividends, cash, instruments and other properties from time to
time received, to be received or otherwise distributed in respect of or in
exchange for any or all of such interests and all certificates and instruments
representing or evidencing such other property received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof.
"Pledged Partnership Entity" means each partnership interest
set forth in Schedule 1 attached hereto, together with any other partnership
interest in which any Grantor may have an interest at any time.
"Pledged Partnership Interests" means all interests in any
partnership or joint venture held by each Grantor, including, but not limited to
those partnership interests set forth in Schedule 1 attached hereto, as such
Schedule may be supplemented from time to time in accordance with the terms of
this Agreement, and all dividends, cash, instruments and other properties from
time to time received, to be received or otherwise distributed in respect of or
in exchange for any or all of such interests.
"Pledged Securities" means all shares of capital stock of each
issuer in which each Grantor has an interest, including, but not limited to
those shares of capital stock set forth in Schedule 1 attached hereto, as such
Schedule may be supplemented from time to time in accordance with the terms of
this Agreement, and all dividends, cash, instruments and other properties from
time to time received, to be received or otherwise distributed in respect of or
in exchange for any or all of such shares.
"Term" has the meaning given to that term in the Credit
Agreement.
2. Creation of Security Interest. Each Grantor, in order to secure the
Obligations, does hereby grant and pledge to Bank to the extent permitted by law
a security interest in and to, all right, title and interest of such Grantor in
and to all presently existing and hereafter acquired Collateral. The security
interest and pledge created by this Section 2 shall continue in effect so long
as any Obligation remains outstanding or Bank has any obligation to make Loans
under the
-6-
Credit Agreement. Notwithstanding the foregoing provisions of this Section 2,
such grant of a security interest shall not extend to, and the term "Collateral"
shall not include, any general intangibles of the Grantors to the extent that
(but only to the extent that) (i) such general intangibles are not assignable or
capable of being encumbered as a matter of law or under the terms of the license
or other agreement applicable thereto (but solely to the extent that any such
restriction shall be enforceable under applicable law), without the consent of
the licensor thereof or other applicable party thereto and (ii) such consent has
not been obtained; provided, however, that the foregoing grant of a security
interest shall extend to, and the term "Collateral" shall include, (A) any
general intangible which is in the nature of an account receivable or a right to
the payment of money or a proceed of, or otherwise related to the enforcement or
collection of, any account receivable or right to the payment of money, or goods
which are the subject of any account receivable or right to the payment of
money, (B) any and all proceeds of any general intangibles which are otherwise
excluded to the extent that the assignment or encumbrance of such proceeds is
not so restricted, and (C) upon obtaining the consent of any such licensor or
other applicable party's consent with respect to any such otherwise excluded
general intangibles, such general intangibles as well as any and all proceeds
thereof that might have theretofor have been excluded from such grant of a
security interest and the term "Collateral".
3. Delivery of Pledged Collateral.
(a) With respect to each Certificate on (i) the Closing Date and (ii)
the day on which such Certificate shall be received or acquired by a Grantor
(with respect to any Certificate received or acquired after the Closing Date
that is not delivered to Senior Lender), and (iii) the day on which any such
Certificate is delivered to Senior Lender, Grantor shall deliver to Bank a
letter, countersigned by Senior Lender, in the form set forth in Exhibit A-1A
attached hereto (the "Pledge Letter") or, if Senior Lender does not have
possession of such Certificates, Grantor shall deliver to Bank the Certificates,
accompanied by instruments of transfer in blank, in form and substance
reasonably satisfactory to Bank.
(b) With respect to each uncertificated Limited Liability Company
Interest and each uncertificated Partnership Interest, on (i) the Closing Date
(with respect to such Limited Liability Company Interests and such Partnership
Interests existing on such date) and (ii) the day on which any such Limited
Liability Company Interest and any such Partnership Interest shall be acquired
by a Grantor (with respect to such Limited Liability Company Interests and such
Partnership Interests acquired after the Closing Date), a notice in the form set
forth in Exhibit A-1 attached hereto (the "Pledge Notice") shall be
appropriately completed and delivered to each Pledged Entity and each Pledged
Partnership Entity, notifying each Pledged Entity and each Pledged Partnership
Entity of the existence of this Agreement, a certified copy of this Agreement
shall be delivered by the Grantor to the relevant Pledged Entity and relevant
Pledged Partnership Entity, and such Grantor shall have received and delivered
to Bank a copy of such Pledge Notice, along with an acknowledgment in the form
set forth in Exhibit A-2 attached hereto (the "Issuer Acknowledgment"), duly
executed by the relevant Pledged Entity.
-7-
(c) Subject to receipt of any and all necessary prior approvals
required under the Communications Act and the FCC Rules, Bank shall have the
right, upon the occurrence and during the continuance of an Event of Default,
without notice to any of the Grantors, in connection with a commercially
reasonable foreclosure sale, to transfer to, or to direct the applicable Grantor
or any nominee of such Grantor to register or cause to be registered in the name
of, Bank or any of its nominees any or all of the Pledged Securities, Pledged
Partnership Interests or Pledged Limited Liability Company Interests. In
addition, Bank shall have the right at any time to exchange certificates or
instruments representing or evidencing Pledged Securities for certificates or
instruments of smaller or larger denominations.
4. Further Assurances.
(a) At any time and from time to time at the reasonable written request
of Bank, each Grantor shall execute and deliver to Bank, at such Grantor's
expense, all such financing statements and other instruments, certificates and
documents (including notices to financial institutions holding deposit accounts
of any Grantor as to the security interest granted hereby) in form and substance
reasonably satisfactory to Bank, and perform all such other acts as shall be
necessary or reasonably desirable to fully perfect or protect or maintain, when
filed, recorded, delivered or performed, Bank's security interests granted
pursuant to this Agreement or to enable Bank to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Grantor shall: (i) at the request of the Bank,
xxxx conspicuously each document included in the Inventory and each other
contract relating to the Accounts, and all chattel paper, instruments and other
documents and each of its records pertaining to the Collateral with a legend, in
form and substance satisfactory to Bank, indicating that such document,
contract, chattel paper, instrument or Collateral is subject to the security
interest granted hereby, (ii) at the request of Bank, if any Account or contract
or other writing relating thereto shall be evidenced by a promissory note or
other instrument, deliver and pledge to the Bank, such note or other instrument
duly endorsed and accompanied by duly executed undated instruments of transfer
or assignment, all in form and substance reasonably satisfactory to the Bank;
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Bank may reasonably request, in order to perfect and preserve,
with the required priority, the security interests granted, or purported to be
granted hereby, (iv) upon any Grantor's registration or application of any
copyright under the Copyright Act, execute and deliver immediately to Bank for
recordation and filing in the United States Copyright Office a Grant of Security
Interest, in the form of Exhibit B attached hereto, (v) upon any Grantor's
registration or application of any Patent or Xxxx, execute and deliver
immediately to Bank for recordation and filing in the United States Patent and
Trademark Office a Grant of Security Interest, in the form of Exhibit B attached
hereto, and (vi) with respect to any license or agreement in which any Grantor
now has or hereafter acquires an interest which by its terms prohibits
assignment, such Grantor will use its best efforts to procure the consent of the
counterpart party thereto.
(b) At any time and from time to time, Bank shall be entitled to file
and/or record any or all such financing statements, instruments and documents
held by it, and any or all such
-8-
further financing statements, documents and instruments, relative to the
Collateral or any part thereof in each instance, and to take all such other
actions as Bank may reasonably deem appropriate to perfect and to maintain
perfected the security interests granted herein.
(c) Each Grantor hereby authorizes Bank to file one or more financing
or continuation statements, and amendments thereto, relative to all or any part
of the Collateral without the signature of such Grantor where permitted by law.
A carbon, photographic or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(d) With respect to any Collateral consisting of securities,
instruments, partnership or joint venture interests, limited liability company
interests, or the like, each Grantor hereby consents and agrees that, upon the
occurrence and during the continuance of an Event of Default, subject to receipt
of any and all necessary prior approvals required under the Communications Act
and the FCC Rules, the issuers of, or obligors on, any such Collateral, or any
registrar or transfer agent or trustee for any such Collateral, shall be
entitled to accept the provisions of this Agreement as conclusive evidence of
the right of Bank to effect any transfer or exercise any right hereunder or with
respect to any such Collateral subject to the terms hereof, notwithstanding any
other notice or direction to the contrary heretofore or hereafter given by any
Grantor or any other Person to such issuers or such obligors or to any such
registrar or transfer agent or trustee.
5. Voting Rights; Dividends; etc. Subject to receipt of any and all
necessary prior approvals required under the Communications Act and the FCC
Rules, so long as no Event of Default shall have occurred and be continuing:
(a) Voting Rights. Each Grantor shall be entitled to exercise any and
all voting and other consensual rights pertaining to its Pledged Securities, its
Pledged Partnership Interests and its Pledged Limited Liability Company
Interests, or any part thereof, for any purpose not inconsistent with the terms
of this Agreement, the Credit Agreement or the other Operative Documents;
provided, however, that each Grantor shall not exercise, or shall refrain from
exercising, any such right if it would result in a Default.
(b) Dividend and Distribution Rights. Subject to the terms of the
Credit Agreement, each Grantor shall be entitled to receive and to retain and
use any and all dividends or distributions paid in respect of its Pledged
Securities, its Pledged Partnership Interests or its Pledged Limited Liability
Company Interests; provided, however, that any and all:
(i) non-cash dividends or distributions in the form of capital
stock, certificated limited liability company interests, instruments or other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Securities, Pledged Partnership Interests, Pledged
Limited Liability Company Interests,
(ii) dividends and other distributions paid or payable in cash in
respect of any Pledged Securities, Pledged Partnership Interests or Pledged
Limited Liability Company
-9-
Interests in connection with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or paid-in-surplus, and
(iii) cash paid, payable or otherwise distributed in redemption of,
or in exchange for, any Pledged Securities, Pledged Partnership Interests or
Pledged Limited Liability Company Interests,
shall, except as otherwise provided for in the Credit Agreement or the
other Operative Documents, forthwith be delivered to Bank, in the case of (i)
above, to be held as Collateral and shall, if received by such Grantor, be
received in trust for the benefit of Bank, be segregated from the other property
of such Grantor and forthwith be delivered to Bank as Collateral in the same
form as so received (with any necessary endorsements), and in the case of (ii)
and (iii) above, to be applied to the Obligations to the extent permitted by the
Credit Agreement or otherwise to be held as Collateral.
6. Rights as to Pledged Collateral During Event of Default. When an
Event of Default has occurred and is continuing, subject to receipt of any and
all necessary prior approvals required under the Communications Act and the FCC
Rules:
(a) Voting, Dividend and Distribution Rights. At the option of Bank,
all rights of each Grantor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to Section 5(a) above,
and to receive the dividends and distributions which it would otherwise be
authorized to receive and retain pursuant to Section 5(b) above, shall cease,
and all such rights shall thereupon become vested in Bank who shall thereupon
have the sole right to exercise such voting and other consensual rights and to
receive and to hold as Pledged Collateral such dividends and distributions
during the continuance of such Event of Default.
(b) Dividends and Distributions Held in Trust. All dividends and other
distributions which are received by any Grantor contrary to the provisions of
Section 6(a) of this Agreement shall be received in trust for the benefit of
Bank, shall be segregated from other funds of such Grantor and forthwith shall
be paid over to Bank as Collateral in the same form as so received (with any
necessary endorsements).
7. Irrevocable Proxy. Except for the proxy granted to Senior Lender,
each Grantor hereby revokes all previous proxies with regard to its Pledged
Securities, its Pledged Partnership Interests and its Pledged Limited Liability
Company Interests and, subject to receipt of any and all necessary prior
approvals required under the Communications Act and the FCC Rules, appoints Bank
as its respective proxyholder to (a) attend and vote at any and all meetings of
the shareholders of the corporation(s) which issued the Pledged Securities, and
any adjournments thereof, held on or after the date of the giving of this proxy
and prior to the termination of this proxy and to execute any and all written
consents of shareholders of such corporation(s) executed on or after the date of
the giving of this proxy and prior to the termination of this proxy, with the
same effect as if such Grantor had personally attended the meetings or had
personally
-10-
voted its shares or had personally signed the written consents, waivers or
ratification, and (b) to attend and vote at any and all meetings of the members
of the Pledged Entities or partners of the Pledged Partnership Entities (whether
or not such Pledged Limited Liability Company Interests or Pledged Partnership
Interests are transferred into the name of Bank), and any adjournments thereof,
held on or after the date of the giving of this proxy and to execute any and all
written consents, waivers and ratifications of the Pledged Entities or Pledged
Partnership Entities executed on or after the date of the giving of this proxy
and prior to the termination of this proxy with the same effect as if such
Grantor had personally attended the meetings or had personally voted on their
respective Limited Liability Company Interests or Partnership Interests or had
personally signed the consents, waivers or ratifications; provided, however,
that Bank as proxyholder shall have rights hereunder only upon the occurrence
and during the continuance of an Event of Default and subject to Section 13(j)
hereof. Each Grantor hereby authorizes Bank to substitute another Person (which
Person shall be a successor to the rights of Bank hereunder, a nominee appointed
by Bank to serve as proxyholder, or otherwise as approved by such Grantor in
writing, such approval not to be unreasonably withheld) as the proxyholder and,
upon the occurrence or during the continuance of any Event of Default, hereby
authorizes and directs the proxyholder to file this proxy and the substitution
instrument with the secretary of the appropriate corporation. This proxy
is-coupled with an interest and is irrevocable until such time as no part of any
commitment to make Loans pursuant to the Credit Agreement remains outstanding
and all Obligations have been indefeasibly paid in full.
8. The Grantors' Representations and Warranties. Each Grantor
represents and warrants as follows:
(a) (i) The locations listed on the Schedule 2 constitute all locations
at which Collateral owned by such Grantor is located; (ii) the chief executive
office of such Grantor, where such Grantor keeps its records concerning the
Collateral, is located at the address set forth for such Grantor on Schedule 3;
and (iii) such Grantor has exclusive possession and control of the Collateral
owned by such Grantor.
(b) Such Grantor currently conducts business only under its own name
and the trade names listed on Schedule 4. Neither such Grantor nor any corporate
predecessor has, during the preceding five years, been known as or used any
other corporate or fictitious name, except the names disclosed on Schedule 4.
(c) Such Grantor is the legal and beneficial owner of the Collateral
free and clear of all Liens except for Permitted Liens and restrictions imposed
by the FCC Rules. Such Grantor has the power, authority and legal right to grant
the security interests in the Collateral purported to be granted hereby, and to
execute, deliver and perform this Agreement. The pledge of the Collateral
pursuant to this Agreement creates a valid first priority security interest in
the Collateral (except for any Permitted Liens).
(d) Except as set forth on Schedule 1, the Pledged Securities described
on Schedule 1 attached hereto constitute (i) all of the shares of capital stock
of any Person owned by such
-11-
Grantor and (ii) that percentage of the issued and outstanding shares of the
respective issuers thereof indicated on Schedule 1 attached hereto, and there is
no other class of shares issued and outstanding of the respective issuers
thereof except as set forth on Schedule 1 attached hereto. Except as set forth
in Schedule 1, the Pledged Partnership Interests described on Schedule 1
attached hereto constitute all of the partnerships or joint ventures in which
each Grantor has an interest, and such Grantor's percentage interest in each
such partnership or joint venture is as set forth on such Schedule 1 attached
hereto. Except as set forth in Schedule 1, the Pledged Limited Liability Company
Interests described on Schedule 1 attached hereto constitute all of the Limited
Liability Company Interests of each Grantor and such Grantor's percentage
interest in each such Pledged Entity is as set forth on Schedule 1 attached
hereto.
(e) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority (other than such authorizations,
approvals and other actions as have already been taken and are in full force and
effect) is required (A) for the pledge of the Collateral or the grant of the
security interest in the Collateral by any of the Grantors hereby or for the
execution, delivery or, subject to approvals described in Section 13(j)(ii)
hereof, performance of this Agreement by any of the Grantors, or (B) for the
exercise by Bank of the voting rights in the Pledged Securities, the Pledged
Partnership Interest or the Pledged Limited Liability Company Interests or of
any other rights or remedies in respect of the Collateral hereunder except (1)
as may be required in connection with any disposition of Collateral consisting
of securities by laws affecting the offering and sale of securities generally,
and (2) as may be required by the FCC Rules and the Comunications Act.
9. Copyrights.
(a) Royalties. Each Grantor hereby agrees that the use by Bank of the
Copyrights as authorized hereunder in connection with Bank's exercise of their
rights and remedies hereunder shall be without any liability for royalties or
other related charges from Bank to Grantors.
(b) Restrictions on Future Agreements. Subject to the terms hereof and
of the Credit Agreement, each Grantor shall be permitted to manage, license and
administer its Copyrights in such manner as such Grantor in its reasonable
business judgment deems desirable, provided, however, that such Grantor will
not, without the Bank's prior written consent, such consent not to be
unreasonably withheld, (i) enter into any copyright license agreements except
license agreements entered into in the ordinary course of its business
consistent with past practices and containing such additional provisions to
protect Bank's interest hereunder as Bank may from time to time reasonably
request or (ii) take any action, or permit any action to be taken by others,
including, without limitation, licensees, or fail to take any action, which
would customarily be taken by a Person in the same business and in similar
circumstances as such Grantor, which could in any respect reasonably be expected
to have a Material Adverse Effect.
(c) Duties of Grantors. Each Grantor shall have the duty to:
(i) prosecute diligently any copyright application included in the
Copyrights,
-12-
(ii) upon the occurrence and during the continuance of an Event of
Default, at the request of Bank, make application for registration of such
uncopyrighted but copyrightable material owned by such Grantor as Bank
reasonably deems appropriate if the failure to do so could reasonably be
expected to have a Material Adverse Effect,
(iii) place notices of copyright on all copyrightable property
produced or owned by such Grantor embodying the Copyrights and use diligent
reasonable efforts to have its licensees do the same and
(iv) take all reasonable action necessary in such Grantor's
reasonable business judgment consistent with past practices to preserve and
maintain all of Grantor's rights in the Copyrights that are or shall be
necessary in the operation of Grantor's business, including, without limitation,
making timely filings for renewals and extensions of registered Copyrights and
diligently monitoring unauthorized use thereof, unless the failure to do so
could not reasonably be expected to have a Material Adverse Effect. Any expenses
incurred in connection with the foregoing shall be borne by Grantors. Bank shall
have no duty with respect to the Copyrights other than to act lawfully and
without gross negligence or willful misconduct. Without limiting the generality
of the foregoing, Bank shall not be under any obligation to take any steps
necessary to preserve rights in the Copyrights against any other parties, but
Bank may do so at its option upon the occurrence and during the continuance of
an Event of Default, and all reasonable expenses incurred in connection
therewith shall be for the sole account of Grantors and shall be added to the
Obligations.
10. Patents and Marks.
(a) Royalties. Each Grantor hereby agrees that any rights granted
hereunder to Bank with respect to Patents and Marks shall be applicable to all
jurisdictions in which such Grantor has the right to use such Patents and Marks,
from time to time, and without any liability for royalties or other related
charges from Bank to Grantors.
(b) Restrictions on Future Agreements. Each Grantor will not, without
Bank's prior written consent, such consent not to be unreasonably withheld,
abandon any Patent or Xxxx in which such Grantor now owns or hereafter acquires
any rights or interests if such abandonment could reasonably be expected to have
a Material Adverse Effect or enter into any agreement, including, without
limitation, any license agreement, which is inconsistent with such Grantor's
obligations under this Agreement, if such actions could reasonably be expected
to have a Material Adverse Effect. Each Grantor further agrees that it will not
take any action, or permit any action to be taken by others subject to its
control, including licensees, or fail to take any action which would customarily
be taken by a Person in the same business and in similar circumstances as such
Grantor, which could reasonably be expected to have a Material Adverse Effect.
(c) Duties of Grantors. Each Grantor shall have the duty to
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(i) prosecute diligently any patent application or trademark
application pending as of the date hereof or thereafter until the Obligations
shall have been indefeasibly paid in full and Bank has no obligation to make any
Loans under the Credit Agreement,
(ii) upon the occurrence and during the continuance of an Event of
Default, make application on unpatented but patentable inventions owned by such
Grantor and on Marks, as the case may be, as Bank reasonably deems appropriate,
(iii) file and prosecute opposition and cancellation proceedings if
the failure to do so could reasonably be expected to have a Material Adverse
Effect and
(iv) take all reasonable action necessary in such Grantor's
reasonable business judgment consistent with past practices to preserve and
maintain all rights in patent applications of the Patents and in applications
for registrations of the Marks unless the failure so to do could not reasonably
be expected to have a Material Adverse Effect. Any expenses incurred in
connection with such applications shall be borne by Grantors. Each Grantor shall
not abandon any right to file a Patent application or Xxxx application without
the consent of Bank (which consent shall not be unreasonably withhold) if such
abandonment could reasonably be expected to have a Material Adverse Effect. Each
Grantor shall give proper statutory notice in connection with its use of each of
the Marks to the extent necessary for the protection of each of the Marks.
Grantors shall notify the Bank of any suits it commences to enforce the Patents
and Marks and shall provide Bank with copies of any documents reasonably
requested by Bank relating to such suits.
11. Grantors' Covenants. In addition to the other covenants and
agreements set forth herein and in the other Operative Documents, each Grantor
covenants and agrees as follows:
(a) Such Grantor will pay, prior to delinquency, all taxes, charges,
Liens and assessments against the Collateral owned by it, except those with
respect to which the amount or validity is being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of such Grantor and except those which
could not reasonably be expected to have a Material Adverse Effect.
(b) The Collateral will not be used in violation of any material law,
regulation or ordinance or any applicable laws (including without limitation,
all applicable regulations, rules and orders), nor used in any way that will
void or impair any insurance required to be carried in connection therewith.
(c) Such Grantor will keep the Collateral in reasonably good repair,
working order and operating condition (normal wear and tear excluded), and from
time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto and, as appropriate and applicable, will
otherwise deal with the Collateral in all such ways as are considered customary
practice by owners of like property.
-14-
(d) Such Grantor will take all reasonable steps to preserve and protect
the Collateral except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(e) Such Grantor will maintain all insurance coverage required pursuant
to Section 6.01 of the Credit Agreement.
(f) Such Grantor will promptly notify Bank in writing in the event of
any material damage to the Collateral from any source whatsoever.
(g) Such Grantor will not (i) establish any location of Collateral not
listed in Schedule 2, (ii) move its principal place of business, chief executive
offices or any other office listed in Schedule 3 or (iii) adopt, use or conduct
business under any trade name or other corporate or fictitious name not
disclosed in Schedule 4, except upon not less than 30 days prior written notice
to Bank and such Grantor's prior compliance with all applicable requirements of
Section 4 hereof necessary to perfect Bank's security interest hereunder.
(h) Subject to the provisions of Section 15(j) hereof, such Grantor
agrees to take any action which Bank may reasonably request in order to obtain
from the FCC such approval as may be necessary to enable Bank to exercise and
enjoy the full rights and benefits granted to them by this Agreement, including
the use of such Grantor's best efforts to assist in obtaining the approval of
the FCC for any action or transaction contemplated by this Agreement or any
other Operative Document for which such approval is required by law.
(i) Such Grantor shall cause all of its equipment constituting
Collateral to be operated and maintained in accordance with any applicable
manufacturer's manuals or instructions and the requirements of its insurance
policies. Such Grantor, at its expense, shall maintain such equipment in good
condition, reasonable wear and tear excepted, and will comply with all laws,
ordinances and regulations to which the use and operation of such equipment may
be or become subject. Such obligation shall extend to repair and replacement of
any partial loss or damage to such equipment, regardless of the cause. If
maintenance is mandated by the manufacturer, such Grantor shall obtain and keep
in effect at all times during the Term maintenance service contracts with the
vendor of such equipment or suppliers approved by Lessor, such approval not to
be unreasonably withheld. All parts furnished in connection with such
maintenance or repair shall immediately become part of such equipment. All such
maintenance, repair and replacement services shall be immediately paid for and
discharged by such Grantor with the result that no lien will attach to such
equipment. Only qualified personnel of such Grantor or qualified contract
personnel shall operate such equipment. Such equipment shall be used only for
the purposes for which it was designed. Upon prior written notice to Lessor,
such Grantor may make improvements, modifications or additions to such
equipment; provided, that if such improvements, modifications or additions are
not capable of being removed without causing material damage to such equipment,
then Lessor's prior written consent shall be required. Upon the return of such
equipment, such Grantor shall, at its expense, restore such equipment to the
original configuration in accordance with the manufacturer's
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specifications; provided, that, with Lessor's prior written consent, such
Grantor may return such equipment as so improved, modified or added to.
12. Bank's Rights Regarding Collateral. At any time and from time to
time, Bank may, to the extent necessary or desirable to protect the security
hereunder, but Bank shall not be obligated to: (a) (whether or not a Default has
occurred) itself or through its representatives, at its own expense, upon
reasonable notice and at such reasonable times during usual business hours,
visit and inspect any of the Grantors' properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired and discuss the business, operations, properties and
financial and other condition of any of the Grantors with officers of such
Grantors and with their accountants or (b) if an Event of Default has occurred
and is continuing, at the expense of the Grantors, perform any obligation of any
of the Grantors under this Agreement. At any time and from time to time, at the
expense of the Grantors, Bank may, to the extent necessary or desirable to
protect the security hereunder, but Bank shall not be obligated to: (i) notify
obligors of the Collateral that the Collateral has been pledged as security to
Bank; (ii) after an Event of Default has occurred and is continuing, at any time
and from time to time request from obligors of the Collateral, in the name of
the applicable Grantor or in the name of Bank, information concerning the
Collateral and the amounts owing thereon; and (iii) after an Event of Default
has occurred and is continuing, direct obligors under the contracts included in
the Collateral to direct their performance to Bank. Each Grantor shall keep
proper books and records and accounts in which full, true and correct entries in
conformity with GAAP and all applicable laws (including without limitation, all
applicable regulations, rules and orders) shall be made of all material dealings
and transactions pertaining to the Collateral. Bank shall at all reasonable
times on reasonable notice have full access to and the right to audit any and
all of Grantors' books and records pertaining to the Collateral, and to confirm
and verify the value of the Collateral. Bank shall not be under any duty or
obligation whatsoever to take any action to preserve any rights of or against
any prior or other parties in connection with the Collateral, to exercise any
voting rights or managerial rights with respect to any Collateral or to make or
give any presentments for payment, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor or notices of
any other nature whatsoever in connection with the Collateral or the
Obligations. Bank shall not be under any duty or obligation whatsoever to take
any action to protect or preserve the Collateral or any rights of the Grantors'
therein, or to make collections or enforce payment thereon, or to participate in
any foreclosure or other proceeding in connection therewith. Nothing contained
herein or in any consent shall constitute an assumption by Bank of any of the
Grantors' obligations under the contracts assigned hereunder unless Bank shall
have given written notice to the counterpart to such assigned contract of Bank's
intention to assume such contract. Each Grantor shall continue to be liable for
performance of its obligations under such contracts.
13. Collections on the Collateral. Except as provided to the contrary
in the Credit Agreement, each Grantor shall have the right to use and to
continue to make collections on and receive dividends and other proceeds of all
of the Collateral in the ordinary course of business so long as no Event of
Default shall have occurred and be continuing. Upon the occurrence and during
the continuance of an Event of Default, at the option of Bank, each Grantor's
right to make collections on and receive dividends and other proceeds of the
Collateral and to use or
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dispose of such collections and proceeds shall terminate, and any and all
dividends, proceeds and collections, including all partial or total prepayments,
then held or thereafter received on or on account of the Collateral will be held
or received by such Grantor in trust for Bank and immediately delivered in kind
to Bank (duly endorsed to Bank, if required), to be applied to the obligations
or held as Collateral, as Bank shall elect. Upon the occurrence and during the
continuance of an Event of Default, Bank shall have the right at all times to
receive, receipt for, endorse, assign, deposit and deliver, in the name of any
of the Grantors, any and all checks, notes, drafts and other instruments for the
payment of money constituting proceeds of or otherwise relating to the
Collateral; and each Grantor hereby authorizes Bank to affix, by facsimile
signature or otherwise, the general or special endorsement of such Grantor, in
such manner as Bank shall deem advisable, to any such instrument in the event
the same has been delivered to or obtained by Bank without appropriate
endorsement, and Bank and any collecting bank are hereby authorized to consider
such endorsement to be a sufficient, valid and effective endorsement by such
Grantor, to the same extent as though it were manually executed by the duly
authorized representative of such Grantor, regardless of by whom or under what
circumstances or by what authority such endorsement actually is affixed, without
duty of inquiry or responsibility as to such matters, and such Grantor hereby
expressly waives demand, presentment, protest and notice of protest or dishonor
and all other notices of every kind and nature with respect to any such
instrument.
14. Possession of Collateral by Bank. All the Collateral now,
heretofore or hereafter delivered to Bank shall be held by Bank in its
possession, custody and control. Upon the occurrence and during the continuance
of an Event of Default, whenever any of the Collateral is in Bank's possession,
custody or control, Bank may use, operate and consume the Collateral, whether
for the purpose of preserving and/or protecting the Collateral, or for the
purpose of performing any of the Grantors' obligations with respect thereto, or
otherwise so long as consistent with the Operative Documents or transactions
contemplated thereby. Bank may at any time deliver or redeliver the Collateral
or any part thereof to the Grantors, and the receipt of any of the same by the
Grantors shall be complete and full acquittance for the Collateral so delivered,
and Bank thereafter shall be discharged from any liability or responsibility
arising after such delivery to the Grantors. So long as Bank exercises
reasonable care and complies with Section 9207 of the UCC with respect to any
Collateral in its possession, custody or control, Bank shall have no liability
for any loss of or damage to any Collateral, and in no event shall Bank have
liability for any diminution in value of Collateral occasioned by economic or
market conditions or events.
15. Remedies. Provided that nothing contained in this Agreement shall
be construed to give Bank or any purchaser of the Collateral the right to
operate or control any aspect of the business of any of the Grantors that
requires an FCC License without the prior consent of the FCC, to the extent
required by law or the terms of any FCC License or the FCC Rules:
(a) Rights Upon Event of Default. Upon the occurrence and during the
continuance of an Event of Default, the Grantors shall be in default hereunder
and, subject to applicable law, Bank shall have, in any jurisdiction where
enforcement is sought, in addition to all other rights
and remedies that Bank
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may have under this Agreement and under applicable laws or in equity, all rights
and remedies of a secured party under the Uniform Commercial Code as enacted in
any such jurisdiction in effect at that time, and in addition the following
rights and remedies, all of which may be exercised with or without further
notice to the Grantors except such notice as may be specifically required by
applicable law: (i) to foreclose the Liens and security interests created
hereunder or under any other Operative Document by any available judicial
procedure or without judicial process; (ii) to enter any premises where any
Collateral may be located for the purpose of securing, protecting, inventorying,
appraising, inspecting, repairing, preserving, storing, preparing, processing,
taking possession of or removing the same; (iii) to sell, assign, lease or
otherwise dispose of any Collateral or any part thereof, either at public or
private sale or at any broker's board, in lot or in bulk, for cash, on credit or
otherwise, with or without representations or warranties and upon such terms as
shall be commercially reasonable; (iv) to notify obligors on the Collateral that
the Collateral has been assigned to Bank and that all payments thereon, or
performance with respect thereto, are to be made directly and exclusively to
Bank; (v) to collect by legal proceedings or otherwise all dividends,
distributions, interest, principal or other sums now or hereafter payable upon
or on account of the Collateral; (vi) to enter into any extension,
reorganization, disposition, merger or consolidation agreement, or any other
agreement relating to or affecting the Collateral, and in connection therewith
Bank may deposit or surrender control of the Collateral and/or accept other
property in exchange for the Collateral as Bank reasonably deems appropriate and
is commercially reasonable; (vii) to settle, compromise or release, on terms
acceptable to Bank, in whole or in part, any amounts owing on the Collateral
and/or any disputes with respect thereto; (viii) to extend the time of payment,
make allowances and adjustments and issue credits in connection with the
Collateral in the name of the applicable Grantor for the benefit of Bank; (ix)
to enforce payment and prosecute any action or proceeding with respect to any or
all of the Collateral and take or bring, on behalf of itself or in the name of
the applicable Grantor, any and all steps, actions, suits or proceedings deemed
necessary or reasonably desirable by Bank to effect collection of or to realize
upon the Collateral, including any judicial or nonjudicial foreclosure thereof
or thereon, and each Grantor specifically consents to any nonjudicial
foreclosure of any or all of the Collateral or any other action taken by Bank
which may release any obligor from personal liability on any of the Collateral,
and each Grantor waives, to the extent permitted by applicable law, any right to
receive notice of any public or private judicial or nonjudicial sale or
foreclosure of any security or any of the Collateral, and any money or other
property received by Bank in exchange for or on account of the Collateral,
whether representing collections or proceeds of Collateral, and whether
resulting from voluntary payments or foreclosure proceedings or other legal
action taken by Bank or any of the Grantors, may be applied by Bank, without
notice to the Grantors, to the Obligations in such order and manner as Bank in
their sole discretion shall determine; (x) to insure, protect and preserve the
Collateral; (xi) to exercise all rights, remedies, powers or privileges provided
under any of the Operative Documents; and (xii) to remove, from any premises
where the same may be located, the Collateral and any and all documents,
instruments, files and records, and any receptacles and cabinets containing the
same, relating to the Collateral, and Bank may, at the cost and expense of the
Grantors, use such of its supplies, equipment, facilities and space at its
places of business as may be necessary or appropriate to properly administer,
process, store, control, prepare for sale or disposition and/or sell or dispose
of the Collateral or to properly administer and control the handling of
collections and realizations thereon, and Bank shall be deemed to have a
rent-free
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tenancy of any premises of the Grantors for such purposes and for such
periods of time as reasonably required by Bank. So long as an Event of Default
has occurred and is continuing, each Grantor will, at Bank's request, assemble
the Collateral and make it available to Bank at places which Bank may designate,
whether at the premises of such Grantor or elsewhere, and will make available to
Bank, free of cost, all premises, equipment and facilities of such Grantor for
the purpose of Bank's taking possession of the Collateral or storing the same or
removing or putting the Collateral in salable form or selling or disposing of
the same.
(b) Possession by Bank. Upon the occurrence and during the continuance
of an Event of Default, Bank also shall have the right, without notice or
demand, either in person, by Bank or by a receiver to be appointed by a court in
accordance with the provisions of applicable law (and each Grantor hereby
expressly consents, to the fullest extent permitted by applicable law, upon the
occurrence and during the continuance of an Event of Default to the appointment
of such a receiver), and, to the extent permitted by applicable law, without
regard to the adequacy of any security for the Obligations, to take possession
of the Collateral or any part thereof and to collect and receive the rents,
issues, profits, income and proceeds thereof. The taking possession of the
Collateral by Bank shall not cure or waive any Event of Default or notice
thereof or invalidate any act done pursuant to such notice. The rights, remedies
and powers of any receiver appointed by a court shall be as ordered by said
court.
(c) Sale of Collateral. Any public or private sale or other disposition
of the Collateral may be held at any office of Bank, or at the Grantors' places
of business, or at any other place permitted by applicable law, and without the
necessity of the Collateral being within the view of prospective purchasers.
Bank may direct the order and manner of sale of the Collateral, or portions
thereof, as it in its sole and absolute discretion may determine provided such
sale is commercially reasonable, and each Grantor expressly waives, to the
extent permitted by applicable law, any right to direct the order and manner of
sale of any Collateral. Bank or any Person acting on Bank's behalf may bid and
purchase at any such sale or other disposition. In furtherance of Bank's rights
hereunder, each Grantor hereby grants to Bank an irrevocable, non-exclusive
license (exercisable without royalty or other payment by Bank) to use, license
or sublicense any patent, trademark, trade name, copyright or other intellectual
property in which Grantor now or hereafter has any right, title or interest
together with the right of access to all media in which any of the foregoing may
be recorded or stored; provided, however, that such license shall only be
exercisable in connection with the disposition of Collateral upon Bank's
exercise of its remedies hereunder.
(d) Notice of Sale. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Bank will give the Grantors reasonable notice of the time and place of
any public sale thereof or of the time on or after which any private sale
thereof is to be made. The requirement of reasonable notice conclusively shall
be met if: (i) such notice is mailed, certified mail, postage prepaid, to the
Grantors at their addresses set forth on the signature page hereto or delivered
or otherwise sent to the Grantors, at least five (5) Business Days before the
date of the sale or (ii) if Grantors have previously executed any applications
for consent to the assignment of any FCC Licenses or for consent to the transfer
of control of any holder of such licenses. Each Grantor expressly waives, to the
-19-
fullest extent permitted by applicable law, any right to receive notice of any
public or private sale of any Collateral or other security for the Obligations
except as expressly provided for in this paragraph. Bank shall not be obligated
to make any sale of the Collateral if it shall determine not to do so regardless
of the fact that notice of sale of the Collateral may have been given. Bank may,
without notice or publication, except as required by applicable law, adjourn the
sale from time to time by announcement at the time and place fixed for sale, and
such sale may, without further notice (except as required by applicable law), be
made at the time and place to which the same was so adjourned.
(e) Private Sales. With respect to any Collateral consisting of
securities, partnership interests, limited liability company interests, joint
venture interests or the like, and whether or not any of such Collateral has
been effectively registered under the Securities Act of 1933, as amended, or
other applicable laws, Bank may, in its sole and absolute discretion, sell all
or any part of such Collateral at private sale in such manner and under such
circumstances as Bank may deem necessary or advisable in order that the sale may
be lawfully conducted in a commercially reasonable manner. Without limiting the
foregoing, Bank may (i) approach and negotiate with a limited number of
potential purchasers, and (ii) restrict the prospective bidders or purchasers to
persons who will represent and agree that they are purchasing such Collateral
for their own account for investment and not with a view to the distribution or
resale thereof. In the event that any such Collateral is sold at private sale,
each Grantor agrees to the extent permitted by applicable law that if such
Collateral is sold for a price which is commercially reasonable, then (A) the
Grantors shall not be entitled to a credit against the Obligations in an amount
in excess of the purchase price, and (B) Bank shall not incur any liability or
responsibility to the Grantors in connection therewith, notwithstanding the
possibility that a substantially higher price might have been realized at a
public sale. Each Grantor recognizes that a ready market may not exist for such
Collateral if it is not regularly traded on a recognized securities exchange,
and that a sale by Bank of any such Collateral for an amount substantially less
than a pro rata share of the fair market value of the issuer's assets minus
liabilities may be commercially reasonable in view of the difficulties that may
be encountered in attempting to sell a large amount of such Collateral or
Collateral that is privately traded.
(f) Title of Purchasers. Upon consummation of any sale of Collateral
hereunder, Bank shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the Collateral so sold absolutely free from any claim
or right upon the part of any Grantor or any other Person claiming through any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
laws) all rights of redemption, stay and appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. If the sale of all or any part of the Collateral is made on
credit or for future delivery, Bank shall not be required to apply any portion
of the sale price to the Obligations until such amount actually is received by
Bank, and any Collateral so sold may be retained by Bank until the sale price is
paid in full by the purchaser or purchasers thereof. Bank shall not incur any
liability in case any such purchaser or purchasers shall fail to pay for the
Collateral so sold, and, in case of any such failure, the Collateral may be sold
again.
-20-
(g) Disposition of Proceeds of Sale. The proceeds resulting from the
collection, liquidation, sale or other disposition of the Collateral shall be
applied, first, to the reasonable costs and expenses (including reasonable
attorneys' fees) of retaking, holding, storing, processing and preparing for
sale, selling, collecting and liquidating the Collateral, and the like; second,
to the satisfaction of all Obligations; and third, any surplus remaining after
the satisfaction of all Obligations, to be paid over to the Grantors or to
whomsoever may be lawfully entitled to receive such surplus.
(h) Certain Waivers. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands against Bank arising out of the
repossession, retention or sale of the Collateral, or any part or parts thereof,
except to the extent any such claims, damages and awards arise out of the gross
negligence or willful misconduct of Bank.
(i) Remedies Cumulative. The rights and remedies provided under this
Agreement are cumulative and may be exercised singly or concurrently, and are
not exclusive of any other rights and remedies provided by law or equity.
(j) Compliance with Communications Act and FCC Rules and Regulations.
(i) Notwithstanding any other provision of this Agreement, any
foreclosure on, sale, transfer or other disposition of, or the exercise of any
right to vote or consent with respect to, any of the Collateral as provided
herein or any other action taken or proposed to be taken by Bank hereunder which
would affect the operational, voting or other control of any entity holding an
FCC License shall be made in accordance with the Communications Act, the terms
of each FCC License, and any applicable FCC Rules, including any requirement
that there be a public or private sale.
(ii) If an Event of Default shall have occurred and be continuing,
each Grantor shall take any action which Bank may request in the exercise of its
rights and remedies under this Agreement, including, but not limited to, the
execution and delivery of any documents requested by Bank, in order to transfer
and assign to Bank or to one or more third parties as Bank may designate,
including, but not limited to, a receiver or trustee or to a combination of the
foregoing, the Collateral for the purposes of a public or private sale. Upon the
occurrence and during the continuance of an Event of Default, each Grantor shall
further use its best efforts to assist in obtaining the approval of the FCC (and
that required by any other Governmental Authority) for any action or transaction
contemplated by this Agreement, including without limitation, the preparation,
execution and filing with the FCC of the assignor's or transferor's portion of
any application or applications for consent to the assignment of any FCC License
or transfer of control of any entity holding or controlling any FCC License as
may be necessary or appropriate under the FCC Rules. Each Grantor further agrees
that, because of the unique nature of its undertaking in this Section 13(j), the
same may be specifically enforced, and it hereby waives, and agrees to waive,
any claim or defense that Bank would have an adequate remedy at law for the
breach of this undertaking and any requirement for the posting of bond or other
security. Each Grantor hereby agrees that in the event that such Grantor has
been given five Business
-21-
Days' prior written notice telecopied to its telecopier number set forth on the
signature page hereto and such Grantor has not responded by executing any such
applications or other instruments, the clerk of the court of any court of
competent jurisdiction may execute in the place of such Grantor any application
or other instrument necessary or appropriate for the obtaining of such consent.
This Section 13(j) shall not be deemed to limit any other rights of Bank
available under applicable law and consistent with the Communications Act and
the applicable FCC Rules.
16. Notice. Bank shall use reasonable efforts to give the Grantors
prior written notice of the exercise of any remedy provided for herein, provided
that the failure to give such notice shall not subject Bank to liability and
shall not affect the validity or exercise of any remedy hereunder.
17. Bank Appointed Attorney-in-Fact. To the full extent permitted by
applicable law, including the Communications Act and FCC Rules, each Grantor
hereby irrevocably appoints Bank as such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor, and in the name of such
Grantor, or otherwise, from time to time, in Bank's sole and absolute discretion
to do any of the following acts or things upon the occurrence and during the
continuance of an Event of Default: (a) to do all acts and things and to execute
all documents necessary or advisable to perfect and continue perfected the
security interests created by this Agreement and to preserve, maintain and
protect the Collateral; (b) to do any and every act which such Grantor is
obligated to do under this Agreement; (c) to prepare, sign, file and record, in
such Grantor's name, any financing statement covering the Collateral; (d) to
endorse and transfer the Collateral upon foreclosure by Bank; and (e) to file
any claims or take any action or institute any proceedings which Bank may
reasonably deem necessary or desirable for the protection or enforcement of any
of the rights of Bank with respect to any of the Collateral; provided, however,
that Bank shall be under no obligation whatsoever to take any of the foregoing
actions, and Bank shall have no liability or responsibility for any act or
omission (other than Bank's own gross negligence or willful misconduct) taken
with respect thereto.
18. Costs and Expenses. Each Grantor shall pay on demand (i) all
reasonable fees and expenses, including reasonable attorneys' fees and expenses,
incurred by Bank in connection with the preparation, execution and delivery of,
and the exercise of its duties under, this Agreement (not to exceed $50,000),
(ii) all reasonable fees and expenses, including reasonable attorneys' fees and
expenses, incurred by Bank in connection with the preparation, execution and
delivery of amendments and waivers hereunder and (iii) all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by Bank in
connection with the enforcement or attempted enforcement of this Agreement or
any of the Obligations or in preserving any of Bank's rights and remedies
(including, without limitation, all such fees and expenses incurred in
connection with any "workout" or restructuring affecting the Operative Documents
or the Obligations or any bankruptcy or similar proceeding involving such
Grantor, any other Grantor, Borrower or any of their Affiliates).
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19. Transfers and Other Liens. Each Grantor agrees that, except as
specifically permitted under the Credit Agreement or any other Operative
Document, it will not (a) sell, assign, exchange, transfer or otherwise dispose
of, or contract to sell, assign, exchange, transfer or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (b) create or permit
to exist any Lien upon or with respect to any of the Collateral, except for
legally permissible Liens in favor of Bank or otherwise permitted under the
Credit Agreement or any other Operative Document.
20. Other Agreements; Governing Agreement. Nothing herein shall in any
way modify or limit the effect of terms or conditions set forth in any other
Operative Document executed by the Grantors or any other Person in connection
with the Obligations, but each and every term and condition hereof shall be in
addition thereto; provided, however, that in the event of inconsistency between
this Agreement and the Credit Agreement, the Credit Agreement shall govern.
21. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
22. Understandings With Respect to Waivers and Consents. Each Grantor
warrants and agrees that each of the waivers and consents set forth herein are
made with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which such Grantor
otherwise may have against Bank or others, or against any Collateral. If any of
the waivers or consents herein are determined to be unenforceable under
applicable law, such waivers and consents shall be effective to the maximum
extent permitted by law.
23. Indemnity. Each Grantor shall indemnify, reimburse and hold Bank,
each of Bank's members, and each of their respective successors, assigns,
agents, officers, directors, shareholders, servants, agents and employees
harmless from and against all liabilities, losses, damages, actions, suits,
demands, claims of any kind and nature (including claims relating to
environmental discharge, cleanup or compliance), all costs and expenses
whatsoever to the extent they may be incurred or suffered by such indemnified
party in connection therewith (including reasonable attorneys' fees and
expenses), fines, penalties (and other charges of applicable governmental
authorities), licensing fees relating to any item of Collateral, damage to or
loss of use of property (including consequential or special damages to third
parties or damages to Borrower's property), or bodily injury to or death of any
person (including any agent or employee of Borrower) (each, a "Claim"), directly
or indirectly relating to or arising out of the use of the proceeds of the Loan,
the falsity of any representation or warranty of such Grantor or such Grantor's
failure to comply with the terms of this Agreement or any other Operative
Document during the Term. The foregoing indemnity shall cover, without
limitation, (i) any Claim in connection with a design or other defect (latent or
patent) in any item of equipment included in the Collateral, (ii) any Claim for
infringement of any patent, copyright, trademark or other intellectual property
right, (iii) any Claim resulting from the presence on or under or
-23-
the escape, seepage, leakage, spillage, discharge, emission or release of any
Hazardous Materials on the premises of such Grantor, including any Claims
asserted or arising under any Environmental Law, or (iv) any Claim for
negligence or strict or absolute liability in tort; provided, however, that such
Grantor shall not indemnify Bank for any liability incurred by Bank as a result
of Bank's gross negligence or willful misconduct. Such indemnities shall
continue in full force and effect, notwithstanding the expiration or termination
of this Agreement. Upon an indemnitee's written demand, such Grantor shall
assume and diligently conduct, at its sole cost and expense, the entire defense
of Bank, each of its members, and each of their respective agents, employees,
directors, officers, shareholders, successors and assigns, using counsel
reasonably acceptable to such indemnitee against any indemnified Claim. Such
Grantor shall not settle or compromise any Claim against or involving Bank
without first obtaining Bank's written consent thereto, which consent shall not
be unreasonably withheld. If Bank elects to assume its own defense in connection
with an indemnified Claim, then Bank shall not settle or compromise such Claim
without first obtaining such Grantor's written consent thereto, which consent
shall not be unreasonably withheld, provided that if such Grantor does not
consent thereto, then Borrower shall post security or a bond in the amount of
such Claim for the benefit of the Bank.
24. Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by the Grantors herefrom (other than
supplements to the Schedules hereto in accordance with the terms of this
Agreement) shall in any event be effective unless the same shall be in writing
and made in accordance with of the Credit Agreement, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
25. Notices. All notices and other communications provided for
hereunder shall be given in the manner and to the addresses set forth either in
the Credit Agreement or in the Guaranty dated as of even date herewith made by
the Grantors.
26. Continuing Security Interest: Transfer of Notes; Termination. This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until indefeasible payment in full of
the Obligations and the termination or expiration of Bank's obligation to make
Loans under the Credit Agreement, (ii) be binding upon each Grantor, their
successors and assigns and (iii) inure, together with the rights and remedies of
Bank hereunder, to the benefit of Bank and any successor Bank, subject to the
terms and conditions of the Credit Agreement. Subject to the terms of the Credit
Agreement, any Bank may assign or otherwise transfer any Loan, or any rights in
Collateral held by it to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Bank or
Bank herein or otherwise. Nothing set forth herein or in any other Operative
Document is intended or shall be construed to give to any other party any right,
remedy or claim under, to or in respect of this Agreement or any other Operative
Document or any Collateral. The Grantors' successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession thereof or
therefor, provided that, except as otherwise permitted under the Credit
Agreement or any other Operative Document, none of the rights or
-24-
obligations of the Grantors hereunder may be assigned or otherwise transferred
without the prior written consent of Bank.
27. Release of the Grantors. This Agreement and all obligations of each
Grantor hereunder and all security interests granted hereby shall be released
and terminated when all Obligations have been paid in full in cash and when
Bank's obligation to make Loans under the Credit Agreement has expired or have
otherwise been terminated. Upon such release and termination of all Obligations
and the security interest hereunder, all rights in and to the Collateral granted
or pledged by the Grantors hereunder shall automatically revert to the Grantors,
and Bank shall return any pledged Collateral in their possession to the
Grantors, or to the Person or Persons legally entitled thereto, and shall
endorse, execute, deliver, record and file all instruments and documents, and do
all other acts and things, reasonably required for the return of the Collateral
to the Grantors, or to the Person or Persons legally entitled thereto, and to
evidence or document the release of the interests of Bank arising under this
Agreement, all as reasonably requested by, and at the sole expense of, the
Grantors.
28. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS OTHERWISE REQUIRED
BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED
BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA ARE GOVERNED BY
THE LAWS OF SUCH JURISDICTION.
29. Jury Trial. EACH GRANTOR AND BANK, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO
ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT.
30. Limitation of Liability. NO CLAIM MAY BE MADE BY ANY GRANTOR
AGAINST BANK OR THE MEMBERS, AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES,
ATTORNEYS OF BANK FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES
IN RESPECT OF ANY CLAIM (WHETHER BASED UPON ANY BREACH OF CONTRACT, TORT, BREACH
OF STATUTORY DUTY OR ANY OTHER THEORY OF LIABILITY) ARISING OUT OF OR RELATED TO
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH AND EACH GRANTOR HEREBY WAIVES, RELEASES AND
AGREES NOT TO XXX UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT NOW
ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
31. Covenant Not to Issue Uncertificated Securities. Each Grantor
covenants to Bank that any Pledged Securities held by them shall be in
certificated form (as contemplated by Article 8 of the Uniform Commercial Code),
and that it will not seek to convert all or any part of
-25-
any Pledged Securities into uncertificated form (as contemplated by Article 8 of
the Uniform Commercial Code).
32. Covenant Not to Dilute Interests of Secured Party in Securities.
Each Grantor represents, warrants and covenants to Bank that it will (a) not at
any time cause or permit any Subsidiary that is an issuer of Pledged Securities
to issue any capital stock or any warrant options or other rights to acquire any
capital stock, other than to such Grantor or as otherwise permitted under the
Credit Agreement and (b) pledge to Bank in accordance with the terms hereof,
immediately upon its acquisition (directly or indirectly) thereof, any and all
shares of stock or other securities of each issuer of Pledged Securities.
33. Pledged Limited Liability Company Interests/Covenant Not to Dilute.
Each Grantor represents, warrants and covenants to Bank that it will (a) not at
any time cause or permit any Pledged Entities to issue any additional membership
interests or any other rights or options to acquire any additional limited
liability company interests, other than to the Grantors or as otherwise
permitted under the Credit Agreement, and (b) pledge to Bank in accordance with
the terms hereof, immediately upon its acquisition (directly or indirectly)
thereof, any and all additional Limited Liability Company Interests of each
Pledged Entity.
34. Pledged Partnership Interests/Covenant Not to Dilute. Each Grantor
represents, warrants and covenants to Bank that it will (a) not at any time
cause or permit any Pledged Partnership Entities to issue any additional
partnership interests or any other rights or options to acquire any additional
partnership interests, other than to the Grantors or as otherwise permitted
under the Credit Agreement, and (b) pledge to Bank in accordance with the terms
hereof, immediately upon its acquisition (directly or indirectly) thereof, any
and all additional Partnership Interests of each Pledged Partnership Entity.
-26-
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement as of the day and year
first above written.
CHADMOORE WIRELESS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
CHADMOORE COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT BEACON HILL, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
-27-
PTT OF NEVADA, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
CMRS SYSTEMS, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
CHADMOORE COMMUNICATIONS OF TENNESSEE, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT COMMUNICATIONS OF RICHMOND, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT MAPLE, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
-00-
XXX XXXXXXXXXXXXXX XX XXXXXXXXXX, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT XXXXXX, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT COMMUNICATIONS OF FORT XXXXX, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF ROANOKE, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT TRISTAN, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
-00-
XXX XXXXXXXXXXXXXX XX XXXXXX, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF JACKSONVILLE, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF VIRGINIA BEACH,LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT ROSELAND, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT XXXXXX, INC.
-30-
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT FRANKLIN, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT CHACO, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
800 SMR NETWORK, INC.
By: /s/Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
PTT COMMUNICATIONS OF BATON ROUGE
LIMITED
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF LAKE XXXXXXX, LLC
-31-
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
PTT COMMUNICATIONS OF BAY CITY, LLC
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
BARCLAYS BANK PLC
By: /s/Xxxxxx Capparis
Name: Xxxxxx Capparis
Title: Director
-00-
Xxxxxxx X-0
-----------
To Security Agreement
FORM OF PLEDGE NOTICE
[Letterhead of Grantor]
[Date]
TO: [Name of Pledged Entity]
Notice is hereby given that, pursuant to the Security Agreement (a true
and correct copy of which is attached hereto), dated as of [Date] (as amended,
modified or supplemented from time to time in accordance with the terms thereof,
the "Security Agreement"), among [NAME OF GRANTOR] (the "Grantor"), the other
pledgors from time to time party thereto and BARCLAYS BANK PLC(the "Bank"), the
Grantor has pledged and assigned to the Bank, and granted to the Bank a
continuing security interest in, all right, title and interest of the Grantor,
whether now existing or hereafter arising or acquired, as a [[limited partner]
[general partner]] [member] in [NAME OF PLEDGED ENTITY] (the ["Partnership"]
["LLC"]), and in, to and under the [TITLE OF APPLICABLE AGREEMENT] (the
"[Partnership] [LLC] Agreement"), including, without limitation:
(i) all the capital of the [Partnership] [LLC] and the Grantor's
interest in all profits, income, surplus, losses, [Partnership] [LLC] assets and
other distributions to which the Grantor shall at any time be entitled in
respect of such [Partnership] [Membership] interest;
(ii) all other payments due or to become due to the Grantor in respect
of such [partnership [limited liability company] interest, whether under the
[Partnership] [LLC] Agreement or otherwise, whether as contractual obligations,
damages, insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under the [Partnership]
[LLC] Agreement or at law or otherwise in respect of such [Partnership]
[Membership] Interest;
-33-
(iv) all present and future claims, if any, of the Grantor against the
[Partnership [LLC] for moneys loaned or advanced, for services rendered or
otherwise;
(v) all of the Grantor's rights under the [Partnership] [LLC] Agreement
or at law to exercise and enforce every right, power, remedy, authority, option
and privilege of the Grantor relating to the [Partnership] [Membership]
Interest, including any power to terminate, cancel or modify the [Partnership]
[LLC] Agreement, to execute any instruments and to take any and all other action
on behalf of and in the name of the Grantor in respect of the [Partnership]
[Membership] Interest and the [Partnership] [LLC], to make determinations, to
exercise any election (including, but not limited, election of remedies) or
option or to give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce, collect or
receipt for any of the foregoing, to enforce or execute any checks, or other
instruments or orders, to file any claims and to take any action in connection
with any of the foregoing;
(vi) all other property hereafter delivered in substitution for or in
addition to any of the foregoing, all certificates and instruments representing
or evidencing such other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all thereof;
and
(vii) to the extent not otherwise included, all proceeds of any or all
of the foregoing.
Pursuant to the Security Agreement, the [Partnership] [LLC] is hereby
authorized and directed to register the Grantor's pledge to the Bank of the
interest of the Grantor on the [Partnership's] [LLC's] books.
The Grantor hereby requests the [Partnership] [LLC] to indicate the
[Partnership's] [LLC's] acceptance of this Notice and consent to and
confirmation of its terms and provisions by signing a copy hereof where
indicated on the attached page and returning the same to the Bank.
[NAME OF GRANTOR]
By
--------------------------------------
Name:
Title:
-00-
Xxxxxxx X-0
-----------
To Security Agreement
FORM OF ISSUER ACKNOWLEDGMENT
-----------------------------
[NAME OF PLEDGED ENTITY] (the ["Partnership"] ["LLC"]) hereby
acknowledges receipt of a copy of the assignment by [NAME OF GRANTOR]
("Grantor") of its interest under the [TITLE OF APPLICABLE AGREEMENT] (the
"[Partnership] [LLC] Agreement") pursuant to the terms of the Security
Agreement, dated as of [Date] (as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "Security Agreement"), among the
Grantor, the other grantors from time to time party thereto, and BARCLAYS BANK
PLC (the "Bank"). The undersigned hereby further confirms (i) the registration
of the Grantor's pledge of its interest to the Bank on behalf of the Secured
Creditors on the [Partnership's] [LLC's] books and (ii) upon receipt from the
Bank of a notice stating that an "Event of Default" has occurred and is
continuing, subject to applicable law, including the Communications Act and the
FCC Rulees, the undersigned shall only comply with instructions originated by
the Bank with respect to the pledge of the interest referred to above
notwithstanding contrary instructions given by any other person or entity,
including the Grantor until such time as otherwise notified by the Bank.
Dated: _______, ____
[NAME OF PLEDGED ENTITY]
BY
-------------------------------------
Name:
Title:
Exhibit B
---------
To Security Agreement
---------------------
[SEPARATE INSTRUMENT FOR
EACH FORM OF COLLATERAL]
GRANT OF SECURITY INTEREST
[PATENTS][TRADEMARKS][COPYRIGHTS]
THIS GRANT OF SECURITY INTEREST, dated as of ________________, 199_, is executed
by [GRANTOR], a [state of incorporation] corporation ("Grantor"), in favor of
BARCLAYS BANK PLC ("Secured Party").
A. Pursuant to a Senior Secured Credit Agreement, dated as of [Date]
(the "Credit Agreement"), among Chadmoore Wireless Group, Inc. ("Chadmoore"),
the subsidiaries of Chadmoore party thereto (collectively, the "Subsidiaries,"
and together with Chadmoore, the "Borrowers") and Secured Party, Secured Party
has agreed to extend certain credit facilities to Borrowers upon the terms and
subject to the conditions set forth therein.
[B. Grantor owns the letters patent, and/or applications for letters
patent, of the United States, more particularly described on Schedules 1-A and
1-B annexed hereto as part hereof (collectively, the "Patents");]
[B. Grantor has adopted, used and is using the trademarks, more
particularly described on Schedules 1-A and 1-B annexed hereto as part hereof,
which trademarks are registered or subject to an application for registration in
the United States Patent and Trademark Office (collectively, the "Trademarks");]
[B. Grantor owns the copyrights registered in the United States
Copyright Office, more particularly described on Schedule 1-A annexed hereto as
part hereof (collectively, the "Copyrights");]
C. Grantor has entered into a Security Agreement dated the date hereof
(the "Security Agreement") in favor of Secured Party; and
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Patents, together with any reissue, continuation, continuation-in-part or
extension thereof, and all proceeds thereof, including any and all causes of
action which may exist by reason of infringement thereof for the full term of
the Patents (the "Collateral"), to secure the prompt payment, performance and
observance of the Obligations, as defined in the Security Agreement;
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Trademarks, together with the goodwill of the business symbolized by the
Trademarks and the customer lists and records related to the Trademarks
and the applications and registrations thereof, and all proceeds thereof,
including any and all causes of action which may exist by reason of infringement
thereof (the "Collateral"), to secure the payment, performance and observance of
the Obligations, as defined in the Security Agreement;]
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Copyrights and the registrations thereof, together with any renewals or
extensions thereof, and all proceeds thereof, including any and all causes of
action which may exist by reason of infringement thereof for the full term of
the Copyrights (the "Collateral"), to secure the prompt payment, performance and
observance of the Obligations, as defined in the Security Agreement;]
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, Grantor does hereby further grant to Secured Party a
security interest in the Collateral to secure the prompt payment, performance
and observance of the Obligations.
Grantor does hereby further acknowledge and affirm that the rights and remedies
of Secured Party with respect to the security interest in the Collateral granted
hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are hereby incorporated herein by reference as if fully set
forth herein.
Secured Party's address is: BARCLAYS BANK PLC
000 Xxxxxxxx
Xxx Xxxx, XX 00000
IN WITNESS WHEREOF, Grantor has caused this instrument to be executed as of the
day and year first above written.
[GRANTOR]
By:
Name:
---------------------------------------
Title:
--------------------------------------
STATE OF NEVADA )
)
COUNTY OF )
--------------------------
On _______________________________ __________, 199___ before me,
_________________________, personally appeared , personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in her/her/their authorized capacity(ies), and
that by his/her/their signature(s) on such instrument the person or entity on
behalf of which the person(s) acted executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
----------------------------------
