SECOND LIEN PLEDGE AND SECURITY AGREEMENT dated as of May 4, 2018, among FUSION CONNECT, INC., THE OTHER GRANTORS PARTY HERETO and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent
EXECUTION
VERSION
dated
as of
May 4,
2018,
among
THE
OTHER GRANTORS PARTY HERETO
and
WILMINGTON
TRUST, NATIONAL ASSOCIATION,
as
Collateral Agent
Table of Contents
Page
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ARTICLE I
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DEFINITIONS
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1
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SECTION 1.01. Credit Agreement and UCC
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1
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SECTION 1.02. Other Defined Terms
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2
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ARTICLE II
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PLEDGE OF SECURITIES
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6
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SECTION 2.01. Pledge
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6
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SECTION 2.02. Delivery of the Pledged Collateral
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7
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SECTION 2.03. Representations and Warranties
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7
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SECTION 2.04. Certification of Limited Liability Company and
Limited Partnership Interests
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8
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SECTION 2.05. Registration in Nominee Name;
Denominations
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8
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SECTION 2.06. Voting Rights; Dividends and Interest
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8
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SECTION 2.07. Collateral Agent Not a Partner or Limited Liability
Company Member
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10
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ARTICLE III
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SECURITY INTERESTS IN PERSONAL PROPERTY
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10
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SECTION 3.01. Security Interest
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10
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SECTION 3.02. Representations and Warranties
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12
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SECTION 3.03. Covenants
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14
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SECTION 3.04. Other Actions
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16
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ARTICLE IV
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SPECIAL PROVISIONS CONCERNING INTELLECTUAL PROPERTY
COLLATERAL
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16
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SECTION 4.01. Grant of License to Use Intellectual
Property
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16
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SECTION 4.02. Protection of Collateral
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17
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ARTICLE V
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REMEDIES
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18
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SECTION 5.01. Remedies Upon Default
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18
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SECTION 5.02. Application of Proceeds
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20
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MISCELLANEOUS
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20
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SECTION 6.01. Notices
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20
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SECTION 6.02. Waivers; Amendment
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21
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SECTION 6.03. Collateral Agent’s Fees and Expenses;
Indemnification
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21
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SECTION 6.04. Independence of Covenants
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22
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SECTION 6.05. Survival of Agreement
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22
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SECTION 6.06. Counterparts; Effectiveness; Several
Agreement
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22
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SECTION 6.07. Severability
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23
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SECTION 6.08. Set-Off
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23
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SECTION 6.09. APPLICABLE LAW
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23
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SECTION 6.10. CONSENT TO JURISDICTION
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23
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SECTION 6.11. WAIVER OF JURY TRIAL
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24
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SECTION 6.12. Headings
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24
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SECTION 6.13. Marshalling; Payments Set Aside
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24
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SECTION 6.14. Security Interest Absolute
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24
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SECTION 6.15. Termination or Release
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25
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SECTION 6.16. Additional Grantors
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25
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SECTION 6.17. Collateral Agent Appointed
Attorney-in-Fact
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26
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SECTION 6.18. General Authority of the Collateral
Agent
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27
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SECTION 6.19. Recourse
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27
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SECTION 6.20. Mortgages
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27
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SECTION 6.21. Permitted Intercreditor Agreements
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27
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SECTION 6.22. Regulatory Matters
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28
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SCHEDULES
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Schedule
I -
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Pledged
Equity; Pledged Debt
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Schedule
II -
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Commercial Tort
Claims
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Schedule
III -
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Intellectual
Property
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EXHIBITS
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Exhibit I
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Form of
Second Lien Pledge and Security Agreement Supplement
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Exhibit
II -
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Form of
Second Lien Copyright Security Agreement
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Exhibit
III -
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Form of
Second Lien Patent Security Agreement
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Exhibit
IV -
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Form of
Second Lien Trademark Security Agreement
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i
SECOND LIEN PLEDGE AND SECURITY
AGREEMENT, dated as of May 4, 2018, among FUSION CONNECT, INC., a Delaware
corporation (the “Borrower”), the other GRANTORS party hereto from time to time
and WILMINGTON TRUST, NATIONAL
ASSOCIATION (“Wilmington Trust”), as Collateral
Agent for the Secured Parties (as defined below).
Reference is made
to the Second Lien Credit and Guaranty Agreement dated as of May 4,
2018 (as it may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the
Borrower, certain Subsidiaries of the Borrower party thereto, as
Guarantor Subsidiaries, the Lenders party thereto and Wilmington
Trust, as Administrative Agent and Collateral Agent.
The
Lenders have agreed to extend credit to the Borrower subject to the
terms and conditions set forth in the Credit Agreement. The
obligations of the Lenders to extend such credit are conditioned
upon, among other things, the execution and delivery of this
Agreement by each Grantor. The Grantors are Affiliates of one
another, will derive substantial direct and indirect benefits from
the extensions of credit to the Borrower pursuant to the Credit
Agreement, and are willing to execute and deliver this Agreement in
order to induce the Lenders to extend such credit. This Agreement
is subject to the Intercreditor Agreement, which governs the
relative rights and priorities of the First Lien Secured Parties
(as defined in the Intercreditor Agreement) and the Second Lien
Secured Parties (as defined in the Intercreditor Agreement) and
certain other matters as described therein. Accordingly, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION
1.01. Credit Agreement and UCC.
(a)
Capitalized terms
used in this Agreement, including the preamble and the introductory
paragraphs hereto, and not otherwise defined herein have the
meanings specified in the Credit Agreement.
(b) As
used herein, each of the following terms has the meaning specified
in the UCC (as defined herein):
|
Term
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UCC
Section
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Certificated
Security
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8-102
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Chattel
Paper
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9-102
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Commercial
Tort Claim
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9-102
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Deposit
Account
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9-102
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Document
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9-102
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Fixtures
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9-102
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Goods
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9-102
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Instrument
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0-000
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Xxxxxxxxx
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9-102
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Investment
Property
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9-102
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Letter-of-Credit
Right
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0-000
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Xxxxx
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1-201
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Payment
Intangible
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9-102
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Proceeds
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9-102
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Promissory
Note
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9-102
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Securities
Account
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8-501
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Security
Entitlement
Supporting
Obligations
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8-102
9-102
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Uncertificated
Security
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8-102
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1
(c) The
rules of construction specified in Section 1.3 of the Credit
Agreement also apply to this Agreement, mutatis mutandis.
SECTION
1.02. Other Defined Terms. As used in this
Agreement, the following terms have the meanings specified
below:
“Account(s)” means
“accounts” as defined in Section 9-102 of the UCC, and
also means a right to payment of a monetary obligation, whether or
not earned by performance, (a) for property that has been or
is to be sold, leased, licensed, assigned, or otherwise disposed
of, (b) for services rendered or to be rendered, or (c) arising out
of the use of a credit or charge card or information contained on
or for use with the card.
“Account Debtor” means any Person
that is or that may become obligated to any Grantor under, with
respect to or on account of an Account or a Payment
Intangible.
“After-Acquired Intellectual
Property” has the meaning assigned to such term in
Section 4.02(d).
“Agreement” means this Second Lien
Pledge and Security Agreement.
“Article 9 Collateral” has the
meaning assigned to such term in Section 3.01(a).
“Bankruptcy Event of Default” means
any Event of Default under Section 8.1(f) or 8.1(g) of the
Credit Agreement.
“Blue Sky Laws” has the meaning
assigned to such term in Section 5.01.
“Borrower” has the meaning assigned
to such term in the preamble.
“Collateral” means the Article 9
Collateral and the Pledged Collateral; provided that all references to
“Collateral” in Section 5.02 shall, unless the context
requires otherwise, also refer to Real Estate Assets subject to a
Mortgage.
“Collateral Agent” means Wilmington
Trust, in its capacity as collateral agent for the Secured Parties
under the Credit Documents, and its successors in such capacity as
provided in the Credit Agreement.
2
“Commercial Software License(s)”
means any non-exclusive license of commercially available (on
non-discriminatory pricing terms) computer software to a Grantor
from a commercial software provider (e.g.,
“shrink-wrap”, “browse-wrap” or
“click-wrap” software licenses) or a license of freely
available computer software from a licensor of free or open source
software.
“Copyright License” means any
written agreement, now or hereafter in effect, granting any right
to any third party under any Copyright now or hereafter owned by
any Grantor or that such Grantor otherwise has the right to
license, or granting any right to any Grantor under any Copyright
now or hereafter owned by any third party, and all rights of such
Grantor under any such agreement.
“Copyrights” means all of the
following now owned or hereafter acquired by or assigned to any
Grantor (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether
as author, assignee, transferee or otherwise, whether registered or
unregistered and whether published or unpublished, (b) all
registrations and applications for registration of any such
copyright in the United States or any other country, including
registrations, recordings, supplemental registrations, pending
applications for registration and renewals in the United States
Copyright Office, including those listed on Schedule III, (c) all
rights and privileges arising under applicable law with respect to
such Grantor’s use of such copyrights, (d) all reissues,
renewals, continuations and extensions thereof and amendments
thereto, (e) all income, fees, royalties, damages, claims and
payments now or hereafter due and/or payable with respect to the
foregoing, including damages and payments for past, present or
future infringements thereof, (f) all rights corresponding
thereto throughout the world and (g) all rights to xxx for
past, present or future infringements thereof.
“Credit Agreement” has the meaning
assigned to such term in the preliminary statement of this
Agreement.
“Domain Names” means all Internet
domain names and associated URL addresses in or to which any
Grantor now or hereafter has any right, title or
interest.
“Equipment” means (a) any
“equipment” as such term is defined in Article 9 of the
UCC and shall also include, but shall not be limited to, all
machinery, equipment, furnishings, appliances, furniture, fixtures,
tools, and vehicles now or hereafter owned by any Grantor in each
case, regardless of whether characterized as equipment under the
UCC and (b) and any and all additions, substitutions and
replacements of any of the foregoing and all accessions thereto,
wherever located, whether or not at any time of determination
incorporated or installed therein or attached thereto, and all
replacements therefore, together with all attachments, components,
parts, equipment and accessories installed thereon or affixed
thereto.
“General
Intangibles” has the meaning provided in Article 9 of
the UCC and shall in any event include all choses in action and
causes of action and all other intangible personal property of
every kind and nature (other than Accounts) now owned or hereafter
acquired by any Grantor, as the case may be, including corporate or
other business records, indemnification claims, contract rights
(including rights under customer contracts, leases, whether entered
into as lessor or lessee, Hedge Agreements and other agreements),
goodwill, registrations, franchises, tax refund claims, licenses
(including Licenses), permits, concessions and authorizations and
any letter of credit, guarantee, claim, security interest or other
security held by or granted to any Grantor.
3
“Grantor” means each of the
Borrower and each Guarantor Subsidiary.
“Guarantor Subsidiaries” means,
collectively, (a) the Restricted Subsidiaries party to this
Agreement on the Closing Date and (b) each Restricted
Subsidiary that becomes a party to this Agreement after the Closing
Date pursuant to Section 6.16, provided that any Restricted
Subsidiary that is designated as an Unrestricted Subsidiary in
accordance with the Credit Agreement shall cease to be a Guarantor
Subsidiary subject to and in accordance with the provisions of
Section 9.8(d)(ii) of the Credit Agreement.
“Intellectual Property” means all
intellectual and similar property of every kind and nature now
owned or hereafter acquired by any Grantor, including rights in
inventions, rights in designs, utility models, Patents, Copyrights,
Intellectual Property Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information,
rights in know how, rights in show how or other data or
information, rights in software, rights in databases, all other
proprietary information, including but not limited to Domain
Names.
“Intellectual Property Collateral”
means Collateral consisting of Intellectual Property.
“Intellectual Property Security
Agreements” has the meaning assigned to such term in
Section 3.02(d).
“Intellectual Property License”
means any Patent License, Trademark License, Copyright License,
Commercial Software License or other license or sublicense
agreement granting rights under Intellectual Property to which any
Grantor is a party, including those listed on Schedule
III.
“Patent License” means any written
agreement, now or hereafter in effect, granting to any third party
any right to develop, commercialize, import, make, have made, offer
for sale, use or sell any invention on which a Patent, now or
hereafter owned by any Grantor or that any Grantor otherwise has
the right to license, is in existence, or granting to any Grantor
any such right with respect to any invention on which a Patent, now
or hereafter owned by any third party, is in existence, and all
rights of any Grantor under any such agreement.
“Patents” means all of the
following now owned or hereafter acquired by any Grantor (a) all
letters patent of the United States or the equivalent thereof in
any other country, all registrations and recordings thereof, and
all applications for letters patent of the United States or the
equivalent thereof in any other country, including registrations,
recordings and pending applications in the United States Patent and
Trademark Office or any similar offices in any other country,
including those listed on Schedule III, (b) all rights and
privileges arising under applicable law with respect to such
Grantor’s use of any patents, (c) all inventions and
improvements described and claimed therein, (d) all reissues,
divisions, continuations, renewals, extensions, reexaminations,
supplemental examinations, inter
partes reviews, adjustments and continuations-in-part
thereof and amendments thereto, (e) all income, fees,
royalties, damages, claims and payments now or hereafter due and/or
payable with respect to any of the foregoing including damages and
payments for past, present or future infringements thereof,
(f) all rights corresponding thereto throughout the world,
including the right to prevent others from making, having made,
using, selling, offering to sell, importing or exporting the
inventions claimed therein and (g) rights to xxx for past,
present or future infringements thereof.
4
“Pledge and Security Agreement
Supplement” means an instrument substantially in the
form of Exhibit I hereto.
“Pledged Collateral” has the
meaning assigned to such term in Section 2.01.
“Pledged Debt” has the meaning
assigned to such term in Section 2.01.
“Pledged Equity” has the meaning
assigned to such term in Section 2.01.
“Pledged Securities” means any Promissory Notes, stock certificates,
limited liability membership interests or other Securities,
certificates or Instruments now or hereafter included in the
Pledged Collateral, including all Pledged Equity, Pledged Debt and
all other certificates, instruments or other documents representing
or evidencing any Pledged Collateral.
“Secured Obligations” means the
“Obligations” as defined in the Credit Agreement, it
being acknowledged and agreed that the term “Secured
Obligations” as used herein shall include each extension of
credit under the Credit Agreement, whether outstanding on the date
of this Agreement or extended or arising from time to time after
the date of this Agreement.
“Secured Parties” means (a) the
Administrative Agent, (b) the Collateral Agent, (c) the Arrangers,
the Syndication Agents and each other Person appointed under the
Credit Documents to serve in an agent or similar capacity,
including any Auction Manager, (d) the Lenders, (e) the
beneficiaries of each indemnification obligation undertaken by any
Credit Party under any Credit Document, (f) the other holders from
time to time of the Secured Obligations and (g) the successors and
permitted assigns of each of the foregoing.
“Security” means a “security” as such term is defined
in Article 8 of the UCC and, in any event, shall include any stock,
shares, partnership interests, voting trust certificates,
certificates of interest or participation in any profit sharing
agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any
instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or
interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the
foregoing.
“Security Interest” has the meaning
assigned to such term in Section 3.01(a).
“Trademark License” means any
written agreement, now or hereafter in effect, granting to any
third party any right to use any Trademark now or hereafter owned
by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark
now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement.
5
“Trademarks” means all of the
following now owned or hereafter acquired by any Grantor (a) all
trademarks, service marks, trade names, corporate names, company
names, business names, fictitious business names, trade styles,
trade dress, logos, other source or business identifiers, designs
and general intangibles of like nature, the goodwill of the
business symbolized thereby or associated therewith, all
registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including
registrations and registration applications in the United States
Patent and Trademark Office or any similar offices in any State of
the United States or any other country or any political subdivision
thereof, and all extensions or renewals thereof, including those
listed on Schedule III, (b) all rights and privileges arising under
applicable law with respect to such Grantor’s use of any
trademarks, (c) all reissues, continuations, extensions and
renewals thereof and amendments thereto, (d) all income, fees,
royalties, damages and payments now and hereafter due and/or
payable with respect to any of the foregoing, including damages,
claims and payments for past, present or future infringements
thereof, (e) all rights corresponding thereto throughout the
world and (f) rights to xxx for past, present and future
infringements or dilutions thereof or other injuries
thereto.
“UCC” means the Uniform Commercial
Code as the same may from time to time be in effect in the State of
New York; provided
that, if by reason of mandatory provisions of law, perfection, or
the effect of perfection or non-perfection, of a security interest
in any Collateral or the availability of any remedy hereunder is
governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, “UCC”
means the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection or
availability of such remedy, as the case may be.
“Wilmington Trust” has the meaning
assigned to such term in the preamble.
ARTICLE II
PLEDGE OF
SECURITIES
SECTION
2.01. Pledge. As security for
the payment and performance in full of the Secured Obligations,
each Grantor hereby assigns and pledges to the Collateral Agent,
its successors and permitted assigns, for the benefit of the
Secured Parties, and hereby grants to the Collateral Agent, its
successors and permitted assigns, for the benefit of the Secured
Parties, a continuing security interest in, all of such
Grantor’s right, title and interest in, to and under: (a) all
Equity Interests now owned or at any time hereafter acquired by it
(including those Equity Interests listed opposite the name of such
Grantor on Schedule I) and all certificates and other instruments
representing all such Equity Interests; provided that the Pledged
Equity shall not include more than 65% of the outstanding voting
Equity Interests in any CFC or CFC Holding Company (collectively,
the “Pledged
Equity”); (b) all Promissory Notes and all Instruments
evidencing Indebtedness now owned or at any time hereafter acquired
by it (including those listed opposite the name of such Grantor on
Schedule I) (the “Pledged Debt”); (c) all other
property that may be delivered to and held by the Collateral Agent
pursuant to the terms of this Section 2.01 or Section 2.02;
(d) subject to Section 2.06, all payments of principal or interest,
dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of, in
exchange for or upon the conversion of, and all other Proceeds
received in respect of, the Pledged Equity and the Pledged Debt;
(e) subject to Section 2.06, all rights and privileges of such
Grantor with respect to the securities and other property referred
to in clauses (a), (b), (c) and (d) above; and (f) all Proceeds of,
and Security Entitlements in respect of, any of the foregoing (the
items referred to in clauses (a) through (f) above being
collectively referred to as the “Pledged Collateral”); provided that the Pledged
Collateral shall not include any item referred to in clauses (a)
through (f) above if, for so long as and to the extent such item
constitutes Excluded Property.
6
SECTION
2.02. Delivery of the Pledged Collateral. (a) On the
Closing Date (in the case of any Grantor that grants a Lien on any
of its assets hereunder on the Closing Date) or on the date on
which it signs and delivers a Pledge and Security Agreement
Supplement (in the case of any other Grantor), each Grantor shall
deliver or cause to be delivered to the Collateral Agent, for the
benefit of the Secured Parties, any and all Pledged Securities
(other than (i) any Uncertificated Securities, but only for so long
as such Securities remain uncertificated, and (ii) certificates or
instruments representing Equity Interests in any Subsidiary that is
not a Material Subsidiary) to the extent such Pledged Securities,
in the case of Promissory Notes and other Instruments evidencing
Indebtedness, are required to be delivered pursuant to
Section 2.02(b). Thereafter, whenever such Grantor acquires
any other Pledged Security (other than (A) any Uncertificated
Securities, but only for so long as such Uncertificated Securities
remain uncertificated, and (B) certificates or instruments
representing Equity Interests in any Subsidiary that is not a
Material Subsidiary), such Grantor shall promptly, and in any event
within 30 days (or such longer period as the Collateral Agent
may agree to in writing), deliver or cause to be delivered to the
Collateral Agent such Pledged Security as Collateral hereunder to
the extent such Pledged Securities, in the case of Promissory Notes
and Instruments evidencing Indebtedness, are required to be
delivered pursuant to Section 2.02(b).
(b) Each
Grantor will cause (i) the Borrower and each Restricted Subsidiary
to execute and deliver a counterpart of each of the Intercompany
Note and the Intercompany Indebtedness Subordination Agreement and
(ii) all Indebtedness for borrowed money in an aggregate principal
amount of $1,000,000 or more owed to such Grantor by any other
Person (other than the Borrower or a Restricted Subsidiary) to be
evidenced by a duly executed Promissory Note, and shall cause each
such Promissory Note, the Intercompany Note and each other
Promissory Note (if any) evidencing any Indebtedness of the
Borrower or any Restricted Subsidiary that is owing to such
Grantor, to be pledged and delivered to the Collateral Agent, for
the benefit of the Secured Parties, (A) on the date hereof, in
the case of any such Indebtedness existing on the date hereof (or,
in the case of any Grantor that becomes a party hereto after the
date hereof, on the date such Grantor becomes a party hereto, in
the case of any such Indebtedness existing on such date) or
(B) promptly following the incurrence thereof, in the case of
any such Indebtedness incurred after the date hereof (or such other
date), in each case pursuant to the terms hereof.
(c) Upon
delivery to the Collateral Agent, (i) any Pledged Securities
required to be delivered pursuant to Section 2.02(a) or
2.02(b) shall be accompanied by undated stock or note powers duly
executed by the applicable Grantor in blank or other instruments of
transfer reasonably satisfactory to the Collateral Agent and by
such other instruments and documents as the Collateral Agent may
reasonably request and (ii) all other property comprising part of
the Pledged Collateral required to be delivered pursuant to
Section 2.02(a) or 2.02(b) shall be accompanied by undated
proper instruments of assignment duly executed by the applicable
Grantor and such other instruments or documents as the Collateral
Agent may reasonably request. Each delivery of Pledged Securities
shall be accompanied by a schedule describing such Pledged
Securities, which schedule shall be deemed to supplement Schedule I
and be made a part hereof; provided that failure to attach
any such schedule hereto shall not affect the validity of such
pledge of such Pledged Securities. Each schedule so delivered shall
supplement any prior schedules so delivered.
(d) The
assignment, pledge and security interest granted in Section 2.01
are granted as security only and shall not subject the Collateral
Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Grantor with respect to or
arising out of the Pledged Collateral.
SECTION
2.03. Representations and Warranties. Each Grantor,
jointly and severally, represents and warrants, as to itself and
the other Grantors, to and with the Collateral Agent, for the
benefit of the Secured Parties, that:
7
(a) Schedule
I correctly sets forth, as of the Closing Date and as of each date
on which a supplement to Schedule I is delivered pursuant to
Section 2.02(c) or 6.15, (i) all the Equity Interests owned by each
Grantor, specifying the issuer and certificate number of (if
applicable), and the number and percentage ownership represented
by, such Equity Interests, and (ii) all the Pledged Debt of
each Grantor, specifying the debtor thereof and the outstanding
principal amount thereof as of the Closing Date, and includes all
Equity Interests, Promissory Notes and Instruments required to be
pledged by each Grantor hereunder in order to satisfy the
Collateral and Guarantee Requirement;
(b) the
Pledged Equity issued by any Subsidiary and the Pledged Debt
(solely with respect to Pledged Debt issued by a Person other than
the Borrower or any Subsidiary, to the best of the Grantors’
knowledge) have been duly and validly authorized and issued by the
issuers thereof and (i) in the case of Pledged Equity (other than
Pledged Equity consisting of limited liability company interests or
partnership interests which, pursuant to the relevant
organizational or formation documents, cannot be fully paid and
non-assessable), are fully paid and non-assessable and (ii) in the
case of Pledged Debt (solely with respect to Pledged Debt issued by
a Person other than the Borrower or any Subsidiary, to the best of
the Grantors’ knowledge), are legal, valid and binding
obligations of the issuers thereof, subject to applicable Debtor
Relief Laws and general principles of equity; and
(c) each
Grantor holds the Pledged Securities indicated on Schedule I as
owned by such Grantor free and clear of all Liens, other than (i)
Liens created by the Collateral Documents and (ii) other Permitted
Liens.
SECTION
2.04. Certification of Limited Liability Company and Limited
Partnership Interests. Each Grantor
acknowledges and agrees that, to the extent any interest in any
limited liability company or limited partnership controlled by any
Grantor and pledged under Section 2.01 is a
“security” within the meaning of Article 8 of the UCC
and is governed by Article 8 of the UCC, such interest shall be
represented by a certificate that is promptly delivered to the
Collateral Agent pursuant to the terms hereof. Each Grantor further
acknowledges and agrees that with respect to any interest in any
limited liability company or limited partnership controlled on or
after the date hereof by such Grantor and pledged hereunder that is
not a “security” within the meaning of Article 8 of the
UCC, such Grantor shall at no time elect to treat any such interest
as a “security” within the meaning of Article 8 of the
UCC, nor shall any such interest in any limited liability company
or limited partnership controlled on or after the date hereof by
such Grantor be represented by a certificate, unless such election
and such interest is thereafter represented by a certificate that
is promptly delivered to the Collateral Agent pursuant to the terms
hereof.
SECTION
2.05. Registration in Nominee Name;
Denominations.
If an Event of Default shall occur and be continuing and, other
than in the case of a Bankruptcy Event of Default, the Collateral
Agent shall have notified the Borrower of its intent to exercise
such rights, (a) the Collateral Agent, on behalf of the
Secured Parties, shall have the right (in its sole and absolute
discretion) to cause each of the Pledged Securities to be
transferred of record into the name of the Collateral Agent or into
the name of its nominee (as pledgee or as sub-agent) or the name of
the applicable Grantor, endorsed or assigned in blank or in favor
of the Collateral Agent and (b) to the extent permitted by the
documentation governing such Pledged Securities and applicable law,
the Collateral Agent shall have the right to exchange the
certificates representing Pledged Securities for certificates of
smaller or larger denominations for any purpose consistent with
this Agreement. Each Grantor will promptly give to the Collateral
Agent copies of any material notices received by it with respect to
Pledged Securities registered in the name of such Grantor. Each
Grantor will take any and all actions reasonably requested by the
Collateral Agent to facilitate compliance with this
Section 2.05.
SECTION
2.06. Voting Rights; Dividends and Interest. (a) Unless and
until an Event of Default shall have occurred and be continuing
and, other than in the case of a Bankruptcy Event of Default, the
Collateral Agent shall have notified the Borrower that the rights
of the Grantors under this Section 2.06 are being
suspended:
(i) Each
Grantor shall be entitled to exercise any and all voting and/or
other consensual rights and powers inuring to an owner of Pledged
Collateral or any part thereof for any purpose consistent with the
terms of this Agreement, the Credit Agreement and the other Credit
Documents.
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(ii) The
Collateral Agent shall promptly execute and deliver to each
Grantor, or cause to be executed and delivered to such Grantor, all
such proxies, powers of attorney and other instruments as such
Grantor may reasonably request in writing for the purpose of
enabling such Grantor to exercise the voting and/or consensual
rights and powers it is entitled to exercise pursuant to Section
2.06(a)(i), in each case as shall be specified in such
request.
(iii) Each
Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or
distributed in respect of the Pledged Collateral, to the extent
(and only to the extent) that such dividends, interest, principal
and other distributions are permitted by, and otherwise paid or
distributed in accordance with, the terms and conditions of the
Credit Agreement, the other Credit Documents and applicable laws;
provided that any
noncash dividends, interest, principal or other distributions that
would constitute Pledged Equity or Pledged Debt, whether resulting
from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any Pledged
Securities or received in exchange for Pledged Securities or any
part thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to
which such issuer may be a party or otherwise, shall be and become
part of the Pledged Collateral, and, if received by any Grantor,
shall be held in trust for the benefit of the Collateral Agent and
the applicable Secured Parties and shall, if certificated and to
the extent required by Section 2.02, be forthwith delivered to the
Collateral Agent in the same form as so received (with any
necessary endorsement reasonably requested by the Collateral
Agent). So long as no Event of Default has occurred and is
continuing, the Collateral Agent shall promptly deliver to each
Grantor any Pledged Securities in its possession if requested to be
delivered to the issuer thereof in connection with any exchange or
redemption of such Pledged Securities.
(b) Upon
the occurrence and during the continuance of an Event of Default
and, other than in the case of a Bankruptcy Event of Default, after
the Collateral Agent shall have notified the Borrower of the
suspension of the rights of the Grantors under
Section 2.06(a)(iii), all rights of any Grantor to dividends,
interest, principal or other distributions that such Grantor is
authorized to receive pursuant to Section 2.06(a)(iii) shall
cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and
authority to receive and retain such dividends, interest, principal
or other distributions as part of the Pledged Collateral, subject
to Section 2.07 and the last sentence of this Section 2.06(b).
All dividends, interest, principal or other distributions received
by any Grantor contrary to the provisions of this Section 2.06
shall be held in trust for the benefit of the Collateral Agent and
the other Secured Parties and shall be forthwith delivered to the
Collateral Agent upon demand in the same form as so received (with
any necessary endorsement reasonably requested by the Collateral
Agent). Any and all money and other property paid over to or
received by the Collateral Agent pursuant to the provisions of this
Section 2.06(b) shall be retained by the Collateral Agent in
an account to be established by the Collateral Agent upon receipt
of such money or other property, shall be held as security for the
payment and performance of the Secured Obligations and shall be
applied in accordance with the provisions of Section 5.02.
After all Events of Default have been cured or waived, and the
Borrower has delivered to the Collateral Agent a certificate of an
Authorized Officer to such effect, the Collateral Agent shall
promptly repay to each Grantor (without interest) all dividends,
interest, principal or other distributions that such Grantor would
otherwise be permitted to retain pursuant to the terms of
Section 2.06(a)(iii) in the absence of an Event of Default and
that remain in such account.
9
(c) Upon
the occurrence and during the continuance of an Event of Default
and, other than in the case of a Bankruptcy Event of Default, after
the Collateral Agent shall have notified the Borrower of the
suspension of the rights of the Grantors under
Section 2.06(a)(i), all rights of any Grantor to exercise the
voting and consensual rights and powers it is entitled to exercise
pursuant to Section 2.06(a)(i), and the obligations of the
Collateral Agent under Section 2.06(a)(ii), shall cease, and
all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority
to exercise such voting and consensual rights and powers subject to
Section 2.07 and the last sentence of this Section 2.06(c);
provided that,
unless otherwise directed by the Requisite Lenders in writing, the
Collateral Agent shall have the right from time to time following
and during the continuance of an Event of Default to permit the
Grantors to exercise such rights. After all Events of Default have
been cured or waived, and the Borrower has delivered to the
Collateral Agent a certificate of an Authorized Officer to such
effect, each Grantor shall have the exclusive right to exercise the
voting and/or consensual rights and powers that such Grantor would
otherwise be entitled to exercise pursuant to the terms of
Section 2.06(a)(i), and the obligations of the Collateral
Agent under Section 2.06(a)(ii) shall be
reinstated.
(d) Any
notice given by the Collateral Agent to the Borrower under Section
2.05 or Section 2.06(a) (i) may be given by telephone if
promptly confirmed in writing, (ii) may be given with respect to
one or more of the Grantors at the same or different times and
(iii) may suspend the rights of the Grantors under Section
2.06(a)(i) or 2.06(a)(iii) in part without suspending all such
rights (as specified by the Collateral Agent in its sole and
absolute discretion) and without waiving or otherwise affecting the
Collateral Agent’s rights to give additional notices from
time to time suspending other rights so long as an Event of Default
has occurred and is continuing.
SECTION
2.07. Collateral Agent Not a Partner or Limited Liability Company
Member. Nothing contained
in this Agreement shall be construed to make the Collateral Agent
or any other Secured Party liable as a member of any limited
liability company or as a partner of any partnership, and neither
the Collateral Agent nor any other Secured Party by virtue of this
Agreement or otherwise (except as referred to in the following
sentence) shall have any of the duties, obligations or liabilities
of a member of any limited liability company or as a partner in any
partnership. The parties hereto expressly agree that, unless the
Collateral Agent shall become the absolute owner of Pledged Equity
consisting of a limited liability company interest or a partnership
interest pursuant hereto, this Agreement shall not be construed as
creating a partnership or joint venture among the Collateral Agent,
any other Secured Party, any Grantor and/or any other
Person.
ARTICLE III
SECURITY INTERESTS
IN PERSONAL PROPERTY
SECTION
3.01. Security Interest. (a) As security
for the payment and performance in full of the Secured Obligations,
each Grantor hereby assigns and pledges to the Collateral Agent,
its successors and permitted assigns, for the benefit of the
Secured Parties, and hereby grants to the Collateral Agent, its
successors and permitted assigns, for the benefit of the Secured
Parties, a security interest (the “Security Interest”) in, all right,
title and interest in, to and under any and all of the following
assets and properties now owned or at any time hereafter acquired
by such Grantor or in which such Grantor now has or at any time in
the future may acquire any right, title or interest (collectively,
the “Article 9
Collateral”):
(i) all
Accounts;
(ii) all
Chattel Paper;
(iii) all
Documents;
(iv) all
Equipment;
(v) all
General Intangibles, including all Intellectual Property, all
Licenses and all Payment Intangibles;
(vi) all
Instruments;
10
(vii) all
Inventory;
(viii)
all Goods and Fixtures;
(ix) all
Investment Property;
(x) all
Money, cash, cash equivalents, Deposit Accounts and Securities
Accounts;
(xi) all
Letter-of-Credit Rights;
(xii) all
Commercial Tort Claims described on Schedule II from time to time,
as such Schedule may be supplemented from time to time pursuant to
Section 3.04(c);
(xiii)
all Supporting Obligations;
(xiv)
all Security Entitlements in any or all of the
foregoing;
(xv) all
books and records pertaining to the Article 9 Collateral;
and
(xvi)
to the extent not otherwise included above, all Proceeds and
products of any and all of the foregoing (including proceeds of all
insurance policies) and all collateral security and guarantees
given by any Person with respect to any of the
foregoing.
(b) Notwithstanding
anything herein to the contrary, if, for so long and to the extent
as any asset constitutes Excluded Property, the Security Interest
granted under this Section 3.01 shall not attach to, and
Article 9 Collateral shall not include, such asset; provided, however, that the Security
Interest shall immediately attach to, and Article 9 Collateral
shall immediately include, any such asset (or portion thereof) upon
such asset (or such portion) ceasing to be Excluded
Property.
(c) Each
Grantor hereby irrevocably authorizes the Collateral Agent (or its
designee) at any time and from time to time to file in any relevant
jurisdiction any financing statements or continuation statements
(including fixture filings and transmitting utility filings) with
respect to the Article 9 Collateral or any part thereof and
amendments thereto that (i) indicate the Collateral as “all
assets” or “all personal property” of such
Grantor or words of similar effect and (ii) contain the information
required by Article 9 of the UCC of each applicable jurisdiction
for the filing of any financing statement or amendment, including
(A) whether such Grantor is an organization, the type of
organization and any organizational identification number issued to
such Grantor, (B) whether such Grantor is a transmitting utility
and (C) in the case of a financing statement filed as a
fixture filing, a sufficient description of the real property to
which such Article 9 Collateral relates. Each Grantor agrees to
provide such information to the Collateral Agent promptly upon
reasonable request. Each Grantor hereby ratifies its authorization
for the Collateral Agent (or its designee) to file in any relevant
jurisdiction any initial financing statements or amendments thereto
if filed prior to the date hereof.
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(d) Each
Grantor hereby irrevocably authorizes the Collateral Agent (or its
designee) to file with the United States Patent and Trademark
Office or United States Copyright Office (or any successor office)
such documents as may be necessary or advisable for the purpose of
perfecting, confirming, continuing, enforcing or protecting the
Security Interest granted by such Grantor hereunder, without the
signature of such Grantor, and naming such Grantor, as debtor, and
the Collateral Agent, as secured party.
(e) The
Security Interest and the security interest granted pursuant to
Article II are granted as security only and, except as
expressly set forth herein, shall not subject the Collateral Agent
or any other Secured Party to, or in any way alter or modify, any
obligation or liability of any Grantor with respect to or arising
out of the Article 9 Collateral.
(f) Notwithstanding
anything to the contrary herein, to the extent this Agreement or
any other Credit Document purports to grant or to require any
Grantor to grant to the Collateral Agent a security interest in any
License, the Collateral Agent shall only have a security interest
in such License at such times and to the extent that a security
interest in such License is permitted under applicable law,
including the applicable Communications Law. The Security Interest
granted in Proceeds of such License is intended to include, and
hereby includes, the economic value of the Licenses, all rights
incident or appurtenant to the Licenses and the right to receive
all monies and consideration derived from or in connection with the
sale, assignment or lease of or the transfer of control over the
Licenses. If at any time in the future the Communications Law
permits any Grantor to grant a security interest in any License,
this Agreement shall be deemed to grant a security interest in such
License immediately thereupon without any further action by or
notice to any Grantor, the Collateral Agent or any Lender or other
Secured Party. In furtherance of the foregoing, each Grantor agrees
to cooperate fully and take all steps necessary to perfect such
security interest as may be required by the Collateral
Agent.
SECTION
3.02. Representations and Warranties. (a) Each Grantor,
jointly and severally, represents and warrants, as to itself and
the other Grantors, to the Collateral Agent for the benefit of the
Secured Parties that:
(b) Each
Grantor has good and valid rights in (not subject to any Liens
other than Permitted Liens) and/or good and marketable title in the
Article 9 Collateral with respect to which it has purported to
grant a Security Interest hereunder, and has full power and
authority to grant to the Collateral Agent the Security Interest in
such Article 9 Collateral pursuant hereto and to execute, deliver
and perform its obligations in accordance with the terms of this
Agreement, without the consent or approval of any other Person
other than any consent or approval that has been
obtained.
12
(c) The
information set forth in the Collateral Questionnaire, including
the exact legal name of each Grantor and its jurisdiction of
organization, is correct and complete in all material respects as
of the Closing Date. The UCC financing statements prepared by or on
behalf of the Grantors based upon the information provided in the
Collateral Questionnaire (or specified by notice from the
applicable Grantor to the Collateral Agent after the Closing Date
in the case of filings, recordings or registrations required by
Section 5.10 or 5.11 of the Credit Agreement) are all the
filings, recordings and registrations (other than any filings
required to be made in the United States Patent and Trademark
Office and the United States Copyright Office in order to perfect
the Security Interest in Article 9 Collateral consisting of United
States registered Patents (and Patents for which United States
applications for registration are pending), United States
registered Trademarks (and Trademarks for which United States
applications for registration are pending), United States
registered Copyrights (and Copyrights for which United States
applications for registration are pending) and United States
exclusive registered Copyright Licenses) that are necessary to
establish a legal, valid and perfected security interest in favor
of the Collateral Agent (for the benefit of the Secured Parties) in
respect of all Article 9 Collateral in which the Security Interest
may be perfected by filing, recording or registration in the United
States (or any political subdivision thereof) and its territories
and possessions pursuant to the UCC. Each Grantor represents and
warrants that, as of the Closing Date, fully executed copies of the
Patent Security Agreement and the Trademark Security Agreement, in
each case containing a description of all Article 0 Xxxxxxxxxx
xxxxxxxxxx xx Xxxxxx Xxxxxx registered Patents (and Patents for
which registration applications are pending) and United States
registered Trademarks (and Trademarks for which registration
applications are pending), respectively, have been provided for
recording by the United States Patent and Trademark Office pursuant
to 35 U.S.C. § 261 or 15 U.S.C. § 1060 and the
regulations thereunder.
(d) The
Security Interest constitutes (i) a legal and valid security
interest in all the Article 9 Collateral securing the payment and
performance of the Secured Obligations, (ii) subject to the filings
described in Section 3.02(c), a perfected security interest in
all Article 9 Collateral in which a security interest may be
perfected by filing, recording or registering a financing statement
in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the UCC and (iii) a
security interest that shall be perfected in all Intellectual
Property Collateral in which a security interest may be perfected
upon the receipt and recording of the UCC financing statements in
the relevant filing offices and the relevant Copyright Security
Agreement, Patent Security Agreement and/or Trademark Security
Agreement, as applicable (the “Intellectual Property Security
Agreements”), with the United States Patent and
Trademark Office and the United States Copyright Office, as
applicable. The Security Interest is and shall be prior to any
other Lien on any of the Article 9 Collateral in existence on the
date hereof, other than Permitted Liens (excluding Permitted Liens
that are required to be junior to the Security Interest) that are
contemplated by Section 6.2 of the Credit
Agreement.
(e) The
Article 9 Collateral is owned by the Grantors free and clear of any
Lien, except for Permitted Liens. None of the Grantors has filed or
consented to the filing of (i) any financing statement or
analogous document under the UCC or any other applicable laws
covering any Article 9 Collateral, (ii) any assignment in which any
Grantor assigns any Article 9 Collateral or any security agreement
or similar instrument covering any Article 9 Collateral with the
United States Patent and Trademark Office or the United States
Copyright Office, (iii) any notice under the Assignment of Claims
Act or (iv) any assignment in which any Grantor assigns any Article
9 Collateral or any security agreement or similar instrument
covering any Article 9 Collateral with any foreign
governmental, municipal or other office, which financing statement
or analogous document, assignment, security agreement or similar
instrument is still in effect, except, in each case, for Permitted
Liens.
13
SECTION
3.03. Covenants. (a) Each Grantor
shall, at its own expense, take any and all commercially reasonable
actions necessary to defend title to the Article 9 Collateral
against all Persons and to defend the Security Interest of the
Collateral Agent in the Article 9 Collateral and the priority
thereof against any Lien other than a Permitted Lien.
(b) Each
Grantor agrees, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and
documents and take all such actions as the Collateral Agent may
from time to time reasonably request to better assure, preserve,
protect and perfect the Security Interest and the rights and
remedies created hereby, including the payment of any reasonable
and documented or invoiced out-of-pocket fees and Taxes required in
connection with the execution and delivery of this Agreement, the
granting of the Security Interest and the filing of any financing
statements (including fixture filings and transmitting utility
filings) or other documents in connection herewith or therewith.
Each Grantor will provide to the Collateral Agent, from time to
time upon request, evidence reasonably satisfactory to the
Collateral Agent as to the perfection and priority of the Liens
created or intended to be created pursuant to this
Agreement.
(c) Each
Grantor agrees to maintain, at its own cost and expense, such
complete and accurate records with respect to the Article 9
Collateral owned by it as is consistent with its current practices
and in accordance with such prudent and standard practices used in
industries that are the same as or similar to those in which such
Grantor is engaged, and, at such time or times as the Collateral
Agent may reasonably request, promptly to prepare and deliver to
the Collateral Agent a duly certified schedule or schedules in form
and detail reasonably satisfactory to the Collateral Agent showing
the identity, amount and location of any and all Article 9
Collateral. In addition, subject to Section 5.6 of the Credit
Agreement, the Collateral Agent and such Persons as the Collateral
Agent may reasonably designate shall have the right, at the
Grantors’ own cost and expense, to inspect the Article 9
Collateral, all records (including its records in respect of
accounts receivables) related thereto (and to make extracts and
copies from such records) and the premises upon which any of the
Article 9 Collateral is located, to discuss the Grantors’
affairs with the officers of the Grantors and their independent
registered public accounting firm and to verify, in the manner and
under the procedures determined by the Collateral Agent in good
faith to be reasonable, the identity, validity, amount, quality,
quantity, value, condition, location and status of, or any other
matter relating to, the Article 9 Collateral, including Accounts
and Payment Intangibles, provided that unless an Event of Default
has occurred and is continuing, the Collateral Agent may not
contact Account Debtors or other third parties without the prior
written consent of the relevant Grantor.
(d) At
its option, the Collateral Agent may, but shall not be obligated
to, discharge past due Taxes, assessments, charges, fees and Liens
at any time levied or placed on the Article 9 Collateral and not
permitted by the Credit Agreement, and may pay for the maintenance
and preservation of the Article 9 Collateral to the extent any
Grantor fails to do so as required by the Credit Agreement or this
Agreement, and each Grantor jointly and severally agrees to
reimburse the Collateral Agent within 10 Business Days after demand
for any payment made or any reasonable expense incurred by the
Collateral Agent pursuant to the foregoing authorization (and any
such payment made or expense incurred shall be additional Secured
Obligations secured hereby). Nothing in this paragraph shall be
interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Collateral Agent or any Secured
Party to cure or perform, any covenants or other promises of any
Grantor with respect to taxes, assessments, charges, fees and Liens
and maintenance as set forth herein or in the other Credit
Documents.
14
(e) Each
Grantor (rather than the Collateral Agent or any other Secured
Party) shall remain liable (as between itself and any relevant
counterparty) to observe and perform all the conditions and
obligations to be observed and performed by it under each contract,
agreement or instrument relating to the Article 9 Collateral, all
in accordance with the terms and conditions thereof, and each
Grantor jointly and severally agrees to indemnify and hold harmless
the Collateral Agent and the other Secured Parties from and against
any and all liability for such performance.
(f) None
of the Grantors shall make or permit to be made any transfer of the
Article 9 Collateral and each Grantor shall remain at all
times in possession or control of the Article 9 Collateral owned by
it, in each case, except that unless and until the Collateral Agent
shall notify the Grantors that an Event of Default shall have
occurred and be continuing and that during the continuance thereof
the Grantors shall not sell, convey, lease, assign, transfer or
otherwise dispose of any Article 9 Collateral (which notice may be
given by telephone if promptly confirmed in writing), the Grantors
may use, transfer and dispose of the Article 9 Collateral in any
lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Credit
Document.
(g) None
of the Grantors will, without the Collateral Agent’s prior
written consent, grant any extension of the time of payment of any
Accounts or Payment Intangibles included in the Article 9
Collateral, compromise, compound or settle the same for less than
the full amount thereof, release, wholly or partly, any Person
liable for the payment thereof or allow any credit or discount
whatsoever thereon, other than extensions, compromises,
settlements, releases, credits or discounts granted or made in the
ordinary course of business and in accordance with past practice or
in connection with any proceeding under any Debtor Relief
Laws.
(h) The
Grantors, at their own expense, shall maintain or cause to be
maintained insurance in accordance with the requirements set forth
in Section 5.5 of the Credit Agreement. Each Grantor irrevocably
makes, constitutes and appoints the Collateral Agent (and its
designees) as such Grantor’s true and lawful agent (and
attorney-in-fact) for the purpose, upon the occurrence and during
the continuance of an Event of Default, of making, settling and
adjusting claims in respect of Article 9 Collateral under policies
of insurance, endorsing the name of such Grantor on any check,
draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at
any time or times shall fail to obtain or maintain any of the
policies of insurance required pursuant to Section 5.5 of the
Credit Agreement, or to pay any premium in whole or part relating
thereto, the Collateral Agent may, but shall not be obligated to,
without waiving or releasing any obligation or liability of the
Grantors hereunder or any Event of Default, in its sole discretion,
obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as the Collateral
Agent deems advisable. All sums disbursed by the Collateral Agent
in connection with this paragraph, including reasonable
attorneys’ fees, court costs, expenses and other charges
relating thereto, shall be payable by the Grantors to the
Collateral Agent within 10 Business Days after demand and shall be
additional Secured Obligations secured hereby.
15
SECTION
3.04. Other Actions. In order to
further insure the attachment, perfection and priority of, and the
ability of the Collateral Agent to enforce, the Security Interest,
each Grantor agrees, in each case at such Grantor’s own
expense, to take the following actions with respect to the
following Article 9 Collateral:
(a) Instruments.
Subject to Article II, if any Grantor shall at any time hold
or acquire any Instrument constituting Collateral and evidencing an
amount equal to or in excess of $1,000,000 such Grantor shall
forthwith endorse, assign and deliver the same to the Collateral
Agent for the benefit of the Secured Parties, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time reasonably
request.
(b) Investment
Property. Except to the extent otherwise provided in
Article II, if any Grantor shall at any time hold or acquire
any Pledged Equity that consists of Certificated Securities, such
Grantor shall forthwith endorse, assign and deliver the same to the
Collateral Agent for the benefit of the applicable Secured Parties,
accompanied by such instruments of transfer or assignment duly
executed in blank as the Collateral Agent may from time to time
reasonably request.
(c) Commercial
Tort Claims. If any Grantor shall at any time after the date
of this Agreement acquire a Commercial Tort Claim as to which the
claim thereunder is $2,000,000 or more, such Grantor shall promptly
notify the Collateral Agent thereof in a writing signed by such
Grantor and provide supplements to Schedule II describing the
details thereof and shall grant to the Collateral Agent a security
interest therein and in the proceeds thereof, all upon the terms of
this Agreement. In the event any Supplemental Collateral
Questionnaire or Pledge and Security Agreement Supplement shall set
forth any Commercial Tort Claim, Schedule II shall be deemed
to be supplemented to include the reference to such Commercial Tort
Claim (and the description thereof), in the same form as such
reference and description are set forth on such Supplemental
Collateral Questionnaire or Pledge and Security Agreement
Supplement.
ARTICLE IV
SPECIAL PROVISIONS
CONCERNING INTELLECTUAL PROPERTY
COLLATERAL
SECTION
4.01. Grant of License to Use Intellectual
Property. Without limiting
the provisions of Section 3.01 or any other rights of the
Collateral Agent as the holder of a Security Interest in any
Intellectual Property Collateral, for the purpose of enabling the
Collateral Agent to exercise rights and remedies under this
Agreement at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby
grants to the Collateral Agent an irrevocable, nonexclusive license
(exercisable without payment of rent, royalty or other compensation
to the Grantors) to use, license or sublicense any of the
Intellectual Property Collateral now owned or hereafter acquired by
such Grantor, and wherever the same may be located (whether or not
any license agreement by and between any Grantor and any other
Person relating to the use of such Intellectual Property Collateral
may be terminated hereafter), and including in such license
reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs
used for the compilation or printout thereof and, to the extent
permitted by applicable law, the right to prosecute and maintain
all Intellectual Property Collateral and the right to xxx for
infringement of the Intellectual Property Collateral. The use of
such license by the Collateral Agent may only be exercised, at the
option of the Collateral Agent, during the continuation of an Event
of Default; provided that any license,
sublicense or other transaction entered into by the Collateral
Agent in accordance herewith shall be binding upon the Grantors
notwithstanding any subsequent cure of an Event of Default. Each
Grantor further agrees to cooperate with the Collateral Agent in
any attempt to prosecute or maintain the Intellectual Property
Collateral or xxx for infringement of the Intellectual Property
Collateral.
16
SECTION
4.02. Protection of Collateral. (a) Except to the
extent permitted by Section 4.02(e), or to the extent that failure
to act could not reasonably be expected to have a Material Adverse
Effect, with respect to registration or pending application of each
item of its Intellectual Property Collateral for which such Grantor
has standing to do so, each Grantor agrees to take, at its expense,
all steps, including in the U.S. Patent and Trademark Office, the
U.S. Copyright Office and any other Governmental Authority located
in the United States, (i) to maintain the validity and
enforceability of any registered Intellectual Property Collateral
and maintain such Intellectual Property Collateral in full force
and effect, and (ii) to pursue the registration and
maintenance of each Patent, Trademark, or Copyright registration or
application, now or hereafter included in such Intellectual
Property Collateral of such Grantor, including the payment of
required fees and taxes, the filing of responses to office actions
issued by the U.S. Patent and Trademark Office, the U.S. Copyright
Office or other Governmental Authorities, the filing of
applications for renewal or extension, the filing of affidavits
under Sections 8 and 15 of the U.S. Trademark Act, the filing
of divisional, continuation, continuation-in-part, reissue and
renewal applications or extensions, the payment of maintenance fees
and the participation in interference, reexamination, opposition,
cancellation, infringement and misappropriation
proceedings.
(b) Except
to the extent permitted by Section 4.02(e), or to the extent that
failure to act could not reasonably be expected to have a Material
Adverse Effect, no Grantor shall do or permit any act or knowingly
omit to do any act whereby any of its Intellectual Property
Collateral may lapse, be terminated, or become invalid or
unenforceable or placed in the public domain (or, in case of a
trade secret, lose its competitive value).
(c) Except
to the extent permitted by Section 4.02(e), or to the extent that
failure to act could not reasonably be expected to have a Material
Adverse Effect, each Grantor shall take all steps to preserve and
protect each item of its Intellectual Property Collateral,
including maintaining the quality of any and all products or
services used or provided in connection with any of the Trademarks,
consistent with the quality of the products and services as of the
date hereof, and taking all steps necessary to ensure that all
licensed users of any of the Trademarks abide by the applicable
license’s terms with respect to the standards of
quality.
(d) Each
Grantor agrees that, should it obtain an ownership or other
interest in any Intellectual Property Collateral after the Closing
Date (the “After-Acquired
Intellectual Property”) (i) the provisions of this
Agreement shall automatically apply thereto, and (ii) any such
After-Acquired Intellectual Property and, in the case of
Trademarks, the goodwill symbolized thereby, shall automatically
become part of the Intellectual Property Collateral subject to the
terms and conditions of this Agreement with respect
thereto.
(e) Notwithstanding
the foregoing provisions of this Section 4.02 or elsewhere in this
Agreement, nothing in this Agreement shall prevent any Grantor from
discontinuing the use or maintenance of any of its Intellectual
Property Collateral, the enforcement of license agreements or the
pursuit of actions against infringers, to the extent permitted by
the Credit Agreement if such Grantor determines in its reasonable
business judgment that such discontinuance is desirable in the
conduct of its business.
(f) Upon
and during the continuance of an Event of Default, each Grantor
shall, if requested by the Collateral Agent, use its commercially
reasonable efforts to obtain all requisite consents or approvals by
the licensor of each Intellectual Property License to effect the
assignment of all such Grantor’s right, title and interest
thereunder to the Collateral Agent or its designee.
17
ARTICLE V
REMEDIES
SECTION
5.01. Remedies Upon Default. Upon the occurrence
and during the continuance of an Event of Default, it is agreed
that the Collateral Agent shall have the right to exercise any and
all rights afforded to a secured party with respect to the Secured
Obligations under this Agreement, the UCC or other applicable law,
and also may (i) require each Grantor to, and each Grantor agrees
that it will at its expense and upon request of the Collateral
Agent forthwith, assemble all or part of the Collateral as directed
by the Collateral Agent and make it available to the Collateral
Agent at a place and time to be designated by the Collateral Agent
that is reasonably convenient to both parties; (ii) occupy any
premises owned or, to the extent lawful and permitted, leased (it
being acknowledged and agreed that the Grantors are not required to
obtain any waiver or consent from any owner of such leased premises
in connection with such occupancy or attempted occupancy) by any of
the Grantors where the Collateral or any part thereof is assembled
or located for a reasonable period in order to effectuate its
rights and remedies hereunder or under law, without obligation to
such Grantor in respect of such occupation; provided that the Collateral
Agent shall provide the applicable Grantor with notice thereof
prior to or promptly after such occupancy; (iii) exercise any and
all rights and remedies of any of the Grantors under or in
connection with the Collateral, or otherwise in respect of the
Collateral; provided that the Collateral
Agent shall provide the applicable Grantor with notice thereof
prior to or promptly after such exercise; (iv) withdraw any and all
cash or other Collateral from any Deposit Account or Securities
Account and apply such cash and other Collateral to the payment of
any and all Secured Obligations in the manner provided in
Section 5.02; (v) subject to the mandatory requirements of
applicable law and the notice requirements described below, sell or
otherwise dispose of all or any part of the Collateral securing the
Secured Obligations at a public or private sale or at any
broker’s board or on any securities exchange, for cash, upon
credit or for future delivery as the Collateral Agent shall deem
appropriate; and (vi) with respect to any Intellectual Property
Collateral, on demand, cause the Security Interest to become an
assignment, transfer and conveyance of any of or all such
Intellectual Property Collateral by the applicable Grantors to the
Collateral Agent, or license or sublicense, whether general,
special or otherwise, and whether on an exclusive or nonexclusive
basis, any such Intellectual Property Collateral throughout the
world on such terms and conditions and in such manner as the
Collateral Agent shall determine, provided, however, that such terms shall
include all terms and restrictions that are customarily required to
ensure the continuing validity and effectiveness of the
Intellectual Property Collateral at issue, such as, without
limitation, notice, quality control and inurement provisions with
regard to trademarks, patent designation provisions with regard to
patents, and copyright notices and restrictions or decompilation
and reverse engineering of copyrighted software, and
confidentiality protections for trade secrets. Each Grantor
acknowledges and recognizes that (a) the Collateral Agent may be
unable to effect a public sale of all or a part of the Collateral
consisting of securities by reason of certain prohibitions
contained in the Securities Act or the securities laws of various
states (the “Blue Sky
Laws”), but may be compelled to resort to one or more
private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire such securities
for their own account, for investment and not with a view to the
distribution or resale thereof, (b) private sales so made may be at
prices and upon other terms less favorable to the seller than if
such securities were sold at public sales, (c) neither the
Collateral Agent nor any other Secured Party has any obligation to
delay sale of any of the Collateral for the period of time
necessary to permit such securities to be registered for public
sale under the Securities Act or the Blue Sky Laws and (d) private
sales made under the foregoing circumstances shall be deemed to
have been made in a commercially reasonable manner. To the maximum
extent permitted by applicable law, each Grantor hereby waives any
claim against any Secured Party arising because the price at which
any Collateral may have been sold at a private sale was less than
the price that might have been obtained at a public sale, even if
the Collateral Agent accepts the first offer received and does not
offer such Collateral to more than one offeree. Upon consummation
of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any sale of
Collateral shall hold the property sold absolutely, free from any
claim or right on the part of any Grantor, and each Grantor hereby
waives (to the extent permitted by applicable law) all rights of
redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now
existing or hereafter enacted.
18
The
Collateral Agent shall give the applicable Grantors 10 days’
written notice (which each Grantor agrees is reasonable notice
within the meaning of Section 9-611 of the UCC or its
equivalent in other jurisdictions) of the Collateral Agent’s
intention to make any sale of Collateral. Such notice, in the case
of a public sale, shall state the time and place for such sale and,
in the case of a sale at a broker’s board or on a securities
exchange, shall state the board or exchange at which such sale is
to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent
may fix and state in the notice (if any) of such sale. The
Collateral Agent may conduct one or more going out of business
sales, in the Collateral Agent’s own right or by one or more
agents and contractors. Such sale(s) may be conducted upon any
premises owned, leased, or occupied by any Grantor. The Collateral
Agent and any such agent or contractor, in conjunction with any
such sale, may augment the Inventory with other goods (all of which
other goods shall remain the sole property of the Collateral Agent
or such agent or contractor). Any amounts realized from the sale of
such goods which constitute augmentations to the Inventory (net of
an allocable share of the costs and expenses incurred in their
disposition) shall be the sole property of the Collateral Agent or
such agent or contractor and neither any Grantor nor any Person
claiming under or in right of any Grantor shall have any interest
therein. At any such sale, the Collateral, or portion thereof, to
be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be obligated
to make any sale of any Collateral if it shall determine not to do
so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same
to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be
made at the time and place to which the same was so adjourned. In
case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be
retained by the Collateral Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Collateral Agent shall
not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may be sold again upon
like notice. In the event of a foreclosure, exercise of a power of
sale or a similar enforcement action by the Collateral Agent on any
of the Collateral pursuant to a public or private sale or other
disposition (including pursuant to Section 363(k), Section
1129(b)(2)(a)(ii) or any other applicable section of the Bankruptcy
Code, any analogous Debtor Relief Laws or any law relating to the
granting or perfection of security interests), the Collateral Agent
(or any Lender, except with respect to a “credit bid”
pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or
any other applicable section of the Bankruptcy Code, any analogous
Debtor Relief Laws or any law relating to the granting or
perfection of security interests) may be the purchaser or licensor
of any or all of such Collateral at any such sale or other
disposition and the Collateral Agent, as agent for and
representative of the Secured Parties (but not any Lender or
Lenders in its or their respective individual capacities) shall be
entitled, upon instructions from the Requisite Lenders and in
accordance with Section 9.8(b) of the Credit Agreement, for
the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold or
licensed at any such sale or other disposition, to use and apply
any of the Secured Obligations as a credit on account of the
purchase price for any Collateral payable by the Collateral Agent
at such sale or other disposition. For purposes of determining the
Grantors’ rights in the Collateral, a written agreement to
purchase the Collateral or any portion thereof shall be treated as
a sale thereof, the Collateral Agent shall be free to carry out
such sale pursuant to such agreement and no Grantor shall be
entitled to the return of the Collateral or any portion thereof
subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of
Default shall have been remedied and the Secured Obligations paid
in full, provided,
however, that such
terms shall include terms and restrictions that are customarily
required to ensure the continuing validity and effectiveness of the
Intellectual Property Collateral at issue, such as, without
limitation, quality control and inurement provisions with regard to
Trademarks, patent designation provisions with regard to patents,
and copyright notices and restrictions or decompilation and reverse
engineering of copyrighted software, and protecting the
confidentiality of trade secrets. As an alternative to exercising
the power of sale herein conferred upon it, the Collateral Agent
may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court
appointed receiver. Any sale pursuant to the provisions of this
Section 5.01 shall be deemed to conform to the commercially
reasonable standards as provided in Section 9-610(b) of the
UCC or its equivalent in other jurisdictions.
19
SECTION
5.02. Application of Proceeds. Subject to any
Permitted Intercreditor Agreement then in effect, the Collateral
Agent shall apply the proceeds of any collection or sale of
Collateral, including any Collateral consisting of cash, as
follows:
FIRST,
to the payment of all costs and expenses incurred by the Collateral
Agent or the Administrative Agent in connection with such
collection, sale, foreclosure or realization or otherwise in
connection with this Agreement, any other Credit Document or any of
the Secured Obligations, including all court costs and the fees and
expenses of its agents and legal counsel, the repayment of all
advances made by the Collateral Agent or the Administrative Agent
hereunder or under any other Credit Document on behalf of any
Grantor and any other costs or expenses incurred in connection with
the exercise of any right or remedy hereunder or under any other
Credit Document;
SECOND,
to the payment in full of the Secured Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Secured Obligations owed to them
on the date of any such distribution); and
THIRD,
to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The
Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance
with this Agreement. Upon any sale of Collateral by the Collateral
Agent (including pursuant to a power of sale granted by statute or
under a judicial proceeding), the receipt of the Collateral Agent
or of the officer making the sale shall be a sufficient discharge
to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the
Collateral Agent or such officer or be answerable in any way for
the misapplication thereof. It is understood and agreed that the
Grantors shall remain jointly and severally liable to the extent of
any deficiency between the amount of the proceeds of the Collateral
and the aggregate amount of the Secured Obligations, including any
attorney’s fees and other expenses incurred by the Collateral
Agent or any other Secured Party to collect such
deficiencies.
ARTICLE VI
MISCELLANEOUS
SECTION
6.01. Notices. All
communications and notices hereunder shall (except as otherwise
expressly permitted herein) be in writing and given as provided in
Section 10.1 of the Credit Agreement. All communications and
notices hereunder to a Grantor other than the Borrower shall be
given to it in care of the Borrower.
20
SECTION
6.02. Waivers; Amendment. (a) No failure or
delay on the part of any Agent, any Arranger or any Lender in
exercising any power, right or privilege hereunder or under any
other Credit Document shall impair such power, right or privilege
or be construed to be a waiver thereof or of any Default or Event
of Default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege, or any abandonment
or discontinuance of steps to enforce such power, right or
privilege, preclude any other or further exercise thereof or the
exercise of any other power, right or privilege. The powers,
rights, privileges and remedies of the Agents, the Arrangers and
the Lenders hereunder and under the other Credit Documents are
cumulative and shall be in addition to and independent of all
powers, rights, privileges and remedies they would otherwise have.
Without limiting the generality of the foregoing, the execution and
delivery of this Agreement or any other Credit Document or the
making of any Loan shall not be construed as a waiver of any
Default or Event of Default, regardless of whether any Agent, any
Arranger or any Lender may have had notice or knowledge of such
Default or Event of Default at the time. No waiver of any provision
of this Agreement or consent to any departure by any Grantor
therefrom shall in any event be effective unless the same shall be
permitted by Section 6.02(b), and then such waiver or consent shall
be effective only in the specific instance and for the purpose for
which given
(b) Subject
to any Permitted Intercreditor Agreement then in effect, neither
this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Grantor or Grantors
with respect to which such waiver, amendment or modification is to
apply, subject to any consent required in accordance with
Section 10.5 of the Credit Agreement.
SECTION
6.03. Collateral Agent’s Fees and Expenses;
Indemnification. (a) The parties
hereto agree that the Collateral Agent shall be entitled to
reimbursement of its reasonable and documented out-of-pocket
expenses incurred hereunder as provided in Section 10.2 of the
Credit Agreement.
(b) Without
limitation of its indemnification obligations under the other
Credit Documents, each Grantor, jointly and severally, agrees to
indemnify the Collateral Agent and the other Indemnitees against,
and hold each Indemnitee harmless from any and all Indemnified
Liabilities incurred by or asserted against any such Indemnitee to
the extent such Grantor would be required to do so pursuant to
Section 10.3 of the Credit Agreement.
(c) Any
such amounts payable as provided hereunder shall be additional
Secured Obligations secured hereby and by the other Collateral
Documents. The provisions of this Section 6.03 shall remain
operative and in full force and effect regardless of the
termination of this Agreement or any other Credit Document, the
consummation of the transactions contemplated hereby, the repayment
of any of the Secured Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any
other Credit Document, or any investigation made by or on behalf of
the Collateral Agent or any other Secured Party. All amounts due
under this Section 6.03 shall be payable promptly after
written demand therefor.
21
(d) To
the extent permitted by applicable law, no Grantor shall assert,
and each Grantor hereby waives, any claim against any Agent, any
Arranger, any Lender or any Related Party of any of the foregoing,
on any theory of liability, for indirect, consequential, special or
punitive damages (as opposed to direct or actual damages) (whether
or not the claim therefor is based on contract, tort or any duty
imposed by any applicable legal requirement) arising out of, in
connection with, as a result of, or in any way related to this
Agreement or any other Credit Document or any agreement or
instrument contemplated hereby or thereby or referred to herein or
therein, the transactions contemplated hereby or thereby, the
syndication of the credit facilities provided for in the Credit
Agreement, any Loan or the use of the proceeds thereof or any act
or omission or event occurring in connection therewith, and each
Grantor hereby waives, releases and agrees not to xxx upon any such
claim for indirect, consequential, special or punitive damages,
whether or not accrued and whether or not known or suspected to
exist in its favor.
(e) Each
Grantor agrees that none of any Agent, any Arranger, any Lender or
any Related Party of any of the foregoing will have any liability
to any Grantor or any Person asserting claims on behalf of or in
right of any Grantor or any other Person in connection with or as a
result of this Agreement or any other Credit Document or any
agreement or instrument contemplated hereby or thereby or referred
to herein or therein, the transactions contemplated hereby or
thereby, any Loan or the use of the proceeds thereof or any act or
omission or event occurring in connection therewith except (but
subject to Section 6.03(d)), in the case of any Grantor, to
the extent that any losses, claims, damages, liabilities or
expenses have been found by a final, non-appealable judgment of a
court of competent jurisdiction to have resulted from (i) the
gross negligence or willful misconduct of such Agent, such Arranger
or such Lender or its Related Parties in performing its express
obligations under this Agreement or any other Credit Document or
(ii) a material breach in bad faith by such Agent, Arranger or
Lender or its Related Parties of its express obligations under the
Credit Agreement.
SECTION
6.04. Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists.
SECTION
6.05. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Credit
Parties in this Agreement and in the certificates or other
documents delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the
Agents, the Arrangers and the Lenders and shall survive the
execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any Agent, any
Arranger and any Lender or on its behalf and notwithstanding that
any Agent, any Arranger or any Lender may have had notice or
knowledge of any Default or Event of Default or incorrect
representation or warranty at the time this Agreement is executed
and delivered or any credit is extended under the Credit Agreement.
Such covenants and agreements made by the Credit Parties shall
continue in full force and effect as long as the principal of or
any accrued interest on any Loan or any fee or any other amount
payable under the Credit Agreement or any other Credit Document is
outstanding and unpaid and so long as the Commitments have not
expired or terminated.
SECTION
6.06. Counterparts; Effectiveness; Several
Agreement. This Agreement
may be executed in any number of counterparts, each of which when
so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page
of this Agreement by facsimile or in electronic format (i.e.,
“pdf” or “tif”) shall be effective as
delivery of a manually executed counterpart of this Agreement. This
Agreement shall become effective as to any Grantor when a
counterpart hereof executed on behalf of such Grantor shall have
been delivered to the Collateral Agent and a counterpart hereof
shall have been executed on behalf of the Collateral Agent, and
thereafter shall be binding upon such Grantor and the Collateral
Agent and their respective permitted successors and assigns, and
shall inure to the benefit of such Grantor, the Collateral Agent
and the other Secured Parties and their respective permitted
successors and assigns, except that no Grantor shall have the right
to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or
transfer shall be void) except as expressly contemplated by this
Agreement or the Credit Agreement. This Agreement shall be
construed as a separate agreement with respect to each Grantor and
may be amended, modified, supplemented, waived or released with
respect to any Grantor without the approval of any other Grantor
and without affecting the obligations of any other Grantor
hereunder.
22
SECTION
6.07. Severability. In case any
provision in or obligation under this Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
SECTION
6.08. Set-Off. In addition to
any rights now or hereafter granted under applicable law and not by
way of limitation of any such rights, upon the occurrence and
during the continuance of any Event of Default each Lender is
hereby authorized by each Grantor at any time or from time to time,
without notice to any Grantor, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including Indebtedness
evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the
account of any Grantor against and on account of the obligations
and liabilities of any Grantor to such Lender hereunder and under
the other Credit Documents, including all claims of any nature or
description arising out of or connected hereto or thereto,
irrespective of whether or not (a) such Lender shall have made any
demand hereunder or under the other Credit Documents or
(b) the principal of or the interest on the Loans or any other
amounts due hereunder or under any other Credit Document shall have
become due and payable and although such obligations and
liabilities, or any of them, may be contingent or
unmatured.
SECTION
6.09. APPLICABLE LAW. THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING
ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE
SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO
POST-JUDGMENT INTEREST) SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT
WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF
THE STATE OF NEW YORK.
SECTION
6.10. CONSENT TO JURISDICTION. SUBJECT TO CLAUSE
(E) BELOW, ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY
HERETO ARISING OUT OF OR RELATING HERETO OR ANY OTHER COLLATERAL
DOCUMENT, OR ANY OF THE SECURED OBLIGATIONS, SHALL BE BROUGHT
EXCLUSIVELY IN ANY FEDERAL COURT OF THE UNITED STATES OF AMERICA
SITTING IN THE BOROUGH OF MANHATTAN OR, IF THAT COURT DOES NOT HAVE
SUBJECT MATTER JURISDICTION, IN ANY STATE COURT LOCATED IN THE CITY
AND COUNTY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT,
EACH PARTY HERETO, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY
THE EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS (SUBJECT TO
CLAUSE (E) BELOW); (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE PARTY AT ITS ADDRESS PROVIDED
IN ACCORDANCE WITH SECTION 6.01; (D) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER THE APPLICABLE GRANTOR IN ANY SUCH PROCEEDING IN
ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; AND (E) AGREES THAT THE AGENTS, THE
ARRANGER AND THE LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY
GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH
THE EXERCISE OF ANY RIGHTS HEREUNDER OR UNDER ANY OTHER COLLATERAL
DOCUMENT OR ANY EXERCISE OF REMEDIES IN RESPECT OF COLLATERAL OR
THE ENFORCEMENT OF ANY JUDGMENT, AND HEREBY SUBMITS TO THE
JURISDICTION OF, AND CONSENTS TO VENUE IN, ANY SUCH
COURT.
23
SECTION
6.11. WAIVER OF JURY TRIAL. EACH OF THE
PARTIES HERETO HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR
UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON
THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN
ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 6.11 AND EXECUTED BY EACH OF THE PARTIES
HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER
CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
SECTION
6.12. Headings. Article and
Section headings herein are included herein for convenience of
reference only and shall not constitute a part hereof for any other
purpose or be given any substantive effect.
SECTION
6.13. Marshalling; Payments Set Aside
. None
of the Agents, the Arrangers or the Lenders shall be under any
obligation to marshal any assets in favor of any Grantor or any
other Person or against or in payment of any or all of the Secured
Obligations. To the extent that any Grantor makes a payment or
payments to any Agent, any Arranger or any Lender (or to the
Administrative Agent or the Collateral Agent, on behalf of any
Agent, any Arranger or any Lender), or any Agent, any Arranger or
any Lender enforces any security interests or exercises any right
of set-off, and such payment or payments or the proceeds of such
enforcement or set-off or any part thereof are subsequently
invalidated, declared to be fraudulent, preferential or at
undervalue, set aside and/or required to be repaid to a trustee,
receiver or any other party under any Debtor Relief Laws, any other
state or federal law, common law or any equitable cause, then, to
the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and
continued in full force and effect as if such payment or payments
had not been made or such enforcement or set-off had not
occurred.
SECTION
6.14. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the Security Interest, the grant of a
security interest in the Pledged Collateral and all obligations of
each Grantor hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the
Credit Agreement, any other Credit Document, any agreement with
respect to any of the Secured Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all
or any of the Secured Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any
other Credit Document or any other agreement or instrument, (c) any
exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent
under or departure from any guarantee, securing or guaranteeing all
or any of the Secured Obligations or (d) subject only to
termination of a Grantor’s obligations hereunder in
accordance with the terms of Section 9.8 of the Credit Agreement,
but without prejudice to reinstatement rights under Section 7.9 of
the Credit Agreement, any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor
in respect of the Secured Obligations or this
Agreement.
24
SECTION
6.15. Termination or Release. (a) This
Agreement, the Security Interest and all other security interests
granted hereby shall terminate with respect to all Secured
Obligations when all Secured Obligations (excluding contingent
obligations as to which no claim has been made) have been paid in
full and all Commitments have terminated.
(b) A
Guarantor Subsidiary shall automatically be released from its
obligations hereunder and the Security Interest in the Collateral
of such Guarantor Subsidiary shall be automatically released in the
circumstances set forth in Section 9.8(d) of the Credit
Agreement.
(c) The
Security Interest in any Collateral shall be automatically released
in the circumstances set forth in Section 9.8(d) of the Credit
Agreement.
(d) In
connection with any termination or release pursuant to
Section 6.15(a), 6.15(b) or 6.15(c), the Collateral Agent
shall promptly (i) execute and deliver to any Grantor, at such
Grantor’s expense, all documents that such Grantor shall
reasonably request to evidence such termination or release and (ii)
subject to the provisions of any Permitted Intercreditor Agreement,
return or cause to be returned to such Grantor all Collateral that
is subject to such release and is held or controlled by the
Collateral Agent. Any execution and delivery of documents, or
performing of other actions, pursuant to this Section 6.15
shall be without recourse to or warranty by the Collateral
Agent.
(e) At
any time that any Grantor desires that the Collateral Agent take
any action described in Section 6.15(d), such Grantor shall,
upon request of the Collateral Agent, deliver to the Collateral
Agent a certificate of an Authorized Officer of the Borrower
certifying that the release of the applicable Collateral is
permitted pursuant to Section 6.15(a), 6.15(b) or 6.15(c). The
Collateral Agent shall have no liability whatsoever to any Secured
Party as the result of any release of any Collateral by it as
permitted (or which the Collateral Agent in good faith believes to
be permitted) by this Section 6.15.
SECTION
6.16. Additional Grantors. Pursuant to
Section 5.10 of the Credit Agreement, certain Restricted
Subsidiaries of the Borrower may or are required to enter in this
Agreement from time to time as Grantors. Upon execution and
delivery by the Collateral Agent and a Restricted Subsidiary of a
Pledge and Security Agreement Supplement, such Restricted
Subsidiary shall become a Grantor hereunder with the same force and
effect as if originally named as a Grantor herein. The execution
and delivery of any Pledge and Security Agreement Supplement shall
not require the consent of any other Grantor hereunder. The rights
and obligations of each Grantor hereunder shall remain in full
force and effect notwithstanding the addition of any new Grantor as
a party to this Agreement.
25
SECTION
6.17. Collateral Agent Appointed
Attorney-in-Fact.
Each Grantor hereby appoints the Collateral Agent the true and
lawful attorney-in-fact of such Grantor for the purpose of carrying
out the provisions of this Agreement and taking any action and
executing any instrument that the Collateral Agent may deem
necessary or advisable to accomplish the purposes hereof at any
time after the occurrence and during the continuance of an Event of
Default, which appointment is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, the
Collateral Agent shall have the right, upon the occurrence and
during the continuance of an Event of Default, with full power of
substitution either in the Collateral Agent’s name or in the
name of such Grantor: (a) to receive, endorse, assign and/or
deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Collateral or
any part thereof; (b) to demand, collect, receive payment of, give
receipt for and give discharges and releases of all or any of the
Collateral; (c) to sign the name of any Grantor on any invoice or
xxxx of lading relating to any of the Collateral; (d) to send
verifications of Accounts or Payment Intangibles to any Account
Debtor; (e) to commence and prosecute any and all suits, actions or
proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the
Collateral or to enforce any rights in respect of any Collateral;
(f) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; (g)
to notify, or to require any Grantor to notify, Account Debtors to
make payment directly to the Collateral Agent or to a Collateral
Account and adjust, settle or compromise the amount of payment of
any Account or Payment Intangible; (h) to make, settle and adjust
claims in respect of Collateral under policies of insurance and to
endorse the name of such Grantor on any check, draft, instrument or
any other item of payment with respect to the proceeds of such
policies of insurance and for making all determinations and
decisions with respect thereto; and (i) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise
deal with all or any of the Collateral, and to do all other acts
and things necessary to carry out the purposes of this Agreement,
as fully and completely as though the Collateral Agent were the
absolute owner of the Collateral for all purposes; provided that nothing herein
contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the
Collateral Agent, or to present or file any claim or notice, or to
take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually
received as a result of the exercise of the powers granted to them
herein, and none of the Collateral Agent, any other Secured Party
or any Related Party of any of the foregoing shall be responsible
to any Grantor for any act or failure to act hereunder, except for
its own gross negligence or willful misconduct or a material breach
in bad faith by it of its express obligations under this Agreement,
in each case, as determined by the final non-appealable judgment of
a court of competent jurisdiction. Notwithstanding anything to the
contrary contained herein or in any other Credit Document, neither
the Administrative Agent nor the Collateral Agent shall have any
responsibility for the preparing, recording, filing, re-recording
or re-filing of any financing statements (amendments or
continuations) or other instruments in any public
office.
SECTION
6.18. General Authority of the Collateral Agent. By acceptance of
the benefits of this Agreement and any other Collateral Documents,
each Secured Party (whether or not a signatory hereto) shall be
deemed irrevocably (a) to consent to the appointment of the
Collateral Agent as its agent hereunder and under such other
Collateral Documents, (b) to confirm that the Collateral Agent
shall have the authority to act as the exclusive agent of such
Secured Party for the enforcement of any provisions of this
Agreement and such other Collateral Documents against any Grantor,
the exercise of remedies hereunder or thereunder and the giving or
withholding of any consent or approval hereunder or thereunder
relating to any Collateral or any Grantor’s obligations with
respect thereto, (c) to agree that it shall not take any action to
enforce any provisions of this Agreement or any other Collateral
Document against any Grantor, to exercise any remedy hereunder or
thereunder or to give any consents or approvals hereunder or
thereunder except as expressly provided in this Agreement or any
other Collateral Document and (d) to agree to be bound by the terms
of this Agreement, any other Collateral Documents and any Permitted
Intercreditor Agreement then in effect. BY ACCEPTING THE BENEFITS
OF THIS AGREEMENT AND THE SECURITY INTERESTS CREATED HEREBY, EACH
SECURED PARTY ACKNOWLEDGES THE PROVISIONS OF SECTION 9 OF THE
CREDIT AGREEMENT, INCLUDING THE RIGHTS, POWERS, PRIVILEGES,
PROTECTIONS, INDEMNITIES AND IMMUNITIES OF THE AGENTS, AND AGREES
TO BE BOUND BY SUCH PROVISIONS AS FULLY AS IF THEY WERE SET FORTH
HEREIN.
26
SECTION
6.19. Recourse. This Agreement is
made with full recourse to each Grantor and pursuant to and upon
all the warranties, representations, covenants and agreements on
the part of such Grantor contained herein, in the Credit Agreement
and the other Credit Documents and otherwise in writing in
connection herewith or therewith, with respect to the Secured
Obligations of each applicable Secured Party. It is the desire and
intent of each Grantor and each Secured Party that this Agreement
shall be enforced against each Grantor to the fullest extent
permissible under the laws applied in each jurisdiction in which
enforcement is sought.
SECTION
6.20. Mortgages. In the event that
any of the Collateral hereunder is also subject to a valid and
enforceable Lien under the terms of a Mortgage and the terms
thereof are inconsistent with the terms of this Agreement, then
with respect to such Collateral, the terms of such Mortgage shall
control in the case of Fixtures and Real Estate Asset leases,
letting and licenses of, and contracts, and agreements relating to
the lease of, Real Estate Assets, and the terms of this Agreement
shall control in the case of all other Collateral.
SECTION
6.21. Permitted Intercreditor Agreements. (a)
Notwithstanding anything to the contrary herein, the Liens granted
to the Collateral Agent under this Agreement and the exercise of
the rights and remedies of the Collateral Agent hereunder and under
any of the other Collateral Documents are subject to the provisions
of the Intercreditor Agreement and any other Permitted
Intercreditor Agreement then in effect. Notwithstanding anything to
the contrary herein, the Collateral Agent acknowledges and agrees
that no Grantor shall be required to take or refrain from taking
any action at the request of the Collateral Agent with respect to
the Collateral if such action or inaction would be inconsistent
with the terms of any Permitted Intercreditor Agreement then in
effect. In the event of any conflict or inconsistency between the
provisions of the Intercreditor Agreement or any other Permitted
Intercreditor Agreement then in effect and this Agreement, the
provisions of the Intercreditor Agreement or such other Permitted
Intercreditor Agreement, as applicable, shall control.
(b) Notwithstanding
anything to the contrary herein but subject to any Permitted
Intercreditor Agreement then in effect, in the event that any
Permitted Section 6.1(e) Indebtedness Document or any other credit
agreement, indenture or other agreement or instrument evidencing or
governing the rights of the holders of any Permitted Credit
Agreement Refinancing Indebtedness or any Permitted Incremental
Equivalent Indebtedness provides for the grant of a security
interest or pledge over the assets of any Grantor and such assets
do not otherwise constitute Collateral under this Agreement or any
other Credit Document, such Grantor shall (i) promptly grant a
security interest in or pledge such assets to secure the Secured
Obligations, (ii) promptly take any actions necessary to perfect
such security interest or pledge to the extent set forth in such
Permitted Section 6.1(e) Indebtedness Document or such other credit
agreement, indenture or other agreement or instrument evidencing or
governing the rights of the holders of any Permitted Credit
Agreement Refinancing Indebtedness or any Permitted Incremental
Equivalent Indebtedness and (iii) take all other steps reasonably
requested by the Collateral Agent in connection with the
foregoing.
(c) Nothing
contained in any Permitted Intercreditor Agreement shall be deemed
to modify any of the provisions of this Agreement, which, as among
the Grantors and the Collateral Agent, shall remain in full force
and effect in accordance with its terms.
27
SECTION
6.22. Regulatory Matters. (a)
Notwithstanding anything in any Credit Document to the contrary,
the Collateral Agent, on behalf of the Secured Parties, agrees that
to the extent prior FCC or State PUC approval is required pursuant
to Communications Laws for (i) the operation and effectiveness of
any right or remedy hereunder or under any other Collateral
Document or (ii) taking any action that may be taken by the
Collateral Agent hereunder or under the other Collateral Documents,
such right, remedy or actions will be subject to any such prior FCC
or State PUC, as applicable, approval having been obtained by or in
favor of the Collateral Agent, on behalf of the Secured Parties.
Notwithstanding anything herein to the contrary, the Collateral
Agent, on behalf of the Secured Parties, acknowledges that, to the
extent required by the FCC or any applicable State PUC, the voting
rights in the Pledged Securities, as well as de jure, de facto and
negative control over all FCC or State PUC authorizations, shall
remain with the Grantors even if an Event of Default has occurred
and is continuing until the FCC and/or State PUC(s), as applicable,
shall have given its prior consent to the exercise of
securityholder rights by a purchaser at a public or private sale of
the Pledged Securities or to the exercise of such rights by a
receiver, trustee, conservator or other agent duly appointed in
accordance with the applicable law. The Grantors shall, upon the
occurrence and during the continuance of an Event of Default, at
the Collateral Agent’s request, file or cause to be filed
such applications for approval and shall take such other actions
reasonably required by the Collateral Agent to obtain each such FCC
or State PUC approval or consent as is necessary to transfer
ownership and control to the Collateral Agent, on behalf of the
Secured Parties, or their successors, assigns or designees, of the
Licenses held by the Grantors. To enforce the provisions of this
Section 6.22, the Collateral Agent is empowered to request the
appointment of a receiver from any court of competent jurisdiction.
Such receiver shall be instructed to seek from the FCC and every
applicable State PUC an involuntary transfer of control of any such
License for the purpose of seeking a bona fide purchaser to whom
control will ultimately be transferred. Upon the occurrence and
during the continuance of an Event of Default, at the Collateral
Agent’s request, the Grantors shall further use their
reasonable best efforts to assist in obtaining approval of the FCC
and/or applicable State PUC(s), if required, for any action or
transactions contemplated hereby, including the preparation,
execution and filing with the FCC and/or applicable State PUC(s) of
the assignor’s or transferor’s portion of any
application for consent to the assignment of any License or
transfer of control, or notice of such assignment or transfer, as
applicable, necessary or appropriate under the FCC’s and/or
any applicable State PUC(s)’ rules and regulations for
approval of the transfer or assignment of any portion of the
Collateral, together with any License or other
authorization.
(b) The
Grantors acknowledge that the assignment or transfer of Licenses is
integral to the Secured Parties’ realization of the value of
the Collateral, that there is no adequate remedy at law for failure
by the Grantors to comply with the provisions of this Section 6.22
and that such failure would not be adequately compensable in
damages, and therefore agree that this Section 6.22 may be
specifically enforced.
(c) Notwithstanding
anything in this Agreement or in any other Credit Document to the
contrary, neither the Collateral Agent nor any other Secured Party
shall, without first obtaining the approval of the FCC and/or any
applicable State PUC (where required), take any action hereunder or
under any other Collateral Document that would constitute or result
in any assignment of a License, change of material control or
ownership of any Grantor, or any assignment or transfer of the
material operating assets of any Grantor if such assignment, change
of material control or ownership or assignment or transfer of
material operating assets would require the approval of the FCC or
any such applicable State PUC under applicable law (including the
FCC’s and any such applicable State PUC’s rules and
regulations).
[Remainder
of page intentionally left blank]
28
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the
day and year first above written.
|
|
FUSION
NBS ACQUISITION CORP.,
FUSION,
LLC,
FUSION
BCHI ACQUISITION LLC,
BIRCH
COMMUNICATIONS, LLC,
CBEYOND,
INC.,
CBEYOND
COMMUNICATIONS, LLC,
BIRCH
MANAGEMENT LLC
BIRCH
TELECOM LLC,
BIRCH
TEXAS HOLDINGS, INC.,
BIRCH
TELECOM OF KANSAS, LLC,
BIRCH
TELECOM OF OKLAHOMA, LLC,
BIRCH
TELECOM OF MISSOURI, LLC,
BIRCH
TELECOM OF TEXAS LTD., L.L.P.,
BIRCAN
HOLDINGS, LLC
PRIMUS
HOLDINGS, INC.
FUSION
MPHC ACQUISITION CORP., as Grantors
|
|
|
By:
|
|
/s/
Xxxxx Xxxxx
|
|
|
|
Name: Xxxxx
Xxxxx
|
|
|
|
Title: Executive
Vice President, Chief Financial Officer and Principal Accounting
Officer
|
|
|
WILMINGTON
TRUST, NATIONAL ASSOCIATION, as Collateral Agent
|
|
|
|
By:
|
/s/
Xxxxx Xxxxxxxx
|
|
|
|
Name:
Xxxxx Xxxxxxxx
Title:
Banking Officer
|
Schedule
I
Pledged
Equity; Pledged Debt
Pledged
Equity:
|
Credit Party
|
Issuer
|
Type of Organization
|
Number of Shares/
Interests Owned
|
Total Shares/Interests Outstanding
|
Percentage of Interest Pledged
|
Certificate No. (if uncertificated,
please indicate so)
|
|
Fusion
BCHI Acquisition LLC
|
Limited
Liability Company
|
N/A
|
N/A
|
100%
|
Uncertificated
|
|
|
Fusion
NBS Acquisition Corp.
|
C
corp.
|
100
|
1
|
100%
|
1
|
|
|
Fusion
NBS Acquisition Corp.
|
Fusion
LLC
|
Limited
Liability Company
|
1
Xxxx
|
0
Xxxx
|
000%
|
Uncertificated
|
|
Fusion
BCHI Acquisition LLC
|
Birch
Communications, LLC
|
Limited
Liability Company
|
N/A
|
N/A
|
100%
|
Uncertificated
|
|
Birch
Communications, LLC
|
Cbeyond,
Inc.
|
C
corp.
|
100
|
100
|
100%
|
2
|
|
Cbeyond,
Inc.
|
Cbeyond
Communications, LLC
|
Limited
Liability Company
|
N/A
|
N/A
|
100%
|
Uncertificated
|
|
Birch
Communications, LLC
|
Birch
Telecom, LLC
|
Limited
Liability Company
|
N/A
|
N/A
|
100%
|
Uncertificated
|
|
Birch
Communications, LLC
|
Birch
Texas Holdings, Inc.
|
C
corp.
|
100
|
100
|
100%
|
2
|
|
Birch
Communications, LLC
|
Birch
Telecom of Kansas, LLC
|
Limited
Liability Company
|
N/A
|
N/A
|
100%
|
Uncertificated
|
|
Birch
Communications, LLC
|
Birch
Telecom of Oklahoma, LLC
|
Limited
Liability Company
|
N/A
|
N/A
|
100%
|
uncertificated
|
|
Birch
Communications, LLC
|
Birch
Telecom of Missouri, LLC
|
Limited
Liability Company
|
N/A
|
N/A
|
100%
|
Uncertificated
|
|
Birch
Communications, LLC
|
Primus
Holdings, Inc.
|
C
corp.
|
100
|
100
|
100%
|
2
|
|
Birch
Communications, LLC
Is
the 99% limited partner and Birch Texas Holdings, Inc. is the
General Partner
|
Birch
Telecom of Texas Ltd., L.L.P.
|
Limited
Liability Partnership
|
N/A
|
N/A
|
100%
|
Uncertificated
|
|
Birch
Communications, LLC
|
Bircan
Holdings, LLC
|
Limited
Liability Company
|
N/A
|
N/A
|
100%
|
Uncertificated
|
|
Primus
Holdings, Inc.
|
Primus
Management ULC [Not a Credit
Party]
|
Unlimited Liability
Company
|
100
|
100
|
65%
|
C-2
C-3
|
|
Birch
Communications, LLC
|
Birch
Management LLC
|
Limited
Liability Company
|
N/A
|
N/A
|
100%
|
Uncertificated
|
|
Fusion
MPHC Acquisition Corp.
|
C
corp.
|
100
|
100
|
100%
|
1
|
Pledged
Debt:
|
Credit Party
|
Debtor
|
Type of Instrument
|
Outstanding Principal Amount
|
|
All
Credit Parties
|
All
credit parties
Fusion
Global Services, LLC (to be renamed)
Vector
Fusion Holdings (Cayman) Ltd.
|
Intercompany
note
Secured
Note
Unsecured
Note
|
N/A
$613,748.71
$25,000,000
|
Schedule
II
Commercial
Tort Claims
None.
Schedule
III
Intellectual
Property
I.
Copyrights/Copyright Applications
|
Registered
Owner
|
Copyright
|
Registration/Application
No.
|
Application
Date/
Registration
Date
|
Expiration
Date
|
|
None.
|
|
|
|
|
|
|
|
|
|
|
II.
Exclusive Copyright Licenses (where a Credit Party is a
licensee)
|
Licensee
|
Licensor
|
Title
|
Registration
Number
|
Expiration
Date
|
|
None.
|
|
|
|
|
|
|
|
|
|
|
III.
Patents/Patent Applications
|
Registered
Owner
|
Patent
|
Application
No./Registration No.
|
Application
Date/
Registration
Date
|
Expiration
Date
|
|
Cbeyond
Communications, LLC
|
Client
Application
|
12369185
/ 8219652
|
02/11/2009/
07/10/2012
|
N/A
|
|
Cbeyond
Communications, LLC
|
Data
Storage Testing
|
12493546
/ 9697210
|
06/29/2009/
07/04/2017
|
N/A
|
|
Primus
Holdings, Inc.
|
Call
Screening System and Method
|
2597377
/2,597,377 (Canada)
|
08/15/2007/
11/16/2010
|
N/A
|
|
Primus
Holdings, Inc.
|
Call
Screening System and Method
|
12/673,377
/ 8577002 (US)
|
02/18/2011/
11/05/2013
|
N/A
|
IV.
Trademarks/Trademark Applications - USA
|
Registered
Owner
|
Trademark
|
Registration
No.
|
Registration
Date
|
Next
Renewal Date
|
|
Fusion
Telecommunications International, Inc.
|
“Clear
Connections in the Cloud”
|
4,775,318
|
July
21, 2015
|
July
21, 2021
|
|
PingTone
Communications, Inc.
|
“PingTone
Communications”
|
2,880,663
|
September
7, 2004
|
September
7, 2024
|
|
Apptix,
Inc.
|
“Apptix”
|
4,054,446
|
November
15, 2011
|
November
15, 2021
|
|
Apptix,
Inc.
|
“Cloud
Alliance Network & Design”
|
4,780,287
|
July
28, 2015
|
July
28, 2025
|
|
Apptix,
Inc.
|
“Cloud
Alliance Network & Design”
|
4,780,288
|
July
28, 2015
|
July
28, 2025
|
|
Apptix,
Inc.
|
“Cloud
Alliance Network & Design”
|
4,861,836
|
September
15, 2015
|
December
1, 2025
|
|
Apptix,
Inc.
|
“Mailstreet”
|
2,840,397
|
May 11,
2004
|
May 11,
2024
|
|
Apptix,
Inc.
|
“Mailstreet”
|
4,054,447
|
November
15, 2011
|
November
15, 2021
|
|
Bircan
Management ULC
|
“Telegroup”
|
2048650
|
April
1, 1997
|
Not
renewed--Will be cancelled
|
|
Birch
Communications, LLC
|
“Econsole”
|
86/081,954
4745290
|
May 26,
2015
|
May 26,
2025
|
|
Birch
Telecom, LLC
|
“B
Birch and design”
|
4826853
|
October
6, 2015
|
October
6, 2025
|
|
Birch
Telecom, LLC
|
“Birch”
|
2467503
|
July
10, 2001
|
July
10, 2021
|
|
Birch
Telecom, LLC
|
“Birch
Branch Out”
|
4261286
|
December
18, 2012
|
December
18, 2022
|
|
Birch
Telecom, LLC
|
“Birch
Communications and design”
|
3549607
|
December
23, 2008
|
December
23, 2018
|
|
Birch
Telecom, LLC
|
“Birch
leaf logo”
|
N/A
|
Not
registered
|
N/A
|
|
Birch
Telecom, LLC
|
“Birch
Power Merchant”
|
4397170
|
September
3, 2013
|
September
3, 2023
|
|
Birch
Telecom, LLC
|
“Birch
Telecom”
|
2186707
|
September
1, 1998
|
September
1, 2018
|
|
Birch
Telecom, LLC
|
“Birch
Telecom and design”
|
2325801
|
March
7, 2000
|
Xxxxx
0, 0000
|
|
Xxxxx
Telecom, LLC
|
“Birchlink”
|
2962432
|
June
14, 2005
|
June
14, 2025
|
|
Birch
Telecom, LLC
|
“Branch
Out”
|
4261289
|
December
18, 2012
|
December
18, 2022
|
|
Birch
Telecom, LLC
|
“Branch
Out”
|
4261291
|
December
18, 2012
|
December
18, 2022
|
|
Birch
Telecom, LLC
|
“Home
Connection”
|
2908160
|
December
7, 2004
|
December
7, 2024
|
|
Birch
Telecom, LLC
|
“Mighty
Mouth”
|
2503776
|
November
6, 2001
|
November
6, 2021
|
|
Birch
Telecom, LLC
|
“Service.
Savings. Simplicity”
|
2616143
|
September
10, 2002
|
September
10, 2022
|
|
Birch
Telecom, LLC
|
“Sp@ce
Host”
|
2691468
|
February
25, 2003
|
February
25, 0000
|
|
Xxxxx
Xxxxxxx, XXX
|
“Xxxxxxxx”
|
0000000
|
January
24, 2006
|
January
24, 2026
|
|
Birch
Telecom, LLC
|
“Your
Business Best Friend”
|
2558118
|
April
9, 2002
|
April
9, 2022
|
|
Cbeyond
Communications, LLC
|
“Beyondoffice”
|
2805009
|
February
27, 2003
|
January
13, 2024
|
|
Cbeyond
Communications, LLC
|
“Beyondvoice”
|
2805009
|
January
13, 2004
|
January
13, 2024
|
|
Cbeyond
Communications, LLC
|
“Beyondvoice”
|
2793909
|
December
16, 2003
|
December
16, 2023
|
|
Cbeyond
Communications, LLC
|
“Beyondvoice”
|
2794512
|
December
16, 2003
|
December
16, 2023
|
|
Cbeyond
Communications, LLC
|
“Beyondvoice
I”
|
2763714
|
September
16, 2003
|
September
16, 2023
|
|
Cbeyond
Communications, LLC
|
“Beyondvoice
I”
|
2761638
|
September
9, 2003
|
September
9, 2023
|
|
Cbeyond
Communications, LLC
|
“Beyondvoice
II”
|
2763713
|
September
16, 2003
|
September
16, 2023
|
|
Cbeyond
Communications, LLC
|
“Beyondvoice
II”
|
2816962
|
February
24, 2004
|
February
24, 2024
|
|
Cbeyond
Communications, LLC
|
“C
and eye design”
|
2597070
|
July
23, 2002
|
July
23, 2022
|
|
Cbeyond
Communications, LLC
|
“Connect
Securely to Our Cloud Cbeyond This Building is Certified Cloud
Ready at the Speed of Light
|
4528389
|
May 13,
2014
|
May 13,
2024
|
|
Cbeyond
Communications, LLC
|
“Netpbx”
|
3600474
|
March
31, 2009
|
March
31, 2019
|
|
Cbeyond
Communications, LLC
|
“Netsip”
|
3600503
|
March
31, 2009
|
March
31, 2019
|
|
Cbeyond
Communications, LLC
|
“The
Last Communications Company a Small Business Will Ever
Need”
|
2671389
|
January
7, 2003
|
January
7, 2023
|
|
Cbeyond
Communications, LLC
|
“Totalcloud”
|
4382713
|
August
13, 2013
|
August
13, 2023
|
|
Cbeyond
Communications, LLC
|
“Totalnetwork”
|
4385711
|
August
13, 2013
|
August
13, 2023
|
|
Cbeyond
Communications, LLC
|
“TotalVoice”
|
4441587
|
November
26, 2013
|
November
26, 2023
|
|
Cbeyond
Communications, LLC
|
“Your
Technology Ally”
|
4355485
|
June
18, 2013
|
June
18, 2023
|
|
Primus
Holdings, Inc.
|
“Primus”
|
2679710
|
January
28, 2003
|
January
28, 2023
|
|
Primus
Holdings, Inc.
|
“Primus”
|
2694591
|
March
11, 2003
|
March
11, 2023
|
|
Primus
Holdings, Inc.
|
“Primus”
|
2194625
|
October
13, 1998
|
October
13, 2018
|
|
Primus
Holdings, Inc.
|
“PTGI”
|
4226291
|
October
16, 2012
|
October
16, 2022
|
|
Primus
Holdings, Inc.
|
“PTGI”
|
4195302
|
August
21, 2012
|
August
21, 2022
|
|
Bircan
Holdings, LLC
|
“Telegroup”
|
2048650
|
April
1, 1997
|
April
1, 2027
|
[FORM
OF] SUPPLEMENT NO. __, dated as of [ ] (this
“Supplement”),
to the Second Lien Pledge and Security Agreement dated as of May 4,
2018 (as it may be amended, restated, supplemented or otherwise
modified from time to time, the “Pledge and Security Agreement”),
among Fusion Connect, Inc., a Delaware corporation (the
“Borrower”), the
other Grantors party thereto from time to time and Wilmington
Trust, National Association (“Wilmington Trust”), as Collateral
Agent for the Secured Parties.
Reference is made
to the Second Lien Credit and Guaranty Agreement, dated as of May
4, 2018 (as it may be amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the
Borrower, certain Subsidiaries of the Borrower party thereto, the
Lenders party thereto and Wilmington Trust, as Administrative Agent
and Collateral Agent. Capitalized terms used in this Supplement and
not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement or the Pledge and Security
Agreement, as applicable.
The
Grantors have entered into the Pledge and Security Agreement in
order to induce the Lenders to make Loans and other extensions of
credit. Section 6.16 of the Pledge and Security Agreement
provides that additional Restricted Subsidiaries of the Borrower
may become Grantors under the Pledge and Security Agreement by
execution and delivery of an instrument substantially in the form
of this Supplement. The undersigned Restricted Subsidiary (the
“New Subsidiary”) is executing
this Supplement in accordance with the requirements of the Credit
Agreement to become a Grantor under the Pledge and Security
Agreement in order to induce the Lenders to make additional Loans
and other extensions of credit and as consideration for permitting
to remain outstanding Loans and other extensions of credit
previously made.
Accordingly, the
Collateral Agent and the New Subsidiary agree as
follows:
SECTION 1. In accordance with
Section 6.16 of the Pledge and Security Agreement, the New
Subsidiary by its signature below becomes a Grantor under the
Pledge and Security Agreement with the same force and effect as if
originally named therein as a Grantor, and the New Subsidiary
hereby (a) agrees to all the terms and provisions of the Pledge and
Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties
made by it as a Grantor thereunder are true and correct on and as
of the date hereof (or, to the extent that such representations and
warranties specifically refer to an earlier date, as of such
earlier date). In furtherance of the foregoing, the New Subsidiary,
as security for the payment and performance in full of the Secured
Obligations hereby assigns and pledges to the Collateral Agent, its
successors and permitted assigns, for the benefit of the Secured
Parties, and hereby grants to the Collateral Agent, its successors
and permitted assigns, for the benefit of the Secured Parties, a
security interest in, all of the New Subsidiary’s right,
title and interest in, to and under the Collateral (as defined in
the Pledge and Security Agreement) of the New Subsidiary, whether
now owned or at any time hereafter acquired by the New Subsidiary
or in which the New Subsidiary now has or at any time in the future
may acquire any right, title or interest. Each reference to a
“Grantor” in the Pledge and Security Agreement shall be
deemed to include the New Subsidiary. The Pledge and Security
Agreement is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary represents
and warrants to the Collateral Agent and the other Secured Parties
that (a) the execution and delivery of this Supplement by it have
been duly authorized by all necessary corporate or other
organizational and, if required, stockholder or other equityholder
action on the part of the New Subsidiary and (b) this Supplement
has been duly executed and delivered by the New Subsidiary and is
the legally valid and binding obligation of the New Subsidiary,
enforceable against the New Subsidiary in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable
principles relating to enforceability.
SECTION 3. This Supplement may be
executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page
of this Supplement by facsimile or in electronic format (i.e.,
“pdf” or “tif”) shall be effective as
delivery of a manually executed counterpart of this Supplement.
This Supplement shall become effective when the Collateral Agent
shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Collateral Agent has
executed a counterpart hereof.
SECTION 4. The New Subsidiary hereby
represents and warrants that (a) Schedule A hereto sets
forth, as of the date hereof, the true and correct legal name of
the New Subsidiary, its jurisdiction of organization and the
location of its chief executive office, and whether the New
Subsidiary is a transmitting utility (as defined in the UCC) and,
if applicable, the location where its transmitting utility
equipment is held, (b) Schedule B hereto sets forth (and
such Schedule hereby supplements Schedule I set forth in the Pledge
and Security Agreement), as of the date hereof, a true and complete
list of (i) all the Pledged Equity of the New Subsidiary,
specifying the percentage of the issued and outstanding units of
each class of the Equity Interests of the issuer thereof
represented by such Pledged Equity, and (ii) all the Pledged Debt
of the New Subsidiary, specifying the issuer thereof and the
principal amount thereof as of the date hereof, and includes all
Equity Interests, Promissory Notes and Instruments owned by the New
Subsidiary required to be pledged hereunder in order to satisfy the
Collateral and Guarantee Requirement, (c) Schedule C hereto
sets forth, as of the date hereof, a true and complete list of (i)
all Copyrights that have been registered and Copyrights for which
registration applications are pending, (ii) all exclusive Copyright
Licenses under which the New Subsidiary is a licensee, (iii) all
Patents that have been granted and Patents for which applications
are pending and (iv) all Trademarks that have been registered and
Trademarks for which registration applications are pending and
that, in each case, are owned by the New Subsidiary, in each case
truly and completely specifying the name of the registered owner,
title, type or xxxx, registration or application number, expiration
date (if already registered) or filing date, a brief description
thereof and, if applicable, the licensee and licensor and (d)
Schedule D hereto sets forth, as of the date hereof, each
Commercial Tort Claim of the New Subsidiary as to which the claim
thereunder is $2,000,000 or more in existence on the date
hereof.
SECTION 5. Except as expressly
supplemented hereby, the Pledge and Security Agreement shall remain
in full force and effect. This Supplement constitutes a Credit
Document for all purpose of the Credit Agreement and the other
Credit Documents.
SECTION
6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER (INCLUDING ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT
LAW ARISING OUT OF THE SUBJECT MATTER HEREOF AND ANY DETERMINATIONS
WITH RESPECT TO POST-JUDGMENT INTEREST) SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN
THE LAW OF THE STATE OF NEW YORK.
SECTION 7. In case any provision in or
obligation hereunder or under any other Credit Document shall be
invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions
or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
SECTION 8. All communications and
notices hereunder shall be in writing and given as provided in
Section 6.01 of the Pledge and Security
Agreement.
SECTION 9. The New Subsidiary agrees to
reimburse the Collateral Agent for its actual reasonable and
documented out-of-pocket expenses in connection with this
Supplement, including all reasonable and documented fees and
expenses of counsel for the Collateral Agent.
IN
WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have
duly executed this Supplement to the Pledge and Security Agreement
as of the day and year first above written.
|
|
||
|
|
||
|
|
[NAME
OF NEW SUBSIDIARY],
|
|
|
|
|
|
|
|
by
|
|
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|
|
Name:
|
|
|
|
Title:
|
|
|
WILMINGTON
TRUST, NATIONAL ASSOCIATION, as Collateral Agent,
|
|
|
|
by
|
|
|
|
|
Name:
Title:
|
Schedule A
NEW SUBSIDIARY
|
Legal Name
|
Jurisdiction of Organization
|
Location of Chief Executive Office (including county)
|
Transmitting utility? If so, jurisdiction where transmitting
utility equipment is held
|
|
|
|
|
|
Schedule B
PLEDGED EQUITY; PLEDGED DEBT
EQUITY INTERESTS
|
Credit Party
|
Issuer
|
Type of Organization
|
Number of Shares/Units Owned
|
Total Shares/Units Outstanding
|
Percentage of Interest Pledged
|
Certificate No. (if uncertificated, please indicate
so)
|
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DEBT INSTRUMENTS
|
Credit Party
|
Debtor
|
Type of Instrument
|
Outstanding Principal Amount
|
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|
Schedule C
INTELLECTUAL PROPERTY
I.
Copyrights and Copyright Applications
|
Property
|
Description
|
Registration
Status
|
|
|
|
|
|
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|
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|
II.
Exclusive Copyright Licenses (where the New Subsidiary is a
licensee)
|
Licensee
|
Licensor
|
Title
|
Registration Number
|
Expiration Date
|
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|
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|
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|
III.
Patents
|
Title
|
Country
|
Type
|
Registration Number
|
Issue Date
|
Expiration Date
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
IV.
Patent Applications
|
Title
|
Country
|
Type
|
Application Number
|
Date Filed
|
|
|
|
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|
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|
V.
Trademarks
|
Trademark
|
Registration No./Application No.
|
Application Date/Registration No.
|
Goods/Services
|
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|
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|
VI.
Trademark Applications
|
Trademark
|
Application No.
|
Filing Date
|
|
|
|
|
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Schedule D
COMMERCIAL TORT CLAIMS
[FORM
OF] SECOND LIEN COPYRIGHT SECURITY
AGREEMENT, dated as of [__________], 20[__] (as it may be
amended, restated, supplemented or otherwise modified from time to
time, this “Agreement”), among the
ENTITIES IDENTIFIED AS GRANTORS ON
THE SIGNATURE PAGES HERETO (collectively, the
“Grantors”) and
WILMINGTON TRUST, NATIONAL
ASSOCIATION (“Wilmington Trust”), as Collateral
Agent for the Secured Parties.
WHEREAS, the Grantors are party to the
Second Lien Pledge and Security Agreement, dated as of May 4, 2018
(the “Pledge and Security
Agreement”), among Fusion Connect, Inc., a Delaware
corporation, the other Grantors party thereto from time to time and
Wilmington Trust, as Collateral Agent, pursuant to which the
Grantors granted a security interest to the Collateral Agent in the
Copyright Collateral (as defined below) and are required to execute
and deliver this Agreement.
NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Grantors hereby agree with the Collateral Agent as
follows:
SECTION 1. Defined Terms. Unless otherwise defined herein,
terms defined in the Pledge and Security Agreement and used herein
have the meaning given to them in the Pledge and Security
Agreement.
SECTION 2. Grant of Security Interest.
As security for the payment and performance in full of the Secured
Obligations, each Grantor hereby assigns and pledges to the
Collateral Agent, its successors and permitted assigns, for the
benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and permitted assigns, for the benefit of the
Secured Parties, a continuing security interest in, all of such
Grantor’s right, title and interest in, to and under any and
all of the following assets now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest
(collectively, the “Copyright
Collateral”):
(a) (i)
all copyright rights in any work subject to the copyright laws of
the United States or any other country, whether as author,
assignee, transferee or otherwise, whether registered or
unregistered and whether published or unpublished, (ii) all
registrations and applications for registration of any such
copyright in the United States or any other country, including
registrations, recordings, supplemental registrations, pending
applications for registration and renewals in the United States
Copyright Office, including those listed on Schedule A under the
heading “Copyright Registrations and Applications”,
(iii) all rights and privileges arising under applicable law with
respect to such Grantor’s use of such copyrights, (iv) all
reissues, renewals, continuations and extensions thereof and
amendments thereto, (v) all income, fees, royalties, damages,
claims and payments now or hereafter due and/or payable with
respect to the foregoing, including damages and payments for past,
present or future infringements thereof, (vi) all rights
corresponding thereto throughout the world and (vii) all rights to
xxx for past, present or future infringements thereof;
and
(b) any
and all written agreement, now or hereafter in effect, granting any
right to any third party under any Copyright now or hereafter owned
by any Grantor or that such Grantor otherwise has the right to
license, or granting any right to any Grantor under any Copyright
now or hereafter owned by any third party, and all rights of such
Grantor under any such agreement, including each such agreement set
forth on Schedule A under the heading “Exclusive Copyright
Licenses”.
Notwithstanding
anything herein to the contrary, if, for so long and to the extent
as any such asset constitutes Excluded Property, the security
interest granted under this Section 2 shall not attach to, and
the Copyright Collateral shall not include, such asset;
provided,
however, that the
security interest granted under this Section 2 shall immediately
attach to, and the Copyright Collateral shall immediately include,
any such asset (or portion thereof) upon such asset (or such
portion) ceasing to be Excluded Property.
SECTION 3. Security Agreement. The
security interest granted pursuant to this Agreement is granted in
conjunction with the security interest granted to the Collateral
Agent, for the benefit of the Secured Parties, pursuant to the
Pledge and Security Agreement, and the Grantors hereby acknowledge
and affirm that the rights and remedies of the Collateral Agent
with respect to the security interest in the Copyright Collateral
made and granted hereby are more fully set forth in the Pledge and
Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein. In
the event that any provision of this Agreement is deemed to
conflict with the Pledge and Security Agreement, the provisions of
the Pledge and Security Agreement shall control.
SECTION 4. GOVERNING LAW. THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING
ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE
SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO
POST-JUDGMENT INTEREST) SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF
THAT WOULD RESULT IN THE APPLICATION OF ANY OTHER LAW OTHER THAN
THE LAW OF THE STATE OF NEW YORK.
SECTION 5. Counterparts. This Agreement
may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same
instrument.
[Remainder
of page intentionally left blank]
IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be
executed and delivered by its duly authorized officer as of the
date first set forth above.
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[NAME
OF GRANTOR]
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By:
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Name:
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Title:
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[ADD
SIGNATURE BLOCKS FOR ANY OTHER GRANTORS]
[Signature
Page to Second Lien Copyright Security Agreement]
Accepted and
Agreed:
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WILMINGTON
TRUST, NATIONAL ASSOCIATION, as Collateral Agent,
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by
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Name:
Title:
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[Signature
Page to Second Lien Copyright Security Agreement]
SCHEDULE A
to
SECOND LIEN COPYRIGHT SECURITY AGREEMENT
Copyright Registrations and Applications
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Registered Owner
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Property
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Description
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Registration Status
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Exclusive Copyright Licenses (where a Grantor is a
licensee)
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Licensee
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Licensor
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Title
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Registration Number
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Expiration Date
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EXHIBIT III
TO SECOND LIEN PLEDGE AND SECURITY AGREEMENT
SECOND LIEN PATENT SECURITY AGREEMENT,
dated as of [__________], 20[__] (as it may be amended, restated,
supplemented or otherwise modified from time to time, this
“Agreement”), is
made among THE ENTITIES IDENTIFIED
AS GRANTORS ON THE SIGNATURE PAGES HERETO (collectively, the
“Grantors”) and
WILMINGTON TRUST, NATIONAL ASSOCIATION (“Wilmington Trust”), as Collateral
Agent for the Secured Parties.
WHEREAS, the Grantors are party to the
Second Lien Pledge and Security Agreement, dated as of May 4, 2018
(the “Pledge and Security
Agreement”), among Fusion Connect, Inc., a Delaware
corporation, the other Grantors party thereto from time to time and
Wilmington Trust, as Collateral Agent, pursuant to which the
Grantors granted a security interest to the Collateral Agent in the
Patent Collateral (as defined below) and are required to execute
and deliver this Agreement.
NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Grantors hereby agree with the Collateral Agent as
follows:
SECTION 1. Defined Terms. Unless
otherwise defined herein, terms defined in the Pledge and Security
Agreement and used herein have the meaning given to them in the
Pledge and Security Agreement.
SECTION 2. Grant of Security Interest.
As security for the payment and performance in full of the Secured
Obligations, each Grantor hereby assigns and pledges to the
Collateral Agent, its successors and permitted assigns, for the
benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and permitted assigns, for the benefit of the
Secured Parties, a continuing security interest in, all of such
Grantor’s right, title and interest in, to and under any and
all of the following assets now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest
(collectively, the “Patent
Collateral”): (a) all letters patent of the United
States or the equivalent thereof in any other country, all
registrations and recordings thereof, and all applications for
letters patent of the United States or the equivalent thereof in
any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or
any similar offices in any other country, including those listed on
Schedule A under the heading “Patents and Patent
Applications”, (b) all rights and privileges arising under
applicable law with respect to such Grantor’s use of any
patents, (c) all inventions and improvements described and claimed
therein, (d) all reissues, divisions, continuations, renewals,
extensions, reexaminations, supplemental examinations, inter partes reviews, adjustments and
continuations-in-part thereof and amendments thereto, (e) all
income, fees, royalties, damages, claims and payments now or
hereafter due and/or payable with respect to any of the foregoing
including damages and payments for past, present or future
infringements thereof, (f) all rights corresponding thereto
throughout the world, including the right to prevent others from
making, having made, using, selling, offering to sell, importing or
exporting the inventions claimed therein and (g) rights to xxx
for past, present or future infringements thereof.
Notwithstanding
anything herein to the contrary, if, for so long and to the extent
as any such asset constitutes Excluded Property, the security
interest granted under this Section 2 shall not attach to, and
the Patent Collateral shall not include, such asset, provided, however, that the security
interest granted under this Section 2 shall immediately attach to,
and the Patent Collateral shall immediately include, any such asset
(or portion thereof) upon such asset (or such portion) ceasing to
be Excluded Property.
SECTION 3. Security Agreement. The
security interest granted pursuant to this Agreement is granted in
conjunction with the security interest granted to the Collateral
Agent, for the benefit of the Secured Parties, pursuant to the
Pledge and Security Agreement, and the Grantors hereby acknowledge
and affirm that the rights and remedies of the Collateral Agent
with respect to the security interest in the Patent Collateral made
and granted hereby are more fully set forth in the Pledge and
Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein. In
the event that any provision of this Agreement is deemed to
conflict with the Pledge and Security Agreement, the provisions of
the Pledge and Security Agreement shall control.
SECTION 4. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING ANY CLAIMS SOUNDING
IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER
HEREOF AND ANY DETERMINATIONS WITH RESPECT TO POST-JUDGMENT
INTEREST) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN
THE APPLICATION OF ANY OTHER LAW OTHER THAN THE LAW OF THE STATE OF
NEW YORK.
SECTION 5. Counterparts. This Agreement may be executed in
one or more counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.
[Remainder
of page intentionally left blank]
IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be
executed and delivered by its duly authorized officer as of the
date first set forth above.
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[NAME
OF GRANTOR]
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By:
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Name:
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Title:
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[ADD
SIGNATURE BLOCKS FOR ANY OTHER GRANTORS]
[Signature
Page to Second Lien Patent Security Agreement]
Accepted and
Agreed:
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WILMINGTON
TRUST, NATIONAL ASSOCIATION, as Collateral Agent,
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by
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Name:
Title:
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[Signature
Page to Second Lien Patent Security Agreement]
SCHEDULE A
to
SECOND LIEN PATENT SECURITY AGREEMENT
Patent and Patent Applications
Patents
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Registered Owner
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Title of Patent
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Country
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Type
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Registration Number
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Issue Date
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Expiration Date
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Patent Applications
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Registered Owner
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Title of Patent
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Country
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Type
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Application Number
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Date Filed
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Schedule
A-1
EXHIBIT IV
TO SECOND LIEN PLEDGE AND SECURITY AGREEMENT
SECOND LIEN TRADEMARK SECURITY AGREEMENT, dated as
of [__________], 20[__] (as it may be amended, restated,
supplemented or otherwise modified from time to time, this
“Agreement”), is
made among THE ENTITIES IDENTIFIED
AS GRANTORS ON THE SIGNATURE PAGES HERETO (collectively, the
“Grantors”) and
WILMINGTON TRUST, NATIONAL
ASSOCIATION (“Wilmington Trust”), as Collateral
Agent for the Secured Parties.
WHEREAS, the Grantors are party to the
Second Lien Pledge and Security Agreement, dated as of May 4, 2018
(the “Pledge and Security
Agreement”), among Fusion Connect, Inc., a Delaware
corporation, the other Grantors party thereto from time to time and
Wilmington Trust, as Collateral Agent, pursuant to which the
Grantors granted a security interest to the Collateral Agent in the
Trademark Collateral (as defined below) and are required to execute
and deliver this Agreement.
NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Grantors hereby agree with the Collateral Agent as
follows:
SECTION 1. Defined Terms. Unless
otherwise defined herein, terms defined in the Pledge and Security
Agreement and used herein have the meaning given to them in the
Pledge and Security Agreement.
SECTION 2. Grant of Security. As
security for the payment and performance in full of the Secured
Obligations, each Grantor hereby assigns and pledges to the
Collateral Agent, its successors and permitted assigns, for the
benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and permitted assigns, for the benefit of the
Secured Parties, a continuing security interest in, all of such
Grantor’s right, title and interest in, to and under any and
all of the following assets now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest
(collectively, the “Trademark
Collateral”): (a) all trademarks, service marks, trade
names, corporate names, company names, business names, fictitious
business names, trade styles, trade dress, logos, other source or
business identifiers, designs and general intangibles of like
nature, the goodwill of the business symbolized thereby or
associated therewith, all registrations and recordings thereof, and
all registration and recording applications filed in connection
therewith, including registrations and registration applications in
the United States Patent and Trademark Office or any similar
offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals
thereof, including those listed on Schedule A under the heading
“Trademark Registrations and Applications”, (b) all
rights and privileges arising under applicable law with respect to
such Grantor’s use of any trademarks, (c) all reissues,
continuations, extensions and renewals thereof and amendments
thereto, (d) all income, fees, royalties, damages and payments now
and hereafter due and/or payable with respect to any of the
foregoing, including damages, claims and payments for past, present
or future infringements thereof, (e) all rights corresponding
thereto throughout the world and (f) rights to xxx for past,
present and future infringements or dilutions thereof or other
injuries thereto.
Exhibit
IV-2
Notwithstanding
anything herein to the contrary, (a) in no event shall the
Trademark Collateral include or the security interest granted under
this Section 2 attach to any “intent to use”
application for registration of a Trademark filed pursuant to
Section 1(b) of the Xxxxxx Act, 15 U.S.C. § 1051, prior to
filing of a “Statement of Use” pursuant to Section 1(d)
of the Xxxxxx Act or an “Amendment to Allege Use”
pursuant to Section 1(c) of the Xxxxxx Act with respect thereto,
solely to the extent, if any, that, and solely during the period,
if any, in which, the grant of a security interest therein would
impair the validity or enforceability of any registration that
issues from such intent to use application under applicable federal
law and (b) if, for so long and to the extent as any such asset
constitutes Excluded Property, the security interest granted under
this Section 2 shall not attach to, and the Trademark
Collateral shall not include, such asset, provided, however, that the security
interest granted under this Section 2 shall immediately attach to,
and the Trademark Collateral shall immediately include, any such
asset (or portion thereof) upon such asset (or such portion)
ceasing to be Excluded Property.
SECTION 3. Security Agreement. The
security interest granted pursuant to this Agreement is granted in
conjunction with the security interest granted to the Collateral
Agent, for the benefit of the Secured Parties, pursuant to the
Pledge and Security Agreement, and the Grantors hereby acknowledge
and affirm that the rights and remedies of the Collateral Agent
with respect to the security interest in the Trademark Collateral
made and granted hereby are more fully set forth in the Pledge and
Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein. In
the event that any provision of this Agreement is deemed to
conflict with the Pledge and Security Agreement, the provisions of
the Pledge and Security Agreement shall control.
SECTION 4. GOVERNING LAW. THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING
ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE
SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO
POST-JUDGMENT INTEREST) SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF
THAT WOULD RESULT IN THE APPLICATION OF ANY OTHER LAW OTHER THAN
THE LAW OF THE STATE OF NEW YORK.
SECTION 5. Counterparts. This Agreement
may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same
instrument.
Exhibit
IV-2
IN
WITNESS WHEREOF, each
Grantor has caused this Agreement to be executed and delivered by
its duly authorized officer as of the date first set forth
above.
|
[NAME
OF GRANTOR]
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By:
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Name:
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|
Title:
|
|
[ADD
SIGNATURE BLOCKS FOR ANY OTHER GRANTORS]
[Signature
Page to Second Lien Trademark Security Agreement]
Accepted and
Agreed:
|
WILMINGTON
TRUST, NATIONAL ASSOCIATION, as Collateral Agent,
|
|
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by
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Name:
Title:
|
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[Signature
Page to Second Lien Trademark Security Agreement]
SCHEDULE A
to
SECOND LIEN TRADEMARK SECURITY AGREEMENT
Trademark Registrations and Applications
Trademarks
|
Registered Owner
|
Trademark
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Registration No./Application No.
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Application Date/Registration Date
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Trademark Applications
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Registered Owner
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Trademark
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Application No.
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Filing Date
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Schedule A-1
