EXHIBIT 10.24
Execution Copy
SECURITY AGREEMENT dated as of February 14, 2001,
among Alamosa (Delaware), Inc., a Delaware corporation
("Alamosa Delaware"), Alamosa Holdings, LLC, a Delaware
limited liability company (the "Borrower"), each
subsidiary of Alamosa Delaware listed on Schedule I
hereto (each such subsidiary individually a "Subsidiary
Guarantor" and collectively, the "Subsidiary Guarantors";
the Subsidiary Guarantors, Alamosa (Delaware) and the
Borrower are referred to collectively herein as the
"Grantors") and CITICORP USA, INC., a New York banking
corporation ("Citicorp"), as collateral agent (in such
capacity, the "Collateral Agent") for the Secured Parties
(as defined herein).
Reference is made to (a) the Credit Agreement dated as of February
14, 2001 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among Alamosa Holdings, Inc., a Delaware
corporation ("Superholdings"), Alamosa Delaware, the Borrower, the lenders
from time to time party thereto (the "Lenders"), Export Development
Corporation, as Co-Documentation Agent, First Union National Bank, as
Documentation Agent, Toronto Dominion (Texas), Inc., as Syndication Agent
and Citicorp, as administrative agent for the Lenders (in such capacity,
the "Administrative Agent"), Collateral Agent and issuing bank (in such
capacity, the "Issuing Bank") and (b) the Guarantee Agreement dated as of
February 14, 2001 (as amended, supplemented or otherwise modified from time
to time (the "Guarantee Agreement"), among Superholdings, Alamosa PCS
Holdings, Inc. ("APCS"), Alamosa Delaware, the Subsidiary Guarantors and
the Collateral Agent.
The Lenders have agreed to make Loans to the Borrower, and the
Issuing Bank has agreed to issue Letters of Credit for the account of the
Borrower, pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. Each of Superholdings, APCS, Alamosa
Delaware and the Subsidiary Guarantors has agreed to guarantee, among other
things, all the obligations of the Borrower under the Credit Agreement. The
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit are conditioned upon, among other things, the execution
and delivery by the Grantors of an agreement in the form hereof to secure
(a) the due and punctual payment by the Borrower of (i) the principal of
and premium, if any, and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding)
on the Loans, when and as due, whether at maturity, by acceleration, upon
one or more dates set for prepayment or otherwise, (ii) each payment
required to be made by the Borrower under the Credit Agreement in respect
of any Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide
cash collateral and (iii) all other monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Borrower to the Secured Parties under the Credit
Agreement or the other Loan Documents, (b) the due and punctual performance
of all covenants, agreements, obligations and liabilities of the Borrower
under or pursuant to the Credit Agreement or the other Loan Documents, (c)
the due and punctual payment and performance of all covenants, agreements,
obligations and liabilities of Superholdings, APCS, Alamosa Delaware and
each Subsidiary Guarantor under or pursuant to this Agreement or the other
Loan Documents, including the guarantee obligations of Loan Parties other
than the Borrower under the Guarantee Agreement and (d) the due and
punctual payment and performance of all obligations of the Loan Parties
under each Hedging Agreement entered into in accordance with Section 5.14
of the Credit Agreement with any counterparty that was a Lender (or an
Affiliate of a Lender) at the time such Hedging Agreement was entered into
(or on the Effective Date, in the case of any such Hedging Agreements
existing on such date) (all the monetary and other obligations described in
the preceding clauses (a) through (d) being collectively called the
"Obligations").
Accordingly, the Grantors and the Collateral Agent, on behalf of
itself and each Secured Party (and each of their respective successors or
assigns), hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Terms Used Herein. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall
have the meanings set forth in the Credit Agreement and all references to
the Uniform Commercial Code shall mean the Uniform Commercial Code in
effect in the State of New York as of the date hereof.
SECTION 1.02. Definition of Certain Terms Used Herein. As used
herein, the following terms shall have the following meanings:
"Account Debtor" shall mean any person who is or who may become
obligated to any Grantor under, with respect to or on account of an
Account.
"Accounts" shall mean any and all right, title and interest of any
Grantor to payment for goods and services sold or leased, including any
such right evidenced by chattel paper, whether due or to become due,
whether or not it has been earned by performance, and whether now or
hereafter acquired or arising in the future, including accounts receivable
from Affiliates of the Grantors.
"Accounts Receivable" shall mean all Accounts and all right, title
and interest in any returned goods, together with all rights, titles,
securities and guarantees with respect thereto, including any rights to
stoppage in transit, replevin, reclamation and resales, and all related
security interests, liens and pledges, whether voluntary or involuntary, in
each case whether now existing or owned or hereafter arising or acquired.
"Collateral" shall mean all (a) Accounts Receivable, (b) Documents,
(c) Equipment, (d) General Intangibles, (e) Inventory, (f) cash and cash
accounts, (g) Investment Property and (h) Proceeds; provided that
"Collateral" shall not include Excluded Assets.
"Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" shall mean a commodity futures contract, an
option on a commodity futures contract, a commodity option or any other
contract that, in each case, is (a) traded on or subject to the rules of a
board of trade that has been designated as a contract market for such a
contract pursuant to the federal commodities laws or (b) traded on a
foreign commodity board of trade, exchange or market, and is carried on the
books of a Commodity Intermediary for a Commodity Customer.
"Commodity Customer" shall mean a person for whom a Commodity
Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a person who is registered as
a futures commission merchant under the federal commodities laws or (b) a
person who in the ordinary course of its business provides clearance or
settlement services for a board of trade that has been designated as a
contract market pursuant to federal commodities laws.
"Copyright License" shall mean 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 which such Grantor
otherwise has the right to license, or granting any right to such Grantor
under any Copyright now or hereafter owned by any third party, and all
rights of such Grantor under any such agreement.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by 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, and (b) all registrations and
applications for registration of any such copyright in the United States or
any other country, including registrations, recordings, supplemental
registrations and pending applications for registration in the United
States Copyright Office, including those listed on Schedule II.
"Credit Agreement" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"Documents" shall mean all instruments, files, records, ledger sheets
and documents covering any of the Collateral.
"Entitlement Holder" shall mean a person identified in the records of
a Securities Intermediary as the person having a Security Entitlement
against the Securities Intermediary. If a person acquires a Security
Entitlement by virtue of Section 8-501(b)(2) or (3) of the Uniform
Commercial Code, such person is the Entitlement Holder.
"Equipment" shall mean all equipment, furniture and furnishings, and
all tangible personal property similar to any of the foregoing, including
tools, parts and supplies of every kind and description, and all
improvements, accessions or appurtenances thereto, that are now or
hereafter owned by any Grantor. The term Equipment shall include Fixtures.
"Excluded Asset" shall mean (a) any asset subject to a Lien permitted
pursuant to Section 6.02 of the Credit Agreement to the extent the
agreement creating such Lien or the Indebtedness secured by such Lien
prohibits the granting of a secured Lien on such asset; provided that upon
the termination of all prior Liens on any of the foregoing assets, such
asset shall cease to be an Excluded Asset and (b) the custody account that
is pledged to Xxxxx Fargo Bank Minnesota, N.A., as collateral agent for the
benefit of the holders of Alamosa Delaware's 12-8/8% Senior Discount Notes
due 2010 and its 12-1/2% Senior Notes due 2011.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a
person or a share, participation or other interest in a person or in
property or an enterprise of a person, which is, or is of a type, dealt
with in or traded on financial markets, or which is recognized in any area
in which it is issued or dealt in as a medium for investment or (c) any
property that is held by a Securities Intermediary for another person in a
Securities Account if the Securities Intermediary has expressly agreed with
the other person that the property is to be treated as a Financial Asset
under Article 8 of the Uniform Commercial Code. As the context requires,
the term Financial Asset shall mean either the interest itself or the means
by which a person's claim to it is evidenced, including a certificated or
uncertificated Security, a certificate representing a Security or a
Security Entitlement.
"Fixtures" shall mean all items of Equipment, whether now owned or
hereafter acquired, of any Grantor that become so related to particular
real estate that an interest in them arises under any real estate law
applicable thereto.
"General Intangibles" shall mean all choses in action and causes of
action and all other assignable intangible personal property of any Grantor
of every kind and nature (other than Accounts Receivable) now owned or
hereafter acquired by any Grantor, including all rights and interests in
partnerships, limited partnerships, limited liability companies and other
unincorporated entities, corporate or other business records,
indemnification claims, contract rights (including rights under leases,
whether entered into as lessor or lessee, Hedging Agreements and other
agreements), Intellectual Property, goodwill, registrations, franchises,
tax refund claims and any letter of credit, guarantee, claim, security
interest or other security held by or granted to any Grantor to secure
payment by an Account Debtor of any of the Accounts Receivable.
"General Obligations" means all Obligations other than Xxxxxxx
Obligations and WOW Obligations.
"Intellectual Property" shall mean all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents,
Copyrights, Licenses, Trademarks, trade secrets, confidential or
proprietary technical and business information, know-how, show-how or other
data or information, software and databases and all embodiments or
fixations thereof and related documentation, registrations and franchises,
and all additions, improvements and accessions to, and books and records
describing or used in connection with, any of the foregoing.
"Inventory" shall mean all goods of any Grantor, whether now owned or
hereafter acquired, held for sale or lease, or furnished or to be furnished
by any Grantor under contracts of service, or consumed in any Grantor's
business, including raw materials, intermediates, work in process,
packaging materials, finished goods, semi-finished inventory, scrap
inventory, manufacturing supplies and spare parts, and all such goods that
have been returned to or repossessed by or on behalf of any Grantor.
"Investment Property" shall mean all Securities (whether certificated
or uncertificated), Security Entitlements, Securities Accounts, Commodity
Contracts and Commodity Accounts of any Grantor, whether now owned or
hereafter acquired by any Grantor.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including those listed on Schedule III (other than those license agreements
in existence on the date hereof and listed on Schedule III and those
license agreements entered into after the date hereof, which by their terms
prohibit assignment or a grant of a security interest by such Grantor as
licensee thereunder).
"Obligations" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Patent License" shall mean any written agreement, now or hereafter
in effect, granting to any third party any right to make, use or sell any
invention on which a Patent, now or hereafter owned by any Grantor or which
any Grantor otherwise has the right to license, is in existence, or
granting to any Grantor any right to make, use or sell 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" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States or any
other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or 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 IV, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions
thereof, and the inventions disclosed or claimed therein, including the
right to make, use and/or sell the inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate substantially in
the form of Annex I hereto, completed and supplemented with the schedules
and attachments contemplated thereby, and duly executed by a Financial
Officer and the chief legal officer of the Borrower.
"Proceeds" shall mean any consideration received from the sale,
exchange, license, lease or other disposition of any asset or property that
constitutes Collateral, any value received as a consequence of the
possession of any Collateral and any payment received from any insurer or
other person or entity as a result of the destruction, loss, theft, damage
or other involuntary conversion of whatever nature of any asset or property
which constitutes Collateral, and shall include (a) any claim of any
Grantor against any third party for (and the right to xxx and recover for
and the rights to damages or profits due or accrued arising out of or in
connection with) (i) past, present or future infringement of any Patent now
or hereafter owned by any Grantor, or licensed under a Patent License, (ii)
past, present or future infringement or dilution of any Trademark now or
hereafter owned by any Grantor or licensed under a Trademark License or
injury to the goodwill associated with or symbolized by any Trademark now
or hereafter owned by any Grantor, (iii) past, present or future breach of
any License and (iv) past, present or future infringement of any Copyright
now or hereafter owned by any Grantor or licensed under a Copyright License
and (b) any and all other amounts from time to time paid or payable under
or in connection with any of the Collateral.
"Xxxxxxx" means Xxxxxxx Wireless Communications, L.L.C., a Missouri
limited liability company.
"Xxxxxxx Collateral" means that portion of the Collateral that was,
immediately prior to the Effective Date, subject to a Lien created pursuant
to the Xxxxxxx Security Documents or that would, on or after the Effective
Date, have been collateral subject to a Lien created pursuant to the
Xxxxxxx Security Documents in accordance with the provisions thereof
(including with respect to after acquired property), assuming the Xxxxxxx
Security Documents had remained in effect on and after the Effective Date,
but shall not in any event include any property or assets other than (i)
Equity Interests in Xxxxxxx and (ii) property and assets owned by Xxxxxxx
and its subsidiaries.
"Xxxxxxx Credit Agreement" means the Credit Agreement dated as of
September 8, 1999, among Xxxxxxx, certain lenders party thereto, State
Street Bank and Trust Company, as collateral agent, and Lucent Technologies
Inc., as administrative agent, as amended and in effect immediately prior
to the Effective Date.
"Xxxxxxx Obligations" means Obligations consisting of (i) the
Borrower's obligation to pay (x) the principal amount of the Xxxxxxx Term
Loans as evidenced by the account entries kept by the Administrative Agent,
pursuant to Section 2.08 of the Credit Agreement and (y) interest
(including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such a proceeding), fees, indemnities, cost
reimbursements and similar amounts directly attributable to the principal
amounts of the Xxxxxxx Term Loans and (ii) each other Loan Party's
obligations under the Guarantee Agreement in respect of its guarantee of
the obligations referred to in clause (i) above.
"Xxxxxxx Security Documents" means, collectively, (i) the Security
Agreement dated as of September 8, 1999, among Xxxxxxx, Xxxxxxx Wireless
Properties, L.L.C., and State Street Bank and Trust Company, as collateral
agent, (ii) the Pledge Agreement dated as of September 8, 1999, between
Xxxxxxx and State Street Bank and Trust Company, as collateral agent, (iii)
the Pledge Agreement dated as of September 8, 1999, among Xxxxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxxxx and State Street Bank and Trust Company, as
collateral agent, and (iv) the Collateral Assignment of Leases dated as of
August 31, 1999, between Xxxxxxx and State Street Bank and Trust Company,
as collateral agent, together in each case with all documents, financing
statements, filings, recordations, instruments and agreements executed,
delivered, filed or recorded pursuant to or in connection with any of the
foregoing, in each case as amended, supplemented and in effect immediately
prior to the Effective Date.
"Xxxxxxx Term Loans" means $20,000,000 principal amount of Term Loans
as evidenced by the account entries kept by the Administrative Agent,
pursuant to Section 2.08 of the Credit Agreement made on the Effective Date
the proceeds of which (together with the proceeds of other Loans) were
utilized to repay outstanding Indebtedness under the Xxxxxxx Credit
Agreement.
"Secured Parties" shall mean (a) the Lenders, (b) the Administrative
Agent, (c) the Collateral Agent, (d) the Issuing Bank, (e) each
counterparty to a Hedging Agreement entered into with the Borrower if such
counterparty was a Lender at the time the Hedging Agreement was entered
into, (f) the beneficiaries of each indemnification obligation undertaken
by any Grantor under any Loan Document and (g) the successors and assigns
of each of the foregoing.
"Securities" shall mean any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an
enterprise of an issuer which (a) are represented by a certificate
representing a security in bearer or registered form, or the transfer of
which may be registered upon books maintained for that purpose by or on
behalf of the issuer, (b) are one of a class or series or by its terms is
divisible into a class or series of shares, participations, interests or
obligations and (c)(i) are, or are of a type, dealt with or trade on
securities exchanges or securities markets or (ii) are a medium for
investment and by their terms expressly provide that they are a security
governed by Article 8 of the Uniform Commercial Code.
"Securities Account" shall mean an account to which a Financial Asset
is or may be credited in accordance with an agreement under which the
person maintaining the account undertakes to treat the person for whom the
account is maintained as entitled to exercise rights that comprise the
Financial Asset.
"Security Entitlements" shall mean the rights and property interests
of an Entitlement Holder with respect to a Financial Asset.
"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Securities Intermediary" shall mean (a) a clearing corporation or
(b) a person, including a bank or broker, that in the ordinary course of
its business maintains securities accounts for others and is acting in that
capacity.
"Trademark License" shall mean 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 which 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.
"Trademarks" shall mean 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, now existing or hereafter
adopted or acquired, 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, any State of the United States or any similar
offices in any other country or any political subdivision thereof, and all
extensions or renewals thereof, including those listed on Schedule V, (b)
all goodwill associated therewith or symbolized thereby and (c) all other
assets, rights and interests that uniquely reflect or embody such goodwill.
"WOW" means Washington Oregon Wireless, LLC, an Oregon limited
liability company.
"WOW Collateral" means that portion of the Collateral that was,
immediately prior to the Effective Date, subject to a Lien created pursuant
to the WOW Security Documents or that would, on or after the Effective
Date, have been collateral subject to a Lien created pursuant to the WOW
Security Documents in accordance with the provisions thereof (including
with respect to after acquired property), assuming the WOW Security
Documents had remained in effect on and after the Effective Date, but shall
not in any event include any property or assets other than (i) Equity
Interests in WOW and (ii) property and assets owned by WOW and its
subsidiaries.
"WOW Credit Agreement" means the Credit Agreement dated as of April
12, 2000, among WOW, the lender or lenders party thereto, and CoBank, ACB,
as administrative agent, as amended and in effect immediately prior to the
Effective Date.
"WOW Obligations" means Obligations consisting of (i) the Borrower's
obligation to pay (x) the principal amount of the WOW Term Loans as
evidenced by the account entries kept by the Administrative Agent, pursuant
to Section 2.08 of the Credit Agreement and (y) interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such a proceeding), fees, indemnities, cost reimbursements and
similar amounts directly attributable to the principal amounts of the WOW
Term Loans and (ii) each other Loan Party's obligations under the Guarantee
Agreement in respect of its guarantee of the obligations referred to in
clause (i) above.
"WOW Security Documents" means, collectively, (i) the Security
Agreement dated as of April 12, 2000, made by WOW in favor of CoBank, ACB,
as administrative agent, (ii) the Collateral Assignment of Sprint
Agreements dated as of April 12, 2000, between WOW and CoBank, ACB, as
administrative agent, (iii) the Collateral Assignment of Sales Agreement
dated as of April 12, 2000, between WOW and CoBank, ACB, as administrative
agent, (iv) the several Membership Interests Pledge Agreements, each dated
as of April 12, 2000, between CoBank, ACB, as administrative agent, and the
several owners of the Equity Interest in WOW and (v) the Collateral
Assignments and Mortgages of Leases and Licenses, each dated as of April
12, 2000, between WOW and CoBank, ACB, as administrative agent, together in
each case with all documents, financing statements, filings, recordations,
instruments and agreements executed, delivered, filed or recorded pursuant
to or in connection with any of the foregoing, in each case as amended,
supplemented and in effect immediately prior to the Effective Date.
"WOW Term Loans" means $10,000,000 principal amount of Term Loans as
evidenced by the account entries kept by the Administrative Agent, pursuant
to Section 2.08 of the Credit Agreement made on the Effective Date the
proceeds of which (together with the proceeds of other Loans) were utilized
to repay outstanding Indebtedness under the WOW Credit Agreement.
SECTION 1.03. Rules of Interpretation. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to
this Agreement.
ARTICLE II
Security Interest
SECTION 2.01. Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor
hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges,
hypothecates and transfers to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, and hereby grants
to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, a security interest in, all of such
Grantor's right, title and interest in, to and under the Collateral (the
"Security Interest"); provided, however, that (i) the Xxxxxxx Obligations
shall be secured only by the Security Interest in the Xxxxxxx Collateral
and (ii) the WOW Obligations shall be secured only by the Security Interest
in the WOW Collateral (it being understood that the Xxxxxxx Collateral and
the WOW Collateral shall also secure all General Obligations) and provided
further that any Collateral that is neither Xxxxxxx Collateral nor WOW
Collateral shall only secure the General Obligations. Without limiting the
foregoing, the Collateral Agent is hereby authorized to file one or more
financing statements (including fixture filings), continuation statements,
filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any
other country) or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest
granted by each Grantor, without the signature of any Grantor, and naming
any Grantor or the Grantors as debtors and the Collateral Agent as secured
party.
SECTION 2.02. No Assumption of Liability. The Security Interest is
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 Collateral.
ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and valid
rights in and title to the 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
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
which has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete. Fully executed Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the
Collateral have been delivered to the Collateral Agent for filing in each
governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate, which are all the filings, recordings and
registrations (other than 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 Collateral consisting of United States
Patents, Trademarks and Copyrights) that are necessary to publish notice of
and protect the validity of and to establish a legal, valid and perfected
security interest in favor of the Collateral Agent (for the ratable benefit
of the Secured Parties) in respect of all 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, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the
filing of continuation statements.
(b) Each Grantor represents and warrants that fully executed security
agreements in the form hereof and containing a description of all
Collateral consisting of Intellectual Property with respect to United
States Patents and United States registered Trademarks (and Trademarks for
which United States registration applications are pending) and United
States registered Copyrights have been delivered to the Collateral Agent
for recording by the United States Patent and Trademark Office and the
United States Copyright Office pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss.
1060 or 17 U.S.C. ss. 205 and the regulations thereunder, as applicable,
and otherwise as may be required pursuant to the laws of any other
necessary jurisdiction, to protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Collateral
Agent (for the ratable benefit of the Secured Parties) in respect of all
Collateral consisting of Patents, Trademarks and Copyrights in which a
security interest may be perfected by filing, recording or registration in
the United States (or any political subdivision thereof) and its
territories and possessions, or in any other necessary jurisdiction, and no
further or subsequent filing, refiling, recording, rerecording,
registration or reregistration is necessary (other than such actions as are
necessary to perfect the Security Interest with respect to any Collateral
consisting of Patents, Trademarks and Copyrights (or registration or
application for registration thereof) acquired or developed after the date
hereof).
SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject to the
filings described in Section 3.02 above, a perfected security interest in
all Collateral in which a security interest may be perfected by filing,
recording or registering a financing statement or analogous document in the
United States (or any political subdivision thereof) and its territories
and possessions pursuant to the Uniform Commercial Code or other applicable
law in such jurisdictions and (c) a security interest that shall be
perfected in all Collateral in which a security interest may be perfected
upon the receipt and recording of this Agreement 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 Collateral, other than Liens expressly permitted to be prior
to the Security Interest pursuant to Section 6.02 of the Credit Agreement.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.02 of the Credit Agreement. The Grantor has not filed
or consented to the filing of (a) any financing statement or analogous
document under the Uniform Commercial Code or any other applicable laws
covering any Collateral, (b) any assignment in which any Grantor assigns
any Collateral or any security agreement or similar instrument covering any
Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (c) any assignment in which any Grantor assigns
any Collateral or any security agreement or similar instrument covering any
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 Liens
expressly permitted pursuant to Section 6.02 of the Credit Agreement.
ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral; Records; Place
of Business. (a) Each Grantor agrees promptly to notify the Collateral
Agent in writing of any change (i) in its corporate name or in any trade
name used to identify it in the conduct of its business or in the ownership
of its properties, (ii) in the location of its chief executive office, its
principal place of business, any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at
which Collateral owned by it is located (including the establishment of any
such new office or facility), (iii) in its identity or corporate structure
or (iv) in its Federal Taxpayer Identification Number. Each Grantor agrees
not to effect or permit any change referred to in the preceding sentence
unless it shall have given the Collateral Agent 10 days notice of such
change and shall promptly make all filings under the Uniform Commercial
Code or otherwise that are required in order for the Collateral Agent to
continue at all times following such change to have a valid, legal and
perfected first priority security interest in all the Collateral. Each
Grantor agrees promptly to notify the Collateral Agent if any material
portion of the Collateral owned or held by such Grantor is damaged or
destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense,
such complete and accurate records with respect to the 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, but in any event to
include complete accounting records indicating all payments and proceeds
received with respect to any part of the Collateral, 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 satisfactory to the Collateral Agent showing the
identity, amount and location of any and all Collateral.
SECTION 4.02. Periodic Certification. Each year, at the time of
delivery of annual financial statements with respect to the preceding
fiscal year pursuant to Section 5.01 of the Credit Agreement, the Borrower
shall deliver to the Collateral Agent a certificate executed by a Financial
Officer and the chief legal officer of the Borrower (a) setting forth the
information required pursuant to Section 2 of the Perfection Certificate or
confirming that there has been no change in such information since the date
of such certificate or the date of the most recent certificate delivered
pursuant to this Section 4.02 and (b) certifying that all Uniform
Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations,
including all refilings, rerecordings and reregistrations, containing a
description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (a) above to the extent necessary to protect
and perfect the Security Interest for a period of not less than 18 months
after the date of such certificate (except as noted therein with respect to
any continuation statements to be filed within such period). Each
certificate delivered pursuant to this Section 4.02 shall identify in the
format of Schedule II, III, IV or V, as applicable, all Intellectual
Property of any Grantor in existence on the date thereof and not then
listed on such Schedules or previously so identified to the Collateral
Agent.
SECTION 4.03. Protection of Security. Each Grantor shall, at its own
cost and expense, take any and all actions necessary to defend title to the
Collateral against all persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any
Lien not expressly permitted pursuant to Section 6.02 of the Credit
Agreement.
SECTION 4.04. Further Assurances. 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 request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any 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) or other documents in connection herewith or
therewith. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be immediately pledged and
delivered to the Collateral Agent, duly endorsed in a manner satisfactory
to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, to supplement this Agreement by supplementing Schedule II, III,
IV or V hereto or adding additional schedules hereto to specifically
identify any asset or item that may constitute Copyrights, Licenses,
Patents or Trademarks; provided, however, that any Grantor shall have the
right, exercisable within 10 days after it has been notified by the
Collateral Agent of the specific identification of such Collateral, to
advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect
to such Collateral. Each Grantor agrees that it will use its best efforts
to take such action as shall be necessary in order that all representations
and warranties hereunder shall be true and correct with respect to such
Collateral within 30 days after the date it has been notified by the
Collateral Agent of the specific identification of such Collateral.
SECTION 4.05. Inspection and Verification. 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
Collateral, all records related thereto (and to make extracts and copies
from such records) and the premises upon which any of the Collateral is
located, to discuss the Grantors' affairs with the officers of the Grantors
and their independent accountants and to verify under reasonable
procedures, in accordance with Section 5.09 of the Credit Agreement, the
validity, amount, quality, quantity, value, condition and status of, or any
other matter relating to, the Collateral, including, in the case of
Accounts or Collateral in the possession of any third person, by contacting
Account Debtors or the third person possessing such Collateral for the
purpose of making such a verification. The Collateral Agent shall have the
absolute right to share any information it gains from such inspection or
verification with any Secured Party (it being understood that any such
information shall be deemed to be "Information" subject to the provisions
of Section 9.12).
SECTION 4.06. Taxes; Encumbrances. At its option, the Collateral
Agent may discharge past due taxes, assessments, charges, fees, Liens,
security interests or other encumbrances at any time levied or placed on
the Collateral and not permitted pursuant to Section 6.02 of the Credit
Agreement, and may pay for the maintenance and preservation of the
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 on demand for any payment made or
any expense incurred by the Collateral Agent pursuant to the foregoing
authorization; provided, however, that nothing in this Section 4.06 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, liens, security interests or other
encumbrances and maintenance as set forth herein or in the other Loan
Documents.
SECTION 4.07. Assignment of Security Interest. If at any time any
Grantor shall take a security interest in any property of an Account Debtor
or any other person to secure payment and performance of an Account, such
Grantor shall promptly assign such security interest to the Collateral
Agent. Such assignment need not be filed of public record unless necessary
to continue the perfected status of the security interest against creditors
of and transferees from the Account Debtor or other person granting the
security interest.
SECTION 4.08. Continuing Obligations of the Grantors. Each Grantor
shall remain liable 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 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 Secured
Parties from and against any and all liability for such performance.
SECTION 4.09. Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment, pledge or hypothecation of
the Collateral or shall grant any other Lien in respect of the Collateral,
except as expressly permitted by Section 6.02 of the Credit Agreement. None
of the Grantors shall make or permit to be made any transfer of the
Collateral and each Grantor shall remain at all times in possession of the
Collateral owned by it, except that (a) Inventory may be sold in the
ordinary course of business and (b) 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
Collateral (which notice may be given by telephone if promptly confirmed in
writing), the Grantors may use and dispose of the Collateral in any lawful
manner not inconsistent with the provisions of this Agreement, the Credit
Agreement or any other Loan Document.
SECTION 4.10. Limitation on Modification of Accounts. None of the
Grantors will, without the Collateral Agent's prior written consent, grant
any extension of the time of payment of any of the Accounts Receivable,
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, credits, discounts, compromises or settlements granted or made
in the ordinary course of business and 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.
SECTION 4.11. Insurance. The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or
damage to the Inventory and Equipment in accordance with Section 5.07 of
the Credit Agreement. Each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or agents
designated by the Collateral Agent) as such Grantor's true and lawful agent
(and attorney-in- fact) for the purpose, during the continuance of an Event
of Default, of making, settling and adjusting claims in respect of
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 hereby or to pay any premium in whole or part relating thereto,
the Collateral Agent may, 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 Section 4.11, including reasonable attorneys' fees,
court costs, expenses and other charges relating thereto, shall be payable,
upon demand, by the Grantors to the Collateral Agent and shall be
additional Obligations secured hereby.
SECTION 4.12. Legend. Each Grantor shall legend, in form and manner
satisfactory to the Collateral Agent, its Accounts Receivable and its
books, records and documents evidencing or pertaining thereto with an
appropriate reference to the fact that such Accounts Receivable have been
assigned to the Collateral Agent for the benefit of the Secured Parties and
that the Collateral Agent has a security interest therein.
SECTION 4.13. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor agrees that it will not, nor will it permit
any of its licensees to, do any act, or omit to do any act, whereby any
Patent which is material to the conduct of such Grantor's business may
become invalidated or dedicated to the public, and agrees that it shall
continue to xxxx any products covered by a Patent with the relevant patent
number as necessary and sufficient to establish and preserve its maximum
rights under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for non-use, (ii) maintain the quality
of products and services offered under such Trademark, (iii) display such
Trademark with notice of Federal or foreign registration to the extent
necessary and sufficient to establish and preserve its maximum rights under
applicable law and (iv) not knowingly use or knowingly permit the use of
such Trademark in violation of any third party rights.
(c) Each Grantor (either itself or through licensees) will, for each
work covered by a material Copyright, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent immediately if it
knows or has reason to know that any Patent, Trademark or Copyright
material to the conduct of its business may become abandoned, lost or
dedicated to the public, or of any adverse determination or development
(including the institution of, or any such determination or development in,
any proceeding in the United States Patent and Trademark Office, United
States Copyright Office or any court or similar office of any country)
regarding such Grantor's ownership of any Patent, Trademark or Copyright,
its right to register the same, or to keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any
agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or
Copyright) with the United States Patent and Trademark Office, United
States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, unless it promptly informs the Collateral Agent, and,
upon request of the Collateral Agent, executes and delivers any and all
agreements, instruments, documents and papers as the Collateral Agent may
request to evidence the Collateral Agent's security interest in such
Patent, Trademark or Copyright, and each Grantor hereby appoints the
Collateral Agent as its attorney-in-fact to execute and file such writings
for the foregoing purposes, all acts of such attorney being hereby ratified
and confirmed; such power, being coupled with an interest, is irrevocable
during the term of this Agreement.
(f) Each Grantor will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or
any political subdivision thereof, to maintain and pursue each material
application relating to the Patents, Trademarks and/or Copyrights (and to
obtain the relevant grant or registration) and to maintain each issued
Patent and each registration of the Trademarks and Copyrights that is
material to the conduct of any Grantor's business, including timely filings
of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if consistent with
good business judgment, to initiate opposition, interference and
cancelation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall
notify the Collateral Agent and shall, if consistent with good business
judgment, promptly xxx for infringement, misappropriation or dilution and
to recover any and all damages for such infringement, misappropriation or
dilution, and take such other actions as are appropriate under the
circumstances to protect such Collateral.
(h) Upon and during the continuance of an Event of Default, each
Grantor shall use its commercially reasonable efforts to obtain all
requisite consents or approvals by the licensor of each Copyright License,
Patent License or Trademark License to effect the assignment of all of such
Grantor's right, title and interest thereunder to the Collateral Agent or
its designee.
ARTICLE V
Collections
Power of Attorney. Each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or agents
designated by the Collateral Agent) as such Grantor's true and lawful agent
and attorney-in-fact, and in such capacity the Collateral Agent shall have
the right, with power of substitution for each Grantor and in each
Grantor's name or otherwise, for the use and benefit of the Collateral
Agent and the Secured Parties, upon the occurrence and during the
continuance of an Event of Default (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 Receivable 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;
and (h) 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, however, that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent or any Secured Party to make any commitment or to make any
inquiry as to the nature or sufficiency of any payment received by the
Collateral Agent or any Secured Party, 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, and no action taken or omitted to be taken by the
Collateral Agent or any Secured Party with respect to the Collateral or any
part thereof shall give rise to any defense, counterclaim or offset in
favor of any Grantor or to any claim or action against the Collateral Agent
or any Secured Party. It is understood and agreed that the appointment of
the Collateral Agent as the agent and attorney-in- fact of the Grantors for
the purposes set forth above is coupled with an interest and is irrevocable
during the term of this Agreement. The provisions of this Section shall in
no event relieve any Grantor of any of its obligations hereunder or under
any other Loan Document with respect to the Collateral or any part thereof
or impose any obligation on the Collateral Agent or any Secured Party to
proceed in any particular manner with respect to the Collateral or any part
thereof, or in any way limit the exercise by the Collateral Agent or any
Secured Party of any other or further right which it may have on the date
of this Agreement or hereafter, whether hereunder, under any other Loan
Document, by law or otherwise.
ARTICLE VI
Remedies
SECTION 6.01. Remedies upon Default. Upon the occurrence and during
the continuance of an Event of Default, each Grantor agrees to deliver each
item of Collateral to the Collateral Agent on demand, and it is agreed that
the Collateral Agent shall have the right to take any of or all the
following actions at the same or different times: (a) with respect to any
Collateral consisting of Intellectual Property, on demand, to cause the
Security Interest to become an assignment, transfer and conveyance of any
of or all such Collateral by the applicable Grantors to the Collateral
Agent, or to license or sublicense, whether general, special or otherwise,
and whether on an exclusive or non-exclusive basis, any such Collateral
throughout the world on such terms and conditions and in such manner as the
Collateral Agent shall determine (other than in violation of any
then-existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral
may be located for the purpose of taking possession of or removing the
Collateral and, generally, to exercise any and all rights afforded to a
secured party under the Uniform Commercial Code or other applicable law.
Without limiting the generality of the foregoing, each Grantor agrees that
the Collateral Agent shall have the right, subject to the mandatory
requirements of applicable law, to sell or otherwise dispose of all or any
part of the Collateral, at 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. The Collateral Agent shall
be authorized at any such sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Collateral for their own
account for investment and not with a view to the distribution or sale
thereof, and 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 such
sale 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 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.
The Collateral Agent shall give the Grantors 10 days' written notice
(which each Grantor agrees is reasonable notice within the meaning of
Section 9-504(3) of the Uniform Commercial Code as in effect in the State
of New York 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. 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. At any public (or, to the extent permitted by law, private) sale
made pursuant to this Section, any Secured Party may bid for or purchase,
free (to the extent permitted by law) from any right of redemption, stay,
valuation or appraisal on the part of any Grantor (all said rights being
also hereby waived and released to the extent permitted by law), the
Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured
Party from any Grantor as a credit against the purchase price, and such
Secured Party may, upon compliance with the terms of sale, hold, retain and
dispose of such property without further accountability to any Grantor
therefor. For purposes hereof, 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 to such agreement, 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 Obligations paid in
full. 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.
SECTION 6.02. Application of Proceeds. (a) Subject to paragraph (b)
of this section, the Collateral Agent shall apply the proceeds of any
collection or sale of the Collateral, as well as any Collateral consisting
of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Administrative Agent or the Collateral Agent (in its capacity as such
hereunder or under any other Loan Document) in connection with such
collection or sale or otherwise in connection with this Agreement or
any of the 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 hereunder or under any other
Loan 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 Loan Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the 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.
(b) Notwithstanding any contrary provision of paragraph (a) of this
Section, (i) proceeds of Collateral and cash Collateral other than the
Xxxxxxx Collateral and the WOW Collateral shall not be applied to the
payment of Xxxxxxx Obligations or WOW Obligations, (ii) proceeds of WOW
Collateral and cash WOW Collateral shall not be applied to the payment of
Xxxxxxx Obligations and shall be applied to the payment of WOW Obligations,
until the WOW Obligations have been paid in full, prior to being applied to
payment of the General Obligations and (iii) proceeds of Xxxxxxx Collateral
and cash Xxxxxxx Collateral shall not be applied to the payment of WOW
Obligations and shall be applied to the payment of the Xxxxxxx Obligations,
until the Xxxxxxx Obligations have been paid in full, prior to being
applied to payment of the General Obligations.
(c) 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 the 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.
SECTION 6.03. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies
under this Article 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, non-exclusive license (exercisable
without payment of royalty or other compensation to the Grantors) to use,
license or sub-license any of the Collateral consisting of Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the
same may be located, 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. The use of such license by the Collateral Agent shall be
exercised, at the option of the Collateral Agent, upon the occurrence and
during the continuation of an Event of Default; provided that any license,
sub- license 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.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All communications and
notices hereunder to any Subsidiary Guarantor shall be given to it at its
address or telecopy number set forth on Schedule I, with a copy to the
Borrower.
SECTION 7.02. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the Security Interest and all obligations of
the Grantors hereunder shall be absolute and unconditional irrespective of
(a) any lack of validity or enforceability of the Credit Agreement, any
other Loan Document, any agreement with respect to any of the 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 Obligations, or any other amendment or waiver of or
any consent to any departure from the Credit Agreement, any other Loan
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 Obligations, or (d) any other circumstance
that might otherwise constitute a defense available to, or a discharge of,
any Grantor in respect of the Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon
by the Secured Parties and shall survive the making by the Lenders of the
Loans, and the execution and delivery to the Lenders of any notes
evidencing such Loans, regardless of any investigation made by the Lenders
or on their behalf, and shall continue in full force and effect until this
Agreement shall terminate.
SECTION 7.04. Binding Effect; Several 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 successors and assigns, and shall
inure to the benefit of such Grantor, the Collateral Agent and the other
Secured Parties and their respective 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.
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Grantor or the Collateral
Agent that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification.
(a) Each Grantor jointly and severally agrees to pay upon demand to the
Collateral Agent the amount of any and all reasonable expenses, including
the reasonable fees, disbursements and other charges of its counsel and of
any experts or agents, which the Collateral Agent may incur in connection
with (i) the administration of this Agreement (including the customary fees
and charges of the Collateral Agent for any audits conducted by it or on
its behalf with respect to the Accounts Receivable or Inventory), (ii) the
custody or preservation of, or the sale of, collection from or other
realization upon any of the Collateral, (iii) the exercise, enforcement or
protection of any of the rights of the Collateral Agent hereunder or (iv)
the failure of any Grantor to perform or observe any of the provisions
hereof.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Grantor jointly and severally agrees to
indemnify the Collateral Agent and the other Indemnitees against, and hold
each of them harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable fees, disbursements
and other charges of counsel, incurred by or asserted against any of them
arising out of, in any way connected with, or as a result of, the
execution, delivery or performance of this Agreement or any claim,
litigation, investigation or proceeding relating hereto or to the
Collateral, whether or not any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct
of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents.
The provisions of this Section 7.06 shall remain operative and in full
force and effect regardless of the termination of this Agreement or any
other Loan Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Loan Document, or any investigation made by or on behalf of the Collateral
Agent or any Lender. All amounts due under this Section 7.06 shall be
payable on written demand therefor.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Collateral Agent hereunder and of the Collateral Agent, the Issuing Bank,
the Administrative Agent and the Lenders under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provisions of this Agreement or any other
Loan Document or consent to any departure by any Grantor therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or
demand on any Grantor in any case shall entitle such Grantor or any other
Grantor to any other or further notice or demand in similar or other
circumstances.
(b) 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 9.02 of the
Credit Agreement.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.09.
SECTION 7.10. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected
or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of
itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 7.11 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract (subject to
Section 7.04), and shall become effective as provided in Section 7.04.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed
counterpart hereof.
SECTION 7.12. Headings. Article and Section headings used herein are
for the purpose of reference only, are not part of this Agreement and are
not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Nothing in
this Agreement shall affect any right that the Collateral Agent, the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or the other Loan
Documents against any Grantor or its properties in the courts of any
jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the
other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 7.14. Termination. (a) This Agreement and the Security
Interest shall terminate when all the Obligations have been indefeasibly
paid in full, the Lenders have no further commitment to lend, the LC
Exposure has been reduced to zero and the Issuing Bank has no further
commitment to issue Letters of Credit under the Credit Agreement, at which
time the Collateral Agent shall execute and deliver to the Grantors, at the
Grantors' expense, all Uniform Commercial Code termination statements and
similar documents which the Grantors shall reasonably request to evidence
such termination. Any execution and delivery of termination statements or
documents pursuant to this whole of Section 7.14 shall be without recourse
to or warranty by the Collateral Agent. A Subsidiary Guarantor shall
automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Subsidiary Guarantor shall be
automatically released in the event that all the capital stock of such
Subsidiary Guarantor shall be sold, transferred or otherwise disposed of to
a person that is not an Affiliate of the Borrower in accordance with the
terms of the Credit Agreement; provided that the Required Lenders shall
have consented to such sale, transfer or other disposition (to the extent
required by the Credit Agreement) and the terms of such consent did not
provide otherwise.
(b) Upon any sale or other transfer by any Grantor of any Collateral
that is permitted under the Credit Agreement to any Person that is not a
Grantor, or upon the effectiveness of any written consent to the release of
a security interest granted hereby in any Collateral pursuant to the Credit
Agreement, the security interest in such Collateral shall be automatically
released.
SECTION 7.15. Additional Grantors. Upon execution and delivery by the
Collateral Agent and a Subsidiary of an instrument in the form of Annex 3
hereto, such 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 such instrument shall not require the consent of any
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.
SECTION 7.16. Compliance with Laws. Notwithstanding anything herein
which may be construed to the contrary, no action shall be taken by any of
the Collateral Agent and the Secured Parties with respect to the Licenses
or any license of the Federal Communications Commission ("FCC") unless and
until any required approval under the Federal Communications Act of 1934,
and any applicable rules and regulations thereunder, requiring the consent
to or approval of such action by the FCC or any governmental or other
authority, have been satisfied and, to the extent applicable, any remedial
action taken with respect to the Collateral or any Security Interest
granted therein by the Collateral Agent and the Secured Parties shall be
subject to other applicable laws.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ALAMOSA (DELAWARE), INC.,
by /s/ Xxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
ALAMOSA HOLDINGS, LLC.,
by /s/ Xxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
EACH OF THE SUBSIDIARY
GUARANTORS LISTED ON
SCHEDULE I HERETO EXCEPT
ALAMOSA LIMITED, LLC,
by /s/ Xxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Officer
ALAMOSA LIMITED, LLC,
by /s/ Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
CITICORP USA, INC., as Collateral
Agent,
by /s/ J. Xxxxxxx Xxxxxx
---------------------------
Name: J. Xxxxxxx Xxxxxx
Title: Authorized Officer
SCHEDULE I
SUBSIDIARY GUARANTORS
SUBSIDIARY GUARANTOR ADDRESS
------------------------------------------------------------------------
Texas Telecommunications, LP 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Alamosa Properties, L.P. 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Alamosa Wisconsin Limited Partnership 0000 Xxxx Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Alamosa (Wisconsin) Properties, LLC 0000 Xxxx Xxxxx Xxxxxx Xxxxx
Xxxxxxxx , Xxxxxxxxx 00000
Alamosa Delaware GP, LLC 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Alamosa Wisconsin GP, LLC 0000 Xxxx Xxxxx Xxxxxx Xxxxx
Xxxxxxxx , Xxxxxxxxx 00000
Alamosa Finance, LLC 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Alamosa Limited, LLC 000 Xxxx Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Alamosa PCS, Inc. 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Alamosa Holdings, LLC 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxxxx Wireless Communications L.L.C. 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Xxxxxxx Wireless Properties L.L.C. 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Washington Oregon Wireless, LLC 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Washington Oregon Wireless Properties, LLC 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Washington Oregon Wireless Licenses, LLC 0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
