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GEONET SYSTEM SECURITY AGREEMENT
Dated as of December 1, 1997
among
GEOTEK COMMUNICATIONS, INC. and
GEOTEK USA, INC.
and
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Collateral Agent
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS.................................................................................. 2
1.1 Defined Terms................................................................................ 2
1.2 UCC Definitions.............................................................................. 9
ARTICLE 2. SECURITY INTERESTS........................................................................... 10
2.1 Grant of Security Interests.................................................................. 10
2.2 Continuing Liability of the Company.......................................................... 11
2.3 Sales and Collections........................................................................ 12
2.4 Release of Collateral........................................................................ 12
2.5 Certain Assurances Regarding Subsidiaries and Collateral..................................... 14
2.6 Consents Regarding Licenses and Leases....................................................... 15
ARTICLE 3. REPRESENTATIONS AND WARRANTIES............................................................... 16
3.1 Validity of Security Agreement; Consents..................................................... 16
3.2 Title to Collateral.......................................................................... 17
3.3 Validity, Perfection and Priority of Security Interests...................................... 18
3.4 Enforceability of Intangibles................................................................ 19
3.5 Place of Business; Location of Collateral.................................................... 20
3.6 Trade Names.................................................................................. 20
3.7 Patents and Trademarks....................................................................... 21
ARTICLE 4. COVENANTS.................................................................................... 21
4.1 Perfection of Security Interests............................................................. 21
4.2 Further Actions.............................................................................. 21
4.3 Change of Name, Identity or Structure........................................................ 24
4.4 Place of Business and Collateral............................................................. 25
4.5 Fixtures..................................................................................... 25
4.6 Maintenance of Records....................................................................... 26
4.7 Compliance with Laws, etc.................................................................... 27
4.8 Payment of Taxes, etc........................................................................ 27
4.9 Compliance with Terms of Accounts, Contracts and Licenses.................................... 28
4.10 Limitation on Liens on Collateral............................................................ 28
4.11 Limitations on Modifications of Intangibles; No Waivers or Extensions........................ 28
4.12 Maintenance of Insurance..................................................................... 29
4.13 Limitations on Dispositions of Collateral.................................................... 30
4.14 Further Identification of Collateral......................................................... 30
4.15 Notices...................................................................................... 30
4.16 Right of Inspection.......................................................................... 31
4.17 Maintenance of Equipment..................................................................... 31
4.18 Covenants Regarding Patent and Trademark Collateral.......................................... 32
4.19 Reimbursement Obligation..................................................................... 34
ARTICLE 5. REMEDIES; RIGHTS UPON DEFAULT................................................................ 35
5.1 UCC Rights................................................................................... 35
5.2 Payments on Collateral....................................................................... 36
5.3 Possession of Collateral..................................................................... 37
5.4 Sale of Collateral........................................................................... 37
5.5 Rights of Purchasers......................................................................... 39
5.6 Intellectual Property........................................................................ 40
5.7 Additional Rights of the Collateral Agent.................................................... 41
5.8 Remedies Not Exclusive....................................................................... 42
5.9 Waiver and Estoppel.......................................................................... 43
5.10 Power of Attorney............................................................................ 44
5.11 Application of Proceeds...................................................................... 47
ARTICLE 6. MISCELLANEOUS................................................................................ 47
6.1 Notices...................................................................................... 47
6.2 No Waivers................................................................................... 48
6.3 Compensation and Expenses of the Collateral Agent............................................ 48
6.4 Indemnification.............................................................................. 49
6.5 Amendments, Supplements and Waivers.......................................................... 50
6.6 Successors and Assigns....................................................................... 50
6.7 Limitation of Law; Severability.............................................................. 51
6.8 Governing Law................................................................................ 52
6.9 Counterparts; Effectiveness.................................................................. 52
6.10 Termination; Survival........................................................................ 52
6.11 Entire Agreement............................................................................. 52
6.12 Controlling Terms............................................................................ 53
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GEONET SYSTEM SECURITY AGREEMENT
This GEONET SYSTEM SECURITY AGREEMENT dated as of December 1, 1997, by
and between GEOTEK COMMUNICATIONS, INC., a Delaware corporation ("Geotek"),
GEOTEK USA, INC., a Delaware corporation ("Geotek USA"), and GEOTEK AMERICA,
INC., a Delaware corporation ("Geotek America"), together with any other
Subsidiaries of Geotek listed on the attached Schedule 1, as such Schedule may
be amended from time to time (jointly and severally, individually and
collectively, the "Company"), and IBJ XXXXXXXX BANK AND TRUST COMPANY, a New
York banking corporation, and its successors or nominees, as collateral agent
(the "Collateral Agent").
W I T N E S S E T H :
WHEREAS, Geotek and the Collateral Agent are parties to a First
Amendment dated as of December 1, 1997 (hereinafter, the "First Amendment") to
the Indenture dated as of June 30, 1995, as supplemented, between Geotek
Communications, Inc. and IBJ Xxxxxxxx Bank & Trust Company, as Trustee (such
Indenture, as amended by the First Amendment, and as it may hereafter be
amended, replaced, extended or otherwise modified from time to time hereinafter,
the "Indenture"); and
WHEREAS, in consideration of the benefits to be realized by the Company
under the First Amendment, the Company has agreed to enter into this Security
Agreement to grant to the Collateral Agent, for the benefit of the holders of
the Securities, a security interest in the Collateral referred to herein; and
WHEREAS, it is a condition precedent to the effectiveness of the First
Amendment that the Company shall have granted to the Collateral Agent a
perfected first priority security interest in the Collateral covered by this
Security Agreement.
NOW, THEREFORE, for good and valuable consideration received by the
Company, the receipt and sufficiency of which is hereby acknowledged, and in
order to induce the Collateral Agent to enter into the First Amendment, the
parties, intending to be legally bound, hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Defined Terms.
Capitalized terms used in this Security Agreement without definition
have the meanings ascribed to them in the Indenture, and the following terms
shall have the following meanings:
"Collateral" has the meaning specified in Section 2.1 hereof.
"Equipment" means all equipment now owned or hereafter acquired by the
Company, or any of them, or any Subsidiary, wherever located, including all
items of machinery, equipment, furnishings and fixtures of every kind (exclusive
of furniture and fixtures at the Company's corporate headquarters), whether
affixed to real property or not, and all handling and delivery equipment,
computers, computer upgrades and other data-processing equipment and all other
office equipment, including without limitation, to the extent it does not
constitute inventory, all software, telephone systems, shelters and antennae,
test equipment, tooling and machinery, demo equipment, FHMA equipment, FHMA
Common, FHMA Sector, UPS, PBX, IMACS & Router, DSX, Echo Canceler, Port Manager,
Protek, TSS & TVSS, generators, DACF and any and all additions to, substitutions
for, replacements of or accessions to any of the foregoing, together with all
attachments, components, parts (including spare parts) and accessories whether
installed thereon or affixed thereto. In addition, each item of Equipment shall
be deemed to include such rights and licenses as (i) are reasonably required to
use such item of Equipment in the manner and for the purposes intended by the
manufacturer thereof, and (ii) the manufacturer of the foregoing, by agreement
or operation of law, may have granted to the Company, or any of them, or any
Subsidiary.
"FCC Licenses" means Licenses (as that term is defined in the
Indenture).
"Intangibles" means all contract rights and general intangibles now
owned or hereafter acquired by the Company, or any of them, or any Subsidiary,
including, without limitation, all customer lists, permits, Trademarks, Patents,
Licenses, copyrights and other rights in intellectual property (including
without limitation, rights in technology and computer software), other than
accounts receivables; provided, however, that an Intangible shall only
constitute Collateral if it is used by the Company primarily in connection with
the Northeast Licensed Area or is listed on the attached Schedule 2, as such
Schedule may be amended from time to time. If an Intangible used in connection
with the Northeast Licensed Area does not constitute Collateral, such Intangible
shall be subject to the Company's obligations under Section 5.6 hereof.
"Leases" means all contracts and agreements, whether now existing or
hereafter entered into, pursuant to which the Company, or any of them, or any
Subsidiary, leases or otherwise occupies or uses property (whether realty or
personalty) as lessee, together with all rights and interests of the lessee
thereunder.
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"License" means, with respect to any patent, any agreement granting any
right to practice any invention covered by any patent and, with respect to any
trademark, any agreement granting any right to use any trademark, and any other
license of intellectual property (including, without limitation, licenses of
technology and computer software); provided, however, that a License shall only
constitute Collateral if (i) such License is used by the Company primarily in
connection with the Northeast Licensed Area or is listed on the attached
Schedule 2, as such Schedule may be amended from time to time, and (ii) the
applicable license agreement does not preclude the Company, or any of them, from
assigning its rights in such License to the Collateral Agent and its assigns, or
the licensor under such License consents to such assignment. If a License used
in connection with the Northeast Licensed Area does not constitute Collateral,
such License shall be subject to the Company's obligations under Section 5.6
hereof.
"Obligations" means (a) all amounts now or hereafter payable by the
Company, or any of them, or any Subsidiary, to the Securityholders in respect of
the Securities and pursuant to the Indenture, (b) all other obligations or
liabilities now or hereafter payable by the Company, or any of them, or any
Subsidiary, pursuant to the Indenture, (c) all obligations and liabilities now
or hereafter payable by the Company, or any of them, or any Subsidiary, under,
arising out of or in connection with this Security Agreement, the Indenture, the
U.S. Pledge Agreement, the Custody Account Pledge Agreement or any other
document, and (d) all other indebtedness, obligations and liabilities of the
Company, or any of them, or any Subsidiary, to the Securityholders or to the
Collateral Agent for the benefit of the Securityholders arising under the
Indenture, now existing or hereafter arising or incurred, whether or not
evidenced by notes or other instruments, and whether such indebtedness,
obligations and liabilities are direct or indirect, fixed or contingent,
liquidated or unliquidated, due or to become due, secured or unsecured, joint,
several or joint and several. Notwithstanding the foregoing, Obligations shall
not include any indebtedness, debts, obligations, agreements, liabilities,
covenants and performance of Geotek under, arising out of or in connection with
(i) the Warrant Agreement dated as of June 30, 1995 by and between Geotek and
IBJ Xxxxxxxx Bank & Trust Company, as warrant agent, or the Warrants issued
pursuant thereto, (ii) the Registration Rights Agreement, or (ii) the Warrant
Share Registration Rights Agreement dated as of June 30, 1995 by and between
Geotek and the Initial Purchaser.
"Patent" means any and all letters patent of the United States or any
other country, and all applications for letters patent pending in the United
States or any other country, and all reissues, continuations,
continuations-in-part or extensions thereof, which the Company, or any of them,
or any Subsidiary,
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may now or hereafter own; provided, however, that a Patent shall only constitute
Collateral if it is used by the Company primarily in connection with the
Northeast Licensed Area or is listed on the attached Schedule 2, as such
Schedule may be amended from time to time. If a Patent used in connection with
the Northeast Licensed Area does not constitute Collateral, such Patent shall be
subject to the Company's obligations under Section 5.6 hereof.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, charitable
foundation, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"PowerSpectrum Subsidiaries" means PowerSpectrum of Boston, Inc.,
PowerSpectrum of New York, Inc., PowerSpectrum of Philadelphia, Inc. and
PowerSpectrum of Washington, Inc., each of which is a Delaware corporation and a
wholly-owned Subsidiary of Geotek USA.
"Proceeds" means all proceeds, including (a) whatever is received upon
any collection, exchange, sale or other disposition of any of the Collateral and
any property into which any of the Collateral is converted, whether cash or
noncash, (b) any and all payments or other property (in any form whatsoever)
made or due and payable on account of any insurance, indemnity, warranty or
guaranty payable to the Company, or any of them, or any Subsidiary, with respect
to any of the Collateral, (c) any and all payments (in any form whatsoever) made
or due and payable in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental body, authority, bureau or agency (or any person, corporation,
agency, authority or other entity acting under color of any governmental
authority), (d) any claim of the Company, or any of them, or any Subsidiary,
against third parties for past, present or future infringement of any Patent
constituting a Qualifying Asset or for past, present or future infringement or
dilution of any Trademark constituting a Qualifying Asset or for injury to the
goodwill associated with any such Trademark or for the breach of any License and
(e) any and all other amounts from time to time paid or payable in consideration
for any of the Collateral.
"Qualifying Asset" means any asset (including without limitation all
property interests and other rights) whatsoever of the Company, or any of them,
or any Subsidiary, whether now existing or hereafter acquired, which either (i)
constitutes part of or is used in connection with or otherwise relates to the
Northeast Licensed Area or any FCC License related thereto, or (ii) is acquired
(either by purchase or lease) or paid for by the Company, or any of them, or any
Subsidiary, pursuant to Geotek's obligations to acquire or pay for Replacement
Collateral under
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Section 4.20 or 10.08 of the Indenture, including without limitation any asset
listed on the attached Schedule 2 as such Schedule may be amended from time to
time in accordance with the terms of this Security Agreement, the Indenture, the
U.S. Pledge Agreement or any other document, or by mutual agreement of the
parties.
"Real Estate" means all real property and all buildings, plants,
furnishing or fixtures or other improvements to or construction on real property
now owned or hereafter acquired by the Company, or any of them, or any
Subsidiary, and all leasehold interests now owned or hereafter acquired by the
Company, or any of them, or any Subsidiary, in real property, including without
limitation, shelters and antennae, DACF and generators.
"Security Agreement" means this GEONET System Security Agreement, as
the same may from time to time be amended, modified or supplemented and shall
refer to this Security Agreement as in effect on the date such reference becomes
operative.
"Trademark" means all right, title or interest which the Company, or
any of them, or any Subsidiary, may now or hereafter have in any or all
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos, other source of
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature, now existing
or hereafter adopted or acquired, all registration and recordings thereof and
all applications in connection therewith, including without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or political subdivision thereof and all
reissues, extensions or renewals thereof; provided, however, that a Trademark
shall only constitute Collateral if it is used by the Company primarily in
connection with the Northeast Licensed Area or is listed on the attached
Schedule 2, as such Schedule may be amended from time to time. If a Trademark
used in connection with the Northeast Licensed Area does not constitute
Collateral, such Trademark shall be subject to the Company's obligations under
Section 5.6 hereof.
"UCC" means at any time 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, the validity or perfection of any
security interest granted herein is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than New York then, as to the validity or
perfection of such security interest, "UCC" shall mean the Uniform Commercial
Code in effect in such other jurisdiction.
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1.2 UCC Definitions.
The uncapitalized terms "account," "account debtor," "chattel paper,"
"contract right," "document," "warehouse receipt," "xxxx of lading," "document
of title," "instrument," "inventory," "equipment," "general intangible,"
"fixture," "money," "proceeds" and "purchase money security interest" as used in
Section 1.1 or elsewhere in this Security Agreement have the meanings of such
terms as defined in the UCC.
ARTICLE 2. SECURITY INTERESTS
2.1 Grant of Security Interests.
To secure the full and punctual payment of all Obligations, and in
order to induce the Collateral Agent to enter into the First Amendment and any
other related amendments and agreements, the Company hereby collaterally assigns
to the Collateral Agent for the benefit of the Securityholders, and grants to
the Collateral Agent a security interest in, all right, title and interest of
the Company, or any of them, or any Subsidiary, in, to and under the following
assets, whether now existing or hereafter acquired, to the extent and only to
the extent any such asset is a Qualifying Asset (all of which are herein
collectively referred to as the "Collateral"):
(a) all Intangibles;
(b) all Equipment;
(c) all Leases;
(d) to the extent not included in the foregoing, all
books, ledgers and records and all computer programs, tapes, discs,
punch cards, data processing software, transaction files, master files
and related property and rights (including computer and peripheral
equipment) necessary or helpful in enforcing, identifying or
establishing any item of Collateral (subject to Section 5.3 hereof);
and
(e) to the extent not otherwise included, all Proceeds and
products of any or all of the foregoing, whether existing on the date
hereof or arising hereafter.
2.2 Continuing Liability of the Company.
Anything herein to the contrary notwithstanding, the Company shall
remain liable to observe and perform all the terms and conditions to be observed
and performed by it under any contract,
6
lease, agreement, warranty or other obligation with respect to the Collateral,
and shall do nothing to impair the security interests herein granted. The
Collateral Agent shall not have any obligation or liability under any such
contract, agreement, warranty or obligation by reason of or arising out of this
Security Agreement or the receipt by the Collateral Agent of any payment
relating to any Collateral, nor shall the Collateral Agent be required to
perform or fulfill any of the obligations of the Company with respect to the
Collateral, to make any inquiry as to the nature or sufficiency of any payment
received by it or the sufficiency of the performance of any party's obligations
with respect to any Collateral. Furthermore, the Collateral Agent shall not be
required to file any claim or demand to collect any amount due or to enforce the
performance of any party's obligations with respect to, the Collateral.
2.3 Sales and Collections.
Except as expressly provided in the Indenture, the
Company will not, and will not permit any of its or their Subsidiaries to,
directly or indirectly sell, convey, transfer, lease or otherwise dispose of any
Collateral.
2.4 Release of Collateral.
Upon the final indefeasible payment in full in cash and performance of
the Obligations, this Agreement and the covenants contained herein shall
terminate (except for Sections 4.19, 6.3 and 6.4 hereof) and the Collateral
shall be released by the Collateral Agent to the Company and the Collateral
Agent shall have no further security interest in the Collateral. In addition,
this Agreement shall terminate (except for the Sections 4.19, 6.3 and 6.4
hereof) and the Collateral shall be released upon the prior written consent of
the holders of at least 66 2/3% of the aggregate principal amount of the
Securities then outstanding (the "Requisite Vote") pursuant to a request (a
"Collateral Release Request") made by the Company to the holders. In the event
that the Company does not receive the Requisite Vote pursuant to any such
Collateral Release Request, the Company may, at its option, within five business
days after the latest date on which such consents are required to be delivered
to the Company pursuant to the terms of the Collateral Release Request, make an
offer to purchase (a "Collateral Release Repurchase Offer") all of the
outstanding Securities at a purchase price of 101.5% of the Accreted Value
thereof, plus accrued and unpaid interest, if any, to the date of repurchase.
Upon the consummation of such Collateral Release Repurchase Offer, this
Agreement automatically shall terminate and the Collateral shall be released. If
the Company shall at any time make a Collateral Release Request, the Company
shall pay to the voting holders an amount in cash equal to .50% of the Accreted
Value on such date as provided in the Indenture. Any Collateral Release Request
shall be made as
7
provided in the Indenture. Upon such termination, the Collateral Agent shall
promptly reassign and redeliver (or cause to be reassigned and redelivered) to
the Company, or to such person or persons as the Company shall designate or to
whomever may be lawfully entitled to receive such surplus, against receipt, such
of the Collateral (if any) as shall not have been sold or otherwise applied by
the Collateral Agent pursuant to the terms hereof and shall still be held by it
hereunder, together with appropriate instruments of reassignment and release.
Any such reassignment shall be without recourse upon or warranty by the
Collateral Agent (other than a warranty that the Collateral Agent has not
assigned or delivered the Collateral so reassigned and redelivered its rights
and interests hereunder to any other person) and at the expense of the Company.
Upon final indefeasible payment in full in cash and performance of the
Obligations, the Collateral Agent will (as soon as reasonably practicable after
receipt of notice from the Company requesting the same but at the expense of the
Company) send the Company, for each jurisdiction in which a UCC financing
statement is on file to perfect the security interests granted to the Collateral
Agent hereunder, a termination statement.
2.5 Certain Assurances Regarding Subsidiaries and Collateral.
In the event that it is at any time or from time to time determined
that any Subsidiary has any right, title or interest in any asset which, if
owned by Company, or any of them, would be Collateral hereunder, or if the
Company, or any of them, acquires any right, title or interest in any asset
which constitutes Collateral but which is not adequately described or included
in this Security Agreement or any applicable financing statement in the
necessary manner to grant to the Collateral Agent a valid first priority
perfected security interest in such asset, then, without notice or demand from
the Collateral Agent, the Company shall immediately furnish written notice of
such fact to the Collateral Agent and the Company shall immediately take all
necessary and appropriate action, and Company shall cause any and all such
Subsidiaries to immediately take all necessary and appropriate actions
(including without limitation, execution of or joinder to this Security
Agreement), (i) to grant to the Collateral Agent for the benefit of the
Securityholders a first priority perfected lien in such assets in accordance
with the provisions of this Security Agreement, and (ii) to bind any and all
such Subsidiaries to all of the provisions of this Security Agreement without
exception.
2.6 Consents Regarding Licenses and Leases.
To the extent that Company's right to assign to the
Collateral Agent, and to grant it a security interest in, any Licenses or Leases
is conditioned upon any third party's consent, Company shall use its
commercially reasonable efforts to expeditiously procure such
8
consent; provided, however, that, unless an Event of Default shall have occurred
and be continuing, the Company shall have no obligation to comply with this
Section 2.6 with respect to (i) any Leases existing as of December 15, 1997, and
(ii) any agreements between the Company and its Subsidiaries and Raphael
Armaments Development Agency.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
3.1 Validity of Security Agreement; Consents.
(a) The execution, delivery and performance of this
Security Agreement by the Company and the creation of the security interests
provided for herein (i) are within Company's (and each of their) corporate
power, (ii) have been duly authorized by all necessary corporate action,
including the consent of shareholders where required, on behalf of the Company,
and each of them, and (iii) are not in contravention of any provision of the
Company's (or any of their) articles of incorporation or bylaws.
(b) The execution, delivery and performance of this
Security Agreement by the Company, the creation of the security interests
provided for herein, and the exercise and enforcement by the Collateral Agent
(including its successors and assigns) of its rights and remedies hereunder upon
the occurrence of an Event of Default, including without limitation the
possession, use and operation of the Collateral by the Collateral Agent and the
sale of the Collateral in whole or in part by the Collateral Agent to a third
party, (i) do not and would not violate any law or regulation or any order or
decree of any court or governmental instrumentality currently applicable to the
Company, or any of them, except to the extent that FCC Licenses may be needed to
use and operate the Collateral, (ii) do not and would not conflict with or
result in a breach of, or constitute a default under, any indenture, mortgage,
deed of trust, license agreement, lease, or other agreement or instrument to
which the Company, or any of them, is a party or by which it or any of its
properties is bound, except for any such conflicts, breaches or defaults which
would not in the aggregate have a material adverse effect on the business,
assets, operations or financial condition of the Company or the value of the
Collateral or the ability of the Collateral Agent or any purchaser of the
Collateral to own, operate, use, sell or otherwise transfer the Collateral,
(iii) do not and would not result in the creation or imposition of any Lien upon
any property of the Company, or any of them, other than in favor of the
Collateral Agent, and (iv) do not and would not require the consent or approval
of any governmental authority or other person other than those that have been
obtained, except
9
that (A) the transfer of the FCC Licenses needed to operate such GEONET systems
would require the approval of the FCC and (B) the assignment of Leases of Real
Estate may require the consent of the lessors, and except for any such consents
or approvals which, if not procured, would not in the aggregate have a material
adverse effect on the business, assets, operations or financial condition of the
Company or the value of the Collateral or the ability of the Collateral Agent or
any purchaser of the Collateral to own, operate, use, sell or otherwise transfer
the Collateral.
(c) This Security Agreement has been duly executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against it, and each of them, in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting the enforceability of creditors' rights generally and
by general provisions of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3.2 Title to Collateral; All Necessary Northeast Licensed
Area Assets.
(a) Except for the security interests granted to the
Collateral Agent pursuant to this Security Agreement, the Company is the sole
owner of each item of the Collateral, having good title thereto, free and clear
of any and all Liens exclusive of Permitted Liens (as such term is modified in
Section 3.3(b) hereof).
(b) The Collateral includes all material assets,
property interests and rights (including all intellectual property) necessary
for the operation of the Company's GEONET systems in the Northeast Licensed
Area, such that upon the occurrence of an Event of Default the Collateral Agent
or any purchaser of the Collateral could use and operate such GEONET systems in
substantially the same manner that such GEONET systems are presently operated by
the Company, without (i) violating any law or regulation or any order or decree
of any court or governmental instrumentality, except to the extent that FCC
Licenses may be needed to use and operate such GEONET systems, (ii) causing or
creating a conflict with or a breach of, or a default under, any indenture,
mortgage, deed of trust, license agreement, lease, or other agreement or
instrument to which any of the Collateral is subject, except for conflicts,
breaches or defaults which would not in the aggregate have a material adverse
effect on the ability of the Collateral Agent or such purchaser to own, operate,
use, sell or otherwise transfer the Collateral, or (iii) obtaining the consent
or approval of any governmental authority or other person, except that (A) the
transfer of the
10
FCC Licenses needed to operate such GEONET systems would require the approval of
the FCC and (B) the assignment of Leases of Real Estate may require the consent
of the lessors, and except for any such consents or approvals which, if not
procured, would not in the aggregate have a material adverse effect on the
ability of the Collateral Agent or such purchaser to own, operate, use, sell or
otherwise transfer the Collateral.
(c) All of the leasehold interests and any other
rights or assets previously held by the Subsidiaries of Geotek USA (including
without limitation the PowerSpectrum Subsidiaries) which are part of, used in
connection with or otherwise relate to the Northeast Licensed Area, have been
assigned or otherwise transferred to Geotek USA, except for the leases listed on
the attached Schedule 10(a).
(d) Geotek America owns no leasehold interests or
other rights or assets which are part of, used in connection with or otherwise
relate to the Northeast Licensed Area except for the leases listed on the
attached Schedule 10(b).
3.3 Validity, Perfection and Priority of Security Interests.
(a) By complying with Section 4.1 hereof, Company
will have created a valid perfected first priority security interest in favor of
the Collateral Agent in all existing Collateral and in all identifiable Proceeds
of such Collateral subject only to Permitted Liens (as such term is modified in
Section 3.3(b) hereof). Continuing compliance by Company with the provisions of
Section 4.2 hereof will also (i) create valid security interests in all
Collateral acquired after the date hereof and in all identifiable Proceeds of
such Collateral and (ii) cause such security interests in all Collateral and in
all Proceeds which are (A) identifiable cash Proceeds of Collateral covered by
financing statements required to be filed hereunder and (B) identifiable
Proceeds in which a security interest may be perfected by such filing under the
UCC to be, in each case, prior to the claims of a trustee in bankruptcy under
the United States Federal Bankruptcy Code.
(b) The security interests of the Collateral Agent
in the Collateral, as set forth in Section 3.3(a) hereof, rank first in
priority, except that the priority of the security interests may be subject to
Permitted Liens (exclusive of those Permitted Liens described in paragraphs (g),
(h), (j), (k) and (l) of the definition of Permitted Liens contained in Section
1.01 of the Indenture and exclusive of Liens described in clauses (iii), (iv)
and (v) of the proviso set forth in Section 4.10 of the Indenture). Except as
described in the immediately preceding sentence, other than financing statements
or other similar documents perfecting the security interests or deed of trust
11
liens of the Collateral Agent, no financing statements, deeds of trust,
mortgages or similar documents covering all or any part of the Collateral are on
file or of record in any government office in any jurisdiction in which such
filing or recording would be effective to perfect a security interest in such
Collateral, nor is any of the Collateral in the possession of any Person (other
than the Company) asserting any claim thereto or security interest therein.
3.4 Enforceability of Intangibles.
To the best knowledge of the Company, each Intangible is a valid and
binding obligation of the related third party in respect thereof, enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
provisions of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law), and complies with any applicable legal
requirements.
3.5 Place of Business; Location of Collateral.
The attached Schedule 3 correctly sets forth the Company's (and each of
their) chief executive office and principal place of business of the Company,
and each of them, and the offices of the Company where records concerning
Intangibles are kept. The attached Schedule 4 correctly sets forth the location
of all Equipment. Except as otherwise specified in the attached Schedule 4, all
Equipment has been located at the address(es) specified on such Schedule 4 at
all times during or acquired by the Company within the four-month period prior
to the date hereof while owned by the Company, or any of them. No amount payable
under or in connection with any of the Collateral is evidenced by promissory
notes or other instruments. The leased real estate listed in the attached
Schedule 5 includes all existing Real Estate which constitutes Qualifying
Assets. The attached Schedule 6 lists all material Leases constituting
Qualifying Assets, provided that for purposes of this Security Agreement, all
leased Real Estate shall be considered material.
3.6 Trade Names.
Any and all trade names, division names, assumed names or other names
under which the Company, or any of them, transacts, or within the four-month
period prior to the date hereof has transacted, business are specified on the
attached Schedule 7.
3.7 Patents and Trademarks.
As of the date hereof, the Company does not have any Patents, Patent
Licenses, Trademarks, Trademark Licenses or
12
material Intangibles (whether or not constituting Collateral) other than as
described on the attached Schedule 8.
ARTICLE 4. COVENANTS
The Company covenants and agrees with the Collateral Agent that until
the payment in full of all Obligations, the Company will comply with the
following:
4.1 Perfection of Security Interests.
At the Collateral Agent's option, either the Collateral Agent or the
Company will, at the Company's expense, cause all filings and recordings and
other actions specified on the attached Schedule 9 to have been completed on or
about the date on which this Security Agreement is executed.
4.2 Further Actions.
(a) At all times after the date of execution of this
Security Agreement, the Company will, at its expense, comply with the following:
(i) as to all Collateral, it will cause UCC
ncing statements and continuation statements to be filed and to be
on file in all applicable jurisdictions as required to perfect the
security interests granted to the Collateral Agent hereunder, to the
extent that applicable law permits perfection of a security interest by
filing under the UCC;
(ii) as to all Proceeds, it will cause all UCC
financing statements and continuation statements filed in accordance
with clause (i) above to include a statement or a checked box
indicating that Proceeds of all items of Collateral described therein
are covered;
(iii) as to any amount payable under or in
connection with any of the Collateral which shall be or shall become
evidenced by any promissory note or other instrument, the Company will
immediately pledge and deliver such note or other instrument to the
Collateral Agent as part of the Collateral, duly endorsed in a manner
satisfactory to the Collateral Agent;
(iv) as to all Real Estate acquired after the
date hereof which constitute Qualifying Assets, the Company will
execute and record such mortgages, deeds of trust or other real estate
security documents in such form as shall be reasonably satisfactory to
the
13
Collateral Agent so as to create a valid first priority perfected lien
thereon in favor of the Collateral Agent, subject only to Permitted
Liens (as such term is modified in Section 3.3(b) hereof);
and
(b) The Company will, from time to time and at its
expense, execute, deliver, file or record such financing statements pursuant to
the Uniform Commercial Code, applications for certificates of title and such
other statements, assignments, instruments, documents, agreements or other
papers and take any other action that may be reasonably necessary, or that the
Collateral Agent may otherwise reasonably request, in order to create, preserve,
perfect, confirm or validate the security interests created thereby, to enable
the Collateral Agent to obtain the full benefits of this Security Agreement or
to enable it to exercise and enforce any of its rights, powers and remedies
hereunder, including, without limitation, its right to take possession of the
Collateral, and will, to the extent required by this Security Agreement, use
commercially reasonable efforts to obtain such waivers from landlords and
mortgagees as the Collateral Agent may reasonably request.
(c) To the fullest extent permitted by law, the Company
authorizes the Collateral Agent to sign and file financing and continuation
statements and amendments thereto with respect to the Collateral without its
signature thereon.
(d) The Company will obtain such consents and approvals
and take such actions as may be required to effect the assignment and transfer
of the leases listed in the attached Schedule 10(a) from the PowerSpectrum
Subsidiaries to Geotek USA not later than January 31, 1998. If the Company
cannot obtain such consents and approvals by such date, Geotek USA will promptly
(i) cause the PowerSpectrum Subsidiaries to join in this Security Agreement and
to execute and deliver to the Collateral Agent such UCC financing statements and
take such further actions pursuant to Section 4.2 hereof as may be requested by
the Collateral Agent to create and perfect a security interest hereunder in such
leases and any other Collateral owned by the PowerSpectrum Subsidiaries, and
(ii) pledge to the Collateral Agent the capital stock of the PowerSpectrum
Subsidiaries and take such other actions as the Collateral Agent may reasonably
request to grant to the Collateral Agent a first priority perfected lien on such
capital stock.
(e) The Company will obtain such consents and approvals
and take such actions as may be required to effect the assignment and transfer
of the leases listed in the attached Schedule 10(b) from Geotek America to
Geotek USA not later than January 31, 1998. If the Company cannot obtain such
consents and approvals by such date, Geotek will promptly (i) execute and
deliver to the Collateral Agent such UCC financing statements and
14
take such further actions pursuant to Section 4.2 hereof as may be requested by
the Collateral Agent to perfect its security interest in such leases and any
other Collateral owned by Geotek America, and (ii) pledge to the Collateral
Agent the capital stock of Geotek America and take such other actions as the
Collateral Agent may reasonably request to grant to the Collateral Agent a first
priority perfected lien on such capital stock.
4.3 Change of Name, Identity or Structure.
The Company, and each of them, will not change its name, identity or
corporate structure in any manner, except that the Company may, after furnishing
the Collateral Agent with at least fifteen (15) days advance written notice,
effect such a change if and only if it has no adverse impact on any Collateral
or the Collateral Agent's security interest therein; provided, however, that no
such notice shall be required if the change affects only Subsidiaries of the
Company other than Geotek USA or the License Holding Company. The Company, and
each of them, will not conduct its business under any trade, assumed or
fictitious name unless it shall have given the Collateral Agent at least thirty
days' prior written notice thereof and shall have taken all action (or made
arrangements to take such action substantially simultaneously with such change
if it is impossible to take such action in advance) reasonably necessary or
reasonably requested by the Collateral Agent to amend any financing statement or
continuation statement relating to the security interests granted hereby in
order to preserve such security interests and to effectuate or maintain the
priority thereof against all Persons, exclusive of Permitted Liens (as such term
is modified in Section 3.3(b) hereof).
4.4 Place of Business and Collateral.
The Company, and each of them, will not change the location of (a) its
places of business, (b) its chief executive office or (c) the office or other
locations where the Company, or any of them, keeps or holds any Collateral or
any records relating thereto, from the applicable location listed on the
attached Schedules to this Security Agreement unless the Company furnishes to
the Collateral Agent 30 days' prior written notice of such change, makes all UCC
filings required by Section 4.2 hereof and takes all other action necessary or
that the Collateral Agent may reasonably request to preserve, perfect, confirm
and protect the security interests granted hereby. The Company will in no event
change the location of any Collateral if such change would cause the security
interest granted hereby in such Collateral to lapse or cease to be perfected.
The Company, and each of them, will at all times maintain its chief executive
office within one of the forty-eight contiguous states (other than Maryland or
Tennessee) in which Article 9 of the UCC is in effect.
15
4.5 Fixtures.
Except in the ordinary course of business, the Company will not permit
any Equipment to become a fixture unless it shall have given the Collateral
Agent at least ten days' prior written notice thereof and shall have taken all
such action and delivered or caused to be delivered to the Collateral Agent all
instruments and documents, including, without limitation, waivers and
subordination agreements by any landlords and mortgagees, and filed all
financing statements necessary or reasonably requested by the Collateral Agent,
to preserve and protect the security interest granted herein and to effectuate
or maintain the priority thereof against all Persons, subject to Permitted Liens
(as such term is modified in Section 3.3(b) hereof).
4.6 Maintenance of Records.
The Company will keep and maintain at its own cost and expense complete
books and records relating to the Collateral which are reasonably satisfactory
to the Collateral Agent including, without limitation, a record of all payments
received and all credits granted with respect to the Collateral and all of its
other dealings with the Collateral. The Company will, upon written request, xxxx
its books and records pertaining to the Collateral to evidence this Security
Agreement and the security interests granted hereby. For the Collateral Agent's
further security, the Company agrees that the Collateral Agent shall have a
special property interest in all of the Company's books and records pertaining
to the Collateral and Company shall, upon the occurrence of an Event of Default,
deliver and turn over copies of any such books and records to the Collateral
Agent or to its representatives at any time on demand of the Collateral Agent.
4.7 Compliance with Laws, etc.
The Company will comply, in all material respects, with all acts,
rules, regulations, orders, decrees and directions of any governmental authority
applicable to the Collateral or any part thereof or to the operation of the
Company's business except to the extent that the failure to comply would not
have a material adverse effect on the financial or other condition of the
Company, or any of them; provided, however, that the Company may contest any
act, regulation, order, decree or direction in any reasonable manner which shall
not in the reasonable opinion of the Collateral Agent materially and adversely
affect the Collateral Agent's rights hereunder or the first priority of its
security interest in the Collateral.
4.8 Payment of Taxes, etc.
The Company will pay promptly when due, all taxes, assessments and
governmental charges or levies imposed upon the
16
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including claims for labor, materials and supplies), except
that no such charge need be paid if (a) the validity thereof is being contested
in good faith by appropriate proceedings and (b) such charge is adequately
reserved against in accordance with GAAP.
4.9 Compliance with Terms of Accounts, Contracts and Licenses.
The Company will perform and comply in all material respects with all
of its obligations under all agreements relating to the Collateral to which it
is a party or by which it is bound.
4.10 Limitation on Liens on Collateral.
The Company will not create, permit or suffer to exist, and will defend
the Collateral and the Company's rights with respect thereto against and take
such other action as is necessary to remove, any Lien, security interest,
encumbrance or claim in or to the Collateral other than the security interests
created hereunder, and except for Permitted Liens (as such term is modified in
Section 3.3(b) hereof).
4.11 Limitations on Modifications of Intangibles; No Waivers
or Extensions.
The Company will not (a) amend, modify, terminate or waive any
provision of any material Intangible in any manner which would have a materially
adverse effect on the value of such Intangible as Collateral, (b) fail to
exercise promptly and diligently each and every material right which it may have
under each Intangible or (c) fail to deliver to the Collateral Agent a copy of
each material demand, notice or document received by it relating in any way to
any Intangible. The Company will not, without the Collateral Agent's prior
written consent, grant any extension of the amounts due under any material
Intangible, 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 trade
discounts granted in the normal course of business, except such as in the
reasonable judgment of the Company are advisable to enhance the collectibility
thereof.
4.12 Maintenance of Insurance.
The Company, and each of them, will maintain with financially sound
insurance companies licensed to do business in Pennsylvania, and all other
states in which Equipment is located, insurance policies (a) insuring the
Equipment against loss by fire, explosion, theft and such other casualties as
are usually insured against by companies engaged in the same or similar business
for an amount not less than the replacement value thereof and (b) insuring the
Company and the
17
Collateral Agent against liability for personal injury arising from, and
property damage relating to, such Equipment, such policies to be in amounts
customary and appropriate for companies engaged in the same or similar business,
with losses payable to the Company and the Collateral Agent as their respective
interests may appear. The Company shall deliver to the Collateral Agent annually
each December 1st an officer's certificate with respect to the adequacy of the
insurance coverage on the Equipment.
4.13 Limitations on Dispositions of Collateral.
Except as expressly provided in the Indenture, the
Company will not, and will not permit any of its or their Subsidiaries to,
directly or indirectly sell, convey, transfer, lease or otherwise dispose of any
Collateral.
4.14 Further Identification of Collateral.
The Company will annually each December 1st furnish to the Collateral
Agent statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral.
4.15 Notices.
The Company will advise the Collateral Agent promptly and in reasonable
detail (a) of any Lien, security interest, encumbrance or claim, other than a
Permitted Lien (as such term is modified in Section 3.3(b) hereof), made or
asserted against any of the Collateral, (b) of any material change in the
composition of the Collateral, and (c) of the occurrence of any other event
which would have a material and adverse effect on the aggregate value of the
Collateral or on the security interests granted to the Collateral Agent in this
Security Agreement.
4.16 Right of Inspection.
The Collateral Agent shall at all times, upon reasonable prior notice,
have full and free access during normal business hours to all the books,
correspondence and records of the Company, and the Collateral Agent or its
representatives may examine the same, take extracts therefrom, make photocopies
thereof and have such discussions with officers, employees and public
accountants of the Company as the Collateral Agent may deem necessary, and the
Company agrees to render to the Collateral Agent, at the Company's cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto, and the Company shall be entitled to have a representative
present during such examinations. The Collateral Agent and its representatives
shall at all times, upon reasonable prior notice, also have the right to enter
into and upon any
18
premises during business hours where any of the Equipment is located for the
purpose of inspecting the same, observing its use or protecting interests of the
Collateral Agent therein.
4.17 Maintenance of Equipment.
The Company will, at its expense, generally maintain the Equipment in
good operating condition, ordinary wear and tear excepted.
4.18 Covenants Regarding Patent and Trademark Collateral.
(a) At such time as the Company, or any of them,
shall acquire any Patents or Trademarks, it will comply with the terms,
covenants and warranties of this Section 4.18.
(b) The Company (either itself or through licensees)
will, unless the Company shall reasonably determine that a Trademark is of
negligible economic value to the Company, (i) continue to use each Trademark on
each and every Trademark class of goods applicable to its current products and
services as reflected in its current catalogs, brochures and price lists in
order to maintain each Trademark in full force and free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under each Trademark, (iii) employ each Trademark with the
appropriate notice of registration, (iv) not adopt or use any xxxx which is
confusingly similar or a colorable imitation of any Trademark and (v) not (and
not permit any licensee or sublicensee thereof to) do any act or knowingly omit
to do any act whereby any Trademark may become invalidated.
(c) The Company will not, unless the Company shall
reasonably determine that a subject Patent is of negligible economic value to
the Company, do any act, or omit to do any act, whereby any Patent may be
abandoned or dedicated.
(d) The Company shall, unless the Company shall
reasonably determine that a subject Patent or Trademark is of negligible
economic value to the Company, notify the Collateral Agent immediately if it
knows, or has reason to know, that any application or registration relating to
any Patent or Trademark may become abandoned or dedicated, or of any adverse
determination or development (including, without limitation, the institution or,
or any such determination or development in any proceeding in the United States
Patent and Trademark Office or any court or tribunal in any country) regarding
the Company's ownership of any Patent or Trademark, its right to register the
same or keep and maintain the same.
(e) In the event the Company, or any of them, or any
Subsidiary, either itself or through any agent, employee,
19
licensee or designee, files any application for registration of any Patent or
Trademark with the United States Patent and Trademark Office or any similar
office or agency in any other country, it shall promptly inform the Collateral
Agent.
(f) The Company will, unless the Company shall
reasonably determine that a subject Patent or Trademark is of negligible
economic value to the Company, take all reasonably necessary steps, including,
without limitation, in any proceeding before the United States Patent and
Trademark Office or any similar office or agency in any other country or any
political subdivision thereof, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each registration of the
Patents and Trademarks, including without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.
(g) If any Patent or Trademark is infringed,
misappropriated or diluted by a third party, the Company shall promptly notify
the Collateral Agent after it learns thereof and shall, unless the Company shall
reasonably determine that such Patent or Trademark is of negligible economic
value to the Company, promptly xxx for infringement, misappropriation or
dilution, seek injunctive relief where appropriate and to recover any and all
damages for such infringement, misappropriation or dilution, or to take such
other action as the Company shall reasonably deem appropriate under the
circumstances to protect such Patent or Trademark.
4.19 Reimbursement Obligation.
Should the Company fail to comply with the provisions of this Security
Agreement, the Indenture, the U.S. Pledge Agreement, the Custody Account Pledge
Agreement or any other document such that the value of any Collateral or the
validity, perfection, rank or value of any security interest granted to the
Collateral Agent hereunder or thereunder is thereby diminished or potentially
diminished or put at risk (as reasonably determined by the Collateral Agent),
the Collateral Agent on behalf of the Company may, but shall not be required to,
effect such compliance on behalf of the Company, and the Company shall reimburse
the Collateral Agent for the cost thereof within 20 days after receipt of an
invoice from the Collateral Agent, and interest shall accrue on such
reimbursement obligation from the expiration of such 20 day period until
reimbursement thereof in full at a prevailing market rate of interest.
20
ARTICLE 5. REMEDIES; RIGHTS UPON DEFAULT
5.1 UCC Rights.
If any Event of Default shall have occurred and be continuing, the
Collateral Agent may in addition to all other rights and remedies granted to it
in this Security Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, exercise all rights and remedies of a
secured party under the UCC and all other rights available to the Collateral
Agent at law or in equity.
5.2 Payments on Collateral.
Without limiting the rights of the Collateral Agent under any other
provision of this Security Agreement, if an Event of Default shall occur and be
continuing:
(a) all payments received by the Company under or in
connection with any of the Collateral shall be held by the Company in trust for
the Collateral Agent, shall be segregated from other funds of the Company and
shall forthwith upon receipt by the Company be turned over to the Collateral
Agent, in the same form as received by the Company (duly endorsed by the Company
to the Collateral Agent, if required to permit collection thereof by the
Collateral Agent); and
(b) all such payments received by the Collateral
Agent (whether from the Company or otherwise) may, in the sole discretion of the
Collateral Agent, be held by the Collateral Agent as collateral security for,
and/or then or at any time thereafter applied in whole or in part by the
Collateral Agent to the payment of the expenses and Obligations as set forth in
Section 5.10 hereof.
5.3 Possession of Collateral.
In furtherance of the foregoing, the Company expressly agrees that, if
an Event of Default shall occur and be continuing, the Collateral Agent may (a)
by judicial process, or without judicial process if it can be done without
breach of the peace, enter any premises where any of such Collateral is or may
be located, and without charge or liability to the Collateral Agent seize and
remove such Collateral from such premises and (b) have access to and use of the
Company's books, records, files and other documents relating to such Collateral.
The Company may retain possession of any books, records, files and other
documents that do not relate primarily to the Northeast Licensed Area, provided
that the Company provides the Collateral Agent with access to and use of all
books, records, files and other documents and furnishes to the Collateral Agent
such copies thereof as it may from time to time request.
21
5.4 Sale of Collateral.
(a) The Company expressly agrees that if an Event of
Default shall occur and be continuing, the Collateral Agent, without demand of
performance or other demand or notice of any kind (except the notice specified
below of the time and place of any public or private sale) to the Company or any
other Person (all of which demands and/or notices are hereby waived by the
Company), may forthwith collect, receive, appropriate and realize upon the
Collateral and/or forthwith sell, lease, assign, give an option or options to
purchase or otherwise dispose of and deliver the Collateral (or contract to do
so) or any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any office of the Collateral Agent or elsewhere
in such manner as is commercially reasonable and as the Collateral Agent may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Collateral Agent shall have the right upon any such public
sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Collateral so sold. The Company further
agrees, at the Collateral Agent's request, to assemble the Collateral, and to
make it available to the Collateral Agent at places which the Collateral Agent
may reasonably select. To the extent permitted by applicable law, the Company
waives all claims, damages and demands against the Collateral Agent arising out
of the foreclosure, repossession, retention or sale of the Collateral.
(b) Unless the Collateral threatens to decline
speedily in value or is of a type customarily sold in a recognized market, the
Collateral Agent shall give the Company twenty days' written notice of its
intention to make any such public or private sale or sale at a broker's board or
on a securities exchange. Such notice shall (i) in the case of a public sale,
state the time and place fixed for such sale, (ii) in the case of a sale at a
broker's board or on a securities exchange, state the board or exchange at which
such sale is to be made and the day on which the Collateral, or any portion
thereof being sold, will first be offered for sale and (iii) in the case of a
private sale, state the day after which such sale may be consummated. The
Collateral Agent shall not be required or obligated to make any such sale
pursuant to any such notice. The Collateral Agent may 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 the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In the case of any sale of all
or any part of the Collateral for credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the selling price is paid
by the purchaser thereof, but the Collateral Agent shall not incur any liability
in case of failure of such purchaser to pay for the
22
Collateral so sold and, in the case of such failure, such Collateral may again
be sold upon like notice.
5.5 Rights of Purchasers.
Upon any sale of the Collateral (whether public or private) by the
Collateral Agent as described in this Security Agreement, the Collateral Agent
shall have the right to deliver, assign and transfer to the purchaser thereof
the Collateral so sold. Each purchaser (including the Collateral Agent) at any
such sale shall hold the Collateral so sold free from any claim or right of
whatever kind, except Permitted Liens (as such term is modified in Section
3.3(b) hereof), including any equity or right of redemption of the Company, and
the Company, to the extent permitted by law, hereby specifically waives all
rights of redemption, including, without limitation, the right to redeem the
Collateral under Section 9-506 of the UCC, and any right to a judicial or other
stay or approval which it has or may have under any law now existing or
hereafter adopted.
5.6 Intellectual Property.
(a) The Company, and each of them, hereby grants to
the Collateral Agent, for the benefit of the Securityholders, upon the
occurrence and during the continuation of an Event of Default, an irrevocable
nonexclusive, royalty-free license or sublicense under all Patents, Licenses and
other Intangibles (other than Trademarks) that do not constitute Collateral to
provide wireless telecommunications services and related equipment and products
in the Northeast Licensed Area, except (in the case of Licenses and other
Intangibles) to the extent that the license agreement or other agreement
pursuant to which the Company holds such Licenses or other Intangibles requires
the consent of the licensor or other third party and the Company is not able
(after making commercially reasonable efforts to do so) to obtain such consent;
provided, however, that the Company shall not be required to use its efforts to
obtain the consent of Xxxxxx Armaments Development Agency ("Xxxxxx") to such a
license.
(b) The Company, and each of them, hereby authorizes,
on behalf of itself and its Subsidiaries, Xxxxxx to xxxxx to the Collateral
Agent, for the benefit of the Securityholders, upon the occurrence and during
the continuation of an Event of Default, and notwithstanding the exclusivity
provisions and other provisions of their respective agreements with Xxxxxx, a
license under Rafael's patents, copyrights and other intellectual property
rights to design, develop, make and have made, market, distribute and sell
equipment and products for use in conjunction with such wireless
telecommunications services in the Northeast Licensed Area.
23
(c) The Company, and each of them, hereby grants to
the Collateral Agent, for the benefit of the Securityholders, upon the
occurrence and during the continuation of an Event of Default, an irrevocable
nonexclusive royalty-free license under their intellectual property rights to
use the Trademarks that do not constitute Collateral in connection with the
provision of wireless telecommunications services and related equipment and
products in the Northeast Licensed Area, provided that all goods and services
offered, sold or provided in conjunction with the Trademarks shall meet or
exceed the quality standards reasonably imposed by Company.
(e) The Collateral Agent shall be entitled to assign
or sublicense its rights under the licenses in this Section 5.6 in whole or
relevant part in connection with any sale or other disposition of Collateral in
accordance with this Article 5.
(f) The Company, and each of them, hereby grants to
any successor of the Company, or any of them (including without limitation any
reorganized debtor under a Chapter 11 Plan of Reorganization approved by the
Securityholders) the right to use the Patents, Trademarks, copyrights, Licenses
and other Intangibles of the Company, and each of them, and its Subsidiaries,
subject to the rights of the Collateral Agent under this Agreement.
5.7 Additional Rights of the Collateral Agent.
(a) The Company expressly agrees that if an Event of
Default shall occur and be continuing, the Collateral Agent shall have the right
and power to institute and maintain such suits and proceedings as it may deem
appropriate to protect and enforce the rights vested in it by this Security
Agreement and may proceed by suit or suits at law or in equity to enforce such
rights and to foreclose upon and sell the Collateral or any part thereof
pursuant to the judgment or decree of a court of competent jurisdiction.
(b) The Collateral Agent shall, to the extent
permitted by law and without regard to the solvency or insolvency at the time of
any Person then liable for the payment of any of the Obligations or the then
value of the Collateral, and without requiring any bond from any party to such
proceedings, be entitled to the appointment of a special receiver or receivers
(who may be the Collateral Agent) for the Collateral or any part thereof and for
the rents, issues, tolls, profits, royalties, revenues and other income
therefrom, which receiver shall have such powers as the court making such
appointment shall confer, and to the entry of an order directing that the rents,
issues, tolls, profits, royalties, revenues and other income of the property
constituting the whole or any part of the Collateral be segregated, sequestered
and impounded for the benefit of the
24
Collateral Agent, and the Company irrevocably consents to the appointment of
such receiver or receivers and to the entry of such order.
5.8 Remedies Not Exclusive.
(a) No remedy conferred upon or reserved to the
Collateral Agent in this Security Agreement is intended to be exclusive of any
other remedy or remedies, but every such remedy shall be cumulative and shall be
in addition to every other remedy conferred herein or now or hereafter existing
at law, in equity or by statute.
(b) If the Collateral Agent shall have proceeded to
enforce any rights, remedy or power under this Security Agreement and the
proceeding for the enforcement thereof shall have been discontinued or abandoned
for any reason or shall have been determined adversely to the Collateral Agent,
the Company and the Collateral Agent shall, subject to any determination in such
proceeding, severally and respectively be restored to their former positions and
rights under this Security Agreement, and thereafter all rights, remedies and
powers of the Collateral Agent shall continue as though no such proceedings had
been taken.
(c) All rights of action under this Security
Agreement may be enforced by the Collateral Agent without the possession of any
instrument evidencing any Obligation or the production thereof at any trial or
other proceeding relative thereto, and any suit or proceeding instituted by the
Collateral Agent shall be brought in its name and any judgment shall be held as
part of the Collateral.
5.9 Waiver and Estoppel.
(a) The Company, to the extent it may lawfully do so,
on behalf of itself and all who may claim through or under it, including without
limitation any and all subsequent creditors, vendees, assignees and lienors,
waives and releases all rights to demand or to have any marshalling of the
Collateral upon any sale, whether made under any power of sale granted herein or
pursuant to judicial proceedings or upon any foreclosure or any enforcement of
this Security Agreement and consents and agrees that all the Collateral may at
any such sale be offered and sold as an entirety.
(b) The Company, to the extent it may lawfully do so,
waives presentment, demand, protest and any notice of any kind (except notices
explicitly required hereunder) in connection with this Security Agreement and
any action taken by the Collateral Agent with respect to the Collateral.
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5.10 Power of Attorney.
The Company hereby irrevocably constitutes and appoints the Collateral
Agent, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of the Company
and in the name of the Company, or any of them, or in its own name, from time to
time in the Collateral Agent's reasonable discretion for the purpose of carrying
out the terms of this Security Agreement at any time (i) upon an occurrence of
an Event of Default and during the continuance thereof, or (ii) in the event the
Company, or any of them, fails to promptly perform any of its or their
obligations under this Security Agreement following the Collateral Agent's
demand for such performance, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, hereby gives the Collateral Agent the
power and right, on behalf of the Company, without notice to or assent by the
Company to do the following:
(a) to pay or discharge taxes, liens, security
interests or other encumbrances levied or placed on the Collateral;
(b) to effect any repairs or any insurance called for
by the terms of this Security Agreement and to pay all or any part of the
premiums therefor and the costs thereof; and
(c) upon the occurrence and continuance of any Event
of Default, (i) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due and to come due thereunder
directly to the Collateral Agent or as the Collateral Agent shall direct; (ii)
to receive payment of and receipt for any and all moneys, claims and other
amounts due and to become due at any time in respect of or arising out of any
Collateral; (iii) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts and other
documents relating to the Collateral; (iv) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce any other
right in respect of any Collateral; (v) to defend any suit, action or proceeding
brought against the Company, or any of them, with respect to any Collateral;
(vi) to settle, compromise and adjust any suit, action or proceeding described
above and, in connection therewith, to give such discharges or releases as the
Collateral Agent may deem appropriate; (vii) to assign any Patent or Trademark
(along with the goodwill of the business to which such Trademark pertains), for
such term or terms, on such conditions, and in such manner,
26
as the Collateral Agent shall in its sole discretion determine; and (viii)
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and to do, at
the Collateral Agent's option and the Company's expense, at any time, or from
time to time, all acts and things which the Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral and the Collateral Agent's
security interest therein, in order to effect the intent of this Security
Agreement, all as fully and effectively as the Company might do.
The Company hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
5.11 Application of Proceeds.
All proceeds realized by the Collateral Agent in respect of any or all
of the Collateral, including the proceeds of any sale thereof or any cash
distributed in respect of any of the Collateral shall be applied against the
Obligations in accordance with the Indenture. To the extent permitted by
applicable law, the Company shall be liable for any deficiency, and any surplus
shall be returned by the Collateral Agent to the person or persons legally
entitled thereto.
ARTICLE 6. MISCELLANEOUS
6.1 Notices.
Unless otherwise specified herein, all notices, requests or other
communications to any party hereunder shall be in writing and shall be given to
such party at its address set forth on the signature pages hereof or any other
address which such party shall have specified for the purpose of communications
hereunder by notice to the other parties hereunder. Each such notice, request or
other communication shall be effective (a) if given by mail, three days after
such communication is deposited, certified or registered, in the mails with
first class postage prepaid, addressed as aforesaid or (b) if given by other
means, when delivered at the address specified in this Section 6.1.
6.2 No Waivers.
No failure on the part of the Collateral Agent to exercise, no course
of dealing with respect to, and no delay in exercising any right, power or
privilege under this Security Agreement or any document or agreement
contemplated hereby shall operate as a waiver thereof nor shall any single or
partial exercise of any
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such right, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
6.3 Compensation and Expenses of the Collateral Agent.
The Company shall pay to the Collateral Agent from time to time upon
demand, all of the fees, costs and reasonable out-of-pocket expenses incurred by
the Collateral Agent (including, without limitation, the reasonable fees and
disbursements of counsel and any amounts payable by the Collateral Agent to any
of its agents, whether on account of fees, indemnities or otherwise) (a) arising
in connection with the preparation, modification, amendment, waiver or
termination of this Security Agreement or any document or agreement contemplated
hereby or any consent or waiver hereunder or thereunder or (b) incurred in
connection with the sale or other disposition of Collateral hereunder or under
any document or agreement contemplated hereby or the preservation, protection or
defense of the rights of the Collateral Agent in and to the Collateral.
6.4 Indemnification.
The Company, and each of them, shall at all times hereafter indemnify,
hold harmless and, on demand, reimburse the Collateral Agent and its
subsidiaries, affiliates, successors, assigns, officers, directors, employees
and agents, and their respective heirs, executors, administrators, successors
and assigns (all of the foregoing parties, including, but not limited to, the
Collateral Agent, being hereinafter collectively referred to as the
"Indemnities" and individually as an "Indemnitee") from, against and for any and
all liabilities, obligations, claims, damages, actions, penalties, causes of
action, losses, judgments, suits, costs, expenses and disbursements, including,
without limitation, attorney's fees (any and all of the foregoing being
hereinafter collectively referred to as the "Liabilities" and individually as a
"Liability") which the Indemnitees, or any of them, might be or become
subjected, by reason of, or arising out of the preparation, execution, delivery,
modification, administration or enforcement of, or performance of the Collateral
Agent's rights under, this Security Agreement or any other document, instrument
or agreement contemplated hereby or executed in connection herewith; provided
that the Company shall not be liable to any Indemnitee for any Liability to the
extent caused by the gross negligence or willful misconduct of such Indemnitee.
In no event shall any Indemnitee, as a condition to enforcing its rights under
this Section 6.4 or otherwise, be obligated to make a claim against any other
Person (including, without limitation, the Collateral Agent) to enforce its
rights under this Section 6.4.
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6.5 Amendments, Supplements and Waivers.
No amendment, supplement or waiver of any provision of this Security
Agreement or of any right, power or remedy under this Security Agreement shall
be effective unless made in accordance with Article Nine of the Indenture.
6.6 Successors and Assigns.
This Security Agreement shall be binding upon and inure to the benefit
of each of the parties hereto and their respective successors and assigns and
shall inure to the benefit of the Collateral Agent's and the Securityholders'
successors and assigns. Nothing herein is intended or shall be construed to give
any Person other than the parties hereto any right, remedy or claim under, to or
in respect of this Security Agreement or any Collateral.
6.7 Limitation of Law; Severability.
(a) All rights, remedies and powers provided in this
rity Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Security Agreement are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Security Agreement invalid,
unenforceable in whole or in part, or not entitled to be recorded, registered or
filed under the provisions of any applicable law.
(b) If any provision hereof is invalid and
forceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible; and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provisions in any other
jurisdiction.
6.8 Governing Law.
This Security Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
conflicts of laws principles.
6.9 Counterparts; Effectiveness.
This Security Agreement may be signed in any number of counterparts
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Security
29
Agreement shall become effective when the Collateral Agent shall receive
counterparts executed by all parties to this Security Agreement.
6.10 Termination; Survival.
This Security Agreement shall terminate when the security interests
granted hereunder have terminated and the Collateral has been released as
provided in Section 2.4 hereof, provided that the obligations of the Company
under any of Sections 4.19, 6.3 and 6.4 hereof shall survive any such
termination.
6.11 Entire Agreement.
This Security Agreement, and the Schedules hereto, constitute the
entire understanding of the parties hereto with respect to the transactions
contemplated hereby. Any and all previous agreements and understandings between
or among the parties regarding the subject matter hereof, whether written or
oral, are superseded by this Security Agreement.
6.12 Controlling Terms.
The parties hereto agree that if any provisions of this Security
Agreement shall be more restrictive on the Company than, or conflict with any
provisions of, the Indenture, then the provisions of this Security Agreement
shall be controlling.
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IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed by their respective authorized officers as of the
day and year first written above.
Addresses:
000 Xxxxxxxx Xxxxx Xxxx GEOTEK COMMUNICATIONS, INC.
Xxxxxxxx, XX 00000
Attn: General Counsel
Telecopier: 000-000-0000 By:
Telephone: 000-000-0000 --------------------------
Name:
Title:
000 Xxxxxxxx Xxxxx Xxxx GEOTEK USA, INC.
Xxxxxxxx, XX 00000
Attn: General Counsel
Telecopier: 000-000-0000 By:
Telephone: 000-000-0000 --------------------------
Name:
Title:
000 Xxxxxxxx Xxxxx Xxxx XXXXXX XXXXXXX, INC.
Xxxxxxxx, XX 00000
Attn: General Counsel
Telecopier: 000-000-0000 By:
Telephone: 000-000-0000 --------------------------
Name:
Title:
One State Street IBJ XXXXXXXX BANK & TRUST
Xxx Xxxx, XX 00000 COMPANY, as Collateral Agent
Xxx Xxxx, XX 00000
Attn: Corporate Trust and
Agency Administration
Telecopier: 000-000-0000 By:
Telephone: 000-000-0000 ----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
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