Exhibit 10.19
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Security Agreement") is made
and entered into as of November 25, 1998 by METROMEDIA FIBER NETWORK, INC., a
Delaware corporation (the "Pledgor"), IBJ XXXXXXXX BANK & TRUST COMPANY, a New
York banking corporation, having an office at Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, as trustee (in such capacity, the "Trustee") for the holders
from time to time (the "Holders") of the Notes (as defined herein) issued by the
Pledgor under the Indenture referred to below and IBJ XXXXXXXX BANK & TRUST
COMPANY, as securities intermediary (the "Securities Intermediary").
WITNESSETH
WHEREAS, the Pledgor and the Trustee have entered into that
certain Indenture dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Indenture"), pursuant
to which the Pledgor is issuing on the date hereof $650,000,000 in aggregate
principal amount of 10% Senior Notes due 2008 (and along with such notes that
may from time to time be issued in substitution therefor, the "Notes"); and
WHEREAS, the Pledgor has agreed, pursuant to the Indenture, to
(i) purchase or cause the purchase of Pledged Securities (as defined herein) in
an amount that will be sufficient upon receipt of scheduled interest and
principal payments in respect thereof to provide for the payment of the first
three scheduled interest payments due on the Notes and (ii) place such Pledged
Securities (or cause them to be replaced) in an account maintained by the
Trustee with the Securities Intermediary for the benefit of Holders of the
Notes; and
WHEREAS, the Pledgor has agreed to purchase and deliver to the
Trustee United States Treasury securities in an amount sufficient, in the
opinion of a nationally recognized firm of independent public accountants
selected by the Pledgor and delivered to the Trustee, upon receipt of scheduled
interest and principal payments of such securities, to provide for payment in
full of each of the first three scheduled interest payments due on the Notes and
interest on the Notes in the event that the Notes become due and payable prior
to such time as the first three scheduled interest payments thereon shall have
been paid in full ("Obligations"); and
WHEREAS, the Pledgor has agreed to (i) grant to the Trustee
for its benefit and the ratable benefit of the Holders of the Notes a security
interest in the Pledged Securities and related collateral and (ii) execute and
deliver this Security Agreement in order to secure the payment and performance
by the Pledgor of all the Obligations; and
WHEREAS, the Trustee has opened an account (the "Security
Account") with the Securities Intermediary, at its office at Xxx Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Account No. 600000071, in the name of the Pledgor,
with respect to which the Trustee is the sole entitlement holder and which is
under the sole dominion and control of the Trustee but subject to the terms of
this Security Agreement. Capitalized terms used herein and not otherwise defined
herein shall have the meanings given to such terms in the Indenture.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and in order to induce the Holders of the Notes to purchase the Notes,
the Pledgor hereby agrees with the Trustee, for the benefit of the Trustee and
for the ratable benefit of the Holders of the Notes, as follows:
SECTION 1. Pledge and Grant of Security Interest. As security
for the prompt and complete payment and performance when due of the Obligations
(whether at the stated maturity or otherwise), the Pledgor hereby pledges to the
Trustee for its benefit and for the ratable benefit of the Holders of the Notes,
and grants to the Trustee for its benefit and for the ratable benefit of the
Holders of the Notes, a continuing first priority security interest in and to
all of the Pledgor's right, title and interest in, to and under the following
(wherever located), whether investment property, general intangibles, other
rights, interests, claims and remedies or proceeds or otherwise (collectively,
the "Pledged Collateral"): (a) the United States Treasury securities identified
by CUSIP Number in Exhibit A to this Security Agreement (the "Pledged
Securities"), (b) any and all applicable Security Entitlements to the Pledged
Securities, (c) the Security Account and all funds, certificates, instruments,
assets and properties, if any, from time to time carried therein or representing
or evidencing the Security Account, (d) any and all related accounts in which
Security Entitlements to the Pledged Securities are carried, and (e) all
proceeds of any and all of the Pledged Collateral (including, without
limitation, proceeds that constitute property of the types described in clauses
(a) - (d) of this Section 1).
SECTION 2. Security for Obligation. This Security Agreement
secures the prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of all the Obligations.
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SECTION 3. Delivery of Pledged Securities; Security
Agreement; Interest. (a) The Pledged Securities shall be pledged and
transferred to the Trustee and the Trustee shall become the holder of a
Security Entitlement to the Pledged Securities through action by the
Securities Intermediary, as confirmed (in writing or electronically or
otherwise in accordance with standard industry practice) to the Trustee by
the Securities Intermediary either (i) indicating by book-entry that the
Pledged Securities and all Security Entitlements thereto has been credited to
the Security Account, or (ii) acquiring the Pledged Securities or a Security
Entitlement (as defined in Section 8-102(a)(8) of the Uniform Commercial Code
in effect in the State of New York (the "UCC")) thereto for the Trustee and
accepting the same for credit to the Security Account.
(b) Prior to or concurrently with the execution and delivery
hereof and prior to the transfer to the Trustee of the Pledged Securities (or
acquisition by the Trustee of any Security Entitlement thereto) as provided in
subsection (a) of this Section 3, the Trustee shall establish with the
Securities Intermediary the Security Account on the books of the Securities
Intermediary as a Securities Account segregated from all other custodial or
collateral accounts, such Security Account to be maintained at the offices of
the Securities Intermediary at Xxx Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, and the
Securities Intermediary shall maintain a Securities Account at the Federal
Reserve Bank of New York ("FRBNY"). Upon transfer of the Pledged Securities to
the Securities Intermediary (or the Securities Intermediary's acquisition of the
Security Entitlements thereto), as confirmed to the Securities Intermediary by
FRBNY or another securities intermediary, the Securities Intermediary shall make
appropriate book entries indicating that the Pledged Securities and/or such
Security Entitlements have been credited to the Trustee and the Security
Account. Subject to the other terms and conditions of this Security Agreement,
all funds or other property held by the Trustee pursuant to this Security
Agreement shall be held in the Security Account subject (except as expressly
provided in Section 4(a), (b) and (c) hereof) to the exclusive dominion and
control (including "control" as defined in Section 9-115(l)(e) of the UCC) of
the Trustee and exclusively, for the benefit of the Trustee and for the ratable
benefit of the Holders of the Notes, and segregated from all other funds or
other property otherwise held by the Trustee.
(c) The Trustee shall, in accordance with all applicable laws,
have sole dominion and control (including "control" as defined in UCC Section
9-115(l)(e)) over the Security Account, and it shall be a term and condition of
the Security Account, and the Pledgor irrevocably instructs the Trustee,
notwithstanding any other term or condition to the contrary in any other
agreement, that no Pledged Collateral shall be
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released to or for the account of, or withdrawn by or for the account of, the
Pledgor or any other Person except as expressly provided in this Security
Agreement.
(d) The Trustee shall, in accordance with and subject to all
applicable laws, be the sole entitlement holder of, and have the sole power to
originate "Entitlement Orders" (as defined in UCC Section 8-102(a)(8)) with
respect to, the Security Account and all United States Treasury securities held
therein, and the Securities Intermediary does hereby agree that it will comply
with Entitlement Orders issued by the Trustee with respect to the Security
Account and all assets and properties from time to time carried in the Security
Account, including such securities, Security Entitlements and other "Financial
Assets" (as defined in UCC Section 8-102(a)(9)), without further consent of the
Pledgor or any other Person (except, to the extent required under the Indenture,
of the Holders), and that no Pledged Collateral shall be released to or for the
account of, or withdrawn by or for the account of, the Pledgor or any other
Person except as expressly provided in this Security Agreement.
(e) All Pledged Collateral shall be retained in the Security
Account pending disbursement pursuant to the terms hereof.
(f) Concurrently with the execution and delivery of this
Security Agreement the Trustee and the Securities Intermediary are delivering to
the Pledgor and to Xxxxxxx Xxxxx Xxxxxx Inc., Xxxxx Securities Inc., Deutsche
Bank Securities Inc. and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation as
the initial purchasers of the Notes, a duly executed certificate, in the form of
Exhibit B hereto, of each of an officer of the Trustee and the Securities
Intermediary, confirming the Trustee's establishment and maintenance of the
Security Account and the Security Intermediary's receipt and holding of the
Pledged Securities or a Security Entitlement thereto and the crediting of the
Pledged Securities or such Security Entitlement to the Security Account, all in
accordance with this Security Agreement.
(g) Concurrently with the execution and delivery of this
Security Agreement, the Pledgor shall deliver to the Trustee executed copies of
proper financing statements, duly filed under the UCC of the State of New York,
covering the Pledged Collateral described in this Security Agreement.
(h) Concurrently with the execution and delivery of this
Security Agreement, the Pledgor shall deliver to the Trustee an opinion of a
nationally recognized firm of independent public accountants, selected by the
Pledgor, substantially in the form of Exhibit C hereto.
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(i) The Security Account shall be governed by the law of the
State of New York.
SECTION 4. Disbursements. (a) At least three Business Days
prior to the due date of any of the first three scheduled interest payments
on the Notes, the Pledgor may, pursuant to written instructions given by the
Pledgor to the Trustee (a "Company Order"), direct the Trustee to release
from the Security Account and pay to the Holders of the Notes on behalf of
the Issuer proceeds sufficient to provide for payment in full of such
interest then due on the Notes. Upon receipt of a Company Order, the Trustee
will release such proceeds in accordance with the Company Order and the
payment provisions of the Indenture to the Holders of the Notes from (and to
the extent of) proceeds of the Pledged Securities in the Security Account.
Nothing in this Section 4 shall affect the Trustee's rights to apply the
Pledged Collateral to the payment of amounts due on the Notes upon
acceleration thereof.
(b) If the Pledgor makes any interest payment or portion of an
interest payment for which the Pledged Collateral is security from a source of
funds other than the Security Account ("Other Funds"), the Pledgor may, after
payment in full of such interest payment, direct the Trustee pursuant to a
Company Order to release to the Pledgor or to another party at the direction of
the Pledgor (the "Pledgor's Designee") proceeds from the Security Account in an
amount less than or equal to the amount of Other Funds applied to such interest
payment. Upon receipt by the Trustee of such Company Order and provided the
Holders of the Notes have received such interest payment, if no Default or Event
of Default (as defined in the Indenture) shall have occurred and be continuing,
the Trustee shall pay over to the Pledgor or the Pledgor's Designee, as the case
may be, the requested amount from proceeds in the Security Account as soon as
practicable (on the same Business Day if practicable). As a condition to any
release of funds to the Pledgor pursuant to this Section 4(b), the Pledgor shall
deliver to the Trustee a certificate signed by an officer of the Pledgor stating
that the Pledgor has made the interest payment from a source of funds other than
the Security Account, and that such release has been duly authorized by the
Pledgor and will not contravene any provision of applicable law or the
Certificate of Incorporation or the By-laws of the Pledgor or any material
agreement or other material instrument binding upon the Pledgor or any of its
subsidiaries or any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Pledgor or any of its subsidiaries or
result in the creation or imposition of any Lien on any assets of the Pledgor,
except for the security interest granted under the Security Agreement.
(c) If at any time the principal of and interest on the
Pledged Securities exceeds 100% of the amount sufficient, in the written opinion
of a
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nationally recognized firm of independent accountants selected by the Pledgor
and delivered to the Trustee, to provide for payment in full of the Obligations,
the Pledgor may direct the Trustee to release any such excess amount to the
Pledgor or to any Pledgor's Designee. Upon receipt of a Company Order (which
shall include a certificate from such nationally recognized firm of independent
accountants stating the amount by which the Pledged Securities exceed the amount
required to be held in the Security Account), if no Default or Event of Default
(as defined in the Indenture) shall have occurred and be continuing, the Trustee
shall pay over to the Pledgor or the Pledgor's Designee, as the case may be, any
such excess amount.
(d) Upon payment in full of the Obligations, or if the Company
shall become obligated under the Indenture to redeem all of the outstanding
Notes and such Notes shall have been redeemed, then, if no Default or Event of
Default (as defined in the Indenture) shall have occurred and be continuing, the
security interest in the Pledged Collateral evidenced by this Security Agreement
will automatically terminate and be of no further force and effect and the
Pledged Collateral shall promptly (on the same Business Day if practicable) be
paid over and transferred to the Pledgor as directed in writing by the Pledgor.
Furthermore, upon the release of any Pledged Collateral from the Security
Account in accordance with the terms of this Security Agreement, whether upon
release of Pledged Collateral to Holders as payment of interest or otherwise,
the security interest evidenced by this Security Agreement in such released
Pledged Collateral will automatically terminate and be of no further force and
effect.
(e) At least three Business Days prior to the due date of each
of the first three scheduled interest payments on the Notes, the Pledgor shall
give the Trustee notice (by Company Order) as to whether such interest payment
will be made pursuant to Section 4(a) or 4(b) and the respective amounts of
interest that will be paid from the Security Account and from Other Funds. Any
Other Funds to be used to make any interest payment shall be delivered to the
Trustee, in immediately available funds, prior to 12:00 p.m. (New York City
time) on such interest payment date. If no such notice is given or such Other
Funds have not been so delivered, the Trustee is hereby directed to act pursuant
to Section 4(a) as if it had received a Company Order pursuant thereto for the
payment in full of the interest then due from the Security Account.
(f) The Trustee shall sell the Pledged Collateral in the
Security Account (pursuant to written instructions from Pledgor) in order to
make any scheduled payment of interest unless there are sufficient funds in the
Security Account on such interest payment date.
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(g) Nothing contained in Section 1, Section 3, this Section 4,
Section 11 or any other provision of this Security Agreement shall (i) afford
the Pledgor any right to issue Entitlement Orders with respect to any Security
Entitlement to the Pledged Securities or any Securities Account in which any
such Security Entitlement may be carried, or otherwise afford the Pledgor rights
to of any such Security Entitlement or (ii) except as otherwise specified under
this Agreement (or required by applicable law) give rise to any other rights of
the Pledgor with respect to the Pledged Securities, any Security Entitlement
thereto or any Securities Account in which any such Security Entitlement may be
carried (except as expressly provided in Sections 4(a), (b) and (C) hereof) of
the Trustee in its capacity as such (and not as a securities intermediary).
SECTION 5. Representations and Warranties. The Pledgor hereby
represents and warrants that, as of the date hereof:
(a) The execution and delivery by the Pledgor of, and the
performance by the Pledgor of its obligations under, this Security Agreement
will not contravene any provision of applicable law or statute or the
organization documents of the Pledgor or any material agreement or other
material instrument binding upon the Pledgor or any of its subsidiaries or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Pledgor or any of its subsidiaries, or result in the
creation or imposition of any Lien on any assets of the Pledgor, except for the
security interests granted under this Security Agreement; no consent, approval,
authorization or order of, or qualification with, or other action by, any
governmental or regulatory body or agency or any third party is required (i) for
the execution, delivery or performance by the Pledgor of this Security
Agreement, (ii) for the grant by the Pledgor of the security interest granted
hereby, (iii) except for the actions required pursuant to Section 3(b), for the
perfection and maintenance of the pledge and security interest created hereby
(including the first priority nature of such pledge and security interest,
assuming compliance by the Securities Intermediary with all obligations
contained in this Security Agreement, or (iv) except for any such consents,
approvals, authorizations or orders required to be obtained by the Trustee (or
the Holders) for reasons other than the consummation of this transaction, for
the exercise by the Trustee of the rights provided for in this Security
Agreement or the remedies in respect of the Pledged Collateral pursuant to this
Security Agreement.
(b) Immediately before depositing the Pledged Securities into
the Security Account, the Pledgor is the legal and beneficial owner of the
Pledged Collateral free and clear of any Lien or claims of any person or entity
(except for the security interests granted under this Security Agreement). No
financing statement or
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other instrument similar in effect covering the Pledgor's interest in the
Pledged Securities is on file in any public office, other than any financing
statements filed pursuant to this Security Agreement.
(c) This Security Agreement has been duly authorized, validly
executed and delivered by the Pledgor and assuming the due authorization,
execution and delivery thereof by the Trustee, constitutes a valid and binding
agreement of the Pledgor, enforceable against the Pledgor in accordance with its
terms, except as (i) may be limited by bankruptcy, insolvency, fraudulent
conveyance, preference, reorganization, moratorium or similar laws now or
hereafter in effect relating to or affecting creditors' rights or remedies
generally, (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability, (iii) the exculpation provisions
and rights to indemnification hereunder may be limited by U.S. federal and state
securities laws and public policy considerations and (iv) the waiver of rights
and defenses contained in Section 11(b), Section 15.11 and Section 15.17 hereof
may be limited by applicable law.
(d) Upon the transfer to the Trustee of the Pledged Securities
and the acquisition by the Trustee of a Security Entitlement thereto in
accordance with Section 3, and the compliance by the Securities Intermediary
with the provisions of this Security Agreement, the pledge of and grant of a
security interest in the Pledged Collateral securing the payment of the
Obligations for the benefit of the Trustee and the Holders of the Notes will
constitute a valid first priority perfected security interest in such Pledged
Collateral, enforceable as such against all creditors of the Pledgor (and any
persons purporting to purchase any of the Pledged Collateral from the Pledgor),
and all filings and actions (other than the transfer to the Trustee of the
Pledged Securities) necessary or desirable to perfect and protect such security
interest have been duly taken.
(e) There are no legal or governmental proceedings pending or,
to the best of the Pledgor's knowledge, threatened to which the Pledgor or any
of its subsidiaries is a party or to which any of the properties of the Pledgor
or any such subsidiary is subject that would materially adversely affect the
power or ability of the Pledgor to perform its obligations under this Security
Agreement or to consummate the transactions contemplated hereby.
(f) The pledge of the Pledged Collateral pursuant to this
Security Agreement is not prohibited by law or governmental regulation
(including, without limitation, Regulations T, U and X of the Board of Governors
of the Federal Reserve System) applicable to the Pledgor.
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(g) No Event of Default (as defined herein) exists.
SECTION 6. Further Assurances. The Pledgor will, promptly upon
request by the Trustee, execute and deliver or cause to be executed and
delivered, or use its commercially reasonable efforts to procure, all
assignments, instruments and other documents, all in form and substance
reasonably satisfactory to the Trustee, any instruments to the Trustee and take
any other actions that are necessary or desirable, to perfect, continue the
perfection of, or protect the first priority of the Trustee's security interest
in and to the Pledged Collateral, to protect the Pledged Collateral against the
rights, claims, or interests of third persons (other than any such rights,
claims or interests created by or arising through the Trustee), to enable the
Trustee to enforce its rights and remedies hereunder, or to effect the purposes
of this Security Agreement. A photocopy or other reproduction of this Agreement
or any financing statement covering the Pledged Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law. The Pledgor
will promptly pay all reasonable costs incurred in connection with any of the
foregoing. The Pledgor also agrees to take all actions that are necessary to
perfect or continue the perfection of, or to protect the first priority of, the
Trustee's security interest in and to the Pledged Collateral, including the
filing of all necessary financing and continuation statements, and to protect
the Pledged Collateral against the rights, claims or interests of third persons
(other than any such rights, claims or interests created by or arising through
the Trustee).
SECTION 7. Covenants. The Pledgor covenants and agrees with
the Trustee and the Holders of the Notes that from and after the date of this
Security Agreement until the payment in full in cash of the Obligations:
(a) that (i) it will not (and will not purport to) sell or
otherwise dispose of, or grant any option or warrant with respect to, any of the
Pledged Collateral or its beneficial interest therein, and (ii) it will not
create or permit to exist any Lien or other adverse interest in or with respect
to its beneficial interest in any of the Pledged Collateral (except for the
security interests granted under this Security Agreement) and at all times will
be the sole beneficial owner of the Pledged Collateral; and
(b) that it will not (i) enter into any agreement or
understanding that restricts or inhibits or purports to restrict or inhibit the
Trustee's rights or remedies hereunder, including, without limitation, the
Trustee's right to sell or otherwise dispose of the Pledged Collateral or (ii)
fail to pay or discharge any tax, assessment or levy of any nature with respect
to its beneficial interest in the Pledged
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Collateral not later than five days prior to the date of any proposed sale under
any judgment, writ or warrant of attachment with respect to such beneficial
interest.
SECTION 8. Power of Attorney. Upon the occurrence and
continuation of an Event of Default, in addition to all of the powers granted to
the Trustee pursuant to the Indenture, the Pledgor hereby appoints and
constitutes the Trustee as the Pledgor's attorney-in-fact, with full authority
in the place and stead of the Pledgor and in the name of the Pledgor or
otherwise, from time to time in the Trustee's discretion, to take any action and
to execute any instrument that the Trustee may deem necessary or advisable to
accomplish the purposes of this Security Agreement, including, without
limitation, the following powers: (a) collection of proceeds of any Pledged
Collateral; (b) conveyance of any item of Pledged Collateral to any purchaser
thereof; (c) giving of any notices or recording of any Liens under Section 6
hereof; and (d) paying or discharging taxes or Liens levied or placed upon the
Pledged Collateral, the legality or validity thereof and the amounts necessary
to discharge the same to be determined by the Trustee in its reasonable
discretion, and such payments made by the Trustee to become part of the
Obligations of the Pledgor to the Trustee, due and payable immediately upon
demand. The Trustee's authority under this Section 8 shall include, without
limitation, the authority to endorse and negotiate any checks or instruments
representing proceeds of Pledged Collateral in the name of the Pledgor, execute
and give receipt for any certificate of ownership or any document constituting
Pledged Collateral, transfer title to any item of Pledged Collateral, sign the
Pledgor's name on all financing statements (to the extent permitted by
applicable law) or any other documents deemed necessary or appropriate by the
Trustee to preserve, protect or perfect the security interest in the Pledged
Collateral and to file the same, prepare, file and sign the Pledgor's name on
any notice of Lien, and to take any other actions arising from or incident to
the powers granted to the Trustee in this Security Agreement. This power of
attorney is coupled with an interest and is irrevocable by the Pledgor.
Notwithstanding anything to the contrary stated herein, the Trustee has no duty
or obligation to exercise any of the powers stated in this Section 8.
SECTION 9. No Assumption of Duties; Reasonable Care. The
rights and powers granted to the Trustee hereunder are being granted in order to
preserve and protect the security interest of the Trustee and the Holders of the
Notes in and to the Pledged Collateral granted hereby and shall not be
interpreted to, and shall not impose any duties on the Trustee or the Securities
Intermediary in connection therewith, other than those expressly provided herein
or imposed under applicable law. Except as provided by applicable law or by the
Indenture, the Trustee shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment
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substantially equal to that which the Trustee accords similar property held by
the Trustee for similar accounts, it being understood that the Trustee in its
capacity as such shall not have any responsibility for (a) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities or other
matters relative to any Pledged Collateral, whether or not the Trustee has or is
deemed to have knowledge of such matters or (b) investing or reinvesting any of
the Pledged Collateral or any loss on any investment.
SECTION 10. Indemnity. The Pledgor shall indemnify, hold
harmless and defend each of the Trustee and the Securities Intermediary and
their respective directors, officers, agents and employees from and against any
and all claims, actions, obligations, liabilities and expenses, including
reasonable defense costs, reasonable investigative fees and costs and reasonable
legal fees and expenses and damages arising from the Trustee's performance as
Trustee under this Security Agreement or from the Securities Intermediary's
performance as Securities Intermediary under this Security Agreement, except to
the extent that such claim, action, obligation, liability or expense is directly
attributable to the gross negligence or wilful misconduct of such indemnified
person.
SECTION 11. Remedies Upon Event of Default. If any Event of
Default, as defined in the Indenture (any such Event of Default being referred
to in this Security Agreement as an "Event of Default") shall have occurred and
be continuing:
(a) The Trustee and the Holders of the Notes shall have, in
addition to all other rights given by law or by this Security Agreement or the
Indenture, all of the rights and remedies with respect to the Pledged Collateral
of a secured party under the UCC. In addition, with respect to any Pledged
Collateral that shall then be in or shall thereafter come into the possession or
custody of the Trustee, the Trustee may, upon the direction of a majority in
aggregate principal amount of the Holders of the Notes sell or cause the same to
be sold at any broker's board or at public or private sale, in one or more sales
or lots, for cash or on credit or for future delivery, without assumption of any
credit risk. The purchaser of any or all Pledged Collateral so sold shall
thereafter hold the same absolutely, free from any claim, encumbrance or right
of any kind whatsoever created by or through the Pledgor. Unless any of the
Pledged Collateral threatens, in the reasonable judgment of the Trustee, to
decline speedily in value or is or becomes of a type sold on a recognized
market, the Trustee will give the Pledgor reasonable notice of the time and
place of any public sale thereof, or of the time after which any private sale or
other intended disposition is to be made. To the extent permitted by applicable
law, any sale of the Pledged Collateral conducted in conformity with reasonable
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commercial practices of banks, insurance companies, commercial finance
companies, or other financial institutions disposing of property similar to the
Pledged Collateral shall be deemed to be commercially reasonable. Any
requirements of reasonable notice shall be met if such notice is mailed to the
Pledgor as provided in Section 15.1 hereof at least 10 days before the time of
the sale or disposition. The Trustee or any Holder of Notes may, in its own name
or in the name of a designee or nominee, buy any of the Pledged Collateral at
any public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees, expenses and
disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition
of the Pledged Collateral.
(b) The Pledgor further agrees to use its reasonable best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Pledged Collateral pursuant
to this Section 11 valid and binding and in compliance with any and all other
applicable requirements of law. The Pledgor further agrees that a breach of any
of the covenants contained in this Section 11 will cause irreparable injury to
the Trustee and the Holders of the Notes, that the Trustee and the Holders of
the Notes have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 11 shall be
specifically enforceable against the Pledgor, and the Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred.
(c) The Trustee may, without notice to the Pledgor except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Obligations against the Security Account
or any part thereof.
SECTION 12. Expenses. The Pledgor will upon demand pay to each
of the Trustee and the Securities Intermediary the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees,
expenses and disbursements of its counsel, experts and agents retained by the
Trustee or the Securities Intermediary that the Trustee or the Securities
Intermediary may incur in connection with (a) the review, negotiation and
administration of this Security Agreement, (b) the custody or preservation of,
or the sale of, collection from, or other realization upon, any of the Pledged
Collateral, (c) the exercise or enforcement of any of the rights of the Trustee
and the Holders of the Notes hereunder or (d) the failure by the Pledgor to
perform or observe any of the provisions hereof.
12
SECTION 13. Security Interest Absolute. All rights of the
Trustee and the Holders of the Notes and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional under
all circumstances including but not limited to:
(a) any lack of validity or enforceability of the Indenture or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture;
(c) any taking, exchange, surrender, release or non-perfection
of any other collateral or any taking, release or amendment or waiver from any
guaranty for all or any of the Obligations;
(d) any change, restructuring or termination of the corporate
structure or the existence of the Pledgor, or any of its subsidiaries; or
(e) to the extent permitted by applicable law, any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Pledgor in respect of the Obligations or of this Security
Agreement.
SECTION 14. Securities Intermediary's Representations,
Warranties and Covenants. The Securities Intermediary represents and warrants
that it is as of the date hereof, and it agrees that for so long as it maintains
the Security Account and acts as securities intermediary pursuant to this
Security Agreement it shall be a "Securities Intermediary" (as defined in the
UCC and in 31 C.F.R. Section 357.2) and shall be eligible to maintain, and does
maintain, a Participant's Securities Account (as defined in 31 C.F.R. Section
357.2) in the name of the Securities Intermediary with the FRBNY (a "FRBNY
Member Securities Account"). In furtherance of the foregoing, the Securities
Intermediary hereby:
(a) represents and warrants that it is a corporation that in
the ordinary course of its business maintains Securities Accounts for others and
is acting in that capacity hereunder and with respect to the Security Account;
(b) represents and warrants that it maintains the FRBNY Member
Securities Account with the FRBNY and that the United Stated Treasury securities
constituting the Pledged Securities transferred to the Securities
13
Intermediary pursuant to Section 3(b) have been credited to the FRBNY Member
Securities Account;
(c) agrees that the Security Account shall be an account to
which Financial Assets may be credited, and the Securities Intermediary
undertakes to treat the Trustee as the sole person entitled to exercise rights
that comprise (and entitled to the benefits of) such Financial Assets, and
entitled to exercise the rights of an entitlement holder and control in the
manner contemplated by the UCC, and further agrees to identify the Trustee in
the records of the Securities Intermediary as the sole person having a
Securities Entitlement against the Securities Intermediary with respect to the
Security Account and all Financial Assets credited thereto;
(d) hereby represents that it has not granted, and covenants
that so long as it acts as Securities Intermediary hereunder it shall not grant,
control (including without limitation, "control" as defined in UCC Section
9-115(l)(e)) over or with respect to any Pledged Collateral credited to the
Security Account from time to time to any other Person other than the Trustee;
(e) covenants that in its capacity as Securities Intermediary
hereunder and with respect to the Security Account, it shall not take any action
inconsistent with, and represents and covenants that it is not and so long as
this Security Agreement remains in effect will not become party to any
agreement, the terms of which are inconsistent with the provisions of this
Security Agreement;
(f) agrees, with the other parties to this Security Agreement,
that any item of property credited to the Security Account shall be treated as a
Financial Asset;
(g) agrees, with the other parties to this Security Agreement,
so long as it serves as Securities Intermediary pursuant to this Security
Agreement, to maintain the Security Account as a Securities Account and maintain
appropriate books and records in respect thereof in accordance with its usual
procedures and subject to the terms of this Security Agreement;
(h) agrees, with the other parties to this Security Agreement,
that the Securities Intermediary's jurisdiction, for purposes of UCC Section
8-110(e) and 31 C.F.R. 357.11(b) as it pertains to this Security Agreement, the
Security Account and Security Entitlements relating thereto, shall be the State
of New York.
SECTION 15. Miscellaneous Provisions.
14
Section 15.1 Notices. Any notice or communication given
hereunder shall be sufficiently given if in writing and delivered in person or
mailed by first class mail, commercial courier service or telecopier
communication, addressed as follows:
if to the Pledgor:
Metromedia Fiber Network, Inc.
c/o Metromedia Company
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attention: General Counsel
Telecopier: 000-000-0000
with a copy to:
Xxxxx X. Xxxxx
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: 212-757-3990
if to the Trustee:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Finance Trust Services
Telecopier: 000-000-0000
if to the Securities Intermediary:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Finance Trust Services
15
Telecopier: 000-000-0000
Section 15.2 No Adverse Interpretation of Other Agreements.
This Security Agreement may not be used to interpret another pledge, security or
debt agreement of the Pledgor or any subsidiary thereof. No such pledge,
security or debt agreement (other than the Indenture) may be used to interpret
this Security Agreement.
Section 15.3 Severability. The provisions of this Security
Agreement are severable, and if any clause or provision shall be held invalid,
illegal or unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect in that jurisdiction only such
clause or provision, or part thereof, and shall not in any manner affect such
clause or provision in any other jurisdiction or any other clause or provision
of this Security Agreement in any jurisdiction.
Section 15.4 Headings. The headings in this Security Agreement
have been inserted for convenience of reference only, are not to be considered a
part hereof and shall in no way modify or restrict any of the terms or
provisions hereof.
Section 15.5 Counterpart Originals. This Security Agreement
may be signed in two or more counterparts, each of which shall be deemed an
original, but all of which shall together constitute one and the same agreement.
Section 15.6 Benefits of Security Agreement. Nothing in this
Security Agreement, express or implied, shall give to any person, other than the
parties hereto and their successors hereunder, and the Holders of the Notes, any
benefit or any legal or equitable right, remedy or claim under this Security
Agreement.
Section 15.7 Amendments, Waivers and Consents. Any amendment
or waiver of any provision of this Security Agreement and any consent to any
departure by the Pledgor from any provision of this Security Agreement shall be
effective only if made or duly given in compliance with all of the terms and
provisions of the Indenture, and neither the Trustee nor any Holder of Notes
shall be deemed, by any act, delay, indulgence, omission or otherwise, to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default (as defined herein) or in any breach of any of the terms and
conditions hereof. Consistent with the foregoing, this Security Agreement may be
amended, its provisions may be waived and departures from its provisions may be
consented to by action of the Pledgor and the Trustee, and (if applicable) the
Holders of the Notes, as
16
provided in the Indenture, and no such amendment, waiver or consent shall
require any action or approval by the Initial Purchasers. Failure of the Trustee
or any Holder of Notes to exercise, or delay in exercising, any right, power or
privilege hereunder shall not preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Trustee or
any Holder of Notes of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy that the Trustee or such Holder
of Notes would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.
Section 15.8 Interpretation of Agreement. All terms not
defined herein or in the Indenture shall have the meaning set forth in the UCC,
except where the context otherwise requires. Acceptance of or acquiescence in a
course of performance rendered under this Security Agreement shall not be
relevant to determine the meaning of this Security Agreement even though the
accepting or acquiescing party had knowledge of the nature of the performance
and opportunity for objection.
Section 15.9 Continuing Security Interest; Termination. This
Security Agreement shall create a continuing security interest in and to the
Pledged Collateral and shall, unless otherwise provided in this Security
Agreement, remain in full force and effect until the payment in full in cash of
the Obligations. This Security Agreement shall be binding upon the Pledgor, its
transferees, successors and assigns, and shall inure, together with the rights
and remedies of the Trustee hereunder, to the benefit of the Trustee, the
Securities Intermediary, the Holders of the Notes and their respective
successors, transferees and assigns.
(a) This Security Agreement (other than the Pledgor's
obligations under Sections 10 and 12) shall terminate upon the payment in full
in cash of the Obligations or if the Company shall become obligated under the
Indenture to redeem all of the outstanding Notes and such Notes shall have been
redeemed, and if no Default or Event of Default (as defined in the Indenture)
shall have occurred and be continuing. At such time, the Trustee shall, pursuant
to a Company Order, and at the expense of the Pledgor, reassign and redeliver to
the Pledgor all of the Pledged Collateral hereunder that has not been sold,
disposed of, retained or applied by the Trustee in accordance with the terms of
this Security Agreement as directed in writing by the Pledgor and the Indenture
and take all actions that are necessary to release the security interest created
by this Security Agreement in and to the Pledged Collateral, including the
execution and delivery of all termination statements necessary to terminate any
financing or continuation statements filed with respect to
17
the Pledged Collateral prepared and delivered to it by the Pledgor. Such
reassignment and redelivery shall be without warranty by or recourse to the
Trustee in its capacity as such, except as to the absence of any Liens on the
Pledged Collateral created by or arising through the Trustee, and shall be at
the reasonable expense of the Pledgor.
Section 15.10 Survival of Representations and Covenants. All
representations, warranties and covenants of the Pledgor contained herein shall
survive execution and delivery of this Security Agreement, and shall terminate
only upon the termination of this Security Agreement.
Section 15.11 Waivers. The Pledgor waives presentment and
demand for payment of any of the Obligations, protest and notice of dishonor or
default with respect to any of the Obligations, and all other notices to which
the Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
Section 15.12 Authority of the Trustee and Securities
Intermediary. (a) Each of the Trustee and Securities Intermediary shall have
the right to exercise all powers hereunder that are specifically granted to
the Trustee or the Securities Intermediary by the terms hereof, together with
such powers as are reasonably incident hereto. The Trustee and the Securities
Intermediary may perform any of their respective duties hereunder or in
connection with the Pledged Collateral by or through agents or employees and
shall be entitled to retain counsel and to act in reliance upon the advice of
counsel concerning all such matters. Except as otherwise expressly provided
in this Security Agreement or the Indenture, neither the Trustee, the
Securities Intermediary, nor any director, officer, employee, attorney or
agent of the Trustee shall be liable to the Pledgor for any action taken or
omitted to be taken by the Trustee, in its capacity as Trustee or Securities
Intermediary, hereunder, except for its own gross negligence or willful
misconduct, and the Trustee and the Securities Intermediary shall not be
responsible for the validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. The Trustee, the Securities
Intermediary and their respective directors, officers, employees, attorneys
and agents may conclusively rely on any communication, instrument or document
believed by it or them to be genuine and correct and to have been signed or
sent by the proper person or persons.
(b) The Pledgor acknowledges that the rights and
responsibilities of the Trustee under this Security Agreement with respect to
any action taken by the Trustee or the exercise or non-exercise by the Trustee
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of
18
this Security Agreement shall, as between the Trustee and the Holders of the
Notes, be governed by the Indenture and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the Trustee
and the Pledgor, the Trustee shall be conclusively presumed to be acting as
agent for the Holders of the Notes with full and valid authority so to act or
refrain from acting, and the Pledgor shall not be obligated or entitled to make
any inquiry respecting such authority.
(c) Each of the Trustee and the Securities Intermediary
undertakes to perform such duties and only such duties as are specifically set
forth in this Security Agreement, and no implied covenants or obligations shall
be read into this Security Agreement against the Trustee or the Securities
Intermediary.
(d) No provision of this Security Agreement shall require the
Trustee or the Securities Intermediary to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights and powers.
(e) The Trustee and the Securities Intermediary may consult
with counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(f) The Trustee and the Securities Intermediary may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee and the Securities
Intermediary shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
(g) The Trustee shall have no duty (i) to see to any
recording, filing or depositing of this Security Agreement or any financing
statements evidencing a security interest in the Pledged Collateral, or to see
to the maintenance of any such recording or filing, or (ii) to inspect the
Pledged Collateral at any time or to inquire as to the performance or observance
of any of the Pledgor's representations, warranties or covenants contained
herein.
Section 15.13 Removal or Resignation of the Securities
Intermediary. The Securities Intermediary may resign by notice to, or be removed
by notice from, the Trustee at any time; provided, however, that such
resignation shall not be effective until, and in the case of removal the
Securities Intermediary's duties hereunder shall not terminate until, a
successor Securities Intermediary shall have
19
been appointed by the Trustee and accepted such appointment (by delivery of an
agreement substantially in the form hereof) and any and all assets held by the
retiring Securities Intermediary hereunder shall have been transferred to such
successor Securities Intermediary in accordance with the Trustee's instruction.
Section 15.14 Fees and Expenses. The Securities Intermediary
shall be entitled to charge such fees and charges, including but not limited to
transaction fees and reimbursement for costs, as from time to time may be in
accordance with its usual practice for maintenance and administration of
accounts of the type contemplated hereby (which charges and fees shall be paid
by the Trustee and shall be reimbursable to it pursuant to Section 7.07 of the
Indenture).
Section 15.15 Final Expression. This Security Agreement,
together with the Indenture and any other agreement executed in connection
herewith, is intended by the parties as a final expression of this Security
Agreement and is intended as a complete and exclusive statement of the terms and
conditions thereof.
Section 15.16 Rights of Holders of the Notes. No Holder of
Notes shall have any independent rights hereunder other than those rights
granted to individual Holders of the Notes pursuant to the Indenture; provided
that nothing in this subsection shall limit any rights granted to the Trustee
under the Notes or the Indenture.
Section 15.17 GOVERNING LAW; SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL; WAIVER OF DAMAGES. (a) THIS SECURITY AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. ANY DISPUTE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL
TO, THE RELATIONSHIP ESTABLISHED BETWEEN THE PLEDGOR, THE TRUSTEE AND THE
HOLDERS OF THE NOTES IN CONNECTION WITH THIS SECURITY AGREEMENT AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
NOTWITHSTANDING THE FOREGOING, THE MATTERS IDENTIFIED IN 31 C.F.R. PART 357,
61 FED. REG. 43626 (AUG. 23, 1996) SHALL BE GOVERNED SOLELY BY THE LAWS
SPECIFIED THEREIN.
(b) THE PLEDGOR AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY
AS TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE THE RIGHT,
TO THE EXTENT PERMITTED BY
20
APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR THE PLEDGED COLLATERAL IN A
COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH (AND HAVING PERSONAL OR
IN REM JURISDICTION OVER THE PLEDGOR OR THE PLEDGED COLLATERAL, AS THE CASE MAY
BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH PLEDGED COLLATERAL, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE. THE PLEDGOR
AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS, SET OFFS OR CROSSCLAIMS IN ANY
PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH PROPERTY OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE TRUSTEE, EXCEPT FOR SUCH
COUNTERCLAIMS, SET OFFS OR CROSSCLAIMS WHICH, IF NOT ASSERTED IN ANY SUCH
PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED. THE PLEDGOR WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN THE CITY OF NEW YORK
ONCE THE TRUSTEE HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
(c) THE PLEDGOR AGREES THAT NEITHER ANY HOLDER OF NOTES NOR
(EXCEPT AS OTHERWISE PROVIDED IN THIS SECURITY AGREEMENT OR THE INDENTURE) THE
TRUSTEE IN ITS CAPACITY AS TRUSTEE SHALL HAVE ANY LIABILITY TO THE PLEDGOR
(WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE
PLEDGOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS SECURITY
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH,
UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT THAT IS
BINDING ON THE TRUSTEE OR SUCH HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH
LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE TRUSTEE OR SUCH
HOLDERS OF NOTES, AS THE CASE MAY BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.
(d) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR
WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER
OF NOTES IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE ANY
JUDGMENT OR OTHER COURT ORDER PERTAINING TO
21
THIS SECURITY AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT ENTERED IN FAVOR OF
THE TRUSTEE OR ANY HOLDER OF NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE,
TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION, THIS
SECURITY AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR ON
THE ONE HAND AND THE TRUSTEE AND/OR THE HOLDERS OF THE NOTES ON THE OTHER HAND.
22
IN WITNESS WHEREOF, the Pledgor, the Trustee and the
Securities Intermediary have each caused this Security Agreement to be duly
executed and delivered as of the date first above written.
Pledgor:
METROMEDIA FIBER
NETWORK, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: President, Chief Operating
Officer and Director
Trustee:
IBJ XXXXXXXX BANK &
TRUST COMPANY,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
IBJ XXXXXXXX BANK &
TRUST COMPANY,
as Securities Intermediary
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
Exhibit A
The United States Treasury securities identified by CUSIP Numbers 000000X00,
000000XX0 and 000000XX0.
CERTIFICATE
Pursuant to Section 3(f) of the Security Agreement (the
"Security Agreement") dated as of November 25, 1998 by and among Metromedia
Fiber Network, Inc. (the "Pledgor"), IBJ Xxxxxxxx Bank & Trust Company, trustee
(the "Trustee") for the holders of the 10% Senior Notes due 2008 (the "Notes")
of the Pledgor, and IBJ Xxxxxxxx Bank & Trust Company, as securities
intermediary (the "Securities Intermediary"), the undersigned officer of the
Trustee, on behalf of the Trustee, and the undersigned officer of the Securities
Intermediary, on behalf of the Securities Intermediary, make the following
certifications to the Pledgor and the initial purchasers of the Notes.
Capitalized terms used and not defined in this Certificate have the meanings set
forth or referred to in the Security Agreement.
1. Substantially contemporaneously with the execution and
delivery of this Certificate, the Trustee has established with the Securities
Intermediary, as Securities Intermediary, the Security Account. The Securities
Intermediary has acquired a Security Entitlement to the United States Treasury
securities identified in Annex I to this Certificate (the "Pledged Securities")
from the FRBNY and holds a Security Entitlement thereto in the FRBNY's Security
Account. The Securities Intermediary has made appropriate book entries in its
records establishing that the Pledged Securities and the Trustee's Securities
Entitlement thereto have been credited to and are held in the Security Account.
2. The Trustee has established and maintained and will
maintain the Security Account and all Securities Entitlements and other
positions carried in the Security Account solely in its capacity as Trustee and
has not asserted and will not assert any claim to or interest in the Security
Account or any such Securities Entitlements or other positions except in such
capacity.
3. The Trustee and the Securities Intermediary have acquired
their Security Entitlements to the Pledged Securities for value and without
notice of any adverse claim thereto. Without limiting the generality of the
foregoing, the Pledged Securities are not and the Securities Intermediary's and
the Trustee's Security Entitlements to the Pledged Securities are not, to their
knowledge, subject to any Lien granted by either of them in favor of any
Securities Intermediary (including, without limitation, the FRBNY) through which
the Trustee derives its Security Entitlement to the Pledged Securities.
4. Neither the Securities Intermediary nor the Trustee has
caused or permitted the Pledged Securities or any Security Entitlement thereto
to become subject to any Lien created by or arising through either of the
Trustee or the Securities Intermediary.
IN WITNESS WHEREOF, the undersigned officers have executed
this Certificate on behalf of IBJ Xxxxxxxx Bank & Trust Company, Trustee, and on
behalf of the Securities Intermediary, respectively, this 25th day of November,
1998.
IBJ XXXXXXXX BANK &
TRUST COMPANY,
As Trustee
------------------------------------
Name:
Title:
IBJ XXXXXXXX BANK &
TRUST COMPANY,
As Securities Intermediary
------------------------------------
Name:
Title:
Exhibit C
[To come]
