SUBSIDIARY SECURITY AND PLEDGE AGREEMENT
----------------------------------------
This SUBSIDIARY SECURITY AND PLEDGE AGREEMENT (as amended,
supplemented, amended and restated or otherwise modified from time to time,
this "Security and Pledge Agreement"), dated as of January 29, 1999, is made by
each of the signatories hereto (each, individually, a "Grantor" and,
collectively, the "Grantors"), in favor of BANK OF MONTREAL, as administrative
agent (together with its successor(s) thereto, in such capacity, the
"Administrative Agent") for each of the Secured Parties (as defined below).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement, dated as of January 29, 1999
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Credit Agreement"), among Nextel Partners Operating Corp., a
Delaware corporation (the "Borrower"), the various financial institutions as
are, or may from time to time become, parties thereto (each, individually, a
"Lender", and, collectively, the "Lenders"), DLJ Capital Funding, Inc., as the
syndication agent, The Bank of New York, as the documentation agent and the
Administrative Agent, the Lenders and the Issuer have extended Commitments to
make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
each Grantor is required to execute and deliver this Security and Pledge
Agreement;
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Security and Pledge Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Security and Pledge Agreement inasmuch as such Grantor will derive substantial
direct and indirect benefits from the Loans made to the Borrower by the Lenders
pursuant to the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the
Lenders and the Issuer to make Credit Extensions (including the initial Credit
Extension) to the Borrower pursuant to the Credit Agreement, each Grantor
agrees, for the benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1.Certain Terms. The following terms (whether or not
underscored) when used in this Security and Pledge Agreement, including its
preamble and recitals, shall have the following meanings (such definitions to
be equally applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Borrower" is defined in the first recital.
"Collateral Account" is defined in Section 4.4(c).
"Collateral" is defined in Section 2.1.
"Commodity Account" means an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" means a commodity futures contract, an option on
a commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that
has been designated as a contract market for such a contract pursuant to the
federal commodities laws or (b) traded on a foreign commodity board of trade,
exchange or market, and is carried on the books of a Commodity Intermediary for
a Commodity Customer.
"Commodity Customer" means a Person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" means (a) a Person who is registered as a
futures commission merchant under the federal commodities laws or (b) a Person
who in the ordinary course of business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units,
display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical
supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware;
(b) all software programs (including both source code, object
code and all related
-2-
applications and data files), whether now owned, licensed or leased
or hereafter acquired by any Grantor, designed for use on the
computers and electronic data processing hardware described in clause
(a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a) through
(c); and
(e) all rights with respect to all of the foregoing, including
any and all copyrights, licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications and
any substitutions, replacements, additions or model conversions of
any of the foregoing.
"Control Agreement" means an agreement in form and substance
satisfactory to the Administrative Agent which provides for the Administrative
Agent to have "control" (as defined in Section 8-106 of the U.C.C., as such
term relates to Investment Property (other than certificated Securities or
Commodity Contracts), or as used in Section 9-115(e) of the U.C.C., as such
term relates to Commodity Contracts).
"Copyright Collateral" means all copyrights of each Grantor, whether
statutory or common law, registered or unregistered, now or hereafter in force
throughout the world including all of such Grantor's right, title and interest
in and to all copyrights registered in the United States Copyright Office or
anywhere else in the world and also including the copyrights referred to in
Item A of Schedule IV attached hereto, and all applications for registration
thereof, whether pending or in preparation, all copyright licenses, including
each copyright license referred to in Item B of Schedule IV attached hereto,
the right to xxx for past, present and future infringements of any thereof, all
rights corresponding thereto throughout the world, all extensions and renewals
of any thereof and all proceeds of the foregoing, including licenses,
royalties, income, payments, claims, damages and proceeds of suit.
"Credit Agreement" is defined in the first recital.
"Distributions" means all stock dividends, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Securities constituting Collateral,
but shall not include Dividends.
"Dividends" means cash dividends and cash distributions with respect
to any Securities constituting Collateral made in the ordinary course of
business and not a liquidating dividend.
-3-
"Entitlement Holder" means a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the U.C.C., such Person is the Entitlement
Holder.
"Equipment" is defined in clause (d) of Section 2.1.
"Financial Asset" means (a) a Security, (b) an obligation of a Person
or a share, participation or other interest in a Person or in property or an
enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the U.C.C. As
the context requires, the term Financial Asset shall mean either the interest
itself or the means by which a Person's claims to it is evidenced, including a
certificated or an uncertificated Security, a certificate representing a
Security or a Security Entitlement.
"Grantor" and "Grantors" are defined in the preamble.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Intercompany Note" means, with respect to each Grantor, as the payee
thereunder, a promissory note substantially in the form of Exhibit A hereto
(with such modifications as the Administrative Agent may consent to, such
consent not to be unreasonably withheld), which promissory note shall evidence
all intercompany loans which may be made from time to time by such Grantor to
any of its Subsidiaries as the maker of such promissory note, as such
promissory note, in accordance with Section 4.2.4, is amended, modified or
supplemented from time to time, together with any promissory note of such maker
taken in extension or renewal thereof or substitution therefor.
"Investment Property" means all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity
Contracts and Commodity Accounts of each Grantor, whether now owned or
hereafter acquired by such Grantor.
"Inventory" is defined in clause (e) of Section 2.1
"Lender" and "Lenders" are defined in the first recital.
"Patent Collateral" means:
-4-
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in
preparation for filing anywhere in the world and including each
patent and patent application referred to in Item A of Schedule II
attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, including each patent license referred
to in Item B of Schedule II attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements
of any patent or patent application, including any patent or patent
application referred to in Item A of Schedule II attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred to in Item B of Schedule II attached hereto, and all
rights corresponding thereto throughout the world.
"Perfection Certificate" means a perfection certificate substantially
in the form of Exhibit E hereto.
"Receivables" is defined in clause (f) of Section 2.1.
"Related Contracts" is defined in clause (f) of Section 2.1.
"Secured Party" means, as the context may require, each Lender, the
Issuer and each Agent and each of their respective successors, transferees and
assigns.
"Secured Obligations" is defined in Section 2.2.
"Securities" means any obligations of an issuer or any shares,
participations, or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of such issuer, (b) are one
of a class or series or by its terms is divisible into a class or series of
shares, participations, interests or obligations and (c) (i) are, or are of a
type, dealt with or traded on securities exchanges or securities markets or
(ii) are a medium for investment and by their terms expressly provide that they
are a security governed by Article 8 of the U.C.C.
"Securities Account" means an account to which a Financial Asset is or
may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
-5-
"Securities Act" is defined in Section 6.2.
"Security Entitlements" means the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"Security and Pledge Agreement" is defined in the preamble.
"Security Intermediary" means (a) a clearing corporation or (b) a
Person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Trademark Collateral" means:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service
marks, certification marks, collective 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 a like
nature (all of the foregoing items in this clause (a) being
collectively called a "Trademark"), now existing anywhere in the
world or hereafter adopted or acquired, whether currently in use or
not, all registrations and recordings thereof and all applications in
connection therewith, whether pending or in preparation for filing,
including registrations, recordings and applications in the United
States Patent and Trademark Office or in any office or agency of the
United States of America or any State thereof or any foreign country,
including those referred to in Item A of Schedule III attached
hereto;
(b) all Trademark licenses, including each Trademark license
referred to in Item B of Schedule III attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in clause (a) and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clauses (a) and (b);
and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by any Grantor against third parties for past,
present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in Item A and
Item B of Schedule III attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach
or enforcement of any Trademark license.
"Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or
-6-
contemplated at any time for use in the business of any Grantor (all of the
foregoing being collectively called a "Trade Secret"), whether or not such
Trade Secret has been reduced to a writing or other tangible form, including
all documents and things embodying, incorporating or referring in any way to
such Trade Secret, all Trade Secret licenses, including each Trade Secret
license referred to in Schedule V attached hereto, and including the right to
xxx for and to enjoin and to collect damages for the actual or threatened
misappropriation of any Trade Secret and for the breach or enforcement of any
such Trade Secret license.
"U.C.C." means the Uniform Commercial Code, as in effect from time to
time in the State of New York.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security and
Pledge Agreement, including its preamble and recitals, have the meanings
provided in the Credit Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or in
the Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the U.C.C. are used in this Security and Pledge
Agreement, including its preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. Each Grantor hereby assigns, pledges,
hypothecates, charges, mortgages, delivers, and transfers to the Administrative
Agent for its benefit and the ratable benefit of each of the Secured Parties,
and hereby grants to the Administrative Agent for its benefit and the ratable
benefit of each of the Secured Parties, a security interest in all of the
following, whether now or hereafter existing or acquired by such Grantor (the
"Collateral"):
(a) all Intercompany Notes in which such Grantor has an interest
(including each Intercompany Note described in Item A of Schedule I
hereto);
(b) all interest and other payments and rights with respect to
each Intercompany Note in which such Grantor has an interest;
(c) all Investment Property in which such Grantor has an
interest (including the Securities of each issuer described in Item B
of Schedule I hereto);
(d) all equipment in all of its forms of such Grantor, wherever
located, including all parts thereof and all accessions, additions,
attachments, improvements, substitutions and replacements thereto and
therefor and all accessories related thereto (any and all of
-7-
the foregoing being the "Equipment");
(e) all inventory in all of its forms of such Grantor, wherever
located, including
(i) all raw materials and other work in process therefor,
finished goods thereof, and materials used or consumed in the
manufacture or production thereof,
(ii) all goods in which such Grantor has an interest in
mass or a joint or other interest or right of any kind
(including goods in which such Grantor has an interest or right
as consignee), and
(iii) all goods which are returned to or repossessed by
such Grantor,
and all accessions thereto, products thereof and documents therefor
(any and all such inventory, materials, goods, accessions, products
and documents being the "Inventory");
(f) all accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles (including tax
refunds) of such Grantor, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of
services, and all rights of such Grantor now or hereafter existing in
and to all security agreements, guaranties, leases and other
contracts securing or otherwise relating to any such accounts,
contracts, contract rights, chattel paper, documents, instruments,
and general intangibles (any and all such accounts, contracts,
contract rights, chattel paper, documents, instruments, and general
intangibles being the "Receivables", and any and all such security
agreements, guaranties, leases and other contracts being the "Related
Contracts");
*[(g) in furtherance of, and not in limitation of, clause (f),
the Management Agreement, and the assignment of the Grantor's rights
under the Master Site Lease Agreement (as amended or modified, an
"Assigned Agreement"), together with (i) all rights of the Grantor to
receive monies due and to become due under or pursuant to each
Assigned Agreement, (ii) all rights of the Grantor to receive
proceeds of any insurance, indemnity, warranty, guaranty or
collateral security with respect to any Assigned Agreement, (iii) all
claims of the Grantor for damages arising out of or for breach or
default under any Assigned Agreement, (iv) all rights of the Grantor
to terminate any Assigned Agreement, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder and
(v) to the extent not included in the foregoing, all proceeds of any
and all of the foregoing;]
(h) all Intellectual Property Collateral of such Grantor;
-------------------
* To be included in Subsidiary Security Agreement executed by Realco.
-8-
(i) the Collateral Account and each lock box of such Grantor
(including all cash, checks, drafts, notes, bills of exchange, money
orders and other like instruments, if any, now owned or hereafter
acquired, held therein (or in sub-accounts thereof) and all
certificates and instruments, if any, from time to time representing
or evidencing such investments, and all interest, earnings and
proceeds in respect thereof );
(j) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section 2.1;
(k) all of such Grantor's other property and rights of every
kind and description and interests therein; and
(l) all products, offspring, rents, issues, profits, returns,
income and proceeds of and from any and all of the foregoing
Collateral (including proceeds which constitute property of the types
described in clauses (a) through (k), and, to the extent not
otherwise included, all payments under insurance (whether or not the
Administrative Agent is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights described in clause (f) above arising under any
contracts, instruments, licenses, permits or leases described in such clause as
to which the grant of a security interest would constitute a violation of a
valid and enforceable restriction in favor of a third party on such grant,
unless and until any required consents shall have been obtained. Such Grantor
agrees to use its best efforts to obtain any such required consent.
SECTION 2.2 Security for Obligations. This Security and Pledge
Agreement secures the payment in full in cash of all monetary Obligations of
the Borrower now or hereafter existing under the Credit Agreement, the Notes
and each other Loan Document to which the Borrower is or may become a party,
whether for principal, interest, costs, fees, expenses or otherwise, and all
obligations of the Borrower and each other Obligor now or hereafter existing
under this Security and Pledge Agreement and each other Loan Document to which
the Borrower or such other Obligor is or may become a party (all such
obligations of such Borrower and such other Obligor being the "Secured
Obligations").
SECTION 2.3. Delivery of Certificated Securities and Intercompany
Notes. All Collateral comprised of Intercompany Notes and certificated
Securities shall be delivered to and held by or on behalf of (and, in the case
of the Intercompany Notes, endorsed to the order of) the Administrative Agent
pursuant hereto, shall be in suitable form for transfer by delivery, and shall
be accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
SECTION 2.4. Dividends on Securities and Payments on Intercompany
Notes. In the
-9-
event that any Dividend is to be paid on any Security that constitutes
Collateral or any payment of principal or interest is to be made on any
Intercompany Note at a time when no Default of the nature referred to in
Section 8.1.9 of the Credit Agreement or Event of Default has occurred and is
continuing or would result therefrom, such Dividend or payment may be paid
directly to and retained by the applicable Grantor. If any such Default or
Event of Default has occurred and is continuing, then any such Dividend or
payment shall be paid directly to the Administrative Agent.
SECTION 2.5. Continuing Security Interest; Transfer of Notes. This
Security and Pledge Agreement shall create a continuing security interest in
the Collateral and shall
(a) remain in full force and effect until payment in full in
cash of all Secured Obligations then due, the termination or
expiration of all Letters of Credit and the termination of all
Commitments,
(b) be binding upon each Grantor, its successors, transferees
and assigns, and
(c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Administrative
Agent and each other Secured Party.
Without limiting the generality of the foregoing clause (c), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person, and such other Person shall thereupon become
vested with all the rights and benefits in respect thereof granted to such
Lender under any Loan Document (including this Security and Pledge Agreement)
or otherwise, subject, however, to any contrary provisions in such assignment
or transfer, and to the provisions of Section 10.11 and Article IX of the
Credit Agreement. Upon (i) the sale, transfer or other disposition of
Collateral in accordance with the Credit Agreement or (ii) the payment in full
in cash of all Secured Obligations then due, the termination or expiration of
all Letters of Credit and the termination of all Commitments, the security
interests granted herein shall automatically terminate with respect to (x) such
Collateral (in the case of clause (i)) or (y) all Collateral (in the case of
clause (ii)). Upon any such sale, transfer, disposition or termination, the
Administrative Agent will, at such Grantor's sole expense, deliver to such
Grantor, without any representations, warranties or recourse of any kind
whatsoever, all applicable certificated Securities and all applicable
Intercompany Notes, together with all other applicable Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such
termination.
SECTION 2.6. Grantor Remains Liable. Anything herein to the contrary
notwithstanding
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth
therein, and shall perform all of its duties and obligations under
such contracts and agreements to the same extent as if this Security
and Pledge Agreement had not been executed,
(b) the exercise by the Administrative Agent of any of its
rights hereunder shall
-10-
not release any Grantor from any of its duties or obligations under
any such contracts or agreements included in the Collateral, and
(c) neither the Administrative Agent nor any other Secured Party
shall have any obligation or liability under any such contracts or
agreements included in the Collateral by reason of this Security and
Pledge Agreement, nor shall the Administrative Agent or any other
Secured Party be obligated to perform any of the obligations or
duties of any Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. Each Grantor represents
and warrants to each Secured Party as set forth in this Article III.
SECTION 3.2. As to Securities. All Securities issued by a Subsidiary
of each Grantor are duly authorized and validly issued, fully paid, and
non-assessable, and constitute all of the issued and outstanding Securities of
such Subsidiary.
SECTION 3.3. As to Intercompany Notes. In the case of each
Intercompany Note, all of such Intercompany Notes have been duly authorized,
executed, endorsed, issued and delivered, and are the legal, valid and binding
obligation of the issuers thereof, and are not in default.
SECTION 3.4. Location of Collateral, etc. All of the lock boxes,
Equipment and Inventory of such Grantor are respectively located at the places
specified in Section 3 of the Perfection Certificate delivered by such Grantor.
None of the Equipment and Inventory has, within the four months preceding the
date of this Security and Pledge Agreement (if then owned by such Grantor),
been located at any place other than the places specified in Section 3 of the
Perfection Certificate delivered by such Grantor. The place of business and
chief executive office of such Grantor and the office where such Grantor keeps
its records concerning the Receivables, and all originals of all chattel paper
which evidence Receivables is ________. Such Grantor has no trade names. During
the four months preceding the date hereof, such Grantor has not been known by
any legal name nor has it had a federal taxpayer identification number
different from the ones set forth in Section 1(a) and 2(a), respectively, of
the Perfection Certificate delivered by such Grantor, nor has such Grantor been
the subject of any merger or other corporate reorganization, except as
disclosed pursuant to Section 1(c) of the Perfection Certificate delivered by
such Grantor. All Receivables evidenced by a promissory note or other
instrument, negotiable document or chattel paper have been duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Administrative
-11-
Agent and delivered and pledged to the Administrative Agent pursuant to Section
4.10. If the Grantor is a party to any Federal, state or local government
contract, the Grantor shall duly comply with the terms of the Federal
Assignment of Claims Act, to the extent required herein to perfect the first
priority security interest in favor of the Administrative Agent.
SECTION 3.5. Ownership, No Liens, etc. Such Grantor owns its
Collateral free and clear of any Lien except for the security interest created
by this Security and Pledge Agreement and, except in the case of Collateral not
consisting of Securities and Intercompany Notes, as permitted by the Credit
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Administrative Agent
relating to this Security and Pledge Agreement or as have been filed in
connection with Liens permitted pursuant to Section 7.2.3 of the Credit
Agreement.
SECTION 3.6. Possession and Control. Such Grantor has exclusive
possession and control of its Equipment and Inventory.
SECTION 3.7. Negotiable Documents, Instruments and Chattel Paper. Such
Grantor has, contemporaneously herewith, delivered to the Administrative Agent
possession of all originals of all negotiable documents, instruments and
chattel paper currently owned or held by such Grantor (duly endorsed in blank,
if requested by the Administrative Agent).
SECTION 3.8. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and has
not been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and
enforceable;
(c) such Grantor has made all necessary filings and recordations
to protect its interest in such Intellectual Property Collateral,
including recordations of all of its interests in the Patent
Collateral and Trademark Collateral in the United States Patent and
Trademark Office and in corresponding offices throughout the world
and its claims to the Copyright Collateral in the United States
Copyright Office and in corresponding offices throughout the world;
(d) such Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual
Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted
rights of any third party; and
(e) such Grantor has performed and will continue to perform all
acts and has paid
-12-
and will continue to pay all required fees and taxes to maintain each
and every such item of Intellectual Property Collateral in full force
and effect throughout the world, as applicable.
Such Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of such Grantor's
business.
SECTION 3.9. Validity, etc. This Security and Pledge Agreement creates
a valid first priority security interest in the Collateral (subject to Section
9-306 of the U.C.C. and Liens permitted pursuant to Section 7.2.3 of the Credit
Agreement) securing the payment of the Secured Obligations, and
(a) in the case of Collateral comprised of certificated
Securities or instruments, upon the delivery of such Collateral to
the Administrative Agent, such security interest will be a valid
first priority perfected security interest;
(b) in the case of Collateral comprised of uncertificated
Securities and other Investment Property (other than certificated
Securities), upon the Administrative Agent obtaining "control" (as
defined in Section 8-106 of the U.C.C., as such term relates to
Investment Property (other than certificated Securities or Commodity
Contracts), or as used in Section 9-115(e) of the U.C.C., as such
term relates to Commodity Contracts) of such Collateral and the
filing of the Uniform Commercial Code financing statements delivered
by such Grantor having an interest in such Collateral to the
Administrative Agent with respect to such Collateral, such security
interest will be a valid first priority perfected security interest;
and
(c) in the case of all other Collateral in which a security
interest can be perfected by the filing of the Uniform Commercial
Code financing statements, upon the filing of such financing
statements delivered by such Grantor to the Administrative Agent with
respect to such Collateral in the filing offices set forth in
Schedule I to the Perfection Certificate, such security interest will
be a valid first priority perfected security interest.
Such Grantor has filed all Uniform Commercial Code financing statements
referred to above in the appropriate offices therefor (or has provided the
Administrative Agent with copies thereof suitable for filing in such offices)
and has taken all of the other actions referred to above necessary to create
perfected, first-priority security interests in the applicable Collateral.
SECTION 3.10. Authorization, Approval, etc. Except as have been
obtained or made and are in full force and effect (or otherwise provided for to
the satisfaction of the Administrative Agent), no authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required either
-13-
(a) for the grant by such Grantor of the security interest
granted hereby, the pledge by such Grantor of any Collateral pursuant
hereto or for the execution, delivery and performance of this
Security and Pledge Agreement by such Grantor,
(b) for the perfection of or the exercise by the Administrative
Agent of its rights and remedies hereunder, or
(c) for the exercise by the Administrative Agent of the voting
or other rights provided for in this Security and Pledge Agreement,
or, except, with respect to any Securities issued by a Subsidiary of
such Grantor, as may be required in connection with a disposition of
such Securities by laws affecting the offering and sale of securities
generally or the rules and regulations of the FCC, the remedies in
respect of the Collateral pursuant to this Security and Pledge
Agreement.
SECTION 3.11.Compliance with Laws. Such Grantor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to materially
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.
ARTICLE IV
COVENANTS
SECTION 4.1.Certain Covenants. Each Grantor covenants and agrees that,
until payment in full of all Secured Obligations then due, the termination or
expiration of all Letters of Credit and the termination of all Commitments,
such Grantor will, unless the Required Lenders shall otherwise consent in
writing, perform, comply with and be bound by the obligations set forth in this
Article IV.
SECTION 4.2. As to Investment Property and Intercompany Notes; Etc.
SECTION 4.2.1. Certificated Securities. Such Grantor shall cause each
of its Subsidiaries to evidence all equity interests in such Subsidiaries by
certificated Securities. Such Grantor shall deliver certificates evidencing all
of the issued and outstanding shares of Capital Stock of each Person that is a
direct Subsidiary of such Grantor from to time, which certificates shall be
accompanied by undated stock powers duly executed in blank.
SECTION 4.2.2. Investment Property (other than Certificated
Securities). With respect
-14-
to any Investment Property (other than certificated Securities) of such
Grantor, such Grantor shall (a) cause a Control Agreement relating to such
Investment Property to be executed and delivered in favor of the Administrative
Agent and (b) deliver Uniform Commercial Code financing statements which when
filed will result in the Administrative Agent having a first priority perfected
security interest in such Investment Property.
SECTION 4.2.3. Stock Powers, etc. Such Grantor agrees that all
certificated Securities constituting Collateral delivered by such Grantor
pursuant to this Security and Pledge Agreement will be accompanied by duly
executed undated blank stock powers or other equivalent instruments of transfer
acceptable to the Administrative Agent. Such Grantor will, from time to time
upon the request of the Administrative Agent, promptly deliver to the
Administrative Agent such stock powers, instruments, and similar documents,
satisfactory in form and substance to the Administrative Agent, with respect to
such Collateral as the Administrative Agent may reasonably request and will,
from time to time upon the request of the Administrative Agent after the
occurrence of any Event of Default, promptly transfer any Securities
constituting Collateral into the name of any nominee designated by the
Administrative Agent.
SECTION 4.2.4. Continuous Pledge. Subject to any sale or other transfer
of Collateral in accordance with Section 7.2.9 of the Credit Agreement or until
such time as all Secured Obligations then due have been paid in full, all
Letters of Credit have terminated or expired and all Commitments have
terminated, such Grantor will, at all times, keep pledged to the Administrative
Agent pursuant hereto on a first priority perfected basis all Investment
Property constituting Collateral, all Dividends and Distributions with respect
thereto, all Intercompany Notes, all interest, principal and other proceeds
received by the Administrative Agent with respect to the Intercompany Notes,
and all other Collateral and other securities, instruments, proceeds, and
rights from time to time received by or distributable to such Grantor in
respect of any of the foregoing Collateral and will not permit any Subsidiary
of such Grantor to issue any Securities which shall not have been immediately
duly pledged hereunder on a first priority perfected basis.
4.2.5.SECTION Voting Rights; Dividends, etc. Such Grantor agrees:
(a) after any Default of the nature referred to in Section 8.1.9
of the Credit Agreement or any Event of Default shall have occurred
and be continuing, promptly upon receipt of notice thereof by such
Grantor and without any request therefor by the Administrative Agent,
to deliver (properly endorsed where required hereby or requested by
the Administrative Agent) to the Administrative Agent all Dividends,
Distributions, all interest, all principal, all other cash payments,
and all proceeds of the Collateral, all of which shall be held by the
Administrative Agent as additional Collateral for use in accordance
with clause (b) of Section 6.1; and
(b) after any Event of Default shall have occurred and be
continuing and the Administrative Agent has notified such Grantor of
the Administrative Agent's intention to exercise its voting power
under this Section 4.2.5(b)
-15-
(i) subject to FCC approval, the Administrative Agent may
exercise (to the exclusion of such Grantor) the voting power and
all other incidental rights of ownership with respect to any
Securities or other Investment Property constituting Collateral
and such Grantor hereby grants the Administrative Agent an
irrevocable proxy, exercisable under such circumstances, to vote
such Securities and such other Collateral; and
(ii) promptly to deliver to the Administrative Agent such
additional proxies and other documents as may be necessary to
allow the Administrative Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by such Grantor but which
such Grantor is then obligated to deliver to the Administrative Agent, shall,
until delivery to the Administrative Agent, be held by such Grantor separate
and apart from its other property in trust for the Administrative Agent. The
Administrative Agent agrees that unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given the notice
referred to in Section 4.2.5(b), such Grantor shall have the exclusive voting
power with respect to any Securities constituting Collateral and the
Administrative Agent shall, upon the written request of such Grantor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by such Grantor which are necessary to allow such Grantor to exercise
voting power with respect to any such Securities; provided, however, that no
vote shall be cast, or consent, waiver, or ratification given, or action taken
by such Grantor that would impair any such Collateral or be inconsistent with
or violate any provision of the Credit Agreement or any other Loan Document
(including this Security and Pledge Agreement).
SECTION 4.2.6. Amendment of Organic Documents. Such Grantor will not
amend, supplement or otherwise modify, or permit, consent or suffer to occur
any amendment, supplement or modification of any terms or provisions contained
in, or applicable to, any Organic Document of any issuer of any Security
comprising the Collateral in which it has an equity interest if the effect
thereof is to impair, or is in any manner adverse to, the rights or interests
of the Administrative Agent or any other Secured Party hereunder or under the
Credit Agreement or any other Loan Document, without the prior written consent
of the Administrative Agent and the Required Lenders.
SECTION 4.3. As to Equipment and Inventory. Such Grantor hereby agrees
that it shall
(a) keep all the Equipment and Inventory (other than Inventory
sold in the ordinary course of business) at the places therefor
specified in Section 3.4 or, upon 30 days' prior written notice to
the Administrative Agent, at such other places in a jurisdiction
where all representations and warranties set forth in Article III
(including Section 3.9) shall be true and correct, and all action
required pursuant to the first sentence
-16-
of Section 4.10 shall have been taken with respect to the Equipment
and Inventory;
(b) cause the Equipment to be maintained and preserved in the
same condition, repair and working order as when new, ordinary wear
and tear excepted, and in accordance with any manufacturer's manual;
and forthwith, or in the case of any loss or damage to any such
Equipment, as quickly as practicable after the occurrence thereof,
make or cause to be made all repairs, replacements, and other
improvements in connection therewith which are necessary or desirable
to such end; and promptly furnish to the Administrative Agent a
statement respecting any loss or damage to any of such Equipment
which could reasonably be expected to have a Material Adverse Effect;
and
(c) pay promptly when due all property and other material taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Equipment and Inventory, except to the extent the validity
thereof is being contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP have been set
aside.
SECTION 4.4. As to Receivables.
(a)Such Grantor shall keep its chief executive office and the office
where it keeps its records concerning the Receivables, and all originals of all
chattel paper which evidences Receivables, located at the address set forth in
Section 3.4 and shall keep its other places of business at the addresses set
forth in Section 3 of the Perfection Certificate delivered by such Grantor, or,
upon 30 days' prior written notice to the Administrative Agent, at such other
locations in a jurisdiction where all actions required by the first sentence of
Section 4.10 shall have been taken with respect to the Receivables and other
Collateral; not change its name or federal taxpayer identification number
except upon 30 days' prior written notice to the Administrative Agent; hold and
preserve such records and chattel paper; and permit representatives of the
Administrative Agent at any time during normal business hours to inspect and
make abstracts from such records and chattel paper. In addition, such Grantor
shall give the Administrative Agent a supplement to such Perfection Certificate
on each date a Compliance Certificate is required to be delivered to the
Administrative Agent under the Credit Agreement, which shall set forth any
changes to the information set forth in Section 3.4.
(b) Such Grantor shall have the right to collect all Receivables so
long as no Default of the nature set forth in Section 8.1.9 of the Credit
Agreement nor any Event of Default shall have occurred and be continuing.
(c) After the occurrence and during the continuance of a Default of
the nature set forth in Section 8.1.9 of the Credit Agreement or an Event of
Default, upon written notice by the Administrative Agent to such Grantor
pursuant to this Section 4.4(c), all proceeds of Collateral received by such
Grantor shall be delivered in kind for deposit to an account of such Grantor
maintained with the Administrative Agent (the "Collateral Account"). Proceeds
of Collateral
-17-
received by such Grantor shall, prior to deposit in the Collateral Account, be
held separate and apart from, and not commingled with, any other property and
in express trust for the benefit of the Administrative Agent until delivery
thereof is made to the Collateral Account.
(d) The Administrative Agent shall have the right to apply any amount
in the Collateral Account to the payment of any Secured Obligations which are
due and payable or payable upon demand or to the payment of any Secured
Obligations at any time that an Event of Default shall have occurred and be
continuing.
(e) With respect to the Collateral Account, it is hereby confirmed and
agreed that (i) deposits in each Collateral Account are subject to a security
interest as contemplated hereby, (ii) the Collateral Account shall be under the
sole dominion and control of the Administrative Agent and (iii) the
Administrative Agent shall have the sole right of withdrawal over the
Collateral Account.
SECTION 4.5. As to Collateral. (a) Until the occurrence and
continuance of a Default of the nature set forth in clauses (a) through (d) of
Section 8.1.9 of the Credit Agreement or an Event of Default, and such time as
the Administrative Agent shall notify such Grantor of the revocation of such
power and authority, such Grantor may in the ordinary course of its business
(except as otherwise permitted under the Credit Agreement), at its own expense,
refine, process, store, transport, sell, lease or furnish under the contracts
of service any of the Inventory normally held by such Grantor for such purpose,
and use and consume, in the ordinary course of its business (except as
otherwise permitted under the Credit Agreement), any raw materials, work in
process or materials normally held by such Grantor for such purpose, will, at
its own expense, endeavor to collect, as and when due, all amounts due with
respect to any Collateral, including the taking of such action with respect to
such collection as the Administrative Agent may reasonably request following
the occurrence of a Default of the nature set forth in clauses (a) through (d)
of Section 8.1.9 of the Credit Agreement or an Event of Default or, in the
absence of such request, as such Grantor may deem advisable, and may grant, in
the ordinary course of business (except as otherwise permitted under the Credit
Agreement), to any party obligated on any of the Collateral, any rebate, refund
or allowance to which such party may be lawfully entitled, and may accept, in
connection therewith, the return of goods, the sale or lease of which shall
have given rise to such Collateral. The Administrative Agent, however, may, at
any time following a Default of the nature set forth in clauses (a) through (d)
of Section 8.1.9 of the Credit Agreement or an Event of Default, whether before
or after any revocation of such power and authority or the maturity of any of
the Secured Obligations, notify any parties obligated on any of the Collateral
to make payment to the Administrative Agent of any amounts due or to become due
thereunder and enforce collection of any of the Collateral by suit or otherwise
and surrender, release, or exchange all or any part thereof, or compromise or
extend or renew for any period (whether or not longer than the original period)
any indebtedness thereunder or evidenced thereby. Upon request of the
Administrative Agent following a Default of the nature set forth in clauses (a)
through (d) of Section 8.1.9 of the Credit Agreement or an Event of Default,
such Grantor will, at its own expense, notify any parties obligated on any of
the Collateral, to make payment to the Administrative Agent of any amounts due
or to become due thereunder.
-18-
(b)Following a Default of the nature set forth in clauses (a) through
(d) of Section 8.1.9 of the Credit Agreement or an Event of Default, the
Administrative Agent is authorized to endorse, in the name of such Grantor, any
item, howsoever received by the Administrative Agent, representing any payment
on or other proceeds of any of the Collateral.
(c)Subject to Section 4.4(c), such Grantor shall have the right to
receive and retain all cash and cash equivalent proceeds of Collateral to be
applied as permitted by the Loan Documents.
SECTION 4.6. As to Intellectual Property Collateral. Such Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of such Grantor:
(a) such Grantor shall not, unless such Grantor shall either (i)
reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Administrative Agent)
that any of the Patent Collateral is of negligible economic value to
such Grantor, or (ii) have a valid business purpose to do otherwise,
do any act, or omit to do any act, whereby any of the Patent
Collateral may lapse or become abandoned or dedicated to the public or
unenforceable;
(b) such Grantor shall not, and such Grantor shall not permit
any of its licensees to, unless such Grantor shall either (i)
reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Administrative Agent)
that any of the Trademark Collateral is of negligible economic value
to such Grantor, or (ii) have a valid business purpose to do
otherwise,
(i) fail to continue to use any of the Trademark Collateral
in order to maintain all of the Trademark Collateral in full
force free from any claim of abandonment for non-use,
(ii) fail to maintain as in the past the quality of
products and services offered under all of the Trademark
Collateral,
(iii) fail to employ all of the Trademark Collateral
registered with any Federal or state or foreign authority with
an appropriate notice of such registration,
(iv) adopt or use any other Trademark which is confusingly
similar or a colorable imitation of any of the Trademark
Collateral,
(v) use any of the Trademark Collateral registered with any
Federal or state or foreign authority except for the uses for
which registration or application
-19-
for registration of all of the Trademark Collateral has been
made, and
(vi) do or permit any act or knowingly omit to do any act
whereby any of the Trademark Collateral may lapse or become
invalid or unenforceable;
(c) such Grantor shall not, unless such Grantor shall either
reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Administrative Agent)
that any of the Copyright Collateral or any of the Trade Secrets
Collateral is of negligible economic value to such Grantor, or have a
valid business purpose to do otherwise, do or permit any act or
knowingly omit to do any act whereby any of the Copyright Collateral
or any of the Trade Secrets Collateral may lapse or become invalid or
unenforceable or placed in the public domain except upon expiration of
the end of an unrenewable term of a registration thereof;
(d) such Grantor shall notify the Administrative Agent
immediately if it knows, or has reason to know, that any application
or registration relating to any material item of the Intellectual
Property Collateral may become abandoned or dedicated to the public or
placed in the public domain or invalid or unenforceable, or of any
adverse determination or development (including the institution of, or
any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office
or any foreign counterpart thereof or any court) regarding such
Grantor's ownership of any of the Intellectual Property Collateral,
its right to register the same or to keep and maintain and enforce the
same;
(e) in no event shall such Grantor or any of its agents,
employees, designees or licensees file an application for the
registration of any Intellectual Property Collateral with the United
States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency in any other country or any political
subdivision thereof, unless it promptly informs the Administrative
Agent, and upon request of the Administrative Agent, executes and
delivers any and all agreements, instruments, documents and papers as
the Administrative Agent may reasonably request to evidence the
Administrative Agent's security interest in such Intellectual Property
Collateral and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby;
(f) such Grantor shall take all necessary steps, including in
any proceeding before the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain
and pursue any application (and to obtain the relevant registration)
filed with respect to, and to maintain any registration of, the
Intellectual Property Collateral, including the filing of applications
for renewal, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings and the payment
of fees and taxes (except to the extent that dedication, abandonment
or invalidation is permitted under the foregoing clauses (a), (b) and
(c)); and
-20-
(g) such Grantor shall, contemporaneously herewith, execute and
deliver to the Administrative Agent a Patent Security Agreement,
Trademark Security Agreement and Copyright Security Agreement in the
forms of Exhibit B, Exhibit C and Exhibit D hereto, and shall execute
and deliver to the Administrative Agent any other document required to
acknowledge or register or perfect the Administrative Agent's interest
in any part of the Intellectual Property Collateral.
SECTION 4.7. Insurance. Such Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses and will furnish a certificate of a
reputable insurance broker setting forth the nature and extent of all insurance
maintained by the Grantor in accordance with this Section. Without limiting the
foregoing, the Grantor further agrees as follows:
(a) Each policy for property insurance shall show the
Administrative Agent as loss payee.
(b) Each policy for liability insurance shall show the
Administrative Agent as an additional insured.
(c) With respect to each life insurance policy (if any), the
Grantor shall, within thirty days of the date hereof or the date on
which such policy becomes effective, execute and deliver to the
Administrative Agent a collateral assignment, notice of which has been
acknowledged in writing by the insurer.
(d) Each insurance policy shall provide that at least 30 days'
prior written notice of cancellation or of lapse shall be given to the
Administrative Agent by the insured.
(e) The Grantor shall, if so requested by the Administrative
Agent, deliver to the Administrative Agent a copy of each insurance
policy.
(f) Except to the extent otherwise permitted under the Credit
Agreement, all payments in respect of property insurance and life
insurance shall be deposited to the Collateral Account and if there
shall be no Collateral Account shall be paid to the Grantor.
SECTION 4.8. Transfers and Other Liens. Such Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except Inventory in the ordinary
course of business or as permitted by the Credit Agreement; or
(b) create or suffer to exist any Lien or other charge or
encumbrance upon or with
-21-
respect to any of the Collateral to secure Indebtedness of any Person
or entity, except for the security interest created by this Security
and Pledge Agreement and except as permitted by the Credit Agreement.
SECTION 4.9. Further Assurances, etc. Such Grantor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Administrative Agent may request, in order
to perfect, preserve and protect any security interest granted or purported to
be granted hereby or to enable the Administrative Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, such Grantor will
(a) if any Receivable shall be evidenced by a promissory note or
other instrument, negotiable document or chattel paper, deliver and
pledge to the Administrative Agent hereunder such promissory note,
instrument, negotiable document or chattel paper duly endorsed and
accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Administrative Agent;
(b) execute and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices
(including any assignment of claim form under or pursuant to the
federal assignment of claims statute, 31 U.S.C. ss. 3726, any
successor or amended version thereof or any regulation promulgated
under or pursuant to any version thereof), as may be necessary or
desirable, or as the Administrative Agent may request, in order to
perfect and preserve the security interests and other rights granted
or purported to be granted to the Administrative Agent hereby;
(c) not enter into any agreement amending, supplementing, or
waiving any provision of any Intercompany Note (including any
underlying instrument pursuant to which such Intercompany Note is
issued) or compromising or releasing or extending the time for payment
of any obligation of the maker thereof without the prior written
consent of the Administrative Agent;
(d) promptly execute and deliver all further instruments and
take all further action, that may be necessary or desirable, or that
the Administrative Agent may reasonably request, in order to perfect
and protect any security interest granted or purported to be granted
hereby or to enable the Administrative Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral;
(e) not take or omit to take any action the taking or the
omission of which would result in any impairment or alteration of any
obligation of the maker of any Intercompany Note or other instrument
constituting Collateral; and
(f) furnish to the Administrative Agent, from time to time at
the Administrative
-22-
Agent's request, statements and schedules further identifying and
describing the Collateral and such other reports in connection with
the Collateral as the Administrative Agent may reasonably request,
all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all
or any part of the Collateral without the signature of such Grantor where
permitted by law. A carbon, photographic or other reproduction of this Security
and Pledge Agreement or any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
law.
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. Such
Grantor hereby irrevocably appoints the Administrative Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor
and in the name of such Grantor or otherwise, from time to time following the
occurrence and during the continuance of an Event of Default, to take any
action and to execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Security and Pledge
Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a) above;
(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Administrative Agent with respect to any of
the Collateral; and
(d) to perform the affirmative obligations of such Grantor
hereunder (including all obligations of such Grantor pursuant to
Section 4.9).
Such Grantor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section is irrevocable and coupled with an
interest.
SECTION 5.2. Administrative Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance
-23-
of, such agreement, and the expenses of the Administrative Agent incurred in
connection therewith shall be payable by such Grantor pursuant to Section 6.4.
SECTION 5.3. Administrative Agent Has No Duty. In addition to, and not
in limitation of, Section 2.6, the powers conferred on the Administrative Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Investment Property, whether or not the Administrative Agent
has or is deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as such Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Collateral) and also may
(i) require such Grantor to, and such Grantor hereby agrees
that it will, at its expense and upon request of the
Administrative Agent forthwith, assemble all or part of the
Collateral as directed by the Administrative Agent and make it
available to the Administrative Agent at a place to be
designated by the Administrative Agent which is reasonably
convenient to both parties, and
-24-
(ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Administrative Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon
such other terms as the Administrative Agent may deem
commercially reasonable. Such Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days'
prior notice to such Grantor of the time and place of any public
sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Administrative
Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(b) All cash proceeds received by the Administrative Agent in
respect of any sale of, collection from, or other realization upon all
or any part of the collateral may, in the discretion of the
Administrative Agent, be held by the Administrative Agent as
collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Administrative Agent pursuant to
Section 6.3) in whole or in part by the Administrative Agent for the
benefit of the Secured Parties against, all or any part of the Secured
Obligations in any such order as the Administrative Agent shall elect.
Any surplus of such cash or cash proceeds held by the Administrative
Agent and remaining after payment in full of all the Obligations shall
be paid over to the Grantor or to whomsoever may be lawfully entitled
to receive such surplus.
(c) The Administrative Agent may
(i) transfer all or any part of the Collateral into the
name of the Administrative Agent or its nominee, with or without
disclosing that such Collateral is subject to the lien and
security interest hereunder,
(ii) notify the parties obligated on any of the Collateral
to make payment to the Administrative Agent of any amount due or
to become due thereunder,
(iii) enforce collection of any of the Collateral by suit
or otherwise, and surrender, release or exchange all or any part
thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any obligations
of any nature of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in such
Grantor's name to allow collection of the Collateral,
-25-
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of such Grantor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the
Collateral.
SECTION 6.2. Securities Laws. If the Administrative Agent shall
determine to exercise its right to sell all or any of the Collateral pursuant
to Section 6.1, such Grantor agrees that, upon request of the Administrative
Agent, such Grantor will, at its own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments
and documents, and do or cause to be done all such other acts
and things, as may be necessary or, in the opinion of the
Administrative Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as from time
to time amended (the "Securities Act"), and to cause the
registration statement relating thereto to become effective and
to remain effective for such period as prospectuses are required
by law to be furnished, and to make all amendments and
supplements thereto and to the related prospectus which, in the
opinion of the Administrative Agent, are necessary or advisable,
all in conformity with the requirements of the Securities Act
and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under
the state securities or "Blue Sky" laws and to obtain all
necessary governmental approvals for the sale of the Collateral,
as requested by the Administrative Agent;
(c) cause each such issuer to make available to its
security holders, as soon as practicable, an earnings statement
that will satisfy the provisions of Section 11(a) of the
Securities Act; and
(d) do or cause to be done all such other acts and things
as may be necessary to make such sale of the Collateral or any
part thereof valid and binding and in compliance with applicable
law.
Such Grantor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Administrative Agent or the Secured
Parties by reason of the failure by such Grantor to perform any of the
covenants contained in this Section and, consequently, agrees that, if such
Grantor shall fail to perform any of such covenants, such covenants shall be
specifically enforceable against such Grantor.
SECTION 6.3. Indemnity and Expenses.
(a) Such Grantor agrees to indemnify the Administrative Agent
from and against
-26-
any and all claims, losses and liabilities arising out of or resulting
from this Security and Pledge Agreement (including enforcement of this
Security and Pledge Agreement), except claims, losses or liabilities
resulting from the Administrative Agent's gross negligence or wilful
misconduct.
(b) Such Grantor will upon demand pay to the Administrative
Agent the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any experts
and agents, which the Administrative Agent may incur in connection
with
(i) the administration of this Security and Pledge
Agreement,
(ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any of the
Collateral,
(iii) the exercise or enforcement of any of the rights of
the Administrative Agent or the Secured Parties hereunder, and
(iv) the failure by such Grantor to perform or observe any
of the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Security and Pledge Agreement is a
Loan Document executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 7.2. Amendments; etc. No amendment to or waiver of any
provision of this Security and Pledge Agreement nor consent to any departure by
such Grantor herefrom shall in any event be effective unless the same shall be
in writing and signed by the Administrative Agent (on behalf of the Lenders or
the Required Lenders, as the case may be), and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 7.3. Protection of Collateral. The Administrative Agent may
from time to time, at its option, perform any act which such Grantor agrees
hereunder to perform and which such Grantor shall fail to perform after being
requested in writing so to perform (it being understood that no such request
need be given after the occurrence and during the continuance of an Event of
Default).
-27-
SECTION 7.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic communication) and, if to such Grantor, mailed or telecopied or
delivered to it at the address of the Borrower specified in the Credit
Agreement, and, if to the Administrative Agent, mailed or telecopied or
delivered to it, addressed to it at the address of the Administrative Agent
specified in the Credit Agreement. All such notices and other communications,
when mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any such notice or communication, if transmitted by telecopier, shall
be deemed given when transmitted and electronically confirmed.
SECTION 7.5. Section Captions. Section captions used in this Security
and Pledge Agreement are for convenience of reference only, and shall not
affect the construction of this Security and Pledge Agreement.
SECTION 7.6. Severability. Wherever possible each provision of this
Security and Pledge Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Security
and Pledge Agreement shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Security and Pledge Agreement.
SECTION 7.7. Counterparts. This Security and Pledge Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed an original and all of which shall constitute together but one and the
same agreement.
SECTION 7.8. Governing Law, Entire Agreement, etc. THIS SECURITY AND
PLEDGE AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK. THIS SECURITY AND PLEDGE AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.9. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT AND EACH
GRANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST
EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
-28-
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT OR SUCH GRANTOR IN CONNECTION HEREWITH OR THEREWITH.
SUCH GRANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE ADMINISTRATIVE AGENT ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
-29-
IN WITNESS WHEREOF, each Grantor has caused this Security and Pledge
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
NEXTEL PARTNERS OF FLORIDA, INC.,
a Delaware corporation
By /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Treasurer
NEXTEL PARTNERS OF KENTUCKY, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Secretary
NEXTEL PARTNERS OF LOUISIANA, INC., a
Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Secretary
NEXTEL PARTNERS OF MIDWEST, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Treasurer
NCPR, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Treasurer
NEXTEL PARTNERS OF PA, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Secretary
NEXTEL PARTNERS OF SOUTHWEST, INC.
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Treasurer
NEXTEL PARTNERS OF TEXAS, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Secretary
NEXTEL PARTNERS OF UPSTATE NEW YORK,
INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Secretary
NEXTEL PARTNERS OF WISCONSIN, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Secretary
NEXTEL WIP LEASE CORP.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, General Counsel and Secretary
ACCEPTED
BY:
BANK OF MONTREAL,
as Administrative Agent
By: /s/ Xxxxx Xxxxxxx
----------------------
Name: Xxxxx Xxxxxxx
Title: Director
