EXHIBIT 4.27
CONFORMED COPY
SECURITY AND PLEDGE AGREEMENT
SECURITY AND PLEDGE AGREEMENT (the "Agreement"), dated as of December
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4, 2000, by and among ICG COMMUNICATIONS, INC., a Delaware corporation, and each
of its direct or indirect subsidiaries party to the Credit Agreement (as
hereinafter defined) (the "Grantors"), each of which Grantors is a debtor and
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debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code,
and THE CHASE MANHATTAN BANK, a New York banking corporation as agent (in such
capacity, the "Agent") for the lenders (the "Lenders") party to the Credit
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Agreement.
WITNESSETH:
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WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Agent, the Lenders and the Grantors are entering into a Revolving
Credit Agreement dated as of the date hereof (as amended, modified or
supplemented from time to time, the "Credit Agreement"); and
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WHEREAS, unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined; and
WHEREAS, it is a condition precedent to the making of Loans and the
issuance of Letters of Credit that the Grantors shall have granted a security
interest, pledge and lien on (x) all cash maintained in the Letter of Credit
Account pursuant to Section 364(c)(2) of the Bankruptcy Code and (y) certain of
the Grantors' assets and properties and the proceeds thereof pursuant to
Sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code; and
WHEREAS, upon entry of the Final Order, the grant of such security
interest, pledge and lien will have been authorized pursuant to Sections
364(c)(2) and 364(c)(3) of the Bankruptcy Code ; and
WHEREAS, to supplement the Final Order without in any way diminishing
or limiting the effect of the Final Order or the security interest, pledge and
lien granted thereunder, the parties hereto desire to more fully set forth their
respective rights in connection with such security interest, pledge and lien;
and
WHEREAS, upon entry of the Final Order, this Agreement will have been
approved by the Bankruptcy Court;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Loans and issue Letters of Credit, the Grantors
hereby agree with the Agent as follows:
SECTION 1. Grant of Security and Pledge. Subject to entry of the
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Final Order, each of the Grantors hereby transfers, grants, bargains, sells,
conveys, hypothecates, assigns, pledges and sets over to the Agent for its
benefit and the ratable benefit of the Lenders, and hereby grants
to the Agent for its benefit and the ratable benefit of the Lenders a perfected
pledge and security interest in, all of the Grantors' right, title and interest
in and to the following (the "Collateral"), which pledge and security interest
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shall be (x) junior to valid and perfected Liens permitted pursuant to clauses
(i) and (ii) of Section 6.1 of the Credit Agreement, provided that upon
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repayment of all Indebtedness under the Existing Agreement, the Obligations of
the Borrowers hereunder and under the Loan Documents and in respect of
Indebtedness permitted by Section 6.3(v) of the Credit Agreement shall
automatically be secured, pursuant to Section 364(c)(2) of the Bankruptcy Code,
by a perfected first priority Lien (subject to valid and perfected Liens
permitted pursuant to clauses (i) and (ii) of Section 6.1 of the Credit
Agreement) on all property of the Borrowers that then secures the Existing
Agreement, and (y) subject to the Carve-Out:
(a) all "accounts" as defined in the Uniform Commercial Code as in
effect from time to time in the State of New York, or when the context implies,
the Uniform Commercial Code as in effect from time to time in any other
applicable jurisdiction (the "UCC"), including, without limitation, all present
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and future accounts, accounts receivable and other rights of each of the
Grantors to payment for goods sold or leased or for services rendered (except
those evidenced by instruments or chattel paper), whether now existing or
hereafter arising and wherever arising, and whether or not they have been earned
by performance (collectively, the "Accounts");
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(b) (i) all "inventory" as defined in the UCC, and (ii) all goods and
merchandise now owned or hereafter acquired by each of the Grantors wherever
located, whether in the possession of a Grantor or of a bailee or other person
for sale, storage, transit, processing, use or otherwise consisting of whole
goods, components, supplies, materials, or consigned, returned or repossessed
goods) which are held for sale or lease or to be furnished (or have been
furnished) under any contract of service or which are raw materials, work-in-
process, finished goods or materials used or consumed in such Grantor's business
or processed by or on behalf of any Grantor (regardless of whether characterized
as inventory under the UCC) (collectively, the "Inventory");
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(c) (i) all "equipment" as defined in the UCC, and (ii) all machinery,
all manufacturing, distribution, selling, data processing and office equipment,
all furniture, furnishings, appliances, fixtures and trade fixtures, tools,
tooling, molds, dies, vehicles, vessels, aircraft and all other goods of every
type and description (other than Inventory), in each instance whether now owned
or hereafter acquired by each of the Grantors and wherever located
(collectively, the "Equipment");
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(d) all works of art now owned or hereafter acquired by each of the
Grantors, including, without limitation, paintings, sketches, drawings, prints,
sculptures, crafts, tapestries, porcelain, carvings, artifacts, renderings and
designs;
(e) all "general intangibles" as defined in the UCC, including,
without limitation, all rights, interests, choses in action, causes of action,
claims and all other intangible property of each of the Grantors of every kind
and nature (other than Accounts, Trademarks, Patents and Copyrights), in each
instance whether now owned or hereafter acquired by such Grantor, including,
without limitation, all general intangibles; all corporate and other business
records; all loans, royalties, and other obligations receivable; all inventions,
designs, trade
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secrets, computer programs, software, printouts and other computer materials,
goodwill, registrations, copyrights, licenses, franchises, customer lists,
credit files, correspondence, and advertising materials; all customer and
supplier contracts, firm sale orders, rights under license and franchise
agreements (including all license agreements with any other Person in connection
with any of the Patents and Trademarks or such other Person's names or marks,
whether such Grantor is a licensor or licensee under any such license
agreement), and other contracts and contract rights (including, without
limitation, all Material Contracts); all interests in partnerships and joint
ventures; all tax refunds and tax refund claims; all right, title and interest
under leases, subleases, licenses and concessions and other agreements to the
extent assignable relating to real or personal property; all payments due or
made to each of the Grantors in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of any property by any person or
governmental authority; all deposit accounts (general or special) with any bank
or other financial institution; all credits with and other claims against
carriers and shippers; all rights to indemnification; all reversionary interests
in pension and profit sharing plans and reversionary, beneficial and residual
interest in trusts; all proceeds of insurance of which each of the Grantors is
beneficiary; and all letters of credit, guaranties, liens, security interest and
other security held by or granted to each of the Grantors; and all other
intangible property, whether or not similar to the foregoing (collectively, the
"General Intangibles");
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(f) all chattel paper (as that term is defined in Article 9 of the
UCC, including, without limitation, electronic chattel paper, as that term is
defined in Revised Article 9), all instruments (as that term is defined in
Article 9 of the UCC), all notes and debt instruments and all payments
thereunder and instruments and other property from time to time delivered in
respect thereof or in exchange therefor, and all bills of lading, warehouse
receipts and other documents of title and documents, in each instance whether
now owned or hereafter acquired by each of the Grantors;
(g) all property or interests in property now or hereafter acquired by
each of the Grantors which may be owned or hereafter may come into the
possession, custody or control of the Agent or any agent or affiliate of the
Agent in any way or for any purpose (whether for safekeeping, deposit, custody,
pledge, transmission, collection or otherwise), and all rights and interests of
each of the Grantors, now existing or hereafter arising and however and wherever
arising, in respect of any and all (i) notes, drafts, letters of credits,
stocks, bonds, and debt and equity securities, whether or not certificated, and
warrants, options, puts and calls and other rights to acquire or otherwise
relating to the same; (ii) money (including all cash and cash equivalents held
in the Letter of Credit Account (as defined and referred to in the Credit
Agreement)); (iii) proceeds of loans, including, without limitation, Loans made
under the Credit Agreement; and (iv) insurance proceeds and books and records
relating to any of the property covered by this Agreement; together, in each
instance, with all accessions and additions thereto, substitutions therefor, and
replacements, proceeds and products thereof;
(h) all of each Grantor's now owned or existing and filed and
hereafter acquired or arising and filed trademarks, service marks, trademark or
service xxxx registrations, trade names, trademark or service xxxx applications,
trade styles, prints and labels on which said trademarks, trade names, trade
styles and service marks have appeared or appear, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, and
all registrations and recordings thereof, including, without limitation,
applications, registrations and
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recordings in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof, or any other country
or political subdivision thereof (except for "intent to use" applications for
trademark or service xxxx registrations filed pursuant to Section 1(b) of the
Xxxxxx Act, unless and until an Amendment to Allege Use or a Statement of Use
under Sections 1(c) and 1(d) of said Act has been filed), and including, without
limitation, each xxxx, registration, and application listed on Schedule 3
attached hereto and made a part hereof (as the same may be amended pursuant
hereto from time to time), and (i) renewals thereof, (ii) all income, royalties,
damages and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages and payment for past or future
infringements thereof, (iii) the right to xxx for past, present and future
infringements thereof, (iv) all rights corresponding thereto throughout the
world, and (v) together in each case with the good will of each Grantor's
business connected with the use of each such trademark, service xxxx, trade name
and trade dress (all of the foregoing being herein referred to as the
"Trademarks");
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(i) all of each Grantor's now owned or existing and filed and
hereafter acquired or arising and filed patents and patent applications of the
United States and any other country, and all registrations and recordings
thereof, including, without limitation, applications, registrations and
recordings in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
any political subdivision thereof, all whether now owned or hereafter acquired
by each Grantor, and including without limitation the inventions and
improvements described and claimed therein, and those patents and patent
applications listed on Schedule 4 attached hereto and made a part hereof, and
(a) all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (b) all income, royalties, damages and payments
now and hereafter due and/or payable under and with respect thereto, including,
without limitation, damages and payments for past or future infringements
thereof, (c) the right to xxx for past, present and future infringements
thereof, (d) all rights, title and interests corresponding thereto throughout
the world (all of the foregoing patents and applications, and (e) the goodwill
of Assignor's business connected with and symbolized by the foregoing, together
with the items described in clauses (a)-(d), are sometimes hereinafter
individually and/or collectively referred to as the "Patents");
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(j) all of each Grantor's now owned, registered and unregistered, and
hereafter acquired or arising, registered and unregistered, copyrights and
copyright applications of the United States, or any other country, and all
registrations and recordings thereof, including, without limitation,
applications, registrations and recordings in the United States Copyright
Office, the Library of Congress or in any similar office or agency of the United
States, any State thereof, or any other country or political subdivision
thereof, including those listed on Schedule 5 attached hereto and made a part
hereof (as the same may be amended pursuant hereto from time to time), and (i)
the renewals thereof, (ii) all income, royalties, damages and payments now and
hereafter due and/or payable with respect thereto, including damages and
payments for past or future infringements thereof, (iii) the right to xxx for
past, present and future infringements thereof, and (iv) all rights, title, and
interests corresponding thereto throughout the world (all of the foregoing being
herein referred to as the "Copyrights");
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(k) all books, records, ledger cards and other property at any time
evidencing or relating to the Accounts, Equipment, General Intangibles,
Trademarks, Patents or Copyrights;
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(l) all shares of capital stock owned by any Grantor, including,
without limitation, all shares of capital stock listed on Schedule 6 hereto (as
such schedule may be amended or supplemented from time to time) of the issuers
listed thereon (individually, an "Issuer", and collectively, the "Issuers") and
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all shares of capital stock of any Issuer obtained in the future by such Grantor
and the certificates, if any, representing or evidencing such shares and any
interest of such Grantor on the books and records of such Issuer or on the books
and records of any securities intermediary pertaining to such shares, and,
subject to Section 9 below, all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares, and all rights and privileges of any
Grantor with respect to such shares (the "Pledged Shares");
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(m) all interests in any general partnership, limited partnership,
limited liability partnership or other partnership held by any Grantor,
including, without limitation, all partnership interests listed in Schedule 7
hereto (as such schedule may be amended or supplemented from time to time) of
the partnerships listed thereon (individually, a "Partnership", and
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collectively, the "Partnerships") and all partnership interests in any
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Partnership obtained in the future by such Grantor and the certificates, if any,
representing or evidencing such interests and any interest of such Grantor on
the books and records of such Partnership or on the books and records of any
securities intermediary pertaining to such interest, and, subject to Section 9
below, all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such interests, and all rights and privileges of any Grantor with
respect to such interests (the "Pledged Partnership Interests");
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(n) all interests in any limited liability company or unlimited
liability company held by any Grantor, including, without limitation, all
limited liability company and unlimited liability company interests listed in
Schedule 8 hereto (as such schedule may be amended or supplemented from time to
time) of the limited liability companies and the unlimited liability company
listed thereon (individually, a "Company", and collectively, the "Companies")
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and all interests in any Company obtained in the future by such Grantor and the
certificates, if any, representing or evidencing such interests and any interest
of such Grantor on the books and records of such Company or on the books and
records of any securities intermediary pertaining to such interest, and, subject
to Section 9 below, all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such interests, and all rights and privileges of any Grantor
with respect to such interests (the "Pledged Company Interests") (the Pledged
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Shares, the Pledged Partnership Interests and the Pledged Company Interests
being collectively called the "Pledged Collateral");
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(o) all health-care-insurance receivables (the "Health-Care-Insurance
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Receivables)", as such term is defined in the 1999 Official Text of Article 9 of
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the Uniform Commercial Code with conforming amendments to Articles 1, 2, 2a, 4,
5, 6, 7 and 8 ("Revised Article 9");
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(p) all letter of credit rights, as such term is defined in Revised
Article 9 (the "Letter of Credit Rights")
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(q) all other personal property of each of the Grantors, whether
tangible or intangible, and whether now owned or hereafter acquired; and
(r) all proceeds and products of any of the foregoing, in any form,
including, without limitation, any claims against third parties for loss or
damage to or destruction of any or all of the foregoing and, to the extent not
otherwise included, all (i) payments under insurance (whether or not the 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 and (ii) cash.
Notwithstanding anything contained herein to the contrary, the total amount of
shares of capital stock or other ownership interests of any Person pledged
pursuant to this Agreement that is not incorporated or organized in the United
States shall in no event exceed sixty-five percent (65%) of the total
outstanding shares of capital stock or such other ownership interests thereof.
For avoidance of doubt, it is expressly understood and agreed that, to the
extent the UCC is revised subsequent to the date hereof such that the definition
of any of the foregoing terms included in the description of Collateral is
changed, the parties hereto desire that any property which is included in such
changed definitions which would not otherwise be included in the foregoing grant
on the date hereof be included in such grant immediately upon the effective date
of such revision. Notwithstanding the immediately preceding sentence, the
foregoing grant is intended to apply immediately on the date hereof to all
Collateral to the fullest extent permitted by applicable law regardless of
whether any particular item of Collateral is currently subject to the UCC.
SECTION 2. Security for Obligations. This Agreement and the
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Collateral secure the payment of all obligations of each of the Grantors, now or
hereafter existing, under the Credit Agreement and the other Loan Documents (and
any other documents in respect of such Obligations), and in respect of
Indebtedness permitted by Section 6.3(v) of the Credit Agreement, whether for
principal, interest, fees, expenses or otherwise, and all obligations of each of
the Grantors now or hereafter existing under or in respect of this Agreement
(all such obligations of the Grantors being herein called the "Obligations").
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SECTION 3. Delivery of Pledged Collateral; Other Actions. Upon
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written request by the Agent (and without further order of the Bankruptcy
Court), all certificates or instruments representing or evidencing the Pledged
Collateral shall be delivered to and held by the Agent pursuant hereto and shall
be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance reasonably satisfactory to the Agent. Upon the
occurrence and during the continuance of any Event of Default, the Agent shall
have the right (for the ratable benefit of the Lenders) to give (to the extent
required) the five (5) Business Day notice referred to in the final proviso of
Section 7.1 of the Credit Agreement (the "Default Notice") and, at any time
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after the expiration of five (5) Business Days from the date of the Default
Notice (the "Default Notice Period") in its discretion and without further
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notice to the Grantors, to transfer to or to register in the name of the Agent
or any of its nominees any or all of the Pledged Collateral.
SECTION 4. Representations and Warranties. Each Grantor, jointly and
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severally, represents and warrants as follows:
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(a) As of the Filing Date, all of the Inventory and/or Equipment
(other than motor vehicles and other immaterial amounts of Inventory and
Equipment not exceeding, in the aggregate, $10,000,000 in value) is located at
the places specified in Schedule 1 hereto. As of the Filing Date, the
jurisdictions of formation, organization or incorporation, as the case may be,
the chief places of business and chief executive offices of each of the Grantors
and the offices where each Grantor keeps its records concerning any Accounts and
any Health-Care-Insurance Receivables and all originals of all chattel paper
which evidence any Account are located at the places specified in Schedule 2
hereto. As of the Filing Date, all trade names under which each of the Grantors
have sold and will sell Inventory are listed on Schedule 3 hereto.
(b) Each of the Grantors owns the Collateral free and clear of any
lien, security interest, charge or encumbrance except for the security interest
created by this Agreement and except as otherwise permitted under Section 6.1 of
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 (x) in favor of the Agent
relating to this Agreement and (y) in favor of any holder of a Lien permitted
under Section 6.1 of the Credit Agreement.
(c) As of the Filing Date, no Grantor owns any material Trademarks,
Patents or Copyrights or has any material Trademarks, Patents or Copyrights
registered in, or the subject of pending applications in, 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,
other than those described in Schedules 3, 4 and 5 hereto. As of the Filing
Date, the registrations for the Trademarks, Patents and Copyrights disclosed on
such Schedules 3, 4 and 5 hereto are subsisting and have not been adjudged
invalid or unenforceable, in whole or in part, and each Patent, Trademark and
Copyright is valid and enforceable. None of the material Trademarks, Patents or
Copyrights has been abandoned or dedicated.
(d) Each Grantor, as the case may be, is the sole and exclusive owner
of the entire right, title and interest in and to each of its Trademarks,
Patents and Copyrights, free and clear of any liens, charges and encumbrances
except for Liens permitted pursuant to Section 6.1 of the Credit Agreement.
(e) As of the Filing Date, no Grantor owns or holds any Pledged
Collateral other than that described in Schedules 6, 7 and 8.
(f) The Pledged Shares have been duly authorized and validly issued
and are fully paid and non-assessable.
(g) As of the Filing Date, each Grantor, as the case may be, is the
record and beneficial owner of the Pledged Collateral described in Schedules 6,
7 and 8 free and clear of any Lien, security interest, option or other charge or
encumbrance, except as permitted under Section 6.1 of the Credit Agreement.
(h) As of the Filing Date, except as disclosed on Schedule 6, the
Pledged Shares constitute all of the issued and outstanding shares of stock of
each of the Issuers which is a Borrower or a Subsidiary of a Borrower and no
such Issuer is under any contractual obligation to issue any additional shares
of stock or any other securities, rights or indebtedness.
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(i) As of the Filing Date, except as disclosed on Schedule 7, the
Pledged Partnership Interests constitute all of the issued and outstanding
interests in each of the Partnerships and no Partnership is under any
contractual obligation to issue any additional interests or any other rights or
indebtedness.
(j) As of the Filing Date, except as disclosed on Schedule 8, the
Pledged Company Interests constitute all of the issued and outstanding interests
in each of the Companies and no Company is under any contractual obligation to
issue any additional interests or any other rights or indebtedness.
(k) Upon the entry by the Bankruptcy Court of the Final Order, (i)
each Grantor will be duly authorized to execute and deliver this Agreement to
the Agent, and (ii) this Agreement will constitute the legal, valid and binding
obligation of the Grantors, enforceable against the Grantors in accordance with
its terms.
(l) As of the Filing Date, all material letters of credit to which any
Grantor has rights are listed on Schedule 9 (as amended or supplemented from
time to time) hereto, and the Grantors have obtained the consent of each issuer
of any material letter of credit to the assignment of the proceeds of the letter
of credit to the Agent.
SECTION 5. Further Assurances.
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(a) Each of the Grantors agrees that from time to time, at its
expense, it will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary, or that the Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Agent to exercise and
enforce any of its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, and without further order of
the Bankruptcy Court, each of the Grantors will execute and file such financing
or continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the Agent may reasonably request, in order
to perfect and preserve the security interests granted or purported to be
granted hereby.
(b) Each Grantor hereby authorizes the 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 Agreement or any
financing statement covering the Collateral or any part thereof is sufficient as
a financing statement where permitted by law.
(c) Each Grantor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
(d) Each Grantor hereby covenants and agrees that with respect to any
material letter of credit hereafter arising it shall obtain the consent of the
issuer thereof to the assignment of the proceeds of the letter of credit to the
Agent.
SECTION 6. As to Equipment and Inventory. Each Grantor shall:
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(a) Keep the Equipment and Inventory (other than Inventory sold in the
ordinary course of business, motor vehicles and other immaterial amounts of
Inventory and Equipment not exceeding, in the aggregate, $10,000,000 in value)
at the places specified therefor in Schedule 1 hereto or, upon 30 days' prior
written notice to the Agent, at other places in jurisdictions where all action
required by Section 5 hereof shall have been taken to assure the continuation of
the perfection of the security interest of the Agent (for its benefit and the
ratable benefit of the Lenders) with respect to the Equipment and Inventory.
(b) Subject to provisions of the Credit Agreement, maintain or cause
to be maintained in good repair, working order and condition, excepting ordinary
wear and tear and damage due to casualty, all of the Equipment, and make or
cause to be made all appropriate repairs, renewals and replacements thereof, to
the extent not obsolete and consistent with past practice of such Grantor, as
quickly as practicable after the occurrence of any loss or damage thereto which
are necessary or reasonably desirable to such end, except where the failure to
do any of the foregoing would not result in a material adverse effect on the
assets, properties or condition (financial or otherwise) of the Grantors, taken
as a whole.
(c) Until satisfaction in full of the Obligations, at any time when an
Event of Default has occurred and is continuing: (i) each Grantor will perform
any and all reasonable actions requested by the Agent to enforce the Agent's
security interest in the Inventory and all of the Agent's rights hereunder, such
as leasing warehouses to the Agent or its designee, placing and maintaining
signs, appointing custodians, transferring Inventory to warehouses, and
delivering to the Agent warehouse receipts and documents of title in the Agent's
name; (ii) if any Inventory is in the possession or control of any of the
Grantors' agents, contractors or processors or any other third party, each such
Grantor will notify the Agent thereof and will notify such agents, contractors
or processors or third party of the Agent's security interest therein and, upon
request, instruct them to hold all such Inventory for the Agent and such
Grantor's account, as their interests may appear, and subject to the Agent's
instructions; (iii) the Agent shall have the right to hold all Inventory subject
to the security interest granted hereunder; and (iv) the Agent shall have the
right to give the Default Notice and, at any time after the expiration of the
Default Notice Period, to take possession of the Inventory or any part thereof
and to maintain such possession on such Grantor's premises or to remove any or
all of the Inventory to such other place or places as the Agent desires in its
sole discretion. If the Agent exercises its right to take possession of the
Inventory, such Grantor, upon the Agent's demand, will assemble the Inventory
and make it available to the Agent at such Grantor's premises at which it is
located.
SECTION 7. As to Accounts.
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(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts, and the offices where it keeps all originals of all chattel paper
which evidence Accounts, at the location therefor specified in Section 4(a)
hereof or, upon 30 days' prior written notice to the Agent, at such other
locations in a jurisdiction where all actions required by Section 5 hereof shall
have been taken with respect to the Accounts. Each Grantor will hold and
preserve such records and chattel paper and will permit representatives of the
Agent, at any time during normal business hours, to inspect and make abstracts
from such records and chattel paper in accordance with Section 5.6 of the Credit
Agreement.
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(b) Except as otherwise provided in this subsection (b), each Grantor
shall continue to collect in accordance with its customary practice, at its own
expense, all amounts due or to become due to such Grantor under the Accounts
and, prior to the occurrence and continuance of an Event of Default, such
Grantor shall have the right to adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon, all in accordance with
its customary practices. In connection with such collections, the Grantors may,
upon the occurrence and during the continuation of an Event of Default, take
(and at the direction of the Agent shall take) such action as the Grantors or
the Agent may reasonably deem necessary or advisable to enforce collection of
the Accounts; provided, that upon written notice by the Agent to any Grantor,
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following the occurrence and during the continuation of an Event of Default and
after the expiration of the Default Notice Period, of its intention so to do,
the Agent shall have the right to notify the account debtors or obligors under
any Accounts of the assignment of such Accounts to the Agent and to direct such
account debtors or obligors to make payment of all amounts due or to become due
to such Grantor thereunder directly to the Agent and, upon such notification and
at the expense of such Grantor, to enforce collection of any such Accounts, and
to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Grantor might have done. After receipt by
such Grantor of the notice referred to in the proviso to the preceding sentence,
-------
(i) all amounts and proceeds (including instruments) received by such Grantor in
respect of the Accounts shall be received in trust for the benefit of the Agent
(for the ratable benefit of the Lenders) hereunder, shall be segregated from
other funds of the Grantors and shall be forthwith paid over to the Agent in the
same form as so received (with any necessary endorsement) to be held as cash
collateral and either (A) released to the Grantors if such Event of Default
shall have been cured or waived or (B) if such Event of Default shall be
continuing, applied as provided by Section 16 hereof, and (ii) the Grantors
shall not adjust, settle or compromise the amount or payment of any Account, or
release wholly or partly any account debtor or obligor thereof, or allow any
credit or discount thereon.
SECTION 8. As to Trademarks, Patents and Copyrights.
----------------------------------------
(a) (i) Each Grantor shall, either itself or through licensees,
continue to use the Trademarks as each is currently used in the Grantor's
business in order to maintain the Trademarks in full force free from any claim
of abandonment for nonuse, and (ii) each such Grantor will not (and will not
permit any licensee thereof to) do any act or knowingly omit to do any act
whereby any Trademark may become invalidated, unless, in the cases of clauses
(i) and (ii), such failure to maintain or use a Trademark is not reasonably
likely to have a material adverse effect on the condition (financial or
otherwise), operation or properties of the Grantors taken as a whole.
(b) Unless and until an Event of Default shall have occurred, the
Agent hereby grants to the Grantors the exclusive and nontransferable right and
license to make, have made, use and sell the inventions disclosed and claimed in
the Patents for the Grantors' own benefit and account and for none other. Each
Grantor agrees that it will not sell or assign its interest in, or grant any
sublicense under, the license granted to the Grantors under this subsection (b)
without the prior written consent of the Agent. From and after the occurrence
of any Default or Event of Default, the Grantors' license with respect to the
Patents as set forth in this subsection (b) shall terminate, and the Agent shall
have, in addition to all other rights and remedies given it by this
10
Agreement, those allowed by law.
(c) Each Grantor hereby agrees that the license granted to the Agent
with respect to each of the Patents shall be without any liability for royalties
or other related charges from the Agent to the Grantors. The assignment granted
to the Agent herein with respect to each of the Patents shall terminate on the
earlier of (i) the expiration of such Patent, and (ii) the payment in full of
all of the Obligations and the termination of the Commitments.
(d) No Grantor will do any act, or omit to do any act, whereby the
Patents or Copyrights may become abandoned or dedicated and each such Grantor
shall notify the Agent immediately if it knows of any reason or has reason to
know that the application or registration of any of the Patents or Copyrights
may become abandoned or dedicated, unless such abandonment or dedication is not
reasonably likely to have a material adverse effect on the condition (financial
or otherwise), operations or properties of the Grantors taken as a whole.
(e) No Grantor will, either itself or through any agent, employee,
licensee or designee, (i) file an application for the registration of any Patent
or Trademark with the United States Patent and Trademark Office or any similar
office or agency in any other country or any political subdivision thereof or
(ii) file any assignment of any Patent or Trademark, which such Grantor may
acquire from a third party, with the United States Patent and Trademark Office
or any similar office or agency in any other country or any political
subdivision thereof, unless such Grantor shall, within 30 days after the date of
------
such filing, notify the Agent thereof, and, upon request of the Agent, execute
and deliver any and all assignments, agreements, instruments, documents and
papers as the Agent may request to evidence the Agent's interest in such Patent
or Trademark and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby, and such Grantor hereby constitutes the Agent
its attorney-in-fact to execute and file all such writings for the foregoing
purposes, all lawful acts of such attorney being hereby ratified and confirmed;
such power being coupled with an interest is irrevocable until the Obligations
are paid in full.
(f) Each Grantor will take all necessary steps in any proceeding
before the United States Patent and Trademark Office, the United States
Copyright Office, the Library of Congress or any similar office or agency in any
other country or any political subdivision thereof, in order to maintain in all
material respects each registered Trademark, Patent and Copyright, and to pursue
each application for registration of any Trademark, Patent and Copyright not
listed on Schedules 3, 4 or 5 hereto, including, without limitation, filing of
renewals, payment of maintenance fees, filing of affidavits of use, filing of
affidavits of incontestability and opposition, and participation in opposition,
interference and cancellation proceedings, unless failure to take such steps is
not reasonably likely to have a material adverse effect on the condition
(financial or otherwise), operation or properties of the Grantors, taken as a
whole.
(g) Each Grantor will, without further order of the Bankruptcy Court,
perform all acts and execute and deliver all further instruments and documents,
including, without limitation, assignments for security in form suitable for
filing with the United States Patent and Trademark Office, and the United States
Copyright Office, respectively, reasonably requested by the Agent at any time to
evidence, perfect, maintain, record and enforce the Agent's interest in all
Trademarks, Patents and Copyrights or otherwise in furtherance of the provisions
of this
11
Agreement, and each Grantor hereby authorizes the Agent to execute and file one
or more accurate financing statements (and similar documents) or copies thereof
or of this Agreement with respect to Patents, Trademarks and Copyrights signed
only by the Agent.
(h) Each Grantor will, upon acquiring knowledge of any use by any
person of any term or design likely to cause confusion with any Trademark,
promptly notify the Agent of such use, and if requested by the Agent, shall join
with the Agent, at such Grantor's expense, in such action as the Agent, in its
reasonable discretion, may deem advisable for the protection of the Agent's
interest in and to the Trademarks.
(i) Each Grantor agrees that, should it obtain rights to any Patent,
Trademark or Copyright which is not now identified on Schedules 3, 4 or 5, or
become entitled to the benefit of any reissue, division, continuation, renewal,
extension, or continuation-in-part of any Trademark, Patent or Copyright, (i)
such Grantor shall give prompt written notice thereof to the Agent, (ii) the
provisions of Section 1 of this Agreement shall automatically apply to any such
Trademark, Patent or Copyright, and (iii) any such Trademark, Patent or
Copyright shall automatically become part of the Collateral.
(j) If any Grantor becomes aware that any Trademark, Patent or
Copyright is infringed or misappropriated by a third party, such Grantor shall
promptly notify the Agent and shall, if reasonably requested by the Agent,
promptly xxx for infringement or misappropriation and for recovery of all
damages caused by such infringement or misappropriation, or, with the prior
written consent of the Agent, shall take such other actions as the Agent shall
reasonably deem appropriate under the circumstances to protect such Trademark,
Patent or Copyright.
(k) Each Grantor shall continue to use reasonable and proper statutory
notice in connection with its use of each registered Patent, Trademark and
Copyright.
(l) This Agreement is executed by collateral purposes only and upon
payment in full of the Obligations and termination of the Commitments, the Agent
shall, at the Grantors' expense, execute and deliver to the Grantors all deeds,
assignments and other instruments as may be necessary or proper to re-vest in
the Grantors full title to the Trademarks, Patents and Copyrights, subject to
any disposition thereof which may have been made by the Agent pursuant hereto or
pursuant to the Credit Agreement.
SECTION 9. As to the Pledged Collateral; Voting Rights; Dividends; Etc.
-----------------------------------------------------------
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) the Grantors (as applicable) shall be entitled to exercise
any and all voting and other consensual rights pertaining to the
Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Credit Agreement;
(ii) notwithstanding the provisions of Section 1 hereof, such
Grantors shall be entitled to receive and retain any and all
dividends, interest or distributions paid in respect of the Pledged
Collateral; provided, that any and all
--------
12
(A) dividends, interest or distributions paid or payable other
than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged Collateral, and
(B) dividends, interest or distributions paid or payable in cash
in respect of any Pledged Collateral (other than the Pledged
Collateral consisting of Pledged Shares, Pledged Partnership
Interests or Pledged Company Interests of Subsidiaries of
the Borrowers) in connection with a partial or total
liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in-surplus; and
(C) cash paid, payable or otherwise distributed in respect of,
or in redemption of, or in exchange for, any Pledged
Collateral (other than the Pledged Collateral consisting of
Pledged Shares, Pledged Partnership Interests or Pledged
Company Interests of Subsidiaries of the Borrowers);
shall be, and shall be forthwith delivered to the Agent, to hold as Pledged
Collateral and shall, if received by any of the Grantors, be received in
trust for the benefit of the Agent, be segregated from the other property
or funds of such Grantor, and be forthwith delivered to the Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement); and
(iii) the Agent shall execute and deliver (or cause to be
executed and delivered) to the Grantors (as applicable) all such
proxies and other instruments as the Grantors (as applicable) may
reasonably request for the purpose of enabling such Grantor to
exercise the voting and other rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the dividends which it
is authorized to receive and retain pursuant to paragraph (ii) above;
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) upon written notice from the Agent to the Grantors (as
applicable) to such effect, all rights of such Grantors (as
applicable) to exercise the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant to Section 9(a)(i)
and to receive the dividends which it would otherwise be authorized to
receive and retain pursuant to Section 9(a)(ii) shall cease, and all
such rights shall thereupon become vested in the Agent, who shall
thereupon have the sole right to exercise such voting and other
consensual rights and to receive and hold as Pledged Collateral any
such dividends; and
(ii) all dividends which are received by such Grantors contrary
to the provisions of paragraph (i) of this Section 9(b) shall be
received in trust for the benefit of the Agent, shall be segregated
from other funds of the Grantors and shall be forthwith paid over to
the Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement).
13
SECTION 10. As to Material Contracts.
------------------------
(a) Each Grantor agrees that the Agent may at any time notify, or
require any Grantor to so notify, the counterparty on any Material Contract of
the security interest of the Agent therein. In addition, after the occurrence
and during the continuance of an Event of Default, the Agent may upon written
notice to the applicable Grantor, notify, or require any Grantor to notify, the
counterparty to make all payments under the Material Contracts directly to the
Agent.
(b) Each Grantor shall perform in all material respects all of its
obligations with respect to the Material Contracts, except where the failure to
do so would not result in a material adverse effect on the condition (financial
or otherwise), operation or properties of the Grantors, taken as a whole.
(c) Each Grantor shall promptly and diligently exercise each material
right it may have under any Material Contract, at its own expense, and in
connection with such collections and exercise, such Grantor shall take such
action as such Grantor may deem necessary or advisable in its good faith
business judgment.
SECTION 11. Insurance. Upon the occurrence and during the continuance of
---------
any Event of Default, all insurance payments in respect of Inventory and
Equipment shall be held, applied and paid to the Agent as specified in Section
16 hereof.
SECTION 12. Transfers to Others; Liens; Additional Shares and Interests.
-----------------------------------------------------------
(a) Each Grantor shall not sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral, except for
dispositions otherwise permitted by the Credit Agreement or other Loan
Documents.
(b) Each Grantor shall not create or suffer to exist any lien,
security interest or other charge or encumbrance upon or with respect to any of
the Collateral to secure any obligation of any person or entity, except for the
security interest created by this Agreement and the Final Order, or except as
otherwise permitted under Section 6.1 of the Credit Agreement.
(c) Each of the Grantors (as applicable) agrees that it will (i) cause
each of the Issuers that are wholly-owned Subsidiaries not to issue any stock or
other securities in addition to or substitution for the Pledged Shares issued by
such Issuer, except to the respective Grantor, and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
such additional shares of stock or other securities of each Issuer.
(d) Each of the Grantors (as applicable) agrees that it will (i) cause
each of the Partnerships that are wholly-owned Subsidiaries not to issue any
interests in addition to or substitution for the Pledged Partnership Interests
issued by such Issuer, except to the respective Grantor, and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all such additional interests of each Partnership.
(e) Each of the Grantors (as applicable) agrees that it will (i) cause
each of the Companies that are wholly-owned Subsidiaries not to issue any
interests in addition to or
14
substitution for the Pledged Company Interests issued by such Company, except to
the respective Grantor and (ii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all such additional
interests of each Company.
SECTION 13. Agent Appointed Attorney-in-Fact. Each Grantor hereby
--------------------------------
irrevocably appoints the Agent such Grantor's attorney-in-fact (which
appointment shall be irrevocable and deemed coupled with an interest), with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time in the Agent's discretion, upon and during the
occurrence and continuation of an Event of Default at any time after the Agent
has given the Default Notice and the Default Notice Period has expired, to take
any action and to execute any instrument which the Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation:
(i) to obtain and adjust insurance required to be paid to the
Agent pursuant to Section 11 hereof,
(ii) to ask, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral,
(iii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(i) or (ii) above,
(iv) to receive, endorse and collect all instruments made
payable to the Grantors representing any dividend or other
distribution in respect of the Pledged Collateral or any part thereof
and to give full discharge for the same, and
(v) to file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of the Agent with respect to any of the Collateral.
SECTION 14. Agent May Perform. If any Grantor fails to perform any
-----------------
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Agent incurred in connection
therewith shall be payable by the Grantors under Section 17(b) hereof.
SECTION 15. The Agent's Duties. The powers conferred on the Agent
------------------
hereunder are solely to protect its interest and the interests of the Lenders in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Collateral,
including, without limitation, ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Pledged Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters.
SECTION 16. Remedies. If any Event of Default shall have occurred and be
--------
continuing
15
at any time after the Agent has given the Default Notice and the Default Notice
Period has expired, and subject to the provisions of Section 7 of the Credit
Agreement:
(a) The Agent may exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein or otherwise available to it,
and without application to or order of the Bankruptcy Court, all the rights and
remedies of a secured party on default under the UCC and also may (i) require
each Grantor to, and each Grantor hereby agrees that it will at its expense and
upon request of the Agent forthwith, assemble all or part of the Collateral as
directed by the Agent and make it available to the Agent at a place to be
designated by the Agent which is reasonably convenient to both parties and (ii)
without notice except as specified in the following sentence, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Agent's offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the Agent may
deem commercially reasonable. Each Grantor agrees that, to the extent notice of
such sale shall be required by law, at least ten days' notice to the Grantors 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 Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The 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) The Agent may instruct the Grantors not to make any further use of
the Patents, Copyrights or Trademarks or any xxxx similar thereto for any
purpose to the extent that such use would be inconsistent with the exercise by
the Agent of any other remedies under this Section.
(c) The Agent may license, whether general, special or otherwise, and
whether on an exclusive or nonexclusive basis, any of the Trademarks, Patents or
Copyrights throughout the world for such term or terms, on such conditions, and
in such manner, as the Agent shall in its sole discretion determine.
(d) The Agent may (without assuming any obligations or liability
thereunder), at any time, enforce (and shall have the exclusive right to
enforce) against any licensee or sublicensee all rights and remedies of the
Grantors in, to and under any one or more license agreements with respect to the
Collateral, and take or refrain from taking any action under any thereof, and
each of the Grantors hereby releases the Agent from, and agrees to hold the
Agent free and harmless from and against any claims arising out of, any action
taken or omitted to be taken with respect to any such license agreement.
(e) In the event of any such license, assignment, sale or other
disposition of the Collateral, or any of it, each Grantor shall supply its know-
how and expertise relating to the manufacture and sale of the products bearing
or in connection with the Trademarks, Patents or Copyrights, and its customer
lists and other records relating to the Trademarks, Patents or Copyrights and to
the distribution of said products, to the Agent or its designee.
(f) In order to implement the assignment, sale or other disposal of
any of the Trademarks, Patents or Copyrights, the Agent may, at any time,
pursuant to the authority granted
16
in Section 13 hereof, execute and deliver on behalf of the Grantors, one or more
instruments of assignment of the Trademarks, Patents or Copyrights (or any
application of registration thereof), in form suitable for filing, recording or
registration in any country.
(g) All cash proceeds received by the 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 Agent, be held by the Agent as collateral for, and
then or at any time thereafter applied (after payment of any amounts payable to
the Agent pursuant to Section 17 hereof) in whole or in part against, all or any
part of the Obligations in such order as the Agent shall elect. Any surplus of
such cash or cash proceeds held by the Agent and remaining after payment in full
of all the Obligations shall be paid over to the Grantors or to whomsoever may
be lawfully entitled to receive such surplus.
(h) If at any time when the Agent shall determine to exercise its
right to sell all or any part of the Pledged Collateral pursuant to this Section
16, such Pledged Collateral or the part thereof to be sold shall not be
effectively registered under the Securities Act of 1933, as amended, and as from
time to time in effect, and the rules and regulations thereunder (the
"Securities Act"), the Agent is hereby expressly authorized to sell such Pledged
--------------
Collateral or such part thereof by private sale in such manner and under such
circumstances as the Agent may deem necessary or advisable in order that such
sale may legally be effected without such registration. Without limiting the
generality of the foregoing, in any such event the Agent, in compliance with
applicable securities laws, (a) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Collateral or such part thereof shall have been filed under such
Securities Act, (b) may approach and negotiate with a restricted number of
potential purchasers to effect such sale and (c) may restrict such sale to
purchasers as to their number, nature of business and investment intention
including without limitation to purchasers each of whom will represent and agree
to the satisfaction of the Agent that such purchaser is purchasing for its own
account, for investment, and not with a view to the distribution or sale of such
Pledged Collateral, or part thereof, it being understood that the Agent may
cause or require each Grantor, and each Grantor hereby agrees upon the written
request of the Agent, to cause (i) a legend or legends to be placed on the
certificates to be delivered to such purchasers to the effect that the Pledged
Collateral represented thereby have not been registered under the Securities Act
and setting forth or referring to restrictions on the transferability of such
securities; and (ii) the issuance of stop transfer instructions to such Issuer's
transfer agent, if any, with respect to the Pledged Collateral, or, if such
Issuer transfers its own securities, a notation in the appropriate records of
such Issuer. In the event of any such sale, each Grantor does hereby consent
and agree that the Agent shall incur no responsibility or liability for selling
all or any part of the Pledged Collateral at a price which the Agent may deem
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might be realized if the sale were public and
deferred until after registration as aforesaid.
SECTION 17. Indemnity and Expenses.
----------------------
(a) Each Grantor, jointly and severally, agrees to indemnify the Agent
from and against any and all claims, losses and liabilities growing out of or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement), except claims, losses
17
or liabilities directly arising from the Agent's own gross negligence, willful
misconduct or bad faith.
(b) The Grantors will upon demand pay to the 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 Agent may incur in
connection with (i) the administration of this 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 Agent hereunder or (iv) the failure by any of the
Grantors to perform or observe any of the provisions hereof.
(c) The Grantors assume all responsibility and liability arising from
the use of the Trademarks, Patents and Copyrights, and the Grantors hereby,
jointly and severally, indemnify and hold the Agent harmless from and against
any claim, suit, loss, damage or expense (including reasonable attorneys' fees)
arising out of any alleged defect in any product manufactured, promoted or sold
by any of the Grantors in connection with any Trademark or out of the
manufacture, promotion, labeling, sale or advertisement of any such product by
any of the Grantors except as the same may have resulted from the gross
negligence, willful misconduct or bad faith of the Agent.
(d) Each of the Grantors agree that the Agent does not assume, and
shall have no responsibility for, the payment of any sums due or to become due
under any agreement or contract included in the Collateral or the performance of
any obligations to be performed under or with respect to any such agreement or
contract by any of the Grantors, and except as the same may have resulted from
the gross negligence or willful misconduct of the Agent, each of the Grantors
hereby jointly and severally agree to indemnify and hold the Agent harmless with
respect to any and all claims by any person relating thereto.
SECTION 18. Security Interest Absolute. All rights of the Agent and
--------------------------
security interests hereunder, and all obligations of each of the Grantors
hereunder, shall be absolute and unconditional, irrespective of any circumstance
which might constitute a defense available to, or a discharge of, any guarantor
or other obligor in respect of the Obligations.
SECTION 19. Amendments; Etc. No amendment or waiver of any provision
---------------
of this Agreement, nor any consent to any departure by any of the Grantors
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the party against whom enforcement is sought, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 20. Addresses for Notices. All notices and other communications
---------------------
provided for hereunder shall be in writing and shall be given in accordance with
the applicable provisions of the Credit Agreement.
SECTION 21. Continuing Security Interest. This Agreement shall create a
----------------------------
continuing security interest in the Collateral and shall (i) remain in full
force and effect until payment in full of the Obligations, (ii) be binding upon
each of the Grantors, their successors and assigns and (iii) inure, together
with the rights and remedies of the Agent hereunder, to the benefit of the Agent
and each of the Lenders and their respective successors, transferees and
assigns. Upon the
18
payment in full of the Obligations, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Grantors subject
to any existing liens, security interests or encumbrances on such Collateral.
Upon any such termination, the Agent will, at the Grantor's expense, execute and
deliver to the Grantors such documents as the Grantors shall reasonably request
to evidence such termination.
SECTION 22. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, except as
required by mandatory provisions of law and 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 and by Federal law (including,
without limitation, the Bankruptcy Code) to the extent the same has pre-empted
the law of the State of New York or such other jurisdiction.
SECTION 23. Headings. Section headings in this Agreement are included
--------
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
19
IN WITNESS WHEREOF, each of the Grantors and the Agent have caused
this Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
GRANTORS:
ICG COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG XXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG FUNDING, LLC
By: ICG Communications, Inc.,
its Managing Member
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
ICG MOUNTAIN VIEW, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
ICG NETAHEAD, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
ICG EQUIPMENT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
ICG CANADIAN ACQUISITION, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
ICG HOLDINGS (CANADA) CO.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
ICG HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
ICG TELECOM GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NIKONET, LLC
By: ICG Telecom Group, Inc.,
its Managing Member
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG OHIO LINX, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG ENHANCED SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
COMMUNICATIONS BUYING GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG TELECOM GROUP OF VIRGINIA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG DATACHOICE NETWORK SERVICES, L.L.C.
By: ICG Telecom Group, Inc.,
its Managing Member
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
PTI HARBOR BAY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
BAY AREA TELEPORT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG ACCESS SERVICES - SOUTHEAST, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
TRANS AMERICAN CABLE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG TELECOM OF SAN DIEGO, L.P.
By: ICG Telecom Group, Inc.,
its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
WESTERN PLAINS FINANCE, L.L.C.
By: ICG Telecom Group, Inc.,
its Managing Member
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG CHOICECOM MANAGEMENT, LLC
By: ICG Telecom Group, Inc.,
its Managing Member
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
ICG CHOICECOM, L.P.
By: ICG ChoiceCom Management, LLC
its General Partner
By: ICG Telecom Group, Inc.,
its Managing Member
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
DOWNNORTH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
AGENT:
THE CHASE MANHATTAN BANK,
By: /s/ Xxxxx X. Xxxxx
-------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
SCHEDULE 1
Locations of Equipment and Inventory
SCHEDULE 2
Locations of Chief Executive
Office, Chief Place of Business
and Locations Where Records
Concerning Accounts are Kept
SCHEDULE 3
Trademarks
SCHEDULE 4
Patents
SCHEDULE 5
Copyrights
SCHEDULE 6
Pledged Shares
Grantor Issuer Class No. Of Shares
------- ------ ----- --------------
SCHEDULE 7
Pledged Partnership Interests
Grantor Partnership Percentage of Partnership Interests Held
------- ------------- ----------------------------------------
SCHEDULE 8
Pledged Company Interests
Grantor Company Percentage of Interests Held
------- ------- ----------------------------
SCHEDULE 9
Material Letters of Credit
