EXECUTION COPY
CASH COLLATERAL AGREEMENT
CASH COLLATERAL AGREEMENT, dated as of February 19, 2003, among RFM 2,
LLC, a Delaware limited liability company (the "Pledgor"), JPMORGAN CHASE
BANK, as Administrative Agent (in such capacity, the "Secured Party") for the
benefit of itself and the Lenders parties to the Credit Agreement referred to
below, and THE NORTHERN TRUST COMPANY, as Securities Intermediary (in such
capacity, the "Securities Intermediary").
Preliminary Statement
Pursuant to Section 6.05 of the Credit Agreement, dated as of June 3,
1999, among RCN CORPORATION, RCN TELECOM SERVICES OF PENNSYLVANIA, INC. (now
known as Telecom Services, Inc.), RCN CABLE SYSTEMS, INC. (now known as RCN
Telecom Services, Inc.), JAVANET, INC. (now known as UNET Holding, Inc.), RCN
FINANCIAL MANAGEMENT, INC., UNET HOLDING, INC., INTERPORT COMMUNICATIONS CORP.
(now known as UNET Holding, Inc.) and ENET HOLDING, INC. (now known as RCN
Internet Services, Inc.) (collectively, the "Borrowers"), the lenders party
thereto (the "Lenders"), and JPMORGAN CHASE BANK, formerly THE CHASE MANHATTAN
BANK, as Administrative Agent and Collateral Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), the Pledgor has
agreed to enter into this Agreement for the benefit of the Secured Party and the
Lenders:
1. Defined Terms. (a) Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Credit Agreement.
(b) As used herein, the following terms shall have the following
meanings:
"Agreement": this Cash Collateral Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"Cash Collateral": the collective reference to:
(a) all cash, instruments, securities, other financial assets and
funds deposited from time to time in the Cash Collateral Account,
including, without limitation, an amount equal to the Net Proceeds of all
sales, transfers or other dispositions of assets to the extent required
under the Credit Agreement;
(b) all investments of funds in the Cash Collateral Account and all
instruments, securities and other financial assets evidencing such
investments;
(c) all interest, dividends, cash, instruments, securities and other
financial assets and other property received in respect of, or as proceeds
of, or in substitution or exchange for, any of the foregoing; and
(d) any security entitlement to any of the foregoing.
"Cash Collateral Account": account no. 0000000 in the name of the Pledgor
established at the office of the Securities Intermediary at 00 Xxxxx Xx Xxxxx
Xxxxxx, Xxxxxxx, XX 00000,
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Attention: Xxxx Xxxxxxxxx, for the benefit of the Secured Party designated "RFM
2, LLC-JPMORGAN CHASE BANK" with such abbreviations as may be required to
comply with the Securities Intermediary's operating systems.
"Collateral": the collective reference to the Cash Collateral and the
Cash Collateral Account.
"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which any of its property is bound.
"Custody Agreement": as defined in Section 7.
"Governmental Authority": the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Investment Manager": the collective reference to Xxxxxx Xxxxxx Partners
LLC, Mellon Bond Associates (together with its successors) and UBS Xxxxx Xxxxx
and any other entity designated in writing as an "Investment Manager" by the
Secured Party and the Pledgor to the Securities Intermediary. As of the date of
this Agreement, Xxxxxx Xxxxxx Partners LLC is the acting Investment Manager
with respect to the Cash Collateral Account.
"Permitted Investments": investments that comply with the Investment
Policy Guidelines attached hereto as Exhibit A.
"Person": any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Requirement of Law": as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
"Secured Obligations": the collective reference to the Obligations and all
obligations and liabilities of the Pledgor which may arise under or in
connection with this Agreement.
"UCC": the Uniform Commercial Code in effect in the State of New York or
any other applicable jurisdiction from time to time.
2. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Secured Obligations, the Pledgor
hereby grants to the Secured Party, for the ratable benefit of the Lenders, a
security interest in the Collateral.
3. Establishment and Maintenance of Cash Collateral Account. (a) The
Securities Intermediary hereby confirms that (i) the Securities Intermediary
has established the Cash Collateral Account, (ii) the Cash Collateral Account
is a "Securities Account" as such term is defined in Section 8-501(a) of the
UCC, (iii) the Securities Intermediary shall, subject to the terms of this
Agreement, treat the Pledgor as entitled to exercise the rights that comprise
any financial asset credited to the account, (iv) all property delivered to the
Securities Intermediary pursuant to this Agreement will be promptly credited to
the Cash Collateral Account, and (v) all securities or other property
underlying any financial assets credited to the Cash Collateral Account shall
be registered in the name of the Securities Intermediary, endorsed to the
Securities Intermediary or in blank or credited to another securities account
maintained in the name of the Securities Intermediary and in no case will any
financial asset credited to the Cash Collateral Account be registered in the
name of the Pledgor, payable to the order of the Pledgor or specially indorsed
to the Pledgor except to the extent the foregoing have been specially endorsed
to the Securities Intermediary or in blank.
(b) The Cash Collateral Account shall be maintained until the Secured
Obligations have been paid and performed in full and the Commitments have been
terminated.
(c) The Collateral shall be subject to the dominion and control of the
Secured Party. Neither the Pledgor nor the Investment Manager shall have any
right of withdrawal from the Cash Collateral Account.
(d) The Pledgor agrees that all financial assets or other instruments or
securities deposited to the Cash Collateral Account shall at all times be cash
or constitute Permitted Investments; provided, that with respect to the
financial assets and other instruments or securities deposited into the Cash
Collateral Account on the date hereof, which shall constitute "Permitted
Investments" as defined in the Credit Agreement, the Pledgor shall have 60 days
to comply with this provision.
4. "Financial Assets" Election. The Securities Intermediary hereby
agrees that each item of property (whether investment property, financial
asset, security, instrument or cash) credited to the Cash Collateral Account
shall be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the UCC.
5. Control of Cash Collateral Account. (a) If at any time the Securities
Intermediary shall receive an "entitlement order" (within the meaning of Section
8-102(a)(8) of the UCC) issued by the Secured Party and relating to the Cash
Collateral Account, the Securities Intermediary shall comply with such
entitlement order without further consent by the Pledgor or any other Person.
(b) The Securities Intermediary agrees that it will take all instructions
with respect to the Cash Collateral Account solely from the Secured Party;
provided that, until such time as the Securities Intermediary receives a
written notice from the Secured Party to the contrary as provided for in
Section 12, the Investment Manager (and only the Investment Manager) shall be
entitled to invest the financial assets deposited to the Cash Collateral
Account in Permitted Investments in accordance with, and subject to the
provisions of, Section 12. The
Securities Intermediary shall have no duty or responsibility to determine or
monitor whether any investment entered into by the Investment Manager is or
continues to be a Permitted Investment.
6. Subordination of Lien; Waiver of Set-Off. In the event that the
Securities Intermediary has or subsequently obtains by agreement, operation of
law or otherwise a security interest in the Cash Collateral Account or any
security entitlement credited thereto, the Securities Intermediary hereby agrees
that such security interest shall be subordinate to the security interest of the
Secured Party. The financial assets and other items deposited to the Cash
Collateral Account will not be subject to deduction, set-off, banker's lien, or
any other right in favor of any person other than the Secured Party (except that
the Securities Intermediary may set off all amounts due to it in respect of its
customary fees and expenses for the routine maintenance and operation of the
Cash Collateral Account).
7. Conflict with other Agreements. There are no other agreements entered
into between the Securities Intermediary and the Pledgor with respect to the
Cash Collateral Account other than the Custody Agreement dated April 2002 (the
"Custody Agreement"). The terms of the Custody Agreement, including but not
limited to those governing investment of cash, exercise of investment authority
by the Investment Manager, delivery and receipt of securities, cash or other
property by the Securities Intermediary in settlement of purchases, sales or
other transfers or upon redemptions, maturities, tenders and other corporate
actions and payment of the fees and expenses of the Securities Intermediary as
custodian, shall continue to apply to the Cash Collateral Account, except to the
extent specifically otherwise provided in this Agreement. In the event of any
conflict between this Agreement (or any portion thereof) and any other agreement
(including, without limitation, the Custody Agreement) now existing or hereafter
entered into, the terms of this Agreement shall prevail.
8. Notice of Adverse Claims. Except for the claims and interests of the
Secured Party and of the Pledgor in the Cash Collateral Account, the Securities
Intermediary does not know of any claim to, or interest in, the Cash Collateral
Account or in any "financial asset" (as defined in Section 8-102(a) of the UCC)
credited thereto, other than the Securities Intermediary's lien under the
Custody Agreement for advances to cover overdrafts arising in the normal course
of investment activities for the Cash Collateral Account. If any person asserts
any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against the Cash
Collateral Account or in any financial asset carried therein, the Securities
Intermediary will promptly notify the Secured Party and the Pledgor thereof.
9. Representations and Warranties of the Pledgor. The Pledgor represents
and warrants to the Secured Party that:
(a) The Pledgor has the power and authority and the legal right to
execute and deliver, to perform its obligations under, and to grant the security
interest in the Collateral pursuant to, this Agreement and has taken all
necessary action to authorize its execution, delivery and performance of, and
grant of the security interest in the Collateral pursuant to, this Agreement.
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(b) This Agreement constitutes a legal, valid and binding obligation of
the Pledgor enforceable against the Pledgor in accordance with its terms and
creates in favor of the Secured Party a perfected, first priority security
interest in the Collateral, enforceable in accordance with its terms, except in
each case as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(c) The execution, delivery and performance of this Agreement will not
violate any provision of any Requirement of Law or Contractual Obligation of the
Pledgor and will not result in the creation or imposition of any Lien on any of
the properties or revenues of the Pledgor pursuant to any Requirement of Law or
Contractual Obligation of the Pledgor, except as contemplated hereby.
(d) No consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or Governmental Authority and no consent of any other
Person (including, without limitation, any member or creditor of the Pledgor),
is required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement by or against the Pledgor.
(e) No litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the knowledge of the Pledgor,
threatened by or against the Pledgor or against any of its properties or
revenues with respect to this Agreement or any of the transactions contemplated
hereby.
10. Covenants of the Pledgor. The Pledgor covenants and agrees with the
Secured Party that:
(a) Except as expressly permitted by the terms of the Credit Agreement,
the Pledgor will not sell, assign, transfer, exchange, or otherwise dispose of,
or grant any option with respect to, the Collateral, or create, incur or permit
to exist any Lien or option in favor of, or any claim of any Person with respect
to, any of the Collateral, or any interest therein, except for the security
interest created by this Agreement.
(b) The Pledgor will maintain the security interest created by this
Agreement as a first priority, perfected security interest and defend the right,
title and interest of the Secured Party in and to the Collateral against the
claims and demands of all Persons whomsoever. At any time and from time to time,
upon the request of the Secured Party, and at the sole expense of the Pledgor,
the Pledgor will promptly and duly execute and deliver such further instruments
and documents and take such further actions as the Secured Party reasonably may
request for the purposes of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of financing statements under the UCC.
(c) The Pledgor will send a statement summarizing all outstanding
investments made pursuant to Section 12 hereof to the Secured Party semimonthly.
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11. Representations, Warranties and Covenants of the Securities
Intermediary. The Security Intermediary hereby makes the following
representations, warranties and covenants:
(a) The Cash Collateral Account has been established as set forth
herein and the Cash Collateral Account will be maintained in the manner set
forth herein until termination of this Agreement. The Securities Intermediary
shall not change the name or account number of the Cash Collateral Account
without the prior written consent of the Secured Party.
(b) No financial asset is or will be registered in the name of the
Pledgor, payable to its order, or specially endorsed to it, except to the
extent such financial asset has been endorsed to the Securities Intermediary or
in blank.
(c) This Agreement is the valid and legally binding obligation of
the Securities Intermediary.
(d) The Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement with any other
Person relating to the Cash Collateral Account and/or any of the financial
assets credited thereto pursuant to which it has agreed to comply with
entitlement orders (as defined in Section 8-102(a)(8) of the UCC) of such
Person. The Securities Intermediary has not entered into any other agreement
with the Pledgor or the Secured Party purporting to limit or condition the
obligation of the Securities Intermediary to comply with entitlement orders as
set forth in Section 5 hereof.
(e) The Securities Intermediary will promptly send copies of all
statements, confirmations and other correspondence (including, without
limitation, with respect to all investments made pursuant to Section 12 hereof)
concerning the Cash Collateral Account and/or any financial assets credit
thereto simultaneously to each of the Pledgor and the Secured Party at the
address set forth in Section 18 of this Agreement.
12. Investment of Cash Collateral. (a) Until such time as the
Securities Intermediary received a written notice from the Secured Party to the
contrary, the Investment Manager shall have the sole investment responsibility
for the financial assets in the Cash Collateral Account. The Pledgor shall have
no right to make any investments. All investments (i) shall constitute Permitted
Investments, (ii) shall be credited to and maintained within the Cash Collateral
Account and (iii) shall be made in such a manner that the books and records of
the Securities Intermediary indicate clearly that such investment has been
credited to and maintained within the Cash Collateral Account. The Securities
Intermediary shall have no responsibility to monitor any investment decision.
(b) Upon receiving a notice from the Secured Party referred to in
clause (a) above and subject to final settlement of transactions already
initiated, the Securities Intermediary shall take direction as to investments
solely from the Secured Party and shall no longer take any instructions from
the Investment Manager with respect to the Cash Collateral Account. The
Securities Intermediary shall not honor any direction to invest, exercise any
voting or other rights, or any settlement instructions, from the Investment
Manager with respect to the Cash
Collateral Account, without prior written permission of the Secured Party and
shall act solely upon the Secured Party's written instructions with respect to
the Cash Collateral Account, which instructions may include a transfer of the
Collateral to the Secured Party.
(c) Neither the Secured Party nor the Securities Intermediary shall have
any responsibility to the Pledgor for any loss or liability arising in respect
of such investments of the Cash Collateral (including, without limitation, as a
result of the liquidation of any portion thereof before maturity).
(d) The Pledgor will pay or reimburse each of the Secured Party and the
Securities Intermediary for any and all costs, expenses and liabilities
incurred by it in connection with this Agreement, the maintenance and operation
of the Cash Collateral Account and the investment of the Cash Collateral, and
any investment charges or other fees in connection with maintenance of the Cash
Collateral Account.
13. Remedies. (a) Upon the occurrence of an Event of Default, if Cash
Collateral remains in the Cash Collateral Account, the Secured Party may,
without notice of any kind, except for notices required by law which may not be
waived, apply the Cash Collateral, after deducting all reasonable costs and
expenses of every kind incurred in respect thereof or in any way relating to the
Cash Collateral or the rights of the Secured Party hereunder, including, without
limitation, reasonable attorneys' fees and disbursements of counsel to the
Secured Party, to the payment in whole or in part of the Secured Obligations,
and only after such application and after the payment by the Secured Party of
any other amount required by any provision of law, including, without
limitation, Section 9-608(a)(1)(C) of the UCC, need the Secured Party account
for the surplus, if any, to the Pledgor. In addition to the rights, powers and
remedies granted to it under this Agreement and in any other agreement securing,
evidencing or relating to the Secured Obligations, the Secured Party shall have
all the rights, powers and remedies available at law, including, without
limitation, the rights and remedies of a secured party under the UCC. To the
extent permitted by law, the Pledgor waives presentment, demand, protest and all
notices of any kind and all claims, damages and demands it may acquire against
the Secured Party arising out of the exercise by it of any rights hereunder.
(b) The Pledgor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay the
Secured Obligations, and the fees and disbursements of any attorneys employed
by the Secured Party to collect such deficiency and any other expenses incurred
by the Secured Party in connection with such collection.
14. Secured Party's Appointment as Attorney-in-Fact. (a) The Pledgor hereby
irrevocably constitutes and appoints the Secured Party and any officer or agent
of the Secured Party, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Pledgor and in the name of the Pledgor or in the Secured Party's
own name, from time to time in the Secured Party's discretion, for the purpose
of carrying out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the
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purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer.
(b) The Pledgor hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
Section 14(a). All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
15. Duty of the Secured Party. The Secured Party's sole duty with
respect to the custody, safekeeping and physical preservation of any Collateral
in its possession, under Section 9-207 of the UCC or otherwise, shall be to
comply with the specific duties and responsibilities set forth herein. The
powers conferred on the Secured Party in this Agreement are solely for the
protection of the Secured Party's interests in the Collateral and shall not
impose any duty upon the Secured Party to exercise any such powers. Neither the
Secured Party nor its directors, officers, employees or agents shall be liable
for any action lawfully taken or omitted to be taken by any of them under or
in connection with the Collateral or this Agreement, except for its or their
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.
16. Filing of Financing Statements. Pursuant to applicable law, the
Pledgor authorizes the Secured Party to file financing statements with respect
to the Collateral in such form and in such filing offices as the Secured Party
reasonably determines appropriate to perfect the security interests of the
Secured Party under this Agreement.
17. Termination. At such time as the Secured Obligations shall have
been paid in full, the Commitments have been terminated and no Letters of
Credit shall be outstanding, this Agreement and all obligations (other than
those expressly stated to survive termination) of the parties hereunder shall
terminate. The Secured Party will notify the Securities Intermediary upon the
termination of this Agreement.
18. Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Pledgor, to it in care of RCN Corporation, 000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, telecopy: (000) 000-0000,
Attention: Chief Financial Officer, (Telecopy No. 609-951-8637);
(b) if to the Secured Party, to JPMorgan Chase Bank, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxxx (Telecopy No.
(000) 000-0000) and Xxxxxxx Xxxx (Telecopy No. (000) 000-0000); and
(c) if to the Securities Intermediary, to The Northern Trust
Company, 00 Xxxxx Xx Xxxxx Xxxxxx, Xxxxxxx, XX 00000, Attention of Xxxx
Xxxxxxxxx (Telecopy No. (000) 000-0000).
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Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of delivery.
The Securities Intermediary may conclusively rely on a direction which it
believes in good faith is from a person or persons having authority to take
such action. The Securities Intermediary shall incur no liability to the
Secured Party, the Pledgor or the Cash Collateral Account for acting on any
instruction, direction or other communication on which the Securities
Intermediary is authorized to rely pursuant to this Agreement, or for any delay
in delivery or non-delivery or error in transmission (other than in the case of
gross negligence or willful misconduct).
19. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
20. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of the
terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Pledgor, the
Secured Party and the Securities Intermediary, provided that any provision of
this Agreement may be waived by the Secured Party in a letter or agreement
executed by the Secured Party or by telex or facsimile transmission from the
Secured Party.
(b) The Secured Party shall not by any act (except by a written
instrument pursuant to Section 20(a) hereof) of delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Secured Party would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
21. Section Headings. The section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
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22. Successors and Assigns. This Agreement and the Cash Collateral Account
shall be binding upon the successors and assigns of the Pledgor and the
Securities Intermediary and shall insure to the benefit of the Secured Party
and its successors and assigns.
23. Indemnity and Expenses. (a) The Pledgor agrees to indemnify each of the
Secured Party and the Securities Intermediary, from and against any and all
claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including, without limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from such party's gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.
(b) The Pledgor shall pay to each of the Secured Party and the Securities
Intermediary upon demand the amount of any and all costs and expenses,
including the reasonable fees and expenses of its counsel and of any experts
and agents, that the Secured Party or the Securities Intermediary 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 Secured Party or the Securities Intermediary
hereunder, or (iv) the failure by the Pledgor to perform or observe any of the
provisions hereof.
(c) The agreements in this Section 23 shall survive termination of this
Agreement.
24. Governing Law. Both this Agreement and the Cash Collateral Account
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York. For purposes of the UCC, New York shall be deemed to
be the Security Intermediary's jurisdiction and the Cash Collateral Account (as
well as the securities entitlements related thereto) shall be governed by the
laws of the State of New York.
25. Securities Intermediary, (a) Under no circumstances shall the
Securities Intermediary be responsible for (i) determining whether a default
exists under the Credit Agreements, (ii) the use that either the Pledgor or the
Secured Party makes of any withdrawn assets or funds or (iii) monitoring the
value of the Cash Collateral Account or of any securities originally a part of
or added to the Cash Collateral Account.
(b) The duties and responsibilities of the Securities Intermediary under
this Agreement shall be limited to those expressly set forth in this Agreement,
and no implied duties may be imputed to it by the terms of this Agreement or
otherwise. The Securities Intermediary shall not be subject to, nor obliged to
recognize, any other agreement governing the rights or duties of the other
parties to this Agreement, even though reference thereto may be made in this
Agreement. Without limiting the generality of the foregoing, Securities
Intermediary shall have no responsibility for, and shall not be charged with
any knowledge of, the terms of the Credit Agreement.
(c) The Securities Intermediary shall have no duty to furnish valuations
of any assets at any time held hereunder, other than the valuations that may
appear in the Securities
Intermediary's periodic statements furnished to the parties pursuant to Section
11(3). In performing any such valuations, the Securities Intermediary may rely
on information furnished by outside sources believed to be reliable, but the
Securities Intermediary shall not be responsible for the accuracy of any
valuations furnished by an outside provider selected by the Securities
Intermediary in the exercise of ordinary care.
(d) The Securities Intermediary shall not be responsible for any losses
incurred in liquidating securities or other property to satisfy a distribution
request hereunder or for the validity, enforceability, perfection or priority
of any lien, charge, security interest or other encumbrance claimed by any
Person against, in or with respect to the Collateral, the Cash Collateral
Account or any asset thereof.
(e) The Securities Intermediary shall be fully protected in relying
without investigation upon any written notice, demand, certificate or other
document which it in good faith believes to be genuine, as to the truth and
accuracy of the statements made therein, the identity and authority of the
persons executing the same and the validity of any signature thereon.
(f) The Securities Intermediary shall not be personally liable for any
act taken or omitted by it under this Agreement in good faith and in the
exercise of its own best judgment (other than in the case of gross negligence
or willful misconduct). In no event shall the Securities Intermediary be (i)
liable to any person for punitive, special, indirect or consequential damages
of any kind, even if the Securities Intermediary has been advised of the
possibility thereof, or (ii) responsible for any delay in performance; or
non-performance, of any obligation hereunder to the extent that the same is due
to forces beyond its reasonable control, including but not limited to delays,
errors or interruptions caused by the Pledgor, the Secured Party or third
parties, any industrial, judicial, governmental, civil or military action, acts
of terrorism, insurrection or revolution, nuclear fusion, fission or radiation,
failure or fluctuation in electrical power, heat, light, air conditioning or
telecommunications equipment, or acts of God.
IN WITNESS WHEREOF, the Pledgor, the Secured Party and the Securities
Intermediary have caused this Cash Collateral Agreement to be duly executed and
delivered as of the date first above written.
RFM 2, LLC, as the Pledgor
By: RCN CORPORATION, as its sole member
By: /s/ W. Xxxxxxx Xxxxxxxxx
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Name: W. Xxxxxxx Xxxxxxxxx
Title: Executive Vice President,
General Counsel & Corporate
Secretary
JPMORGAN CHASE BANK, as the Secured Party
By:
-----------------------------------
Name:
Title:
THE NORTHERN TRUST COMPANY, as the
Securities Intermediary
By:
-----------------------------------
Name:
Title:
IN WITNESS WHEREOF, the Pledgor, the Secured Party and the Securities
Intermediary have caused this Cash Collateral Agreement to be duly executed and
delivered as of the date first above written.
RFM 2, LLC, as the Pledgor
By: RCN CORPORATION, as its sole member
By:
----------------------------------
Name:
Title:
JPMORGAN CHASE BANK, as the Secured Party
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
THE NORTHERN TRUST COMPANY, as the
Securities Intermediary
By:
-----------------------------------
Name:
Title:
IN WITNESS WHEREOF, the Pledgor, the Secured Party and the Securities
Intermediary have caused this Cash Collateral Agreement to be duly executed and
delivered as of the date first above written.
RFM 2, LLC, as the Pledgor
By: RCN CORPORATION, its sole member
By:
----------------------------------
Name:
Title:
JPMORGAN CHASE BANK, as the Secured Party
By:
-----------------------------------
Name:
Title:
THE NORTHERN TRUST COMPANY, as the
Securities Intermediary
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
The Northern Trust Company
EXHIBIT A
INVESTMENT POLICY GUIDELINES
I. ELIGIBLE INVESTMENTS
The portfolio of investments will be limited to:
(a) Obligations issued by the U.S. Treasury.
(b) Obligations guaranteed by the U.S. Government or issued by the
following Federal agencies (collectively, the "Permitted
Federal Agencies"): (i) the Government National Mortgage
Association ("Xxxxx Xxx"), (ii) the Student Loan Marketing
Association ("Xxxxxx Mae"), (iii) the Federal National Mortgage
Association ("Xxxxxx Xxx"), (iv) the Federal Home Loan Mortgage
Corp. ("Xxxxxxx Mac") and (v) the Federal Home Loan Bank.
(c) Obligations of foreign and domestic commercial banks and bank
holding companies limited to bankers' acceptances, certificates
of deposit, negotiable Eurodollar time deposits and longer-term
notes issued by banks and Bank Holding companies.
(d) Obligations of U.S. corporations including commercial paper,
asset-backed commercial paper, master notes, floating rate
notes, medium term notes and corporate bonds.
(e) Reverse and Repurchase Agreements with major banks and
authorized dealers fully collateralized by U.S. Government or
Permitted Federal Agency securities. The market value of the
collateral securities, when marked to market must be equal to
or greater than the face value of the agreement. During the
time a reverse repurchase agreement is outstanding the term of
the reinvested proceeds may not exceed the term of the reverse
repurchase agreements.
(f) Asset-Backed Securities and Structured Notes: Securities
backed by receivables or other assets that are expected to
provide predictable cash flows. The average life of the
security may not exceed one (1) year at the time of purchase.
(g) Money-market funds (intended solely for temporary housing of
cash or interest).
(h) The portfolio MAY NOT invest in Mortgage-Backed Securities.
II. Maturity Limits
The following maturity guidelines will apply to individual investments and
to the portfolio as a whole:
(a) The weighted average maturity of the portfolio is not to exceed
ONE (1) YEAR.
(b) The final maturity of any investment is not to exceed TWO (2)
YEARS, with the exception of Asset-Backed Securities, where the
average life will be used in lieu of final maturity and will be
limited to less than one (1) year.
(c) All investments with maturities greater than THIRTEEN (13) MONTHS
will NOT EXCEED 20% of the portfolio.
III. Concentration Limits
(a) Obligations of the U.S. Government and the Permitted Federal
Agencies: no limits at time of purchase.
(b) Obligations of Commercial Banks and Bank Holding Companies: WITH
ANY ONE ISSUER, NOT TO EXCEED 3%.
(c) Obligations of U.S. Corporations: with any one issuer, NOT TO
EXCEED 3%.
(d) Reverse and Repurchase Agreements: with any one issuer not to
exceed the greater of 10% or $5,000,000.
(e) Asset-Backed Securities and Structured Notes: with any one issuer
or trust, NOT TO EXCEED 3%.
IV. Credit Quality
In all categories, emphasis will be on securities of high quality. Assigned
credit ratings will be from Xxxxx'x Investor Service ("Moody's") and
Standard & Poor's Corporation ("S&P"). Holdings are subject to the
following limitations:
(a) Long term debt of foreign and domestic commercial banks and bank
holding companies: at least A2 by Moody's and A by S&P.
(b) Commercial paper: rated at least A1 BY MOODY'S AND P1 BY S&P.
(c) Repurchase agreements: underlying collateral meets all previous
requirements. Collateral value must exceed 102% of repo proceeds.
(d) Other Corporate Debt: Rated at least A2 BY MOODY'S AND A BY S&P.
(e) Asset-backed Securities and Structured Notes: Rated Aaa by
Moody's or AAA by S&P.
V. OTHER LIMITATIONS
Investments in securities other than allowed in Section I are prohibited.
EXECUTION COPY
FIRST AMENDMENT, dated as of March 5, 2003 (this "Amendment"), to the Cash
Collateral Agreement, dated as of February 19, 2003 (as amended, supplemented
or otherwise modified from time to time, the "Cash Collateral Agreement"),
among RFM 2, LLC, a Delaware limited liability company (the "Pledgor"),
JPMORGAN CHASE BANK, as Administrative Agent (in such capacity, the "Secured
Party") for the benefit of itself and the Lenders parties to the Credit
Agreement referred to below, and THE NORTHERN TRUST COMPANY, as Securities
Intermediary (in such capacity, the "Securities Intermediary").
WHEREAS, pursuant to Section 6.05 of the Credit Agreement, dated as of
June 3, 1999, among RCN CORPORATION, RCN TELECOM SERVICES OF PENNSYLVANIA, INC.
(now known as Telecom Services, Inc.), RCN CABLE SYSTEMS, INC. (now known as
RCN Telecom Services, Inc.), JAVANET, INC. (now known as UNET Holding, Inc.),
RCN FINANCIAL MANAGEMENT, INC., UNET HOLDING, INC., INTERPORT COMMUNICATIONS
CORP. (now known as UNET Holding, Inc.) and ENET HOLDING, INC. (now known as
RCN Internet Services, Inc.)(collectively, the "Borrowers"), the lenders party
thereto (the "Lenders"), and JPMORGAN CHASE BANK, formerly THE CHASE MANHATTAN
BANK, as Administrative Agent and Collateral Agent (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), the Pledgor
entered into the Cash Collateral Agreement for the benefit of the Secured Party
and the Lenders; and
WHEREAS the parties to the Cash Collateral Agreement have requested that a
certain provision of the Cash Collateral Agreement be modified in the manner
provided for in this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used and not defined herein shall
have the meanings given to them in the Cash Collateral Agreement, as amended
hereby.
2. Amendment to the Cash Collateral Agreement.
The definition of the term "Investment Manager" in Section 1 of the Cash
Collateral Agreement is hereby amended by deleting such term in its entirety
and inserting in its place the following:
"Investment Manager": the collective
reference to Xxxxxx Xxxxxx Partners LLC, Mellon
Bond Associates (together with its successors) and
any other entity designated in writing as an
"Investment Manager" by the Secured Party and the
Pledgor to the Securities Intermediary. As of the
date of this Agreement, Xxxxxx Xxxxxx Partners LLC
is the acting Investment Manager with respect to
the Cash Collateral Account."
2
3. No Other Amendments: Confirmation. Except as expressly amended
hereby, the provisions of the Cash Collateral Agreement are and shall remain in
full force and effect.
4. Representations and Warranties. The Pledgor hereby represents
and warrants to the Secured Party that, as of the date hereof, all
representations and warranties of the Pledgor, the Secured Party and the
Securities Intermediary set forth in the Cash Collateral Agreement are true and
correct in all material respects.
5. Conditions Precedent to Effectiveness. This Amendment shall
become effective when the Secured Party shall have received counterparts hereof
duly executed and delivered by the Pledgor and the Securities Intermediary.
6. Expenses. The Pledgor agrees to reimburse each of the Secured
Party and the Securities Intermediary for its out-of-pocket expenses in
connection with this Amendment, including the reasonable fees, charges and
disbursements of its legal counsel.
7. Governing Law; Counterparts.
(a) This Amendment and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
(b) This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. This Amendment may be delivered by facsimile transmission of the
relevant signature pages hereof.
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their duly authorized officers as of the day
and year first above written.
RFM 2, LLC, as the Pledgor
By: RCN CORPORATION, as its sole member
By: /s/ Xxxxxxx X. Xxxxxxxx
___________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
JPMORGAN CHASE BANK, as the Secured Party
By:
___________________________________
Name:
Title:
THE NORTHERN TRUST COMPANY, as the
Securities Intermediary
By:
___________________________________
Name:
Title:
' 3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
RFM 2, LLC, as the Pledgor
By: RCN CORPORATION, as its sole member
By:
-------------------------------
Name:
Title:
JPMORGAN CHASE BANK, as the Secured Party
By: Xxxx Xxxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxx Xxxxxx
Title: Managing Director
THE NORTHERN TRUST COMPANY, as the
Securities Intermediary
By:
--------------------------------
Name:
Title:
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
RFM 2, LLC, as the Pledgor
By: RCN CORPORATION, as its sole member
By:
-------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, as the Secured Party
By:
-------------------------------------
Name:
Title:
THE NORTHERN TRUST COMPANY, as the
Securities Intermediary
By: Xxxxxxxx Xxxxxxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxxxxxx
Title: Vice President
