EXHIBIT 10.50
EXHIBIT A
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GUARANTEE AND COLLATERAL AGREEMENT
made by
CLEARWIRE CORPORATION
and certain of its Subsidiaries
in favor of
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as Administrative Agent
Dated as of August 21, 2006
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINED TERMS................................................ 1
1.1 Definitions.................................................. 1
1.2 Other Definitional Provisions................................ 5
SECTION 2. GUARANTEE.................................................... 6
2.1 Guarantee.................................................... 6
2.2 Right of Contribution........................................ 6
2.3 No Subrogation............................................... 7
2.4 Amendments, etc. with respect to the Borrower Obligations.... 7
2.5 Guarantee Absolute and Unconditional......................... 7
2.6 Reinstatement................................................ 8
2.7 Payments..................................................... 8
SECTION 3. GRANT OF SECURITY INTEREST................................... 8
SECTION 4. REPRESENTATIONS AND WARRANTIES............................... 9
4.1 Representations in Credit Agreement.......................... 9
4.2 Title; No Other Liens........................................ 9
4.3 Perfected First Priority Liens............................... 10
4.4 Jurisdiction of Organization; Chief Executive Office......... 10
4.5 Investment Property.......................................... 10
4.6 Receivables.................................................. 10
4.7 Intellectual Property........................................ 10
SECTION 5. COVENANTS................................................... 11
5.1 Covenants in Credit Agreement................................ 11
5.2 Maintenance of Insurance..................................... 11
5.3 Payment of Obligations....................................... 11
5.4 Maintenance of Perfected Security Interest; Further
Documentation................................................ 12
5.5 Changes in Name, etc......................................... 12
5.6 Notices...................................................... 12
5.7 Investment Property.......................................... 12
5.8 Receivables.................................................. 14
5.9 Intellectual Property........................................ 14
SECTION 6. REMEDIAL PROVISIONS.......................................... 15
6.1 Certain Matters Relating to Receivables...................... 15
6.2 Communications with Obligors; Grantors Remain Liable......... 16
6.3 Pledged Stock................................................ 16
6.4 Proceeds to be Turned Over To Administrative Agent........... 17
6.5 Application of Proceeds...................................... 17
6.6 Code and Other Remedies...................................... 18
6.7 Registration Rights.......................................... 18
6.8 Deficiency................................................... 19
SECTION 7. THE ADMINISTRATIVE AGENT..................................... 19
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc.. 19
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7.2 Duty of Administrative Agent................................. 21
7.3 Execution of Financing Statements............................ 21
7.4 Authority of Administrative Agent............................ 21
SECTION 8. MISCELLANEOUS................................................ 22
8.1 Amendments in Writing........................................ 22
8.2 Notices...................................................... 22
8.3 No Waiver by Course of Conduct; Cumulative Remedies.......... 22
8.4 Enforcement Expenses; Indemnification........................ 22
8.5 FCC Compliance............................................... 22
8.6 Successors and Assigns....................................... 24
8.7 Set-Off...................................................... 24
8.8 Counterparts................................................. 24
8.9 Severability................................................. 24
8.10 Section Headings............................................. 25
8.11 Integration.................................................. 25
8.12 GOVERNING LAW................................................ 25
8.13 Submission To Jurisdiction; Waivers.......................... 25
8.14 Acknowledgements............................................. 25
8.15 Additional Guarantors/Grantors............................... 26
8.16 Releases..................................................... 26
8.17 WAIVER OF JURY TRIAL......................................... 26
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Pledged Stock
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization and Chief Executive Offices
Schedule 5 Intellectual Property
ANNEXES
Annex I Acknowledgment and Consent
Annex II Assumption Agreement
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of August 21, 2006, made
by Clearwire Corporation (the "Borrower") and each of the other signatories
hereto (together with any other entity that may become a party hereto as
provided herein, the "Guarantors"), in favor of Xxxxxx Xxxxxxx Senior Funding,
Inc., as Administrative Agent (in such capacity, the "Administrative Agent") for
the banks and other financial institutions or entities (the "Lenders") from time
to time parties to the Credit Agreement, dated as of August 21, 2006 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the Lenders and the Administrative
Agent.
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make Loans to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes each Guarantor;
WHEREAS, the proceeds of the Loans under the Credit Agreement will be
used in part to enable the Borrower to make valuable transfers to one or more of
the Guarantors in connection with the operation of their respective businesses;
WHEREAS, the Borrower and the Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefit from the making of the Loans under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective Loans to the Borrower under the Credit Agreement that
the Borrower and the Guarantors shall have executed and delivered this Agreement
to the Administrative Agent for the ratable benefit of the Secured Parties;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Loans to the Borrower thereunder,
each of the Borrower and each Guarantor hereby agrees with the Administrative
Agent, for the ratable benefit of the Secured Parties, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms are used herein as defined in the New
York UCC: Accounts, Certificated Security, Chattel Paper, Documents, Equipment,
Farm Products, General Intangibles, Goods, Instruments, Inventory,
Letter-of-Credit Rights, Payment Intangibles and Supporting Obligations.
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
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"Borrower Credit Agreement Obligations": the collective reference to
the unpaid principal of and interest on the Loans and all other obligations and
liabilities of the Borrower (including, without limitation, interest accruing at
the then applicable rate provided in the Credit Agreement after the maturity of
the Loans and interest accruing at the then applicable rate provided in the
Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) to the Administrative Agent or any Lender,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under the Credit Agreement, this
Agreement, the other Loan Documents or any other document made, delivered or
given in connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Administrative Agent or to the Lenders that are required to be paid by
the Borrower pursuant to the terms of any of the foregoing agreements).
"Borrower Swap Agreement Obligations": the collective reference to all
obligations and liabilities of the Borrower (including, without limitation,
interest accruing at the then applicable rate provided in any Specified Swap
Agreement after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Qualified Counterparty, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under any Specified Swap Agreement or any other
document made, delivered or given in connection therewith, in each case whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the relevant Qualified Counterparty that are
required to be paid by the Borrower pursuant to the terms of any Specified Swap
Agreement).
"Borrower Obligations": the collective reference to (i) the Borrower
Credit Agreement Obligations, (ii) the Borrower Swap Agreement Obligations, but
only to the extent that, and only so long as, the Borrower Credit Agreement
Obligations are secured and guaranteed pursuant hereto, and (iii) all other
obligations and liabilities of the Borrower, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under this Agreement (including, without limitation,
all fees and disbursements of counsel to the Administrative Agent or to the
Lenders that are required to be paid by the Borrower pursuant to the terms of
this Agreement).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.
"Copyrights": (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office listed in Schedule 5, and
(ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those agreements listed in
Schedule 5), granting any right under any Copyright, including, without
limitation, the grant of rights to distribute and reproduce materials derived
from any Copyright.
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"Deposit Account": as defined in the Uniform Commercial Code of any
applicable jurisdiction and, in any event, including, without limitation, any
demand, time, savings, passbook or like account maintained with a depositary
institution.
"Excluded Assets": (A) any application for registration of a Trademark
filed in the United States Patent and Trademark Office on an intent-to-use basis
to the extent that the grant of a security interest in any such Trademark
application would adversely affect the validity or enforceability or result in
cancellation of such Trademark application, provided, however, that such
Trademark applications shall be considered Collateral upon the filing of a
Statement of Use or an Amendment to Allege Use has been filed and accepted in
the United States Patent and Trademark Office, (B) the Capital Stock of
Clearwire 1, Clearwire International, Fixed Wireless Holdings, LLC,
a________________limited liability company and NextNet, or any Subsidiary of any
thereof, in each case pledged pursuant to that certain Securities Purchase
Agreement between the Borrower, the Guarantors and the Buyers (as listed on the
Schedule of Buyers) or pursuant to the Promissory Note, Warrants and Indenture
of the Borrower dated August 5, 2005 or Promissory Notes and Warrants of the
Borrower dated February 16, 2006, except in each case to the extent required to
be pledged hereunder pursuant to paragraph (b), (c) or (d) of Section 6.9 of the
Credit Agreement; (C) purchased personal property and other telecommunications
equipment located in Canada pledged pursuant to the Credit Agreement, Security
Agreement and Moveable Hypothec Agreement each between the Borrower and Xxxx
Canada and dated July 19, 2005 or pursuant to the Amendment to such Credit
Agreement dated February__________, 2006, in each case to the extent that and
for so long as the terms of such Agreement would prohibit the granting of a
security interest in such property to the Administrative Agent hereunder; (D)
any leasehold in real property; (E) any property, including any contract,
General Intangible, Copyright License, Patent License or Trademark License,
Copyrights, Patent or Trademarks, in each case to the extent the grant by the
relevant Grantor of a security interest pursuant to this Agreement in such
Grantor's right, title and interest in such property (i) is prohibited by any
contract, agreement, instrument, indenture or Requirement of Law of any
Governmental Authority governing such property, (ii) would give any other party
to such contract, agreement, instrument or indenture the right to terminate its
obligations thereunder, (iii) is permitted only with the consent of another
party (including, without limitation, consent of any Governmental Authority), if
such consent has not been obtained or (iv) is limited by the Communications Act
of 1934, as amended, and the rules, regulations, and policies promulgated
thereunder by the Federal Communications Commission, including (A) restrictions
on granting security interests in FCC License Rights, as discussed more fully in
Section 8.5, and (B) the prior approval of the FCC, as discussed more fully in
Section 8.5 (provided, that none of the following shall be Excluded Assets: (1)
any Receivable or any money or other amounts due or to become due under any such
contract, agreement, instrument or indenture set out in the foregoing clauses
(i) through (iv) and (2) in the case of the preceding clause (iv), any proceeds
of FCC Licenses or Spectrum Leases, and the right to receive all monies,
consideration and proceeds derived from or in connection with the sale,
assignment, transfer, or other disposition of the FCC Licenses or Spectrum
Leases, and the right to exercise rights and actions against the lessor,
licensor or other party to the Spectrum Lease); (F) property subject to Liens
permitted under Section 7.2(2)(D) of the Credit Agreement to the extent any
agreement governing purchase money Liens or Capital Lease Obligations with
respect to such property contains a negative pledge clause that prohibits a
grant by the relevant Grantor of a security interest pursuant to this Agreement
in such Grantor's right, title and interest in such property; (G) Vehicles; (H)
Capital Stock and assets of Unrestricted Subsidiaries; and (I) any assets of the
Borrower other than Pledged Stock, but only to the extent that either (x) the
Borrower is prohibited by the terms of the Existing Notes Indenture or any
Restrictive Refinancing from granting a security interest to the Administrative
Agent hereunder in such assets other than Pledged Stock or (y) if the preceding
clause (x) does not apply, the Borrower shall not have granted a security
interest to any other party in such assets other than Pledged Stock to secure
any other present or future Indebtedness.
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"Foreign Subsidiary": any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of any
Foreign Subsidiary.
"Grantors": the collective reference to (i) the Borrower, (ii) each
Guarantor other than Clearwire 1 and its Subsidiaries and (iii) any other Person
that becomes a party hereto as a Grantor pursuant to Section 8.15.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2) or any
other Loan Document, any Specified Swap Agreement (to the extent such
obligations or liabilities are owing to any Qualified Counterparty) to which
such Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Administrative Agent or to the Lenders that are required to be paid by
such Guarantor pursuant to the terms of this Agreement or any other Loan
Document).
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to
xxx at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.
"Investment Property": the collective reference to (i) all "investment
property" as such term is defined in Section 9-102(a)(49) of the New York UCC
(other than any Foreign Subsidiary Voting Stock excluded from the definition of
"Pledged Stock") and (ii) whether or not constituting "investment property" as
so defined, all Pledged Stock.
"Issuers": the collective reference to each issuer of any Pledged
Stock.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor Obligations.
"Patents": (i) all letters patent of the United States, any other
country or any political subdivision thereof, and all reissues and extensions
thereof, including, without limitation, any letters patent of the United States
listed in Schedule 5, (ii) all applications for letters patent of the United
States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any applications
for letters patent of the United States listed in Schedule 5, and (iii) all
rights to obtain any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 5.
"Pledged Stock": the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options or rights of any
nature whatsoever in respect of the Capital Stock
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of any Person (other than Excluded Assets) that may be issued or granted to, or
held by, any Grantor while this Agreement is in effect and that is required to
be pledged pursuant to Section 6.9 of the Credit Agreement; provided that (i) in
the case of the Borrower only, Pledged Stock shall be limited to the Capital
Stock (and any shares, stock certificates, options or rights of any nature
whatsoever in respect thereof) of the Borrower's Subsidiaries (any Capital Stock
of any Person other than such Subsidiaries, "Non-Subsidiary Stock") to the
extent that either (x) the Borrower is prohibited by the terms of the Existing
Notes Indenture or any Restrictive Refinancing from granting a security interest
to the Administrative Agent hereunder in Non-Subsidiary Stock or (y) if the
preceding clause (x) does not apply, the Borrower shall not have granted a
security interest to any other party in Non-Subsidiary Stock to secure any other
present or future Indebtedness and (ii) in no event shall more than 65% of the
total outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be
required to be pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the Uniform Commercial Code in effect in the State of New York
on the date hereof and, in any event, including, without limitation, all
dividends or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.
"Qualified Counterparty": with respect to any Specified Swap
Agreement, any counterparty thereto that, at the time such Specified Swap
Agreement was entered into, was a Lender or an affiliate of a Lender.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument or
Chattel Paper and whether or not it has been earned by performance (including,
without limitation, any Account).
"Secured Parties": the collective reference to the Administrative
Agent, the Lenders and any other Qualified Counterparty to which Borrower
Obligations or Guarantor Obligations, as applicable, are owed.
"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, all registrations and recordings thereof, and all
applications in connection therewith, whether 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, or
otherwise, and all common-law rights related thereto, including, without
limitation, any registrations and applications in respect of the foregoing in
the United States Patent and Trademark Office listed in Schedule 5, and (ii) the
right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral, providing
for the grant by or to any Grantor of any right to use any Trademark, including,
without limitation, any of the foregoing agreements listed in Schedule 5.
"Vehicles": all cars, trucks, trailers, construction and earth moving
equipment and other vehicles covered by a certificate of title law of any state
and, in any event including, without limitation, all tires and other
appurtenances to any of the foregoing.
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a
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whole and not to any particular provision of this Agreement, and Section and
Schedule references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) The Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantee to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Section 2 or affecting the
rights and remedies of the Administrative Agent or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in full force
and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full (other than contingent indemnity obligations not
due and payable).
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid in
full (other than contingent indemnity obligations not due and payable).
2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent
that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent and the Lenders, and each
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Guarantor shall remain liable to the Administrative Agent and the Lenders for
the full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower on
account of the Borrower Obligations are paid in full (other than contingent
indemnity obligations not due and payable). If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all of the
Borrower Obligations shall not have been paid in full (other than contingent
indemnity obligations not due and payable), such amount shall be held by such
Guarantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form received
by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent,
if required), to be applied against the Borrower Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Borrower Obligations
continued, and the Borrower Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released, in each
case, in accordance with the Loan Documents. Neither the Administrative Agent
nor any Lender shall have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for the Borrower Obligations or for
the guarantee contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives, to the
extent permitted by law and except as otherwise provided for herein, any and all
notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Administrative Agent and the Lenders,
on the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each
Guarantor waives, to the extent permitted by law and except as otherwise
provided for herein, diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower or any of the Guarantors
with respect to the Borrower Obligations. Each Guarantor understands and agrees
that the guarantee contained in this Section 2 shall be construed as a
continuing,
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absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
any of the Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance or fraud) which may
at any time be available to or be asserted by the Borrower or any other Person
against the Administrative Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or such
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower for the Borrower Obligations, or of such
Guarantor under the guarantee contained in this Section 2, in bankruptcy or in
any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Administrative Agent or
any Lender may, but shall be under no obligation to and each Guarantor waives
any right to require the Administrative Agent or any Lender to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
the Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or against any assets of the
Borrower or any Guarantor or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Lender to make any such demand, to
pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or assets or to exercise any such right of
offset, or any release of the Borrower, any other Guarantor or any other Person
or any such collateral security, guarantee or right of offset, shall not relieve
any Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any Lender against any Guarantor.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall continue
to be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Borrower Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Lender upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments hereunder will
be paid to the Administrative Agent without set-off or counterclaim in Dollars
at the Funding Office.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Administrative Agent,
and hereby grants to the Administrative Agent, for the ratable benefit of the
Secured Parties, a security interest in, all of such Grantor's right, title and
interest in the following property now owned or at any time hereafter acquired
by such Grantor or in which such Grantor now has or at any time in the future
may acquire any right, title or interest (collectively, the "Collateral"), as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of such Grantor's
Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
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(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Investment Property;
(k) all Letter-of-Credit Rights;
(l) all Goods;
(m) all books and records pertaining to the Collateral; and
(n) to the extent not otherwise included, all Proceeds and products of any
and all of the foregoing, all Supporting Obligations in respect of any of the
foregoing and all collateral security and guarantees given by any Person with
respect to any of the foregoing;
(o) all FCC License Rights;
provided, that the Collateral shall not include the Excluded Assets.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case of each Guarantor, the
representations and warranties set forth in Section 4 of the Credit Agreement as
they relate to such Guarantor or to the Loan Documents to which such Guarantor
is a party, each of which is hereby incorporated herein by reference, are true
and correct, and the Administrative Agent and each Lender shall be entitled to
rely on each of them as if they were fully set forth herein, provided that each
reference in each such representation and warranty to the Borrower's knowledge
shall, for the purposes of this Section 4.1, be deemed to be a reference to such
Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security interest granted to the
Administrative Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Credit Agreement, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others. No financing statement or other public
notice with respect to all or any part of the Collateral is on file or of record
in any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, pursuant
to this Agreement or as are permitted by the Credit Agreement. For the avoidance
of doubt, it is understood and agreed that any Grantor may, as part of its
business, grant licenses to third parties to use Intellectual Property owned or
developed by a Grantor. For purposes of this Agreement and the other
10
Loan Documents, such licensing activity shall not constitute a "Lien" on such
Intellectual Property. Each of the Administrative Agent and each Lender
understands that any such licenses may be exclusive to the applicable licensees,
and such exclusivity provisions may limit the ability of the Administrative
Agent to utilize, sell, lease or transfer the related Intellectual Property or
otherwise realize value from such Intellectual Property pursuant hereto.
4.3 Perfected First Priority Liens. The security interests granted pursuant
to this Agreement (a) upon completion of the filings and other actions specified
on Schedule 3 (which, in the case of all filings and other documents referred to
on said Schedule, have been delivered to the Administrative Agent in completed
and duly executed form) within the time periods prescribed under applicable law,
will constitute valid perfected security interests (to the extent such matter is
governed by laws of the United States or a jurisdiction therein) in all of the
Collateral (to the extent that a security interest therein may be perfected by
the filing of Uniform Commercial Code financing statements and such other
filings specified on Schedule 3) in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, as collateral security for such
Grantor's Obligations, enforceable in accordance with the terms hereof against
all creditors of such Grantor and any Persons purporting to purchase any
Collateral from such Grantor and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except to the extent otherwise
permitted by the Credit Agreement.
4.4 Jurisdiction of Organization: Chief Executive Office. On the date
hereof, such Grantor's jurisdiction of organization, identification number from
the jurisdiction of organization (if any), and the location of such Grantor's
chief executive office or sole place of business or principal residence, as the
case may be, are specified on Schedule 4. Such Grantor has furnished to the
Administrative Agent a certified charter, certificate of incorporation or other
organization document and long-form good standing certificate as of a date which
is recent to the date hereof.
4.5 Investment Property. (a) The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and validly issued
and are fully paid and nonassessable.
(c) Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.
4.6 Receivables. (a) As of the date hereof, none of the obligors on any
Receivable is a Governmental Authority, except for Receivables constituting not
more than 5% of the face amount of all Receivables.
(b) The amounts represented by such Grantor to the Lenders from time to
time as owing to such Grantor in respect of the Receivables will at such times
be accurate in all material respects.
4.7 Intellectual Property. (a) Schedule 5 lists all issuances,
registrations and applications in respect of Intellectual Property owned by such
Grantor (other than the Borrower at any time to the extent the Borrower is not
then required to pledge such Intellectual Property hereunder pursuant to clause
(I) of the definition of "Excluded Assets") in its own name on the date hereof.
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(b) On the date hereof, all Intellectual Property owned by such Grantor
listed on Schedule 5 (i) is valid, subsisting, unexpired and enforceable, has
not been abandoned and (ii) does not infringe any Intellectual Property rights
of any other Person, except as could not reasonably be expected to have a
Material Adverse Effect.
(c) Except as set forth in Schedule 5, on the date hereof, none of the
Intellectual Property listed on Schedule 5 is the subject of any Copyright
License, Trademark License or Patent License pursuant to which such Grantor is
the licensor.
(d) No holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of, or such
Grantor's rights in, any Intellectual Property listed on Schedule 5 in any
respect that could reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any material Intellectual Property listed on Schedule 5 or such
Grantor's ownership interest therein, or (ii) which, if adversely determined,
would have a Material Adverse Effect.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and
the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full (other than contingent indemnity
obligations not due and payable):
5.1 Covenants in Credit Agreement. In the case of each Guarantor, such
Guarantor shall take, or shall refrain from taking, as the case may be, each
action that is necessary to be taken or not taken, as the case may be, so that
no Default or Event of Default is caused by the failure to take such action or
to refrain from taking such action by such Guarantor or any of its Subsidiaries.
5.2 Maintenance of Insurance. (a) Such Grantor will maintain insurance
policies in accordance with the Credit Agreement.
(b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Administrative Agent of written
notice thereof, unless acceptable to the Administrative Agent, (ii) name the
Administrative Agent as insured party or loss payee, in each case only with
respect to Collateral, (iii) if reasonably requested by the Administrative
Agent, include a breach of warranty clause and (iv) be reasonably satisfactory
in all other respects to the Administrative Agent.
(c) Upon request by the Administrative Agent, the Borrower shall deliver to
the Administrative Agent and the Lenders a report of a reputable insurance
broker with respect to such insurance substantially concurrently with the
delivery by the Borrower to the Administrative Agent of its audited financial
statements for each fiscal year.
5.3 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all material taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except that
no such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could
12
not reasonably be expected to result in the sale, forfeiture or loss of any
material portion of the Collateral or any interest therein.
5.4 Maintenance of Perfected Security Interest: Further Documentation. (a)
Such Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in Section
4.3, to the extent required herein, and shall defend such security interest
against the claims and demands of all Persons whomsoever, subject to the rights
of such Grantor under the Credit Agreement and/or the Loan Documents to dispose
of the Collateral and permitted Liens under the Credit Agreement.
(b) Such Grantor will furnish to the Administrative Agent and the Lenders
from time to time statements and schedules further identifying and describing
the assets and property of such Grantor as the Administrative Agent may
reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted; provided
that in no event shall any Grantor be required to perfect any Lien by means
other than the delivery of share certificates of Subsidiaries or the making of
filings, registrations or recordings required for perfection under the laws of
the United States or any jurisdiction thereof, to the extent required by the
terms hereof.
5.5 Changes in Name, etc. Such Grantor will not, except upon 15 days' prior
written notice to the Administrative Agent and delivery to the Administrative
Agent of all additional executed financing statements and other documents
reasonably requested by the Administrative Agent to maintain the validity,
perfection and priority of the security interests provided for herein, (i)
change its jurisdiction of organization or the location of its chief executive
office or sole place of business or principal residence from that referred to in
Section 4.3 or (ii) change its name.
5.6 Notices. Such Grantor will advise the Administrative Agent and the
Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Administrative Agent to exercise any of its
remedies hereunder; and
(b) the occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the Collateral or on
the security interests created hereby.
5.7 Investment Property. (a) If such Grantor shall become entitled to
receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization) in respect of the Capital Stock of any
Issuer that is a Subsidiary of a Grantor, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly endorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so reasonably requests, signature
guaranteed, to be held by the Administrative Agent, subject to the terms
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hereof, as additional collateral security for the Obligations. After the
occurrence and during the continuation of an Event of Default, any sums paid
upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in respect of the
Investment Property, or any property shall be distributed upon or with respect
to the Investment Property pursuant to the recapitalization or reclassification
of the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Investment Property shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Lenders, segregated from other funds of such Grantor, as additional collateral
security for the Obligations. Notwithstanding the foregoing, the Grantors shall
not be required to pay over to the Administrative Agent or deliver to the
Administrative Agent as Collateral (A) any proceeds of any liquidation or
dissolution of any Issuer, or any distribution of capital or property in respect
of any Investment Property, to the extent that (i) such liquidation, dissolution
or distribution, if treated as a Disposition of the relevant Issuer, would be
permitted by the Credit Agreement and (ii) the proceeds thereof are applied
toward prepayment of Loans and reduction of Commitments to the extent required
by the Credit Agreement or (B) distributions permitted under the Credit
Agreement.
(b) Without the prior written consent of the Administrative Agent, such
Grantor will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any stock or other equity securities of any nature or to issue
any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
unless such securities that are issued to such Grantor are delivered to the
Administrative Agent, concurrently with the issuance thereof, to be held by the
Administrative Agent as Collateral, (ii) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Pledged Stock or
Proceeds thereof (except pursuant to a transaction expressly permitted by the
Credit Agreement), (iii) 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 Pledged Stock
or Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any of the Pledged Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Pledged
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.7(a) with
respect to the Pledged Securities issued by it and (iii) the terms of Sections
6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all actions
that may be required of it pursuant to Section 6.3(c) or 6.7 with respect to the
Pledged Securities issued by it.
(d) Each Issuer that is a partnership or a limited liability company (i)
confirms that none of the terms of any equity interest issued by it provides
that such equity interest is a "security" within the meaning of Sections 8-102
and 8-103 of the New York UCC (a "Security"), (ii) agrees that it will take no
action to cause or permit any such equity interest to become a Security, (iii)
agrees that it will not issue any certificate representing any such equity
interest and (iv) agrees that if, notwithstanding the foregoing,
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any such equity interest shall be or become a Security, such Issuer will (and
the Grantor that holds such equity interest hereby instructs such Issuer to)
comply with instructions originated by the Administrative Agent without further
consent by such Grantor.
5.8 Receivables. Other than in the ordinary course of business, such
Grantor (other than the Borrower at any time to the extent the Borrower is not
then required to pledge such Receivable hereunder pursuant to clause (I) of the
definition of "Excluded Assets") will not (i) grant any extension of the time of
payment of any Receivable material, (ii) compromise or settle any material
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any material Receivable, (iv)
allow any credit or discount whatsoever on any material Receivable or (v) amend,
supplement or modify any material Receivable in any manner that could adversely
affect the value thereof.
5.9 Intellectual Property. (a) Such Grantor (other than the Borrower at any
time to the extent the Borrower is not then required to pledge such Intellectual
Property hereunder pursuant to clause (I) of the definition of "Excluded
Assets"), either itself or through licensees, will (i) as deemed necessary in
such Grantor's reasonable business judgment, continue to use each material
Trademark in connection with each and every trademark class of goods applicable
to its current line as reflected in its current catalogs, brochures and price
lists in order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such material Trademark, (iii) use such material
Trademark with the appropriate notice of registration and all other notices and
legends required by applicable Requirements of Law, (iv) not adopt or use any
new xxxx or any xxxx which is confusingly similar or a colorable imitation of
such Trademark unless such xxxx shall be considered Collateral and subject to
the terms of this Agreement, and (iv) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
material Trademark may become abandoned, invalidated or impaired in any material
respect other than as set forth in (i) above.
(b) Such Grantor (either itself or through licensees) will not do any act,
or omit to do any act, whereby any material Patent could reasonably be expected
to become forfeited, abandoned or dedicated to the public, other than through
expiration of any statutory term.
(c) Such Grantor (either itself or through licensees) (i) will not (and
will not permit any licensee or sublicense thereof) to do any act or knowingly
omit to do any act whereby any material portion of the Copyrights may become
invalided or otherwise impaired, and (ii) will not (either itself or through
licensees) do any act whereby any material portion of the Copyrights may fall
into the public domain, other than through expiration of any statutory term.
(d) Such Grantor (either itself or through licensees) will not do any act
that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
(including, without limitation, the institution against Grantor of, or any such
determination in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any court or tribunal in any
country) regarding such Grantor's ownership of, or the validity of, any material
Intellectual Property owned by such Grantor or such Grantor's right to register
the same or to own and maintain the same.
15
(f) Whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent as promptly as reasonably practicable after
the last day of the fiscal quarter in which such filing occurs. Upon request of
the Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may reasonably request to evidence the Administrative
Agent's and the Lenders' security interest in any Copyright, Patent or Trademark
and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby.
(g) Such Grantor will take all reasonably necessary steps including,
without limitation, in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, to maintain
and pursue each application relating to any material Intellectual Property owned
by such Grantor (and to obtain the relevant registration) and to maintain each
registration of the material Intellectual Property owned by such Grantor,
including, without limitation, filing of applications for renewal, affidavits of
use and affidavits of incontestability, except as provided in Section 5.9(a)(i).
(h) In the event that any Grantor knows, or has reason to know, that any
material Intellectual Property owned by such Grantor is infringed,
misappropriated, diluted or otherwise violated by a third party, such Grantor
shall (i) take such actions as such Grantor shall reasonably deem appropriate in
its reasonable business judgment under the circumstances to protect such
Intellectual Property and (ii) if such Intellectual Property is deemed by such
Grantor to be of material economic value, as promptly as reasonably practicable
notify the Administrative Agent after it learns thereof and xxx for
infringement, misappropriation, dilution or other violation (as the case may
be), to seek injunctive relief where deemed appropriate by such Grantor and to
recover any and all damages for such infringement, misappropriation, dilution or
other violation.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables (a) The Administrative Agent
shall have the right, at any time after the occurrence and during the
continuance of an Event of Default, to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications.
At any time and from time to time after the occurrence and during the
continuance of an Event of Default, upon the Administrative Agent's request and
at the expense of the relevant Grantor, such Grantor shall cause independent
public accountants or others satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to collect such
Grantor's Receivables, subject to the Administrative Agent's direction and
control after the occurrence and during the continuance of an Event of Default,
and the Administrative Agent may curtail or terminate said authority at any time
after the occurrence and during the continuance of an Event of Default. If
required by the Administrative Agent at any time after the occurrence and during
the continuance of an Event of Default, any payments of Receivables, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Lenders only as provided in Section 6.5, and (ii) until so turned
over, shall be held by
16
such Grantor in trust for the Administrative Agent and the Lenders; provided
that all funds in such Collateral Account shall be promptly released to the
Grantors upon the cure or waiver of any such Event of Default.
(c) At the Administrative Agent's reasonable request, each Grantor shall
deliver to the Administrative Agent all original and other documents evidencing,
and relating to, the agreements and transactions which gave rise to the
Receivables, including, without limitation, all original orders, invoices and
shipping receipts
(d) The foregoing provisions of this Section 6.1 shall not apply to the
Borrower at any time to the extent the Borrower is not then required to pledge
Receivables hereunder pursuant to clause (I) of the definition of "Excluded
Assets".
6.2 Communications with Obligors: Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's reasonable satisfaction the existence, amount and terms
of any Receivables.
(b) Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables that the Receivables have been assigned to
the Administrative Agent for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables (or any agreement giving rise
thereto) to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. Neither the Administrative Agent nor any Lender
shall have any obligation or liability under any Receivable (or any agreement
giving rise thereto) by reason of or arising out of this Agreement or the
receipt by the Administrative Agent or any Lender of any payment relating
thereto, nor shall the Administrative Agent or any Lender be obligated in any
manner to perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
(d) The foregoing provisions of this Section 6.2 shall not apply to the
Borrower at any time to the extent the Borrower is not then required to pledge
Receivables hereunder pursuant to clause (I) of the definition of "Excluded
Assets".
6.3 Pledged Stock. (a) Unless an Event of Default shall have occurred and
be continuing and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid, to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate
rights with respect to the Pledged Securities; provided, however, that no vote
shall be cast or corporate right exercised or other action taken which would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
17
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Pledged Securities and make application thereof to the
Obligations in the order set forth in Section 6.5, and (ii) any or all of the
Pledged Securities shall be registered in the name of the Administrative Agent
or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such Pledged
Securities at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such Pledged
Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or
option pertaining to such Pledged Securities, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged
Securities pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Administrative Agent in writing that (x) states that an
Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In addition to the
rights of the Administrative Agent and the Lenders specified in Section 6.1 with
respect to payments of Receivables, if an Event of Default shall occur and be
continuing and at the election of Administrative Agent, all Proceeds (x)
received by any Grantor in respect of any Collateral and (y) consisting of cash,
checks and Instruments, shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required). All Proceeds
received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a Collateral
Account (or by such Grantor in trust for the Administrative Agent and the
Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5; provided that all funds in such Collateral Account shall be
promptly released to Grantor upon the cure or waiver of any such Event of
Default.
6.5 Application of Proceeds. At such intervals as may be agreed upon by the
Borrower and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent's election,
the Administrative Agent shall apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, and any proceeds of
the guarantee set forth in Section 2, in payment of the Obligations in the
following order:
First, to pay incurred and unpaid fees and expenses of the
Administrative Agent under the Loan Documents;
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Second, to the Administrative Agent, for application by it towards
payment of amounts then due and owing and remaining unpaid in respect of
the Obligations, pro rata among the Secured Parties according to the
amounts of the Obligations then due and owing and remaining unpaid to the
Secured Parties;
Third, to the Administrative Agent, for application by it towards
prepayment of the Obligations, pro rata among the Secured Parties according
to the amounts of the Obligations then held by the Secured Parties; and
Fourth, any balance of such Proceeds remaining after the Obligations
shall have been paid in full shall be paid over to the Borrower or to
whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor's premises
or elsewhere. The Administrative Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 6.6, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Administrative Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the Administrative Agent may elect, and only after such application and
after the payment by the Administrative Agent of any other amount required by
any provision of law, including, without limitation, Section 9-615(a)(3) of the
New York UCC, need the Administrative Agent account for the surplus, if any, to
any Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition.
6.7 Registration Rights. (a) Upon acceleration of obligations pursuant to
Section 8 of the Credit Agreement, if the Administrative Agent shall determine
to exercise its right to sell any or all of the Pledged Stock pursuant to
Section 6.6, and if in the opinion of the Administrative Agent it is necessary
or advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of
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the Securities Act, the relevant Grantor will cause the Issuer thereof to (i)
execute and deliver, and cause the directors and officers of such Issuer to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Pledged Stock, or that portion thereof to
be sold, under the provisions of the Securities Act, (ii) use its commercially
reasonable efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the date
of the first public offering of the Pledged Stock, or that portion thereof to be
sold, and (iii) make all amendments thereto and/or to the related prospectus
which, in the opinion of the Administrative Agent, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11 (a) of the Securities
Act.
(b) Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its commercially reasonable efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section 6.7
valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.7 will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.
6.8 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any Lender to collect such deficiency, subject to
Section 10.5 of the Credit Agreement.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent thereof, 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 such Grantor and in the name of such Grantor or in its own name,
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 reasonably necessary or desirable to accomplish the
20
purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Receivable or with respect
to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the
Administrative Agent's and the Lenders' security interest in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 6.6
or 6.7, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (2) ask or demand for, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (3)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Administrative Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions,
and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Administrative
Agent's and the Lenders' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor
might do.
Anything in this Section 7.1 (a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
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(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
(c) The reasonable out-of-pocket expenses of the Administrative Agent
incurred in connection with actions undertaken as provided in this Section 7.1
shall be payable by such Grantor to the Administrative Agent within 10 days of
demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. 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.
7.2 Duty of Administrative Agent. The Administrative Agent's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the New York UCC or otherwise, shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative Agent, any
Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Lenders hereunder are solely to protect the Administrative Agent's and
the Lenders' interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own (or their officers', directors' employees' or agents') bad faith,
gross negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to any applicable law, each
Grantor authorizes the Administrative Agent to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Grantor in such form and in such
offices as the Administrative Agent determines appropriate to perfect the
security interests of the Administrative Agent under this Agreement. Each
Grantor authorizes the Administrative Agent to use the collateral description
"all personal property other than Excluded Assets" in any such financing
statements. Each Grantor hereby ratifies and authorizes the filing by the
Administrative Agent of any financing statement with respect to the Collateral
made prior to the date hereof.
7.4 Authority of Administrative Agent. Each Grantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
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SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing, None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by each affected Grantor and the Administrative
Agent, provided that any provision of this Agreement imposing obligations on any
Grantor may be waived by the Administrative Agent in a written instrument
executed by the Administrative Agent in accordance with Section 10.1 of the
Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), 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. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, 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 Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay
or reimburse each Lender and the Administrative Agent for, all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent subject to Section 10.5 of the
Credit Agreement.
(b) Each Guarantor agrees to pay, and to save the Administrative Agent and
the Lenders harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes (if
any) which may be payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions contemplated by this
Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative Agent and
the Lenders harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrower would be required to do so pursuant to Section 10.5 of the Credit
Agreement.
(d) The agreements in this Section shall survive repayment of the
Obligations and. all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 FCC Compliance.
Notwithstanding anything to the contrary contained herein:
23
(a) The security interest/Collateral includes all rights of each Grantor
under or relating to FCC License Rights and the proceeds thereof, provided that
such security interest does not include at any time any FCC License Rights to
the extent (but only to the extent) that at such time the Administrative Agent
may not validly possess a security interest therein pursuant to the
Communications Act of 1934, as amended, the regulations promulgated thereunder
or any other applicable law, regulation, or policy, as in effect at such time,
but such security interest does include, to the maximum extent permitted by law,
all rights incident or appurtenant to the FCC License Rights and the right to
receive all proceeds derived from or in connection with the sale, assignment or
transfer of the FCC License Rights;
(b) At any time after the occurrence and during the continuance of an Event
of Default, to the extent permitted by the FCC, each Grantor shall take all
lawful action that the Administrative Agent may reasonably request in the
exercise of its rights and remedies hereunder, which include the right to
require the Grantor to transfer or assign the Pledged Stock, FCC Licenses and
Spectrum Leases held by it or any of its Subsidiaries to any party or parties to
facilitate an arms'-length public or private sale for the benefit of the
Administrative Agent. In furtherance of this right, the Grantor shall (i)
cooperate fully with the Administrative Agent in obtaining all approvals and
consents from the FCC and each other Governmental Authority and from any third
parties that the Administrative Agent may deem necessary or advisable to
accomplish any such transfer or assignment of the Pledged Stock or such FCC
Licenses and Spectrum Leases, and (ii) prepare, execute and file with the FCC
and any other Governmental Authority any application, request for consent,
certificate or instrument that the Administrative Agent may deem necessary or
advisable to accomplish any such transfer or assignment of the Pledged Stock and
such FCC Licenses and Spectrum Leases. If the Grantor fails to execute such
applications, requests for consent, certificates or instruments, the clerk of
any court that has jurisdiction over the Loan Documents may, upon an ex parte
request by the Administrative Agent, execute and file the same on behalf of the
Grantor for purposes of placing such request before the FCC, to the extent
permitted by the FCC;
(c) No action shall be taken with respect to the Collateral unless and
until all applicable requirements (if any) of the FCC under the Communications
Act of 1934, as amended, and the respective rules and regulations thereunder
have been satisfied with respect to such action and there have been obtained
such consents, approvals and authorizations (if any) as may be required to be
obtained from the FCC;
(d) Following an event of default all ownership interest in the FCC License
Rights and other Collateral will remain with the relevant Grantor unless and
until the prior consent (if required) of the FCC pursuant to 47 U.S.C. Section
310(d) shall have been obtained;
(e) The creation of any Lien, and the exercise of any remedy, with respect
to any FCC License Rights shall be consistent with the rules and regulations
administered by the FCC;
(f) Each Secured Party, by acceptance of the benefits hereof, acknowledges
that: (i) the security interest/Liens hereunder and ability to foreclose thereon
will be limited by the need to comply with applicable law; (ii) it is not
entitled to exercise any rights with respect to the Collateral if such action
would constitute or result in any assignment of an FCC License Right or any
change of control (whether as a matter of law or fact) of the holder of any FCC
License Right unless the prior approval of the FCC is first obtained; (iii) no
Grantor can assure the Administrative Agent and the Secured Parties that any
such required FCC approval can be obtained on a timely basis or at all; (iv) the
requirement to obtain prior FCC approval may limit the number of potential
bidders for certain Collateral in any foreclosure and may delay any sale, either
of which events may have an adverse effect on the sale price of the Collateral;
and (v) therefore, the practical value of realizing on the Collateral may,
without the appropriate FCC consents, be limited; and
24
(g) Each Grantor acknowledges that the approval of the FCC, each other
appropriate Governmental Authority and each lessor, licensor or other party to
any Spectrum Lease to the assignment of the FCC Licenses or the transfer of
control of the Grantor whose stock is pledged hereunder is integral to the
Administrative Agent's realization of the value of the Collateral, including the
FCC Licenses and the Spectrum Leases, that there is no adequate remedy at law
for failure by the Grantor to comply with the provisions of this Section 8.5 and
that such failure could not be adequately compensable in damages. Therefore, the
Grantor agrees that the provisions of this Section 8.5 may be specifically
enforced, without any requirement to post bond (such rights being rally waived
by Grantor) and without regard to the adequacy of any remedies available at law
(the defense of the adequacy of remedies at law being fully waived by Grantor)
and that the Administrative Agent may seek to obtain approvals and consents with
respect to any Spectrum Lease directly from the lessor, licensor or other party
to any Spectrum Lease.
(h) The foregoing provisions of this Section 8.5, to the extent such
provisions relate to FCC License Rights (including any actions with respect
thereto), shall not apply to the Borrower at any time to the extent the Borrower
is not then required to pledge FCC License Rights hereunder pursuant to clause
(I) of the definition of "Excluded Assets", provided that the foregoing
provisions of this Section 8.5 shall in any event apply to the Borrower to the
extent such provisions relate to Pledged Stock (including any actions with
respect thereto) then pledged by the Borrower hereunder.
8.6 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; provided
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.7 Set-Off. Each Grantor hereby irrevocably authorizes the Administrative
Agent and each Lender at any time and from time to time when an Event of Default
shall have occurred and be continuing, to set-off and appropriate and apply any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such Lender
to or for the credit or the account of such Grantor, or any part thereof in such
amounts as the Administrative Agent or such Lender may elect, against and on
account of the obligations and liabilities of such Grantor to the Administrative
Agent or such Lender hereunder and claims of every nature and description of the
Administrative Agent or such Lender against such Grantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Document
or otherwise, as the Administrative Agent or such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender shall notify such Grantor
promptly of any such set-off and the application made by the Administrative
Agent or such Lender of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Administrative Agent and each Lender under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set- off) which the Administrative Agent or such Lender may have.
8.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.9 Severability. Any provision of this Agreement which 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
25
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.10 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.
8.11 Integration. This Agreement and the other Loan Documents represent the
agreement of the Grantors, the Administrative Agent and the Lenders with respect
to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.
8.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.13 Submission To Jurisdiction; Waivers. Each party hereto hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same and any other rights to jurisdiction to which it may be entitled as a
result of its domicile or otherwise;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages; provided
that, neither the Borrower nor any Guarantor shall be liable for any special,
exemplary, punitive or consequential damages.
8.14 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
26
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Administrative Agent and Lenders, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.
8.15 Additional Guarantors/Grantors. Each Subsidiary of the Borrower that
is required to become a party to this Agreement pursuant to Section 6.09 of the
Credit Agreement shall become a Grantor and/or Guarantor, as applicable, for all
purposes of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex II hereto.
8.16 Releases. (a) At such time as the Loans and the other Obligations
(other than Obligations in respect of Specified Swap Agreements) shall have been
paid in full (other than contingent payment obligations not due and payable),
the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) Any of the Collateral transferred or otherwise disposed of by any
Grantor in a transaction permitted by the Credit Agreement, shall be transferred
free of the Liens created hereby on such Collateral and such Liens shall
automatically terminate upon such permitted disposition. Upon the designation by
Borrower of any Grantor as an Unrestricted Subsidiary in accordance with Section
7.10 of the Credit Agreement, the Liens credited hereby on the Collateral of
such Grantor shall be automatically terminated. The Administrative Agent, at the
request and sole expense of such Grantor, shall execute and deliver to such
Grantor all releases or other documents reasonably necessary or desirable to
evidence any such release of the Liens created hereby on such Collateral. Any
Guarantor shall be automatically released from its obligations hereunder in the
event that all the Capital Stock of such Guarantor (or enough so that upon the
consummation of such sale it is no longer a Subsidiary) shall be sold,
transferred or otherwise disposed of or if such Guarantor is designated as an
Unrestricted Subsidiary, in each case in a transaction permitted by the Credit
Agreement.
8.17 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS
HEREOF, EACH AGENT AND EACH LENDER, HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.
CLEARWIRE CORPORATION
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President &
Chief Financial Officer
CLEARWIRE SPECTRUM HOLDINGS, LLC
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President &
Chief Financial Officer
CLEARWIRE TELECOMMUNICATIONS SERVICES,
LLC
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President &
Chief Financial Officer
CLEARWIRE US LLC
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President &
Chief Financial Officer
WINBEAM, INCORPORATED
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President &
Chief Financial Officer
[GUARANTEE AGREEMENT SIGNATURE PAGE]
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
For all Guarantors:
Guarantor
c/o Clearwire Corporation
0000 Xxxx Xxxxxxxxxx Xxxx. X.X.
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Guarantor
0000 Xxxx Xxxxxxxxxx Xxxx. X.X.
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
Xxxxx Xxxxxx Xxxxxxxx, LLP
0000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
Schedule 2
DESCRIPTION OF PLEDGED STOCK
Issuer Class of Stock Stock Certificate No. No. of Shares
------ -------------- --------------------- -------------
Clearwire Spectrum n/a: limited n/a n/a
Holdings LLC liability company
interests
Clearwire n/a: limited n/a n/a
Telecommunications liability company
Services, LLC interests
Winbeam, Incorporated Common Stock 49 2,267,112
Winbeam Xxxxxxxxxxxx, n/a: limited n/a n/a
LLC liability company
interests
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
GRANTOR FILING OFFICE
------- -------------
Clearwire Corporation Delaware Secretary of State
Clearwire Spectrum Holdings LLC Nevada Secretary of State
Clearwire Telecommunications Services, LLC Nevada Secretary of State
WinBeam, Incorporated Pennsylvania Secretary of State
Patent and Trademark Filings
None
Actions with respect to Pledged Stock
Delivery of existing certificates
Schedule 4
JURISDICTION OF ORGANIZATION, IDENTIFICATION NUMBER AND LOCATION OF CHIEF
EXECUTIVE OFFICE
Jurisdiction
of Identification Location of Chief
Grantor Organization Number Executive Office
------- ------------ -------------- -----------------
Clearwire Corporation Delaware 3720220 0000 Xxxx
Xxxxxxxxxx
Xxxx. X.X.,
Xxxxx 000
Xxxxxxxx, XX
00000
Clearwire Spectrum Nevada E0000000000-5 5808 Lake
Holdings LLC Xxxxxxxxxx
Xxxx. X.X.,
Xxxxx 000
Xxxxxxxx, XX
00000
Clearwire Nevada E0258682005 0000 Xxxx
Xxxxxxxxxxxxxxxxx Xxxxxxxxxx
Services, LLC Blvd. N.E.,
Suite 300
Kirkland, WA
98033
Clearwire US LLC Nevada LLC27127-2004 0000 Xxxx
Xxxxxxxxxx
Xxxx. X.X.,
Xxxxx 000
Xxxxxxxx, XX
00000
Winbeam, Incorporated Pennsylvania 2919033 0000 Xxxx
Xxxxxxxxxx Xxxx.
Xxxx. X.X.,
Xxxxx 000
Xxxxxxxx, XX
00000
