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EXHIBIT 4.4
EXECUTION COPY
AMENDED AND RESTATED SECURITY AGREEMENT (this "AGREEMENT")
dated as of April 16, 2002 among MCLEODUSA INCORPORATED, a
Delaware corporation (the "BORROWER"), each Subsidiary of the
Borrower listed on Schedule I hereto or becoming a party hereto
as provided in Section 7.16 hereof (each such Subsidiary
individually, a "SUBSIDIARY GRANTOR", and collectively, the
"SUBSIDIARY GRANTORS", and together with the Borrower, the
"GRANTORS") and JPMORGAN CHASE BANK (f/k/a The Chase Manhattan
Bank), a New York banking corporation ("JPMORGAN CHASE"), as
Collateral Agent for the Secured Parties (as defined herein).
Reference is made to (a) the Credit Agreement dated as of May 31, 2000
(as amended, supplemented or otherwise modified from time to time, the "EXISTING
CREDIT AGREEMENT") among the Borrower, the lenders from time to time party
thereto (the "EXISTING LENDERS") and JPMorgan Chase, as Administrative Agent and
Collateral Agent, (b) the Credit Agreement dated as of April 16, 2002 (as
amended, supplemented or otherwise modified from time to time, the "NEW CREDIT
AGREEMENT", and together with the Existing Credit Agreement, the "CREDIT
AGREEMENTS") among the Borrower, the lenders from time to time party thereto
(the "NEW LENDERS", and together with the Existing Lenders, the "LENDERS"), and
JPMorgan Chase, as Administrative Agent and Collateral Agent, and (c) the
Amended and Restated Subsidiary Guarantee Agreement dated as of April 16, 2002
(as amended, supplemented or otherwise modified from time to time, the
"SUBSIDIARY GUARANTEE AGREEMENT") among the Subsidiary Grantors and the
Collateral Agent.
Reference is also made to (a) the Subsidiary Security Agreement dated
as of May 31, 2000 (the "EXISTING SUBSIDIARY SECURITY AGREEMENT") among each
Subsidiary of the Borrower listed on Schedule I thereto and each other
Subsidiary that became a party thereto as provided in Section 7.15 thereof
(collectively, the "EXISTING SUBSIDIARY GRANTORS") and the Collateral Agent and
(b) the Borrower Security Agreement dated as of May 31, 2000 (the "EXISTING
BORROWER SECURITY AGREEMENT", and together with the Existing Subsidiary Security
Agreement, the "EXISTING SECURITY AGREEMENTS") among the Borrower and the
Collateral Agent. The Collateral Agent, the
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Borrower and the Existing Subsidiary Grantors now wish to amend and restate the
Existing Security Agreements as set forth herein. Each Existing Security
Agreement shall be amended and restated in the form hereof as of the Effective
Date (as defined in Section 7.18 hereof) and this amendment and restatement of
the Original Security Agreements shall not constitute a novation.
The Existing Lenders have made Loans (as defined in the Existing
Credit Agreement) under the Existing Credit Agreement (the "EXISTING AGREEMENT
LOANS") to the Borrower and the Issuing Bank (as defined in the Existing Credit
Agreement) under the Existing Credit Agreement (the "EXISTING AGREEMENT ISSUING
BANK") has issued Letters of Credit (as defined in the Existing Credit
Agreement) under the Existing Credit Agreement (the "EXISTING AGREEMENT LETTERS
OF CREDIT") for the account of the Borrower, pursuant to, and upon the terms and
subject to the conditions specified in, the Existing Credit Agreement. The New
Lenders have agreed to make Loans (as defined in the New Credit Agreement) under
the New Credit Agreement (the "NEW AGREEMENT LOANS", and together with the
Existing Agreement Loans, the "LOANS") to the Borrower and the Issuing Bank (as
defined in the New Credit Agreement) under the New Credit Agreement (the "NEW
AGREEMENT ISSUING BANK", and together with the Existing Agreement Issuing Bank,
the "ISSUING BANKS") has agreed to issue Letters of Credit (as defined in the
New Credit Agreement) under the New Credit Agreement (the "NEW AGREEMENT LETTERS
OF CREDIT", and together with Existing Agreement Letters of Credit, the "LETTERS
OF CREDIT") for the account of the Borrower, pursuant to, and upon the terms and
subject to the conditions specified in, the New Credit Agreement. Each of the
Subsidiary Grantors has agreed to guarantee, among other things, all the
Guaranteed Obligations (as defined herein). Each of the Grantors acknowledges
that it has and will derive substantial benefit from the making of the Loans by
the Lenders and the issuance of the Letters of Credit by the Issuing Banks under
the Credit Agreements. The obligations of the Existing Lenders to keep the
Existing Agreement Loans outstanding and of the Existing Agreement Issuing Banks
to keep the Existing Agreement Letters of Credit outstanding are conditioned on,
among other things, the execution and delivery of an Amended and Restated
Security Agreement in the form hereof. The obligations of the New Lenders to
make the New Agreement Loans and of the New Agreement Issuing Banks to issue the
New Agreement Letters of Credit are conditioned on, among other things, the
execution and delivery by the Grantors of an Amended and Restated
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Security Agreement in the form hereof. In consideration therefor, in
consideration for the Existing Agreement Loans previously made and the Existing
Agreement Letters of Credit previously issued under the Existing Credit
Agreement and in order to induce the New Lenders to make the New Agreement Loans
and the New Agreement Issuing Banks to issue the New Agreement Letters of Credit
under the New Credit Agreement, the Grantors are willing to execute this
Agreement. Each Grantor agrees that the Guaranteed Obligations may be extended
or renewed, in whole or in part, without notice to or further assent from it,
and that the security interest granted hereunder and the obligations of each
Grantor will survive any extension or renewal of any Guaranteed Obligation.
Accordingly, the Grantors and the Collateral Agent, on behalf of
itself and each Secured Party (and each of their respective successors or
assigns), hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITION OF TERMS USED HEREIN. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall have
the meanings set forth in the Credit Agreements and the Subsidiary Guarantee
Agreement, as applicable. To the extent of any conflict between the Existing
Credit Agreement and the New Credit Agreement, the definitions contained in the
New Credit Agreement shall control. As used in this Agreement, (i) the term
"COLLATERAL AGENT" shall mean JPMorgan Chase, as collateral agent under this
Agreement, the Existing Credit Agreement, the New Credit Agreement and the
Subsidiary Guarantee Agreement and (ii) the term "ORIGINAL AGREEMENT EXECUTION
DATE" shall mean May 31, 2000. All capitalized terms used in this Agreement and
defined in the New York UCC (as defined herein) and not otherwise defined in
this Agreement shall have the meanings specified therein; the term "instrument"
shall have the meaning specified in Article 9 of the New York UCC. The rules of
construction and interpretation specified in Sections 1.03 and 1.04 of the
Existing Credit Agreement and Sections 1.03 and 1.04 of the New Credit Agreement
also apply to this Agreement. To the extent of any conflict between the Existing
Credit Agreement and the New Credit Agreement, the rules of construction and
interpretation contained in the New Credit Agreement shall control.
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SECTION 1.02. DEFINITION OF CERTAIN TERMS USED HEREIN. As used herein,
the following terms shall have the following meanings:
"ACCOUNT DEBTOR" shall mean any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.
"ACCOUNTS" shall mean (a) all "Accounts", as such term is defined in
the New York UCC, and (b) all indebtedness owed to the Borrower by any
Subsidiary pursuant to the Intercompany Loan Agreement.
"ACCOUNTS RECEIVABLE" shall mean (a) all Accounts and all right, title
and interest in any returned goods, together with all rights, titles, securities
and guarantees with respect thereto, including any rights to stoppage in
transit, replevin, reclamation and resales, and all related security interests,
liens and pledges, whether voluntary or involuntary, in each case whether now
owned or hereafter arising or acquired and (b) the liens and security interests
granted pursuant to the Intercompany Security Agreement.
"ADMINISTRATIVE AGENTS" shall mean the Existing Agreement
Administrative Agent and the New Agreement Administrative Agent.
"BORROWER" shall have the meaning assigned to such term in the
preamble of this Agreement.
"COLLATERAL AGENT" shall have the meaning assigned to such term in
Section 1.01 of this Agreement.
"COPYRIGHT LICENSE" shall mean any written agreement, now or hereafter
in effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting to such Grantor the right to use any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"COPYRIGHTS" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental
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registrations and pending applications for registration in the United States
Copyright Office, including those listed on Schedule II hereto.
"CREDIT AGREEMENTS" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"DESIGNATED HEDGING AGREEMENT" shall mean any Hedging Agreement
designated by the Borrower as a secured obligation set forth on Schedule VI
attached hereto, as such Schedule may be modified from time to time.
"EXCLUDED COLLATERAL" shall mean (i) the Grantors= rights under
contracts and agreements which by their terms prohibit the granting of a
Security Interest therein or assignment thereof (except for (a) Accounts and
General Intangibles for money due or to become due thereunder and (b) any such
contract as to which consent for the Lien created hereby has been obtained);
provided, HOWEVER, that the foregoing limitation shall not affect, limit,
restrict or impair the grant by such Grantor of a security interest pursuant to
this Agreement in any such Guaranteed Obligations Collateral to the extent that
an otherwise applicable prohibition on such grant is rendered ineffective by the
Uniform Commercial Code as from time to time in effect or other applicable law,
(ii) Equipment subject to a capitalized lease or purchase money Liens permitted
under each Credit Agreement that prohibits the granting of any other Lien on
such Equipment; PROVIDED that such Equipment shall become Guaranteed Obligations
Collateral upon release of such capitalized lease or purchase money Lien, (iii)
property subject to a Lien permitted by Section 6.03(iii) of the Existing Credit
Agreement and Section 6.03(iii) of the New Credit Agreement if an agreement
relating to such Lien prohibits the granting of any other Lien on such property
and (iv) any Fixtures attached to real property that is subject to a Lien
permitted by each Credit Agreement.
"EXISTING AGREEMENT ADMINISTRATIVE AGENT" shall mean the
"Administrative Agent", as such term is defined in the Existing Credit
Agreement.
"EXISTING AGREEMENT EFFECTIVE DATE" shall mean the "Effective Date",
as such term is defined in the Existing Credit Agreement.
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"EXISTING AGREEMENT EVENT OF DEFAULT" shall mean an "Event of
Default", as such term is defined in the Existing Credit Agreement.
"EXISTING AGREEMENT GUARANTEED OBLIGATIONS" shall mean (i) the due and
punctual payment by the Borrower of (A) the principal of and premium, if any,
and interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, including the Bankruptcy
Proceeding, regardless of whether allowed or allowable in such proceeding) on
the Existing Agreement Loans under the Existing Credit Agreement, when and as
due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (B) each payment required to be made by the Borrower
under the Existing Credit Agreement in respect of any Existing Agreement Letters
of Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral and
(C) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, including the Bankruptcy
Proceeding, regardless of whether allowed or allowable in such proceeding), of
the Borrower to the Existing Agreement Secured Parties under the Existing Credit
Agreement or the other Existing Agreement Loan Documents, (ii) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Borrower and the other Existing Agreement Loan Parties under or pursuant
to the Existing Credit Agreement and the other Existing Agreement Loan Documents
and (iii) the due and punctual payment and performance of all obligations of any
Existing Agreement Loan Party under each Designated Hedging Agreement entered
into in connection with the Existing Credit Agreement with a counterparty that
was an Existing Lender (or an Affiliate of an Existing Lender) at the time such
Designated Hedging Agreement was entered into (or, if later, on the date of the
Existing Credit Agreement).
"EXISTING AGREEMENT ISSUING BANK" shall have the meaning assigned to
such term in the preliminary statement of this Agreement.
"EXISTING AGREEMENT LETTERS OF CREDIT" shall have the meaning assigned
to such term in the preliminary statement of this Agreement.
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"EXISTING AGREEMENT LOAN DOCUMENTS" shall mean the "Loan Documents",
as such term is defined in the Existing Credit Agreement.
"EXISTING AGREEMENT LOAN PARTIES" shall mean the "Loan Parties", as
such term is defined in the Existing Credit Agreement.
"EXISTING AGREEMENT PERMITTED INVESTMENTS" shall mean the "Permitted
Investments", as such term is defined in the Existing Credit Agreement.
"EXISTING AGREEMENT REQUIRED LENDERS" shall mean the "Required
Lenders", as such term is defined in the Existing Credit Agreement.
"EXISTING AGREEMENT SECURED PARTIES" shall mean (a) the Existing
Lenders, (b) the Swingline Lender (as defined in the Existing Credit Agreement),
(c) the Existing Agreement Administrative Agent, (d) the Collateral Agent, (e)
the Existing Agreement Issuing Bank, (f) each counterparty to a Designated
Hedging Agreement entered into with an Existing Agreement Loan Party if such
counterparty was an Existing Lender (or an Affiliate thereof) at the time such
Designated Hedging Agreement was entered into (or, if later, on the date of the
Existing Credit Agreement), (g) the beneficiaries of each indemnification
obligation undertaken by the Borrower under any Existing Agreement Loan Document
and (h) the successors and assigns of each of the foregoing.
"EXISTING BORROWER SECURITY AGREEMENT" shall have the meaning assigned
to such term in the preliminary statement of this Agreement.
"EXISTING CREDIT AGREEMENT" shall have the meaning assigned to such
term in the preliminary statement of this Agreement.
"EXISTING LENDERS" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"EXISTING SUBSIDIARY GRANTORS" shall have the meaning assigned to such
term in the preliminary statement of this Agreement.
"EXISTING SUBSIDIARY SECURITY AGREEMENT" shall have the meaning
assigned to such term in the preliminary statement of this Agreement.
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"GRANTORS" shall have the meaning assigned to such term in the
preamble of this Agreement.
"GUARANTEED OBLIGATIONS" shall mean the Existing Agreement Guaranteed
Obligations and the New Agreement Guaranteed Obligations.
"GUARANTEED OBLIGATIONS COLLATERAL" shall have the meaning assigned to
such term in Section 2.01.
"INTELLECTUAL PROPERTY" shall mean all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter acquired
by any Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"LENDERS" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"LICENSE" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense agreement to which any Grantor is a
party, including those listed on Schedule III hereto.
"LOANS" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"LOAN PARTIES" shall mean the Existing Agreement Loan Parties and the
New Agreement Loan Parties.
"LOAN DOCUMENTS" shall mean the Existing Agreement Loan Documents and
the New Agreement Loan Documents.
"NEW AGREEMENT ADMINISTRATIVE AGENT" shall mean the "Administrative
Agent", as such term is defined in the New Credit Agreement.
"NEW AGREEMENT EFFECTIVE DATE" shall mean the "Effective Date", as
such term is defined in the New Credit Agreement.
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"NEW AGREEMENT EVENT OF DEFAULT" shall mean an "Event of Default", as
such term is defined in the New Credit Agreement.
"NEW AGREEMENT GUARANTEED OBLIGATIONS" shall mean (i) the due and
punctual payment by the Borrower of (A) the principal of and premium, if any,
and interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding regardless of whether
allowed or allowable in such proceeding) on the New Agreement Loans under the
New Credit Agreement, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise, (B) each payment
required to be made by the Borrower under the New Credit Agreement in respect of
any New Agreement Letters of Credit, when and as due, including payments in
respect of reimbursement of disbursements, interest thereon and obligations to
provide cash collateral and (C) all other monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding
regardless of whether allowed or allowable in such proceeding), of the Borrower
to the New Agreement Secured Parties under the New Credit Agreement or the other
New Agreement Loan Documents, (ii) the due and punctual performance of all
covenants, agreements, obligations and liabilities of the Borrower and the other
New Agreement Loan Parties under or pursuant to the New Credit Agreement and the
other New Agreement Loan Documents and (iii) the due and punctual payment and
performance of all obligations of any New Agreement Loan Party under each
Designated Hedging Agreement entered into in connection with the New Credit
Agreement with a counterparty that was a New Lender (or an Affiliate of a New
Lender) at the time such Designated Hedging Agreement was entered into (or, if
later, on the date of the New Credit Agreement).
"NEW AGREEMENT ISSUING BANK" shall have the meaning assigned to such
term in the preliminary statement of this Agreement.
"NEW AGREEMENT LETTERS OF CREDIT" shall have the meaning assigned to
such term in the preliminary statement of this Agreement.
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"NEW AGREEMENT LOANS" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"NEW AGREEMENT LOAN DOCUMENTS" shall mean the "Loan Documents", as
such term is defined in the New Credit Agreement.
"NEW AGREEMENT LOAN PARTIES" shall mean the "Loan Parties", as such
term is defined in the New Credit Agreement.
"NEW AGREEMENT PERMITTED INVESTMENTS" shall mean the "Permitted
Investments", as such term is defined in the New Credit Agreement.
"NEW AGREEMENT REQUIRED LENDERS" shall mean the "Required Lenders", as
such term is defined in the New Credit Agreement.
"NEW AGREEMENT SECURED PARTIES" shall mean (a) the New Lenders, (b)
the New Agreement Administrative Agent, (c) the Collateral Agent, (d) the New
Agreement Issuing Bank, (e) each counterparty to a Designated Hedging Agreement
entered into with a New Agreement Loan Party if such counterparty was a New
Lender (or an Affiliate thereof) at the time such Designated Hedging Agreement
was entered into (or, if later, on the date of the New Credit Agreement), (f)
the beneficiaries of each indemnification obligation undertaken by the Borrower
under any New Agreement Loan Document and (g) the successors and assigns of each
of the foregoing.
"NEW CREDIT AGREEMENT" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"NEW LENDERS" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"NEW YORK UCC" means the Uniform Commercial Code as from time to time
in effect in the State of New York.
"PATENT LICENSE" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or
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hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement.
"PATENTS" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States or any
other country, all registrations and recordings thereof, and all applications
for letters patent of the United States or the equivalent thereof in any other
country, including registrations, recordings and pending applications in the
United States Patent and Trademark Office or the equivalent thereof in any
similar offices in any other country, including those listed on Schedule IV, and
(b) all reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.
"PERFECTION CERTIFICATE" means a certificate substantially in the form
of Exhibit I to the New Credit Agreement, completed and supplemented with the
schedules and attachments contemplated thereby, and duly executed by a Financial
Officer and the chief legal officer of the Borrower.
"PERMITTED INVESTMENTS" shall mean the Existing Agreement Permitted
Investments and the New Agreement Permitted Investments.
"PLEDGE AGREEMENT" shall mean the Amended and Restated Pledge
Agreement dated as of April 16, 2002, among the Borrower, the Subsidiaries set
forth on Schedule I thereto or becoming a party thereto as provided in Section
24 thereof and the Collateral Agent.
"PROCEEDS" has the meaning specified in Section 9-102 of the New York
UCC.
"REQUIRED LENDERS" shall mean the Existing Agreement Required Lenders
and the New Agreement Required Lenders.
"SECURED PARTIES" shall mean the Existing Agreement Secured Parties
and the New Agreement Secured Parties.
"SECURITY INTEREST" shall have the meaning assigned to such term in
Section 2.01.
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"SUBSIDIARY GRANTOR" and "SUBSIDIARY GRANTORS" shall have the meanings
assigned to such terms in the preamble of this Agreement.
"SUBSIDIARY GUARANTEE AGREEMENT" shall have the meaning assigned to
such term in the preliminary statement of this Agreement.
"TRADEMARK LICENSE" shall mean any written agreement, now or hereafter
in effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"TRADEMARKS" shall mean all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and pending applications in the United States Patent and Trademark Office, any
State of the United States or any similar offices in any other country or any
political subdivision thereof, and all extensions or renewals thereof, including
those listed on Schedule V, except for "Intent to Use" applications for
Trademark or service mark registrations filed pursuant to Section 1(b) of the
Lanham Act, unless and until an Amendment to Allege Use or a Statement of Use
under Section 1(c) and 1(d) of said Act has been filed, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.
ARTICLE II
SECURITY INTEREST
SECTION 2.01. SECURITY INTEREST. (a) As security for the payment or
performance, as the case may be, in full of the Guaranteed Obligations, each
Grantor hereby assigns and pledges to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, and hereby grants to
the Collateral
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Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest (the "SECURITY INTEREST"), in all right, title or
interest in or to any and all of the following assets and properties 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 "GUARANTEED OBLIGATIONS COLLATERAL"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Intellectual Property;
(x) all Investment Property;
(xi) Letter-of-credit rights;
(xii) specified commercial tort claims, if any;
(xiii) all books and records pertaining to the Guaranteed
Obligations Collateral; and
(xiv) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the foregoing;
PROVIDED, HOWEVER, that the Guaranteed Obligations Collateral shall not include
the Excluded Collateral.
(b) Each Grantor hereby irrevocably authorizes the Collateral Agent at
any time and from time to time to file in any relevant jurisdiction any initial
financing statements (including fixture filings) and amendments thereto that
contain the information required by Article 9 of the Uniform Commercial Code of
each applicable
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jurisdiction for the filing of any financing statement or amendment, including
(a) whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor and (b) in the case
of a financing statement filed as a fixture filing or covering Guaranteed
Obligations Collateral constituting minerals or the like to be extracted or
timber to be cut, a sufficient description of the real property to which such
Guaranteed Obligations Collateral relates. Each Grantor agrees to provide such
information to the Collateral Agent promptly upon request.
Each Grantor also ratifies its authorization for the Collateral Agent
to file in any relevant jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.
The Collateral Agent is further authorized to file with the United
States Patent and Trademark Office or United States Copyright Office (or any
successor office or any similar office in any other country) such other
documents as may be necessary or advisable for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest granted by
each Grantor, without the signature of any Grantor, and naming any Grantor or
the Grantors as debtors and the Collateral Agent as secured party.
(c) The Security Interest is granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or in any way alter
or modify, any obligation or liability of any Grantor with respect to or arising
out of the Guaranteed Obligations Collateral.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:
SECTION 3.01. TITLE AND AUTHORITY. Each Grantor has good and valid
rights in and title to the Guaranteed Obligations Collateral with respect to
which it has purported to grant a Security Interest hereunder and has full power
and authority to grant to the Collateral Agent the Security Interest in such
Guaranteed
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Obligations Collateral pursuant hereto and to execute, deliver and perform its
obligations in accordance with the terms of this Agreement, without the consent
or approval of any other person other than any consent or approval which has
been obtained.
SECTION 3.02. FILINGS. (a) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein,
including the exact legal name of each Grantor, is correct and complete. Fully
authorized Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Guaranteed Obligations Collateral
have been delivered to the Collateral Agent for filing in each governmental,
municipal or other office specified in Schedule 6 to the Perfection Certificate
(or specified by notice from the Borrower to the Existing Agreement
Administrative Agent or the New Agreement Administrative Agent, as the case may
be, after the Existing Agreement Effective Date in the case of filings,
recordings or registrations required by Section 5.03(a) or 5.12 of the Existing
Credit Agreement or Section 5.03(a) or 5.12 of the New Credit Agreement,
respectively) which are all the filings, recordings and registrations (other
than filings required to be made in the United States Patent and Trademark
Office and the United States Copyright Office in order to perfect the Security
Interest in Guaranteed Obligations Collateral consisting of United States
Patents, Trademarks and Copyrights) that are necessary to publish notice of and
protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Collateral Agent (for the ratable benefit of the
Secured Parties) in respect of all Guaranteed Obligations Collateral in which
the Security Interest may be perfected by filing, recording or registration in
the United States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.
(b) Each Grantor represents and warrants that fully executed security
agreements in the form hereof or in a form appropriate for filing with the
appropriate office, to the satisfaction of the Collateral Agent, and containing
a description of all Guaranteed Obligations Collateral consisting of
Intellectual Property with respect to United States Patents and United States
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registered Trademarks (and Trademarks for which United States registration
applications are pending) and United States registered Copyrights have been
delivered to the Collateral Agent for recording by the United States Patent and
Trademark Office and the United States Copyright Office pursuant to 35 U.S.C.
Section 261, 15 U.S.C. Section 1060 or 17 U.S.C. Section 205 and the regulations
thereunder, as applicable, and otherwise as may be required pursuant to the laws
of any other necessary jurisdiction, to protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Guaranteed
Obligations Collateral consisting of Patents, Trademarks and Copyrights in which
a security interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories and
possessions, or in any other necessary jurisdiction, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Guaranteed Obligations Collateral
consisting of Patents, Trademarks and Copyrights (or registration or application
for registration thereof) acquired or developed after the date hereof).
SECTION 3.03. VALIDITY OF SECURITY INTEREST. The Security Interest
constitutes (a) a legal and valid security interest in all the Guaranteed
Obligations Collateral securing the payment and performance of the Guaranteed
Obligations, (b) subject to the filings described in Section 3.02 above, a
perfected security interest in all Guaranteed Obligations Collateral in which a
security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions (except as to
vehicles) and (c) a security interest that shall be perfected in all Guaranteed
Obligations Collateral in which a security interest may be perfected upon the
receipt and recording of this Agreement with the United States Patent and
Trademark Office and the United States Copyright Office, as applicable. The
Security Interest is and shall be prior to any other Lien on any of the
Guaranteed Obligations Collateral, other than Liens expressly permitted to be
prior to the Security Interest pursuant to Section 6.03 of the Existing Credit
Agreement and Section 6.03 of the New Credit Agreement.
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SECTION 3.04. ABSENCE OF OTHER LIENS. The Guaranteed Obligations
Collateral is owned by the Grantors free and clear of any Lien, except for Liens
expressly permitted pursuant to Section 6.03 of the Existing Credit Agreement
and Section 6.03 of the New Credit Agreement. No Grantor has filed or consented
to the filing of (a) any financing statement or analogous document under the
Uniform Commercial Code or any other applicable laws covering any Guaranteed
Obligations Collateral, (b) any assignment in which any Grantor assigns any
Guaranteed Obligations Collateral or any security agreement or similar
instrument covering any Guaranteed Obligations Collateral with the United States
Patent and Trademark Office or the United States Copyright Office or (c) any
assignment in which any Grantor assigns any Guaranteed Obligations Collateral or
any security agreement or similar instrument covering any Guaranteed Obligations
Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Liens expressly
permitted pursuant to Section 6.03 of the Existing Credit Agreement and Section
6.03 of the New Credit Agreement. None of the Grantors hold any commercial tort
claim except as indicated on the Perfection Certificate.
ARTICLE IV
COVENANTS
SECTION 4.01. CHANGE OF NAME; LOCATION OF GUARANTEED OBLIGATIONS
COLLATERAL; RECORDS; PLACE OF BUSINESS. (a) Each Grantor agrees promptly to
notify the Collateral Agent in writing of any change (i) in its corporate name,
(ii) in the location of its chief executive office, its principal place of
business, any office in which it maintains books or records relating to
Guaranteed Obligations Collateral owned by it or any office or facility at which
Guaranteed Obligations Collateral (other than real property and improvements and
fixtures thereto) owned by it with a book value in excess of $250,000 is located
(including the establishment of any such new office or facility), (iii) in its
identity, type of organization, corporate structure or jurisdiction of
incorporation or organization or (iv) in its Federal Taxpayer Identification
Number or other identification number given by its jurisdiction of incorporation
or organization. Each Grantor agrees not to effect or permit any change referred
to in the preceding sentence
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unless all filings have been made under the Uniform Commercial Code or otherwise
that are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected first priority
security interest in all the Guaranteed Obligations Collateral. Each Grantor
agrees promptly to notify the Collateral Agent if any material portion of the
Guaranteed Obligations Collateral owned or held by such Grantor is damaged or
destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense, such
complete and accurate records with respect to the Guaranteed Obligations
Collateral owned by it as is consistent with its current practices and in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged, but in any
event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Guaranteed Obligations
Collateral, and, at such time or times as the Collateral Agent may reasonably
request, promptly to prepare and deliver to the Collateral Agent a duly
certified schedule or schedules in form and detail satisfactory to the
Collateral Agent showing the identity, amount and location of any and all
Guaranteed Obligations Collateral.
SECTION 4.02. PERIODIC CERTIFICATION. Each year, at the time of
delivery of annual financial statements with respect to the preceding fiscal
year pursuant to Section 5.01 of the Existing Credit Agreement and Section 5.01
of the New Credit Agreement, the Borrower shall deliver to the Collateral Agent
a certificate executed by a Financial Officer and a legal officer of the
Borrower (a) setting forth the information required pursuant to Section 2 of the
Perfection Certificate or confirming that there has been no change in such
information since the date of such certificate or the date of the most recent
certificate delivered pursuant to this Section 4.02 and (b) certifying that all
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations, including
all refilings, rerecordings and reregistrations, containing a description of the
Guaranteed Obligations Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (a) above to the extent necessary to protect and
perfect the Security Interest for a period of not less than 18 months after the
date of such certificate (except as noted therein with respect to any
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continuation statements to be filed within such period). Each certificate
delivered pursuant to this Section 4.02 shall identify in the format of Schedule
II, III, IV or V, as applicable, all Intellectual Property of any Grantor in
existence on the date thereof and not then listed on such Schedules or
previously so identified to the Collateral Agent.
SECTION 4.03. PROTECTION OF SECURITY. Each Grantor shall, at its own
cost and expense, take any and all actions necessary to defend title to the
Guaranteed Obligations Collateral against all Persons and to defend the Security
Interest of the Collateral Agent in the Guaranteed Obligations Collateral and
the priority thereof against any Lien not expressly permitted pursuant to
Section 6.03 of the Existing Credit Agreement and Section 6.03 of the New Credit
Agreement.
SECTION 4.04. FURTHER ASSURANCES. Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the Collateral
Agent may from time to time request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable under or in
connection with any of the Guaranteed Obligations Collateral shall be or become
evidenced by any promissory note or other instrument (other than promissory
notes issued by Illinois Consolidated Telephone Company and set forth in
Schedule 6.02 to the Existing Credit Agreement and Schedule 6.02 of the New
Credit Agreement), such note or instrument shall be immediately pledged and
delivered to the Collateral Agent, duly endorsed in a manner satisfactory to the
Collateral Agent. Each Grantor further agrees that it will not take any action
or permit any action to be taken that would cause any membership interest in a
limited liability company or partnership interest pledged hereunder to become a
"security" as defined in Article 8 of the Uniform Commercial Code of any State
or the District of Columbia, unless such membership interest or partnership
interest has been certificated and pledged to the Collateral Agent pursuant to
the Pledge Agreement.
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Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to
supplement this Agreement by supplementing Schedule II, III, IV or V hereto or
adding additional schedules hereto to specifically identify any asset or item
that may constitute Copyrights, Licenses, Patents or Trademarks; provided,
HOWEVER, that any Grantor shall have the right, exercisable within 10 days after
it has been notified by the Collateral Agent of the specific identification of
such Guaranteed Obligations Collateral, to advise the Collateral Agent in
writing of any inaccuracy of the representations and warranties made by such
Grantor hereunder with respect to such Guaranteed Obligations Collateral. Each
Grantor agrees that it will use its reasonable best efforts to take such action
as shall be necessary in order that all representations and warranties hereunder
shall be true and correct with respect to such Guaranteed Obligations Collateral
within 30 days after the date it has been notified by the Collateral Agent of
the specific identification of such Guaranteed Obligations Collateral.
SECTION 4.05. INSPECTION AND VERIFICATION. The Collateral Agent and
such Persons as the Collateral Agent may reasonably designate shall have the
right, at the Grantors' own cost and expense, to inspect the Guaranteed
Obligations Collateral, all records related thereto (and to make extracts and
copies from such records) and the premises upon which any of the Guaranteed
Obligations Collateral is located, to discuss the Grantors' affairs with the
officers of the Grantors and, upon an Existing Agreement Event of Default or a
New Agreement Event of Default, with their independent accountants and to verify
under reasonable procedures the validity, amount, quality, quantity, value,
condition and status of, or any other matter relating to, the Guaranteed
Obligations Collateral, including, in the case of Accounts or Guaranteed
Obligations Collateral in the possession of any third person, by contacting
Account Debtors or the third person possessing such Guaranteed Obligations
Collateral for the purpose of making such a verification. The Collateral Agent
shall have the absolute right to share any information it gains from such
inspection or verification with any Secured Party (it being understood that any
such information shall be deemed to be "Information" subject to the provisions
of Section 9.12 of the Existing Credit Agreement and Section 9.12 of the New
Credit Agreement).
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SECTION 4.06. TAXES; ENCUMBRANCES. At its option, the Collateral Agent
may discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Guaranteed
Obligations Collateral and not permitted pursuant to Sections 5.05 and 6.03 of
the Existing Credit Agreement and Sections 5.05 and 6.03 of the New Credit
Agreement, and may pay for the maintenance and preservation of the Guaranteed
Obligations Collateral to the extent any Grantor fails to do so as required by
the Credit Agreements or this Agreement, and each Grantor jointly and severally
agrees to reimburse the Collateral Agent on demand for any payment made or any
expense incurred by the Collateral Agent pursuant to the foregoing
authorization; PROVIDED, HOWEVER, that nothing in this Section 4.06 shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Loan Documents.
SECTION 4.07. ASSIGNMENT OF SECURITY INTEREST. If at any time any
Grantor shall take a security interest in any property of an Account Debtor or
any other person to secure payment and performance of an Account, such Grantor
shall promptly assign such security interest to the Collateral Agent. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other person granting the security interest. The
Borrower hereby assigns to the Collateral Agent the security interest that is
created by the Intercompany Security Agreement to secure the payment of Accounts
due under the Intercompany Loan Agreement.
SECTION 4.08. CONTINUING OBLIGATIONS OF THE SUBSIDIARY GRANTORS. Each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Guaranteed Obligations Collateral, all in accordance
with the terms and conditions thereof, and each Grantor jointly and severally
agrees to indemnify and hold harmless the Collateral Agent and the Secured
Parties from and against any and all liability for such performance.
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SECTION 4.09. USE AND DISPOSITION OF GUARANTEED OBLIGATIONS
COLLATERAL. None of the Grantors shall make or permit to be made an assignment,
pledge or hypothecation of the Guaranteed Obligations Collateral or shall grant
any other Lien in respect of the Guaranteed Obligations Collateral, except as
expressly permitted by Section 6.03 of the Existing Credit Agreement and Section
6.03 of the New Credit Agreement. None of the Grantors shall make or permit to
be made any assignment or transfer of the Guaranteed Obligations Collateral and
each Grantor shall remain at all times in possession of the Guaranteed
Obligations Collateral owned by it, except that (a) Inventory may be sold in the
ordinary course of business and (b) unless and until an Existing Agreement Event
of Default or a New Agreement Event of Default shall have occurred and be
continuing, that during the continuance thereof the Grantors shall not sell,
convey, lease, assign, transfer or otherwise dispose of any Guaranteed
Obligations Collateral (which notice may be given by telephone if promptly
confirmed in writing), the Grantors may use and dispose of the Guaranteed
Obligations Collateral in any lawful manner not inconsistent with the provisions
of this Agreement, the Existing Credit Agreement, the New Credit Agreement or
any other Loan Document. Without limiting the generality of the foregoing, each
Grantor agrees that it shall not permit any Inventory having an aggregate value
of more than $5,000,000 to be in the possession or control of any warehouseman,
bailee, agent or processor at any time unless such warehouseman, bailee, agent
or processor shall have been notified of the Security Interest and shall have
agreed in writing to hold the Inventory subject to the Security Interest and the
instructions of the Collateral Agent.
SECTION 4.10. LIMITATION ON MODIFICATION OF ACCOUNTS. None of the
Grantors will, without the Collateral Agent's prior written consent, grant any
extension of the time of payment of any of the Accounts Receivable, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its good faith business judgment.
SECTION 4.11. INSURANCE. The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage to
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the Inventory and Equipment in accordance with Section 5.07 of the Existing
Credit Agreement and Section 5.07 of the New Credit Agreement. Each Grantor
irrevocably makes, constitutes and appoints the Collateral Agent (and all
officers, employees or agents designated by the Collateral Agent) as such
Grantor's true and lawful agent (and attorney-in-fact) for the purpose, during
the continuance of an Existing Agreement Event of Default or a New Agreement
Event of Default, of making, settling and adjusting claims in respect of
Guaranteed Obligations Collateral under policies of insurance, endorsing the
name of such Grantor on any check, draft, instrument or other item of payment
for the proceeds of such policies of insurance and for making all determinations
and decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or to pay any premium in whole or in part relating thereto, the
Collateral Agent may, without waiving or releasing any obligation or liability
of the Grantors hereunder or any Existing Agreement Event of Default or any New
Agreement Event of Default, in its sole discretion, obtain and maintain such
policies of insurance and pay such premium and take any other actions with
respect thereto as the Collateral Agent deems advisable. All sums disbursed by
the Collateral Agent in connection with this Section 4.11, including reasonable
attorneys' fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by the Grantors to the Collateral Agent and shall be
additional Guaranteed Obligations secured hereby.
SECTION 4.12. LEGEND. If requested by the Collateral Agent, each
Grantor shall legend, in form and manner satisfactory to the Collateral Agent,
its Accounts Receivable and its books, records and documents evidencing or
pertaining thereto with an appropriate reference to the fact that such Accounts
Receivable have been assigned to the Collateral Agent for the benefit of the
Secured Parties and that the Collateral Agent has a security interest therein.
The Borrower shall, whether or not requested by the Collateral Agent, legend, in
form and manner satisfactory to the Collateral Agent, all Accounts representing
Indebtedness under the Intercompany Loan Agreement and its books, records and
documents evidencing or pertaining thereto with an appropriate reference to the
fact that such Accounts have been assigned to the Collateral Agent for the
benefit of the Secured Parties and that the Collateral Agent has a security
interest therein.
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SECTION 4.13. COVENANTS REGARDING PATENT, TRADEMARK AND COPYRIGHT
GUARANTEED OBLIGATIONS COLLATERAL. (a) Each Grantor agrees that it will not, nor
will it permit any of its licensees to, do any act, or omit to do any act,
whereby any Patent which is material to the conduct of the business of the
Borrower and the Restricted Subsidiaries, taken as a whole, may become
invalidated or dedicated to the public, and agrees that it shall continue to
mark any products covered by such Patent with the relevant patent number as
necessary and sufficient to establish and preserve its maximum rights under
applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of the business
of the Borrower and the Restricted Subsidiaries, taken as a whole, (i) maintain
such Trademark in full force free from any claim of abandonment or invalidity
for non-use, (ii) maintain the quality of products and services offered under
such Trademark, (iii) display such Trademark with notice of Federal or foreign
registration to the extent necessary and sufficient to establish and preserve
its maximum rights under applicable law and (iv) not knowingly use or knowingly
permit the use of such Trademark in violation of any third party rights.
(c) Each Grantor (either itself or through its licensees or
sublicensees) will, for each work covered by a Copyright material to the conduct
of the business of the Borrower and the Restricted Subsidiaries, taken as a
whole, continue to publish, reproduce, display, adopt and distribute the work
with appropriate copyright notice as necessary and sufficient to establish and
preserve its rights under applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent immediately if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the conduct of the business of the Borrower and the Restricted Subsidiaries,
taken as a whole, may become abandoned, lost or dedicated to the public, or of
any adverse determination or development (including the institution of, or any
such determination or development in, any proceeding in the United States Patent
and Trademark Office, United States Copyright Office or any court or similar
office of any country) regarding such Grantor's ownership of any such Patent,
Trademark or Copyright, its right to register the same, or its right to keep and
maintain the same.
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(e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright material to the conduct of the business of the Borrower and the
Restricted Subsidiaries, taken as a whole, (or for the registration of any such
Trademark or Copyright) with the United States Patent and Trademark Office,
United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, unless it promptly informs the Collateral Agent, and, upon
request of the Collateral Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Collateral Agent may request to
evidence the Collateral Agent's security interest in such Patent, Trademark or
Copyright, and each Grantor hereby appoints the Collateral Agent as its
attorney-in-fact to execute and file such writings for the foregoing purposes,
all acts of such attorney being hereby ratified and confirmed; such power, being
coupled with an interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
the business of the Borrower and the Restricted Subsidiaries, taken as a whole,
including timely filings of applications for renewal, affidavits of use,
affidavits of incontestability and payment of maintenance fees, and, if
consistent with good business judgment, to initiate opposition, interference and
cancelation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any
Guaranteed Obligations Collateral consisting of a Patent, Trademark or Copyright
material to the conduct of the business of the Borrower and the Restricted
Subsidiaries, taken as a whole, has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly sue for infringement, misappropriation or dilution and to recover any
and all
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damages for such infringement, misappropriation or dilution, and take such other
actions as are appropriate under the circumstances to protect such Guaranteed
Obligations Collateral.
(h) Upon and during the continuance of an Existing Agreement Event of
Default or a New Agreement Event of Default, each Grantor shall use its best
efforts to obtain all requisite consents or approvals by the licensor of each
Copyright License, Patent License or Trademark License to effect the assignment
of all of such Grantor's right, title and interest thereunder to the Collateral
Agent or its designee.
SECTION 4.14. OTHER ACTIONS. In order to further insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent's security interest in the Guaranteed
Obligations Collateral, each Grantor agrees, in each case at such Grantor's own
expense, to take the following actions with respect to the following Guaranteed
Obligations Collateral:
(a) INSTRUMENTS. If any Grantor shall at any time hold or acquire any
instruments, such Grantor shall forthwith endorse, assign and deliver the
same to the Collateral Agent, accompanied by such instruments of transfer
or assignment duly executed in blank as the Collateral Agent reasonably may
from time to time specify.
(b) DEPOSIT ACCOUNTS. For each Deposit Account that any Grantor at any
time opens or maintains, such Grantor shall, either (i) cause the
depositary bank to agree to comply at any time with instructions from the
Collateral Agent to such depositary bank directing the disposition of funds
from time to time credited to such Deposit Account, without further consent
of such Grantor, pursuant to an agreement in a form satisfactory to the
Collateral Agent, or (ii) arrange for the Collateral Agent to become the
customer of the depositary bank with respect to the Deposit Account, with
the Grantor being permitted, only with the consent of the Collateral Agent,
to exercise rights to withdraw funds from such Deposit Account. The
provisions of this paragraph shall not apply to (A) any Deposit Account for
which any Grantor, the depositary bank and the Collateral Agent have
entered into a cash collateral agreement specially negotiated among such
Grantor, the depositary bank and the Collateral
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Agent for the specific purpose set forth therein, (B) Deposit Accounts for
which the Collateral Agent is the depositary bank or (C) any Deposit
Account which holds assets with an aggregate value of less than
$10,000,000; PROVIDED, HOWEVER, that the Borrower shall have used and shall
use its reasonable best efforts to enter into an agreement of the type
described in clause (i) of this Section 4.14(b) with respect to any Deposit
Account that holds assets with an aggregate value of more than $1,000,000
but less than $10,000,000.
(c) INVESTMENT PROPERTY. Except to the extent otherwise provided under
the Pledge Agreement, if any Grantor shall at any time hold or acquire any
Certificated Securities, such Grantor shall forthwith endorse, assign and
deliver the same to the Collateral Agent, accompanied by such instruments
of transfer or assignment duly executed in blank as the Collateral Agent
may from time to time specify. If any Securities now or hereafter acquired
by any Grantor are uncertificated and are issued to such Grantor or its
nominee directed by the issuer thereof, such Grantor shall immediately
notify the Collateral Agent thereof and, at the Collateral Agent's request
and option, pursuant to an agreement in form and substance satisfactory to
the Collateral Agent, either (a) cause the issuer to agree to comply with
instructions from the Collateral Agent as to such Securities, without
further consent of any Grantor or such nominee, or (b) arrange for the
Collateral Agent to become the registered owner of the Securities. If any
Securities, whether certificated or uncertificated, or other Investment
Property now or hereafter acquired by any Grantor are held by such Grantor
or its nominee through a Securities Intermediary or Commodity Intermediary,
such Grantor shall immediately notify the Collateral Agent thereof and, to
the extent required by Section 5 hereof and at the Collateral Agent's
request and option, pursuant to an agreement in form and substance
satisfactory to the Collateral Agent, either (i) cause such Securities
Intermediary or (as the case may be) Commodity Intermediary to agree to
comply with entitlement orders or other instructions from the Collateral
Agent to such Securities Intermediary as to such Securities or other
Investment Property, or (as the case may be) to apply any value distributed
on account of any Commodity Contract as directed by the Collateral Agent to
such Commodity Intermediary,
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in each case without further consent of any Grantor or such nominee, or
(ii) in the case of Financial Assets or other Investment Property held
through a Securities Intermediary, arrange for the Collateral Agent to
become the entitlement holder with respect to such Investment Property,
with the Grantor being permitted, only with the consent of the Collateral
Agent, to exercise rights to withdraw or otherwise deal with such
Investment Property. The provisions of this paragraph shall not apply to
any Financial Assets credited to a Securities Account for which the
Collateral Agent is the Securities Intermediary.
(d) ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS. If any Grantor
at any time holds or acquires an interest in any electronic chattel paper
or any "transferable record," as that term is defined in Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, such Grantor shall promptly notify the Collateral
Agent thereof and, at the request of the Collateral Agent, shall take such
action as the Collateral Agent may reasonably request to vest in the
Collateral Agent control under New York UCC Section 9-105 of such
electronic chattel paper or control under Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or, as the case
may be, Section 16 of the Uniform Electronic Transactions Act, as so in
effect in such jurisdiction, of such transferable record.
(e) LETTER-OF-CREDIT RIGHTS. If any Grantor is at any time a
beneficiary under a letter of credit now or hereafter issued in favor of
such Grantor, such Grantor shall promptly notify the Collateral Agent
thereof and, at the request and option of the Collateral Agent, such
Grantor shall, pursuant to an agreement in form and substance satisfactory
to the Collateral Agent, either (i) arrange for the issuer of such letter
of credit to consent to an assignment to the Collateral Agent of the
proceeds of any drawing under the letter of credit or (ii) arrange for the
Collateral Agent to become the transferee beneficiary of the letter of
credit, with the Collateral Agent agreeing, in each case, that the Proceeds
of any drawing under the letter of credit are to be paid to the applicable
pledgor unless an Existing Agreement Event of Default or a New
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Agreement Event of Default has occurred and is continuing.
(f) COMMERCIAL TORT CLAIMS. If any Grantor shall at any time hold or
acquire a commercial tort claim, the Grantor shall immediately notify the
Collateral Agent thereof in a writing signed by such Grantor including a
summary description of such claim and grant to the Collateral Agent in such
writing a security interest therein and in the proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and substance
satisfactory to the Collateral Agent.
ARTICLE V
COLLECTIONS
SECTION 5. SECURITIES ACCOUNTS. The Grantors shall have, within 75
days after the Original Agreement Execution Date, caused any financial
intermediary through which they hold Permitted Investments to enter into a
control agreement in respect of such Permitted Investments for the benefit of
the Secured Parties in a form reasonably acceptable to the Collateral Agent;
PROVIDED, that (i) no such control agreement shall have been or shall be
required for any bank account so long as such bank account does not hold more
than $1 million, (ii) the Grantors shall have used and shall use their
reasonable best efforts to enter into such a control agreement with respect to
any bank account holding more than $1 million but less than $10 million (but the
time limit stated above shall not apply) and (iii) the Grantors shall in any
event not have allowed or shall in any event not allow $10 million or more to
have remained or remain for more than five days in any bank account that did not
become subject or is not subject to such a control agreement.
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ARTICLE VI
REMEDIES
SECTION 6.01. REMEDIES UPON DEFAULT. Upon the occurrence and during
the continuance of an Existing Agreement Event of Default or a New Agreement
Event of Default, each Grantor agrees to deliver each item of Guaranteed
Obligations Collateral to the Collateral Agent on demand, and it is agreed that
the Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Guaranteed
Obligations Collateral consisting of Intellectual Property, on demand, to cause
the Security Interest to become an assignment, transfer and conveyance of any of
or all such Guaranteed Obligations Collateral by the applicable Grantors to the
Collateral Agent, or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any such
Guaranteed Obligations Collateral throughout the world on such terms and
conditions and in such manner as the Collateral Agent shall determine (other
than in violation of any then-existing licensing arrangements to the extent that
waivers cannot be obtained), and (b) with or without legal process and with or
without prior notice or demand for performance, to take possession of the
Guaranteed Obligations Collateral and without liability for trespass to enter
any premises where the Guaranteed Obligations Collateral may be located for the
purpose of taking possession of or removing the Guaranteed Obligations
Collateral and, generally, to exercise any and all rights afforded to a secured
party under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Guaranteed Obligations Collateral, at a public or private sale or at any
broker's board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate. The Collateral
Agent shall be authorized at any such sale (if it deems it advisable to do so)
to restrict the prospective bidders or purchasers to Persons who will represent
and agree that they are purchasing the Guaranteed Obligations Collateral for
their own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Guaranteed
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Obligations Collateral so sold. Each such purchaser at any such sale shall hold
the property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
The Collateral Agent shall give the applicable Grantors 10 days'
written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-612 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Guaranteed Obligations Collateral. Such notice, in the case of a public sale,
shall state the time and place for such sale and, in the case of a sale at a
broker's board or on a securities exchange, shall state the board or exchange at
which such sale is to be made and the day on which the Guaranteed Obligations
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix and state in the notice (if any) of such sale. At any such sale, the
Guaranteed Obligations Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may (in
its sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Guaranteed Obligations Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of such
Guaranteed Obligations Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Guaranteed Obligations Collateral is made on credit or for future
delivery, the Guaranteed Obligations Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Guaranteed
Obligations Collateral so sold and, in case of any such failure, such Guaranteed
Obligations Collateral may be sold again upon like notice. At any public (or, to
the extent permitted by law, private) sale made
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pursuant to this Section, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Guaranteed Obligations
Collateral or any part thereof offered for sale and may make payment on account
thereof by using any claim then due and payable to such Secured Party from any
Grantor as a credit against the purchase price, and such Secured Party may, upon
compliance with the terms of sale, hold, retain and dispose of such property
without further accountability to any Grantor therefor. For purposes hereof, a
written agreement to purchase the Guaranteed Obligations Collateral or any
portion thereof shall be treated as a sale thereof; the Collateral Agent shall
be free to carry out such sale pursuant to such agreement and no Grantor shall
be entitled to the return of the Guaranteed Obligations Collateral or any
portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Existing
Agreement Events of Default and all New Agreement Events of Default Agreement
shall have been remedied and the Guaranteed Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Guaranteed Obligations Collateral or any portion
thereof pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. To the
extent permitted by applicable law any sale pursuant to the provisions of this
Section 6.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.
SECTION 6.02. APPLICATION OF PROCEEDS. The Collateral Agent shall
apply the proceeds of any collection or sale of the Guaranteed Obligations
Collateral, as well as any Guaranteed Obligations Collateral consisting of cash,
as follows:
FIRST, to the payment of all costs and expenses incurred by either
Administrative Agent or the Collateral Agent (in its capacity as such
hereunder or under any other Loan Document) in connection with such
collection or sale or otherwise in connection with this Agreement, any
other Loan Document or any of the Guaranteed Obligations, including all
court
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costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by either Administrative Agent or the
Collateral Agent hereunder or under any other Loan Document on behalf of
any Grantor and any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the New Agreement Guaranteed
Obligations (the amounts so applied to be distributed among the New
Agreement Secured Parties PRO RATA in accordance with the amounts of the
New Agreement Guaranteed Obligations owed to them on the date of any such
distribution);
THIRD, to the payment in full of the Existing Agreement Guaranteed
Obligations (the amounts so applied to be distributed among the Existing
Agreement Secured Parties PRO RATA in accordance with the amounts of the
Existing Agreement Guaranteed Obligations owed to them on the date of any
such distribution); and
FOURTH, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Guaranteed Obligations Collateral by the
Collateral Agent (including pursuant to a power of sale granted by statute or
under a judicial proceeding), the receipt of any such proceeds, moneys or
balances by the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Guaranteed
Obligations Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 6.03. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the
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Grantors) to use, license or sub-license any of the Guaranteed Obligations
Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Grantor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
shall be exercised, at the option of the Collateral Agent, solely upon the
occurrence and during the continuation of an Existing Agreement Event of Default
or a New Agreement Event of Default; PROVIDED that any license, sub-license or
other transaction entered into by the Collateral Agent in accordance herewith
shall be binding upon the Grantors notwithstanding any subsequent cure of such
Event of Default.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. NOTICES. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Existing Credit Agreement (with respect to the
Existing Lenders) and Section 9.01 of the New Credit Agreement (with respect to
the New Lenders). All communications and notices hereunder to any Subsidiary
Grantor shall be given to it at its address or telecopy number set forth on
Schedule I hereto, with a copy to the Borrower.
SECTION 7.02. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Existing Credit Agreement, the New Credit
Agreement any other Loan Document, any agreement with respect to any of the
Guaranteed Obligations or any other agreement or instrument relating to any of
the foregoing, (b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to any departure from the Existing Credit
Agreement, the New Credit Agreement, any other Loan Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of any Lien
on other collateral, or any release or amendment or waiver of or
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consent under or departure from any guarantee, securing or guaranteeing all or
any of the Guaranteed Obligations, or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Grantor in
respect of the Guaranteed Obligations or this Agreement.
SECTION 7.03. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Secured Parties and shall survive the execution and
delivery of the Loan Documents and the making by the Lenders of any Loans and
other extensions of credit contemplated by the Credit Agreements, regardless of
any investigation made by the Lenders or on their behalf and shall continue in
full force until this Agreement shall terminate.
SECTION 7.04. BINDING EFFECT; SEVERAL AGREEMENT. Subject to the
conditions set forth in Section 7.18 hereof, this Agreement shall become
effective as to any Grantor when a counterpart hereof executed on behalf of such
Grantor shall have been delivered to the Collateral Agent and a counterpart
hereof shall have been executed on behalf of the Collateral Agent, and
thereafter shall be binding upon such Grantor and the Collateral Agent and their
respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Guaranteed Obligations Collateral (and any such assignment or transfer shall be
void) except as expressly contemplated by this Agreement, the Existing Credit
Agreement or the New Credit Agreement. This Agreement shall be construed as a
separate agreement with respect to each Grantor and may be amended, modified,
supplemented, waived or released with respect to any Grantor without the
approval of any other Grantor and without affecting the obligations of any other
Grantor hereunder.
SECTION 7.05. SUCCESSORS AND ASSIGNS. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of any
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Grantor or the Collateral Agent that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and assigns.
SECTION 7.06. COLLATERAL AGENT'S FEES AND EXPENSES; INDEMNIFICATION.
(a) Each Grantor jointly and severally agrees to pay upon demand to the
Collateral Agent the amount of any and all reasonable expenses, including the
reasonable fees, disbursements and other charges of its counsel and of any
experts or agents, which the Collateral Agent may incur in connection with (i)
the administration of this Agreement (including the customary fees and charges
of the Collateral Agent for any audits conducted by it or on its behalf with
respect to the Accounts Receivable or Inventory), (ii) the custody or
preservation of, or the sale of, collection from or other realization upon any
of the Guaranteed Obligations Collateral, (iii) the exercise, enforcement or
protection of any of the rights of the Collateral Agent hereunder or (iv) the
failure of any Grantor to perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, each Grantor jointly and severally agrees to indemnify the
Collateral Agent and the other Indemnitees (as defined in Section 9.03 of the
Existing Credit Agreement) under the Existing Credit Agreement (the "EXISTING
INDEMNITEES") and the other Indemnitees (as defined in Section 9.03 of the New
Credit Agreement) under the New Credit Agreement (the "NEW INDEMNITEES", and
together with the Existing Indemnitees, the "INDEMNITEES") against, and hold
each of them harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable fees, disbursements and other charges of
counsel, incurred by or asserted against any of them arising out of, in any way
connected with, or as a result of, the execution, delivery or performance of
this Agreement or any agreement or instrument contemplated hereby or any claim,
litigation, investigation or proceeding relating hereto or to the Guaranteed
Obligations Collateral, whether or not any Indemnitee is a party thereto;
PROVIDED that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the bad faith, gross negligence or willful
misconduct of such Indemnitee.
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(c) Any such amounts payable as provided hereunder shall be additional
Guaranteed Obligations secured hereby and by the other Security Documents. The
provisions of this Section 7.06 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Guaranteed Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Collateral Agent or
any other Secured Party. All amounts due under this Section 7.06 shall be
payable within 10 days of written demand therefor.
SECTION 7.07. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. Each
Grantor hereby appoints the Collateral Agent the attorney-in-fact of such
Grantor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, the Collateral Agent shall have the right, upon the occurrence
and during the continuance of an Existing Agreement Event of Default or a New
Agreement Event of Default, with full power of substitution either in the
Collateral Agent's name or in the name of such Grantor (a) to receive, endorse,
assign and/or deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Guaranteed Obligations
Collateral or any part thereof; (b) to demand, collect, receive payment of, give
receipt for and give discharges and releases of all or any of the Guaranteed
Obligations Collateral; (c) to sign the name of any Grantor on any invoice or
bill of lading relating to any of the Guaranteed Obligations Collateral; (d) to
send verifications of Accounts Receivable to any Account Debtor; (e) to commence
and prosecute any and all suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect or otherwise realize on all or
any of the Guaranteed Obligations Collateral or to enforce any rights in respect
of any Guaranteed Obligations Collateral; (f) to settle, compromise, compound,
adjust or defend any actions, suits or proceedings relating to all or any of the
Guaranteed Obligations Collateral; (g) to notify, or to require any Grantor to
notify, Account Debtors to make payment directly to the Collateral Agent; and
(h) to use, sell, assign, transfer, pledge, make any agreement with respect
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to or otherwise deal with all or any of the Guaranteed Obligations Collateral,
and to do all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though the Collateral Agent were the
absolute owner of the Guaranteed Obligations Collateral for all purposes;
PROVIDED, that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral Agent, or
to present or file any claim or notice, or to take any action with respect to
the Guaranteed Obligations Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby. The Collateral
Agent and the other Secured Parties shall be accountable only for amounts
actually received as a result of the exercise of the powers granted to them
herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence or wilful misconduct.
SECTION 7.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.09. WAIVERS; AMENDMENT. (a) No failure or delay of the
Collateral Agent, either Administrative Agent, either Issuing Bank or any Lender
in exercising any power or right hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Collateral Agent hereunder and of the Collateral Agent, the Issuing Banks, the
Administrative Agents and the Lenders under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by any Grantor therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan or issuance of a Letter of Credit under either Credit
Agreement shall not be construed as a waiver of any
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Default (as defined in each Credit Agreement) under either Credit Agreement. No
notice to or demand on any Grantor in any case shall entitle such Grantor or any
other Grantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Grantor or Grantors with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.02 of the Existing Credit Agreement (with
respect to the Existing Lenders) and Section 9.02 of the New Credit Agreement
(with respect to the New Lenders).
SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OF THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.10.
SECTION 7.11. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
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SECTION 7.12 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract (subject to Section 7.04),
and shall become effective as provided in Section 7.04. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 7.13. HEADINGS. Article and Section headings used herein are
for the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 7.14. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Collateral Agent, the Administrative Agents, the
Issuing Banks or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Grantor or
its properties in the courts of any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to
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the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process by mail in the manner provided for notices in Section 7.01. Nothing in
this Agreement or any other Loan Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
SECTION 7.15. TERMINATION. This Agreement and the Security Interest
shall terminate when all the Guaranteed Obligations have been indefeasibly paid
in full, the Commitments (as defined in each Credit Agreement) under each Credit
Agreement have expired or been terminated, the LC Exposure under each Credit
Agreement has been reduced to zero and the Issuing Banks have no further
commitment to issue Letters of Credit under either Credit Agreement, at which
time the Collateral Agent shall execute and deliver to the Grantors, at the
Grantors' expense, all Uniform Commercial Code termination statements and
similar documents which the Subsidiary Grantors shall reasonably request to
evidence such termination. Upon the written request of a Grantor, the Collateral
Agent will execute appropriate financing statement amendments to confirm that
assets otherwise listed thereon are Excluded Collateral. Any execution and
delivery of termination statements or documents pursuant to this Section 7.15
shall be without recourse to or warranty by the Collateral Agent. A Subsidiary
Grantor shall automatically be released from its obligations hereunder and the
Security Interest in the Guaranteed Obligations Collateral of such Grantor shall
be automatically released in the event that all the capital stock of such
Grantor shall be sold, transferred or otherwise disposed of to a person that is
not the Borrower or an Affiliate of the Borrower in accordance with the terms of
the Credit Agreements; PROVIDED that the Required Lenders shall have consented
to such sale, transfer or other disposition (to the extent required by the
Existing Credit Agreement or the New Credit Agreement, as the case may be) and
the terms of such consent did not provide otherwise. If any of the Guaranteed
Obligations Collateral shall be sold or disposed of to a Person other than
another Grantor in a transaction (a) permitted under each Credit Agreement, (b)
consented to by the Required Lenders (or such greater number of Existing Lenders
or New Lenders the consent of which is required under the applicable Credit
Agreement) or (c) consummated on terms no less favorable than contemplated by
the Restructuring
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(as defined in the Credit Agreements), PROVIDED, HOWEVER, in
the case of this clause (c) that the proceeds of such transaction are applied in
the manner contemplated by the Restructuring, then such Guaranteed Obligations
Collateral shall be automatically released from the Lien created hereunder and,
in connection therewith, the Collateral Agent, at the request and sole expense
of the relevant Grantor, shall execute and deliver to such Grantor all releases
or other documents reasonably necessary or desirable for the release of the Lien
created hereby on such Guaranteed Obligations Collateral.
SECTION 7.16. ADDITIONAL SUBSIDIARY GRANTORS. Pursuant to Section 5.12
of the Existing Credit Agreement and Section 5.12 of the New Credit Agreement,
each Subsidiary Loan Party that was not in existence or was not a Subsidiary
Loan Party on the date of the respective Credit Agreement is required to enter
into this Agreement as a Subsidiary Grantor. Upon execution and delivery by the
Collateral Agent and a Subsidiary of an instrument in the form of Annex 1
hereto, such Subsidiary shall become a Subsidiary Grantor hereunder with the
same force and effect as if originally named as a Subsidiary Grantor herein. The
execution and delivery of any such instrument shall not require the consent of
any Grantor hereunder. The rights and obligations of each Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Subsidiary Grantor as a party to this Agreement.
SECTION 7.17. COMPLIANCE WITH LAWS. Notwithstanding anything herein
which may be construed to the contrary, no action shall be taken by any of the
Collateral Agent and the Secured Parties with respect to the Licenses or any
license, permit, certificate or authorization of the Federal Communications
Commission ("FCC") or any other federal, state or local regulatory or
governmental bodies applicable to or having jurisdiction over the Grantors
unless and until any required approval under the Federal Communications Act of
1934, and any applicable rules and regulations thereunder, requiring the consent
to or approval of such action by the FCC or any governmental or other
communications authority, have been satisfied and, to the extent applicable, any
action taken with respect to, concerning or affecting the Guaranteed Obligations
Collateral, directly or indirectly, or any Security Interest granted therein by
the Collateral Agent and the Secured Parties shall be subject to any required
approval of the FCC and any state or local communications
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regulatory authority and all applicable communications laws.
SECTION 7.18. EFFECTIVENESS. This Agreement shall become effective on
the first date on which the following conditions shall have been satisfied,
which date shall be in no event later than August 31, 2002 (the "EFFECTIVE
DATE"): (a) the Restructuring of the Borrower shall have been consummated on the
terms set forth on Annex I to the Third Amendment, as amended in accordance with
its terms, (b) the Reorganization Consummation Date shall have occurred and (c)
the Collateral Agent shall have received counterparts of this Agreement that
bear the signatures of the Collateral Agent and all of the Grantors.
<Page>
44
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
MCLEODUSA INCORPORATED,
by /s/ Chris A. Davis
-----------------------------
Name: Chris A. Davis
Title: Chief Operating and
Financial Officer
EACH OF THE SUBSIDIARY GRANTORS
LISTED ON SCHEDULE I HERETO,
by /s/ Chris A. Davis
------------------------
Name: Chris A. Davis
Title: Authorized Signatory
JPMORGAN CHASE BANK, as
Collateral Agent,
by /s/ John Kowalczuk
------------------------
Name: John Kowalczuk
Title: Vice President
<Page>
Schedule I to the
Amended and Restated Security Agreement
SUBSIDIARY GRANTORS
The following subsidiaries of McLeodUSA Incorporated, all of which utilize the
McLeodUSA headquarters address of McLeodUSA Technology Park, 6400 C Street, SW,
Cedar Rapids, Iowa 52406-3177, are all "Subsidiary Grantors" under the Amended
and Restated Security Agreement.
McLeodUSA Holdings, Inc.
McLeodUSA Telecommunications Services, Inc.
McLeodUSA Market Response, Inc.
Consolidated Market Response, Inc.
McLeodUSA Telecom Development, Inc.
McLeodUSA Network Services, Inc.
McLeodUSA Purchasing, L.L.C.
McLeodUSA Integrated Business Systems, Inc.
McLeodUSA Public Services, Inc.
McLeodUSA Community Telephone, Inc.
Dakota Community Telephone, Inc.
McLeodUSA Information Services, Inc.
CapRock Communications Corp.
CapRock Telecommunications Corp.
CapRock Fiber Network, Ltd.
CapRock Telecommunications Leasing Corp.
CapRock Design Services, L.P.
CapRock Network Services, L.P.
Intelispan, Inc.
Devise Associates, Inc.
<Page>
Schedule II to the
Amended and Restated Security Agreement
U.S. COPYRIGHTS OWNED BY MCLEODUSA INCORPORATED
U.S. COPYRIGHT REGISTRATIONS
TITLE OF WORK REG. NO. AUTHOR
Simply the Best SR 287-343 Gregg Hammann and
Mona Askalani
PENDING U.S. COPYRIGHT APPLICATIONS FOR REGISTRATION
None.
NON-U.S. COPYRIGHT REGISTRATIONS
None.
NON-U.S. PENDING COPYRIGHT APPLICATION FOR REGISTRATION
None.
<Page>
Schedule II to the
Amended and Restated Security Agreement
U.S. COPYRIGHTS OWNED BY ALL GRANTORS (OTHER THAN
MCLEODUSA INCORPORATED)
U.S. COPYRIGHT REGISTRATIONS
None.
PENDING U.S. COPYRIGHT APPLICATIONS FOR REGISTRATION
None.
NON-U.S. COPYRIGHT REGISTRATIONS
None.
NON-U.S. PENDING COPYRIGHT APPLICATION FOR REGISTRATION
None.
<Page>
Schedule III to the
Amended and Restated Security Agreement
LICENSES
PART 1
LICENSES/SUBLICENSES OF ALL GRANTORS (OTHER THAN MCLEODUSA
TELECOMMUNICATIONS SERVICES, INC. AND MCLEODUSA NETWORK
SERVICES, INC.) AS LICENSOR ON DATE HEREOF
A. COPYRIGHTS
U.S. COPYRIGHTS
Shrink-wrap and other non-exclusive information
technology licenses in connection with
information technology applications used in the
ordinary course of business
NON-U.S. COPYRIGHTS
None.
B. PATENTS
U.S. PATENTS
None.
U.S. PATENT APPLICATIONS
None.
NON-U.S. PATENTS
None.
NON-U.S. PATENT APPLICATIONS
None.
C. TRADEMARKS
U.S. TRADEMARKS
None.
U.S. TRADEMARK APPLICATIONS
<Page>
Schedule III to the
Amended and Restated Security Agreement
None.
NON-U.S. TRADEMARKS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
D. OTHERS
None.
<Page>
Schedule III to the
Amended and Restated Security Agreement
LICENSES
PART 1
LICENSES/SUBLICENSES OF MCLEODUSA TELECOMMUNICATIONS
SERVICES, INC. AS LICENSOR ON DATE HEREOF
A. COPYRIGHTS
U.S. COPYRIGHTS
Shrink-wrap and other non-exclusive information
technology licenses in connection with
information technology applications used in the ordinary
course of business
NON-U.S. COPYRIGHTS
None.
B. PATENTS
U.S. PATENTS
None.
U.S. PATENT APPLICATIONS
None.
NON-U.S. PATENTS
None.
NON-U.S. PATENT APPLICATIONS
None.
C. TRADEMARKS
U.S. TRADEMARKS
None.
<Page>
Schedule III to the
Amended and Restated Security Agreement
U.S. TRADEMARK APPLICATIONS
LICENSEE DATE OF
NAME LICENSE/ U.S. DATE APPLICATION
AND ADDRESS SUBLICENSE MARK FILED NO.
Quality Consulting, August 7, KnowledgePortal 06/01/99 75717573
Inc. 2001
2750 First Avenue
NE
Suite 424
Cedar Rapids, IA
52402
NON-U.S. TRADEMARKS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
D. OTHERS
[SKADDEN - Please list authority from governments to
place and operate our network and to provide
telecommunications services]
<Page>
Schedule III to the
Amended and Restated Security Agreement
LICENSES
PART 1
LICENSES/SUBLICENSES OF MCLEODUSA NETWORK
SERVICES, INC. AS LICENSOR ON DATE HEREOF
A. COPYRIGHTS
U.S. COPYRIGHTS
Shrink-wrap and other non-exclusive information
technology licenses in connection with
information technology applications used in the ordinary
course of business
NON-U.S. COPYRIGHTS
None.
B. PATENTS
U.S. PATENTS
None.
U.S. PATENT APPLICATIONS
None.
NON-U.S. PATENTS
None.
NON-U.S. PATENT APPLICATIONS
None.
C. TRADEMARKS
U.S. TRADEMARKS
Oral non-exclusive permission granted to James Petro to
use the corporate name "NewCom Technologies".
U.S. TRADEMARK APPLICATIONS
<Page>
Schedule III to the
Amended and Restated Security Agreement
None.
NON-U.S. TRADEMARKS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
D. OTHERS
[SKADDEN - Please list authority from governments to
place and operate our network and to provide
telecommunications services]
<Page>
Schedule III to the
Amended and Restated Security Agreement
LICENSES
PART 2
LICENSES/SUBLICENSES OF ALL GRANTORS AS LICENSEE ON DATE
HEREOF
A. COPYRIGHTS
U.S. COPYRIGHTS
Shrink-wrap and other non-exclusive information
technology licenses in connection with
information technology applications used in the ordinary
course of business
NON-U.S. COPYRIGHTS
None.
B. PATENTS
U.S. PATENTS
None.
U.S. PATENT APPLICATIONS
None.
NON-U.S. PATENTS
None.
NON-U.S. PATENT APPLICATIONS
None.
C. TRADEMARKS
U.S. TRADEMARKS
None.
<Page>
Schedule III to the
Amended and Restated Security Agreement
U.S. TRADEMARK APPLICATIONS
None.
NON-U.S. TRADEMARKS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
D. OTHERS
None.
<Page>
Schedule IV to the
Amended and Restated Security Agreement
PATENTS OWNED BY MCLEODUSA TELECOMMUNICATIONS SERVICES, INC.
U.S. PATENT REGISTRATIONS
None.
U.S. PATENT APPLICATIONS
PATENT FILING DATE
APPLICATION NO.
09/540,195 3/31/00
09/540,346 3/31/00
09/540,195 3/31/00
09/579,150 05/25/00
NON-U.S. PATENT REGISTRATIONS
None.
NON-U.S. PATENT APPLICATIONS
None.
<Page>
Schedule IV to the
Amended and Restated Security Agreement
PATENTS OWNED BY INTELISPAN, INC.
U.S. PATENT REGISTRATIONS
None.
U.S. PATENT APPLICATIONS
None.
U.S. PROVISIONAL PATENT APPLICATIONS
ATTORNEY DOCKET NO. FILING DATE
19621A-000200US January 2001
NON-U.S. PATENT REGISTRATIONS
None.
NON-U.S. PATENT APPLICATIONS
None.
<Page>
Schedule IV to the
Amended and Restated Security Agreement
PATENTS OWNED BY ALL GRANTORS (OTHER THAN MCLEODUSA
TELECOMMUNICATIONS SERVICES, INC. AND INTELISPAN, INC.)
U.S. PATENT REGISTRATIONS
None.
U.S. PATENT APPLICATIONS
None.
NON-U.S. PATENT REGISTRATIONS
None.
NON-U.S. PATENT APPLICATIONS
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY CAPROCK COMMUNICATIONS
CORP.
U.S. TRADEMARK REGISTRATIONS
None.
U.S. TRADEMARK APPLICATIONS
None.
STATE TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
TRADE NAMES
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY CAPROCK TELECOMMUNICATIONS
CORP.
U.S. TRADEMARK REGISTRATIONS
MARK REG. DATE REG. NO.
CAPROCK COMMUNICATIONS 9/07/99 2276194
WE GO BEYOND
CAPROCK COMMUNICATIONS 9/14/99 2278202
WE GO BEYOND W/STYLIZED "C"
WE GO BEYOND 2/13/01 2427857
U.S. TRADEMARK APPLICATIONS
None.
STATE TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
TRADE NAMES
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY CONSOLIDATED MARKET
RESPONSE INC.
U.S. TRADEMARK REGISTRATIONS
MARK REG. DATE REG. NO.
CONSOLIDATED MARKET
RESPONSE 2/17/98 2136588
U.S. TRADEMARK APPLICATIONS
None.
STATE TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
TRADE NAMES
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY INTELISPAN, INC.
U.S. TRADEMARK REGISTRATIONS
MARK REG. DATE REG. NO.
Intelispan 3/23/99 2233508
ExSPANd 3/21/00 2331001
TradeSPAN 8/15/00 2376669
U.S. TRADEMARK APPLICATIONS
None.
STATE TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
TRADE NAMES
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY MCLEODUSA
COMMUNITY TELEPHONE, INC.
U.S. TRADEMARK REGISTRATIONS
MARK REG. DATE REG. NO.
DTG DAKOTA
TELECOMMUNICATIONS GROUP 11/30/99 2295383
(Registered owner is Dakota Telecommunications Group,
Inc. which changed its name to the above
entity.)
U.S. TRADEMARK APPLICATIONS
None.
STATE TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
TRADE NAMES
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY MCLEODUSA INCORPORATED
U.S. TRADEMARK REGISTRATIONS
MARK REG. DATE REG. NO.
MCLEOD 9/16/97 2097023
MCLEODUSA 4/7/98 2149798
MCLEODUSA 4/7/98 2149799
MCLEOD USA 4/21/98 2151922
MCLEOD USA 8/25/98 2183392
MCLEOD USA 8/25/98 2183393
RUFFALOCODY 2/23/99 2225179
TELE-FUN 10/13/98 2196058
TELE-FUN 10/13/98 2196059
TQE 5/30/95 1897116
(Registered owner is McLeod Telecommunications, Inc.
which changed its name to the above entity.)
WE'RE SETTING YOUR WORLD
ON FIBER 4/11/00 2341331
U.S. TRADEMARK APPLICATIONS
MARK REG. DATE REG. NO.
CALLEDGE 9/05/00 78-024430
FASTDIRECT/DSL 10/17/00 78-031036
FLEXVIEW 1/03/01 78-041544
STATE TRADEMARK REGISTRATIONS
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
NON-U.S. TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
TRADE NAMES
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY MCLEODUSA HOLDINGS, INC.
U.S. TRADEMARK REGISTRATIONS
MARK REG. DATE REG. NO.
ACCESS LONG DISTANCE
A TELECOMMUNICATIONS
CORPORATION 4/4/95 1887486
CONSOLIDATED 4/4/95 1887489
FIRST CELLULAR 3/14/00 2327488
(Registered owner is Southern Illinois RSA Partnership
composed of Cellular Corp., Centel Cellular of
Illinois, Inc., and Consolidated Communications, Inc.
which changed its name to McLeodUSA Holdings,
Inc.)
FROM VISION COME VALUES 8/13/96 1993425
(Registered owner is Consolidated Communication Inc.
which changed its name to the above entity.)
U.S. TRADEMARK APPLICATIONS
MARK FILING DATE APPLICATION NO.
ONE SIMPLE CONNECTION 10/31/01 76-332376
STATE TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
TRADE NAMES
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY MCLEODUSA
TELECOMMUNICATIONS SERVICES, INC.
U.S. TRADEMARK REGISTRATIONS
MARK REG. DATE REG. NO.
ACCESS LONG DISTANCE 3/26/96 1963744
(Registered owner is Access Communications, Inc. which
dissolved into the above entity.)
CALLADVANTAGE 6/13/95 1900124
(Registered owner is Midwest Fibernet, Inc. which merged into
the above entity.)
CALLEDGE 12/21/93 1813147
CCINET 5/20/97 2063931
(Registered owner is Consolidated Communications Telecom
Services, Inc. which merged into the above entity.)
FINALLY, IT ALL FITS 3/31/98 2148186
(Registered owner is Consolidated Communications Telecom
Services, Inc. which merged into the above entity.)
GLOBAL PATH 1/27/98 2133469
(Registered owner is Communications Cable-Laying, Inc. The
above entity purchased all the assets of Communications Cable-Laying, Inc.)
MEMBERLINK 11/7/95 1933703
(Registered owner is McLeod Telemanagement, Inc. which
changed its name to the above entity.)
ONE STOP 3/9/99 2229884
(Registered owner is One Stop Telecommunications, Inc. which
dissolved into the above entity.)
OVATION COMMUNICATIONS 3/2/99 2229054
(Registered owner is Ovation Communications, Inc. which
dissolved into the above entity.)
PRIMELINE 11/7/95 1933705
(Registered owner is McLeod Telemanagement, Inc. which
changed its name to the above entity.)
RATERIZER 10/31/95 1931808
(Registered owner is McLeod Telemanagement, Inc. which
changed its name to the above entity.)
<Page>
Schedule V to the
Amended and Restated Security Agreement
TMO 3/11/97 2043980
(Registered owner is McLeod Telemanagement, Inc. which
changed its name to the above entity.)
<Page>
Schedule V to the
Amended and Restated Security Agreement
U.S. TRADEMARK APPLICATIONS
MARK FILING DATE APPLICATION NO.
KNOWLEDGEPORTAL 6/1/99 75-717573
STATE TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
TRADE NAMES
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY MCLEODUSA MARKET RESPONSE. INC.
U.S. TRADEMARK REGISTRATIONS
MARK REG. DATE REG. NO.
CAMPUSCALL 6/7/94 1838820
VIEWERCALL 1/2/96 1945600
CAMPUSCALL 8/13/96 1992581
MEMBERCALL 12/15/98 2210843
MEMBERCALL 12/15/98 2210844
(Registered owner of the above trademarks is Ruffalo,
Cody & Associates, Inc. which changed its name to the
above entity.)
U.S. TRADEMARK APPLICATIONS
MARK FILING DATE APPLICATION NO.
CUSTOMCALL 7/22/99 75-757394
STATE TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
TRADE NAMES
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY MCLEODUSA NETWORK
SERVICES, INC.
U.S. TRADEMARK REGISTRATIONS
MARK REG. DATE REG. NO.
NEWCOM TECHNOLOGIES 10/21/97 2107017
NEWCOM TECHNOLOGIES 10/21/97 2107018
NEWCOM COMPANIES 10/21/97 2107506
(Registered owner of above trademarks is Newcom
Technologies, Inc. which dissolved into the above
entity.)
U.S. TRADEMARK APPLICATIONS
None.
STATE TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK REGISTRATIONS
None.
NON-U.S. TRADEMARK APPLICATIONS
None.
TRADE NAMES
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
TRADEMARK/TRADE NAMES OWNED BY MCLEODUSA INFORMATION
SERVICES, INC.
U.S. TRADEMARK REGISTRATIONS
MARK REG. DATE REG. NO.
A CARRIER OF WISDOM 11/23/99 2294674
A CARRIER OF WISDOM 9/14/99 2278397
ATM-TO-THE-EDGE 2/27/01 2430766
ATM-TO-THE-EDGE 2/27/01 2430763
SPLITROCK 9/21/99 2279896
SPLITROCK 8/17/99 2271096
SPLITROCK 6/27/00 2363059
(Registered owner of the above trademarks is Splitrock
Services, Inc. which changed its name to the above
entity.)
U.S. TRADEMARK APPLICATIONS
None.
STATE TRADEMARK REGISTRATIONS
None.
<Page>
Schedule V to the
Amended and Restated Security Agreement
NON-U.S. TRADEMARK REGISTRATIONS
<Table>
<Caption>
COUNTRY MARK REG. DATE REG. NO.
- -------------------- ------------------------------- --------- --------
AUSTRALIA A CARRIER OF WISDOM 7/9/99 779155
CHILE A CARRIER OF WISDOM 7/23/99
CHILE A CARRIER OF WISDOM 7/23/99
COLOMBIA A CARRIER OF WISDOM 5/31/99 219.091
COSTA RICA A CARRIER OF WISDOM 8/4/99 114996
COSTA RICA A CARRIER OF WISDOM 8/4/99 114997
EUROPEAN UNION A CARRIER OF WISDOM 2/16/00 989616
GUATEMALA A CARRIER OF WISDOM 5/25/99 95.670
GUATEMALA A CARRIER OF WISDOM 5/25/99 95.684
MEXICO A CARRIER OF WISDOM 2/24/99 601534
NICARAGUA A CARRIER OF WISDOM 10/11/99
PERU A CARRIER OF WISDOM 5/15/99 00017186
PERU A CARRIER OF WISDOM 8/29/99 00018977
RUSSIA A CARRIER OF WISDOM 2/28/00 293-00 DNPI
RUSSIA A CARRIER OF WISDOM 2/28/00 294-00 DNPI
AUSTRALIA SPLITROCK 8/21/98 756757
ARGENTINA SPLITROCK 4/15/99 1731173
ARGENTINA SPLITROCK 4/15/99 1731174
CHILE SPLITROCK 9/17/98 522006
CHILE SPLITROCK 9/17/98 522007
CHINA SPLITROCK 8/21/99 1307282
COLOMBIA SPLITROCK 11/25/98 214319
COLOMBIA SPLITROCK 11/25/98 214421
</Table>
<Page>
Schedule V to the
Amended and Restated Security Agreement
<Table>
<Caption>
COUNTRY MARK REG. DATE REG. NO
- -------------------- ------------------------------- --------- -------
COSTA RICA SPLITROCK 12/14/98 110714
COSTA RICA SPLITROCK 12/14/98 110744
ECUADOR SPLITROCK 2/7/00 68-00 DNP1
ECUADOR SPLITROCK 2/28/00 69-00 DNPI
FEDERATION OF RUSSIA SPLITROCK 1/11/00 183263
HONDURAS SPLITROCK 5201/453/9
HONDURAS SPLITROCK 3/30/99 5202/454/9
NICARAGUA SPLITROCK 11/4/98 39.304C.C
NICARAGUA SPLITROCK 11/4/98 39.305C.C
PERU SPLITROCK 8/10/99 00018455
RUSSIA SPLITROCK 1/11/00 183263
SOUTH KOREA SPLITROCK 10/20/99 57179
TAIWAN SPLITROCK 2/1/99 107029
TAIWAN SPLITROCK 4/15/99 108798
THAILAND SPLITROCK 9/18/97 BOR8283
THAILAND SPLITROCK 7/12/99 BOR8294
ARGENTINA SPLITROCK (WITH TRIANGLE DESIGN) 2/24/00 1776227
AUSTRALIA SPLITROCK (WITH TRIANGLE DESIGN) 4/6/99 778599
CHILE SPLITROCK (WITH TRIANGLE DESIGN) 7/23/99
CHILE SPLITROCK (WITH TRIANGLE DESIGN) 7/23/99
CHINA SPLITROCK (WITH TRIANGLE DESIGN) 9/14/99 1314917
</Table>
<Page>
Schedule V to the
Amended and Restated Security Agreement
<Table>
<Caption>
Country Mark Reg. Date Reg. No
- -------------------- ------------------------------- --------- -------
COSTA RICA SPLITROCK (WITH TRIANGLE DESIGN) 8/4/99 114974
COSTA RICA SPLITROCK (WITH TRIANGLE DESIGN) 8/4/99 114980
GUATEMALA SPLITROCK (WITH TRIANGLE DESIGN) 5/18/99 94107
GUATEMALA SPLITROCK (WITH TRIANGLE DESIGN) 8/13/99 94762
MEXICO SPLITROCK (WITH TRIANGLE DESIGN) 4/28/99 607425
MEXICO SPLITROCK (WITH TRIANGLE DESIGN) 4/20/99 609029
NICARAGUA SPLITROCK (WITH TRIANGLE DESIGN) 10/11/99
NICARAGUA SPLITROCK (WITH TRIANGLE DESIGN) 10/11/99
PERU SPLITROCK (WITH TRIANGLE DESIGN) 4/14/99 00017455
PERU SPLITROCK (WITH TRIANGLE DESIGN) 8/10/99 00018459
RUSSIA SPLITROCK (WITH TRIANGLE DESIGN) 2/28/00 294-00 DNPI
RUSSIA SPLITROCK (WITH TRIANGLE DESIGN) 2/28/00 295-00 DNPI
SOUTH KOREA SPLITROCK (WITH TRIANGLE DESIGN) 11/25/99 0019461
THAILAND SPLITROCK (WITH TRIANGLE DESIGN) 12/22/99 BOR9147
</Table>
<Page>
Schedule V to the
Amended and Restated Security Agreement
<Table>
<Caption>
Country Mark Reg. Date Reg. No
- -------------------- ------------------------------- --------- -------
ARGENTINA A CARRIER OF WISDOM 12/3/98 2190645
ARGENTINA A CARRIER OF WISDOM 12/3/98 2190646
BRAZIL A CARRIER OF WISDOM 12/16/98 821097644
BRAZIL A CARRIER OF WISDOM 12/16/98 821097652
CANADA A CARRIER OF WISDOM 12/3/98 898359
CHINA A CARRIER OF WISDOM 12/19/98 9800142707
CHINA A CARRIER OF WISDOM 12/18/98 9800142708
COLOMBIA A CARRIER OF WISDOM 11/25/98 98-069.636
ECUADOR A CARRIER OF WISDOM 11/24/98 92365
ECUADOR A CARRIER OF WISDOM 11/24/98 92368
EL SALVADOR A CARRIER OF WISDOM 12/1/98 7552-98
EL SALVADOR A CARRIER OF WISDOM 12/1/98 7553-98
EUROPEAN UNION A CARRIER OF WISDOM 11/19/98 989616
FEDERATION OF RUSSIA A CARRIER OF WISDOM 11/19/98 98718343
HONDURAS A CARRIER OF WISDOM 11/24/98 15018-98
HONDURAS A CARRIER OF WISDOM 11/24/98 15019-98
HONG KONG A CARRIER OF WISDOM 12/2/98 15825-98
HONG KONG A CARRIER OF WISDOM 12/2/98 15826-98
JAPAN A CARRIER OF WISDOM 11/25/98 HEI101011483
JAPAN A CARRIER OF WISDOM 11/25/98 HEI101011484
MEXICO A CARRIER OF WISDOM 1/5/99 359202
NICARAGUA A CARRIER OF WISDOM 12/14/98 98-04603
POLAND A CARRIER OF WISDOM 11/20/98 Z-194644
SOUTH KOREA A CARRIER OF WISDOM 11/24/98 98-9686
SOUTH KOREA A CARRIER OF WISDOM 11/25/98 15826/98
</Table>
<Page>
Schedule V to the
Amended and Restated Security Agreement
<Table>
<Caption>
Country Mark Reg. Date Reg. No
- -------------------- ------------------------------- --------- -------
TAIWAN A CARRIER OF WISDOM 11/21/98 8756313
TAIWAN A CARRIER OF WISDOM 11/21/98 8756314
THAILAND A CARRIER OF WISDOM 12/22/98 376934
THAILAND A CARRIER OF WISDOM 12/22/98 376935
VENEZUELA A CARRIER OF WISDOM 11/27/98 98-022159
VENEZUELA A CARRIER OF WISDOM 11/27/98 98-022160
BRAZIL SPLITROCK 3/18/98 820553581
BRAZIL SPLITROCK 4/16/98 820599760
CANADA SPLITROCK 3/9/98 871543
CHINA SPLITROCK 3/18/98 9800023239
ECUADOR SPLITROCK 3/9/98 85781
ECUADOR SPLITROCK 3/9/98 85782
EL SALVADOR SPLITROCK 3/13/98 1510-98
EL SALVADOR SPLITROCK 3/13/98 1511-98
GUATEMALA SPLITROCK 3/16/98 98-1986
GUATEMALA SPLITROCK 3/16/98 98-1987
HONG KONG SPLITROCK 3/10/98 3027/98
HONG KONG SPLITROCK 3/10/98 3028/98
JAPAN SPLITROCK 3/10/98 HEI1020128
JAPAN SPLITROCK 3/10/98 HEI1020129
MEXICO SPLITROCK 3/17/98 326242
MEXICO SPLITROCK 3/17/98 326243
POLAND SPLITROCK 3/12/98 Z-184504
VENEZUELA SPLITROCK 3/10/98 98-003997
VENEZUELA SPLITROCK 3/10/98 98-003998
ARGENTINA SPLITROCK (WITH TRIANGLE DESIGN) 11/26/98 2189167
</Table>
<Page>
Schedule V to the
Amended and Restated Security Agreement
<Table>
<Caption>
Country Mark Reg. Date Reg. No
- -------------------- ------------------------------- --------- -------
BRAZIL SPLITROCK (WITH TRIANGLE DESIGN) 12/16/98 821097580
BRAZIL SPLITROCK (WITH TRIANGLE DESIGN) 12/16/98 821097660
CANADA SPLITROCK (WITH TRIANGLE DESIGN) 12/3/98 898360
CHINA SPLITROCK (WITH TRIANGLE DESIGN) 12/14/98 980140699
COLOMBIA SPLITROCK (WITH TRIANGLE DESIGN) 11/25/98 98-069633
COLOMBIA SPLITROCK (WITH TRIANGLE DESIGN) 11/25/98 98-069634
ECUADOR SPLITROCK (WITH TRIANGLE DESIGN) 11/24/98 92366
ECUADOR SPLITROCK (WITH TRIANGLE DESIGN) 11/24/98 92367
EL SALVADOR SPLITROCK (WITH TRIANGLE DESIGN) 12/1/98 7554-98
EL SALVADOR SPLITROCK (WITH TRIANGLE DESIGN) 12/1/98 7555-98
EUROPEAN UNION SPLITROCK (WITH TRIANGLE DESIGN) 11/19/98 989640
FEDERATION OF RUSSIA SPLITROCK (WITH TRIANGLE DESIGN) 11/18/98 98718281
HONDURAS SPLITROCK (WITH TRIANGLE DESIGN) 11/24/98 15016-98
HONDURAS SPLITROCK (WITH TRIANGLE DESIGN) 11/24/98 15017-98
HONG KONG SPLITROCK (WITH TRIANGLE DESIGN) 11/26/98 15634/98
HONG KONG SPLITROCK (WITH TRIANGLE DESIGN) 11/26/98 15635/98
JAPAN SPLITROCK (WITH TRIANGLE DESIGN) 11/25/98 HEI10101481
JAPAN SPLITROCK (WITH TRIANGLE DESIGN) 11/25/98 HEI10101482
POLAND SPLITROCK (WITH TRIANGLE DESIGN) 11/20/88 Z-194643
</Table>
<Page>
Schedule V to the
Amended and Restated Security Agreement
<Table>
<Caption>
Country Mark Reg. Date Reg. No
- -------------------- ------------------------------- --------- -------
TAIWAN SPLITROCK (WITH TRIANGLE DESIGN) 11/23/98 87-056416
TAIWAN SPLITROCK (WITH TRIANGLE DESIGN) 11/23/98 87-056417
THAILAND SPLITROCK (WITH TRIANGLE DESIGN) 12/16/98 376545
VENEZUELA SPLITROCK (WITH TRIANGLE DESIGN) 11/27/98 98-022157
VENEZUELA SPLITROCK (WITH TRIANGLE DESIGN) 11/27/98 98-022158
</Table>
(Registered owner of the above non-U.S. trademarks is Splitrock
Services, Inc. which changed its name to McLeodUSA Information
Services, Inc.)
TRADE NAMES
None
<Page>
Schedule VI to the
Amended and Restated Security Agreement
DESIGNATED HEDGING AGREEMENTS
None.
<Page>
Annex 1 to the
Security Agreement
SUPPLEMENT NO. __ dated as of [ ], to the Amended
and Restated Security Agreement dated as of April 16, 2002
(the "SECURITY AGREEMENT"), among MCLEODUSA INCORPORATED, a
Delaware corporation (the "BORROWER"), the Subsidiaries of the
Borrower listed on Schedule I thereto or becoming a party
thereto as provided in Section 7.16 thereto, and JPMORGAN
CHASE BANK (f/k/a The Chase Manhattan Bank) ("JPMORGAN
CHASE"), as Collateral Agent for the Secured Parties (as
defined in the Security Agreement).
A. Reference is made to (a) the Credit Agreement dated as of May 31,
2000 (as amended, supplemented or otherwise modified from time to time, the
"EXISTING CREDIT AGREEMENT") among the Borrower, the lenders from time to time
party thereto (the "EXISTING LENDERS"), and JPMorgan Chase (f/k/a The Chase
Manhattan Bank), as Administrative Agent and Collateral Agent, (b) the Credit
Agreement dated as of April 16, 2002 (as amended, supplemented or otherwise
modified from time to time, the "NEW CREDIT AGREEMENT", and together with the
Existing Credit Agreement, the "CREDIT AGREEMENTS") among the Borrower, the
lenders from time to time party thereto (the "NEW LENDERS", and together with
the Existing Lenders, the "LENDERS") and JPMorgan Chase, as Administrative Agent
and Collateral Agent, and (c) the Security Agreement.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement and the
Credit Agreements, as applicable. To the extent of any conflict between the
Existing Credit Agreement and the New Credit Agreement, the definitions
contained in the New Credit Agreement shall control. The term "COLLATERAL AGENT"
shall mean JPMorgan Chase, as collateral agent under this Agreement, the
Existing Credit Agreement, the New Credit Agreement and the Security Agreement.
C. The Grantors have entered into the Security Agreement in order to
induce the Existing Lenders to keep the Loans (as defined in the Existing Credit
Agreement) under the Existing Credit Agreement (the "EXISTING AGREEMENT LOANS")
outstanding and in order to induce the Issuing Bank (as defined in the Existing
Credit Agreement) under the Existing Credit Agreement (the
<Page>
2
"EXISTING AGREEMENT ISSUING BANK") to keep the Letters of Credit (as defined in
the Existing Credit Agreement) under the Existing Credit Agreement (the
"EXISTING AGREEMENT LETTERS OF CREDIT") outstanding and in order to induce the
New Lenders to make Loans (as defined in the New Credit Agreement) under the New
Credit Agreement (the "NEW AGREEMENT LOANS", and together with the Existing
Agreement Loans, the "LOANS") and the Issuing Bank (as defined in the New Credit
Agreement) under the New Credit Agreement (the "NEW AGREEMENT ISSUING BANK") to
issue Letters of Credit (as defined in the New Credit Agreement) under the New
Credit Agreement (the "NEW AGREEMENT LETTERS OF CREDIT", and together with the
Existing Agreement Letters of Credit, the "LETTERS OF CREDIT"). Pursuant to
Section 5.12 of the Existing Credit Agreement and Section 5.12 of the New Credit
Agreement, each Subsidiary Loan Party that was not in existence or not a
Subsidiary Loan Party on the date of the respective Credit Agreement is required
to enter into the Security Agreement as a Subsidiary Grantor upon becoming a
Subsidiary Loan Party. Section 7.16 of the Security Agreement provides that
additional Subsidiary Loan Parties may become Subsidiary Grantors under the
Security Agreement by execution and delivery of an instrument in the form of
this Supplement. The undersigned Subsidiary Loan Party (the "NEW SUBSIDIARY
GRANTOR") is executing this Supplement in accordance with the requirements of
the New Credit Agreement to become a Subsidiary Grantor under the Subsidiary
Agreement in consideration for the Existing Lenders keeping the Existing Loans
outstanding and for the Existing Agreement Issuing Bank keeping the Existing
Letters of Credit outstanding and in consideration for the New Lenders to issue
the New Agreement Loans and the New Agreement Issuing Bank to issue the New
Agreement Letters of Credit.
Accordingly, the Collateral Agent and the New Subsidiary Grantor agree
as follows:
SECTION 1. In accordance with Section 7.16 of the Security Agreement,
the New Subsidiary Grantor by its signature below becomes a Grantor under the
Security Agreement with the same force and effect as if originally named therein
as a Grantor, and the New Subsidiary Grantor hereby (a) agrees to all the terms
and provisions of the Security Agreement applicable to it as a Grantor
thereunder and (b) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct on and as of
the date hereof. In furtherance of the foregoing, the New Subsidiary Grantor, as
security for the payment and
<Page>
3
performance in full of the Guaranteed Obligations (as defined in the Security
Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, their successors and
assigns, a security interest in and lien on all of the New Subsidiary Grantor's
right, title and interest in and to the Guaranteed Obligations Collateral (as
defined in the Security Agreement) of the New Subsidiary Grantor. Each reference
to a "Grantor" in the Security Agreement shall be deemed to include the New
Subsidiary Grantor. The Security Agreement is hereby incorporated herein by
reference.
SECTION 2. The New Subsidiary Grantor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Subsidiary Grantor and the Collateral
Agent. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Subsidiary Grantor hereby represents and warrants
that set forth under its signature hereto, is the true and correct legal name of
the New Subsidiary Grantor, its jurisdiction of formation and, if such New
Subsidiary Grantor is not a "registered organization" under the New York UCC,
the location of its chief executive office.
SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
<Page>
4
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Subsidiary Grantor shall be
given to it at the address set forth under its signature below, with a copy to
the Borrower.
SECTION 9. The New Subsidiary Grantor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
<Page>
5
IN WITNESS WHEREOF, the New Subsidiary Grantor and the Collateral
Agent have duly executed this Supplement to the Security Agreement as of the day
and year first above written.
[Name of New Subsidiary Grantor],
by
---------------------------
Name:
Title:
Address:
JPMORGAN CHASE BANK, as
Collateral Agent,
by
---------------------------
Name:
Title: