EXHIBIT 10.29
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SECURITY AGREEMENT
By
TERREMARK WORLDWIDE, INC.,
as Issuer
and
THE GUARANTORS PARTY HERETO
and
FMP AGENCY SERVICES, LLC,
as Agent
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Dated as of December 31, 2004
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TABLE OF CONTENTS
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PREAMBLE..........................................................................................................1
RECITALS..........................................................................................................1
AGREEMENT.........................................................................................................2
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions...............................................................................2
SECTION 1.2. Interpretation...........................................................................10
SECTION 1.3. Resolution of Drafting Ambiguities.......................................................10
SECTION 1.4. Perfection Certificate...................................................................10
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Security Interest...............................................................10
SECTION 2.2. Filings..................................................................................11
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. Delivery of Certificated Securities Collateral...........................................12
SECTION 3.2. Perfection of Uncertificated Securities Collateral.......................................12
SECTION 3.3. Financing Statements and Other Filings; Maintenance of Perfected Security
Interest..............................................................................13
SECTION 3.4. Other Actions............................................................................13
SECTION 3.5. Joinder of Additional Guarantors.........................................................18
SECTION 3.6. Supplements; Further Assurances..........................................................18
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1. Title....................................................................................19
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SECTION 4.2. Validity of Security Interest............................................................19
SECTION 4.3. Defense of Claims; Transferability of Pledged Collateral.................................20
SECTION 4.4. Other Financing Statements...............................................................20
SECTION 4.5. Chief Executive Office; Change of Name; Jurisdiction of Organization.....................20
SECTION 4.6. Location of Inventory and Equipment......................................................21
SECTION 4.7. Due Authorization and Issuance...........................................................21
SECTION 4.8. Consents, etc............................................................................21
SECTION 4.9. Pledged Collateral.......................................................................21
SECTION 4.10. Insurance................................................................................21
SECTION 4.11. Payment of Taxes; Compliance with Laws; Contesting Liens; Claims.........................22
SECTION 4.12. Access to Pledged Collateral, Books and Records; Other Information.......................22
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. Pledge of Additional Securities Collateral...............................................22
SECTION 5.2. Voting Rights; Distributions; etc........................................................23
SECTION 5.3. Defaults, etc............................................................................24
SECTION 5.4. Certain Agreements of Pledgors As Issuers and Holders of Equity Interests................24
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. Grant of License.........................................................................25
SECTION 6.2. Protection of Agent's Security...........................................................25
SECTION 6.3. After-Acquired Property..................................................................26
SECTION 6.4. Litigation...............................................................................26
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. Maintenance of Records...................................................................27
SECTION 7.2. Legend...................................................................................27
SECTION 7.3. Modification of Terms, etc...............................................................27
SECTION 7.4. Collection...............................................................................27
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ARTICLE VIII
TRANSFERS
SECTION 8.1. Transfers of Pledged Collateral..........................................................28
ARTICLE IX
REMEDIES
SECTION 9.1. Remedies.................................................................................28
SECTION 9.2. Notice of Sale...........................................................................30
SECTION 9.3. Waiver of Notice and Claims..............................................................30
SECTION 9.4. Certain Sales of Pledged Collateral......................................................30
SECTION 9.5. No Waiver; Cumulative Remedies...........................................................32
SECTION 9.6. Certain Additional Actions Regarding Intellectual Property...............................32
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS; APPLICATION OF PROCEEDS
SECTION 10.1. Proceeds of Casualty Events and Collateral Dispositions..................................33
SECTION 10.2. Application of Proceeds..................................................................33
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Concerning Agent.........................................................................33
SECTION 11.2. Agent May Perform; Agent Appointed Attorney-in-Fact......................................34
SECTION 11.3. Continuing Security Interest; Assignment.................................................35
SECTION 11.4. Termination; Release.....................................................................35
SECTION 11.5. Modification in Writing..................................................................35
SECTION 11.6. Notices..................................................................................35
SECTION 11.7. Governing Law, Consent to Jurisdiction and Service of Process; Waiver of Jury
Trial.................................................................................36
SECTION 11.8. Severability of Provisions...............................................................36
SECTION 11.9. Execution in Counterparts................................................................36
SECTION 11.10. Business Days............................................................................36
SECTION 11.11. No Credit for Payment of Taxes or Imposition.............................................36
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SECTION 11.12. No Claims Against Agent..................................................................36
SECTION 11.13. No Release...............................................................................36
SECTION 11.14. Obligations Absolute.....................................................................37
SIGNATURES......................................................................................................S-1
EXHIBIT 1 Form of Issuer's Acknowledgment
EXHIBIT 2 Form of Securities Pledge Amendment
EXHIBIT 3 Form of Joinder Agreement
EXHIBIT 4 Form of Control Agreement Concerning Securities Accounts
EXHIBIT 5 Form of Control Agreement Concerning Deposit Accounts
EXHIBIT 6 Form of Copyright Security Agreement
EXHIBIT 7 Form of Patent Security Agreement
EXHIBIT 8 Form of Trademark Security Agreement
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SECURITY AGREEMENT
SECURITY AGREEMENT dated as of December 31, 2004 (as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the provisions hereof, the "AGREEMENT") made by TERREMARK
WORLDWIDE, INC., a Delaware corporation (the "ISSUER") and THE GUARANTORS LISTED
ON THE SIGNATURE PAGES HERETO (the "ORIGINAL GUARANTORS") OR FROM TIME TO TIME
PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (the "ADDITIONAL GUARANTORS,"
and together with the Original Guarantors, the "GUARANTORS"), as pledgors,
assignors and debtors (the Issuer, together with the Guarantors, in such
capacities and together with any successors in such capacities, the "PLEDGORS,"
and each, a "PLEDGOR"), in favor of FMP AGENCY SERVICES, LLC, a Delaware limited
liability company, in its capacity as collateral agent for the Secured Parties
(as hereinafter defined), as pledgee, assignee and secured party (in such
capacities and together with any successors in such capacities, the "AGENT").
R E C I T A L S :
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A. Pursuant to that certain Purchase Agreement dated as of the
date hereof by and among the purchasers listed on SCHEDULE A thereto (each
individually as a "PURCHASER" and collectively as the "PURCHASERS"), the
Pledgors and the Agent (including all annexes, exhibits and schedules thereto,
as from time to time amended, restated, supplemented or otherwise modified, the
"PURCHASE AGREEMENT"), the Purchasers have agreed to purchase the Purchased
Securities (as defined in the Purchase Agreement).
B. Each Original Guarantor has, pursuant to the Purchase
Agreement, unconditionally guaranteed the Obligations.
C. The Issuer and each Original Guarantor will receive
substantial benefits from the execution, delivery and performance of the
obligations under the Purchase Agreement and the other Basic Documents and each
is, therefore, willing to enter into this Agreement.
D. This Agreement is given by each Pledgor in favor of the
Agent for the benefit of the Secured Parties (as hereinafter defined) to secure
the payment and performance of all of the Obligations.
F. It is a condition to the obligations of the Purchaser to
purchase the Purchased Securities that each Pledgor execute and deliver the
applicable Basic Documents, including this Agreement.
A G R E E M E N T :
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NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each Pledgor and the Agent hereby agree as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS.
(a) Unless otherwise defined herein or in the Purchase
Agreement, capitalized terms used herein that are defined in the UCC shall have
the meanings assigned to them in the UCC.
(b) Terms used but not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given to them in the
Purchase Agreement.
(c) The following terms shall have the following meanings:
"ACQUISITION AGREEMENT RIGHTS" shall mean, with respect to
each Pledgor, collectively, all of such Pledgor's rights, title and interest in,
to and under the Acquisition Agreement, including (i) all rights and remedies
relating to monetary damages, including indemnification rights and remedies, and
claims for damages or other relief pursuant to or in respect of the Acquisition
Agreement, (ii) all rights and remedies relating to monetary damages, including
indemnification rights and remedies, and claims for monetary damages under or in
respect of the agreements, documents and instruments referred to in the
Acquisition Agreement or related thereto and (iii) all proceeds, collections,
recoveries and rights of subrogation with respect to the foregoing.
"ADDITIONAL GUARANTORS" shall have the meaning assigned to
such term in the Preamble hereof.
"ADDITIONAL PLEDGED INTERESTS" shall mean, collectively, with
respect to each Pledgor, (i) all options, warrants, rights, agreements,
additional membership, partnership or other equity interests of whatever class
of any issuer of Initial Pledged Interests or any interest in any such issuer,
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under any Organizational
Document of any such issuer pertaining to such membership, partnership or other
equity interests, and the certificates, instruments and agreements representing
such membership, partnership or other interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
such membership, partnership or other equity interests from time to time
acquired by such Pledgor in any manner and (ii) all membership, partnership or
other equity interests, as applicable, of each limited liability company,
partnership or other entity (other than a corporation) hereafter acquired or
formed by such Pledgor and all options, warrants, rights, agreements, additional
membership, partnership or other equity interests of whatever class of such
limited liability company, partnership or other entity, together with all
rights, privileges, authority and powers of such Pledgor relating to such
interests or under any Organizational Document of any such issuer pertaining to
such membership, partnership or other equity
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interests, and the certificates, instruments and agreements representing such
membership, partnership or other equity interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such membership, partnership or other interests, from time to time
acquired by such Pledgor in any manner.
"ADDITIONAL PLEDGED SHARES" shall mean, collectively, with
respect to each Pledgor, (i) all options, warrants, rights, agreements,
additional shares of capital stock of whatever class of any issuer of the
Initial Pledged Shares or any other equity interest in any such issuer, together
with all rights, privileges, authority and powers of such Pledgor relating to
such interests issued by any such issuer under any Organizational Document of
any such issuer pertaining to such interests, and the certificates, instruments
and agreements representing such interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
such interests, from time to time acquired by such Pledgor in any manner and
(ii) all the issued and outstanding shares of capital stock of each corporation
hereafter acquired or formed by such Pledgor and all options, warrants, rights,
agreements or additional shares of capital stock of whatever class of such
corporation, together with all rights, privileges, authority and powers of such
Pledgor relating to such shares or under any Organizational Document of such
corporation pertaining to such interests, and the certificates, instruments and
agreements representing such shares and any and all interest of such Pledgor in
the entries on the books of any financial intermediary pertaining to such
shares, from time to time acquired by such Pledgor in any manner.
"AGENT" shall have the meaning assigned to such term in the
Preamble hereof.
"AGREEMENT" shall have the meaning assigned to such term in
the Preamble hereof.
"CLAIMS" shall mean any and all property and other taxes,
assessments and special assessments, levies, fees and all governmental charges
imposed upon or assessed against, and landlords', carriers', mechanics',
workmen's, repairmen's, laborers', materialmen's, suppliers' and warehousemen's
Liens and other claims arising by operation of law against, all or any portion
of the Pledged Collateral.
"COMMODITY ACCOUNT CONTROL AGREEMENT" shall mean a commodity
account control agreement in a form that is reasonably satisfactory to the
Administrative Agent.
"CONTESTED LIENS" shall mean, collectively, any Liens incurred
in respect of any Claims to the extent that the amounts owing in respect thereof
are not yet delinquent or are being contested and otherwise comply with the
provisions of SECTION 4.11 hereof; PROVIDED, HOWEVER, that such Liens shall in
all respects be subject and subordinate in priority to the Lien and security
interest created by this Agreement, except if and to the extent that the law or
regulation creating, permitting or authorizing such Lien provides that such Lien
must be superior to the Lien and security interest created and evidenced hereby.
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"CONTRACTS" shall mean, collectively, with respect to each
Pledgor, all sale, service, performance, equipment or property lease contracts,
agreements and grants and all other contracts, agreements or grants (in each
case, whether written or oral, or third party or intercompany), between such
Pledgor and third parties, and all assignments, amendments, restatements,
supplements, extensions, renewals, replacements or modifications thereof.
"CONTROL" shall mean (i) in the case of each Deposit Account,
"control," as such term is defined in Section 9-104 of the UCC, and (ii) in the
case of any Security Entitlement, "control," as such term is defined in Section
8-106 of the UCC and (iii) in the case of any Commodity Contract, "control," as
such term is defined in Section 9-106 of the UCC.
"CONTROL AGREEMENTS" shall mean, collectively, the Deposit
Account Control Agreement, the Securities Account Control Agreement and the
Commodity Account Control Agreement.
"COPYRIGHTS" shall mean, collectively, with respect to each
Pledgor, all copyrights (whether statutory or common law, whether established or
registered in the United States or any other country or any political
subdivision thereof, whether registered or unregistered and whether published or
unpublished) and all copyright registrations and applications made by such
Pledgor, in each case, whether now owned or hereafter created or acquired by or
assigned to such Pledgor, together with any and all (i) rights and privileges
arising under applicable law with respect to such Pledgor's use of such
copyrights, (ii) reissues, renewals, continuations and extensions thereof, (iii)
income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable with respect thereto, including damages and payments for past,
present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present or future
infringements thereof.
"COPYRIGHT SECURITY AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 6.
"DEPOSIT ACCOUNT CONTROL AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 5 or such other form that is
reasonably satisfactory to the Agent.
"DEPOSIT ACCOUNTS" shall mean, collectively, with respect to
each Pledgor, (i) all "deposit accounts" as such term is defined in the UCC and
(ii) all cash, funds, checks, notes and instruments from time to time on deposit
in any of the accounts described in clause (i) of this definition.
"DISTRIBUTIONS" shall mean, collectively, with respect to each
Pledgor, all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes.
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"EXCLUDED ACCOUNTS" shall mean (i) account number 10144611828
of the Issuer maintained with Ocean Bank (or any replacement account) so long as
such account shall be pledged to Ocean Bank to secure the reimbursement
obligations under the stand by letter of credit issued to Rainbow Property
Management, LLC or any successor and the balance of such account shall not at
any time exceed $750,000 plus accrued interest, (ii) account number
00720541210000100250 of the Issuer maintained with Banco Pastor (or any
replacement account or accounts) so long as (x) such account or accounts shall
be pledged to secure (A) the lease obligations of NAP de las Americas - Madrid,
S.A. in connection with the lease of a facility located at Calle Yecora 4, Las
Mercedes, Madrid, Paraje Coto de Corralejos, Spain and (B) the loan obligations
of NAP de las Americas - Madrid, S.A to Banco de Pastor (or any successor) and
(y) the aggregate balance of such account or accounts shall not at any time
exceed Euro1,725,000 plus accrued interest and (iii) account number
7431079115687 of the Issuer maintained with Lehman Brothers, Inc. so long as the
balance of such account shall not at any time exceed $1,000.
"EXCLUDED PROPERTY" shall mean (a) all personal property and
fixtures of the Issuer or any Guarantor located at the Facility so long as such
property is pledged to secure the obligations under the SPV Financing Agreement
and (b) Special Property other than the following:
(i) the right to receive any payment of money (including
Accounts, General Intangibles and Payment Intangibles) or any other
rights referred to in Sections 9-406(d), 9-407(a) or 9-408(a) of the
UCC to the extent that such sections of the UCC are effective to limit
the prohibitions which make such property "Special Property"; and
(ii) any Proceeds, substitutions or replacements of any
Special Property (unless such Proceeds, substitutions or replacements
would constitute Special Property).
"GENERAL INTANGIBLES" shall mean, collectively, with respect
to each Pledgor, all "general intangibles," as such term is defined in the UCC,
of such Pledgor and, in any event, shall include (i) all of such Pledgor's
rights, title and interest in, to and under all insurance policies and
Contracts, (ii) all know-how and warranties relating to any of the Pledged
Collateral, (iii) any and all other rights, claims, choses-in-action and causes
of action of such Pledgor against any other person and the benefits of any and
all collateral or other security given by any other person in connection
therewith, (iv) all guarantees, endorsements and indemnifications on, or of, any
of the Pledged Collateral, (v) all lists, books, records, correspondence,
ledgers, printouts, files (whether in printed form or stored electronically),
tapes and other papers or materials containing information relating to any of
the Pledged Collateral, including all customer or tenant lists, identification
of suppliers, data, plans, blueprints, specifications, designs, drawings,
appraisals, recorded knowledge, surveys, studies, engineering reports, test
reports, manuals, standards, processing standards, performance standards,
catalogs, research data, computer and automatic machinery software and programs
and the like, field repair data, accounting information pertaining to such
Pledgor's operations or any of the Pledged Collateral and all media in which or
on which any of the information or knowledge or data or records may be recorded
or stored and all computer programs used for the compilation or printout of such
information, knowledge, records or data, (vi) all licenses, consents, permits,
variances,
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certifications, authorizations and approvals, however characterized, of any
Governmental Authority (or any person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Pledgor pertaining to
operations now or hereafter conducted by such Pledgor or any of the Pledged
Collateral including building permits, certificates of occupancy, environmental
certificates, industrial permits or licenses and certificates of operation and
(vii) all rights to reserves, deferred payments, deposits, refunds,
indemnification of claims to the extent the foregoing relate to any Pledged
Collateral and claims for tax or other refunds against any Governmental
Authority relating to any Pledged Collateral.
"GOODWILL" shall mean, collectively, with respect to each
Pledgor, the goodwill connected with such Pledgor's business including all
goodwill connected with (i) the use of and symbolized by any Trademark or
Trademark License in which such Pledgor has any interest, (ii) all know-how,
trade secrets, customer and supplier lists, proprietary information, inventions,
methods, procedures, formulae, descriptions, compositions, technical data,
drawings, specifications, name plates, catalogs, confidential information and
the right to limit the use or disclosure thereof by any person, pricing and cost
information, business and marketing plans and proposals, consulting agreements,
engineering contracts and such other assets which relate to such goodwill and
(iii) all product lines of such Pledgor's business.
"GUARANTORS" shall have the meaning assigned to such term in
the Preamble hereof.
"INITIAL PLEDGED INTERESTS" shall mean, with respect to each
Pledgor, all membership, partnership or other equity interests (other than in a
corporation), as applicable, of each issuer described in SCHEDULE 10 annexed to
the Perfection Certificate, together with all rights, privileges, authority and
powers of such Pledgor in and to each such issuer or under any Organizational
Document of each such issuer pertaining to such membership, partnership or other
interests, and the certificates, instruments and agreements representing such
membership, partnership or other interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
such membership, partnership or other interests.
"INITIAL PLEDGED SHARES" shall mean, collectively, with
respect to each Pledgor, the issued and outstanding shares of capital stock of
each issuer described in SCHEDULE 10 annexed to the Perfection Certificate
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under any Organizational
Document of each such issuer pertaining to the Initial Pledged Shares, and the
certificates, instruments and agreements representing such shares of capital
stock and any and all interest of such Pledgor in the entries on the books of
any financial intermediary pertaining to the Initial Pledged Shares.
"INSTRUMENTS" shall mean, collectively, with respect to each
Pledgor, all "instruments," as such term is defined in Article 9, rather than
Article 3, of the UCC, and shall include all promissory notes, drafts, bills of
exchange or acceptances.
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"INTELLECTUAL PROPERTY COLLATERAL" shall mean, collectively,
the Patents, Trademarks, Copyrights, Licenses and Goodwill other than any
non-U.S. Intellectual Property Collateral.
"INTERCOMPANY NOTES" shall mean, with respect to each Pledgor,
all intercompany notes described in SCHEDULE 11 annexed to the Perfection
Certificate and intercompany notes hereafter acquired by such Pledgor and all
certificates, instruments or agreements evidencing such intercompany notes, and
all assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.
"INVESTMENT PROPERTY" shall mean a security, whether
certificated or uncertificated, Security Entitlement, Securities Account,
Commodity Contract or Commodity Account, excluding, however, the Securities
Collateral.
"ISSUER" shall have the meaning assigned to such term in the
Preamble hereof.
"JOINDER AGREEMENT" shall mean an agreement substantially in
the form annexed hereto as EXHIBIT 3.
"LICENSES" shall mean, collectively, with respect to each
Pledgor, all license and distribution agreements with, and covenants not to sue,
any other party with respect to any Patent, Trademark or Copyright or any other
patent, trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
together with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, fees, royalties, damages, claims and
payments now and hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future infringements
or violations thereof, (iii) rights to sue for past, present and future
infringements or violations thereof and (iv) other rights to use, exploit or
practice any or all of the Patents, Trademarks or Copyrights or any other
patent, trademark or copyright.
"ORGANIZATIONAL DOCUMENTS" shall mean, with respect to any
person, (i) in the case of any corporation, the certificate of incorporation and
by-laws (or similar documents) of such person, (ii) in the case of any limited
liability company, the certificate of formation and operating agreement (or
similar documents) of such person, (iii) in the case of any limited partnership,
the certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other
case, the functional equivalent of the foregoing.
"ORIGINAL GUARANTORS" shall have the meaning assigned to such
term in the Preamble hereof.
"PATENTS" shall mean, collectively, with respect to each
Pledgor, all patents issued or assigned to and all patent applications and
registrations made by such Pledgor (whether
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established or registered or recorded in the United States or any other country
or any political subdivision thereof), together with any and all (i) rights and
privileges arising under applicable law with respect to such Pledgor's use of
any patents, (ii) inventions and improvements described and claimed therein,
(iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (iv) income, fees, royalties, damages, claims and
payments now or hereafter due and/or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements
thereof, (v) rights corresponding thereto throughout the world and (vi) rights
to sue for past, present or future infringements thereof.
"PATENT SECURITY AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 7.
"PERFECTION CERTIFICATE" shall mean that certain perfection
certificate dated as of the date hereof, executed and delivered by each Pledgor
in favor of the Agent for the benefit of the Secured Parties, and each other
Perfection Certificate (which shall be in form and substance reasonably
acceptable to the Agent) executed and delivered by the applicable Guarantor in
favor of the Agent for the benefit of the Secured Parties contemporaneously with
the execution and delivery of each Joinder Agreement executed in accordance with
SECTION 3.5 hereof, in each case, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the Purchase Agreement or upon the request of the Agent.
"PLEDGE AMENDMENT" shall have the meaning assigned to such
term in SECTION 5.1 hereof.
"PLEDGED COLLATERAL" shall have the meaning assigned to such
term in SECTION 2.1 hereof.
"PLEDGED INTERESTS" shall mean, collectively, the Initial
Pledged Interests and the Additional Pledged Interests; PROVIDED, HOWEVER, that
to the extent applicable, Pledged Interests shall not include any interest which
is not required to be pledged pursuant to SECTION 7.13(B) of the Purchase
Agreement.
"PLEDGED SECURITIES" shall mean, collectively, the Pledged
Interests, the Pledged Shares and the Successor Interests.
"PLEDGED SHARES" shall mean, collectively, the Initial Pledged
Shares and the Additional Pledged Shares; PROVIDED, HOWEVER, that Pledged Shares
shall not include any shares which are not required to be pledged pursuant to
SECTION 7.13(B) of the Purchase Agreement.
"PLEDGOR" shall have the meaning assigned to such term in the
Preamble hereof.
"PURCHASE AGREEMENT" shall have the meaning assigned to such
term in RECITAL A hereof.
"SECURED PARTIES" shall mean, collectively, the Agent and the
Noteholders.
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"SECURITIES ACCOUNT CONTROL AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 4 or such other form that is
reasonably satisfactory to the Agent.
"SECURITIES COLLATERAL" shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.
"SPECIAL PROPERTY" shall mean:
(a) any permit, lease or contract held by any Pledgor that
prohibits the creation by such Pledgor of a security interest therein
without the consent of any of the other parties thereto to the extent
they are not Pledgors;
(b) any permit, lease or contract held by any Pledgor to the
extent that any Requirement of Law applicable thereto prohibits the
creation of a security interest therein without the consent of any of
the other parties thereto to the extent they are not Pledgors;
(c) Equipment owned by any Pledgor on the date hereof or
hereafter acquired that is subject to a Lien securing a Purchase Money
Obligation or Capital Lease Obligation permitted to be incurred
pursuant to the provisions of the Purchase Agreement if the contract or
other agreement in which such Lien is granted (or the documentation
providing for such Purchase Money Obligation or Capital Lease
Obligation) validly prohibits the creation of any other Lien on such
Equipment; and
(d) Excluded Accounts.
PROVIDED, HOWEVER, that in each case described in clauses (a), (b) and (c) of
this definition, such property shall constitute "Special Property" only to the
extent and for so long as such permit or lease or Requirement of Law applicable
thereto validly prohibits the creation of a Lien on such property in favor of
the Agent and, upon the termination of such prohibition (howsoever occurring),
such property shall cease to constitute "Special Property."
"SUCCESSOR INTERESTS" shall mean, collectively, with respect
to each Pledgor, all shares of each class of the capital stock of the successor
corporation or interests or certificates of the successor limited liability
company, partnership or other entity owned by such Pledgor (unless such
successor is such Pledgor itself) formed by or resulting from any consolidation
or merger in which any person listed in SCHEDULE 1(A) annexed to the Perfection
Certificate is not the surviving entity; PROVIDED, HOWEVER, that to the extent
applicable, Successor Interest shall not include any shares or interests which
are not required to be pledged pursuant to SECTION 7.13(B) of the Purchase
Agreement.
"TRADEMARKS" shall mean, collectively, with respect to each
Pledgor, all trademarks (including service marks), slogans, logos, certification
marks, trade dress, uniform resource locations (URL's), domain names, corporate
names and trade names, whether registered or unregistered, owned by or assigned
to such Pledgor and all registrations and applications for
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the foregoing (whether statutory or common law and whether established or
registered in the United States or any other country or any political
subdivision thereof), together with any and all (i) rights and privileges
arising under applicable law with respect to such Pledgor's use of any
trademarks, (ii) reissues, continuations, extensions and renewals thereof, (iii)
income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including damages, claims and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past,
present and future infringements thereof.
"TRADEMARK SECURITY AGREEMENT" shall mean an agreement
substantially in the form annexed hereto as EXHIBIT 8.
"UCC" shall mean the Uniform Commercial Code as in effect on
the date hereof in the State of New York; PROVIDED, HOWEVER, that if by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of the Agent's and the Secured Parties' security interest in any item
or portion of the Pledged Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term "UCC"
shall mean the Uniform Commercial Code as in effect on the date hereof in such
other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions relating to
such provisions.
SECTION 1.2. INTERPRETATION. The rules of interpretation
specified in the Purchase Agreement shall be applicable to this Agreement.
SECTION 1.3. RESOLUTION OF DRAFTING AMBIGUITIES. Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (I.E., the Agent) shall not be employed in the interpretation
hereof.
SECTION 1.4. PERFECTION CERTIFICATE. The Agent and each
Secured Party agree that the Perfection Certificate and all descriptions of
Pledged Collateral, schedules, amendments and supplements thereto are and shall
at all times remain a part of this Agreement.
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. GRANT OF SECURITY INTEREST. As collateral
security for the payment and performance in full of all the Obligations, each
Pledgor hereby pledges and grants to the Agent for the benefit of the Secured
Parties, a lien on and security interest in and to all of the right, title and
interest of such Pledgor in, to and under the following property, wherever
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located, whether now existing or hereafter arising or acquired from time to time
(collectively, the "PLEDGED COLLATERAL"):
(i) all Accounts;
(ii) all Equipment, Goods, Inventory and Fixtures;
(iii) all Documents, Instruments and Chattel Paper;
(iv) all Letters of Credit and Letter-of-Credit Rights;
(v) all Securities Collateral;
(vi) all Investment Property;
(vii) all Intellectual Property Collateral;
(viii) the Commercial Tort Claims described on SCHEDULE 13
to the Perfection Certificate;
(ix) all General Intangibles;
(x) all Deposit Accounts;
(xi) the Acquisition Agreement and Acquisition Agreement
Rights;
(xii) all Supporting Obligations;
(xiii) all books and records relating to the Pledged
Collateral; and
(xiv) to the extent not covered by clauses (i) through
(xiv) of this sentence, all other personal property
of such Pledgor, whether tangible or intangible and
all Proceeds and products of each of the foregoing
and all accessions to, substitutions and replacements
for, and rents, profits and products of, each of the
foregoing, any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such
Pledgor from time to time with respect to any of the
foregoing.
Notwithstanding anything to the contrary contained in clauses
(i) through (xv) above, no Pledgor shall be required to take any action outside
of the United States to perfect a security interest in any non-U.S. Intellectual
Property Collateral, the security interest created by this Agreement shall not
extend to, and the term "Pledged Collateral" shall not include, any Excluded
Property and (i) the Pledgors shall from time to time at the request of the
Agent give written notice to the Agent identifying in reasonable detail the
Special Property (and stating in such notice that such Special Property
constitutes "Excluded Property") and shall provide to the Agent such other
information regarding the Special Property as the Agent may reasonably
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request and (ii) from and after the Closing Date, no Pledgor shall permit to
become effective in any document creating, governing or providing for any
permit, lease or license, a provision that would prohibit the creation of a Lien
on such permit, lease or license in favor of the Agent unless such Pledgor
believes, in its reasonable judgment, that such prohibition is usual and
customary in transactions of such type.
In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern and control.
SECTION 2.2. FILINGS. (a) Each Pledgor hereby irrevocably
authorizes the 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 jurisdiction for the filing of any
financing statement or amendment relating to the Pledged Collateral, including
(i) whether such Pledgor is an organization, the type of organization and any
organizational identification number issued to such Pledgor, (ii) any financing
or continuation statements or other documents without the signature of such
Pledgor where permitted by law, including the filing of a financing statement
describing the Pledged Collateral as "all assets in which the Pledgor now owns
or hereafter acquires rights" and (iii) in the case of a financing statement
filed as a fixture filing or covering Pledged Collateral constituting minerals
or the like to be extracted or timber to be cut, a sufficient description of the
real property to which such Pledged Collateral relates. Each Pledgor agrees to
provide all information described in the immediately preceding sentence to the
Agent promptly upon request.
(b) Each Pledgor hereby ratifies its authorization for the
Agent to file in any relevant jurisdiction any initial financing statements or
amendments thereto relating to the Pledged Collateral if filed prior to the date
hereof.
(c) Each Pledgor hereby further authorizes the Agent to file
filings 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), including this Agreement, the Copyright Security Agreement, the Patent
Security Agreement and the Trademark Security Agreement, or other documents for
the purpose of perfecting, confirming, continuing, enforcing or protecting the
security interest granted by such Pledgor hereunder, without the signature of
such Pledgor, and naming such Pledgor, as debtor, and the Agent, as secured
party.
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. DELIVERY OF CERTIFICATED SECURITIES COLLATERAL.
Each Pledgor represents and warrants that all certificates, agreements or
instruments representing or
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evidencing the Securities Collateral in existence on the date hereof have been
delivered to the Agent in suitable form for transfer by delivery or accompanied
by duly executed instruments of transfer or assignment in blank and that the
Agent has a perfected first priority security interest therein. Each Pledgor
hereby agrees that all certificates, agreements or instruments representing or
evidencing Securities Collateral acquired by such Pledgor after the date hereof
shall immediately upon receipt thereof by such Pledgor be delivered to and held
by or on behalf of the Agent pursuant hereto. All certificated Securities
Collateral shall be in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Agent. The Agent shall have the right,
at any time upon the occurrence and during the continuance of any Event of
Default, to endorse, assign or otherwise transfer to or to register in the name
of the Agent or any of its nominees or endorse for negotiation any or all of the
Securities Collateral, without any indication that such Securities Collateral is
subject to the security interest hereunder. In addition, upon the occurrence and
during the continuance of an Event of Default, the Agent shall have the right at
any time to exchange certificates representing or evidencing Securities
Collateral for certificates of smaller or larger denominations.
SECTION 3.2. PERFECTION OF UNCERTIFICATED SECURITIES
COLLATERAL. Each Pledgor represents and warrants that the Agent has a perfected
first priority security interest in all uncertificated Pledged Securities
pledged by it hereunder that is in existence on the date hereof. Each Pledgor
hereby agrees that if any of the Pledged Securities are at any time not
evidenced by certificates of ownership, then each applicable Pledgor shall, to
the extent permitted by applicable law (i) if necessary or desirable to perfect
a security interest in such Pledged Securities, cause such pledge to be recorded
on the equityholder register or the books of the issuer, cause the issuer to
execute and deliver to the Agent an acknowledgment of the pledge of such Pledged
Securities substantially in the form of EXHIBIT 1 annexed hereto, execute any
customary pledge forms or other documents necessary or appropriate to complete
the pledge and give the Agent the right to transfer such Pledged Securities
under the terms hereof and, upon request, provide to the Agent an opinion of
counsel, in form and substance reasonably satisfactory to the Agent, confirming
such pledge and perfection thereof and (ii) use its commercially reasonable
efforts to cause such Pledged Securities to become certificated and delivered to
the Agent in accordance with the provisions of SECTION 3.1.
SECTION 3.3. FINANCING STATEMENTS AND OTHER FILINGS;
MAINTENANCE OF PERFECTED SECURITY INTEREST. Each Pledgor represents and warrants
that all filings necessary to perfect the security interest granted by it to the
Agent in respect of the Pledged Collateral have been delivered to the Agent in
completed and, to the extent necessary or appropriate, duly executed form for
filing in each governmental, municipal or other office specified in SCHEDULE 7
annexed to the Perfection Certificate (to the extent required to be listed on
the schedules to the Perfection Certificate as of the date this representation
is made or deemed made). Each Pledgor agrees that at the sole cost and expense
of the Pledgors, (i) such Pledgor will maintain the security interest created by
this Agreement in the Pledged Collateral as a perfected first priority security
interest and shall defend such security interest against the claims and demands
of all persons except Permitted Collateral Liens, (ii) such Pledgor shall
furnish to the Agent from time
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to time statements and schedules further identifying and describing the Pledged
Collateral and such other reports in connection with the Pledged Collateral as
the Agent may reasonably request, all in reasonable detail and (iii) at any time
and from time to time, upon the written request of the Agent, such Pledgor shall
promptly and duly execute and deliver, and file and have recorded, such further
instruments and documents and take such further action as the Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and the rights and powers herein granted, including the filing
of any financing statements, continuation statements and other documents
(including this Agreement) under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interest
created hereby and the execution and delivery of Control Agreements, all in form
reasonably satisfactory to the Agent and in such offices (including the United
States Patent and Trademark Office and the United States Copyright Office)
wherever required by law to perfect, continue and maintain a valid, enforceable,
first priority security interest in the Pledged Collateral as provided herein
and to preserve the other rights and interests granted to the Agent hereunder,
as against third parties, with respect to the Pledged Collateral.
SECTION 3.4. OTHER ACTIONS. In order to further insure the
attachment, perfection and priority of, and the ability of the Agent to enforce,
the Agent's security interest in the Pledged Collateral, each Pledgor represents
and warrants (as to itself) as follows and agrees, in each case at such
Pledgor's own expense, to take the following actions with respect to the
following Pledged Collateral:
(a) INSTRUMENTS AND TANGIBLE CHATTEL PAPER. (i) No amounts
payable under or in connection with any of the Pledged Collateral are
evidenced by any Instrument or Tangible Chattel Paper other than such
Instruments and Tangible Chattel Paper listed in SCHEDULE 11 annexed to
the Perfection Certificate (to the extent required to be listed on the
schedules to the Perfection Certificate as of the date this
representation is made or deemed made) and (ii) each Instrument and
each item of Tangible Chattel Paper listed in SCHEDULE 11 annexed to
the Perfection Certificate has been properly endorsed, assigned and
delivered to the Agent, accompanied by instruments of transfer or
assignment duly executed in blank. If any amount then payable under or
in connection with any of the Pledged Collateral shall be evidenced by
any Instrument or Tangible Chattel Paper, and such amount, together
with all amounts payable evidenced by any Instrument or Tangible
Chattel Paper not previously delivered to the Agent exceeds $500,000 in
the aggregate for all Pledgors, the Pledgor acquiring such Instrument
or Tangible Chattel Paper shall forthwith endorse, assign and deliver
the same to the Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Agent may from time to time
specify.
(b) DEPOSIT ACCOUNTS. (i) Each Pledgor has neither opened nor
maintains any Deposit Accounts other than the accounts listed in
SCHEDULE 14 annexed to the Perfection Certificate (to the extent
required to be listed on the schedules to the Perfection Certificate as
of the date this representation is made or deemed made) and (ii) the
Agent has a perfected first priority security interest in each Deposit
Account listed in SCHEDULE 14 annexed to the Perfection Certificate
(other than the Excluded Accounts) by Control.
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No Pledgor shall hereafter establish and maintain any Deposit Account
unless (1) the applicable Pledgor shall have given the Agent 30 days'
prior written notice of its intention to establish such new Deposit
Account with a Bank, (2) such Bank shall be reasonably acceptable to
the Agent and (3) such Bank and such Pledgor shall have duly executed
and delivered to the Agent a Deposit Account Control Agreement with
respect to such Deposit Account. Each Pledgor agrees that at the time
it establishes any additional Deposit Accounts it shall enter into a
duly authorized, executed and delivered Deposit Account Control
Agreement with respect to such Deposit Account. The Agent agrees with
each Pledgor that the Agent shall not give any instructions directing
the disposition of funds from time to time credited to any Deposit
Account or withhold any withdrawal rights from such Pledgor with
respect to funds from time to time credited to any Deposit Account
unless an Event of Default has occurred and is continuing. Except as
set forth in the Intercreditor Agreement, no Pledgor shall grant
Control of any Deposit Account (other than the Excluded Accounts) to
any person other than the Agent.
(c) INVESTMENT PROPERTY. (i) Each Pledgor (1) has no
Securities Accounts or Commodity Accounts other than those listed in
SCHEDULE 14 annexed to the Perfection Certificate (to the extent
required to be listed on the schedules to the Perfection Certificate as
of the date this representation is made or deemed made) and the Agent
has a perfected first priority security interest in such Securities
Accounts (other than the Excluded Accounts) and Commodity Accounts by
Control, (2) does not hold, own or have any interest in any
certificated securities or uncertificated securities other than those
constituting Pledged Securities and those maintained in Securities
Accounts or Commodity Accounts listed in SCHEDULE 14 annexed to the
Perfection Certificate (to the extent required to be listed on the
schedules to the Perfection Certificate as of the date this
representation is made or deemed made) and (3) as of the date hereof,
has entered into a duly authorized, executed and delivered Securities
Account Control Agreement or a Commodity Account Control Agreement with
respect to each Securities Account or Commodity Account listed in
SCHEDULE 14 annexed to the Perfection Certificate, as applicable.
(ii) If any Pledgor shall at any time hold or acquire any
certificated securities constituting Investment Property, such Pledgor
shall promptly (a) endorse, assign and deliver the same to the Agent,
accompanied by such instruments of transfer or assignment duly executed
in blank, all in form and substance reasonably satisfactory to the
Agent or (b) deliver such securities into a Securities Account with
respect to which a Control Agreement is in effect in favor of the
Agent. If any securities now or hereafter acquired by any Pledgor
constituting Investment Property are uncertificated and are issued to
such Pledgor or its nominee directly by the issuer thereof, such
Pledgor shall promptly notify the Agent thereof and pursuant to an
agreement in form and substance satisfactory to the Agent, either (a)
cause the issuer to agree to comply with instructions from the Agent as
to such securities, without further consent of any Pledgor or such
nominee, (b) cause a Security Entitlement with respect to such
uncertificated security to be held in a Securities Account with respect
to which the Agent has Control or (c) arrange for the Agent to
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become the registered owner of the securities. Pledgor shall not
hereafter establish and maintain any Securities Account or Commodity
Account with any Securities Intermediary or Commodity Intermediary
unless (1) the applicable Pledgor shall have given the Agent 30 days'
prior written notice of its intention to establish such new Securities
Account or Commodity Account with such Securities Intermediary or
Commodity Intermediary, (2) such Securities Intermediary or Commodity
Intermediary shall be reasonably acceptable to the Agent and (3) such
Securities Intermediary or Commodity Intermediary, as the case may be,
and such Pledgor shall have duly executed and delivered a Control
Agreement with respect to such Securities Account or Commodity Account,
as the case may be. Each Pledgor shall accept any cash and Investment
Property in trust for the benefit of the Agent and within one (1)
Business Day of actual receipt thereof, deposit any cash or Investment
Property and any new securities, instruments, documents or other
property by reason of ownership of the Investment Property (other than
payments of a kind described in SECTION 7.4 hereof) received by it into
a Controlled Account. The Agent agrees with each Pledgor that the Agent
shall not give any Entitlement Orders or instructions or directions to
any issuer of uncertificated securities, Securities Intermediary or
Commodity Intermediary, and shall not withhold its consent to the
exercise of any withdrawal or dealing rights by such Pledgor, unless an
Event of Default has occurred and is continuing, or, after giving
effect to any such investment and withdrawal rights would occur. The
provisions of this SECTION 3.4(C) shall not apply to any Financial
Assets credited to a Securities Account for which the Agent is the
Securities Intermediary. No Pledgor shall grant control over any
Investment Property to any person other than the Agent.
(iii) As between the Agent and the Pledgors, the Pledgors
shall bear the investment risk with respect to the Investment Property
and Pledged Securities, and the risk of loss of, damage to, or the
destruction of the Investment Property and Pledged Securities, whether
in the possession of, or maintained as a security entitlement or
deposit by, or subject to the control of, the Agent, a Securities
Intermediary, Commodity Intermediary, any Pledgor or any other person;
PROVIDED, HOWEVER, that nothing contained in this SECTION 3.4(C) shall
release or relieve any Securities Intermediary or Commodity
Intermediary of its duties and obligations to the Pledgors or any other
person under any Control Agreement or under applicable law. Each
Pledgor shall promptly pay all Claims and fees of whatever kind or
nature with respect to the Investment Property and Pledged Securities
pledged by it under this Agreement. In the event any Pledgor shall fail
to make such payment contemplated in the immediately preceding
sentence, the Agent may do so for the account of such Pledgor and the
Pledgors shall promptly reimburse and indemnify the Agent from all
costs and expenses incurred by the Agent under this SECTION 3.4(C) in
accordance with SECTION 13 of the Purchase Agreement.
(d) ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS. No
amount under or in connection with any of the Pledged Collateral is
evidenced by 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
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Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction) other than such Electronic Chattel Paper and transferable
records listed in SCHEDULE 11 annexed to the Perfection Certificate (to
the extent required to be listed on the schedules to the Perfection
Certificate as of the date this representation is made or deemed made).
If any amount payable under or in connection with any of the Pledged
Collateral shall be evidenced by any Electronic Chattel Paper or any
transferable record, the Pledgor acquiring such Electronic Chattel
Paper or transferable record shall promptly notify the Agent thereof
and shall take such action as the Agent may reasonably request to vest
in the Agent control under 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. The requirement in the
preceding sentence shall apply to the extent that such amount, together
with all amounts payable evidenced by Electronic Chattel Paper or any
transferable record in which the Agent has not been vested control
within the meaning of the statutes described in this sentence exceeds
$500,000 in the aggregate for all Pledgors. The Agent agrees with such
Pledgor that the Agent will arrange, pursuant to procedures
satisfactory to the Agent and so long as such procedures will not
result in the Agent's loss of control, for the Pledgor to make
alterations to the Electronic Chattel Paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201
of the Federal Electronic Signatures in Global and National Commerce
Act or Section 16 of the Uniform Electronic Transactions Act for a
party in control to allow without loss of control, unless an Event of
Default has occurred and is continuing or would occur after taking into
account any action by such Pledgor with respect to such Electronic
Chattel Paper or transferable record.
(e) LETTER-OF-CREDIT RIGHTS. If any Pledgor is at any time a
beneficiary under a Letter of Credit now or hereafter issued in favor
of such Pledgor, such Pledgor shall promptly notify the Agent thereof
and such Pledgor shall, at the request of the Agent, pursuant to an
agreement in form and substance reasonably satisfactory to the Agent,
either (i) arrange for the issuer and any confirmer of such Letter of
Credit to consent to an assignment to the Agent of the proceeds of any
drawing under the Letter of Credit or (ii) arrange for the Agent to
become the transferee beneficiary of such Letter of Credit, with the
Agent agreeing, in each case, that the proceeds of any drawing under
the Letter of Credit are to be applied as provided in the Purchase
Agreement. The actions in the preceding sentence shall be taken to the
extent that the amount under such Letter of Credit, together with all
amounts under Letters of Credit for which the actions described above
in clause (i) and (ii) have not been taken, exceeds $500,000 in the
aggregate for all Pledgors.
(f) COMMERCIAL TORT CLAIMS. As of the date hereof each Pledgor
hereby represents and warrants that it holds no Commercial Tort Claims
other than those listed in SCHEDULE 13 annexed to the Perfection
Certificate (to the extent required to be listed on the schedules to
the Perfection Certificate as of the date this representation is made
or
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deemed made). If any Pledgor shall at any time hold or acquire a
Commercial Tort Claim having a value together with all other Commercial
Tort Claims of all Pledgors in which the Agent does not have a security
interest in excess of $500,000 in the aggregate, such Pledgor shall
immediately notify the Agent in writing signed by such Pledgor of the
brief details thereof and grant to the 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
reasonably satisfactory to the Agent.
(g) LANDLORD'S ACCESS AGREEMENTS. Each Pledgor shall use its
commercially reasonable efforts to obtain a Landlord Access Agreement
and/or, if required by the Purchase Agreement, landlord's lien waiver,
as applicable, from all such landlords, as applicable, who from time to
time after the date hereof have possession of Pledged Collateral (other
than with respect to any location of Pledged Collateral maintained on
the date hereof) in the ordinary course of such Pledgor's business and
if reasonably requested by the Agent. A Landlord Access Agreement
and/or landlord's lien waiver shall not be required if (i) the value of
the Pledged Collateral held by such landlord is less than $100,000,
provided that the aggregate value of the Pledged Collateral held by all
landlords who have not delivered a Landlord Access Agreement and/or
landlord's lien waiver is less than $500,000 in the aggregate or (ii)
the Pledgor has delivered a leasehold mortgage with respect to such
property.
(h) MOTOR VEHICLES. Upon the request of the Agent, each
Pledgor shall deliver to the Agent originals of the certificates of
title or ownership for the motor vehicles (and any other Equipment
covered by Certificates of Title or ownership) owned by it with the
Agent listed as lienholder therein. Such requirement shall apply to the
Pledgors if any such motor vehicle (or any such other Equipment) is
valued at over $50,000, provided that the value of all such motor
vehicles (and such Equipment) as to which any Pledgor has not delivered
a Certificate of Title or ownership is over $500,000.
SECTION 3.5. JOINDER OF ADDITIONAL GUARANTORS. The Pledgors
shall cause each new Subsidiary of the Issuer (other than a Foreign Subsidiary)
which, from time to time, after the date hereof shall be required to pledge any
assets to the Agent for the benefit of the Secured Parties pursuant to the
provisions of the Purchase Agreement, to execute and deliver to the Agent (i) a
Joinder Agreement substantially in the form of EXHIBIT 3 annexed hereto within
thirty (30) Business Days of the date on which it was acquired or created and
(ii) a Perfection Certificate, in each case, within thirty (30) Business Days of
the date on which it was acquired or created and, in each case, upon such
execution and delivery, such Subsidiary shall constitute a "Guarantor" and a
"Pledgor" for all purposes hereunder with the same force and effect as if
originally named as a Guarantor and Pledgor herein. The execution and delivery
of such Joinder Agreement shall not require the consent of any Pledgor
hereunder. The rights and obligations of each Pledgor hereunder shall remain in
full force and effect notwithstanding the addition of any new Guarantor and
Pledgor as a party to this Agreement.
SECTION 3.6. SUPPLEMENTS; FURTHER ASSURANCES. Each Pledgor
shall take such further actions, and to execute and deliver to the Agent such
additional assignments, agreements,
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supplements, powers and instruments, as the Agent may in its reasonable judgment
deem necessary or appropriate, wherever required by law, in order to perfect,
preserve and protect the security interest in the Pledged Collateral as provided
herein and the rights and interests granted to the Agent hereunder, to carry
into effect the purposes hereof or better to assure and confirm unto the Agent
the Pledged Collateral or permit the Agent to exercise and enforce its rights,
powers and remedies hereunder with respect to any Pledged Collateral. Without
limiting the generality of the foregoing, each Pledgor shall make, execute,
endorse, acknowledge, file or refile and/or deliver to the Agent from time to
time upon reasonable request such lists, descriptions and designations of the
Pledged Collateral, copies of warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, supplements, additional security
agreements, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments as the Agent
shall reasonably request. If an Event of Default has occurred and is continuing,
the Agent may institute and maintain, in its own name or in the name of any
Pledgor, such suits and proceedings as the Agent may be advised by counsel shall
be necessary or expedient to prevent any impairment of the security interest in
or the perfection thereof in the Pledged Collateral. All of the foregoing shall
be at the sole cost and expense of the Pledgors.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
EACH PLEDGOR REPRESENTS, WARRANTS AND COVENANTS AS FOLLOWS:
SECTION 4.1. TITLE. Except for the security interest granted
to the Agent for the ratable benefit of the Secured Parties pursuant to this
Agreement and Permitted Liens, such Pledgor owns and, as to Pledged Collateral
acquired by it from time to time after the date hereof, will own the rights in
each item of Pledged Collateral pledged by it hereunder free and clear of any
and all Liens or claims of others other than Permitted Collateral Liens. In
addition, no Liens or claims exist on the Securities Collateral, other than as
permitted by SECTION 8.07 of the Purchase Agreement. Such Pledgor has not filed,
nor authorized any third party to file a financing statement or other public
notice with respect to all or any part of the Pledged Collateral on file or of
record in any public office, except such as have been filed in favor of the
Agent pursuant to this Agreement, those filed by the holder of a Permitted
Collateral Lien relating to the Permitted Collateral Liens or as are permitted
by the Purchase Agreement or financing statements or public notices relating to
the termination statements listed on SCHEDULE 9 to the Perfection Certificate.
No person other than the Agent has control or possession of all or any part of
the Pledged Collateral, except as permitted by the Purchase Agreement.
SECTION 4.2. VALIDITY OF SECURITY INTEREST. The security
interest in and Lien on the Pledged Collateral granted to the Agent for the
benefit of the Secured Parties hereunder constitutes (a) a legal and valid
security interest in all the Pledged Collateral securing the
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payment and performance of the Obligations, and (b) subject to the filings and
other actions described in SCHEDULE 7 annexed to the Perfection Certificate (to
the extent required to be listed on the schedules to the Perfection Certificate
as of the date this representation is made or deemed made), a perfected security
interest in all the Pledged Collateral. The security interest and Lien granted
to the Agent for the benefit of the Secured Parties pursuant to this Agreement
in and on the Pledged Collateral will at all times constitute a perfected,
continuing security interest therein, subject only to Permitted Collateral
Liens.
SECTION 4.3. DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED
COLLATERAL. Each Pledgor shall, at its own cost and expense, defend title to the
Pledged Collateral pledged by it hereunder and the security interest therein and
Lien thereon granted to the Agent and the priority thereof against all claims
and demands of all persons, at its own cost and expense, at any time claiming
any interest therein adverse to the Agent or any other Secured Party other than
Permitted Collateral Liens (other than Contested Liens). There is no agreement,
and no Pledgor shall enter into any agreement or take any other action, that
would restrict the transferability of any of the Pledged Collateral or otherwise
impair or conflict with such Pledgors' obligations or the rights of the Agent
hereunder, except as permitted herein or by the Purchase Agreement.
SECTION 4.4. OTHER FINANCING STATEMENTS. It has not filed, nor
authorized any third party to file (nor will there be any) valid or effective
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Pledged Collateral other than financing statements and other
statements and instruments relating to Permitted Collateral Liens. So long as
any of the Obligations remain unpaid, no Pledgor shall execute, authorize or
permit to be filed in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction)
relating to any Pledged Collateral, except financing statements and other
statements and instruments filed or to be filed in respect of and covering the
security interests granted by such Pledgor to the holder of the Permitted
Collateral Liens.
SECTION 4.5. CHIEF EXECUTIVE OFFICE; CHANGE OF NAME;
JURISDICTION OF ORGANIZATION. (a) It shall comply with the provisions of SECTION
7.15(A) of the Purchase Agreement.
(b) The Agent may rely on opinions of counsel as to whether
any or all UCC financing statements of the Pledgors need to be amended as a
result of any of the changes described in SECTION 7.15(A) of the Purchase
Agreement. If any Pledgor fails to provide information to the Agent about such
changes on a timely basis, the Agent shall not be liable or responsible to any
party for any failure to maintain a perfected security interest in such
Pledgor's property constituting Pledged Collateral, for which the Agent needed
to have information relating to such changes. The Agent shall have no duty to
inquire about such changes if any Pledgor does not inform the Agent of such
changes, the parties acknowledging and agreeing that it would not be feasible or
practical for the Agent to search for information on such changes if such
information is not provided by any Pledgor.
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SECTION 4.6. LOCATION OF INVENTORY AND EQUIPMENT. It shall not
move any Equipment or Inventory to any location other than one within the
continental United States and until (i) it shall have given the Agent not less
than 30 days' prior written notice (in the form of an Officers' Certificate) of
its intention so to do, clearly describing such new location within the
continental United States and providing such other information in connection
therewith as the Agent may request and (ii) with respect to such new location,
such Pledgor shall have taken all action reasonably satisfactory to the Agent to
maintain the perfection and priority of the security interest of the Agent for
the benefit of the Secured Parties in the Pledged Collateral intended to be
granted hereby, including using commercially reasonable efforts to obtain
waivers of landlord's liens with respect to such new location, if applicable,
and if requested by the Agent. Such Pledgor agrees to provide the Agent with
prompt notice following the movement of any Equipment or Inventory to any
location other than one that is listed in the relevant Schedules to the
Perfection Certificate.
SECTION 4.7. DUE AUTHORIZATION AND ISSUANCE. All of the
Initial Pledged Shares have been, and to the extent any Pledged Shares are
hereafter issued, such Pledged Shares will be, upon such issuance, duly
authorized, validly issued and fully paid and non-assessable. All of the Initial
Pledged Interests have been fully paid for, and there is no amount or other
obligation owing by any Pledgor to any issuer of the Initial Pledged Interests
in exchange for or in connection with the issuance of the Initial Pledged
Interests or any Pledgor's status as a partner or a member of any issuer of the
Initial Pledged Interests.
SECTION 4.8. CONSENTS, ETC. In the event that the Agent
desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
person therefor, then, upon the reasonable request of the Agent, such Pledgor
agrees to use its commercially reasonable efforts to assist and aid the Agent to
obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.
SECTION 4.9. PLEDGED COLLATERAL. All information set forth
herein, including the schedules annexed hereto, and all information contained in
any documents, schedules and lists heretofore delivered to any Secured Party,
including the Perfection Certificate and the schedules thereto, in connection
with this Agreement, in each case, relating to the Pledged Collateral, is
accurate and complete in all material respects. The Pledged Collateral described
on the schedules annexed to the Perfection Certificate constitutes all of the
property of such type of Pledged Collateral owned or held by the Pledgors that
is required to be pledged herein or by the Purchase Agreement.
SECTION 4.10. INSURANCE. In the event that the proceeds of any
insurance claim are paid after the Agent has exercised its right to foreclose
after an Event of Default, such Net Cash Proceeds shall be paid to the Agent to
satisfy any deficiency remaining after such foreclosure.
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SECTION 4.11. PAYMENT OF TAXES; COMPLIANCE WITH LAWS;
CONTESTING LIENS; CLAIMS. Each Pledgor represents and warrants that all Claims
imposed upon or assessed against the Pledged Collateral have been paid and
discharged except to the extent such Claims constitute a Lien not yet due and
payable which is a Contested Lien or a Permitted Collateral Lien. Each Pledgor
shall comply with all Requirements of Law applicable to the Pledged Collateral
the failure to comply with which would, individually or in the aggregate, have a
Material Adverse Effect. Each Pledgor may at its own expense contest the
validity, amount or applicability of any Claims so long as the contest thereof
shall be conducted in accordance with, and permitted pursuant to the provisions
of, the Purchase Agreement. Notwithstanding the foregoing provisions of this
SECTION 4.11, (i) no contest of any such obligation may be pursued by such
Pledgor if such contest would expose the Agent or any other Secured Party to (A)
any possible criminal liability or (B) any additional civil liability for
failure to comply with such obligations unless such Pledgor shall have furnished
a bond or other security therefor satisfactory to the Agent, or such Secured
Party, as the case may be and (ii) if at any time payment or performance of any
obligation contested by such Pledgor pursuant to this SECTION 4.11 shall become
necessary to prevent the imposition of remedies because of non-payment, such
Pledgor shall pay or perform the same in sufficient time to prevent the
imposition of remedies in respect of such default or prospective default.
SECTION 4.12. ACCESS TO PLEDGED COLLATERAL, BOOKS AND RECORDS;
OTHER INFORMATION. Except as provided in the Purchase Agreement, upon reasonable
request to each Pledgor and upon the execution of a confidentiality agreement
substantially in the form set forth in the Purchase Agreement or as otherwise
mutually acceptable to the Issuer and the Agent, the Agent, its agents,
accountants and attorneys shall have full and free access to visit and inspect,
as applicable, during normal business hours and such other reasonable times as
may be requested by the Agent all of the Pledged Collateral including all of the
books, correspondence and records of such Pledgor relating thereto. The Agent
and its representatives may examine the same, take extracts therefrom and make
photocopies thereof, and such Pledgor agrees to render to the Agent, at such
Pledgor's cost and expense, such clerical and other assistance as may be
reasonably requested by the Agent with regard thereto. Such Pledgor shall, at
any and all times, within a reasonable time after written request by the Agent,
furnish or cause to be furnished to the Agent, in such manner and in such detail
as may be reasonably requested by the Agent, additional information with respect
to the Pledged Collateral.
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. PLEDGE OF ADDITIONAL SECURITIES COLLATERAL. Each
Pledgor shall, upon obtaining any Pledged Securities or Intercompany Notes of
any person, accept the same in trust for the benefit of the Agent and forthwith
deliver to the Agent a pledge amendment, duly executed by such Pledgor, in
substantially the form of EXHIBIT 2 annexed hereto (each, a "PLEDGE AMENDMENT"),
and the certificates and other documents required under SECTION 3.1 and
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SECTION 3.2 hereof in respect of the additional Pledged Securities or
Intercompany Notes which are to be pledged pursuant to this Agreement, and
confirming the attachment of the Lien hereby created on and in respect of such
additional Pledged Securities or Intercompany Notes. Each Pledgor hereby
authorizes the Agent to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Securities or Intercompany Notes listed on any Pledge
Amendment delivered to the Agent shall for all purposes hereunder be considered
Pledged Collateral.
SECTION 5.2. VOTING RIGHTS; DISTRIBUTIONS; ETC.
(i) So long as no Event of Default shall have occurred and be
continuing:
(A) Each Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not inconsistent with
the terms or purposes hereof, the Purchase Agreement or any other
document evidencing the Obligations; PROVIDED, HOWEVER, that no Pledgor
shall in any event exercise such rights in any manner which could
reasonably be expected to have a Material Adverse Effect.
(B) Each Pledgor shall be entitled to receive and retain, and
to utilize free and clear of the Lien hereof, any and all
Distributions, but only if and to the extent made in accordance with
the provisions of the Purchase Agreement; PROVIDED, HOWEVER, that any
and all such Distributions consisting of rights or interests in the
form of securities shall be forthwith delivered to the Agent to hold as
Pledged Collateral and shall, if received by any Pledgor, be received
in trust for the benefit of the Agent, be segregated from the other
property or funds of such Pledgor and be forthwith delivered to the
Agent as Pledged Collateral in the same form as so received (with any
necessary endorsement).
(ii) The Agent shall be deemed without further action or
formality to have granted to each Pledgor all necessary consents relating to
voting rights and shall, if necessary, upon written request of any Pledgor and
at the sole cost and expense of the Pledgors, from time to time execute and
deliver (or cause to be executed and delivered) to such Pledgor all such
instruments as such Pledgor may reasonably request in order to permit such
Pledgor to exercise the voting and other rights which it is entitled to exercise
pursuant to SECTION 5.2(I)(A) hereof and to receive the Distributions which it
is authorized to receive and retain pursuant to SECTION 5.2(i)(B) hereof.
(iii) Upon the occurrence and during the continuance of any
Event of Default:
(A) All rights of each Pledgor to exercise the voting and
other consensual rights it would otherwise be entitled to exercise
pursuant to SECTION 5.2(I)(A) hereof shall cease, and all such rights
shall thereupon become vested in the Agent to the extent permitted by
applicable law, which shall thereupon have the sole right to exercise
such voting and other consensual rights to the extent permitted by
applicable law.
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(B) All rights of each Pledgor to receive Distributions which
it would otherwise be authorized to receive and retain pursuant to
SECTION 5.2(I)(B) hereof shall cease and all such rights shall
thereupon become vested in the Agent to the extent permitted by
applicable law, which shall thereupon have the sole right to receive
and hold as Pledged Collateral such Distributions to the extent
permitted by applicable law.
(iv) Each Pledgor shall, at its sole cost and expense, from
time to time execute and deliver to the Agent appropriate instruments as the
Agent may request in order to permit the Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to SECTION 5.2(III)(A)
hereof and to receive all Distributions which it may be entitled to receive
under SECTION 5.2(III)(B) hereof.
(v) All Distributions which are received by any Pledgor
contrary to the provisions of SECTION 5.2(I)(B) hereof shall be received in
trust for the benefit of the Agent, shall be segregated from other funds of such
Pledgor and shall immediately be paid over to the Agent as Pledged Collateral in
the same form as so received (with any necessary endorsement).
SECTION 5.3. DEFAULTS, ETC. Such Pledgor is not in default in
the payment of any portion of any mandatory capital contribution, if any,
required to be made under any agreement to which such Pledgor is a party
relating to the Pledged Securities pledged by it, and such Pledgor is not in
violation of any other provisions of any such agreement to which such Pledgor is
a party, or otherwise in default or violation thereunder. No Securities
Collateral pledged by such Pledgor is subject to any defense, offset or
counterclaim, nor have any of the foregoing been asserted or alleged against
such Pledgor by any person with respect thereto, and as of the date hereof,
there are no certificates, instruments, documents or other writings (other than
the Organizational Documents and certificates, if any, delivered to the Agent)
which evidence any Pledged Securities of such Pledgor.
SECTION 5.4. CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND
HOLDERS OF EQUITY INTERESTS.
(i) In the case of each Pledgor which is an issuer of
Securities Collateral, such Pledgor agrees to be bound by the terms of this
Agreement relating to the Securities Collateral issued by it and will comply
with such terms insofar as such terms are applicable to it.
(ii) In the case of each Pledgor which is a partner in a
partnership, limited liability company or other entity, such Pledgor hereby
consents to the extent required by the applicable Organizational Document to the
pledge by each other Pledgor, pursuant to the terms hereof, of the Pledged
Interests in such partnership, limited liability company or other entity and,
upon the occurrence and during the continuance of an Event of Default, to the
transfer of such Pledged Interests to the Agent or its nominee and to the
substitution of the Agent or its nominee as a substituted partner or member in
such partnership, limited liability company or other entity with all the rights,
powers and duties of a general partner or a limited partner or member, as the
case may be.
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ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. GRANT OF LICENSE. For the purpose of enabling the
Agent, during the continuance of an Event of Default, to exercise rights and
remedies under ARTICLE IX hereof at such time as the Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Pledgor hereby grants to the Agent, to the extent assignable, an irrevocable,
non-exclusive license to use, assign, license or sublicense any of the
Intellectual Property Collateral now owned or hereafter acquired by such
Pledgor, wherever the same may be located. Such license shall include access to
all media in which any of the licensed items may be recorded or stored and to
all computer programs used for the compilation or printout hereof.
SECTION 6.2. PROTECTION OF AGENT'S SECURITY. On a continuing
basis, each Pledgor shall, at its sole cost and expense, (i) promptly following
its becoming aware thereof, notify the Agent of (A) any materially adverse
determination in any proceeding in the United States Patent and Trademark Office
or the United States Copyright Office with respect to any material Patent,
Trademark or Copyright or (B) the institution of any proceeding or any adverse
determination in any federal, state or local court or administrative body
regarding such Pledgor's claim of ownership in or right to use any of the
Intellectual Property Collateral material to the use and operation of the
Pledged Collateral, its right to register such Intellectual Property Collateral
or its right to keep and maintain such registration in full force and effect,
(ii) maintain and protect the Intellectual Property Collateral material to the
use and operation of the Pledged Collateral as presently used and operated and
as contemplated by the Purchase Agreement, (iii) not permit to lapse or become
abandoned any Intellectual Property Collateral material to the use and operation
of the Pledged Collateral as presently used and operated and as contemplated by
the Purchase Agreement, and not settle or compromise any pending or future
litigation or administrative proceeding with respect to such Intellectual
Property Collateral, in each case except as shall be consistent with
commercially reasonable business judgment, (iv) upon such Pledgor obtaining
knowledge thereof, promptly notify the Agent in writing of any event which may
be reasonably expected to materially and adversely affect the value or utility
of the Intellectual Property Collateral or any portion thereof material to the
use and operation of the Pledged Collateral, the ability of such Pledgor or the
Agent to dispose of the Intellectual Property Collateral or any portion thereof
or the rights and remedies of the Agent in relation thereto including a levy or
threat of levy or any legal process against the Intellectual Property Collateral
or any portion thereof, (v) not license the Intellectual Property Collateral
other than licenses entered into by such Pledgor in, or incidental to, the
ordinary course of business, or amend or permit the amendment of any of the
licenses in a manner that materially and adversely affects the right to receive
payments thereunder, or in any manner that would materially impair the value of
the Intellectual Property Collateral or the Lien on and security interest in the
Intellectual Property Collateral intended to be granted to the Agent for the
benefit of the Secured Parties, without the consent of the Agent, (vi)
diligently keep adequate records respecting the Intellectual Property Collateral
and (vii) furnish to the Agent from time to time upon the Agent's request
therefor
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reasonably detailed statements and amended schedules further identifying and
describing the Intellectual Property Collateral and such other materials
evidencing or reports pertaining to the Intellectual Property Collateral as the
Agent may from time to time request.
SECTION 6.3. AFTER-ACQUIRED PROPERTY. If any Pledgor shall, at
any time before the Obligations have been paid in full (other than contingent
indemnification obligations which, pursuant to the provisions of the Purchase
Agreement or the Security Documents, survive the termination thereof), (i)
obtain any rights to any additional Intellectual Property Collateral or (ii)
become entitled to the benefit of any additional Intellectual Property
Collateral or any renewal or extension thereof, including any reissue, division,
continuation, or continuation-in-part of any Intellectual Property Collateral,
or any improvement on any Intellectual Property Collateral, the provisions
hereof shall automatically apply thereto and any such item enumerated in clause
(i) or (ii) of this SECTION 6.3 with respect to such Pledgor shall automatically
constitute Intellectual Property Collateral if such would have constituted
Intellectual Property Collateral at the time of execution hereof and be subject
to the Lien and security interest created by this Agreement without further
action by any party. Each Pledgor shall promptly (i) provide to the Agent
written notice of any of the foregoing and (ii) confirm the attachment of the
Lien and security interest created by this Agreement to any rights described in
clauses (i) and (ii) of the immediately preceding sentence of this SECTION 6.3
by execution of an instrument in form reasonably acceptable to the Agent and the
filing of any instruments or statements as shall be reasonably necessary to
preserve, protect or perfect the Agent's security interest in such Intellectual
Property Collateral. Further, each Pledgor authorizes the Agent to modify this
Agreement by amending SCHEDULES 12(A) and 12(B) annexed to the Perfection
Certificate to include any Intellectual Property Collateral acquired or arising
after the date hereof of such Pledgor.
SECTION 6.4. LITIGATION. Unless there shall occur and be
continuing any Event of Default, each Pledgor shall have the right to commence
and prosecute in its own name, as the party in interest, for its own benefit and
at the sole cost and expense of the Pledgors, such applications for protection
of the Intellectual Property Collateral and suits, proceedings or other actions
to prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary to protect the Intellectual
Property Collateral. Upon the occurrence and during the continuance of any Event
of Default, the Agent shall have the right but shall in no way be obligated to
file applications for protection of the Intellectual Property Collateral and/or
bring suit in the name of any Pledgor, the Agent or the Secured Parties to
enforce the Intellectual Property Collateral and any license thereunder. In the
event of such suit, each Pledgor shall, at the reasonable request of the Agent,
do any and all lawful acts and execute any and all documents requested by the
Agent in aid of such enforcement and the Pledgors shall promptly reimburse and
indemnify the Agent for all costs and expenses incurred by the Agent in the
exercise of its rights under this SECTION 6.4 in accordance with SECTION 13 of
the Purchase Agreement. In the event that the Agent shall elect not to bring
suit to enforce the Intellectual Property Collateral, each Pledgor agrees, at
the reasonable request of the Agent, to take all commercially reasonable actions
necessary, whether by suit, proceeding or other action, to prevent the
infringement, counterfeiting, unfair competition, dilution, diminution in value
of or
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other damage to any of the material Intellectual Property Collateral by others
and for that purpose agrees to diligently maintain any suit, proceeding or other
action against any person so infringing necessary to prevent such infringement.
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. MAINTENANCE OF RECORDS. Each Pledgor shall keep
and maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto. Except as provided in the Intercreditor
Agreement, each Pledgor shall, at such Pledgor's sole cost and expense, upon the
Agent's demand made at any time after the occurrence and during the continuance
of any Event of Default, deliver all tangible evidence of Accounts, including
all documents evidencing Accounts and any books and records relating thereto to
the Agent or to its representatives (copies of which evidence and books and
records may be retained by such Pledgor). Except as provided in the
Intercreditor Agreement, upon the occurrence and during the continuance of any
Event of Default and acceleration of the Notes (as defined in the Purchase
Agreement), the Agent may transfer a full and complete copy of any Pledgor's
books, records, credit information, reports, memoranda and all other writings
relating to the Accounts to and for the use by any person that has acquired or
is contemplating acquisition of an interest in the Accounts or the Agent's
security interest therein without the consent of any Pledgor.
SECTION 7.2. LEGEND. Each Pledgor shall legend, at the request
of the Agent and in form and manner satisfactory to the Agent, the Accounts and
the other books, records and documents of such Pledgor evidencing or pertaining
to the Accounts with an appropriate reference to the fact that the Accounts have
been assigned to the Agent for the benefit of the Secured Parties and that the
Agent has a security interest therein.
SECTION 7.3. MODIFICATION OF TERMS, ETC. No Pledgor shall
rescind or cancel any obligations evidenced by any Account or modify any term
thereof or make any adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or renew
any such obligations except in the ordinary course of business consistent with
prudent business practice or compromise or settle any dispute, claim, suit or
legal proceeding relating thereto or sell any Account or interest therein except
in the ordinary course of business consistent with prudent business practice
without the prior written consent of the Agent. Each Pledgor shall timely
fulfill all obligations on its part to be fulfilled under or in connection with
the Accounts.
SECTION 7.4. COLLECTION. Each Pledgor shall cause to be
collected from the Account Debtor of each of the Accounts, as and when due in
the ordinary course of business and consistent with prudent business practice
(including Accounts that are delinquent), any and all
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amounts owing under or on account of such Account, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Account, except that any Pledgor may, with respect to an Account, allow
in the ordinary course of business (i) a refund or credit due and (ii) such
extensions of time to pay amounts due in respect of Accounts and such other
modifications of payment terms or settlements in respect of Accounts as shall be
commercially reasonable in the circumstances, all in accordance with such
Pledgor's ordinary course of business consistent with its collection practices
as in effect from time to time. The costs and expenses (including attorneys'
fees) of collection, in any case, whether incurred by any Pledgor, the Agent or
any Secured Party, shall be paid by the Pledgors.
ARTICLE VIII
TRANSFERS
SECTION 8.1. TRANSFERS OF PLEDGED COLLATERAL. No Pledgor shall
sell, convey, assign or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral pledged by it hereunder except as permitted by
the Purchase Agreement, including SECTION 7.19 of the Purchase Agreement.
ARTICLE IX
REMEDIES
SECTION 9.1. REMEDIES. Upon the occurrence and during the
continuance of any Event of Default the Agent may from time to time exercise in
respect of the Pledged Collateral, in addition to the other rights and remedies
provided for herein or otherwise available to it, the following remedies:
(i) Personally, or by agents or attorneys, immediately take
possession of the Pledged Collateral or any part thereof, from any Pledgor or
any other person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon any Pledgor's
premises where any of the Pledged Collateral is located, remove such Pledged
Collateral, remain present at such premises to receive copies of all
communications and remittances relating to the Pledged Collateral and use in
connection with such removal and possession any and all services, supplies, aids
and other facilities of any Pledgor;
(ii) Demand, sue for, collect or receive any money or property
at any time payable or receivable in respect of the Pledged Collateral including
instructing the obligor or obligors on any agreement, instrument or other
obligation constituting part of the Pledged Collateral to make any payment
required by the terms of such agreement, instrument or other obligation directly
to the Agent, and in connection with any of the foregoing, compromise, settle,
extend the time for payment and make other modifications with respect thereto;
PROVIDED,
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HOWEVER, that in the event that any such payments are made directly to any
Pledgor, prior to receipt by any such obligor of such instruction, such Pledgor
shall segregate all amounts received pursuant thereto in trust for the benefit
of the Agent and shall promptly (but in no event later than one (1) Business Day
after receipt thereof) pay such amounts to the Agent;
(iii) Sell, assign, grant a license to use or otherwise
liquidate, or direct any Pledgor to sell, assign, grant a license to use or
otherwise liquidate, any and all investments made in whole or in part with the
Pledged Collateral or any part thereof, and take possession of the proceeds of
any such sale, assignment, license or liquidation;
(iv) Take possession of the Pledged Collateral or any part
thereof, by directing any Pledgor in writing to deliver the same to the Agent at
any place or places so designated by the Agent, in which event such Pledgor
shall at its own expense: (A) forthwith cause the same to be moved to the place
or places designated by the Agent and therewith delivered to the Agent, (B)
store and keep any Pledged Collateral so delivered to the Agent at such place or
places pending further action by the Agent and (C) while the Pledged Collateral
shall be so stored and kept, provide such security and maintenance services as
shall be necessary to protect the same and to preserve and maintain them in good
condition. Each Pledgor's obligation to deliver the Pledged Collateral as
contemplated in this SECTION 9.1(IV) is of the essence hereof. Upon application
to a court of equity having jurisdiction, the Agent shall be entitled to a
decree requiring specific performance by any Pledgor of such obligation;
(v) Withdraw all moneys, instruments, securities and other
property in any bank, financial securities, deposit or other account of any
Pledgor constituting Pledged Collateral for application to the Obligations as
provided in ARTICLE X hereof;
(vi) Retain and apply the Distributions to the Obligations as
provided in ARTICLE X hereof;
(vii) Exercise any and all rights as beneficial and legal
owner of the Pledged Collateral, including perfecting assignment of and
exercising any and all voting, consensual and other rights and powers with
respect to any Pledged Collateral; and
(viii) Exercise all the rights and remedies of a secured party
on default under the UCC, and the Agent may also in its sole discretion, without
notice except as specified in SECTION 9.2 hereof, sell, assign or grant a
license to use the Pledged Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker's board or at any of the
Agent's offices or elsewhere, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as the Agent may deem
commercially reasonable. The Agent or any other Secured Party or any of their
respective Affiliates may be the purchaser, licensee, assignee or recipient of
any or all of the Pledged Collateral at any such sale and shall be entitled, for
the purpose of bidding and making settlement or payment of the purchase price
for all or any portion of the Pledged Collateral sold, assigned or licensed at
such sale, to use and apply any of the Obligations owed to such person as a
credit on account of the purchase price of any Pledged Collateral payable by
such person at such sale. Each purchaser, assignee, licensee or recipient at
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any such sale shall acquire the property sold, assigned or licensed absolutely
free from any claim or right on the part of any Pledgor, and each Pledgor hereby
waives, to the fullest extent permitted by law, all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. The Agent shall
not be obligated to make any sale of Pledged Collateral regardless of notice of
sale having been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Each Pledgor hereby waives, to the fullest extent permitted by law,
any claims against the Agent arising by reason of the fact that the price at
which any Pledged Collateral may have been sold, assigned or licensed at such a
private sale was less than the price which might have been obtained at a public
sale, even if the Agent accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree.
SECTION 9.2. NOTICE OF SALE. Each Pledgor acknowledges and
agrees that, to the extent notice of sale or other disposition of Pledged
Collateral shall be required by law, ten (10) days' prior notice to such Pledgor
of the time and place of any public sale or of the time after which any private
sale or other intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification need be given to any
Pledgor if it has signed, after the occurrence of an Event of Default, a
statement renouncing or modifying any right to notification of sale or other
intended disposition.
SECTION 9.3. WAIVER OF NOTICE AND CLAIMS. Each Pledgor hereby
waives, to the fullest extent permitted by applicable law, notice or judicial
hearing in connection with the Agent's taking possession or the Agent's
disposition of any of the Pledged Collateral, including any and all prior notice
and hearing for any prejudgment remedy or remedies and any such right which such
Pledgor would otherwise have under law, and each Pledgor hereby further waives,
to the fullest extent permitted by applicable law: (i) all damages occasioned by
such taking of possession, (ii) all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement of the
Agent's rights hereunder and (iii) all rights of redemption, appraisal,
valuation, stay, extension or moratorium now or hereafter in force under any
applicable law. The Agent shall not be liable for any incorrect or improper
payment made pursuant to this ARTICLE IX in the absence of gross negligence or
willful misconduct. Any sale of, or the grant of options to purchase, or any
other realization upon, any Pledged Collateral shall operate to divest all
right, title, interest, claim and demand, either at law or in equity, of the
applicable Pledgor therein and thereto, and shall be a perpetual bar both at law
and in equity against such Pledgor and against any and all persons claiming or
attempting to claim the Pledged Collateral so sold, optioned or realized upon,
or any part thereof, from, through or under such Pledgor.
SECTION 9.4. CERTAIN SALES OF PLEDGED COLLATERAL.
(i) Each Pledgor recognizes that, by reason of certain
prohibitions contained in law, rules, regulations or orders of any Governmental
Authority, the Agent may be compelled, with respect to any sale of all or any
part of the Pledged Collateral, to limit purchasers to those
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who meet the requirements of such Governmental Authority. Each Pledgor
acknowledges that any such sales may be at prices and on terms less favorable to
the Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such restricted sale
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Agent shall have no obligation
to engage in public sales.
(ii) Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act, and applicable state securities
laws, the Agent may be compelled, with respect to any sale of all or any part of
the Securities Collateral and Investment Property, to limit purchasers to
persons who will agree, among other things, to acquire such Securities
Collateral or Investment Property for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to the
Agent than those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration statement under the
Securities Act), and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Agent shall have no obligation to engage in public sales and
no obligation to delay the sale of any Securities Collateral or Investment
Property for the period of time necessary to permit the issuer thereof to
register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would agree to do so.
(iii) Notwithstanding the foregoing, each Pledgor shall, upon
the occurrence and during the continuance of any Event of Default, at the
reasonable request of the Agent, for the benefit of the Agent, cause any
registration, qualification under or compliance with any Federal or state
securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of
the Pledgors. Each Pledgor will use its commercially reasonable efforts to cause
such registration to be effected (and be kept effective) and will use its
commercially reasonable efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral including
registration under the Securities Act (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with all other requirements of any Governmental
Authority. Each Pledgor shall use its commercially reasonable efforts to cause
the Agent to be kept advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof,
shall furnish to the Agent such number of prospectuses, offering circulars or
other documents incident thereto as the Agent from time to time may request, and
shall indemnify and shall cause the issuer of the Securities Collateral to
indemnify the Agent and all others participating in the distribution of such
Securities Collateral against all claims, losses, damages and liabilities caused
by any untrue statement (or alleged untrue statement) of a material fact
contained therein (or in any related registration statement, notification or the
like) or by any omission (or alleged omission) to state therein (or in any
related registration statement, notification or the like) a
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material fact required to be stated therein or necessary to make the statements
therein not misleading.
(iv) If the Agent determines to exercise its right to sell any
or all of the Securities Collateral or Investment Property, upon written
request, the applicable Pledgor shall from time to time furnish to the Agent all
such information as the Agent may request in order to determine the number of
securities included in the Securities Collateral or Investment Property which
may be sold by the Agent as exempt transactions under the Securities Act and the
rules of the Securities and Exchange Commission thereunder, as the same are from
time to time in effect.
(v) Each Pledgor further agrees that a breach of any of the
covenants contained in this SECTION 9.4 will cause irreparable injury to the
Agent and other Secured Parties, that the Agent and the other Secured Parties
have no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this SECTION 9.4 shall be specifically
enforceable against such Pledgor, and such Pledgor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing.
SECTION 9.5. NO WAIVER; CUMULATIVE REMEDIES.
(i) No failure on the part of the Agent to exercise, no course
of dealing with respect to, and no delay on the part of the Agent in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy; nor shall the Agent be required to look first to,
enforce or exhaust any other security, collateral or guaranties. The remedies
herein provided are cumulative and are not exclusive of any remedies provided by
law.
(ii) In the event that the Agent shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Agent, then and in every such case, the Pledgors, the Agent and each
other Secured Party shall be restored to their respective former positions and
rights hereunder with respect to the Pledged Collateral, and all rights,
remedies and powers of the Agent and the other Secured Parties shall continue as
if no such proceeding had been instituted.
SECTION 9.6. CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL
PROPERTY. If any Event of Default shall have occurred and be continuing, upon
the written demand of the Agent, each Pledgor shall execute and deliver to the
Agent an assignment or assignments of the registered Patents, Trademarks and/or
Copyrights and Goodwill constituting Intellectual Property Collateral and such
other documents as are necessary or appropriate to carry out the intent and
purposes hereof. Within five (5) Business Days of written notice thereafter from
the Agent, each Pledgor shall make available to the Agent, to the extent within
such Pledgor's power and authority, such personnel in such Pledgor's employ on
the date of the Event of Default as the Agent may reasonably designate to permit
such Pledgor to continue, directly or indirectly, to
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produce, advertise and sell the products and services sold by such Pledgor under
the registered Patents, Trademarks and/or Copyrights constituting Intellectual
Property Collateral, and such persons shall be available to perform their prior
functions on the Agent's behalf.
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
SECTION 10.1. PROCEEDS OF CASUALTY EVENTS AND COLLATERAL
DISPOSITIONS. The Pledgors shall take all actions required by the Purchase
Agreement with respect to any Net Cash Proceeds of any Casualty Event or from
the sale or disposition of any Pledged Collateral.
SECTION 10.2. APPLICATION OF PROCEEDS. The proceeds received
by the Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral pursuant to the exercise by the Agent of
its remedies shall be applied, together with any other sums then held by the
Agent pursuant to this Agreement, in accordance with the Purchase Agreement.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. CONCERNING AGENT.
(i) The Agent has been appointed as collateral agent pursuant
to the Purchase Agreement. The actions of the Agent hereunder are subject to the
provisions of the Purchase Agreement. The Agent shall have the right hereunder
to make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking action (including the release or
substitution of the Pledged Collateral), in accordance with this Agreement and
the Purchase Agreement. The Agent may employ agents and attorneys-in-fact in
connection herewith and shall not be liable for the negligence or misconduct of
any such agents or attorneys-in-fact selected by it in good faith. The Agent may
resign and a successor Agent may be appointed in the manner provided in the
Purchase Agreement. Upon the acceptance of any appointment as the Agent by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
under this Agreement, and the retiring Agent shall thereupon be discharged from
its duties and obligations under this Agreement. After any retiring Agent's
resignation, the provisions hereof shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was the Agent.
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(ii) The Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its possession
if such Pledged Collateral is accorded treatment substantially equivalent to
that which the Agent, in its individual capacity, accords its own property
consisting of similar instruments or interests, it being understood that neither
the Agent nor any of the Secured Parties shall have responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Securities Collateral,
whether or not the Agent or any other Secured Party has or is deemed to have
knowledge of such matters or (ii) taking any necessary steps to preserve rights
against any person with respect to any Pledged Collateral.
(iii) The Agent shall be entitled to rely upon any written
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, upon advice of counsel selected by it.
(iv) If any item of Pledged Collateral also constitutes
collateral granted to the Agent under any other deed of trust, mortgage,
security agreement, pledge or instrument of any type, in the event of any
conflict between the provisions hereof and the provisions of such other deed of
trust, mortgage, security agreement, pledge or instrument of any type in respect
of such collateral, the Agent, in its sole discretion, shall select which
provision or provisions shall control.
SECTION 11.2. AGENT MAY PERFORM; AGENT APPOINTED
ATTORNEY-IN-FACT. If any Pledgor shall fail to perform any covenants contained
in this Agreement (including such Pledgor's covenants to (i) pay the premiums in
respect of all required insurance policies hereunder, (ii) pay Claims, (iii)
make repairs, (iv) discharge Liens or (v) pay or perform any obligations of such
Pledgor under any Pledged Collateral) or if any representation or warranty on
the part of any Pledgor contained herein shall be breached, the Agent may (but
shall not be obligated to) do the same or cause it to be done or remedy any such
breach, and may expend funds for such purpose; PROVIDED, HOWEVER, that the Agent
shall in no event be bound to inquire into the validity of any tax, lien,
imposition or other obligation which such Pledgor fails to pay or perform as and
when required hereby and which such Pledgor does not contest in accordance in
accordance with the provisions of SECTION 4.11 hereof. Any and all amounts so
expended by the Agent shall be paid by the Pledgors in accordance with the
provisions of SECTION 13 of the Purchase Agreement. Neither the provisions of
this SECTION 11.2 nor any action taken by the Agent pursuant to the provisions
of this SECTION 11.2 shall prevent any such failure to observe any covenant
contained in this Agreement nor any breach of representation or warranty from
constituting an Event of Default. Each Pledgor hereby appoints the Agent its
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor, or otherwise, from time to time in the Agent's
discretion to take any action and to execute any instrument consistent with the
terms of the Purchase Agreement, this Agreement and the other Security Documents
which the Agent may deem necessary or advisable to accomplish the purposes
hereof. The foregoing grant of authority is a power of attorney coupled with an
interest
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and such appointment shall be irrevocable for the term hereof. Each Pledgor
hereby ratifies all that such attorney shall lawfully do or cause to be done by
virtue hereof.
SECTION 11.3. CONTINUING SECURITY INTEREST; ASSIGNMENT. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgors, their respective successors and
assigns and (ii) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Agent and the other Secured Parties and each of
their respective successors, transferees and assigns. No other persons
(including any other creditor of any Pledgor) shall have any interest herein or
any right or benefit with respect hereto. Without limiting the generality of the
foregoing clause (ii), any Secured Party may assign or otherwise transfer any
indebtedness held by it secured by this Agreement to any other person, and such
other person shall thereupon become vested with all the benefits in respect
thereof granted to such Secured Party, herein or otherwise, subject however, to
the provisions of the Purchase Agreement.
SECTION 11.4. TERMINATION; RELEASE. (a)When all the
Obligations have been paid in full, this Agreement shall terminate. Upon
termination of this Agreement the Pledged Collateral shall be released from the
Lien of this Agreement. Upon the transfer of any Pledged Collateral that is
permitted by SECTION 7.19(A) or SECTION 8.05 of the Purchase Agreement to a
party that in not the Issuer or a Guarantor, such Pledged Collateral shall be
released from the Lien of this Agreement. Upon such release or any release of
Pledged Collateral in accordance with the provisions of the Purchase Agreement,
the Agent shall, upon the request and at the sole cost and expense of the
Pledgors, assign, transfer and deliver to Pledgor, against receipt and without
recourse to or warranty by the Agent except as to the fact that the Agent has
not encumbered the released assets, such of the Pledged Collateral to be
released (in the case of a release) as may be in possession of the Agent and as
shall not have been sold or otherwise applied pursuant to the terms hereof, and,
with respect to any other Pledged Collateral, proper documents and instruments
(including UCC-3 termination statements or releases) acknowledging the
termination hereof or the release of such Pledged Collateral, as the case may
be.
SECTION 11.5. MODIFICATION IN WRITING. No amendment,
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by any Pledgor therefrom, shall be effective unless
the same shall be made in accordance with the terms of the Purchase Agreement
and unless in writing and signed by the Agent. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Pledgor from the terms of any provision
hereof shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement or any other document evidencing the Obligations, no notice to or
demand on any Pledgor in any case shall entitle any Pledgor to any other or
further notice or demand in similar or other circumstances.
SECTION 11.6. NOTICES. Unless otherwise provided herein or in
the Purchase Agreement, any notice or other communication herein required or
permitted to be given shall be given in the manner and become effective as set
forth in the Purchase Agreement, as to any
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Pledgor, addressed to it at the address of the Issuer set forth in the Purchase
Agreement and as to the Agent, addressed to it at the address set forth in the
Purchase Agreement, or in each case at such other address as shall be designated
by such party in a written notice to the other party complying as to delivery
with the terms of this SECTION 11.6.
SECTION 11.7. GOVERNING LAW, CONSENT TO JURISDICTION AND
SERVICE OF PROCESS; WAIVER OF JURY TRIAL. SECTION 15.08 of the Purchase
Agreement is incorporated herein, MUTATIS MUTANDIS, as if a part hereof.
SECTION 11.8. SEVERABILITY OF PROVISIONS. Any provision hereof
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.9. EXECUTION IN COUNTERPARTS. This Agreement and
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
SECTION 11.10. BUSINESS DAYS. In the event any time period or
any date provided in this Agreement ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business Day, and performance herein may be made
on such Business Day, with the same force and effect as if made on such other
day.
SECTION 11.11. NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION.
Such Pledgor shall not be entitled to any credit against the principal, premium,
if any, or interest payable under the Purchase Agreement, and such Pledgor shall
not be entitled to any credit against any other sums which may become payable
under the terms thereof or hereof, by reason of the payment of any Tax on the
Pledged Collateral or any part thereof.
SECTION 11.12. NO CLAIMS AGAINST AGENT. Nothing contained in
this Agreement shall constitute any consent or request by the Agent, express or
implied, for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Pledged Collateral or any part
thereof, nor as giving any Pledgor any right, power or authority to contract for
or permit the performance of any labor or services or the furnishing of any
materials or other property in such fashion as would permit the making of any
claim against the Agent in respect thereof or any claim that any Lien based on
the performance of such labor or services or the furnishing of any such
materials or other property is prior to the Lien hereof.
SECTION 11.13. NO RELEASE. Nothing set forth in this Agreement
shall relieve any Pledgor from the performance of any term, covenant, condition
or agreement on such Pledgor's part to be performed or observed under or in
respect of any of the Pledged Collateral or from any liability to any person
under or in respect of any of the Pledged Collateral or shall
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impose any obligation on the Agent or any other Secured Party to perform or
observe any such term, covenant, condition or agreement on such Pledgor's part
to be so performed or observed or shall impose any liability on the Agent or any
other Secured Party for any act or omission on the part of such Pledgor relating
thereto or for any breach of any representation or warranty on the part of such
Pledgor contained in this Agreement, the Purchase Agreement or the other Basic
Documents, or under or in respect of the Pledged Collateral or made in
connection herewith or therewith. The obligations of each Pledgor contained in
this SECTION 11.13 shall survive the termination hereof and the discharge of
such Pledgor's other obligations under this Agreement, the Purchase Agreement
and the other Basic Documents.
SECTION 11.14. OBLIGATIONS ABSOLUTE. All obligations of each
Pledgor hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any other
Pledgor;
(ii) any lack of validity or enforceability of the Purchase
Agreement or any other Basic Document, or any other agreement or
instrument relating thereto;
(iii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the
Purchase Agreement or any other Basic Document or any other agreement
or instrument relating thereto;
(iv) any pledge, exchange, release or non-perfection of any
other collateral, or any release or amendment or waiver of or consent
to any departure from any guarantee, for all or any of the Obligations;
(v) any exercise, non-exercise or waiver of any right, remedy,
power or privilege under or in respect hereof, the Purchase Agreement
or any other Basic Document except as specifically set forth in a
waiver granted pursuant to the provisions of SECTION 11.5 hereof; or
(vi) any other circumstances which might otherwise constitute
a defense available to, or a discharge of, any Pledgor.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
S-1
IN WITNESS WHEREOF, the Pledgors and the Agent have caused
this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
TERREMARK WORLDWIDE, INC.,
as Pledgor
By: /s/ JOSE SEGRERA
-------------------------------------
Name:
Title:
NAP OF THE AMERICAS, INC.
NAP OF THE AMERICAS/WEST, INC.
OPTICAL COMMUNICATIONS, INC.
PARK WEST TELECOMMUNICATIONS
INVESTORS, INC.
SPECTRUM TELECOMMUNICATIONS CORP.
TECOTA SERVICES CORP.
TERREMARK FINANCIAL SERVICES, INC.
TERREMARK FORTUNE HOUSE #1, INC.
TERREMARK LATIN AMERICA, INC.
TERREMARK MANAGEMENT SERVICES, INC.
TERREMARK REALTY, INC.
TERREMARK TECHNOLOGY CONTRACTORS, INC.
TERRREMARK TRADEMARK HOLDINGS, INC.
TERRENAP DATA CENTERS, INC.
TERRENAP SERVICES, INC.
as Pledgors
By: /s/ JOSE SEGRERA
-------------------------------------
Name:
Title:
S-2
FMP AGENCY SERVICES, LLC,
as Agent
By: /s/ RAFAEL FOGEL
-------------------------------------
Name:
Title: