Exhibit 10.4
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Agreement"), dated as of March 2, 1999, is made
between each entity set forth on the signature pages hereto as a grantor (each
such entity and each entity which hereafter executes and delivers a Borrower
Joinder in substantially the form of Exhibit E to the Loan Agreement or a
Subsidiary Joinder in substantially the form of Attachment 1 to the Guaranty (as
defined below) to be referred to herein as a "Grantor", and collectively as, the
"Grantors") and GATX CAPITAL CORPORATION ("Lender").
RECITALS
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A. Lender is entering into a Loan Agreement, dated as of March 2, 1999
(such agreement, as it may hereafter be amended or modified, the "Loan
Agreement" with Chadmoore Wireless Group, Inc. ("Chadmoore") and the
subsidiaries of Chadmoore party thereto (collectively, the "Subsidiaries," and
together with Chadmoore, the "Borrowers"). Each Grantor is a Borrower under the
Loan Agreement and a guarantor of each other Borrowers' Obligations pursuant to
a Guaranty of even date herewith executed in favor of Lender.
B. It is a condition precedent to the extension of credit by Lender under
the Loan Agreement that each Grantor shall have executed and delivered this
Agreement and shall have granted a security interest in all of its assets to
Lender in accordance herewith.
C. Terms defined in the Loan Agreement and not otherwise defined herein
have the same respective meanings when used herein.
AGREEMENT
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NOW, THEREFORE, in order to induce Lender to enter into the Loan
Agreement and for other good and valuable consideration, the receipt and
adequacy of which hereby is acknowledged, each Grantor hereby represents,
warrants, covenants, agrees and grants as follows:
1. Definitions. Unless the context otherwise requires, terms defined in
the Uniform Commercial Code of the State of California (the "Uniform Commercial
Code") and not otherwise defined in this Agreement or in the Loan Agreement
shall have the meanings defined for those terms in the Uniform Commercial Code.
In addition, the following terms shall have the meanings respectively set forth
after each:
"Certificates" means all certificates, instruments and other documents
now or hereafter representing or evidencing any Pledged Securities or Pledged
Limited Liability Company Interests.
"Closing Date" shall mean the date of this Agreement.
"Collateral" means and includes all present and future right, title,
interest, claims and demands of each Grantor in or to any personal property or
assets whatsoever, whether now owned or existing or hereafter arising or
acquired and wheresoever located, and all hereafter arising or acquired and
wheresoever located, and all rights and powers of such Grantor to transfer any
interest in or to any personal property or assets whatsoever, including without
limitation, any and all of the following personal property:
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(a) All present and future acounts, accounts receivable, agreements,
guaranties, contracts (including without limitation management agreements,
leases, contract rights and rights to payment (collectively, the "Accounts"),
together with all instruments, documents, chattel paper, security agreements,
guaranties, undertakings, surety bonds, insurance policies, notes and drafts,
and all forms of obligations owing to such Grantor or to which such Grantor may
have an interest, however created or arising;
(b) All present and future general intangibles, including without
limitation, (i) each FCC License and each Other Authorization described on
Schedule 1-C-1 and Schedule 1-D-1, respectively, attached hereto and including
without limitation, all of such Grantor's rights under or relating to any FCC
License or any Other Authorization and the proceeds of any FCC License or Other
Authorization; provided, however, that the Collateral does not include at any
time any FCC License to the extent, but only to the extent, that such Grantor is
prohibited at that time from granting a security interest therein pursuant to
the Communications Act and the FCC Rules, but includes, to the maximum extent
permitted by law, all of such Grantor's proprietary rights vis-a-vis third
parties under or relating to any FCC License and the rights to receive all
proceeds derived from or in connection with the sale, assignment or transfer of
such FCC License, (ii) all tax refunds of every kind and nature to which such
Grantor now or hereafter may become entitled, however arising, (iii) all other
refunds, (iv) all commitments to extend financing to such Grantor, (v) all
deposits, (vi) all goodwill, (vii) all choses in action, (viii) all insurance
proceeds, and (ix) all trade secrets, computer programs, software, customer
lists, trademarks, trade names, patents, licenses, copyrights, tecnology,
processes and proprietary information, including without limitation, the
Copyrights, the Patents and the Marks and the goodwill of such Grantor's
business connected with and symbolized by the Marks;
(c) All present and future demand, time, savings, passbook, deposit and
like accounts (general or special) (collectively, the "Deposit Accounts") in
which such Grantor has any interest which is maintained with any bank, savings
and loan association, credit union or like organization, including without
limitation, each account listed on Schedule 1-B attached hereto and all money,
cash and cash equivalents of such Grantor, whether or not deposited in any
Deposit Account;
(d) All present and future books and records, including without
limitation, books of account and ledgers of every kind and nature, all
electronically recorded data relating to such Grantor, all receptacles and
containers for such records, and all files and correspondence;
(e) All present and future goods, including without limitation, all
equipment, machinery, audio and/or video recording equipment, transmitting
towers, transmitters, broadcasting equipment, videotapes, audio tapes, DAT tapes
and other recorded media, tools, molds, dies, furniture, furnishings, fixtures,
trade fixtures and all other goods used in connection with or in the conduct of
such Grantor's business, including without limitation, all goods as defined in
Section 9101(2) of the Uniform Commercial Code (collectively, the "Equipment");
(f) All present and future inventory and merchandise, including without
limitation, all present and future goods held for sale or lease or to be
furnished under a contract of service, all recorded media, all raw materials,
work in process and finished goods, all packing materials, supplies and
containers relating to or used in connection with any of the foregoing, and all
bills of lading, warehouse receipts and documents of title relating to any of
the foregoing (collectively, the "Inventory");
(g) All present and future stocks, bonds, debentures, certificated and
uncertificated securities, security entitlements, subscription rights, options,
warrants, puts, calls, certificates, security
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accounts, commodity accounts, commodity contracts, partnership interests,
limited liability compnay interests, joint venture interests and investment
and/or brokerage accounts, and all other investment properties, including
without limitation, the Certificates, the Pledged Securities, the Pledged
Partnership Interests, the Pledged Limited Liability Company Interests and all
rights, preferences, privileges, dividends, distributions (in cash or in kind),
redemption payments or liquidation payments with respect thereto;
(h) All present and future accessions, appurtenances, components,
repairs, repair parts, spare parts, replacements, substitutions, additions,
issue and/or improvements to or of or with respect to any of the foregoing;
(i) All other tangible and intangible personal property of such Grantor;
(j) All rights, remedies, powers and/or privileges of such Grantor with
respect to any of the foregoing; and
(k) Any and all proceeds and products of the foregoing, including without
limitation, all money, accounts, general intangibles, deposit accounts,
documents, instruments, chattel paper, goods, insurance proceeds and any other
tangible or intangible property received upon the sale or disposition of any of
the foregoing.
"Communications Act" has the meaning given to that term in the Loan
Agreement.
"Copyright" means all:
(a) Copyrights, whether or not published or registered under the
Copyright Act of 1976, 17 U.S.C. Section 101 et seq., as the same shall be
amended from time to time and any predecessor or successor statute thereto (the
"Copyright Act"), and applications for registration of copyrights, and all works
of authorship and other intellectual property rights therein, including without
limitation, copyrights for computer programs, source code and object code
databases and related materials and documentation and including without
limitation, the registered copyrights and copyright applications listed on
Schedule 1-J attached hereto, and (i) all renewals, revisions, derivative works,
enhancements, modifications, updates, new releases and other revisions thereof,
(ii) all income, royalties, damages and payments now and hereafter due and/or
payable with respect thereto, including without limitation, payments under all
licenses entered into in connection therewith and damages and payments for past
or future infringements thereof, (iii) the right to sue for past, present and
future infringemens thereof and (iv) all of such Grantor's rights corresponding
thereto throughout the world;
(b) Rights under or interests in any copyright license agreements
with any other party, whether Grantors are a licensee or licensor under any such
license agreement and the right to use the foregoing in connnection with the
enforcement of the Lender's rights under the Operative Documents; and
(c) Copyrightable materials now or hereafter owned by such Grantor,
including without limitation, all tangible property embodying the copyright
described in clause (a) hereof or such copyrightable materials, and all tangible
property covered by the licenses described in clause (b) hereof.
"Disclosure Schedule"has the meaning given to that term in the Loan
Agreement.
"FCC" has the meaning given to that term in the Loan Agreement.
"FCC License" has the meaning given to that term in the Loan Agreement.
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"FCC Rules" has the meaning given to that term in the Loan Agreement.
"Governmental Authority" has the meaning given to that term in the Loan
Agreement.
"Guaranty" has the meaning given to that term in the Loan Agreement.
"Issuer Acknowledgement" has the meaning given to that term in Section
3(b) of this Agreement.
"Liens" has the meaning given to that term in the Loan Agreement.
"Limited Liability Company Interests" means the entire limited liability
company interest at any time owned by the Grantors in any Pledged Entity.
"Loans" has the meaning given to that term in the Loan Agreement.
"Marks" means all (a) trademarks, trademark registrations, interest under
trademark license agreements, trade names, trademark applications, service
marks, business names, trade styles, designs, logos and other source or business
identifiers for which registrations have been issued or applied for in the
United States Patent and Trademark Office or in any other office or with any
other official anywhere in the world or which are used in the United States or
any state, territory or possession thereof, or in any other place, nation or
jurisdicion anywhere in the world including without limitation, the trademarks,
trademark registrations, applications, service marks, business names, trade
styles, design logos and other source or business identifiers listed on
Schedule1-H attached hereto, (b) licenses pertaining to any such mark whether
such Grantor is licensor or licensee, (c) all income, royalties, damages and
payments for past, present or future infringements thereof, (d) rights to sue
for past, present and future infringements thereof, (e) rights corresponding
thereto throughout the world, (f) all product specification documents and
production and quality control manuals used in the manufacture of products sold
under or in connection with such marks, (g) all documents that reveal the name
and address of all sources of supply of, and all terms of purchase and delivery
for, all materials and components used in the production of products sold under
or in connection with such marks, (h) all documents constituting or concerning
the then current or proposed advertising and promotion by such Grantor, their
subsidiaries or licensees of products sold under or in connection with such
marks, including without limitation, all documents that reveal the media used or
to be used and the cost for all such advertising conducted within the described
period or planned for such products and (i) renewals and proceeds of any of the
foregoing.
"Material Adverse Effect" has the meaning given to that term in the Loan
Agreement.
"Obligations" has the meaning given to that term in the Loan Agreement.
"Operative Documents" has the meaning given to that term in the Loan
Agreement.
"Other Authorization" has the meaning given to that term in the Loan
Agreement.
"Patents" means all (a) letters patent, design patents, utility patents,
inventions and trade secrets, all patents and patent applications in the United
States Patent and Trademark Office, and interests under patent license
agreements, including without limitation, the inventions and improvements
described and claimed therein, including without limitation, those patents
listed on Schedule 1-I attached hereto, (b) licenses pertaining to any patent
whether such Grantor is licensor or licensee, (c) income, royalties, damges and
payments now and hereafter due and /or payable under and with respect thereto,
including without
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limitation, damages and payments for past, present or future infringements, (d)
rights to sue for past, present and future infringements thereof, (e) rights
corresponding thereto throughout the world in all jurisdictions in which such
patents have been issud or applied for and (f) the reissues, divisions,
continuations, renewals, extensions and continuations-in-part of any of the
foregoing.
"Permitted Liens" has the meaning given to that term in the Loan
Agreement.
"Person" has the meaning given to that term in the Loan Agreement.
"Partnership Interests" means the entire partnership interest at any time
owned by the Grantors in any Pledged Partnership Entity.
"Pledge Notice" shall have the meaning ascribed to it in Section 3(b) of
this Agreement.
"Pledged Collateral" means the Certificates, the Pledged Securities, the
Pledged Partnership Interests and the Pledged Limited Liability Company
Interests.
"Pledged Entity" means each limited liability company set forth in
Schedule 1-D attached hereto, together with any other limited liability company
in which any Grantor may have an interest at any time.
"Pledged Limited Liability Company Interests" means all limited liability
company interests held by each Grantor, including, but not limited to those
limited liability company interests set forth in Schedule 1-D attached hereto,
as such Schedule may be supplemented from time to time in accordance with the
terms of this Agreement and all capital, limited liability company assets,
dividends, cash, instruments and other properties from time to time received, to
be received or otherwise distributed in respect of or in exchange for any or all
of such interests and all certificates and instruments representing or
evidencing such other property received, receivable or otherwise distributed in
respect of or in exchange for any or all thereof.
"Pledged Partnership Entity" means each partnership interest set forth in
Schedule 1-D attached hereto, together with any other partnership interest in
which any Grantor may have an interest at any time.
"Pledged Partnership Interests" means all interests in any partnership or
joint venture held by each Grantor, including, but not limited to those
partnership interests set forth in Schedule 1-D attached hereto, as such
Schedule may be supplemented from time to time in accordance with the terms of
this Agreement, and all dividends, cash, instruments and other properties from
time to time received, to be received or otherwise distributed in respect of or
in exchange for any or all of such interests.
"Pledged Securities" means all shares of capital stock of each issuer in
which each Grantor has an interest, including, but not limited to those shares
of capital stock set forth in Schedule 1-D attached hereto, as such Schedule may
be supplemented from time to time in accordance with the terms of this
Agreement, and all dividends, cash, instruments and other properties from time
to time received, to be received or otherwise distributed in respect of or in
exchange for any or all of such shares.
"Term" has the meaning given to that term in the Loan Agreement.
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2. Creation of Security Interest. Each Grantor, in order to secure the
Obligations, does hereby grant and pledge to Lender to the extent permitted by
law a security interest in and to, all right, title and interest of such Grantor
in and to all presently existing and hereafter acquired Collateral. The security
interest and pledge created by this Section 2 shall continue in effect so long
as any Obligation remains outstanding or Lender has any obligation to make Loans
under the Loan Agreement. Notwithstanding the foregoing provisions of this
Section 2, such grant of a security interest shall not extend to, and the term
"Collateral" shall not include, any general intangibles of the Grantors to the
extent that (but only to the extent that) (i) such general intangibles are not
assignable or capable of being encumbered as a matter of law or under the terms
of the license or other agreement applicable thereto (but solely to the extent
that any such restriction shall be enforceable under applicable law), without
the consent of the licensor thereof or other applicable party thereto and (ii)
such consent has not been obtained; provided, however, that the foregoing grant
of a security interest shall extend to, and the term "Collateral" shall include,
(A) any general intangible which is in the nature of an account receivable or a
right to the payment of money or a proceed of, or otherwise related to the
enforcement or collection of, any account receivable or right to the payment of
money, or goods which are the subject of any account receivable or right to the
payment of money, (B) any and all proceeds of any general intangibles which are
otherwise excluded to the extent that the assignment or encumbrance of such
proceeds is not so restricted, and (C) upon obtaining the consent of any such
licensor or other applicable party's consent with respect to any such otherwise
excluded general intangibles, such general intangibles as well as any and all
proceeds thereof that might have theretofor have been excluded from such grant
of a security interest and the term "Collateral".
3. Delivery of Pledged Collateral.
(a) Each Certificate shall, on (i) the Closing Date (with respect to
Certificates delivered on such date) and (ii) the day on which such Certificate
shall be received or acquired by a Grantor (with respect to any Certificate
received or acquired after the Closing Date), be delivered to and held by Lender
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed undated endorsements, instruments of transfer or assignment in
blank, all in form and substance reasonably satisfactory to Lender.
(b) With respect to each uncertificated Limited Liability Company
Interest and each uncertificated Partnership Interest, on (i) the Closing Date
(with respect to such Limited Liability Company Interests and such Partnership
Interests existing on such date) and (ii) the day on which any such Limited
Liability Company Interest and any such Partnership Intersest shall be acquired
by a Grantor (with respect to such Limited Liability Company Interests and such
Partnership Interests acquired after the Closing Date), a notice in the form set
forth in Exhibit A-1 attached hereto (the "Pledge Notice") shall be
appropriately completed and delivered to each Pledged Entity and each Pledged
Partnership Entity, notifying each Pledged Entity and each Pledged Partnership
Entity of the existence of this Agreement, a certified copy of this Agreement
shall be delivered by the Grantor to the relevant Pledged Entity and relevant
Pledged Partnership Entity, and such Grantor shall have received and delivered
to Lender a copy of such Pledge Notice, along with an acknowledgment in the form
set forth in Exhibit A-2 attached hereto (the "Issuer Acknowledgment"), duly
executed by the relevant Pledged Entity.
(c) Subject to receipt of any and all necessary prior approvals
required under the Communications Act and the FCC Rules, Lender shall have the
right, upon the occurrence and during the continuance of an Event of Default,
without notice to any of the Grantors, in connection with a commercially
reasonable foreclosure sale, to transfer to, or to direct the applicable Grantor
or any nominee of such Grantor to register or cause to be registered in the name
of, Lender or any of its nominees any or all of the Pledged Securities, Pledged
Partnership Interests or Pledged Limited Liability Company Interests. In
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addition, Lender shall have the right at any time to exchange certificates or
instruments representing or evidencing Pledged Securities for certificates or
instruments of smaller or larger denominations.
4. Further Assurances.
(a) At any time and from time to time at the reasonable written
request of Lender, each Grantor shall execute and deliver to Lender, at such
Grantor's expense, all such financing statements and other instruments,
certificates and documents (including notices to financial institutions holding
deposit accounts of any Grantor as to the security interest granted hereby) in
form and substance reasonably satisfactory to Lender, and perform all such other
acts as shall be necessary or reasonably desirable to fully perfect or protect
or maintain, when filed, recorded, delivered or performed, Lender's security
interests granted pursuant to this Agreement or to enable Lender to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor shall: (i) at the
request of the Lender, mark conspicuously each document included in the
Inventory and each other contract relating to the Accounts, and all chattel
paper, instruments and other documents and each of its records pertaining to the
Collateral with a legend, in form and substance satisfactory to Lender,
indicating that such document, contract, chattel paper, instrument or Collateral
is subject to the security interest granted hereby, (ii) at the request of
Lender, if any Account or contract or other writing relating thereto shall be
evidenced by a promissory note or other instrument, deliver and pledge to the
Lender, such note or other instrument duly endorsed and accompanied by duly
executed undated instruments of transfer or assignment, all in form and
substance reasonably satisfactory to the Lender; (iii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Lender may
reasonably request, in order to perfect and preserve, with the required
priority, the security interests granted, or purported to be granted hereby,
(iv) upon any Grantor's registration or application of any copyright under the
Copyright Act, execute and deliver immediately to Lender for recordation and
filing in the United States Copyright Office a Grant of Security Interest, in
the form of Exhibit B attached hereto, (v) upon any Grantor's registration or
application of any Patent or Mark, execute and deliver immediately to Lender for
recordation and filing in the United States Patent and Trademark Office a Grant
of Security Interest, in the form of Exhibit B attached hereto, and (vi) with
respect to any license or agreement in which any Grantor now has or hereafter
acquires an interest which by its terms prohibits assignment, such Grantor will
use its best efforts to procure the consent of the counterpart party thereto.
(b) At any time and from time to time, Lender shall be entitled to
file and/or record any or all such financing statements, instruments and
documents held by it, and any or all such further financing statements,
documents and instruments, relative to the Collateral or any part thereof in
each instance, and to take all such other actions as Lender may reasonably deem
appropriate to perfect and to maintain perfected the security interests granted
herein.
(c) Each Grantor hereby authorizes Lender to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. A carbon, photographic or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(d) With respect to any Collateral consisting of securities,
instruments, partnership or joint venture interests, limited liability company
interests, or the like, each Grantor hereby consents and agrees that, upon the
occurrence and during the continuance of an Event of Default, subject to receipt
of any and all necessary prior approvals required under the Communications Act
and the FCC Rules, the
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issuers of, or obligors on, any such Collateral, or any registrar or transfer
agent or trustee for any such Collateral, shall be entitled to accept the
provisions of this Agreement as conclusive evidence of the right of Lender to
effect any transfer or exercise any right hereunder or with respect to any such
Collateral subject to the terms hereof, notwithstanding any other notice or
direction to the contrary heretofore or hereafter given by any Grantor or any
other Person to such issuers or such obligors or to any such registrar or
transfer agent or trustee. 5. Voting Rights; Dividends; etc. Subject to receipt
of any and all necessary prior approvals required under the Communications Act
and the FCC Rules, so long as no Event of Default shall have occurred and be
continuing:
(a) Voting Rights. Each Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to its Pledged Securities, its
Pledged Partnership Interests and its Pledged Limited Liability Company
Interests, or any part thereof, for any purpose not inconsistent with the terms
of this Agreement, the Loan Agreement or the other Operative Documents;
provided, however, that each Grantor shall not exercise, or shall refrain from
exercising, any such right if it would result in a Default.
(b) Dividend and Distribution Rights. Subject to the terms of the
Loan Agreement, each Grantor shall be entitled to receive and to retain and use
any and all dividends or distributions paid in respect of its Pledged
Securities, its Pledged Partnership Interests or its Pledged Limited Liability
Company Interests; provided, however, that any and all:
(i) non-cash dividends or distributions in the form of capital
stock, certificated limited liability company interests, instruments or other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Securities, Pledged Partnership Interests, Pledged
Limited Liability Company Interests,
(ii) dividends and other distributions paid or payable in cash
in respect of any Pledged Securities, Pledged Partnership Interests or Pledged
Limited Liability Company Interests in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in-surplus, and
(iii) cash paid, payable or otherwise distributed in redemption
of, or in exchange for, any Pledged Securities, Pledged Partnership Interests or
Pledged Limited Liability Company Interests, shall, except as otherwise provided
for in the Loan Agreement or the other Operative Documents, forthwith be
delivered to Lender, in the case of (i) above, to be held as Collateral and
shall, if received by such Grantor, be received in trust for the benefit of
Lender, be segregated from the other property of such Grantor and forthwith be
delivered to Lender as Collateral in the same form as so received (with any
necessary endorsements), and in the case of (ii) and (iii) above, to be applied
to the Obligations to the extent permitted by the Loan Agreement or otherwise to
be held as Collateral.
6. Rights as to Pledged Collateral During Event of Default. When an Event
of Default has occurred and is continuing, subject to receipt of any and all
necessary prior approvals required under the Communications Act and the FCC
Rules:
(a) Voting, Dividend and Distribution Rights. At the option of
Lender, all rights of each Grantor to exercise the voting and other consensual
rights which it would otherwise be entitled to
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exercise pursuant to Section 5(a) above, and to receive the dividends and
distributions which it would otherwise be authorized to receive and retain
pursuant to Section 5(b) above, shall cease, and all such rights shall thereupon
become vested in Lender who shall thereupon have the sole right to exercise such
voting and other consensual rights and to receive and to hold as Pledged
Collateral such dividends and distributions during the continuance of such Event
of Default.
(b) Dividends and Distributions Held in Trust. All dividends and
other distributions which are received by any Grantor contrary to the provisions
of Section 6(a) of this Agreement shall be received in trust for the benefit of
Lender, shall be segregated from other funds of such Grantor and forthwith shall
be paid over to Lender as Collateral in the same form as so received (with any
necessary endorsements).
7. Irrevocable Proxy. Each Grantor hereby revokes all previous proxies
with regard to its Pledged Securities, its Pledged Partnership Interests and its
Pledged Limited Liability Company Interests and, subject to receipt of any and
all necessary prior approvals required under the Communications Act and the FCC
Rules, appoints Lender as its respective proxyholder to (a) attend and vote at
any and all meetings of the shareholders of the corporation(s) which issued the
Pledged Securities, and any adjournments thereof, held on or after the date of
the giving of this proxy and prior to the termination of this proxy and to
execute any and all written consents of shareholders of such corporation(s)
executed on or after the date of the giving of this proxy and prior to the
termination of this proxy, with the same effect as if such Grantor had
personally attended the meetings or had personally voted its shares or had
personally signed the written consents, waivers or ratification, and (b) to
attend and vote at any and all meetings of the members of the Pledged Entities
or partners of the Pledged Partnership Entities (whether or not such Pledged
Limited Liability Company Interests or Pledged Partnership Interests are
transferred into the name of Lender), and any adjournments thereof, held on or
after the date of the giving of this proxy and to execute any and all written
consents, waivers and ratifications of the Pledged Entities or Pledged
Partnership Entities executed on or after the date of the giving of this proxy
and prior to the termination of this proxy with the same effect as if such
Grantor had personally attended the meetings or had personally voted on their
respective Limited Liability Company Interests or Partnership Interests or had
personally signed the consents, waivers or ratifications; provided, however,
that Lender as proxyholder shall have rights hereunder only upon the occurrence
and during the continuance of an Event of Default and subject to Section 13(j)
hereof. Each Grantor hereby authorizes Lender to substitute another Person
(which Person shall be a successor to the rights of Lender hereunder, a nominee
appointed by Lender to serve as proxyholder, or otherwise as approved by such
Grantor in writing, such approval not to be unreasonably withheld) as the
proxyholder and, upon the occurrence or during the continuance of any Event of
Default, hereby authorizes and directs the proxyholder to file this proxy and
the substitution instrument with the secretary of the appropriate corporation.
This proxy is-coupled with an interest and is irrevocable until such time as no
part of any commitment to make Loans pursuant to the Loan Agreement remains
outstanding and all Obligations have been indefeasibly paid in full.
8. The Grantors' Representations and Warranties. Each Grantor represents
and warrants as follows:
(a) (i) The locations listed on the Schedule 1-A constitute all
locations at which Collateral owned by such Grantor is located; (ii) the chief
executive office of such Grantor, where such Grantor keeps its records
concerning the Collateral, is located at the address set forth for such Grantor
on Schedule 1-F; (iii) such Grantor has exclusive possession and control of the
Collateral owned by such Grantor and (iv) such Grantor has only the Deposit
Accounts listed on Schedule 1-B and, except as indicated on Schedule 1-B, no
individual Deposit Account has a balance in excess of $10,000.
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(b) Such Grantor currently conducts business only under its own name
and the trade names listed on Schedule 1-G. Neither such Grantor nor any
corporate predecessor has, during the preceding five years, been known as or
used any other corporate or fictitious name, except the names disclosed on
Schedule 1-G.
(c) Such Grantor is the legal and beneficial owner of the Collateral
free and clear of all Liens except for Permitted Liens and restrictions imposed
by the FCC Rules. Such Grantor has the power, authority and legal right to grant
the security interests in the Collateral purported to be granted hereby, and to
execute, deliver and perform this Agreement. The pledge of the Collateral
pursuant to this Agreement creates a valid first priority security interest in
the Collateral (except for any Permitted Liens).
(d) Except as set forth on Schedule 1-E, the Pledged Securities
described on Schedule 1-E attached hereto constitute (i) all of the shares of
capital stock of any Person owned by such Grantor and (ii) that percentage of
the issued and outstanding shares of the respective issuers thereof indicated on
Schedule 1-E attached hereto, and there is no other class of shares issued and
outstanding of the respective issuers thereof except as set forth on Schedule
1-E attached hereto. Except as set forth in Schedule 1-E, the Pledged
Partnership Interests described on Schedule 1-E attached hereto constitute all
of the partnerships or joint ventures in which each Grantor has an interest, and
such Grantor's percentage interest in each such partnership or joint venture is
as set forth on such Schedule 1-E attached hereto. Except as set forth in
Schedule 1-E, the Pledged Limited Liability Company Interests described on
Schedule 1-E attached hereto constitute all of the Limited Liability Company
Interests of each Grantor and such Grantor's percentage interest in each such
Pledged Entity is as set forth on Schedule 1-E attached hereto.
(e) No authorization, approval or other action by, and no notice to
or filing with, any Governmental Authority (other than such authorizations,
approvals and other actions as have already been taken and are in full force and
effect) is required (A) for the pledge of the Collateral or the grant of the
security interest in the Collateral by any of the Grantors hereby or for the
execution, delivery or, subject to approvals described in Section 13(j)(ii)
hereof, performance of this Agreement by any of the Grantors, or (B) for the
exercise by Lender of the voting rights in the Pledged Securities, the Pledged
Partnership Interest or the Pledged Limited Liability Company Interests or of
any other rights or remedies in respect of the Collateral hereunder except (1)
as may be required in connection with any disposition of Collateral consisting
of securities by laws affecting the offering and sale of securities generally,
and (2) as may be required by the FCC Rules and the Comunications Act.
9. Copyrights.
(a) Royalties. Each Grantor hereby agrees that the use by Lender of
the Copyrights as authorized hereunder in connection with Lender's exercise of
their rights and remedies hereunder shall be without any liability for royalties
or other related charges from Lender to Grantors.
(b) Restrictions on Future Agreements. Subject to the terms hereof
and of the Loan Agreement, each Grantor shall be permitted to manage, license
and administer its Copyrights in such manner as such Grantor in its reasonable
business judgment deems desirable, provided, however, that such Grantor will
not, without the Lender's prior written consent, such consent not to be
unreasonably withheld, (i) enter into any copyright license agreements except
license agreements entered into in the ordinary course
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of its business consistent with past practices and containing such additional
provisions to protect Lender's interest hereunder as Lender may from time to
time reasonably request or (ii) take any action, or permit any action to be
taken by others, including, without limitation, licensees, or fail to take any
action, which would customarily be taken by a Person in the same business and in
similar circumstances as such Grantor, which could in any respect reasonably be
expected to have a Material Adverse Effect.
(c) Duties of Grantors. Each Grantor shall have the duty to: (i)
prosecute diligently any copyright application included in the Copyrights, (ii)
upon the occurrence and during the continuance of an Event of Default, at the
request of Lender, make application for registration of such uncopyrighted but
copyrightable material owned by such Grantor as Lender reasonably deems
appropriate if the failure to do so could reasonably be expected to have a
Material Adverse Effect, (iii) place notices of copyright on all copyrightable
property produced or owned by such Grantor embodying the Copyrights and use
diligent reasonable efforts to have its licensees do the same and (iv) take all
reasonable action necessary in such Grantor's reasonable business judgment
consistent with past practices to preserve and maintain all of Grantor's rights
in the Copyrights that are or shall be necessary in the operation of Grantor's
business, including, without limitation, making timely filings for renewals and
extensions of registered Copyrights and diligently monitoring unauthorized use
thereof, unless the failure to do so could not reasonably be expected to have a
Material Adverse Effect. Any expenses incurred in connection with the foregoing
shall be borne by Grantors. Lender shall have no duty with respect to the
Copyrights other than to act lawfully and without gross negligence or willful
misconduct. Without limiting the generality of the foregoing, Lender shall not
be under any obligation to take any steps necessary to preserve rights in the
Copyrights against any other parties, but Lender may do so at its option upon
the occurrence and during the continuance of an Event of Default, and all
reasonable expenses incurred in connection therewith shall be for the sole
account of Grantors and shall be added to the Obligations.
10. Patents and Marks.
(a) Royalties. Each Grantor hereby agrees that any rights granted
hereunder to Lender with respect to Patents and Marks shall be applicable to all
jurisdictions in which such Grantor has the right to use such Patents and Marks,
from time to time, and without any liability for royalties or other related
charges from Lender to Grantors.
(b) Restrictions on Future Agreements. Each Grantor will not,
without Lender's prior written consent, such consent not to be unreasonably
withheld, abandon any Patent or Mark in which such Grantor now owns or hereafter
acquires any rights or interests if such abandonment could reasonably be
expected to have a Material Adverse Effect or enter into any agreement,
including, without limitation, any license agreement, which is inconsistent with
such Grantor's obligations under this Agreement, if such actions could
reasonably be expected to have a Material Adverse Effect. Each Grantor further
agrees that it will not take any action, or permit any action to be taken by
others subject to its control, including licensees, or fail to take any action
which would customarily be taken by a Person in the same business and in similar
circumstances as such Grantor, which could reasonably be expected to have a
Material Adverse Effect.
(c) Duties of Grantors. Each Grantor shall have the duty to (i)
prosecute diligently any patent application or trademark application pending as
of the date hereof or thereafter until the Obligations shall have been
indefeasibly paid in full and Lender has no obligation to make any Loans under
the Loan Agreement, (ii) upon the occurrence and during the continuance of an
Event of Default, make application on unpatented but patentable inventions owned
by such Grantor and on
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Marks, as the case may be, as Lender reasonably deems appropriate, (iii) file
and prosecute opposition and cancellation proceedings if the failure to do so
could reasonably be expected to have a Material Adverse Effect and (iv) take all
reasonable action necessary in such Grantor's reasonable business judgment
consistent with past practices to preserve and maintain all rights in patent
applications of the Patents and in applications for registrations of the Marks
unless the failure so to do could not reasonably be expected to have a Material
Adverse Effect. Any expenses incurred in connection with such applications shall
be borne by Grantors. Each Grantor shall not abandon any right to file a Patent
application or Mark application without the consent of Lender (which consent
shall not be unreasonably withhold) if such abandonment could reasonably be
expected to have a Material Adverse Effect. Each Grantor shall give proper
statutory notice in connection with its use of each of the Marks to the extent
necessary for the protection of each of the Marks. Grantors shall notify the
Lender of any suits it commences to enforce the Patents and Marks and shall
provide Lender with copies of any documents reasonably requested by Lender
relating to such suits.
9. Grantors' Covenants. In addition to the other covenants and agreements
set forth herein and in the other Operative Documents, each Grantor covenants
and agrees as follows:
(a) Such Grantor will pay, prior to delinquency, all taxes, charges,
Liens and assessments against the Collateral owned by it, except those with
respect to which the amount or validity is being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of such Grantor and except those which
could not reasonably be expected to have a Material Adverse Effect.
(b) The Collateral will not be used in violation of any material
law, regulation or ordinance or any applicable laws (including without
limitation, all applicable regulations, rules and orders), nor used in any way
that will void or impair any insurance required to be carried in connection
therewith.
(c) Such Grantor will keep the Collateral in reasonably good repair,
working order and operating condition (normal wear and tear excluded), and from
time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto and, as appropriate and applicable, will
otherwise deal with the Collateral in all such ways as are considered customary
practice by owners of like property.
(d) Such Grantor will take all reasonable steps to preserve and
protect the Collateral except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(e) Such Grantor will maintain all insurance coverage required
pursuant to Section 6.01 of the Loan Agreement.
(f) Such Grantor will promptly notify Lender in writing in the event
of any material damage to the Collateral from any source whatsoever.
(g) Such Grantor will not (i) establish any location of Collateral
not listed in Schedule 1-A, (ii) move its principal place of business, chief
executive offices or any other office listed in Schedule 1-F or (iii) adopt, use
or conduct business under any trade name or other corporate or fictitious name
not disclosed in Schedule 1-G, except upon not less than 30 days prior written
notice to Lender and such Grantor's prior compliance with all applicable
requirements of Section 4 hereof necessary to perfect Lender's security interest
hereunder.
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(h) Subject to the provisions of Section 13(j) hereof, such Grantor
agrees to take any action which Lender may reasonably request in order to obtain
from the FCC such approval as may be necessary to enable Lender to exercise and
enjoy the full rights and benefits granted to them by this Agreement, including
the use of such Grantor's best efforts to assist in obtaining the approval of
the FCC for any action or transaction contemplated by this Agreement or any
other Operative Document for which such approval is required by law.
(i) Such Grantor shall cause all of its equipment constituting
Collateral to be operated and maintained in accordance with any applicable
manufacturer's manuals or instructions and the requirements of its insurance
policies. Such Grantor, at its expense, shall maintain such equipment in good
condition, reasonable wear and tear excepted, and will comply with all laws,
ordinances and regulations to which the use and operation of such equipment may
be or become subject. Such obligation shall extend to repair and replacement of
any partial loss or damage to such equipment, regardless of the cause. If
maintenance is mandated by the manufacturer, such Grantor shall obtain and keep
in effect at all times during the Term maintenance service contracts with the
vendor of such equipment or suppliers approved by Lessor, such approval not to
be unreasonably withheld. All parts furnished in connection with such
maintenance or repair shall immediately become part of such equipment. All such
maintenance, repair and replacement services shall be immediately paid for and
discharged by such Grantor with the result that no lien will attach to such
equipment. Only qualified personnel of such Grantor or qualified contract
personnel shall operate such equipment. Such equipment shall be used only for
the purposes for which it was designed. Upon prior written notice to Lessor,
such Grantor may make improvements, modifications or additions to such
equipment; provided, that if such improvements, modifications or additions are
not capable of being removed without causing material damage to such equipment,
then Lessor's prior written consent shall be required. Upon the return of such
equipment, such Grantor shall, at its expense, restore such equipment to the
original configuration in accordance with the manufacturer's specifications;
provided, that, with Lessor's prior written consent, such Grantor may return
such equipment as so improved, modified or added to.
(j) Such Grantor shall not establish any additional Deposit Account
not listed on Schedule 1-B, or any investment, securities, brokerage or similar
account, except upon prior written notice to Lender and, at Lender's request,
such Grantor's compliance with all applicable requirements of Section 4 hereof
necessary to perfect Lender's security interest hereunder, including without
limitation, delivery to the applicable depositary institution of a notice of
such security interest in Grantor's Deposit Account(s), in form and substance
satisfactory to Lender.
(k) Such Grantor shall maintain not more than $10,000 in any Deposit
Account including, without limitation, those listed on Schedule 1-B attached
hereto (unless it is indicated on Schedule 1-B that such account holds or may
hold in excess of $10,000); provided, however, that such Grantor may maintain in
excess of $10,000 in any Deposit Account if it gives prior written notice to
Lender and, at Lender's request, such Grantor complies with all applicable
requirements of Section 4 hereof necessary to perfect Lender's security interest
hereunder, including without limitation, delivery to the applicable depositary
institution of a notice of such security interest in Grantor's Deposit
Account(s), in form and substance satisfactory to Lender.
10. Lender's Rights Regarding Collateral. At any time and from time to
time, Lender may, to the extent necessary or desirable to protect the security
hereunder, but Lender shall not be obligated to: (a) (whether or not a Default
has occurred) itself or through its representatives, at its own expense, upon
reasonable notice and at such reasonable times during usual business hours,
visit and inspect any of the
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Grantors' properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and
discuss the business, operations, properties and financial and other condition
of any of the Grantors with officers of such Grantors and with their accountants
or (b) if an Event of Default has occurred and is continuing, at the expense of
the Grantors, perform any obligation of any of the Grantors under this
Agreement. At any time and from time to time, at the expense of the Grantors,
Lender may, to the extent necessary or desirable to protect the security
hereunder, but Lender shall not be obligated to: (i) notify obligors of the
Collateral that the Collateral has been pledged as security to Lender; (ii)
after an Event of Default has occurred and is continuing, at any time and from
time to time request from obligors of the Collateral, in the name of the
applicable Grantor or in the name of Lender, information concerning the
Collateral and the amounts owing thereon; and (iii) after an Event of Default
has occurred and is continuing, direct obligors under the contracts included in
the Collateral to direct their performance to Lender. Each Grantor shall keep
proper books and records and accounts in which full, true and correct entries in
conformity with GAAP and all applicable laws (including without limitation, all
applicable regulations, rules and orders) shall be made of all material dealings
and transactions pertaining to the Collateral. Lender shall at all reasonable
times on reasonable notice have full access to and the right to audit any and
all of Grantors' books and records pertaining to the Collateral, and to confirm
and verify the value of the Collateral. Lender shall not be under any duty or
obligation whatsoever to take any action to preserve any rights of or against
any prior or other parties in connection with the Collateral, to exercise any
voting rights or managerial rights with respect to any Collateral or to make or
give any presentments for payment, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor or notices of
any other nature whatsoever in connection with the Collateral or the
Obligations. Lender shall not be under any duty or obligation whatsoever to take
any action to protect or preserve the Collateral or any rights of the Grantors'
therein, or to make collections or enforce payment thereon, or to participate in
any foreclosure or other proceeding in connection therewith. Nothing contained
herein or in any consent shall constitute an assumption by Lender of any of the
Grantors' obligations under the contracts assigned hereunder unless Lender shall
have given written notice to the counterpart to such assigned contract of
Lender's intention to assume such contract. Each Grantor shall continue to be
liable for performance of its obligations under such contracts.
11. Collections on the Collateral. Except as provided to the contrary in
the Loan Agreement, each Grantor shall have the right to use and to continue to
make collections on and receive dividends and other proceeds of all of the
Collateral in the ordinary course of business so long as no Event of Default
shall have occurred and be continuing. Upon the occurrence and during the
continuance of an Event of Default, at the option of Lender, each Grantor's
right to make collections on and receive dividends and other proceeds of the
Collateral and to use or dispose of such collections and proceeds shall
terminate, and any and all dividends, proceeds and collections, including all
partial or total prepayments, then held or thereafter received on or on account
of the Collateral will be held or received by such Grantor in trust for Lender
and immediately delivered in kind to Lender (duly endorsed to Lender, if
required), to be applied to the obligations or held as Collateral, as Lender
shall elect. Upon the occurrence and during the continuance of an Event of
Default, Lender shall have the right at all times to receive, receipt for,
endorse, assign, deposit and deliver, in the name of any of the Grantors, any
and all checks, notes, drafts and other instruments for the payment of money
constituting proceeds of or otherwise relating to the Collateral; and each
Grantor hereby authorizes Lender to affix, by facsimile signature or otherwise,
the general or special endorsement of such Grantor, in such manner as Lender
shall deem advisable, to any such instrument in the event the same has been
delivered to or obtained by Lender without appropriate endorsement, and Lender
and any collecting bank are hereby authorized to consider such endorsement to be
a sufficient, valid and effective endorsement by such Grantor, to the same
extent as though it were manually executed by the duly authorized representative
of such Grantor, regardless of by whom or under what circumstances or by what
authority such endorsement actually is affixed, without duty of inquiry or
responsibility as to such matters,
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and such Grantor hereby expressly waives demand, presentment, protest and notice
of protest or dishonor and all other notices of every kind and nature with
respect to any such instrument.
12. Possession of Collateral by Lender. All the Collateral now,
heretofore or hereafter delivered to Lender shall be held by Lender in its
possession, custody and control. Upon the occurrence and during the continuance
of an Event of Default, whenever any of the Collateral is in Lender's
possession, custody or control, Lender may use, operate and consume the
Collateral, whether for the purpose of preserving and/or protecting the
Collateral, or for the purpose of performing any of the Grantors' obligations
with respect thereto, or otherwise so long as consistent with the Operative
Documents or transactions contemplated thereby. Lender may at any time deliver
or redeliver the Collateral or any part thereof to the Grantors, and the receipt
of any of the same by the Grantors shall be complete and full acquittance for
the Collateral so delivered, and Lender thereafter shall be discharged from any
liability or responsibility arising after such delivery to the Grantors. So long
as Lender exercises reasonable care and complies with Section 9207 of the UCC
with respect to any Collateral in its possession, custody or control, Lender
shall have no liability for any loss of or damage to any Collateral, and in no
event shall Lender have liability for any diminution in value of Collateral
occasioned by economic or market conditions or events.
13. Remedies. Provided that nothing contained in this Agreement shall be
construed to give Lender or any purchaser of the Collateral the right to operate
or control any aspect of the business of any of the Grantors that requires an
FCC License without the prior consent of the FCC, to the extent required by law
or the terms of any FCC License or the FCC Rules:
(a) Rights Upon Event of Default. Upon the occurrence and during the
continuance of an Event of Default, the Grantors shall be in default hereunder
and, subject to applicable law, Lender shall have, in any jurisdiction where
enforcement is sought, in addition to all other rights and remedies that Lender
may have under this Agreement and under applicable laws or in equity, all rights
and remedies of a secured party under the Uniform Commercial Code as enacted in
any such jurisdiction in effect at that time, and in addition the following
rights and remedies, all of which may be exercised with or without further
notice to the Grantors except such notice as may be specifically required by
applicable law: (i) to foreclose the Liens and security interests created
hereunder or under any other Operative Document by any available judicial
procedure or without judicial process; (ii) to enter any premises where any
Collateral may be located for the purpose of securing, protecting, inventorying,
appraising, inspecting, repairing, preserving, storing, preparing, processing,
taking possession of or removing the same; (iii) to sell, assign, lease or
otherwise dispose of any Collateral or any part thereof, either at public or
private sale or at any broker's board, in lot or in bulk, for cash, on credit or
otherwise, with or without representations or warranties and upon such terms as
shall be commercially reasonable; (iv) to notify obligors on the Collateral that
the Collateral has been assigned to Lender and that all payments thereon, or
performance with respect thereto, are to be made directly and exclusively to
Lender; (v) to collect by legal proceedings or otherwise all dividends,
distributions, interest, principal or other sums now or hereafter payable upon
or on account of the Collateral; (vi) to enter into any extension,
reorganization, disposition, merger or consolidation agreement, or any other
agreement relating to or affecting the Collateral, and in connection therewith
Lender may deposit or surrender control of the Collateral and/or accept other
property in exchange for the Collateral as Lender reasonably deems appropriate
and is commercially reasonable; (vii) to settle, compromise or release, on terms
acceptable to Lender, in whole or in part, any amounts owing on the Collateral
and/or any disputes with respect thereto; (viii) to extend the time of payment,
make allowances and adjustments and issue credits in connection with the
Collateral in the name of the applicable Grantor for the benefit of Lender; (ix)
to enforce payment and prosecute any action or proceeding with respect to any or
all of the Collateral and take or bring, on behalf of itself or in the name of
the applicable Grantor, any and all steps, actions, suits or proceedings deemed
necessary or reasonably desirable by Lender to
-15-
effect collection of or to realize upon the Collateral,
including any judicial or nonjudicial foreclosure thereof or thereon, and each
Grantor specifically consents to any nonjudicial foreclosure of any or all of
the Collateral or any other action taken by Lender which may release any obligor
from personal liability on any of the Collateral, and each Grantor waives, to
the extent permitted by applicable law, any right to receive notice of any
public or private judicial or nonjudicial sale or foreclosure of any security or
any of the Collateral, and any money or other property received by Lender in
exchange for or on account of the Collateral, whether representing collections
or proceeds of Collateral, and whether resulting from voluntary payments or
foreclosure proceedings or other legal action taken by Lender or any of the
Grantors, may be applied by Lender, without notice to the Grantors, to the
Obligations in such order and manner as Lender in their sole discretion shall
determine; (x) to insure, protect and preserve the Collateral; (xi) to exercise
all rights, remedies, powers or privileges provided under any of the Operative
Documents; and (xii) to remove, from any premises where the same may be located,
the Collateral and any and all documents, instruments, files and records, and
any receptacles and cabinets containing the same, relating to the Collateral,
and Lender may, at the cost and expense of the Grantors, use such of its
supplies, equipment, facilities and space at its places of business as may be
necessary or appropriate to properly administer, process, store, control,
prepare for sale or disposition and/or sell or dispose of the Collateral or to
properly administer and control the handling of collections and realizations
thereon, and Lender shall be deemed to have a rent-free tenancy of any premises
of the Grantors for such purposes and for such periods of time as reasonably
required by Lender. So long as an Event of Default has occurred and is
continuing, each Grantor will, at Lender's request, assemble the Collateral and
make it available to Lender at places which Lender may designate, whether at the
premises of such Grantor or elsewhere, and will make available to Lender, free
of cost, all premises, equipment and facilities of such Grantor for the purpose
of Lender's taking possession of the Collateral or storing the same or removing
or putting the Collateral in salable form or selling or disposing of the same.
(b) Possession by Lender. Upon the occurrence and during the
continuance of an Event of Default, Lender also shall have the right, without
notice or demand, either in person, by Lender or by a receiver to be appointed
by a court in accordance with the provisions of applicable law (and each Grantor
hereby expressly consents, to the fullest extent permitted by applicable law,
upon the occurrence and during the continuance of an Event of Default to the
appointment of such a receiver), and, to the extent permitted by applicable law,
without regard to the adequacy of any security for the Obligations, to take
possession of the Collateral or any part thereof and to collect and receive the
rents, issues, profits, income and proceeds thereof. The taking possession of
the Collateral by Lender shall not cure or waive any Event of Default or notice
thereof or invalidate any act done pursuant to such notice. The rights, remedies
and powers of any receiver appointed by a court shall be as ordered by said
court.
(c) Sale of Collateral. Any public or private sale or other
disposition of the Collateral may be held at any office of Lender, or at the
Grantors' places of business, or at any other place permitted by applicable law,
and without the necessity of the Collateral being within the view of prospective
purchasers. Lender may direct the order and manner of sale of the Collateral, or
portions thereof, as it in its sole and absolute discretion may determine
provided such sale is commercially reasonable, and each Grantor expressly
waives, to the extent permitted by applicable law, any right to direct the order
and manner of sale of any Collateral. Lender or any Person acting on Lender's
behalf may bid and purchase at any such sale or other disposition. In
furtherance of Lender's rights hereunder, each Grantor hereby grants to Lender
an irrevocable, non-exclusive license (exercisable without royalty or other
payment by Lender) to use, license or sublicense any patent, trademark, trade
name, copyright or other intellectual property in which Grantor now or hereafter
has any right, title or interest together with the right of access to all media
in which any of the foregoing may be recorded or stored; provided, however, that
such license shall only be
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exercisable in connection with the disposition of Collateral upon Lender's
exercise of its remedies hereunder.
(d) Notice of Sale. Unless the Collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, Lender will give the Grantors reasonable notice of the time and place of
any public sale thereof or of the time on or after which any private sale
thereof is to be made. The requirement of reasonable notice conclusively shall
be met if: (i) such notice is mailed, certified mail, postage prepaid, to the
Grantors at their addresses set forth on the signature page hereto or delivered
or otherwise sent to the Grantors, at least five (5) Business Days before the
date of the sale or (ii) if Grantors have previously executed any applications
for consent to the assignment of any FCC Licenses or for consent to the transfer
of control of any holder of such licenses. Each Grantor expressly waives, to the
fullest extent permitted by applicable law, any right to receive notice of any
public or private sale of any Collateral or other security for the Obligations
except as expressly provided for in this paragraph. Lender shall not be
obligated to make any sale of the Collateral if it shall determine not to do so
regardless of the fact that notice of sale of the Collateral may have been
given. Lender may, without notice or publication, except as required by
applicable law, adjourn the sale from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice (except as
required by applicable law), be made at the time and place to which the same was
so adjourned.
(e) Private Sales. With respect to any Collateral consisting of
securities, partnership interests, limited liability company interests, joint
venture interests or the like, and whether or not any of such Collateral has
been effectively registered under the Securities Act of 1933, as amended, or
other applicable laws, Lender may, in its sole and absolute discretion, sell all
or any part of such Collateral at private sale in such manner and under such
circumstances as Lender may deem necessary or advisable in order that the sale
may be lawfully conducted in a commercially reasonable manner. Without limiting
the foregoing, Lender may (i) approach and negotiate with a limited number of
potential purchasers, and (ii) restrict the prospective bidders or purchasers to
persons who will represent and agree that they are purchasing such Collateral
for their own account for investment and not with a view to the distribution or
resale thereof. In the event that any such Collateral is sold at private sale,
each Grantor agrees to the extent permitted by applicable law that if such
Collateral is sold for a price which is commercially reasonable, then (A) the
Grantors shall not be entitled to a credit against the Obligations in an amount
in excess of the purchase price, and (B) Lender shall not incur any liability or
responsibility to the Grantors in connection therewith, notwithstanding the
possibility that a substantially higher price might have been realized at a
public sale. Each Grantor recognizes that a ready market may not exist for such
Collateral if it is not regularly traded on a recognized securities exchange,
and that a sale by Lender of any such Collateral for an amount substantially
less than a pro rata share of the fair market value of the issuer's assets minus
liabilities may be commercially reasonable in view of the difficulties that may
be encountered in attempting to sell a large amount of such Collateral or
Collateral that is privately traded.
(f) Title of Purchasers. Upon consummation of any sale of Collateral
hereunder, Lender shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the Collateral so sold absolutely free from any claim
or right upon the part of any Grantor or any other Person claiming through any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
laws) all rights of redemption, stay and 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. If the sale of all or any part of the Collateral is made on
credit or for future delivery, Lender shall not be required to apply any portion
of the sale price to the Obligations until such amount actually is received by
Lender, and any Collateral so sold may be retained by Lender until the sale
price is paid in full by the purchaser or purchasers thereof. Lender shall not
incur any liability in case any
-17-
such purchaser or purchasers shall fail to pay for the Collateral so sold, and,
in case of any such failure, the Collateral may be sold again.
(g) Disposition of Proceeds of Sale. The proceeds resulting from the
collection, liquidation, sale or other disposition of the Collateral shall be
applied, first, to the reasonable costs and expenses (including reasonable
attorneys' fees) of retaking, holding, storing, processing and preparing for
sale, selling, collecting and liquidating the Collateral, and the like; second,
to the satisfaction of all Obligations; and third, any surplus remaining after
the satisfaction of all Obligations, to be paid over to the Grantors or to
whomsoever may be lawfully entitled to receive such surplus.
(h) Certain Waivers. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands against Lender arising out of the
repossession, retention or sale of the Collateral, or any part or parts thereof,
except to the extent any such claims, damages and awards arise out of the gross
negligence or willful misconduct of Lender.
(i) Remedies Cumulative. The rights and remedies provided under this
Agreement are cumulative and may be exercised singly or concurrently, and are
not exclusive of any other rights and remedies provided by law or equity.
(j) Compliance with Communications Act and FCC Rules and
Regulations.
(i) Notwithstanding any other provision of this Agreement, any
foreclosure on, sale, transfer or other disposition of, or the exercise of any
right to vote or consent with respect to, any of the Collateral as provided
herein or any other action taken or proposed to be taken by Lender hereunder
which would affect the operational, voting or other control of any entity
holding an FCC License shall be made in accordance with the Communications Act,
the terms of each FCC License, and any applicable FCC Rules, including any
requirement that there be a public or private sale.
(ii) If an Event of Default shall have occurred and be
continuing, each Grantor shall take any action which Lender may request in the
exercise of its rights and remedies under this Agreement, including, but not
limited to, the execution and delivery of any documents requested by Lender, in
order to transfer and assign to Lender or to one or more third parties as Lender
may designate, including, but not limited to, a receiver or trustee or to a
combination of the foregoing, the Collateral for the purposes of a public or
private sale. Upon the occurrence and during the continuance of an Event of
Default, each Grantor shall further use its best efforts to assist in obtaining
the approval of the FCC (and that required by any other Governmental Authority)
for any action or transaction contemplated by this Agreement, including without
limitation, the preparation, execution and filing with the FCC of the assignor's
or transferor's portion of any application or applications for consent to the
assignment of any FCC License or transfer of control of any entity holding or
controlling any FCC License as may be necessary or appropriate under the FCC
Rules. Each Grantor further agrees that, because of the unique nature of its
undertaking in this Section 13(j), the same may be specifically enforced, and it
hereby waives, and agrees to waive, any claim or defense that Lender would have
an adequate remedy at law for the breach of this undertaking and any requirement
for the posting of bond or other security. Each Grantor hereby agrees that in
the event that such Grantor has been given five Business Days' prior written
notice telecopied to its telecopier number set forth on the signature page
hereto and such Grantor has not responded by executing any such applications or
other instruments, the clerk of the court of any court of competent jurisdiction
may execute in the place of such Grantor any application or other instrument
necessary or appropriate for the obtaining of such consent. This Section 13(j)
shall not be deemed to limit any other rights of Lender available under
applicable law and consistent with the Communications Act and the applicable FCC
Rules.
-18-
14. Notice. Lender shall use reasonable efforts to give the Grantors
prior written notice of the exercise of any remedy provided for herein, provided
that the failure to give such notice shall not subject Lender to liability and
shall not affect the validity or exercise of any remedy hereunder.
15. Lender Appointed Attorney-in-Fact. To the full extent permitted by
applicable law, including the Communications Act and FCC Rules, each Grantor
hereby irrevocably appoints Lender as such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor, and in the name of such
Grantor, or otherwise, from time to time, in Lender's sole and absolute
discretion to do any of the following acts or things upon the occurrence and
during the continuance of an Event of Default: (a) to do all acts and things and
to execute all documents necessary or advisable to perfect and continue
perfected the security interests created by this Agreement and to preserve,
maintain and protect the Collateral; (b) to do any and every act which such
Grantor is obligated to do under this Agreement; (c) to prepare, sign, file and
record, in such Grantor's name, any financing statement covering the Collateral;
(d) to endorse and transfer the Collateral upon foreclosure by Lender; and (e)
to file any claims or take any action or institute any proceedings which Lender
may reasonably deem necessary or desirable for the protection or enforcement of
any of the rights of Lender with respect to any of the Collateral; provided,
however, that Lender shall be under no obligation whatsoever to take any of the
foregoing actions, and Lender shall have no liability or responsibility for any
act or omission (other than Lender's own gross negligence or willful misconduct)
taken with respect thereto.
16. Costs and Expenses. Each Grantor shall pay on demand (i) all
reasonable fees and expenses, including reasonable attorneys' fees and expenses,
incurred by Lender in connection with the preparation, execution and delivery
of, and the exercise of its duties under, this Agreement (not to exceed
$50,000), (ii) all reasonable fees and expenses, including reasonable attorneys'
fees and expenses, incurred by Lender in connection with the preparation,
execution and delivery of amendments and waivers hereunder and (iii) all
reasonable fees and expenses, including reasonable attorneys' fees and expenses,
incurred by Lender in connection with the enforcement or attempted enforcement
of this Agreement or any of the Obligations or in preserving any of Lender's
rights and remedies (including, without limitation, all such fees and expenses
incurred in connection with any "workout" or restructuring affecting the
Operative Documents or the Obligations or any bankruptcy or similar proceeding
involving such Grantor, any other Grantor, Borrower or any of their Affiliates).
17. Transfers and Other Liens. Each Grantor agrees that, except as
specifically permitted under the Loan Agreement or any other Operative Document,
it will not (a) sell, assign, exchange, transfer or otherwise dispose of, or
contract to sell, assign, exchange, transfer or otherwise dispose of, or grant
any option with respect to, any of the Collateral, or (b) create or permit to
exist any Lien upon or with respect to any of the Collateral, except for legally
permissible Liens in favor of Lender or otherwise permitted under the Loan
Agreement or any other Operative Document.
18. Other Agreements; Governing Agreement. Nothing herein shall in any
way modify or limit the effect of terms or conditions set forth in any other
Operative Document executed by the Grantors or any other Person in connection
with the Obligations, but each and every term and condition hereof shall be in
addition thereto; provided, however, that in the event of inconsistency between
this Agreement and the Loan Agreement, the Loan Agreement shall govern.
19. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
-19-
20. Understandings With Respect to Waivers and Consents. Each Grantor
warrants and agrees that each of the waivers and consents set forth herein are
made with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which such Grantor
otherwise may have against Lender or others, or against any Collateral. If any
of the waivers or consents herein are determined to be unenforceable under
applicable law, such waivers and consents shall be effective to the maximum
extent permitted by law.
21. Indemnity. Each Grantor shall indemnify, reimburse
and hold Lender, each of Lender's members, and each of their respective
successors, assigns, agents, officers, directors, shareholders, servants, agents
and employees harmless from and against all liabilities, losses, damages,
actions, suits, demands, claims of any kind and nature (including claims
relating to environmental discharge, cleanup or compliance), all costs and
expenses whatsoever to the extent they may be incurred or suffered by such
indemnified party in connection therewith (including reasonable attorneys' fees
and expenses), fines, penalties (and other charges of applicable governmental
authorities), licensing fees relating to any item of Collateral, damage to or
loss of use of property (including consequential or special damages to third
parties or damages to Borrower's property), or bodily injury to or death of any
person (including any agent or employee of Borrower) (each, a "Claim"), directly
or indirectly relating to or arising out of the use of the proceeds of the Loan,
the falsity of any representation or warranty of such Grantor or such Grantor's
failure to comply with the terms of this Agreement or any other Operative
Document during the Term. The foregoing indemnity shall cover, without
limitation, (i) any Claim in connection with a design or other defect (latent or
patent) in any item of equipment included in the Collateral, (ii) any Claim for
infringement of any patent, copyright, trademark or other intellectual property
right, (iii) any Claim resulting from the presence on or under or the escape,
seepage, leakage, spillage, discharge, emission or release of any Hazardous
Materials on the premises of such Grantor, including any Claims asserted or
arising under any Environmental Law, or (iv) any Claim for negligence or strict
or absolute liability in tort; provided, however, that such Grantor shall not
indemnify Lender for any liability incurred by Lender as a result of Lender's
gross negligence or willful misconduct. Such indemnities shall continue in full
force and effect, notwithstanding the expiration or termination of this
Agreement. Upon an indemnitee's written demand, such Grantor shall assume and
diligently conduct, at its sole cost and expense, the entire defense of Lender,
each of its members, and each of their respective agents, employees, directors,
officers, shareholders, successors and assigns, using counsel reasonably
acceptable to such indemnitee against any indemnified Claim. Such Grantor shall
not settle or compromise any Claim against or involving Lender without first
obtaining Lender's written consent thereto, which consent shall not be
unreasonably withheld. If Lender elects to assume its own defense in connection
with an indemnified Claim, then Lender shall not settle or compromise such Claim
without first obtaining such Grantor's written consent thereto, which consent
shall not be unreasonably withheld, provided that if such Grantor does not
consent thereto, then Borrower shall post security or a bond in the amount of
such Claim for the benefit of the Lender.
22. Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by the Grantors herefrom (other than
supplements to the Schedules hereto in accordance with the terms of this
Agreement) shall in any event be effective unless the same shall be in writing
and made in accordance with Section 10.01 of the Loan Agreement, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
23. Notices. All notices and other communications provided for hereunder
shall be given in the manner and to the addresses set forth either in the Loan
Agreement or in the Guaranty dated as of even date herewith made by the
Grantors.
-20-
24. Continuing Security Interest: Transfer of Notes; Termination. This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until indefeasible payment in full of
the Obligations and the termination or expiration of Lender's obligation to make
Loans under the Loan Agreement, (ii) be binding upon each Grantor, their
successors and assigns and (iii) inure, together with the rights and remedies of
Lender hereunder, to the benefit of Lender and any successor Lender, subject to
the terms and conditions of the Loan Agreement. Subject to the terms of the Loan
Agreement, any Lender may assign or otherwise transfer any Loan, or any rights
in Collateral held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender or Lender herein or otherwise. Nothing set forth herein or in any other
Operative Document is intended or shall be construed to give to any other party
any right, remedy or claim under, to or in respect of this Agreement or any
other Operative Document or any Collateral. The Grantors' successors and assigns
shall include, without limitation, a receiver, trustee or debtor-in-possession
thereof or therefor, provided that, except as otherwise permitted under the Loan
Agreement or any other Operative Document, none of the rights or obligations of
the Grantors hereunder may be assigned or otherwise transferred without the
prior written consent of Lender.
25. Release of the Grantors. This Agreement and all obligations of each
Grantor hereunder and all security interests granted hereby shall be released
and terminated when all Obligations have been paid in full in cash and when
Lender's obligation to make Loans under the Loan Agreement has expired or have
otherwise been terminated. Upon such release and termination of all Obligations
and the security interest hereunder, all rights in and to the Collateral granted
or pledged by the Grantors hereunder shall automatically revert to the Grantors,
and Lender shall return any pledged Collateral in their possession to the
Grantors, or to the Person or Persons legally entitled thereto, and shall
endorse, execute, deliver, record and file all instruments and documents, and do
all other acts and things, reasonably required for the return of the Collateral
to the Grantors, or to the Person or Persons legally entitled thereto, and to
evidence or document the release of the interests of Lender arising under this
Agreement, all as reasonably requested by, and at the sole expense of, the
Grantors.
26. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of California (without reference to its
choice of law provisions), except as otherwise required by mandatory provisions
of law and except to the extent that remedies provided by the laws of a
jurisdiction other than the State of California are governed by the laws of such
jurisdiction.
-21-
27. Jury Trial . EACH GRANTOR AND LENDER, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO
ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT.
28. Limitation of Liability . NO CLAIM MAY BE MADE BY ANY GRANTOR AGAINST
LENDER OR THE MEMBERS, AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OF
LENDER FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT
OF ANY CLAIM (WHETHER BASED UPON ANY BREACH OF CONTRACT, TORT, BREACH OF
STATUTORY DUTY OR ANY OTHER THEORY OF LIABILITY) ARISING OUT OF OR RELATED TO
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION THEREWITH AND EACH GRANTOR HEREBY WAIVES, RELEASES AND
AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT NOW
ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
29. Covenant Not to Issue Uncertificated Securities. Each Grantor
covenants to Lender that any Pledged Securities held by them shall be in
certificated form (as contemplated by Article 8 of the Uniform Commercial Code),
and that it will not seek to convert all or any part of any Pledged Securities
into uncertificated form (as contemplated by Article 8 of the Uniform Commercial
Code).]
30. Covenant Not to Dilute Interests of Secured Party in Securities. Each
Grantor represents, warrants and covenants to Lender that it will (a) not at any
time cause or permit any Subsidiary that is an issuer of Pledged Securities to
issue any capital stock or any warrant options or other rights to acquire any
capital stock, other than to such Grantor or as otherwise permitted under the
Loan Agreement and (b) pledge to Lender in accordance with the terms hereof,
immediately upon its acquisition (directly or indirectly) thereof, any and all
shares of stock or other securities of each issuer of Pledged Securities.
31. Pledged Limited Liability Company Interests/Covenant Not to Dilute.
Each Grantor represents, warrants and covenants to Lender that it will (a) not
at any time cause or permit any Pledged Entities to issue any additional
membership interests or any other rights or options to acquire any additional
limited liability company interests, other than to the Grantors or as otherwise
permitted under the Loan Agreement, and (b) pledge to Lender in accordance with
the terms hereof, immediately upon its acquisition (directly or indirectly)
thereof, any and all additional Limited Liability Company Interests of each
Pledged Entity.
32. Pledged Partnership Interests/Covenant Not to Dilute. Each Grantor
represents, warrants and covenants to Lender that it will (a) not at any time
cause or permit any Pledged Partnership Entities to issue any additional
partnership interests or any other rights or options to acquire any additional
partnership interests, other than to the Grantors or as otherwise permitted
under the Loan Agreement, and (b) pledge to Lender in accordance with the terms
hereof, immediately upon its acquisition (directly or indirectly) thereof, any
and all additional Partnership Interests of each Pledged Partnership Entity. IN
WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
-22-
CHADMOORE WIRELESS GROUP, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: CEO
------------------------
CHADMOORE COMMUNICATIONS, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT TANNER, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT BEACON HILL, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT OF NEVADA, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
CMRS SYSTEMS, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
CHADMOORE CONSTRUCTION SERVICES, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
CHADMOORE COMMUNICATIONS OF TENNESSEE, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT COMMUNICATIONS OF RICHMOND, LLC
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
PTT MAPLE, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT COMMUNICATIONS OF HUNTSVILLE, LLC
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
PTT BURTON, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT COMMUNICATIONS OF FORT WAYNE, LLC
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
PTT COMMUNICATIONS OF ROANOKE, LLC
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
PTT TRISTAN, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT COMMUNICATIONS OF AUSTIN, LLC
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
PTT COMMUNICATIONS OF JACKSONVILLE, LLC
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
PTT COMMUNICATIONS OF VIRGINIA BEACH, LLC
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
PTT ROSELAND, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT ARTINA, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT FRANKLIN, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT CHACO, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
800 SMR NETWORK, INC.
By: /s/Robert W. Moore
---------------------------
Name: Robert W. Moore
-------------------------
Title: President
------------------------
PTT COMMUNICATIONS OF BATON ROUGE LIMITED
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
PTT COMMUNICATIONS OF LAKE CHARLES, LLC
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
PTT COMMUNICATIONS OF BAY CITY, LLC
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
PTT COMMUNICATIONS OF ROCKFORD, LLC
By: /s/Jan Zwaik
---------------------------
Name: Jan Zwaik
-------------------------
Title: Manager
------------------------
GATX CAPITAL CORPORATION
By:/s/ Mathew Maloney
---------------------------
Name: Mathew Maloney
-------------------------
Title: Vice President
------------------------
-28-
Schedule 1-A
------------
List of Asset Locations
-----------------------
Grantor Brief Description of Assets Location (county, state)
- ------- --------------------------- ------------------------
Schedule 1-B
------------
List of Deposit Accounts
------------------------
Grantor/Depositor's Name Depositary Bank Account Number Account
- ------------------------ --------------- -------------- -------
Type
- ----
Schedule 1-C
------------
List of FCC Licenses
--------------------
Part 1 -- Schedule 1-C-1: FCC Licenses Held By Grantors
- --------------------------------------------------------
Grantor Description of FCC License Date of Expiration
- ------- -------------------------- ------------------
Part 2 -- Schedule 1-C-2:
- ------------------------
FCC Licenses Used by Grantors Pursuant to a Management Agreement
- ----------------------------------------------------------------
Transfer Option Exercised:
Grantor Other Licensee Description of FCC License Date of Expiration
- ------- -------------- -------------------------- ------------------
Transfer Option to be Exercised:
Grantor Other Licensee Description of FCC License Date of Expiration
- ------- -------------- -------------------------- ------------------
Schedule 1-D
------------
List of Other Authorizations
----------------------------
Part 1 -- Schedule 1-D-1: Other Authorizations Held By Grantors
Grantor Description of Other Authorization Date of Expiration
- ------- ---------------------------------- ------------------
Part 2 -- Schedule 1-D-2:
- ------------------------
Other Authorizations Used by Grantors Pursuant to a Management Agreement
- ------------------------------------------------------------------------
Transfer Option Exercised:
Grantor Other Licensee Description of FCC License Date of Expiration
- ------- -------------- -------------------------- ------------------
Transfer Option to be Exercised:
Grantor Other Licensee Description of FCC License Date of Expiration
- ------- -------------- -------------------------- ------------------
Schedule 1-E
------------
List of Pledged Collateral
--------------------------
Shares or Interest Shares Issued Shares
Grantor Issuer Certif. # Pledged & Outstanding Authorized
- ------- ------ --------- ------------------ ------------- ----------
Schedule 1-F
------------
Location of Chief Executive Office of each Grantor
--------------------------------------------------
Grantor Location
- ------- --------
Schedule 1-G
------------
List of Tradenames
------------------
Grantor Trade Names (including any used in the preceding 5 years)
- ------- ---------------------------------------------------------
Schdule 1-H
-----------
Trademark Registration Number Registration Date
- --------- ------------------- -----------------
Trademark Application Application Number Application Date
- --------------------- ------------------ ----------------
Schdule 1-I
-----------
Patent Registration Number Registration Date
- ------ ------------------- -----------------
Patent Application Application Number Application Date
- ------------------ ------------------ ----------------
Schdule 1-J
-----------
Copyright Registration Number Registration Date
- --------- ------------------- -----------------
Copyright Application Application Number Application Date
- --------------------- ------------------ ----------------
Exhibit A-1
-----------
To Security Agreement
---------------------
FORM OF PLEDGE NOTICE
---------------------
[Letterhead of Grantor]
-----------------------
[Date]
TO: [Name of Pledged Entity]
Notice is hereby given that, pursuant to the Security
Agreement (a true and correct copy of which is attached hereto), dated as of
[Date] (as amended, modified or supplemented from time to time in accordance
with the terms thereof, the "Security Agreement"), among [NAME OF GRANTOR] (the
"Grantor"), the other pledgors from time to time party thereto and GATX CAPITAL
CORPORATION (the "Lender"), the Grantor has pledged and assigned to the Lender,
and granted to the Lender a continuing security interest in, all right, title
and interest of the Grantor, whether now existing or hereafter arising or
acquired, as a [[limited partner] [general partner]] [member] in [NAME OF
PLEDGED ENTITY] (the ["Partnership"] ["LLC"]), and in, to and under the [TITLE
OF APPLICABLE AGREEMENT] (the "[Partnership] [LLC] Agreement"), including,
without limitation:
(i)all the capital of the [Partnership] [LLC] and the Grantor's
interest in all profits, income, surplus, losses, [Partnership] [LLC]
assets and other distributions to which the Grantor shall at any time be
entitled in respect of such [Partnership] [Membership] interest;
(ii)other payments due or to become due to the Grantor in respect of
such [partnership [limited liability company] interest, whether under the
[Partnership] [LLC] Agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(iii)f its claims, rights, powers, privileges, authority, options,
security interest, liens and remedies, if any, under the [Partnership]
[LLC] Agreement or at law or otherwise in respect of such [Partnership]
[Membership] Interest;
(iv)all present and future claims, if any, of the Grantor against
the [Partnership [LLC] for moneys loaned or advanced, for services
rendered or otherwise;
(v)all of the Grantor's rights under the [Partnership] [LLC]
Agreement or at law to exercise and enforce every right, power, remedy,
authority, option and privilege of the Grantor relating to the
[Partnership] [Membership] Interest, including any power to terminate,
cancel or modify the [Partnership] [LLC] Agreement, to execute any
instruments and to take any and all other action on behalf of and in the
name of the Grantor in respect of the [Partnership] [Membership] Interest
and the [Partnership] [LLC], to make determinations, to
exercise any election (including, but not limited, election of remedies)
or option or to give or receive any notice, consent, amendment, waiver or
approval, together with full power and authority to demand, receive,
enforce, collect or receipt for any of the foregoing, to enforce or
execute any checks, or other instruments or orders, to file any claims
and to take any action in connection with any of the foregoing;
(vi)all other property hereafter delivered in substitution for or in
addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other property at any time and from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all thereof; and
(vii)to the extent not otherwise included, all proceeds of any or
all of the foregoing.
Pursuant to the Security Agreement, the [Partnership] [LLC] is
hereby authorized and directed to register the Grantor's pledge to the Lender of
the interest of the Grantor on the [Partnership's] [LLC's] books.
The Grantor hereby requests the [Partnership] [LLC] to indicate the
[Partnership's] [LLC's] acceptance of this Notice and consent to and
confirmation of its terms and provisions by signing a copy hereof where
indicated on the attached page and returning the same to the Lender
[NAME OF GRANTOR]
By
Name:
Title:
Exhibit A-2
-----------
To Security Agreement
---------------------
FORM OF ISSUER ACKNOWLEDGMENT
-----------------------------
[NAME OF PLEDGED ENTITY] (the ["Partnership"] ["LLC"]) hereby
acknowledges receipt of a copy of the assignment by [NAME OF GRANTOR]
("Grantor") of its interest under the [TITLE OF APPLICABLE AGREEMENT] (the
"[Partnership] [LLC] Agreement") pursuant to the terms of the Security
Agreement, dated as of [Date] (as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "Security Agreement"), among the
Grantor, the other grantors from time to time party thereto, and GATX TELECOM I,
L.L.C. (the "Lender"). The undersigned hereby further confirms (i) the
registration of the Grantor's pledge of its interest to the Lender on behalf of
the Secured Creditors on the [Partnership's] [LLC's] books and (ii) upon receipt
from the Lender of a notice stating that an "Event of Default" has occurred and
is continuing, subject to applicable law, including the Communications Act and
the FCC Rulees, the undersigned shall only comply with instructions originated
by the Lender with respect to the pledge of the interest referred to above
notwithstanding contrary instructions given by any other person or entity,
including the Grantor until such time as otherwise notified by the Lender.
Dated: ,
----------- ----
[NAME OF PLEDGED ENTITY]
BY
Name:
Title:
Exhibit B
---------
To Security Agreement
---------------------
[SEPARATE INSTRUMENT FOR
EACH FORM OF COLLATERAL]
GRANT OF SECURITY INTEREST
--------------------------
[PATENTS][TRADEMARKS][COPYRIGHTS]
THIS GRANT OF SECURITY INTEREST, dated as of , 199 , is
executed by [GRANTOR], a [state of incorporation] corporation ("Grantor"), in
favor of GATX CAPITAL CORPORATION ("Secured Party").
A. Pursuant to a Senior Secured Loan Agreement, dated as of [Date] (the
"Loan Agreement"), among Chadmoore Wireless Group, Inc. ("Chadmoore"), the
subsidiaries of Chadmoore party thereto (collectively, the "Subsidiaries," and
together with Chadmoore, the "Borrowers") and Secured Party, Secured Party has
agreed to extend certain credit facilities to Borrowers upon the terms and
subject to the conditions set forth therein.
[B. Grantor owns the letters patent, and/or applications for letters
patent, of the United States, more particularly described on Schedules 1 A and 1
B annexed hereto as part hereof (collectively, the "Patents");]
[B. Grantor has adopted, used and is using the trademarks, more
particularly described on Schedules 1 A and 1 B annexed hereto as part hereof,
which trademarks are registered or subject to an application for registration in
the United States Patent and Trademark Office (collectively, the "Trademarks");]
[B. Grantor owns the copyrights registered in the United States
Copyright Office, more particularly described on Schedule 1 A annexed hereto as
part hereof (collectively, the "Copyrights");]
C. Grantor has entered into a Security Agreement dated the date hereof
(the "Security Agreement") in favor of Secured Party; and
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Patents, together with any reissue, continuation, continuation part or
extension thereof, and all proceeds thereof, including any and all causes of
action which may exist by reason of infringement thereof for the full term of
the Patents (the "Collateral"), to secure the prompt payment, performance and
observance of the Obligations, as defined in the Security Agreement;
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Trademarks, together with the goodwill of the business symbolized by the
Trademarks and the customer lists and records related to the Trademarks and the
applications and registrations thereof, and all proceeds thereof, including any
and all causes of action which may exist by reason of
II-2
infringement thereof (the "Collateral"), to secure the payment, performance and
observance of the Obligations, as defined in the Security Agreement;]
[D. Pursuant to the Security Agreement, Grantor has granted to Secured
Party a security interest in all right, title and interest of Grantor in and to
the Copyrights and the registrations thereof, together with any renewals or
extensions thereof, and all proceeds thereof, including any and all causes of
action which may exist by reason of infringement thereof for the full term of
the Copyrights (the "Collateral"), to secure the prompt payment, performance and
observance of the Obligations, as defined in the Security Agreement;]
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, Grantor does hereby further grant to Secured Party a
security interest in the Collateral to secure the prompt payment, performance
and observance of the Obligations.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are hereby incorporated herein by reference as
if fully set forth herein.
Secured Party's address is: GATX CAPITAL CORPORATION
Four Embarcadero Center
Suite 2200
San Francisco, CA 94111
II-3
IN WITNESS WHEREOF, Grantor has caused this instrument to be executed as of the
day and year first above written.
[GRANTOR]
By:
--------------------------
Name:
------------------------
Title:
-----------------------
STATE OF CALIFORNIA )
)
COUNTY OF )
On , 199 before me, , personally appeared , personally
known to me (or proved to me on the basis of satis factory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in her/her/their
authorized capacity(ies), and that by his/her/their signature(s) on such
instrument the person or entity on behalf of which the person(s) acted executed
the instrument.
WITNESS my hand and official seal.
Signature (Seal)
SCHEDULE 1 A TO GRANT OF SECURITY INTEREST
------------------------------------------
PATENTS
-------
Title Date Issued Patent No.
SCHEDULE 1B TO GRANT OF SECURITY INTEREST
-----------------------------------------
PATENT APPLICATIONS
-------------------
Title Application Date Application No.
SCHEDULE 1A TO GRANT OF SECURITY INTEREST
-----------------------------------------
TRADEMARKS
----------
Mark Registration Date Registration No.
SCHEDULE 1B TO GRANT OF SECURITY INTEREST
-----------------------------------------
TRADEMARK APPLICATIONS
----------------------
Mark Application Date Application No.
SCHEDULE 1A TO GRANT OF SECURITY INTEREST
-----------------------------------------
COPYRIGHTS
----------
Description Registration Date Registration No.