EXHIBIT 10.3
PLEDGE AND SECURITY AGREEMENT
DATED AS OF AUGUST 22, 2002
AMONG
ORBITAL SCIENCES CORPORATION
ORBITAL INTERNATIONAL, INC.,
AS DEBTORS
AND
U.S. BANK, N.A.,
AS SECURED PARTY
TABLE OF CONTENTS
PAGE
1. DEFINITIONS 1
1.1 GENERAL DEFINITIONS................................................................... 1
1.2 DEFINITIONS; INTERPRETATION........................................................... 6
2. GRANT OF SECURITY 7
2.1 GRANT OF SECURITY..................................................................... 7
2.2 CERTAIN LIMITED EXCLUSIONS............................................................ 8
2.3 INTERCREDITOR AGREEMENT............................................................... 8
3. SECURITY FOR OBLIGATIONS. 8
3.1 SECURITY FOR OBLIGATIONS.............................................................. 8
3.2 OBLIGATIONS REMAIN.................................................................... 8
4. REPRESENTATIONS AND WARRANTIES AND COVENANTS. 9
4.1 GENERALLY............................................................................. 9
4.2 EQUIPMENT AND INVENTORY............................................................... 12
4.3 ACCOUNTS.............................................................................. 12
4.4 INVESTMENT PROPERTY................................................................... 13
4.5 INTELLECTUAL PROPERTY................................................................. 18
4.6 COMMERCIAL TORT CLAIMS................................................................ 21
5. FURTHER ASSURANCES; ADDITIONAL DEBTORS. 21
5.1 FURTHER ASSURANCES.................................................................... 21
5.2 ADDITIONAL DEBTORS.................................................................... 23
6. ATTORNEY-IN-FACT. 24
6.1 POWER OF ATTORNEY..................................................................... 24
6.2 NO DUTY ON THE PART OF SECURED PARTY.................................................. 25
7. REMEDIES. 25
7.1 GENERALLY............................................................................. 25
7.2 APPLICATION OF PROCEEDS............................................................... 27
7.3 INVESTMENT PROPERTY................................................................... 27
7.4 INTELLECTUAL PROPERTY................................................................. 28
7.5 CASH PROCEEDS......................................................................... 29
8. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. 29
9. STANDARD OF CARE; SECURED PARTY MAY PERFORM. 30
10. INDEMNITY AND EXPENSES. 30
11. MISCELLANEOUS. 30
11.1 NOTICES............................................................................... 30
11.2 EXPENSES.............................................................................. 31
11.3 AMENDMENTS AND WAIVERS................................................................ 31
11.4 SUCCESSORS AND ASSIGNS................................................................ 32
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11.5 INDEPENDENCE OF COVENANTS............................................................. 32
11.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS................................ 32
11.7 NO WAIVER; REMEDIES CUMULATIVE........................................................ 32
11.8 MARSHALING; PAYMENTS SET ASIDE........................................................ 32
11.9 SEVERABILITY.......................................................................... 32
11.10 HEADINGS.............................................................................. 32
11.11 APPLICABLE LAW........................................................................ 32
11.12 CONSENT TO JURISDICTION............................................................... 33
11.13 WAIVER OF JURY TRIAL.................................................................. 33
11.14 COUNTERPARTS.......................................................................... 34
11.15 EFFECTIVENESS......................................................................... 34
11.16 ENTIRE AGREEMENT...................................................................... 34
11.17 INDENTURE CONTROLS.................................................................... 34
11.18 TRUST INDENTURE ACT CONTROLS.......................................................... 34
SCHEDULE 4.1 - (A) FULL LEGAL NAME/JURISDICTION OF ORGANIZATION/CHIEF EXECUTIVE OFFICE
(B) OTHER NAMES
(C) FINANCING STATEMENTS
SCHEDULE 4.2 - LOCATION OF EQUIPMENT AND INVENTORY
SCHEDULE 4.4 - INVESTMENT PROPERTY
SCHEDULE 4.5 - INTELLECTUAL PROPERTY
SCHEDULE 4.6 - COMMERCIAL TORT CLAIMS
EXHIBIT A - FORM OF PLEDGE SUPPLEMENT
EXHIBIT B - FORM OF PLEDGE JOINDER
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This PLEDGE AND SECURITY AGREEMENT, dated as of August 22,
2002 (this "AGREEMENT"), among ORBITAL SCIENCES CORPORATION, a Delaware
corporation ("ISSUER"), each of the undersigned Subsidiaries of Issuer (Issuer
and such Subsidiaries, together with each Subsidiary that subsequently becomes a
party hereto, each a "DEBTOR" and collectively, "DEBTORS"), and U.S. Bank, N.A.
(together with any successor Trustee pursuant to the terms of the Indenture,
"SECURED PARTY"), acting in the capacity of collateral agent for the benefit of
the holders of the Notes of Issuer issued under the Indenture referred to below.
R E C I T A L S:
WHEREAS, reference is made to that certain Indenture, dated as
of the date hereof (as it may be amended, restated, supplemented or otherwise
modified from time to time, the "INDENTURE"), by and among Issuer, the other
Debtors party thereto and Secured Party.
WHEREAS, in consideration of the extension of credit as set
forth in the Indenture each Debtor has agreed to secure all obligations under
the Indenture.
WHEREAS, Secured Party and Foothill Capital Corporation, as
agent, are parties to that certain Intercreditor and Subordination Agreement
dated as of August 22, 2002 (as amended, restated, modified or otherwise
supplemented from time to time, the "INTERCREDITOR AGREEMENT") pursuant to which
both parties, among other things, have established their relative priorities
with respect to the security interest granted in, and liens on, the Collateral
(as defined therein) and have agreed to the application of payment from the
disposition of the Collateral in the event of foreclosure upon or other
liquidation of such Collateral or in the event of bankruptcy of any of the
Debtors.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, each Debtor and Secured
Party agree as follows:
1. DEFINITIONS
1.1 GENERAL DEFINITIONS.
In this Agreement, the following terms shall have the following
meanings:
"ACCOUNT DEBTOR" shall mean each Person who is obligated on an
Account or any Supporting Obligation related thereto.
"ACCOUNTS" shall mean all "accounts" as defined in Article 9
of the UCC.
"AGREEMENT" shall have the meaning set forth in the preamble.
"ADDITIONAL DEBTORS" shall mean those additional Persons that
may become parties to this Agreement as additional Debtors, by executing a
Pledge Joinder.
"BOOKS" shall mean books and records of Debtors (including all
of their Records indicating, summarizing, or evidencing assets (including the
Collateral) or liabilities, all Records relating to each Debtor's business
operations or financial conditions, and all of their goods or General
Intangibles related to such information, including, without limitation, (i)
original copies of all documents, instruments or other writings or electronic
records or other Records evidencing Accounts, (ii) all books, correspondence,
credit or other files, Records, ledger sheets or cards, invoices, and other
papers relating to Accounts, including, without limitation, all tapes, cards,
computer tapes, computer discs, computer
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runs, record keeping systems and other papers and documents relating to
Accounts, whether in the possession or under the control of Debtor or any
computer bureau or agent from time to time acting for Debtor or otherwise, (iii)
all evidences of the filing of financing statements and the registration of
other instruments in connection therewith, and amendments, supplements or other
modifications thereto, notices to other creditors or secured parties, and
certificates, acknowledgments, or other writings, including, without limitation,
lien search reports, from filing or other registration officers, (iv) all credit
information, reports and memoranda relating thereto and (v) all other written or
non-written forms of information related in any way to the foregoing or any
Account.
"CASH PROCEEDS" shall mean all proceeds of any Collateral
received by any Debtor consisting of cash, checks and cash equivalents.
"CHATTEL PAPER" shall mean all "chattel paper" as defined in
Article 9 of the UCC, including, without limitation, "electronic chattel paper"
or "tangible chattel paper", as each term is defined in Article 9 of the UCC.
"COLLATERAL" shall have the meaning set forth in Section 2.1.
"COMMERCIAL TORT CLAIMS" shall mean all "commercial tort
claims" as defined in the UCC, including, without limitation, the commercial
tort claims listed on Schedule 4.6 (as such schedule may be amended or
supplemented from time to time).
"COMMODITIES ACCOUNTS" (i) shall mean all "commodity accounts"
as defined in Article 9 of the UCC and (ii) shall include, without limitation,
all of the accounts listed on Schedule 4.4 under the heading "Commodities
Accounts" (as such schedule may be amended or supplemented from time to time).
"CONTROLLED FOREIGN CORPORATION" shall mean "controlled
foreign corporation" as defined in the United States Internal Revenue Code of
1986, as amended from time to time.
"COPYRIGHTS" shall mean (i) copyrights and copyright
registrations, including, without limitation, the copyright registrations listed
on Schedule 4.5(A) and (A) all renewals thereof, (B) all income, royalties,
damages and payments now and hereafter due or payable under and with respect
thereto, including, without limitation, payments under all licenses entered into
in connection therewith and damages and payments for past or future
infringements or dilutions thereof, (C) the right to ▇▇▇ for past, present and
future infringements and dilutions thereof, (D) the goodwill of any Debtor's
business symbolized by the foregoing and connected therewith, and (E) all of any
Debtor's rights corresponding thereto throughout the world; and (ii) all
proceeds of any and all of the foregoing, including, without limitation,
licensed royalties and proceeds of infringement suits.
"CREDIT AGREEMENT" shall mean the credit agreement, dated as
of March 1, 2002, by and among the Issuer, certain of its Subsidiaries, certain
financial institutions and Foothill Capital Corporation, as arranger and agent.
The term "Credit Agreement" shall include agreements in respect of Interest Swap
and Hedging Obligations and letter of credit facilities with lenders (or
Affiliates thereof) party to the Credit Agreement and shall also include any
amendment, amendment and restatement, renewal, extension, restructuring,
supplement or modification to any Credit Agreement and all refundings,
refinancings and replacements of any Credit Agreement, including any credit
agreement:
(1) extending the maturity of any Indebtedness incurred
thereunder or contemplated thereby,
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(2) adding or deleting borrowers or guarantors thereunder, so
long as borrowers and issuers include one or more of the Issuer and its
Subsidiaries and their respective successors and assigns,
(3) increasing the amount of Indebtedness incurred thereunder
or available to be borrowed thereunder; provided, that on the date such
Indebtedness is incurred it would not be prohibited by Section 4.7 of the
Indenture, or
(4) otherwise altering the terms and conditions thereof in a
manner not prohibited by the terms of the Indenture.
"CREDIT FACILITY DOCUMENTS" shall mean the Credit Agreement
and any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, as such credit agreement and/or
related documents may be amended, restated, supplemented, renewed, replaced or
otherwise modified from time to time, whether or not with the same agent,
trustee, representative lenders or holders, and, subject to the proviso in
clause (3) of the definition of "Credit Agreement," irrespective of any changes
in the terms and conditions thereof.
"CREDIT FACILITY SECURED PARTY" shall mean the agent or any
other Person acting on behalf and for the benefit of the lender(s) under the
Credit Agreement.
"DDA" shall mean any checking or other demand deposit account
maintained by any Debtor.
"DEPOSIT ACCOUNTS" (i) shall mean all "deposit accounts" as
defined in Article 9 of the UCC and (ii) shall include, without limitation, all
of the accounts listed on Schedule 4.4 under the heading "Deposit Accounts" and
all DDAs.
"EQUIPMENT" shall mean all equipment (including, without
limitation, the manufacturing equipment located at Issuer's Highbay facility
whether or not any such equipment is so attached to the real property that it
constitutes fixtures), machinery, machine tools, motors, furniture, furnishings,
vehicles (including motor vehicles), tools, parts, goods (other than consumer
goods, farm products, or Inventory), wherever located, including all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing, excluding assets described in clause
(a) of the definition of "Excluded Collateral."
"EXCLUDED COLLATERAL" shall mean all of Issuer's now owned
right, title, and interest in and to each of the following:
(a) that certain aircraft with Model Number L-1011-385-1-15,
Serial Number 193E-1067, and Registration Number N#140SC, and the engines and
all other parts attached thereto,
(b) the money, in an amount not to exceed $10,355,676 in the
aggregate, so long as such money is collateralizing the following existing
letters of credit: (i) (a) the letter of credit number M-12870/01G in the amount
of $1,847,500, the letter of credit number M-12974/02G in the amount of
$2,804,219, the letter of credit number M-12945/01G in the amount of $735,474,
which amount is being increased to $5,516,057, each of which were issued by the
International Commercial Bank of China in favor of the National Science Counsel,
the Executive Yuan of the Republic of China, (ii) the letter of credit number
930718 in the amount of $27,900 issued by Bank of America, N.A. (successor by
merger to NationsBank, N.A.) in favor of Hellenic Air Force Command, and (iii)
the letter of credit number SM416742C in the amount of $160,000 issued by
Wachovia Bank, N.A. (successor by merger to First Union National Bank) in favor
of Boston Properties Limited Partnership,
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(c) the common stock of ORBIMAGE that is owned or beneficially
held by Issuer,
(d) the outstanding capital stock of a Controlled Foreign
Corporation in excess of 65% of the voting power of all classes of capital stock
of such Controlled Foreign Corporation entitled to vote; provided that
immediately upon the amendment of the United States Internal Revenue Code of
1986, as amended, to allow the pledge of a greater percentage of the voting
power of capital stock in a Controlled Foreign Corporation without adverse tax
consequences, the Collateral shall include, and each Debtor shall be deemed to
have granted a security interest in, such greater percentage of capital stock of
each Controlled Foreign Corporation,
(e) assets secured by Purchase Money Obligations or Capital
Lease Obligations permitted to be incurred under the Indenture, and
(f) any assets, agreements, leases, permits or licenses or
other assets or property that cannot be subjected to a Lien hereunder without
the consent of third parties, to the extent that such consent is not obtained.
Upon any amendment to any of the Credit Facility Documents which results in a
narrowing of the definition of "Excluded Collateral" as set forth therein, the
definition of Excluded Collateral herein shall be automatically amended in the
same manner.
"FINANCIAL ASSET" shall mean "financial asset" as defined in
Article 8 of the UCC.
"GENERAL INTANGIBLES" shall mean all general intangibles
(including payment intangibles, contract rights, rights to payment, rights
arising under common law, statutes, or regulations, choses or things in action,
goodwill, patents, trade names, trademarks, servicemarks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, infringement claims, computer programs,
information contained on computer disks or tapes, software, literature, reports,
catalogs, money, deposit accounts, insurance premium rebates, tax refunds, and
tax refund claims), and any other personal property other than goods, Accounts,
Investment Property, Negotiable Collateral and Chattel Paper.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, or any court, in each case whether of the United States or
foreign.
"INDEMNITEE" shall mean Secured Party and its Affiliates'
officers, partners, directors, trustees, employees, representatives and agents.
"INDENTURE" shall have the meaning set forth in the recitals
hereto.
"INDENTURE DOCUMENTS" shall mean the Purchase Agreement, the
Indenture, the Notes, the Guarantees, the Collateral Agreements, the Warrants,
the Warrant Agreement, the Note Registration Rights Agreement and the Warrant
Registration Rights Agreement, and such other agreements, instruments and
certificates executed and delivered (or issued) by Issuer or any other Debtor
pursuant to the Indenture or any of the foregoing, as any or all of the same may
be amended, restated, supplemented or otherwise modified from time to time.
"INTELLECTUAL PROPERTY" shall mean, collectively, the
Copyrights, the Patents, the Trademarks and the Intellectual Property Licenses.
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"INTELLECTUAL PROPERTY LICENSES" shall mean all rights under
or interest in any Patent, Trademark or Copyright license agreements with any
other party, whether a Debtor is a licensee or licensor under any such license
agreement, including, without limitation, the license agreements listed on
Schedule 4.5(E), and the right to use the foregoing in connection with the
enforcement of the Secured Party's rights under this Agreement or any other
Indenture Document, including without limitation, the right to prepare for sale
and sell any and all Inventory now or hereafter owned by any Debtor and now or
hereafter covered by such licenses, provided, however, that Intellectual
Property Licenses shall not include any license agreement in effect as of the
date hereof which by its terms prohibits the grant of the security interest
contemplated by this Agreement, except that upon the termination of such
prohibitions for any reason whatsoever, such license agreement shall be deemed
to be included in Intellectual Property Licenses.
"INVENTORY" shall mean all inventory, including goods held for
sale or lease or to be furnished under a contract of service, goods that are
leased by any Debtor as lessor, goods that are furnished by any Debtor under a
contract of service, and raw materials, work in process, or materials used or
consumed in any Debtor's business; including all accessions, additions,
attachments, improvements, substitutions and replacements thereto and therefor.
"INVESTMENT PROPERTY" shall mean all "investment property" as
defined in Article 9 of the UCC, including all Securities, Securities Accounts
and Commodities Accounts.
"ISSUE DATE" shall mean the date of first issuance of the 12%
Series A Second Priority Secured Notes due 2006 under the Indenture.
"MONEY" shall mean "money" as defined in the UCC.
"NEGOTIABLE COLLATERAL" shall mean all letters of credit,
letter of credit rights, instruments, promissory notes, drafts and documents (as
defined in Article 9 of the UCC).
"NOTES PROCEEDS ACCOUNT" shall mean account #▇▇▇▇▇▇▇▇
maintained in the name of "Orbital Sciences Notes and Warrant Account" at U.S.
Bank, N.A. and all funds on deposit therein.
"ORBIMAGE" shall mean Orbital Imaging Corporation, a Delaware
corporation.
"PATENTS" shall mean all (i) patents and patent applications,
including, without limitation, the patents and patent applications listed on
Schedule 4.5(B), and (A) all extensions and adjustments thereof, (B) all income,
royalties, damages and payments now and hereafter due or payable under and 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, (C) the right to ▇▇▇ for past, present and future
infringements thereof, and (D) all of any Debtor's rights corresponding thereto
throughout the world; and (ii) proceeds of any and all of the foregoing,
including, without limitation, license royalties and proceeds of infringement
suits.
"PLEDGE JOINDER" shall mean any joinder to this agreement in
substantially the form of Exhibit B.
"PLEDGE SUPPLEMENT" shall mean any supplement to this
agreement in substantially the form of Exhibit A.
"RECORD" shall mean information that is inscribed on a
tangible medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
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"REPLACEMENT CREDIT FACILITY SECURED PARTY" means the
collateral agent (or other agent serving in such capacity) pursuant to the
Credit Facility Documents or any other person or entity in whose favor any of
the Debtors may grant liens on and security interests in the Collateral in
connection with the replacement or refinancing of the Credit Agreement.
"SECURED OBLIGATIONS" shall have the meaning specified in
Section 3.1.
"SECURED PARTY" shall have the meaning set forth in the
preamble.
"SECURITIES" shall mean any stock, shares, partnership
interests, voting trust certificates, certificates of interest or participation
in any profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participations
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACCOUNTS" (i) shall mean all "securities accounts"
as defined in Article 8 of the UCC and (ii) shall include, without limitation,
all of the accounts listed on Schedule 4.4 under the heading "Securities
Accounts" (as such schedule may be amended or supplemented from time to time).
"SUPPORTING OBLIGATION" shall mean "supporting obligation" as
defined in Article 9 of the UCC.
"TRADEMARKS" shall mean (i) all trademarks, trade names,
registered trademarks, trademark applications, service marks, registered service
marks and service ▇▇▇▇ applications, including, without limitation, the trade
names, registered trademarks, trademark applications, registered service marks
and service ▇▇▇▇ applications listed on Schedule 4.5(D), and (A) all renewals
thereof, (B) all income, royalties, damages and payments now and hereafter due
or payable under and with respect thereto, including, without limitation,
payments under all licenses entered into in connection therewith and damages and
payments for past or future infringements or dilutions thereof, (C) the right to
▇▇▇ for past, present and future infringements and dilutions thereof, (D) the
goodwill of any Debtor's business symbolized by the foregoing and connected
therewith, and (E) all of any Debtor's rights corresponding thereto throughout
the world; and (ii) all proceeds of any and all of the foregoing, including,
without limitation, license royalties and proceeds of infringement suits.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the State of New York or, when the context implies, the Uniform
Commercial Code as in effect from time to time in any other applicable
jurisdiction.
1.2 DEFINITIONS; INTERPRETATION.
All capitalized terms used herein (including the preamble and recitals
hereto) and not otherwise defined herein shall have the meanings ascribed
thereto in the Indenture or, if not defined therein, in the UCC. References to
"Sections," "Exhibits" and "Schedules" shall be to Sections, Exhibits and
Schedules, as the case may be, of this Agreement unless otherwise specifically
provided. Section headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any
other purpose or be given any substantive effect. Any of the terms defined
herein may, unless the context otherwise requires, be used in the singular or
the plural, depending on the reference. The use herein of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not
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nonlimiting language (such as "without limitation" or "but not limited to" or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter. If any conflict or
inconsistency exists between this Agreement and the Indenture, the Indenture
shall govern. All references herein to provisions of the UCC shall include all
successor provisions under any subsequent version or amendment to any Article of
the UCC.
2. GRANT OF SECURITY
2.1 GRANT OF SECURITY.
Each Debtor hereby grants to Secured Party a security interest and
continuing lien on all of such Debtor's right, title and interest in, to and
under all property of such Debtor including, but not limited to the following,
in each case whether now owned or existing or hereafter acquired or arising and
wherever located (collectively, such Debtor's "COLLATERAL"):
(i) Accounts;
(ii) Books;
(iii) Chattel Paper;
(iv) Deposit Accounts, including any DDAs;
(v) Equipment;
(vi) Financial Assets;
(vii) General Intangibles;
(viii) Intellectual Property;
(ix) Inventory;
(x) Investment Property;
(xi) Negotiable Collateral;
(xii) The Notes Proceeds Account;
(xiii) Commercial Tort Claims;
(xiv) money, cash, Cash Equivalents, or other assets of any
Debtor that now or hereafter come into the
possession, custody, or control of Secured Party;
(xv) to the extent not otherwise included above, all
Supporting Obligations relating to any of the
foregoing;
(xvi) to the extent not otherwise included above, all of
the proceeds and products, whether tangible or
intangible, of any of the foregoing, including
proceeds of insurance or commercial tort claims,
covering any
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or all of the foregoing, and any and all Accounts,
Books, Chattel Paper, Deposit Accounts, Equipment,
Financial Assets, General Intangibles, Inventory,
Investment Property, Licenses, Negotiable Collateral,
Supporting Obligations, money, Deposit Accounts, or
other tangible or intangible property resulting from
the sale, lease, license, exchange, collection, or
other disposition of any of the foregoing, or any
portion thereof or interest therein, and the proceeds
thereof; and
(xvii) to the extent not otherwise included above, all other
personal property of the Debtors of any kind or
description.
2.2 CERTAIN LIMITED EXCLUSIONS.
Notwithstanding anything herein to the contrary, in no event shall the
Collateral include any Excluded Collateral.
2.3 INTERCREDITOR AGREEMENT.
Notwithstanding anything herein to the contrary, the relative rights
and remedies of Secured Party hereunder and the Credit Facility Secured Party
shall be subject to and governed by the terms of the Intercreditor Agreement at
any time the Intercreditor Agreement is in effect. In the event of any
inconsistency between the terms hereof and the Intercreditor Agreement, the
Intercreditor Agreement shall control at any time the Intercreditor Agreement is
in effect. In the event that the obligations of any Debtor under this Agreement
conflict with the obligations of such Debtor under the Credit Facility
Documents, such Debtor shall be required to comply with the Credit Facility
Documents, and such compliance shall constitute compliance hereunder.
3. SECURITY FOR OBLIGATIONS.
3.1 SECURITY FOR OBLIGATIONS.
With respect to each Debtor, this Agreement secures, and the Collateral
granted by such Debtor is collateral security for, the prompt and complete
payment or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a) (and
any successor provision thereof)), of all Obligations of such Debtor under the
Indenture Documents (the "SECURED OBLIGATIONS").
3.2 OBLIGATIONS REMAIN.
(a) Anything contained herein to the contrary notwithstanding:
(i) each Debtor shall remain liable under any partnership
agreement or limited liability company agreement
relating to any partnership interest or limited
liability company interest included in the Collateral
and any other contracts and agreements included in
the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder
to the same extent as if this Agreement had not been
executed;
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(ii) the exercise by Secured Party of any of its rights
hereunder shall not release any Debtor from any of
its duties or obligations under the contracts and
agreements included in the Collateral; and
(iii) Secured Party shall not have any obligation or
liability under any partnership agreement or limited
liability company agreement relating to any
partnership interest or limited liability company
interest included in the Collateral and any other
contracts and agreements included in the Collateral
by reason of this Agreement, nor shall Secured Party,
be obligated to perform any of the obligations or
duties of any Debtor thereunder or to take any action
to collect or enforce any claim for payment assigned
hereunder.
(b) Neither Secured Party nor any purchaser at a foreclosure sale under
this Agreement shall be obligated to assume any obligation or liability under
any partnership agreement or limited liability company agreement relating to any
partnership interest or limited liability company interest included in the
Collateral or any other contracts and agreements included in the Collateral.
4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.
4.1 GENERALLY.
(a) Representations and Warranties. Each Debtor hereby represents and
warrants on the Issue Date that:
(i) it owns the Collateral purported to be owned by it or
otherwise has the rights it purports to have in each
item of Collateral and, as to all Collateral whether
now existing or hereafter acquired, will continue to
own or have such rights in each item of the
Collateral, in each case free and clear of any and
all Liens, rights or claims of all other Persons
other than Permitted Liens, including, without
limitation, liens arising as a result of such Debtor
becoming bound (as a result of merger or otherwise)
as debtor under a security agreement entered into by
another Person;
(ii) it has indicated on Schedule 4.1(A): (x) the type of
organization of such Debtor, (y) the jurisdiction of
organization of such Debtor and (z) the jurisdiction
where the chief executive office or its sole place of
business is, and for the lesser of the one-year
period preceding the date hereof or the period since
its formation or incorporation, as applicable, has
been, located;
(iii) the full legal name of such Debtor is as set forth on
Schedule 4.1(A) and it has not done in the lesser of
the five-year period preceding the date hereof or the
period since its formation or incorporation, as
applicable, and does not do, business under any other
name (including any trade-name or fictitious business
name) except for those names set forth on Schedule
4.1(B);
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(iv) except for the Credit Facility Documents, such Debtor
has not within the lesser of the five-year period
preceding the date hereof or the period since its
formation or incorporation, as applicable, become
bound (whether as a result of merger or otherwise) as
debtor under a security agreement covering the
Collateral entered into by another Person as debtor,
which has not heretofore been terminated;
(v) upon the filing of all UCC financing statements
naming each Debtor as "debtor" and Secured Party as
"Secured Party" and describing the Collateral in the
filing offices set forth opposite such Debtor's name
on Schedule 4.1(C) hereof and, to the extent not
subject to Article 9 of the UCC, upon the recordation
of the security interest granted hereunder in
Patents, Trademarks and Copyrights in the applicable
patent, trademark and copyright registries (including
the United States Patent and Trademark Office and the
United States Copyright Office), the registration of
all unregistered Copyrights and other filings
delivered by each Debtor, and the execution of the
agreements referred to in Section 4.4(c) by all
parties thereto, security interests granted to
Secured Party hereunder will constitute valid and
perfected Liens (subject in the case of priority only
to Permitted Liens and the Intercreditor Agreement);
provided, however, that the security interests with
respect to Deposit Accounts and Securities Accounts
shall be perfected only to the extent required
pursuant to Section 4.4(c);
(vi) all actions and consents, including all filings,
notices, registrations and recordings necessary for
the exercise by Secured Party of the voting or other
rights provided for in this Agreement or the exercise
of remedies in respect of the Collateral have been
made or obtained except (i) for the landlord consents
referred to in Section 4.1(b)(vi) and such landlord
consents that are not otherwise required to be
delivered hereunder and (ii) to the extent any
consents or approvals are required under applicable
laws (including, without limitation, the Assignment
of Claims Act of 1940, as amended), the Intercreditor
Agreement, the Credit Facility Documents or any
Intellectual Property License, contract or agreement;
(vii) other than the financing statements filed in favor of
Secured Party, no effective UCC financing statement,
fixture filing or other instrument similar in effect
under any applicable law covering all or any part of
the Collateral is on file in any filing or recording
office except for (x) financing statements which have
lapsed or for which proper termination statements
have been delivered to Secured Party for filing and
(y) financing statements filed in connection with
Permitted Liens;
(viii) no authorization, approval or other action by, and no
notice to or filing with, any Governmental Authority
is required for either (i) the pledge or grant by any
Debtor of the Liens purported to be created in favor
of Secured Party hereunder or (ii) the exercise by
Secured Party of any rights or remedies in respect of
any Collateral (whether specifically granted or
created hereunder or created or provided for by
applicable law), except (A) for the filings
contemplated by clause (v) above, (B) as may be
required, in connection with the disposition of any
Investment
10
Property, by laws generally affecting the offering
and sale of Securities and (C) to the extent any
consents or approvals are required under applicable
laws (including, without limitation, the Assignment
of Claims Act of 1940, as amended), the Intercreditor
Agreement, the Credit Facility Documents or any
Intellectual Property License, contract or agreement;
(ix) all information supplied by any Debtor with respect
to the Collateral taken as a whole is accurate and
complete in all material respects; and
(x) none of the Collateral constitutes, or is the
proceeds (as defined in Article 9 of the UCC) of,
"farm products" (as defined in Article 9 of the UCC).
(b) Covenants and Agreements. Each Debtor hereby covenants and agrees
that:
(i) except for the security interest created by this
Agreement, it shall not create or suffer to exist any
Lien upon or with respect to any of the Collateral,
except Permitted Liens, and such Debtor shall defend
the Collateral against all Persons at any time
claiming any interest therein;
(ii) it shall not produce, use or permit any Collateral to
be used unlawfully or in violation of any provision
of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance
covering the Collateral;
(iii) it shall not change such Debtor's name, identity,
corporate structure, sole place of business, chief
executive office or jurisdiction of organization or
establish any trade names unless it shall have (a) if
such change would adversely affect the validity or
perfection of Secured Party's security interest in
the Collateral, notified Secured Party in writing, by
executing and delivering to Secured Party a completed
Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with Supplements
to Schedules 4.1(A), 4.1(B) or 4.1(C), as applicable,
at least thirty (30) days prior to any such change or
establishment, identifying such new proposed name,
identity, corporate structure, sole place of
business, chief executive office, jurisdiction of
organization or trade name and providing such other
information in connection therewith as Secured Party
may reasonably request and (b) taken all actions
necessary to maintain the continuous validity and
perfection of Secured Party's security interest in
the Collateral intended to be granted and agreed to
hereby;
(iv) it shall pay promptly when due all property and other
taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for
labor, materials and supplies) against, the
Collateral, except to the extent the validity thereof
is being contested in good faith; provided, such
Debtor shall in any event pay such taxes,
assessments, charges, levies or claims not later than
five (5) days prior to the date of any proposed sale
under any judgment, writ or warrant of
11
attachment entered or filed against such Debtor or
any of the Collateral as a result of the failure to
make such payment;
(v) upon such Debtor or any officer of such Debtor
obtaining knowledge thereof, it shall promptly notify
Secured Party in writing of the levy of any legal
process against the Collateral or any portion
thereof; and
(vi) it shall use reasonable best efforts (which will be
deemed not to include any obligation to pay money to
any third parties other than filing fees, reasonable
fees and expenses of the third party or other de
minimus payments) to deliver to Secured Party within
30 days after the Issue Date, or as soon as
practicable thereafter, landlord consents for the
properties located at: (i) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (ii) ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, (iii) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, (iv) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and (v) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to the extent it occupies and
has business activities on any of such premises as a
lessee under a lease, executed by the landlord in
respect of such lease the effect of which would
subordinate the claims of such landlord to the Liens
created under this Agreement and enable Secured Party
to access such premises without delay for the purpose
of enforcing such Liens.
4.2 EQUIPMENT AND INVENTORY.
(a) Representations and Warranties. Each Debtor represents and
warrants, on the Issue Date, that except for Inventory and Equipment temporarily
moved for the purpose of testing, conducting launches or otherwise fulfilling
contractual obligations in the ordinary course of business, all of the Equipment
and Inventory included in the Collateral is kept only at the locations specified
in Schedule 4.2.
(b) Covenants and Agreements. Each Debtor covenants and agrees that:
(i) it shall not deliver any Document (as defined in
Article 9 of the UCC) evidencing any Equipment and
Inventory to any Person other than the issuer of such
Document to claim the goods evidenced therefor or
Secured Party or the Credit Facility Secured Party or
any other holder or representative of a holder of a
Permitted Lien; and
(ii) if any Collateral consisting of Equipment or
Inventory is in possession or control of any third
party which is a bailee or warehouseman, it shall, if
reasonably requested by Secured Party, notify such
third party of the Secured Party's security interest
and use its reasonable efforts in obtaining an
acknowledgment from such third party that it is
holding the Equipment and Inventory for the benefit
of the Secured Party or other holders of Permitted
Liens.
4.3 ACCOUNTS.
12
Covenants and Agreements: Each Debtor hereby covenants and agrees that:
(a) it shall keep and maintain at its own cost and expense complete
records of the Accounts in a manner that enables such Debtor to produce
financial statements in accordance with GAAP;
(b) it shall ▇▇▇▇ conspicuously all Chattel Paper and Negotiable
Collateral (other than any delivered to Secured Party as provided herein or to
Credit Facility Secured Party as provided in the Credit Facility Documents),
with an appropriate reference to the fact that Secured Party has a security
interest therein;
(c) other than in the ordinary course of business as generally
conducted by it on and prior to the date hereof, and except as otherwise
provided in Section 4.3(e) below, following an Event of Default, such Debtor
shall not (w) grant any extension or renewal of the time of payment of any
Account, (x) compromise or settle any dispute, claim or legal proceeding with
respect to any Account for less than the total unpaid balance thereof, (y)
release, wholly or partially, any Person liable for the payment thereof, or (z)
allow any credit or discount thereon;
(d) except as otherwise provided in this Section 4.3 and other than in
the ordinary course of business as generally conducted by it on and prior to the
date hereof, it shall continue to collect all amounts due or to become due to
such Debtor under the Accounts and any Supporting Obligation and diligently
exercise each material right it may have under any Account or any Supporting
Obligation, in each case, at its own expense and to the extent advisable in its
reasonable business judgment; and
(e) it shall use reasonable efforts to keep in full force and effect
any Supporting Obligation relating to any Account to the extent advisable in its
reasonable business judgment.
4.4 INVESTMENT PROPERTY.
(a) Representations and Warranties. With respect to any capital stock
of Earthwatch, Inc., each Debtor hereby represents and warrants to the best of
such Debtor's knowledge, and with respect to all other Investment Property, each
Debtor hereby represents and warrants, that on the Issue Date:
(i) Schedule 4.4 sets forth under the headings "Pledged
Stock, "Pledged LLC Interests," "Pledged Partnership
Interests" and "Pledged Trust Interests," all of the
equity interests owned by any Debtor included in the
Collateral and such equity interests constitute the
percentage of issued and outstanding shares of stock,
percentage of membership interests, percentage of
partnership interests or percentage of beneficial
interest of the respective issuers thereof to the
extent indicated on such Schedule;
(ii) it is the record and beneficial owner of the equity
interests included in the Collateral free of all
Liens, rights or claims of other Persons other than
Permitted Liens;
(iii) without limiting the generality of Section 4.1(a)(v),
no consent of any other general or limited partner of
a pledged partnership, any other member of a pledged
limited liability company or any other shareholder of
a pledged corporation is necessary in connection with
the creation or
13
perfection of the security interest of Secured Party
in any equity interests included in the Collateral or
(other than approvals required by applicable laws)
the exercise by Secured Party of the voting or other
rights provided for in this Agreement or the exercise
of remedies in respect thereof;
(iv) as of the Issue Date, none of the equity interests
included in the Collateral are or represent interests
in issuers that are: (a) registered as investment
companies or (b) are dealt in or traded on securities
exchanges or markets;
(v) Schedule 4.4 sets forth under the heading "Pledged
Debt" all of the issued and outstanding Indebtedness
evidenced by an instrument or certificated security
of the respective issuers thereof owing to such
Debtor and, to the best of such Debtor's knowledge,
none of such Pledged Debt is in default;
(vi) Schedule 4.4 sets forth under the headings
"Securities Accounts" and "Commodities Accounts,"
respectively, all of the Securities Accounts and
Commodities Accounts in which each Debtor has an
interest. Each Debtor is the sole entitlement holder
of each such Securities Account and Commodities
Account, and such Debtor has not consented to, and is
not otherwise aware of, any Person (other than the
Credit Facility Secured Party) having "control" (as
defined in Section 9-115(e) of the UCC) over, or any
other interest in, any such Securities Account or
Commodity Account or any securities or other property
credited thereto;
(vii) Schedule 4.4 sets forth under the heading "Deposit
Accounts" all of the Deposit Accounts in which each
Debtor has an interest and each Debtor is the sole
account holder of each such Deposit Account and such
Debtor has not consented to, and is not otherwise
aware of, any Person (other than Credit Facility
Secured Party) having either sole dominion and
control or "control" (within the meaning of Section
9-104 of Article 9 of the UCC) over, or any other
interest in, any such Deposit Account or any money or
other property deposited therein; and
(viii) each Debtor has, to the extent required under Section
4.4(c), taken all actions necessary to: (a) establish
Secured Party's "control" (within the meaning of
Section 9-104 of the UCC) over all Deposit Accounts;
and (b) deliver all instruments (as defined in
Article 9 of the UCC) to Secured Party or Credit
Facility Secured Party pursuant to the terms of the
Credit Facility Documents and the Intercreditor
Agreement.
(b) Covenants and Agreements. Each Debtor hereby covenants and agrees
that:
(i) it shall not vote to enable or take any other action
to: (a) amend or terminate any partnership agreement,
limited liability company agreement, certificate of
incorporation, by-laws or other organizational
documents in any way that adversely affects the
validity, perfection or priority of Secured Party's
security interest, (b) permit any of its Subsidiaries
to dispose of all or a material portion of their
assets in a manner which would be prohibited under
the Indenture or the Credit
14
Facility Documents, (c) waive any default under or
breach of any terms of any organizational document
relating to any of its Subsidiaries or the terms of
any Pledged Debt unless such waiver is deemed
advisable in such Debtor's reasonable business
judgment, or (d) cause any issuer of any partnership
interests or limited liability company interests
included in the Collateral which are not securities
(for purposes of the UCC) on the date hereof to elect
or otherwise take any action to cause such
partnership interests or limited liability company
interests to be treated as securities for purposes of
the UCC; unless such Debtor shall take all steps
necessary to establish Secured Party's "control"
thereof;
(ii) in the event it acquires rights in any Investment
Property after the date hereof, it shall deliver to
Secured Party a completed Pledge Supplement,
substantially in the form of Exhibit A attached
hereto, together with a Supplement to Schedule 4.4,
reflecting such new Investment Property.
Notwithstanding the foregoing, it is understood and
agreed that the security interest of Secured Party
shall attach to all Investment Property immediately
upon any Debtor's acquisition of rights therein and
shall not be affected by the failure of any Debtor to
deliver a supplement to Schedule 4.4 as required
hereby;
(iii) except as provided in the next sentence, in the event
such Debtor receives any dividends, interest or
distributions on any Investment Property, or any
securities or other property upon the merger,
consolidation, liquidation or dissolution of any
issuer of any Investment Property, then (a) such
dividends, interest or distributions and securities
or other property shall be included in the definition
of Collateral without further action and (b) except
with respect to Cash Proceeds, such Debtor shall
promptly take all steps, if any, necessary to ensure
the validity and perfection, priority and, if
applicable, control of the Credit Facility Secured
Party or the Secured Party over such Investment
Property (including, without limitation, delivery
thereof to Secured Party or Credit Facility Secured
Party in accordance with the terms of the
Intercreditor Agreement to the extent then in effect)
and pending any such action such Debtor shall be
deemed to hold such dividends, interest,
distributions, securities or other property in trust
for the benefit of the Secured Party and the Credit
Facility Secured Party and shall be segregated from
all other property of such Debtor. Notwithstanding
the foregoing, so long as no Event of Default shall
have occurred and be continuing, Secured Party
authorizes each Debtor to retain all ordinary and
extraordinary cash dividends and distributions paid
in the normal course of business and all payments of
principal and interest;
(iv) it shall comply with all of its obligations under any
partnership agreement or limited liability company
agreement relating to partnership interests or
limited liability interests included in the
Collateral and shall enforce all of its material
rights with respect to any Investment Property, in
each case, as appropriate in such Debtor's reasonable
business judgment;
15
(v) other than as permitted under the Indenture, it shall
not permit any of its Subsidiaries to merge or
consolidate unless (i) such Subsidiary creates a
security interest by executing a Pledge Joinder
pursuant to Section 5.2 that is perfected by a filed
financing statement (that is not effective solely
under section 9-508 of the UCC) in collateral in
which such new debtor has or acquires rights, in each
case, to the extent not created or perfected pursuant
to this Agreement and any financing statement in
effect at such time and (ii) all the outstanding
capital stock or other equity interests of the
surviving or resulting corporation, limited liability
company, partnership or other entity is, upon such
merger or consolidation, pledged hereunder; provided
that if the surviving or resulting company upon any
such merger or consolidation involving an issuer
which is a Controlled Foreign Corporation, then such
Debtor shall only be required to pledge equity
interests to the extent they are not Excluded
Collateral; and
(vi) each Debtor consents to the grant by each other
Debtor of a security interest in all Investment
Property to Secured Party.
(c) Delivery and Control. Each Debtor agrees that (i) with respect to
any Investment Property in which it has rights as of the Issue Date it shall
comply with the provisions of this Section 4.4(c) on or before the Issue Date;
and (ii) with respect to any Investment Property hereafter acquired by such
Debtor it shall comply with the provisions of this Section 4.4(c) promptly upon
acquiring rights therein. With respect to any Investment Property that is now or
hereafter represented by a certificate or that is an "instrument" (other than
any Investment Property credited to a Securities Account) it shall cause such
certificate or instrument to be delivered to the Credit Facility Secured Party
or the Secured Party (in accordance with the terms of the Intercreditor
Agreement to the extent then in effect), indorsed in blank by an "effective
indorsement" (as defined in Section 8-107 of the UCC), regardless of whether
such certificate constitutes a "certificated security" for purposes of the UCC.
In the event that at any time after the date of this Agreement any partnership
interest or limited liability company interest included in the Collateral is (i)
dealt in or traded on a securities exchange or in a securities market, (ii) by
its terms expressly provides that it is a security governed by Article 8 of the
UCC, (iii) is an investment company security or (iv) is held in a securities
account, the applicable Debtor will promptly notify Secured Party in writing of
such event, and will promptly execute such documents, and do such other acts or
things reasonably requested by Secured Party to deliver to Credit Facility
Secured Party or Secured Party (subject to the terms of the Intercreditor
Agreement to the extent then in effect) control (within the meaning of Article 8
of the UCC) of such partnership interest or limited liability company interest,
as applicable. Each Debtor represents and warrants that none of the events
described in clauses (i), (ii), (iii) or (iv) of the immediately preceding
sentence has occurred and is existing as of the date of this Agreement. No
Debtor will contest in any manner the perfection or priority of Secured Party's
lien on any partnership interest or limited liability company interest included
in the Collateral. With respect to any Investment Property consisting of
Securities Accounts or securities entitlements (as defined in Article 8 of the
UCC), to the extent required under the Credit Facility Documents, it shall use
its reasonable best efforts to cause the securities intermediary maintaining
such Securities Account or securities entitlement to enter into an agreement in
form and substance reasonably satisfactory to Secured Party pursuant to which it
shall, subject to the Intercreditor Agreement to the
16
extent then in effect, agree to comply with the Credit Facility Secured Party's
or the Secured Party's "entitlement orders" without further consent by such
Debtor. With respect to any material Investment Property that is a "Deposit
Account," to the extent required under the Credit Facility Documents, it shall
use its reasonable best efforts to cause the depositary institution maintaining
such account to enter into an agreement in form and substance reasonably
satisfactory to Secured Party, pursuant to which the Credit Agreement Secured
Party or the Secured Party, subject to the terms of the Intercreditor Agreement
to the extent then in effect and any agreements between Secured Party, Credit
Facility Secured Party and the depositary institution, shall have both dominion
and control over such Deposit Account (within the meaning of the common law) and
"control" (as defined in Section 9-104 of the UCC) over such Deposit Account. In
addition to the foregoing, if any issuer of any Investment Property is located
in a jurisdiction outside of the United States, each Debtor shall take such
additional actions within its power or control, including, without limitation,
causing the issuer to register the pledge on its books and records or making
such filings or recordings, in each case as the Secured Party may reasonably
request, under the laws of such issuer's jurisdiction to insure the validity,
perfection and priority of the security interest of Secured Party. Upon the
occurrence of an Event of Default, subject to the terms of the Credit Facility
Documents and the Intercreditor Agreement, in each case, to the extent then in
effect, any applicable laws (including, without limitation) and Section 7
hereof, Secured Party shall have the right to have all or any portion of the
partnership interests or limited liability company interests included in the
Collateral registered in its name or the name of a nominee or agent on the books
of the issuer, to the extent necessary to enforce its rights to receive
distributions with respect thereto or vote such partnership interests and
limited liability company interests; provided that no such registration shall
constitute a transfer of ownership and no Debtor shall be deemed to have waived
its rights under Section 9-610 of the UCC to have such partnership interests or
limited liability company interests sold in a public sale. In addition, Secured
Party (subject to and in accordance with the terms of the Intercreditor
Agreement to the extent then in effect) shall have the right at any time,
without notice to any Debtor, to exchange any certificates or instruments
representing any Investment Property for certificates or instruments of smaller
or larger denominations.
(d) Voting and Distributions.
(i) So long as no Event of Default shall have occurred
and be continuing, subject to applicable laws:
(A) each Debtor shall be entitled to exercise or
refrain from exercising any and all voting
and other consensual rights pertaining to
the Investment Property or any part thereof
for any purpose not inconsistent with the
terms of this Agreement or the Indenture;
and
(B) Secured Party shall promptly execute and
deliver (or cause to be executed and
delivered) to each Debtor all proxies, and
other instruments as such Debtor may from
time to time reasonably request for the
purpose of enabling such Debtor to exercise
the voting and other consensual rights when
and to the extent which it is entitled to
exercise pursuant to clause (A) above; and
(ii) Upon the occurrence and during the continuation of an
Event of Default subject to Section 7.6(a),
applicable laws and the terms of the Credit Facility
Documents and the Intercreditor Agreement, in each
case, to the extent then in effect:
(A) all rights of each Debtor to exercise or
refrain from exercising the voting and other
consensual rights which it would otherwise
be entitled to exercise pursuant hereto
shall cease and all such rights shall
thereupon become vested in Secured Party who
shall thereupon have the sole right to
exercise such voting and other consensual
rights; and
17
(B) in order to permit Secured Party to exercise
the voting and other consensual rights which
it may be entitled to exercise pursuant
hereto and to receive all dividends and
other distributions which it may be entitled
to receive hereunder: (1) each Debtor shall
promptly execute and deliver (or cause to be
executed and delivered) to Secured Party all
proxies, dividend payment orders and other
instruments as necessary or as Secured Party
may from time to time reasonably request and
(2) each Debtor acknowledges that Secured
Party may utilize the power of attorney set
forth in Section 6.
4.5 INTELLECTUAL PROPERTY.
(a) Representations and Warranties. Except with respect to the patents
listed on Schedule 4.5(C), each Debtor hereby represents and warrants, on the
Issue Date, that:
(i) Schedule 4.5 sets forth a true and complete list of
(i) all United States, state and foreign
registrations of and applications for Patents,
Trademarks, and registered copyrights owned by each
Debtor and material to the business of such Debtor
and (ii) all Intellectual Property Licenses material
to the business of such Debtor;
(ii) it is the sole and exclusive owner of the entire
right, title, and interest in and to all Intellectual
Property on Schedule 4.5 (other than Intellectual
Property Licenses where such Debtor is a
non-exclusive licensee), and owns or has the valid
right to use all other Intellectual Property
necessary to conduct its business, free and clear of
all Liens, claims, encumbrances and licenses, except
for Permitted Liens;
(iii) all Intellectual Property material to the business of
each Debtor is subsisting and has not been adjudged
invalid or unenforceable, in whole or in part, and
each Debtor has performed all acts and has paid all
renewal, maintenance, and other fees and taxes
required to maintain each and every registration and
application of Intellectual Property material to the
business of such Debtor in full force and effect;
(iv) all Intellectual Property material to the business of
each Debtor is valid and enforceable; no holding,
decision, or judgment has been rendered in any action
or proceeding before any court or administrative
authority challenging the validity of such Debtor's
right to register, or such Debtor's rights to own or
use, any Intellectual Property material to the
business of such Debtor and no such action or
proceeding is pending or, to the best of such
Debtor's knowledge, threatened;
(v) all registrations and applications for Copyrights,
Patents and Trademarks material to the business of
such Debtor are standing in the name of each Debtor,
and other than in the ordinary course of such
Debtor's business, none of the Trademarks, Patents,
Copyrights or Trade Secret Collateral has been
licensed by any Debtor to any affiliate or third
party;
18
(vi) each Debtor has been using appropriate statutory
notice of registration in connection with its use of
registered Trademarks, proper marking practices in
connection with the use of Patents, and appropriate
notice of copyright in connection with the
publication of Copyrights material to the business of
such Debtor;
(vii) each Debtor uses adequate standards of quality in the
manufacture, distribution, and sale of all products
sold and in the provision of all services rendered
under or in connection with all Trademark Collateral
and has taken all action necessary to ensure that all
licensees of the Trademark Collateral owned by such
Debtor use such adequate standards of quality;
(viii) to the best of such Debtor's knowledge, the conduct
of such Debtor's business does not infringe upon any
trademark, patent, copyright, trade secret or similar
intellectual property right owned or controlled by a
third party;
(ix) to the best of such Debtor's knowledge, no third
party is infringing upon any material Intellectual
Property owned or used by such Debtor;
(x) no settlement or consents, covenants not to ▇▇▇,
nonassertion assurances, or releases have been
entered into by any Debtor or to which any Debtor is
bound that adversely affects such Debtor's rights to
own or use any Intellectual Property material to the
business of such Debtor; and
(xi) except in connection with Permitted Liens, each
Debtor has not made a previous assignment, sale,
transfer or agreement constituting a present or
future assignment, sale, transfer or agreement of any
Intellectual Property material to the business of
such Debtor as currently conducted that has not been
terminated or released. There is no effective
financing statement or other document or instrument
now executed, or on file or recorded in any public
office, granting a security interest in or otherwise
encumbering any part of such Intellectual Property,
other than Permitted Liens and a security interest in
favor of Secured Party.
(b) Covenants and Agreements. Each Debtor hereby covenants and agrees
as follows:
(i) it shall not do any act or omit to do any act whereby
any of the Intellectual Property which is material to
the business of Debtor may lapse, or become
abandoned, dedicated to the public, or unenforceable,
or which would adversely affect the validity, grant,
or enforceability of the security interest granted
therein;
(ii) with respect to any Trademarks which are material to
the business of any Debtor, each Debtor shall take
all commercially reasonable steps (as determined by
such Debtor in the exercise of its reasonable
business judgment) to require that licensees of such
Trademarks use standards of
19
quality consistent with the quality of products sold
and services rendered under any of such Trademarks as
of the date hereof;
(iii) it shall take all reasonable steps in the United
States Patent and Trademark Office and the United
States Copyright Office, and, if reasonably requested
by the Secured Party, any state registry or any
foreign counterpart of the foregoing, to pursue any
application and maintain any registration of each
Trademark, Patent, and Copyright owned by any Debtor
and material to its business which is now or shall
become included in the Collateral constituting
Intellectual Property (except for such works with
respect to which such Debtor has determined in the
exercise of its commercially reasonable judgment that
it shall not seek registration) including, but not
limited to, those items on Schedule 4.5(A), (B) and
(D) (as each may be amended or supplemented from time
to time);
(iv) in the event that any Intellectual Property owned by
or exclusively licensed to any Debtor that is
material to such Debtor's business is infringed,
misappropriated, or diluted by a third party, such
Debtor shall promptly take all reasonable actions (as
determined by such Debtor in the exercise of its
reasonable business judgment) to seek a remedy for
such infringement, misappropriation, or dilution and
protect its exclusive rights in such Intellectual
Property;
(v) on such periodic basis as Secured Party shall
reasonably require and in any event no less
frequently than quarterly, not later than the
thirtieth day after the end of each quarter, it shall
report to Secured Party (i) the filing of any
application to register any Intellectual Property
with the United States Patent and Trademark Office,
the United States Copyright Office, or any state
registry or foreign counterpart of the foregoing
(whether such application is filed by such Debtor or
through any agent, employee, licensee, or designee
thereof) and (ii) the registration of any
Intellectual Property by any such office, in each
case by executing and delivering to Secured Party a
completed Pledge Supplement, substantially in the
form of Exhibit A attached hereto, together with a
Supplement to Schedule 4.5;
(vi) in connection with the actions required pursuant to
Section 4.5(b)(v), it shall promptly execute and
deliver to Secured Party any document required to
acknowledge, confirm, register, record, or perfect
Secured Party's interest in any part of the
Intellectual Property, whether now owned or hereafter
acquired;
(vii) except as permitted under the Indenture, no Debtor
shall execute, and there will not be on file in any
public office, any financing statement or other
document or instruments, except financing statements
or other documents or instruments filed or to be
filed in favor of creditors under Permitted Liens,
Secured Party or the Credit Facility Secured Party,
and no Debtor shall create or suffer to exist any
Lien upon or with respect to the Intellectual
Property, except for Permitted Liens, the Lien
created by
20
and under this Security Agreement and the other
Indenture Documents and the Lien in favor of the
Credit Facility Secured Party;
(viii) it shall hereafter use commercially reasonable
efforts consistent with industry practice (as
determined by such Debtor in the exercise of its
reasonable business judgment) so as not to permit the
inclusion in any contract to which it hereafter
becomes a party of any provision that could
reasonably be expected to in any way materially
impair or prevent the creation of a security interest
in, or the assignment of, such Debtor's rights and
interests in any material property included within
the definitions of any Intellectual Property acquired
under such contracts;
(ix) it shall use proper statutory notice in connection
with its use of any material Intellectual Property;
and
(x) it shall continue to collect, at its own expense, all
amounts due or to become due to such Debtor in
respect of the Intellectual Property or any portion
thereof as it deems advisable in its reasonable
business judgment. In connection with such
collections, each Debtor may take such action as such
Debtor may deem reasonably necessary or advisable to
enforce collection of such amounts. Notwithstanding
the foregoing, subject to the Credit Facility
Documents and the Intercreditor Agreement as then in
effect, Secured Party shall have the right at any
time following an Event of Default, to notify, or
require any Debtor to notify, any obligors with
respect to any such amounts of the existence of the
security interest created hereby.
4.6 COMMERCIAL TORT CLAIMS.
(a) Representations and Warranties. Each Debtor hereby represents and
warrants, on the Issue Date, that Schedule 4.6 sets forth all Commercial Tort
Claims of each Debtor against third parties; and
(b) Covenants and Agreements. Each Debtor hereby covenants and agrees
that with respect to any Commercial Tort Claim of it against third parties
hereafter arising it shall deliver to Secured Party a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto, together
with a Supplement to Schedule 4.6, identifying such new Commercial Tort Claims.
5. FURTHER ASSURANCES; ADDITIONAL DEBTORS.
5.1 FURTHER ASSURANCES.
(a) Each Debtor agrees that from time to time, at the expense of such
Debtor, it shall promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or reasonably
requested in order to create and/or maintain the validity, perfection or
priority of and protect any security interest granted or purported to be granted
hereby or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any Collateral, in each case, to
21
the extent required hereunder and consistent with its obligations under the
Credit Facility Documents. Without limiting the generality of the foregoing,
each Debtor shall:
(i) execute and file such financing or continuation
statements, or amendments thereto, and execute and
deliver such other agreements, instruments,
endorsements, powers of attorney or notices, as may
be necessary or desirable, in order to perfect and
preserve the security interests granted or purported
to be granted hereby;
(ii) take all actions necessary to ensure the recordation
of appropriate evidence of the liens and security
interest granted hereunder in the Intellectual
Property with any intellectual property registry in
which said Intellectual Property is registered or in
which an application for registration is pending
including, without limitation, the United States
Patent and Trademark Office, the United States
Copyright Office, the various Secretaries of State,
and the foreign counterparts on any of the foregoing;
(iii) at any reasonable time, upon request by Secured
Party, exhibit the Collateral to and allow inspection
of the Collateral by Secured Party, or persons
designated by Secured Party; and
(iv) appear in and defend any action or proceeding that
may affect such Debtor's title to or Secured Party's
security interest in all or any part of the
Collateral.
(b) Each Debtor hereby authorizes Secured Party to file a Record or
Records, including, without limitation, financing or continuation statements,
and amendments thereto, in all jurisdictions and with all filing offices as are
necessary or advisable to perfect the security interest granted to Secured Party
herein. Such financing statements may describe the Collateral in the same manner
as described herein or may contain an indication or description of collateral
that describes such property in any other manner as is necessary, advisable or
prudent to ensure the perfection of the security interest in the Collateral
granted to Secured Party herein. Each Debtor shall, if requested by the Secured
Party, furnish to Secured Party from time to time statements and schedules
further identifying and describing the Collateral, all in reasonable detail.
(c) Each Debtor hereby authorizes Secured Party to modify this
Agreement after obtaining such Debtor's approval of or signature to such
modification by amending Schedule 4.5 to include reference to any right, title
or interest in any existing Intellectual Property or any Intellectual Property
acquired or developed by any Debtor after the execution hereof or to delete any
reference to any right, title or interest in any Intellectual Property in which
any Debtor no longer has or claims any right, title or interest.
(d) The Issuer covenants and agrees that, upon the satisfaction or
termination of that certain Credit Line Deed of Trust, executed by the Issuer
and recorded in the land records of Loudoun County, Virginia on March 5, 2002,
in Deed Book 2125, Page 2255 (the "SENIOR DEED OF TRUST"), and all indebtedness
and other rights or interests (collectively, the "SENIOR INDEBTEDNESS")
evidenced or created by the Credit Facility Documents being Fully Paid (as
defined in the Intercreditor Agreement), the lien created by that certain Deed
of Trust and Security Agreement, dated as of the date hereof (the "DEED OF
TRUST"), executed by the Issuer, as grantor, in favor of ▇▇▇▇▇▇ Title & Escrow
Company, Inc., a Virginia corporation, as trustee, for the benefit of Secured
Party, as beneficiary, shall be a first priority
22
lien on the "Secured Property" (as defined in the Deed of Trust), and the value
of such lien shall be the then fair market value of the Secured Property;
provided, however, that the foregoing provisions of this Section 5.1(d) shall
not become effective in the event that the Senior Deed of Trust is replaced upon
the satisfaction or termination of the Senior Deed of Trust with a new deed of
trust on the same property securing indebtedness incurred pursuant to any
refinancing or replacement of the Credit Facility Documents permitted under the
Indenture; provided, further, that, notwithstanding the Deed of Trust becoming a
first priority lien at any time pursuant to this Section 5.1(d), in connection
with any subsequent refinancing or replacement of Credit Facility indebtedness
permitted under the Indenture, the Secured Party shall, if requested by the
Issuer, subordinate its lien on the Secured Property to any such lien granted in
favor of the Credit Facility Secured Party and shall take such actions as may be
reasonably requested by the Issuer to evidence such subordination.
(e) Upon the Deed of Trust becoming a first priority Lien on the
Secured Property and at the reasonable request of Secured Party, the Issuer, at
its sole cost and expense, shall have delivered to Secured Party the following
documents:
(i) one or more endorsements to the mortgagee policies of
title insurance delivered to Secured Party in
connection with the Deed of Trust insuring that,
after giving effect to such satisfaction, (A) the
insured amounts under such mortgagee policies is
increased to the then fair market value of the
Secured Property insured thereunder (together with
any updated endorsements as may be required pursuant
to such increased insured amount, including without
limitation, updated tie-in endorsements), and (B)
that each such policy is in full force and effect and
unaffected by such satisfaction of the Senior Deed of
Trust, and
(ii) any other documents, instruments or deliveries as may
reasonably be required by Secured Party, including,
without limitation, any amendments or modifications
to the Deed of Trust.
(f) If, at any time, the Trustee obtains possession or control of items
of Collateral, upon a replacement or refinancing of the Credit Agreement, the
Trustee shall deliver such items to the Replacement Credit Facility Secured
Party if such Replacement Credit Facility Secured Party has entered into an
intercreditor agreement as contemplated by Section 7.1(i) of the Indenture.
(g) Secured Party acknowledges that Issuer is required under the Credit
Facility Documents to enter into a new control agreement with respect to a
Deposit Account or a Securities Account within 30 days following the date hereof
and, in connection therewith, agrees to reasonably cooperate with the Debtors
and the Credit Facility Secured Party to implement the control agreement
contemplated by Section 4.4(c) hereof within such time period.
5.2 ADDITIONAL DEBTORS.
From time to time subsequent to the date hereof, additional Guarantors
may become Additional Debtors pursuant to the terms of the Indenture, by
executing a Pledge Joinder substantially in the form attached hereto as Exhibit
B. Upon delivery of any such counterpart agreement to Secured Party, notice of
which is hereby waived by Debtors, (a) each Additional Debtor shall be a Debtor
and shall be as fully a party hereto as if such Additional Debtor were an
original signatory hereto and (b) the supplemental schedules thereto shall be
incorporated into and become a part of and supplement the respective schedules
to this Agreement; and each reference to such Schedules shall mean and be a
reference to such Schedules as supplemented pursuant to each Pledge Supplement.
Each Debtor expressly agrees that its obligations
23
arising hereunder shall not be affected or diminished by the addition or release
of any other Debtor hereunder, nor by any election of Secured Party not to cause
any Subsidiary of Issuer to become an Additional Debtor hereunder. This
Agreement shall be fully effective as to any Debtor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Debtor hereunder.
6. ATTORNEY-IN-FACT.
6.1 POWER OF ATTORNEY.
Each Debtor hereby irrevocably appoints Secured Party (such appointment
being coupled with an interest) as such Debtor's attorney-in-fact, with full
authority in the place and stead of such Debtor and in the name of such Debtor,
Secured Party or the Credit Facility Secured Party (subject to the Intercreditor
Agreement to the extent then in effect), from time to time in its discretion to
take any action permitted under the Credit Facility Documents and to execute any
instrument that it may deem reasonably necessary or advisable to accomplish the
purposes of this Agreement (subject to the Intercreditor Agreement to the extent
then in effect), including, without limitation, the following:
(a) upon the occurrence and during the continuance of any
Event of Default, to obtain and adjust insurance required to be maintained by
such Debtor pursuant to the Indenture;
(b) upon the occurrence and during the continuance of any
Event of Default, to ask for, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of any
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above,
subject in all respects to the rights of any lender under the Credit Agreement
to receive, endorse and collect the same;
(d) upon the occurrence and during the continuance of any
Event of Default, to file any claims or take any action or institute any
proceedings necessary or desirable for the collection of any of the Collateral
or otherwise to enforce the rights of Secured Party with respect to any of the
Collateral;
(e) to prepare and file any UCC financing statements against
such Debtor as debtor;
(f) to prepare, sign, and file for recordation in any
intellectual property registry, appropriate evidence of the lien and security
interest granted herein in the Intellectual Property in the name of such Debtor
as assignor;
(g) to take or cause to be taken all actions necessary to
perform or comply or cause performance or compliance with the terms of this
Agreement, including, without limitation, access to pay or discharge taxes or
Liens (other than Permitted Liens) levied or placed upon or threatened against
the Collateral, the legality or validity thereof and the amounts necessary to
discharge the same, any such payments made by Secured Party to become
obligations of such Debtor to Secured Party, due and payable immediately without
demand; and
(h) upon the occurrence and during the continuance of any
Event of Default and subject to the provisions of the UCC, generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though Secured Party were the
absolute owner thereof for all purposes, and to do, at Secured Party's option
and such Debtor's expense, at
24
any time or from time to time, all acts and things necessary to protect,
preserve or realize upon the Collateral and Secured Party's security interest
therein in order to effect the intent of this Agreement, all as fully and
effectively as such Debtor might do.
6.2 NO DUTY ON THE PART OF SECURED PARTY.
The powers conferred on Secured Party hereunder are solely to protect
the interests of Secured Party in the Collateral and shall not impose any duty
upon Secured Party to exercise any such powers. Secured Party shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to any Debtor for any act or failure to
act hereunder, except for their own gross negligence or willful misconduct.
7. REMEDIES.
7.1 GENERALLY.
(a) If any Event of Default shall have occurred and be continuing,
subject to applicable laws and the provisions of the Intercreditor Agreement to
the extent then in effect, Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it at law or in equity, all the rights and remedies of
Secured Party on default under the UCC (whether or not the UCC applies to the
affected Collateral) to collect, enforce or satisfy any Secured Obligations then
owing, whether by acceleration or otherwise, and also may pursue any of the
following separately, successively or simultaneously:
(i) require any Debtor to, and each Debtor hereby agrees
that it shall at its expense and promptly upon
request of Secured Party forthwith, assemble all or
part of the Collateral as directed by Secured Party
and make it available to Secured Party at a place to
be designated by Secured Party that is reasonably
convenient to both parties;
(ii) enter onto the property where any Collateral is
located and take possession thereof with or without
judicial process;
(iii) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or
otherwise prepare the Collateral for disposition in
any manner to the extent Secured Party deems
appropriate;
(iv) without notice except as specified below or under the
UCC, sell, assign, lease, license (on an exclusive or
nonexclusive basis) or otherwise dispose of the
Collateral or any part thereof in one or more parcels
at public or private sale, at any of Secured Party's
offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such
price or prices and upon such other terms as Secured
Party may deem commercially reasonable; and
(v) subject to the terms of the Intercreditor Agreement,
apply the balance from any Deposit Account or
instruct the bank at which any Deposit
25
Account is maintained to pay the balance of any
Deposit Account to or for the benefit of Secured
Party.
(b) Secured Party may be a purchaser of any or all of the Collateral at
any public or private (to the extent permitted by applicable law) sale in
accordance with the UCC and Secured Party, as Secured Party for and
representative of the Holders, shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such sale made in accordance with the UCC, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale. Each purchaser
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Debtor, and each Debtor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Debtor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days notice to
such Debtor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Debtor agrees that it would not be commercially unreasonable
for Secured Party to dispose of the Collateral or any portion thereof by using
Internet sites that provide for the auction of assets of the types included in
the Collateral or that have the reasonable capability of doing so, or that match
buyers and sellers of assets. Each Debtor hereby waives any claims against
Secured Party arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Secured Party accepts
the first offer received and does not offer such Collateral to more than one
offeree. If the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, each Debtor shall be liable for
the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency. Each Debtor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to Secured
Party, that Secured Party has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against such Debtor, and such Debtor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default has
occurred giving rise to the Secured Obligations becoming due and payable prior
to their stated maturities. Nothing in this Section shall in any way alter the
rights of Secured Party hereunder.
(c) Secured Party may sell the Collateral without giving any warranties
as to the Collateral. Secured Party may specifically disclaim or modify any
warranties of title or the like. This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.
(d) If Secured Party sells any of the Collateral on credit, the Secured
Obligations will be credited only with payments actually made by the purchaser
and received by Secured Party and applied to the indebtedness of the purchaser.
In the event the purchaser fails to pay for the Collateral, Secured Party may
resell the Collateral, subject to applicable laws.
(e) Secured Party shall have no obligation to marshal any of the
Collateral.
(f) Subject to the Credit Facility Documents and the Intercreditor
Agreement, all amounts and proceeds (including checks and other instruments)
received by any Debtor in respect of amounts due to such Debtor in respect of
the Collateral or any portion thereof following the occurrence
26
and during the continuance of an Event of Default shall be received in trust for
the benefit of Secured Party or the Credit Facility Secured Party, shall be
segregated from other funds of such Debtor and shall be forthwith paid over or
delivered to Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as provided by Section
7.5 following the occurrence and during the continuance of an Event of Default.
Upon demand from Secured Party, Debtors shall not adjust, settle or compromise
the amount or payment of any such amount or release wholly or partly any obligor
with respect thereto or allow any credit or discount thereon.
7.2 APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement and in the
Intercreditor Agreement to the extent then in effect, all proceeds received by
Secured Party in respect of any sale, any collection from, or other realization
upon all or any part of the Collateral shall be applied in full or in part by
Secured Party against the Secured Obligations in the following order of
priority: first, to the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to Secured
Party and its agents and counsel, and all other expenses, liabilities and
advances made or incurred by Secured Party in connection therewith, and all
amounts for which Secured Party is entitled to indemnification hereunder and all
advances made by Secured Party hereunder for the account of the applicable
Debtor, and to the payment of all costs and expenses paid or incurred by Secured
Party in connection with the exercise of any right or remedy hereunder or under
the Indenture, all in accordance with the terms hereof or thereof; second, to
the extent of any excess of such proceeds, to the payment of all other Secured
Obligations for the ratable benefit of the Holders; and third, to the extent of
any excess of such proceeds, to the payment to or upon the order of such Debtor
or to whomsoever may be lawfully entitled to receive the same as a court of
competent jurisdiction may direct.
7.3 INVESTMENT PROPERTY.
Each Debtor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Investment Property conducted without prior registration or qualification of
such Investment Property under the Securities Act and/or such state securities
laws, to limit purchasers to those who will agree, among other things, to
acquire the Investment Property for their own account, for investment and not
with a view to the distribution or resale thereof and to comply with applicable
laws. Each Debtor acknowledges that any such sale may be at prices and on terms
less favorable than those obtainable through a sale without such restrictions
(including a public offering made pursuant to a registration statement under the
Securities Act) and each Debtor agrees that any such sale shall not be deemed to
have not been made in a commercially reasonable manner by reason of such
circumstances and that Secured Party shall have no obligation to engage in
public sales and no obligation to delay the sale of any Investment Property for
the period of time necessary to permit the issuer thereof to register it for a
form of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should, agree to
so register it. If Secured Party determines to exercise its right to sell any or
all of the Investment Property, upon written request, each Debtor shall and
shall cause each issuer of any stock included in the Collateral to be sold
hereunder, each partnership and each limited liability company from time to time
to furnish to Secured Party all such information as Secured Party may request in
order to determine the number and nature of interests, shares or other
instruments included in the Investment Property which may be sold by Secured
Party in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.
27
7.4 INTELLECTUAL PROPERTY.
(a) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default and subject to the
Credit Facility Documents and the Intercreditor Agreement to the extent then in
effect:
(i) Secured Party shall have the right (but not the
obligation) to bring suit or otherwise commence any
action or proceeding in the name of any Debtor,
Secured Party or otherwise, in Secured Party's sole
discretion, to enforce any Intellectual Property
which is material to any Debtor's business, in which
event such Debtor shall, at the request of Secured
Party, do any and all lawful acts and execute any and
all documents required by Secured Party in aid of
such enforcement and such Debtor shall promptly, upon
demand, reimburse and indemnify Secured Party as
provided in Section 10 hereof in connection with the
exercise of its rights under this Section, and, to
the extent that Secured Party shall elect not to
bring suit to enforce any Intellectual Property which
is material to any Debtor's business as provided in
this Section, each Debtor agrees to use all
reasonable measures, whether by action, suit,
proceeding or otherwise, to prevent the infringement
of any such Intellectual Property by others and for
that purpose agrees to diligently maintain any
action, suit or proceeding against any Person so
infringing as shall be necessary to prevent such
infringement;
(ii) upon written demand from Secured Party, each Debtor
shall grant, assign, convey or otherwise transfer to
Secured Party all of such Debtor's right, title and
interest in and to the Intellectual Property and
shall execute and deliver to Secured Party such
documents as are necessary or appropriate to carry
out the intent and purposes of this Agreement;
(iii) each Debtor agrees that such an assignment and/or
recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that
Secured Party receives cash proceeds in respect of
the sale of, or other realization upon, the
Intellectual Property; and
(iv) Secured Party shall have the right to notify, or
require each Debtor to notify, any obligors with
respect to amounts due or to become due to such
Debtor in respect of the Intellectual Property, of
the existence of the security interest created
herein, to direct such obligors to make payment of
all such amounts directly to Secured Party, and, upon
such notification and at the expense of such Debtor,
to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as
such Debtor might have done.
(b) If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment or other transfer to Secured Party of any rights, title and interests
in and to the Intellectual Property shall have been previously made and shall
have become
28
absolute and effective, and (iv) the Secured Obligations shall not have become
immediately due and payable, upon the written request of any Debtor, Secured
Party shall promptly execute and deliver to such Debtor, at such Debtor's sole
cost and expense, such assignments or other transfer as may be necessary to
reassign to such Debtor any such rights, title and interests as may have been
assigned to Secured Party as aforesaid, subject to any disposition thereof that
may have been made by Secured Party; provided, after giving effect to such
reassignment, Secured Party's security interest granted pursuant hereto, as well
as all other rights and remedies of Secured Party granted hereunder, shall
continue to be in full force and effect; and provided further, the rights, title
and interests so reassigned shall be free and clear of any Liens granted by or
on behalf of Secured Party.
(c) Solely for the purpose of enabling Secured Party to exercise rights
and remedies under this Section 7 and at such time as Secured Party shall be
lawfully entitled to exercise such rights and remedies, each Debtor hereby
grants to Secured Party, to the extent it has the right to do so (including,
without limitation, pursuant to the Credit Facility Documents and the
Intercreditor Agreement to the extent then in effect), an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to such Debtor), subject, in the case of Trademarks, to sufficient
rights to quality control and inspection in favor of such Debtor to avoid the
risk of invalidation of said Trademarks, to use, operate under, license, or
sublicense any Intellectual Property now owned or hereafter acquired by such
Debtor, and wherever the same may be located.
7.5 CASH PROCEEDS.
Subject to the Credit Facility Documents and the Intercreditor
Agreement as then in effect, in addition to the rights of Secured Party
specified in Section 4.3 with respect to payments of Accounts, Cash Proceeds
shall be held by such Debtor in trust for Secured Party, segregated from other
funds of such Debtor, and shall, forthwith upon receipt by such Debtor, unless
otherwise provided pursuant to Section 4.4, be turned over to Secured Party in
the exact form received by such Debtor (duly indorsed by such Debtor to Secured
Party, if required). Subject to the Intercreditor Agreement as then in effect,
if an Event of Default shall have occurred and be continuing, any Cash Proceeds
received by Secured Party (whether from a Debtor or otherwise) may, in the sole
discretion of Secured Party, (i) be held by Secured Party for the ratable
benefit of the Holders, as collateral security for the Secured Obligations
(whether matured or unmatured) and/or (ii) then or at any time thereafter may be
applied by Secured Party against the Secured Obligations then due and owing.
8. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES.
This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
of all Secured Obligations, be binding upon each Debtor, its successors and
assigns (except to the extent otherwise provided in the Indenture), and inure,
together with the rights and remedies of Secured Party hereunder, to the benefit
of Secured Party and its successors, transferees and assigns. Without limiting
the generality of the foregoing, but subject to the terms of the Indenture, any
Holder may assign or otherwise transfer any Note held by it to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Holders herein or otherwise. Upon the payment in full
of all Secured Obligations, the security interest granted hereby shall terminate
hereunder and of record and all rights to the Collateral granted hereunder shall
revert to Debtors. Upon the sale or other disposition of any Collateral
permitted by the Indenture, the security interest granted hereby with respect to
such sold or disposed Collateral shall terminate hereunder and of record. Upon
any such termination Secured Party shall, at Debtors' expense and upon documents
provided by them, execute and deliver to Debtors such documents as Debtors shall
reasonably request to evidence such termination.
29
9. STANDARD OF CARE; SECURED PARTY MAY PERFORM.
The powers conferred on Secured Party hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the exercise of reasonable care in the custody of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, Secured Party shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property. Neither Secured Party nor any
of its directors, officers, employees or agents shall be liable for failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of any Debtor or otherwise. If any Debtor
fails to perform any agreement contained herein, Secured Party may itself
perform, or cause performance of, such agreement, and the expenses of Secured
Party incurred in connection therewith shall be payable by each Debtor under
Section 11.2 hereof.
10. INDEMNITY AND EXPENSES.
(a) Each Debtor agrees:
(i) to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless each
Indemnitee, from and against any and all claims,
losses, damages, expenses (including reasonable legal
fees and expenses) and liabilities in any way
relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby
(including without limitation enforcement of this
Agreement), except to the extent such claims, losses
or liabilities result from such Indemnitee's own
gross negligence or willful misconduct as finally and
unappeallably determined by a court of competent
jurisdiction; and
(ii) to pay to Secured Party promptly following written
demand the amount of any and all costs and expenses,
including the reasonable fees and expenses of its
counsel and of any experts and agents in accordance
with the terms and conditions of the Indenture.
(b) The obligations of each Debtor in this Section 10 shall survive the
termination of this Agreement and the discharge of such Debtor's other
obligations under this Agreement and the Indenture.
11. MISCELLANEOUS.
11.1 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given to a Debtor or Secured
Party shall be sent to such Person's address as set forth in the Indenture. Each
notice hereunder shall be in writing and may be personally served or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile or three Business Days
after depositing it in the United States mail with postage prepaid and
30
properly addressed; provided, no notice to Secured Party shall be effective
until received by Secured Party.
11.2 EXPENSES.
Debtors agree to pay promptly all the costs and expenses of preparation
of the Collateral Agreements and any consents, amendments, waivers or other
modifications thereto; all the costs of furnishing all opinions by counsel for
Debtors; the reasonable fees, expenses and disbursements of counsel to Secured
Party (in each case including allocated costs of internal counsel) in connection
with the negotiation, preparation, execution and administration of the
Collateral Agreements and any consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by Debtors;
all the actual costs and reasonable expenses of creating and perfecting Liens in
favor of Secured Party, for the benefit of Holders pursuant hereto, including
filing and recording fees, expenses and taxes, stamp or documentary taxes,
search fees, title insurance premiums and reasonable fees, expenses and
disbursements of counsel to Secured Party and of counsel providing any opinions
in respect of the Collateral or the Liens created pursuant to the Collateral
Agreements; all the actual costs and reasonable fees, expenses and disbursements
of any auditors, accountants, consultants or appraisers to the extent that any
audit or appraisal is permitted under the Indenture Documents prior to the
occurrence of an Event of Default; all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any appraisers,
consultants, advisors and agents employed or retained by Secured Party and its
counsel) in connection with the custody or preservation of any of the Collateral
to the extent that any audit, inspection or appraisal is permitted under the
Indenture Documents prior to the occurrence of an Event of Default; and after
the occurrence of a Default or an Event of Default, all the actual costs and
reasonable fees, expenses and disbursements of any auditors, accountants,
consultants or appraisers, all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any appraisers,
consultants, advisors and agents employed or retained by Secured Party and its
counsel) in connection with the custody or preservation of any of the
Collateral, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by Secured Party in enforcing any Secured Obligations of or in
collecting any payments due from any Debtor hereunder or under the other
Indenture Documents by reason of such Default or Event of Default (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral) or in connection with any refinancing or restructuring of the
credit arrangements provided hereunder in the nature of a "work-out" or pursuant
to any insolvency or bankruptcy cases or proceedings.
11.3 AMENDMENTS AND WAIVERS.
(a) Secured Party's Consent. Subject to Section 11.3(b) and 11.3(c) and
the terms of the Indenture, no amendment, modification, termination or waiver of
any provision of this Agreement, or consent to any departure by any Debtor
therefrom, shall in any event be effective without the written concurrence of
Secured Party.
(b) Other Consents. No amendment, modification, termination or waiver
of any provision of this Agreement, or consent to any departure by any Debtor
therefrom, shall amend, modify, terminate or waive any provision herein as the
same applies to Secured Party without the consent of Secured Party except as
provided in accordance with the Indenture.
(c) Waiver. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on any Debtor in any case shall entitle any Debtor to any other or
further notice or demand in similar or other circumstances.
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11.4 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns including all persons who become bound as
debtor to this Agreement. No Debtor shall, except as permitted under the
Indenture, assign any right, duty or obligation hereunder.
11.5 INDEPENDENCE OF COVENANTS.
Without limiting the effect of the last sentence of Section 2.3, all
covenants hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or would otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a Default or
an Event of Default if such action is taken or condition exists.
11.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
All representations, warranties and agreements made herein shall
survive the execution and delivery hereof. Notwithstanding anything herein or
implied by law to the contrary, the agreements of each Debtor set forth in
Sections 10 and 11.2 shall survive the payment of the Obligations under the
Indenture and the termination hereof.
11.7 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder or under any other Indenture Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. All rights, powers and remedies existing
under this Agreement and the other Indenture Documents are cumulative, and not
exclusive of, any rights or remedies otherwise available. Any forbearance or
failure to exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
11.8 MARSHALING; PAYMENTS SET ASIDE.
Secured Party shall not be under any obligation to marshal any assets
in favor of any Debtor or any other Person or against or in payment of any or
all of the Secured Obligations.
11.9 SEVERABILITY.
In case any provision in or obligation hereunder shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
11.10 HEADINGS.
Section headings herein are included herein for convenience of
reference only and shall not constitute a part hereof for any other purpose or
be given any substantive effect.
11.11 APPLICABLE LAW.
32
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
11.12 CONSENT TO JURISDICTION.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY DEBTOR ARISING OUT OF OR
RELATING HERETO OR ANY OTHER INDENTURE DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
DEBTOR, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY ACCEPTS
GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS; WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE DEBTOR AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 11.1; AGREES THAT SERVICE AS
PROVIDED ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE
DEBTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND AGREES SECURED PARTY RETAINS
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST ANY DEBTOR IN THE COURTS OF ANY OTHER JURISDICTION.
11.13 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND
THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
11.13 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN
THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
33
11.14 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
11.15 EFFECTIVENESS.
This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Secured Party of
written or telephonic notification of such execution and authorization of
delivery thereof.
11.16 ENTIRE AGREEMENT.
This Agreement and the other Indenture Documents embody the entire
agreement and understanding between Debtors and Secured Party and supersede all
prior agreements and understandings between such parties relating to the subject
matter hereof and thereof. Accordingly, the Indenture Documents may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no unwritten oral agreements between the parties.
11.17 INDENTURE CONTROLS.
All terms, covenants, conditions, provisions and requirements of the
Indenture, including without limitation Article VII, are incorporated by
reference in this Agreement. In the event of any conflict or inconsistency
between the provisions of this Agreement and those of the Indenture, including,
without limitation, any conflicts or inconsistencies in any definitions herein
or therein, the provisions or definitions of the Indenture shall govern.
11.18 TRUST INDENTURE ACT CONTROLS.
If any provision of this Agreement limits, qualifies or conflicts with
the duties imposed by the Trust Indenture Act of 1939 as in effect on the date
of this Agreement, the imposed duties shall control.
[Remainder of page intentionally left blank; signature page follows.]
34
IN WITNESS WHEREOF, each Debtor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
ORBITAL SCIENCES CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and Treasurer
ORBITAL INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and Treasurer
U.S. BANK, N.A.,
as Secured Party
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
TO PLEDGE AND SECURITY AGREEMENT
FORM OF PLEDGE SUPPLEMENT
This PLEDGE SUPPLEMENT, dated [MM/DD/YY] (the "SUPPLEMENT"), is delivered
pursuant to the Pledge and Security Agreement, dated as of August 22, 2002 (as
it may be from time to time amended, restated, modified or supplemented, the
"SECURITY AGREEMENT"), among Orbital Sciences Corporation, the other Debtors
named therein, and U.S. Bank, N.A., as Secured Party. Capitalized terms used
herein not otherwise defined herein shall have the meanings ascribed thereto in
the Security Agreement. This Supplement is being delivered pursuant to Section
[__](1) of the Security Agreement.
Debtor hereby confirms, as of the date first written above, the grant to
Secured Party set forth in the Security Agreement of, does hereby grant to
Secured Party, a security interest in all of Debtor's right, title and interest
in and to all Collateral to secure the Secured Obligations, in each case whether
now or hereafter existing or in which Debtor now has or hereafter acquires an
interest and wherever the same may be located and hereby agrees, as of the date
first above written, to continue to be bound as a Debtor by all of the terms and
provisions of the Security Agreement, as supplemented by this Pledge Supplement.
Debtor hereby represents and warrants that the attached Supplements to Schedules
accurately and completely set forth all additional information currently
required pursuant to the Security Agreement and hereby agrees that such
Supplements to Schedules shall constitute part of the Schedules to the Security
Agreement.
IN WITNESS WHEREOF, Debtor has caused this Pledge Supplement to be duly
executed and delivered by its duly authorized officer as of [mm/dd/yy].
[NAME OF DEBTOR]
By: _____________________________
Name:
Title:
--------
(1) Insert Section 4.1(b)(iii), 4.4(b)(ii), 4.5(b)(v) or 4.6(b), as applicable.
EXHIBIT B
TO PLEDGE AND SECURITY AGREEMENT
FORM OF PLEDGE JOINDER
This PLEDGE JOINDER, dated [MM/DD/YY], is delivered pursuant to the Pledge
and Security Agreement, dated as of August 22, 2002 (as it may be from time to
time amended, restated, modified or supplemented, the "SECURITY AGREEMENT"),
among Orbital Sciences Corporation, the other Debtors named therein, and U.S.
Bank, N.A., as Secured Party. Capitalized terms used herein not otherwise
defined herein shall have the meanings ascribed thereto
SECTION 1. GRANT OF SECURITY INTEREST. The undersigned hereby grants to
Secured Party a security interest and continuing lien on all of its right, title
and interest in, to and under all personal property of the undersigned that may
be perfected by the filing of UCC financing statements in the appropriate
jurisdictions, including without limitation, the property and assets of the
undersigned set forth on the attached supplemental schedules to the Schedules to
the Security Agreement, in each case whether now owned or existing or hereafter
acquired or arising and wherever located (the undersigned's "COLLATERAL"),
subject to the same limited exclusions set forth in the Security Agreement.
SECTION 2. SECURITY FOR OBLIGATIONS. The grant of security interest and
continuing lien under this Pledge Joinder secures, and the Collateral is
collateral security for, the prompt and complete payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a) (and any successor provision
thereof)), of all Obligations of each Debtor.
SECTION 3. SUPPLEMENTS TO SECURITY AGREEMENT SCHEDULES. The undersigned has
attached hereto supplemental Schedules 4.1, 4.2, 4.4, 4.5, and 4.6 to Schedules
4.1, 4.2, 4.4, 4.5, and 4.6, respectively, to the Security Agreement, and the
undersigned hereby certifies, as of the date first above written, that such
supplemental schedules have been prepared by the undersigned in substantially
the form of the equivalent Schedules to the Security Agreement and are complete
and correct in all material respects.
SECTION 4. REPRESENTATIONS AND WARRANTS AND COVENANTS. As of the date
hereof, the undersigned hereby makes each representation and warranty and
covenant set forth in Section 4 of the Security Agreement (as supplemented by
the attached supplemental schedules) to the same extent as each other Debtor.
SECTION 5. OBLIGATIONS UNDER THE SECURITY AGREEMENT. The undersigned hereby
agrees, as of the date first above written, to be bound as a Debtor by all of
the terms and provisions of the Security Agreement to the same extent as each of
the other Debtors. The undersigned further agrees, as of the date first above
written, that each reference in the Security Agreement to an "Additional Debtor"
or a "Debtor" shall also mean and be a reference to the undersigned.
The terms of Sections 11.11, 11.12, 11.13 and 11.14 of the Security
Agreement are hereby incorporated by reference.
IN WITNESS WHEREOF, the undersigned has caused this Pledge Joinder to be
duly executed and delivered by its duly authorized officer as of [mm/dd/yy].
[NAME OF ADDITIONAL DEBTOR]
By:_____________________________
Name:
Title:
