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EXHIBIT 99.3
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of February 18, 2005 (this "AGREEMENT"), between
dbsXmedia Inc., a Delaware corporation (the "Debtor"), and Loral Skynet Network
Services, Inc., a Delaware corporation ("LSNS"), CyberStar L.P., a Delaware
limited partnership ("CLP"), and CyberStar, LLC ("CL") (collectively, LSNS, CLP,
and CL are referred to herein as the "Secured Party").
WHEREAS, the Debtor and the Secured Party entered into an Asset Purchase
Agreement, dated as of February 18, 2005 (together with all attachments,
exhibits and schedules thereto, and as may be amended from time to time, the
"APA"), pursuant to which the Secured Party, subject to the terms and conditions
contained therein, sold certain assets to the Debtor (the "Asset Sale"), and the
Debtor agreed to make certain payments and to perform certain obligations in
connection with such Asset Sale;
WHEREAS, contemporaneously with and in connection with the closing of the Asset
Sale, Debtor will execute a Teleport Services Agreement (together with all
attachments, exhibits and schedules thereto, and as may be amended from time to
time, the "TSA"),") in which Debtor agreed to purchase certain satellite space
segment and teleport services from LSNS; and
WHEREAS, the it is a condition precedent to the Secured Party's willingness to
close on the Asset Sale that the Debtor execute and deliver to the Secured Party
a security agreement in substantially the form hereof; and
WHEREAS, the Debtor wishes to grant a security interest in favor of the Secured
Party as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. All capitalized terms used herein without definitions shall have
the respective meanings provided therefor in the APA. All terms defined in the
Uniform Commercial Code of the State and used herein shall have the same
definitions herein as specified therein. However, if a term is defined in
Article 9 of the Uniform Commercial Code of the State differently than in
another Article of the Uniform Commercial Code of the State, the term has the
meaning specified in such Article 9. As used herein:
"CUSTOMER CONTRACTS" means contracts between the Debtor and third
party customers relating to its business television business, regardless
of whether such third party contracts were Purchased Assets.
"EVENT OF DEFAULT" means each of the following (a) the failure of
any representation or warranty of the Debtor contained in the APA, the
TSA, or this Agreement to be true and correct when made in any material
respect, (b) after the expiration of any applicable cure period, the
breach of any material covenant, agreement or obligation by the Debtor
under the APA, the TSA, or this Agreement and (c) after the expiration of
any applicable cure period, the failure of the Debtor to pay any of the
Obligations as and when due to be paid under the terms of the APA, the
TSA, or this Agreement.
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"OBLIGATIONS" means the payment of any and all indebtedness,
obligations, and liabilities of any nature whatsoever under the APA, the
TSA, or this Agreement.
"PURCHASED ASSETS" shall have the same definition as in the APA.
"STATE" means the State of New York.
2. Grant of Security Interest. The Debtor hereby grants to the Secured
Party, to secure the payment and performance in full of all of the Obligations,
a security interest in the following properties, assets, and rights of the
Debtor, wherever located, whether now owned or hereafter acquired or arising,
and all proceeds and products thereof (all of the same being hereinafter called
the "COLLATERAL"):
A. the Purchased Assets;
B. all Customer Contracts; and
C. Proceeds or products of any or all of the foregoing Collateral,
including to the extent the same constitute proceeds, all goods, equipment,
instruments, documents, accounts, deposit accounts, letter-of-credit rights,
general intangibles, intellectual property (including patents, trademarks and
copyrights), books and records, manuals, instructions,, commercial tort claims,
securities, investment property, supporting obligations, contract rights or
rights to the payment of money, insurance.
3. Authorization to File Financing Statements. The Debtor hereby
irrevocably authorizes the Secured Party at any time and from time to time to
file in any filing office in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that (a) indicate the
Collateral, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the Uniform Commercial Code of
the State or such jurisdiction, or as being of an equal or lesser scope or with
greater detail, and (b) provide any other information required by part 5 of
Article 9 of the Uniform Commercial Code of the State, or such other
jurisdiction, for the sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether the Debtor is an organization, the
type of organization and any organizational identification number issued to the
Debtor and, (ii) in the case of a financing statement filed as a fixture filing,
a sufficient description of real property to which the Collateral relates. The
Debtor agrees to furnish any such information to the Secured Party promptly upon
the Secured Party's request. The Debtor also ratifies its authorization for the
Secured Party to have filed in any Uniform Commercial Code jurisdiction any like
initial financing statements or amendments thereto if filed prior to the date
hereof.
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4. Other Actions. To further the attachment, perfection and first priority
of, and the ability of the Secured Party to enforce, the Secured Party's
security interest in the Collateral, and without limitation on the Debtor's
other obligations in this Agreement, the Debtor agrees, in each case at the
Debtor's expense, to take the following actions with respect to the following
Collateral:
4.1. Promissory Notes and Tangible Chattel Paper. If in connection
with payment under a Customer Contract or to the extent related to other
Collateral, the Debtor shall at any time hold or acquire any promissory notes or
tangible chattel paper, the Debtor shall forthwith endorse, assign and deliver
the same to the Secured Party, accompanied by such instruments of transfer or
assignment duly executed in blank as the Secured Party may from time to time
specify.
4.2. Investment Property. If any of the Collateral shall at any time
consist of certificated securities, the Debtor shall forthwith endorse, assign
and deliver the same to the Secured Party, accompanied by such instruments of
transfer or assignment duly executed in blank as the Secured Party may from time
to time specify. If any such securities now or hereafter acquired by the Debtor
as payment under a Customer Contract are uncertificated and are issued to the
Debtor or its nominee directly by the issuer thereof, the Debtor shall
immediately notify the Secured Party thereof and, at the Secured Party's request
and option, pursuant to an agreement in form and substance satisfactory to the
Secured Party, either (a) cause the issuer to agree to comply with instructions
from the Secured Party as to such securities, without further consent of the
Debtor or such nominee, or (b) arrange for the Secured Party to become the
registered owner of the securities. If any securities, whether certificated or
uncertificated, or other investment property now or hereafter acquired by the
Debtor constitute Collateral and are held by the Debtor or its nominee through a
securities intermediary or commodity intermediary, the Debtor shall immediately
notify the Secured Party thereof and, at the Secured Party's request and option,
pursuant to an agreement in form and substance satisfactory to the Secured
Party, either (i) cause such securities intermediary or (as the case may be)
commodity intermediary to agree to comply with entitlement orders or other
instructions from the Secured Party to such securities intermediary as to such
securities or other investment property, or (as the case may be) to apply any
value distributed on account of any commodity contract as directed by the
Secured Party to such commodity intermediary, in each case without further
consent of the Debtor or such nominee, or (ii) in the case of financial assets
or other investment property held through a securities intermediary, arrange for
the Secured Party to become the entitlement holder with respect to such
investment property, with the Debtor being permitted, only with the consent of
the Secured Party, to exercise rights to withdraw or otherwise deal with such
investment property. The Secured Party agrees with the Debtor that the Secured
Party shall not give any such entitlement orders or instructions or directions
to any such issuer, securities intermediary or commodity intermediary, and shall
not withhold its consent to the exercise of any withdrawal or dealing rights by
the Debtor, unless an Event of Default has occurred and is continuing.
4.3. Collateral in the Possession of a Bailee. If any Collateral is
at any time in the possession of a bailee (other than the Secured Party), the
Debtor shall promptly notify the Secured Party thereof and, at the Secured
Party's request and option, shall promptly obtain an acknowledgement from the
bailee, in form and substance satisfactory to the Secured Party, that the bailee
holds such Collateral for the benefit of the Secured Party, and that such bailee
agrees to comply, without further consent of the Debtor, with instructions from
the Secured Party as to such Collateral. The Secured Party agrees with the
Debtor that the Secured Party shall not give any such instructions unless an
Event of Default has occurred and is continuing or would occur after taking into
account any action by the Debtor with respect to the bailee.
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4.4. Electronic Chattel Paper and Transferable Records. If in
connection with payment under a Contract or to the extent related to other
Collateral, the Debtor at any time holds or acquires an interest in any
electronic chattel paper or any "transferable record," as that term is defined
in Section 201 of the federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in
effect in any relevant jurisdiction, the Debtor shall promptly notify the
Secured Party thereof and, at the request and option of the Secured Party, shall
take such action as the Secured Party may reasonably request to vest in the
Secured Party control, under Section 9-105 of the Uniform Commercial Code, of
such electronic chattel paper or control under Section 201 of the federal
Electronic Signatures in Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in
such jurisdiction, of such transferable record. The Secured Party agrees with
the Debtor that the Secured Party will arrange, pursuant to procedures
satisfactory to the Secured Party and so long as such procedures will not result
in the Secured Party's loss of control, for the Debtor to make alterations to
the electronic chattel paper or transferable record permitted under UCC Section
9-105 or, as the case may be, Section 201 of the federal Electronic Signatures
in Global and National Commerce Act or Section 16 of the Uniform Electronic
Transactions Act for a party in control to make without loss of control, unless
an Event of Default has occurred and is continuing.
4.5. Letter-of-Credit Rights. If, in connection with payment under a
Contract or to the extent related to other Collateral, the Debtor is at any time
a beneficiary under a letter of credit, the Debtor shall promptly notify the
Secured Party thereof and, at the request and option of the Secured Party, the
Debtor shall, pursuant to an agreement in form and substance satisfactory to the
Secured Party, either (i) arrange for the issuer and any confirmer or other
nominated person of such letter of credit to consent to an assignment to the
Secured Party of the proceeds of the letter of credit, or (ii) arrange for the
Secured Party to become the transferee beneficiary of the letter of credit, with
the Secured Party agreeing, in each case, that the proceeds of the letter to
credit are to be applied to reduce the Adjusted Principal .
4.6. Commercial Tort Claims. If the Debtor shall at any time hold or
acquire a commercial tort claim that constitutes Collateral, the Debtor shall
immediately notify the Secured Party in a writing signed by the Debtor of the
particulars thereof and grant to the Secured Party in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to the
Secured Party.
4.7. Other Actions as to Any and All Collateral. The Debtor further
agrees, at the request and option of the Secured Party, to take any and all
other actions the Secured Party may determine to be necessary or useful for the
attachment, perfection and first priority of, and the ability of the Secured
Party to enforce, the Secured Party's security interest in any and all of the
Collateral, including, without limitation, (a) executing, delivering and, where
appropriate, filing financing statements and amendments relating thereto under
the Uniform Commercial Code, to the extent, if any, that the Debtor's signature
thereon is required therefor, (b) causing the Secured Party's name to be noted
as secured party on any certificate of title for a titled good if such notation
is a condition to attachment, perfection or priority of, or ability of the
Secured Party to enforce, the Secured Party's security interest in such
Collateral, (c) complying with any provision of any statute, regulation or
treaty of the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, or ability of
the Secured Party to enforce, the Secured Party's security interest in such
Collateral, (d) obtaining governmental and other third party waivers, consents
and approvals in form and substance satisfactory to Secured Party, including,
without limitation, any consent of any licensor, lessor or other person
obligated on Collateral, (e) obtaining waivers from mortgagees and landlords in
form and substance satisfactory to the Secured Party, (f) taking all actions
under any earlier versions of the Uniform Commercial Code or under any other
law, as reasonably determined by the Secured Party to be applicable in any
relevant Uniform Commercial Code or other jurisdiction, including any foreign
jurisdiction, and (g) executing, delivering and filing a copyright security
agreement in form and substance satisfactory to the Secured Party.
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5. Representations and Warranties Concerning Debtor's Legal Status. The
Debtor has previously delivered to the Secured Party a certificate signed by the
Debtor and entitled "Perfection Certificate" (the "PERFECTION CERTIFICATE"). The
Debtor represents and warrants to the Secured Party as follows: (a) the Debtor's
exact legal name is that indicated on the Perfection Certificate and on the
signature page hereof, (b) the Debtor is an organization of the type, and is
organized in the jurisdiction set forth in the Perfection Certificate, (c) the
Perfection Certificate accurately sets forth the Debtor's organizational
identification number or accurately states that the Debtor has none, (d) the
Perfection Certificate accurately sets forth the Debtor's place of business or,
if more than one, its chief executive office, as well as the Debtor's mailing
address, if different, (e) all other information set forth on the Perfection
Certificate pertaining to the Debtor is accurate and complete, and (f) that
there has been no change in any information provided in the Perfection
Certificate since the date on which it was executed by the Debtor.
6. Covenants Concerning Debtor's Legal Status. The Debtor covenants with
the Secured Party as follows: (a) without providing at least 30 days prior
written notice to the Secured Party, the Debtor will not change its name, its
place of business or, if more than one, chief executive office, or its mailing
address or organizational identification number if it has one, (b) if the Debtor
does not have an organizational identification number and later obtains one, the
Debtor shall forthwith notify the Secured Party of such organizational
identification number, and (c) the Debtor will not change its type of
organization, jurisdiction of organization or other legal structure.
7. Representations, Warranties and Covenants Concerning Collateral, etc.
The Debtor further represents and warrants to the Secured Party as follows: (a)
the Debtor is the owner of or has other rights in or power to transfer the
Collateral, free from any right or claim or any person or any adverse lien,
security interest or other encumbrance, except for the security interest created
by this Agreement and other liens permitted by the APA or the TSA, (b) none of
the Collateral constitutes, or is the proceeds of, "farm products" as defined in
Section 9-102(a)(34) of the Uniform Commercial Code of the State, (c) except as
may have been disclosed in writing to the Secured Party none of the account
debtors or other persons obligated on any of the Collateral as of the date
hereof is a governmental authority covered by the Federal Assignment of Claims
Act or like federal, state or local statute or rule in respect of such
Collateral and the Debtor will promptly notify the Secured Party if such
representation and warranty ceases to be true at any time and take all actions
necessary under such applicable law to perfect the security interest under this
Agreement in such accounts, (d) the Debtor holds no commercial tort claim in
connection with a Customer Contract except as indicated on the Perfection
Certificate, (e) all other information set forth on the Perfection Certificate
pertaining to the Collateral is accurate and complete, and (f) that there has
been no change in any information provided in the Perfection Certificate since
the date on which it was executed by the Debtor.
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8. Covenants Concerning Collateral, etc. The Debtor further covenants with
the Secured Party as follows: (a) except as contemplated by the APA or, with
respect to equipment inventory, as may be required in good faith to perform in
the ordinary course of business under the terms and conditions of a Customer
Contract, the Collateral, to the extent not delivered to the Secured Party
pursuant to Section 4, will be kept at those locations listed on the Perfection
Certificate and the Debtor will not remove the Collateral from such locations
without providing at least thirty days prior written notice to the Secured
Party, (b) except for the security interest herein granted, the rights of
Secured Party under the APA and the TSA, the Debtor shall be the owner of or
have other rights in the Collateral free from any right or claim of any other
person, lien, security interest or other encumbrance, and the Debtor shall
defend the same against all claims and demands of all persons at any time
claiming the same or any interests therein adverse to the Secured Party, (c) the
Debtor shall not pledge, mortgage or create, or suffer to exist any right of any
person in or claim by any person to the Collateral, or any security interest,
lien or encumbrance in the Collateral in favor of any person, other than the
Secured Party, (d) the Debtor will keep the Collateral in good order and repair
and will not use the same in violation of law or any policy of insurance
thereon, (e) the Debtor will permit the Secured Party, or its designee, to
inspect the Collateral at any reasonable time, wherever located, (f) the Debtor
will pay promptly when due all taxes, assessments, governmental charges and
levies upon the Collateral or incurred in connection with the use or operation
of such Collateral or incurred in connection with this Agreement, and (g) the
Debtor will not sell or otherwise dispose, or offer to sell or otherwise
dispose, of the Collateral or any interest therein except for (x) leases of
inventory and licenses of general intangibles in the ordinary course of business
and (y) so long as no Event of Default has occurred and is continuing, sales or
other dispositions of obsolescent items of equipment consistent with past
practices.
9. Insurance. The Debtor will maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks as are usually carried by the companies
engaged in the same or a similar business, and if reasonably requested by the
Secured Party additional property and/or liability insurance; and furnish to the
Secured Party, upon written request, full information as to the insurance
carried. Any deductibles or exclusions under such policies must be reasonably
acceptable to the Secured Party. Each such policy shall name the Secured Party
as loss payee and contain such other indorsements as Secured Party shall require
from time to time.
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10. Collateral Protection Expenses; Preservation of Collateral.
10.1. Expenses Incurred by Secured Party. In the Secured Party's
discretion, if the Debtor fails to do so, the Secured Party may discharge taxes
and other encumbrances at any time levied or placed on any of the Collateral,
maintain any of the Collateral, make commercially reasonable repairs thereto and
pay any necessary filing fees or insurance premiums. The Debtor agrees to
reimburse the Secured Party on demand for all expenditures so made. The Secured
Party shall have no obligation to the Debtor to make any such expenditures, nor
shall the making thereof be construed as the waiver or cure of any Event of
Default.
10.2. Secured Party's Obligations and Duties. Anything herein to the
contrary notwithstanding, the Debtor shall remain obligated and liable under
each contract or agreement comprised in the Collateral to be observed or
performed by the Debtor thereunder. The Secured Party shall not have any
obligation or liability under any such contract or agreement by reason of or
arising out of this Agreement or the receipt by the Secured Party of any payment
relating to any of the Collateral, nor shall the Secured Party be obligated in
any manner to perform any of the obligations of the Debtor under or pursuant to
any such contract or agreement, to make inquiry as to the nature or sufficiency
of any payment received by the Secured Party in respect of the Collateral or as
to the sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Secured Party or to which the Secured Party may be entitled at
any time or times. The Secured Party's sole duty with respect to the custody,
safe keeping and physical preservation of the Collateral in its possession,
under Section 9-207 of the Uniform Commercial Code of the State or otherwise,
shall be to deal with such Collateral in the same manner as the Secured Party
deals with similar property for its own account.
11. Securities and Deposits. The Secured Party may at any time following
and during the continuance of an Event of Default, at its option, transfer to
itself or any nominee any securities constituting Collateral, receive any income
thereon and hold such income as additional Collateral or apply it to the
Obligations. Whether or not any Obligations are due, the Secured Party may,
following and during the continuance of an Event of Default, demand, xxx for,
collect, or make any settlement or compromise which it deems desirable with
respect to the Collateral. Regardless of the adequacy of Collateral or any other
security for the Obligations, any deposits or other sums at any time credited by
or due from the Secured Party to the Debtor may at any time be applied to or set
off against any of the Obligations.
12. Notification to Account Debtors and Other Persons Obligated on
Collateral. If an Event of Default shall have occurred and be continuing, the
Debtor shall, at the request and option of the Secured Party, notify account
debtors and other persons obligated on any of the Customer Contracts of the
security interest of the Secured Party in the Collateral and that payment
thereof is to be made directly to the Secured Party or to any financial
institution designated by the Secured Party as the Secured Party's agent
therefor, and the Secured Party may itself, if an Event of Default shall have
occurred and be continuing, after notice to and consent from the Debtor, so
notify account debtors and other persons obligated on Collateral. After the
making of such a request or the giving of any such notification, the Debtor
shall hold any proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by the Debtor as trustee
for the Secured Party without commingling the same with other funds of the
Debtor and shall turn the same over to the Secured Party in the identical form
received, together with any necessary endorsements or assignments. The Secured
Party shall apply the proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by the Secured Party to
the Obligations, such proceeds to be immediately credited after final payment in
cash or other immediately available funds of the items giving rise to them.
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13. Power of Attorney.
13.1. Appointment and Powers of Secured Party. The Debtor hereby
irrevocably constitutes and appoints the Secured Party and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place and
stead of the Debtor or in the Secured Party's own name, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments that may be necessary or
useful to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives said attorneys the power and right, on
behalf of the Debtor, without notice to or assent by the Debtor, to do the
following:
(a) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise dispose of or deal with any of the Collateral in such manner as is
consistent with the Uniform Commercial Code of the State and other applicable
law, and as fully and completely as though the Secured Party were the absolute
owner thereof for all purposes, and to do, at the Debtor's expense, at any time,
or from time to time, all acts and things which the Secured Party deems
necessary or useful to protect, preserve or realize upon the Collateral and the
Secured Party's security interest therein, in order to effect the intent of this
Agreement, all at least as fully and effectively as the Debtor might do,
including, without limitation, (i) the filing and prosecuting of registration
and transfer applications with the appropriate federal, state, local or other
agencies or authorities with respect to trademarks, copyrights and patentable
inventions and processes, (ii) upon written notice to the Debtor, the exercise
of voting rights with respect to voting securities, which rights may be
exercised, if the Secured Party so elects, with a view to causing the
liquidation of assets of the issuer of any such securities, and (iii) the
execution, delivery and recording, in connection with any sale or other
disposition of any Collateral, of the endorsements, assignments or other
instruments of conveyance or transfer with respect to such Collateral; and
(b) to the extent that the Debtor's authorization given in Section 3
is not sufficient, to file such financing statements with respect hereto, with
or without the Debtor's signature, or a photocopy of this Agreement in
substitution for a financing statement, as the Secured Party may deem
appropriate and to execute in the Debtor's name such financing statements and
amendments thereto and continuation statements which may require the Debtor's
signature.
13.2. Ratification by Debtor. To the extent permitted by law, the
Debtor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof. This power of attorney is a power coupled with an
interest and is irrevocable.
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13.3. No Duty on Secured Party. The powers conferred on the Secured
Party hereunder are solely to protect its interests in the Collateral and shall
not impose any duty upon it to exercise any such powers. The Secured Party shall
be accountable only for the 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 the Debtor for any act or failure to
act, except for the Secured Party's own gross negligence or willful misconduct.
14. Rights and Remedies. If an Event of Default shall have occurred and be
continuing, the Secured Party, without any other notice to or demand upon the
Debtor, shall have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party under the Uniform Commercial Code of the State and any additional rights
and remedies which may be provided to a secured party in any jurisdiction in
which Collateral is located, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Secured Party may, so far
as the Debtor can give authority therefor, enter upon any premises on which the
Collateral may be situated and remove the same therefrom. The Secured Party may
in its discretion require the Debtor to assemble all or any part of the
Collateral at such location or locations within the jurisdiction(s) of the
Debtor's principal office(s) or at such other locations as the Secured Party may
reasonably designate. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, the Secured Party shall give to the Debtor at least twenty Business Days
prior written notice of the time and place of any public sale of Collateral or
of the time after which any private sale or any other intended disposition is to
be made. The Debtor hereby acknowledges that five Business Days prior written
notice of such sale or sales shall be reasonable notice. In addition, the Debtor
waives any and all rights that it may have to a judicial hearing in advance of
the enforcement of any of the Secured Party's rights and remedies hereunder,
including, without limitation, its right following an Event of Default to take
immediate possession of the Collateral and to exercise its rights and remedies
with respect thereto.
15. Standards for Exercising Rights and Remedies. To the extent that
applicable law imposes duties on the Secured Party to exercise remedies in a
commercially reasonable manner, the Debtor acknowledges and agrees that, subject
to the Secured Party's obligations under the APA and TSA, it is not commercially
unreasonable for the Secured Party (a) to fail to incur expenses reasonably
deemed significant by the Secured Party to prepare Collateral for disposition or
otherwise to fail to complete raw material or work in process into finished
goods or other finished products for disposition, (b) to fail to obtain third
party consents for access to Collateral to be disposed of, or to obtain or, if
not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or
disposed of, (c) to fail to exercise collection remedies against account debtors
or other persons obligated on Collateral or to fail to remove liens or
encumbrances on or any adverse claims against Collateral, (d) to exercise
collection remedies against account debtors and other persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (f) to contact other persons, whether or not in the
same business as the Debtor, for expressions of interest in acquiring all or any
portion of the Collateral, (g) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the collateral is of a
specialized nature, (h) to dispose of Collateral by utilizing 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, (i) to dispose of assets in wholesale rather than retail
markets, (j) to disclaim disposition warranties, (k) to purchase insurance or
credit enhancements to insure the Secured Party against risks of loss,
collection or disposition of Collateral or to provide to the Secured Party a
guaranteed return from the collection or disposition of Collateral, or (l) to
the extent deemed appropriate by the Secured Party, to obtain the services of
other brokers, investment bankers, consultants and other professionals to assist
the Secured Party in the collection or disposition of any of the Collateral. The
Debtor acknowledges that the purpose of this Section 15 is to provide
non-exhaustive indications of what actions or omissions by the Secured Party
would fulfill the Secured Party's duties under the Uniform Commercial Code or
other law of the State or any other relevant jurisdiction in the Secured Party's
exercise of remedies against the Collateral and that other actions or omissions
by the Secured Party shall not be deemed to fail to fulfill such duties solely
on account of not being indicated in this Section 15. Without limitation upon
the foregoing, nothing contained in this Section 15 shall be construed to grant
any rights to the Debtor or to impose any duties on the Secured Party that would
not have been granted or imposed by this Agreement or by applicable law in the
absence of this Section 15.
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16. No Waiver by Secured Party, etc. The Secured Party shall not be deemed
to have waived any of its rights or remedies in respect of the Obligations or
the Collateral unless such waiver shall be in writing and signed by the Secured
Party. No delay or omission on the part of the Secured Party in exercising any
right or remedy shall operate as a waiver of such right or remedy or any other
right or remedy. A waiver on any one occasion shall not be construed as a bar to
or waiver of any right or remedy on any future occasion. All rights and remedies
of the Secured Party with respect to the Obligations or the Collateral, whether
evidenced hereby or by any other instrument or papers, shall be cumulative and
may be exercised singularly, alternatively, successively or concurrently at such
time or at such times as the Secured Party deems expedient.
17. Suretyship Waivers by Debtor. The Debtor waives demand, notice,
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of any description. With respect to
both the Obligations and the Collateral, the Debtor assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Secured Party may deem advisable. The Secured Party
shall have no duty as to the collection or protection of the Collateral or any
income therefrom, the preservation of rights against prior parties, or the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in Section 10.2. The Debtor further waives any and all other
suretyship defenses.
18. Marshalling. The Secured Party shall not be required to marshal any
present or future collateral security (including but not limited to the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights and remedies, however existing or
arising. To the extent that it lawfully may, the Debtor hereby agrees that it
will not invoke any law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Secured Party's rights and
remedies under this Agreement or under any other instrument creating or
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Debtor hereby
irrevocably waives the benefits of all such laws.
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19. Proceeds of Dispositions; Expenses. The Debtor shall pay to the
Secured Party on demand any and all expenses, including reasonable attorneys'
fees and disbursements, incurred or paid by the Secured Party in protecting,
preserving or enforcing the Secured Party's rights and remedies under or in
respect of any of the Obligations or any of the Collateral. After deducting all
of said expenses, the residue of any proceeds of collection or sale or other
disposition of the Collateral shall, to the extent actually received in cash, be
applied to the payment of the Obligations in such order or preference as the
Secured Party may determine, proper allowance and provision being made for any
Obligations not then due. Upon the final payment and satisfaction in full of all
of the Obligations and after making any payments required by Sections
9-608(a)(1)(C) or 9-615(a)(3) of the Uniform Commercial Code of the State, any
excess shall be returned to the Debtor. In the absence of final payment and
satisfaction in full of all of the Obligations, the Debtor shall remain liable
for any deficiency.
20. Overdue Amounts. Until paid, all amounts due and payable by the Debtor
hereunder shall be a debt secured by the Collateral and shall bear, whether
before or after judgment, interest at the rate of interest for overdue payments
as may be established in the TSA.
21. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED TO
TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The parties to this
Agreement hereby submit to the jurisdiction of the bankruptcy court for the
Southern District of New York with jurisdiction over Secured Party's case under
chapter 11 of title 11 of the United States Code (the "Bankruptcy Court") and
the courts of the State of New York. The parties agree that the Bankruptcy Court
shall be the exclusive forum for enforcement of the Agreement until the closing
of the Secured Party's chapter 11 cases, and to adjudicate, if necessary, any
and all disputes with respect thereto; provided that if the Bankruptcy Court
determines that it does not have subject matter jurisdiction over any action or
proceeding arising out of or relating to the Agreement then each of the parties
agrees that all such actions or proceedings shall be heard and determined
exclusively in a federal court of the United States sitting in the City of New
York, County of New York, or, if such federal court lacks jurisdiction over such
action, exclusively in a court of the State of New York sitting in the City of
New York, County of New York. After the closing of the Secured Party's chapter
11 cases, the Debtor agrees that any action or claim arising out of, or any
dispute in connection with, this Agreement, any rights, remedies, obligations,
or duties hereunder, or the performance or enforcement hereof or thereof, may be
brought in the courts of the State or any federal court sitting therein and
consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made upon the Debtor by mail at the address
specified in Section 11.4 of the APA. The Debtor hereby waives any objection
that it may now or hereafter have to the venue of any such suit or any such
court or that such suit is brought in an inconvenient court.
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22. Waiver of Jury Trial. THE DEBTOR WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS, REMEDIES, OBLIGATIONS, OR DUTIES HEREUNDER, OR THE
PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF. Except as prohibited by law, the
Debtor waives any right which it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. The Debtor (i) certifies that neither the Secured Party nor any
representative, agent or attorney of the Secured Party has represented,
expressly or otherwise, that the Secured Party would not, in the event of
litigation, seek to enforce the foregoing waivers or other waivers contained in
this Agreement, and (ii) acknowledges that the Secured Party is relying upon,
among other things, the waivers and certifications contained in this Section 22.
23. Miscellaneous. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Debtor and its respective successors and assigns, and shall inure to the benefit
of the Secured Party and its successors and assigns. If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity of
all other terms hereof shall in no way be affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein. The Debtor acknowledges receipt
of a copy of this Agreement.
24. Assignment. If Secured Party shall assign any of its rights and
obligations under the APA and/or the TSA as permitted under the terms of such
agreements, then Secured Party may freely assign some or all its rights and
obligations under this Agreement to any such assignee. Debtor may not assign its
rights and obligations hereunder without the prior written consent of the
Secured Party.
IN WITNESS WHEREOF, intending to be legally bound, the Debtor has caused this
Agreement to be duly executed as of the date first above written.
dbsXMEDIA, INC
By:
----------------------------------------
[Name]
[Title]
ACCEPTED:
LORAL SKYNET NETWORK SERVICES, INC.
By:
----------------------------------------
[Name]
[Title]
[SIGNATURES CONTINUE ON NEXT PAGE]
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[SIGNATURES CONTINUE FROM PREVIOUS PAGE]
CYBERSTAR, L.P.
By: Loral CyberStar, L.L.C., its general partner
By:
----------------------------------------
[Name]
[Title]
CYBERSTAR, L.L.C.
By:
----------------------------------------
[Name]
[Title]
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