EXHIBIT 4.1(b)
COLLATERAL AGREEMENT
COLLATERAL AGREEMENT (as amended, supplemented or otherwise modified
from time to time, this "Agreement"), dated as of March 25, 2004, made by RURAL
CELLULAR CORPORATION, a Minnesota corporation (the "Company"), and each of the
subsidiaries of the Company that are signatories hereto (such subsidiaries
together with any other subsidiary that may become a party hereto as provided
herein, the "Guarantors"; the Company and the Guarantors being referred to
collectively herein as the "Pledgors"), in favor of U.S. BANK NATIONAL
ASSOCIATION, as Collateral Trustee (in such capacity, together with its
successors, the "Collateral Trustee") for the Secured Parties (as defined
herein).
W I T N E S S E T H:
WHEREAS, pursuant to the Indenture dated as of March 25, 2004 (as
amended, supplemented or otherwise modified from time to time, the "Indenture")
by and among the Company, the Persons named therein as Guarantors and U.S. Bank
National Association, as trustee (the "Trustee"), the Company issued its Senior
Secured Floating Rate Notes due 2010 (the "2010 Notes") and its 8 1/4% Senior
Secured Notes due 2012 (the "2012 Notes" and, together with the Senior Secured
Floating Rate Notes, the "2010 Notes");
WHEREAS, the Company is a member of an affiliated group of companies
that includes each other Pledgor;
WHEREAS, the Company and the other Pledgors are engaged in related
businesses, and each Pledgor will derive substantial direct and indirect benefit
from the issuance of the Senior Secured Notes; and
WHEREAS, it is a condition precedent to the obligation of the Initial
Purchasers (as defined in the Indenture) under the Purchase Agreement (as
defined in the Indenture) to purchase the Senior Secured Notes that the Pledgors
shall have executed and delivered this Agreement to the Collateral Trustee for
the ratable benefit of the Secured Parties;
NOW, THEREFORE, in consideration of the premises and to induce the
purchase of the Senior Secured Notes by the Initial Purchasers (as defined in
the Indenture) thereof and for other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, each Pledgor hereby agrees
with the Collateral Trustee, for the ratable benefit of the Secured Parties, as
follows:
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SECTION 1
DEFINED TERMS
1.1 Definitions. (a) The following terms which are defined in the
UCC (as defined below) on the date hereof are used herein as so defined:
Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims,
Commodity Account, Deposit Account, Documents, Electronic Chattel Paper,
Equipment, Fixtures, General Intangibles, Instruments, Inventory,
Letter-of-Credit Rights, Proceeds, Promissory Note, Securities Account and
Supporting Obligations.
(b) The following terms shall have the following
meanings:
"Account Agent" has the meaning assigned to such term in the
Intercreditor Agreement.
"Account Institution" means (i) with respect to any Controlled Account
that is a Deposit Account, the bank at which such account is held and (ii) with
respect to any Controlled Account that is a Securities Account, the securities
intermediary for such Securities Account.
"Additional Second Lien Obligations" has the meaning assigned to such
term in Section 8.18.
"Administrative Agent" means (i) initially Xxxxxx Commercial Paper,
Inc. in its capacity as Administrative Agent for itself and the Lenders (as
defined in the Credit Agreement) and its successors thereunder in that capacity,
and (ii) the Credit Agreement Agent under any other Credit Agreement.
"Agreement" has the meaning assigned to such term in the preamble to
this Agreement.
"Alexandria Indemnity" has the meaning assigned to such term in the
Indenture.
"Alexandria Regulatory Reserve Account" means any and all segregated
Deposit Accounts maintained at KeyBank National Association in the name of
Alexandria Indemnity Corporation Loss Reserve Account or any and all
replacements of such accounts, in each case to the extent set up and maintained
by Alexandria Indemnity solely for the purpose of satisfying any regulatory
reserve requirement.
"Associated Operations and Liabilities" means business operations and
liabilities associated with the acquisition of a Restricted PCS Block C or F
License or control of the holder of a Restricted PCS Block C or F License by TLA
Spectrum.
"Board Resolution" has the meaning assigned to such term in the
Indenture.
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"Business Day" has the meaning assigned to such term in the Indenture.
"Capital Lease Obligations" has the meaning assigned to such term in
the Indenture.
"Capital Stock" has the meaning assigned to such term in the Indenture.
"Cellular 2000" has the meaning assigned to such term in the Indenture.
"Collateral" has the meaning assigned to such term in Section 3.1.
"Collateral Account" means any collateral account established by the
Collateral Trustee as provided in Section 6.1 or 6.4.
"Collateral Documents" has the meaning assigned to such term in the
Indenture.
"Collateral Trustee" has the meaning assigned to such term in the
preamble to this Agreement.
"Commission" has the meaning assigned to such term in the Indenture.
"Communications Act" has the meaning assigned to such term in the
Indenture.
"Company" has the meaning assigned to such term in the preamble to this
Agreement.
"Contracts" means all construction contracts, subscriber contracts,
customer service agreements, management agreements, rights of way, easements,
pole attachment agreements, transmission capacity agreements, public utility
contracts, and other agreements to which the Pledgor is a party, whether now
existing or hereafter arising, but excluding any Contract which is Excluded
Property.
"Control Event" means either (i) an Event of Default described in
Section 5.01(a), (b), (c), (j) or (k) of the Indenture has occurred and is
continuing or (ii) any of the Securities have become due and payable prior to
the Stated Maturity thereof as a result of any Event of Default pursuant to
Article V of the Indenture.
"Controlled Accounts" means all Included Deposit Accounts and all
Same-Institution Accounts.
"Copyright Licenses" means any written agreement providing for the
grant by or to any Pledgor of any right under any Copyright (including, without
limitation, those registered copyrights listed on Schedule 4.7).
"Copyrights" means (i) all copyrights arising under the laws of the
United States, whether registered or unregistered and whether published or
unpublished
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(including, without limitation, those listed on Schedule 4.7), all registrations
and recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"Credit Agreement" has the meaning assigned to such term in the
Indenture.
"Credit Agreement Agent" has the meaning assigned to such term in the
Indenture.
"Default" has the meaning assigned to such term in the Indenture.
"Domestic Subsidiary" has the meaning assigned to such term in the
Indenture.
"Dropdown Subsidiary" means a Wholly-Owned Restricted Subsidiary that
is a Domestic Subsidiary and a direct subsidiary of RCC Atlantic or RCC Holdings
formed for the purpose of holding the FCC Licenses held as of the date hereof by
such entity.
"Eligible Entity" means a Person that is eligible to hold or acquire
PCS Block C or F licenses, as specified in the rules, regulations and orders of
the FCC, including, without limitation, 47 C.F.R. Sections 24.709 and 24.839.
"Event of Default" has the meaning assigned to such term in the
Indenture.
"Excluded Disbursement Account" means any Deposit Account that is a
disbursement, payroll, tax or impress account (other than any Existing
Controlled Deposit Account or Same-Institution Account) but only if (1) such
account has a zero balance as of the end of each day, (2) the Pledgors do not
transfer during any day into such account any funds exceeding the amount
reasonably expected to be paid from such account during such day and (3) no
other Person has a control agreement on such account.
"Excluded Permitted Lien Property" means any property or assets of the
Pledgors that are subject to the following Permitted Liens (but only to the
extent that (i) the agreements relating to such Liens prohibit the creation of
Liens in favor of the Collateral Trustee on any such property or assets or (ii)
the grant of a Lien on any such property or assets would constitute or result in
the abandonment, invalidation or unenforceability of any material right under
any such agreement):
(a) Liens on Securities Accounts and Deposit Accounts permitted
under clauses (10), (15) or (16) of the definition of Permitted Liens,
(b) Liens permitted under clauses (1), (6), (7), (9) or (22) of
the definition of Permitted Liens,
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(c) Liens permitted under clause (8) of the definition of
Permitted Liens, with respect to replacements of Liens permitted under clause
(1) of the definition of Permitted Liens, and
(d) Liens permitted under clause (25) of the definition of
Permitted Liens, on property or assets the Fair Market Value of which does not
exceed $10,000,000 in the aggregate;
provided that Excluded Permitted Lien Property will not include any property or
assets of a Pledgor subject to (x) a Permitted Lien described in clauses (a),
(b) or (c) above that was created during the continuance of an event of default
under the Credit Agreement or an Event of Default under the Indenture or (y) a
Permitted Lien described in clause (d) above that was created during the
continuance of a Default or an Event of Default under the Indenture or a default
or event of default under the Credit Agreement.
"Excluded Property" means (a) any Chattel Paper, Promissory Note,
Lease, Contract, General Intangible, license, property right or agreement
(collectively, "Contract Collateral") to which any Pledgor is a party (i) to the
extent that the grant of a security interest therein by such Pledgor would
constitute or result in the abandonment, invalidation or unenforceability of any
material right, title or interest of such Pledgor under such Contract
Collateral, (ii) to the extent that the terms of such Contract Collateral
prohibit the creation by such Pledgor of a security interest therein or (iii) to
the extent that any Requirement of Law applicable thereto prohibits the creation
of a security interest therein (other than, in the case of clauses (i), (ii) and
(iii), to the extent that any such result would be rendered ineffective pursuant
to Sections 9-406, 9-407, 9-408, or 9-409 of the UCC), (b) any Capital Stock of
Wireless Alliance or Cellular 2000 or (c) the Alexandria Regulatory Reserve
Account; provided that any Proceeds, substitutions or replacements of any
Excluded Property shall not themselves be Excluded Property (unless such
Proceeds, substitutions or replacements would constitute property described in
clause (a), (b) or (c) above).
"Existing Control Agreement" means the Blocked Account Control
Agreement among the Company, Toronto Dominion (Texas), Inc. and U.S. Bank
National Association as in effect prior to the date hereof in the form attached
as Exhibit A hereto.
"Existing Controlled Deposit Accounts" means all Deposit Accounts
covered by the Existing Control Agreement.
"Fair Market Value" has the meaning assigned to such term in the
Indenture.
"FCC" has the meaning assigned to such term in the Indenture.
"FCC License" has the meaning assigned to such term in the Indenture.
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"First Lien Obligations" has the meaning assigned to such term in the
Indenture.
"First Lien Security Documents" has the meaning assigned to such term
in the Indenture.
"First Lien Obligation Period" has the meaning assigned to such term in
the Indenture.
"Governmental Entity" has the meaning assigned to such term in the
Indenture.
"Guarantee" has the meaning assigned to such term in the Indenture.
"Guarantors" has the meaning assigned to such term in the preamble to
this Agreement.
"Holder" has the meaning assigned to such term in the Indenture.
"Included Deposit Accounts" means (x) all Deposit Accounts that are
Existing Controlled Deposit Accounts, and (y) all other Deposit Accounts of the
Pledgors, other than (i) Excluded Disbursement Accounts, (ii) Excluded Permitted
Lien Property and the Alexandria Regulatory Reserve Account and (iii) Deposit
Accounts to the extent that the aggregate amount of funds credited to all such
Deposit Accounts does not exceed $10,000,000 at any time outstanding and no
other Person has a control agreement on such Deposit Accounts. For the avoidance
of doubt, the term "Included Deposit Accounts" shall not include any Collateral
Account.
"Incur" has the meaning assigned to such term in the Indenture.
"Indebtedness" has the meaning assigned to such term in the Indenture.
"Intellectual Property" means, collectively, all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks and the Trademark Licenses and all rights to xxx at law
or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Indenture" has the meaning assigned to such term in the recitals to
this Agreement.
"Intercompany Indebtedness" has the meaning assigned to such term in
the Indenture.
"Intercreditor Agreement" has the meaning assigned to such term in the
Indenture.
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"Investment Property" means the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49) of the UCC
and (ii) whether or not constituting "investment property" as so defined, all
Pledged Notes and all Pledged Stock.
"Issue Date" has the meaning assigned to such term in the Indenture.
"Issuers" means, collectively, the issuers of Pledged Stock.
"Leases" means all lease agreements for personal property or fixtures
to which any Pledgor is a party, whether now existing or hereafter arising, but
excluding any Lease that is Excluded Property.
"License Only Subsidiary" means: (1) RCC Minnesota and TLA Spectrum;
(2) each Dropdown Subsidiary; and (3) any other Wholly Owned Restricted
Subsidiary that is a Domestic Subsidiary owned directly by the Company or any
Guarantor and that is designated by the Company as a License-Only Subsidiary in
an Officers' Certificate and by a Board Resolution.
"Liens" has the meaning assigned to such term in the Indenture.
"Material Adverse Effect" has the meaning assigned to such term in the
Indenture.
"Material Adverse Tax Effect" means, with respect to the transfer or
acquisition of an FCC License, an adverse tax consequence to the Company and its
Subsidiaries (after taking into account any applicable tax benefits, including
the application of any net operating loss carryforwards that will expire during
the then-current tax year, but excluding the application of any net operating
loss carryforwards that will expire in any tax year, other than the then-current
tax year) in an amount that exceeds the lesser of (x) 2.0% of the Fair Market
Value of the FCC License to be acquired or transferred and (y) $200,000.
"Material Intellectual Property" means all Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses that are
included in the Collateral and (a) used in or necessary for the conduct of the
Pledgors' respective businesses as currently conducted and (b) material to the
business, assets, operations, properties or condition (financial or otherwise)
of the Pledgors, taken as a whole; and "Material Patent" and "Material
Trademark" mean all Patents and Trademarks, respectively, that meet the criteria
described in clauses (a) and (b) above.
"Obligations" has the meaning assigned to such term in the Indenture.
"Officers' Certificate" has the meaning assigned to such term in the
Indenture.
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"Other Receivables" means those Promissory Notes, other Instruments,
negotiable documents and Chattel Paper which, collectively, evidence Receivables
or other obligations of the Pledgors in an aggregate amount not in excess of
$1,000,000 in any fiscal year.
"Pari Passu Indebtedness" has the meaning assigned to such term in the
Indenture.
"Patents" means (i) all letters patent of the United States, all
reissues thereof and including, without limitation, any of the foregoing
referred to in Schedule 4.7, (ii) all applications for letters patent of the
United States and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any of the foregoing referred to on
Schedule 4.7, and (iii) all rights to obtain any reissues or extensions of the
foregoing.
"Patent Licenses" means any written agreements providing for the grant
by or to any Pledgor of any right to manufacture, use or sell any invention
covered in whole or in part by a Patent, including, without limitation, any of
the foregoing referred to in Schedule 4.7.
"Permitted Control Agreement" means, with respect to any Controlled
Account, a control agreement among the Pledgor that owns such Controlled
Account, the Account Institution for such Controlled Account and the Account
Agent, which control agreement meets the requirements of Section 5.16 of this
Agreement.
"Permitted Junior Liens" means
(a) Liens permitted under clause (10), (15) or (16) of the
definition of Permitted Liens on any assets or property other than Excluded
Permitted Lien Property;
(b) Liens permitted under clause (25) of the definition of
Permitted Liens on any assets or property other than Liens on the following (but
no other) assets and property securing only the Indebtedness contemplated by
such clause (25) of the definition of Permitted Liens: (i) Excluded Property or
Excluded Permitted Lien Property, (ii) fixed or capital assets acquired,
constructed or improved by the Company or any Subsidiary of the Company after
the date hereof provided that the condition set forth in subclause (a) of clause
(6) of the definition of Permitted Liens is met with respect to the Liens
referred to in this clause (ii) and the Indebtedness secured thereby and (iii)
assets leased to the Company or any Subsidiary of the Company pursuant to
capital leases giving rise to Capital Lease Obligations; and
(c) Liens permitted under clause (5) of the definition of
Permitted Liens with respect to Indebtedness permitted under clause (c) of
Section 10.08 of the Indenture.
"Permitted Liens" has the meaning assigned to such term in the
Indenture.
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"Person" has the meaning assigned to such term in the Indenture.
"Pledged Notes" means all Promissory Notes issued to or held by any
Pledgor, including, without limitation, the Promissory Notes listed on Schedule
4.5.
"Pledged Securities" means, collectively, all Pledged Notes and all
Pledged Stock.
"Pledged Stock" means all the Capital Stock issued by any Subsidiary of
the Company that may be issued or granted to, or held by, any Pledgor while this
Agreement is in effect, including, without limitation, the Capital Stock listed
on Schedule 4.5, but excluding any Capital Stock (i) that is Excluded Property,
(ii) issued by a Subsidiary other than an S-X Stock Pledge Subsidiary or a
License-Only Subsidiary that is not a Dropdown Subsidiary or (iii) or is
otherwise excluded from the Collateral pursuant to clause (y) of Section 3.2.
"Pledgor" has the meaning assigned to such term in the preamble to this
Agreement.
"RCC Atlantic" means RCC Atlantic, Inc., a Minnesota corporation.
"RCC Holdings" means RCC Holdings, Inc., a Minnesota corporation.
"RCC Minnesota" means RCC Minnesota, Inc., a Minnesota corporation.
"Receivable" means any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument or
Chattel Paper and whether or not it has been earned by performance (including,
without limitation, any Account).
"Requirement of Law" has the meaning assigned to such term in the
Indenture.
"Restricted PCS Block C or F License" means an FCC License in PCS
Frequency Block C or F that has been in effect for a period of less than five
years from its initial grant, such that it may only be held by or assigned to an
Eligible Entity.
"Restricted Subsidiary" has the meaning assigned to such term in the
Indenture.
"Same-Institution Accounts" means all Deposit Accounts and Securities
Accounts that are maintained with the same financial institution where any
Pledgor has any Included Deposit Account. For the avoidance of doubt, the term
"Same-Institution Account" shall not include any Collateral Account.
"Second Priority Liens" has the meaning assigned to such term in the
Indenture.
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"Secured Documents" as used herein means the Indenture, the Securities,
the Subsidiary Guarantees, all Collateral Documents and all documents and
instruments evidencing any Additional Second Lien Obligations.
"Secured Parties" means, collectively, (i) the Collateral Trustee, (ii)
the Trustee, (iii) the holders of the Securities, (iv) the holders of any
Additional Second Lien Obligations (or the trustee or agent thereof) that have
entered into a joinder, supplement or amendment to this Agreement as
contemplated by Section 8.18 and (v) the permitted successors and assigns of any
of the foregoing.
"Securities" has the meaning assigned to such term in the Indenture.
"Securities Act" has the meaning assigned to such term in the
Indenture.
"Securities Obligations" has the meaning assigned to such term in the
Indenture.
"Stated Maturity" has the meaning assigned to such term in the
Indenture.
"Subsidiary" has the meaning assigned to such term in the Indenture.
"Subsidiary Guarantee" has the meaning assigned to such term in the
Indenture.
"System" means, as to any Person, assets constituting a commercial
radio communications system authorized under the rules for telecommunications
services (including any license and the network, marketing, distribution, sales,
customer interface and operations functions relating thereto) owned and operated
by such Person.
"S-X Stock Pledge Subsidiary" means each Subsidiary of the Company,
excluding: (1) RCC Holdings and RCC Atlantic; (2) each Dropdown Subsidiary; (3)
each License Only Subsidiary that is not a Dropdown Subsidiary; (4) Wireless
Alliance and (5) all Subsidiaries acquired or created by any Pledgor after the
Issue Date; provided that an entity described in clause (1), (2) or (5) above
shall not be excluded from this definition if the pledge of all of the Capital
Stock of such entity would not require the Company to file separate financial
statements with the Commission with respect to such entity (or the direct parent
of such entity, in the case of a Dropdown Subsidiary) pursuant to Rule 3-10 or
Rule 3-16 of Regulation S-X, as in effect from time to time.
"Termination Date" has the meaning assigned to such term in Section 5.
"TLA Spectrum" means TLA Spectrum, LLC, a Minnesota limited liability
company.
"Trademarks" means (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, all registrations and recordings thereof, and all
applications in connection therewith, whether
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in the United States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the registered
trademarks and trademark applications referred to on Schedule 4.7, and (ii) the
right to obtain all renewals thereof.
"Trademark License" means any written agreement providing for the grant
by or to any Pledgor of any right to use any Trademark, including, without
limitation, any of the foregoing referred to on Schedule 4.7.
"UCC" means the Uniform Commercial Code of the State of New York.
"Wholly-Owned Restricted Subsidiary" has the meaning assigned to such
term in the Indenture.
"Wireless Alliance" has the meaning assigned to such term in the
Indenture.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein," "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Pledgor, shall refer
to such Pledgor's Collateral or the relevant part thereof.
SECTION 2
INTERCREDITOR AGREEMENT
Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Collateral Trustee pursuant to this Agreement and the
exercise of any right or remedy by the Collateral Trustee, are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of this Agreement and the Intercreditor Agreement, the terms of the
Intercreditor Agreement shall govern.
SECTION 3
GRANT OF SECURITY INTEREST
3.1 Grant of Security Interest. Each Pledgor hereby pledges and
grants to the Collateral Trustee, for the ratable benefit of the Secured
Parties, a security interest in all of the following property now owned or at
any time hereafter acquired by such Pledgor or in which such Pledgor now has or
at any time in the future may acquire any
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right, title or interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of such Pledgor's
Obligations under the Secured Documents:
(a) all Accounts;
(b) all Capital Stock of (i) each S-X Stock Pledge
Subsidiary and (ii) each License-Only Subsidiary that is not a Dropdown
Subsidiary and, in any event, all Capital Stock identified on Schedule 3.1(b)
hereto (the "Initial Pledged Stock");
(c) all Chattel Paper;
(d) all Commercial Tort Claims of such Pledgor described
on Schedule 4.11 as supplemented by any written notification given by a Pledgor
to the Collateral Trustee pursuant to Section 5.13;
(e) all Deposit Accounts;
(f) all Documents;
(g) all Equipment;
(h) to the extent permitted by applicable law, all FCC
Licenses (including, without limitation, those listed in Schedule 4.9);
(i) all Fixtures;
(j) all General Intangibles (other than FCC Licenses and
the Capital Stock of any Subsidiary of the Company), including, without
limitation, all Contracts and Leases;
(k) all Instruments;
(l) all Intellectual Property;
(m) all Inventory;
(n) all Investment Property (other than the Capital Stock
of any Subsidiary of the Company);
(o) all Letter-of-Credit Rights;
(p) all other personal property not otherwise described
above;
(q) all books and records pertaining to the Collateral;
and
(r) to the extent not otherwise included, all Proceeds
(including, without limitation, the proceeds of the sale, lease or assignment of
any FCC License or of any rights thereunder and all insurance proceeds),
Supporting Obligations
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and products of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the foregoing.
3.2 Exclusions. Notwithstanding Section 3.1 (x) the grant of a
security interest hereunder shall not include a security interest in Excluded
Property; provided, that at any time that any Collateral constitutes Excluded
Permitted Lien Property, the security interest of the Collateral Trustee in such
Excluded Permitted Lien Property shall immediately and automatically terminate
as at such time and such Excluded Permitted Lien Property shall cease to
constitute Collateral; and provided, further, however, that if and when the
prohibition or impediment which prevents such Excluded Permitted Lien Property
to be included in the Collateral is removed or otherwise terminated, the
applicable Pledgor shall be deemed to grant to the Collateral Trustee for the
ratable benefit of the Secured Parties, and the Collateral Trustee, for the
ratable benefit of the Secured Parties, will be deemed to have a security
interest in such Excluded Permitted Lien Property, and such Excluded Permitted
Lien Property shall again constitute Collateral for all purposes hereunder; and
(y) if the pledge of any Capital Stock or other securities of an S-X Stock
Pledge Subsidiary hereunder (other than, on the Issue Date, the Initial Pledged
Stock) would require the Company to file separate financial statements with the
Commission with respect to such S-X Stock Pledge Subsidiary pursuant to Rule
3-10 or Rule 3-16 of Regulation S-X under the Securities Act, as in effect from
time to time then all of the Capital Stock or other securities of such S-X Stock
Pledge Subsidiary shall be automatically released from the security interest
granted to the Collateral Trustee hereunder and shall automatically be deemed to
not be part of the Collateral (and in such event, the Collateral Documents may
in accordance with the Indenture be amended or modified, without the consent of
any Holder, to the extent necessary to release the Second Priority Liens on the
shares of Capital Stock or other securities that are so deemed to no longer
constitute part of the Collateral); provided that, if Rule 3-10 or Rule 3-16 of
Regulation S-X under the Securities Act is amended, modified or interpreted by
the Commission to require (or is replaced with another rule or regulation, or
any other law, rule or regulation is adopted, which would require) the filing
with the Commission of separate financial statements of any S-X Stock Pledge
Subsidiary of the Company due to the fact that such S-X Stock Pledge
Subsidiary's Capital Stock or other securities are part of the Collateral, then
all of the Capital Stock or other securities of such S-X Stock Pledge Subsidiary
shall be automatically released from the security interest granted to the
Collateral Trustee hereunder and shall automatically be deemed to not be part of
the Collateral (and in such event, the Collateral Documents may in accordance
with the Indenture be amended or modified, without the consent of any Holder, to
the extent necessary to release the Second Priority Liens on the shares of
Capital Stock or other securities that are so deemed to no longer constitute
part of the Collateral); provided, however, that if Rule 3-10 or Rule 3-16 or
Regulation S-X under the Securities Act is amended, modified or interpreted by
the Commission to permit (or is replaced with another rule or regulation, or any
other law, rule or regulation is adopted, which would permit) all of such S-X
Stock Pledge Subsidiary's Capital Stock and other securities to be pledged to
secure the Securities Obligations without the filing with the Commission of
separate financial statements of such S-X Stock Pledge Subsidiary, then all of
the Capital Stock and other securities of such S-X Stock Pledge Subsidiary shall
automatically be
14
deemed to be a part of the Collateral and shall be pledged and granted to the
Collateral Trustee hereunder (and the Collateral Documents shall be amended or
supplemented (without the consent of any Holder) to so reflect such inclusion in
the Collateral).
SECTION 4
REPRESENTATIONS AND WARRANTIES
To induce the Initial Purchasers to purchase the Senior Secured Notes,
each of the Company, as to itself and each other Pledgor, and each other
Pledgor, as to itself, hereby represents and warrants to the Collateral Trustee
for the ratable benefit of the Secured Parties that:
4.1 Title; No Other Liens. Except for the security interest
granted to the Collateral Trustee for the ratable benefit of the Secured Parties
pursuant to this Agreement and other Permitted Liens, such Pledgor owns or has
rights in each item of the Collateral free and clear of any and all other Liens.
No financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Collateral Trustee, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are permitted by the
Indenture.
4.2 Perfected Second Priority Liens. (a) This Agreement is
effective to create in favor of the Collateral Trustee, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable security interest in the
Collateral. The security interests granted pursuant to this Agreement (i) when
financing statements in appropriate form are filed in the offices specified on
Schedule 4.2, (which schedule shall be deemed automatically updated from time to
time in accordance with information provided pursuant to Section 5.5), shall
constitute a perfected Lien on, and security interest in, all right, title and
interest of the Pledgors in such Collateral in which a security interest can be
perfected by filing under the Uniform Commercial Code, and (ii) when the
Collateral which may be perfected by possession or control is delivered to the
Administrative Agent or the Administrative Agent or the Account Agent obtains
control over such Collateral, as agent of the Collateral Trustee in accordance
with the terms of the Intercreditor Agreement, such security interest shall
constitute a perfected Lien on, and security interest in, all right, title and
interest of the Pledgors in such Collateral, in the case of clause (i) and (ii)
subject to no Liens other than Permitted Liens; provided that, in the case of
any Permitted Junior Liens on any assets or property included in the Collateral,
the Liens securing the Securities Obligations take priority over such Permitted
Junior Liens.
(b) When this Agreement (or any short form hereof
mutually agreed upon by the Company and the Collateral Trustee for purposes of
such filing) is filed in the United States Patent and Trademark Office and the
United States Copyright Office and steps are taken under applicable foreign law
to the extent of Intellectual Property created under such law, and, with respect
to Intellectual Property in which a security interest cannot be perfected solely
by such filings, upon the filing of the
15
financing statements referred to in clause (a) above, the security interest
granted pursuant to this Agreement shall constitute a perfected Lien on, and
security interest in, all right, title and interest of the Pledgors in the
Intellectual Property included in the Collateral subject to no Liens other than
Permitted Liens; provided that, in the case of any Permitted Junior Liens on any
Intellectual Property included in the Collateral, the Liens securing the
Securities Obligations shall take priority over such Permitted Junior Liens (it
being understood that subsequent recordings in the United States Patent and
Trademark Office and the United States Copyright Office and steps taken under
applicable foreign law with respect to Intellectual Property created under such
law may be necessary to perfect a lien on registered Trademarks, Trademark
applications, Patents, Patent applications and registered Copyrights and
Copyright applications acquired by such Pledgor after the date hereof).
4.3 Jurisdiction of Organization; Chief Executive Office. On the
date hereof, such Pledgor's jurisdiction of organization, identification number
from the jurisdiction of organization (if any) and the location of such
Pledgor's chief executive office is specified on Schedule 4.3. On or prior to
the date hereof, such Pledgor has furnished to the Collateral Trustee a
certified charter, certificate of incorporation or other organization document
and long-form good standing certificate from its jurisdiction of organization as
of a date which is recent to the date hereof.
4.4 Inventory and Equipment. On the date hereof, the material
Inventory and the material Equipment (other than mobile goods) of each Pledgor
are located in the States listed on Schedule 4.4.
4.5 Pledged Securities. (a) Schedule 4.5 sets forth a complete and
accurate list of all shares of Pledged Stock held by each Pledgor as of the date
hereof.
(b) As of the date hereof, the shares of Pledged Stock
pledged by such Pledgor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Subsidiary owned by such
Pledgor except for any shares of Pledged Stock excluded from the Collateral.
(c) All the shares of the Pledged Stock held by such
Pledgor have been duly and validly issued or the equivalent, if applicable, with
respect to any limited liability company interest, and are fully paid and
nonassessable or the equivalent, if applicable, with respect to any limited
liability company interest.
(d) As of the date hereof, each of the Pledged Notes set
forth on Schedule 4.5, to the knowledge of the Company if made by any Person
other than the Company or a Subsidiary of the Company, constitutes the legal,
valid and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
16
(e) Except to the extent resulting from a transaction
after the date hereof not prohibited by the terms hereof and of the Indenture
and except as set forth on Schedule 4.5, all outstanding Capital Stock of each
Subsidiary of the Company is owned by the Company or a Restricted Subsidiary, in
each case free and clear of any Lien other than Liens described in clause (11)
or (17) of the definition of Permitted Liens in the Indenture and Liens arising
under the First Lien Security Documents and the Collateral Documents.
4.6 Receivables. As of the date hereof, the aggregate amount of
Receivables that are owed to the Pledgors by obligors that are Governmental
Entities does not constitute a material portion of all Receivables owed to the
Pledgors.
4.7 Intellectual Property. (a) Schedule 4.7 lists all applications
for registration and registered Intellectual Property owned by such Pledgor in
its own name on the date hereof.
(b) On the date hereof, all Material Intellectual
Property is valid, subsisting, unexpired and, to the knowledge of such Pledgor,
is enforceable and has not been abandoned and does not, to the knowledge of such
Pledgor, infringe the intellectual property rights of any other Person.
(c) Except as set forth on Schedule 4.7, on the date
hereof, none of the Material Intellectual Property is the subject of any
licensing or franchise agreement pursuant to which such Pledgor is the licensor
or franchisor.
(d) No holding, decision or judgment has been rendered by
any Governmental Entity which would limit, cancel or question the validity of,
or such Pledgor's rights in, any Material Intellectual Property, other than
routine office actions in the course of prosecution of pending Patent and
Trademark applications.
(e) Except as set forth on Schedule 4.7, no action or
proceeding is pending, or, to the knowledge of such Pledgor, threatened, on the
date hereof (i) seeking to limit, cancel or question the validity of any
Material Intellectual Property or such Pledgor's ownership interest therein,
other than routine office actions in the course of prosecution of pending Patent
and Trademark applications, or (ii) which, if adversely determined, would have a
material adverse effect on the value of any Material Intellectual Property.
4.8 Deposit Accounts; Securities Accounts. On the date hereof,
such Pledgor does not have any Deposit Accounts or Securities Accounts that are
not listed on Schedule 4.8 (other than Local Accounts (as defined in the
Intercreditor Agreement) that are neither Included Deposit Accounts nor
Same-Institution Accounts). None of the Deposit Accounts or Securities Accounts
of the Pledgors was subject to a control agreement prior to the date hereof
other than the Existing Controlled Deposit Accounts.
4.9 FCC Licenses. Schedule 4.9 sets forth a complete and accurate
list of the FCC Licenses in effect on the date hereof.
17
4.10 Transmitting Utility. Each of the Pledgors listed on Schedule
4.10 is a person primarily engaged in the business of transmitting
communications electrically, electromagnetically or by light on the date hereof.
4.11 Commercial Tort Claims. On the date hereof, such Pledgor does
not hold any Commercial Tort Claim which might reasonably result in awarded
damages (less any and all legal and other expenses incurred or reasonably
expected to be incurred by such Pledgor) in excess of $500,000 that is not
listed in Schedule 4.11.
4.12 Letter-of-Credit Rights. On the date hereof, such Pledgor is
not the beneficiary under any letter of credit with a face amount in excess of
$500,000 issued in favor of such Pledgor that is not listed on Schedule 4.12.
4.13 Material Collateral. Such Pledgor does not own, or have any
other right or interest in, any asset or property included in the Collateral
(other than FCC Licenses) that cannot be perfected in the manner described in
Section 4.2 (collectively, "Non-Perfected Assets"), except for Non-Perfected
Assets which together with the Non-Perfected Assets of all other Pledgors, in
the aggregate are not material to the Company and its Restricted Subsidiaries
taken as a whole.
SECTION 5
COVENANTS
The Company, as to itself and each other Pledgor, and each other
Pledgor, as to itself, covenants and agrees with the Collateral Trustee for the
ratable benefit of the Secured Parties that, from and after the date hereof
until the principal of, and interest and premium on the Securities and all fees
and other amounts then payable with respect to the Securities Obligations have
been paid in full (the "Termination Date"):
5.1 Covenants in Indenture. In the case of each Pledgor, such
Pledgor shall take, or shall refrain from taking, as the case may be, each
action that is necessary to be taken or not taken, as the case may be, so that
no Default or Event of Default is caused by the failure to take such action or
to refrain from taking such action by, in each case, such Pledgor.
5.2 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral in excess of $500,000,
individually or in the aggregate at any time outstanding, shall be or become
evidenced by any Instrument (other than checks received in the ordinary course
of business) or Chattel Paper, such Instrument or Chattel Paper shall be
promptly delivered during any First Lien Obligation Period to the Administrative
Agent, as agent and bailee of the Collateral Trustee pursuant to the terms of
the Intercreditor Agreement, duly indorsed in a manner satisfactory to the
Administrative Agent, and if no First Lien Obligation Period then exists, to the
Collateral Trustee, duly indorsed in a manner satisfactory to the Collateral
Trustee, in each case to be held as Collateral pursuant to this Agreement.
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5.3 Intentionally Omitted.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Pledgor shall maintain the security interest created by
this Agreement as a perfected security interest to the extent and having the
priority provided in Section 4.2, and shall defend such security interest
against the claims and demands of all Persons whomsoever, in each case, other
than claims or demands related to Permitted Liens.
(b) At any time and from time to time, upon the written
request of the Collateral Trustee, and at the sole expense of such Pledgor, such
Pledgor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Collateral Trustee may reasonably request for the purpose of granting,
preserving, protecting or perfecting the security interest granted by such
Pledgor pursuant to this Agreement, including, without limitation, filing any
financing or continuation statements under the UCC (or other similar laws) in
effect in any jurisdiction with respect to the security interests created
hereby.
5.5 Changes in Locations, Name, etc. Such Pledgor will not, except
upon ten days' prior written notice to the Collateral Trustee and delivery to
the Collateral Trustee of all additional financing statements and other
documents reasonably requested by the Collateral Trustee, if any, necessary to
maintain the validity, perfection and priority of the security interests
provided for herein:
(i) change its jurisdiction of organization or,
in the case of any Pledgor which is not a registered organization (as defined in
the UCC) the location of its chief executive office from that referred to in
Section 4.3; or
(ii) change its name, identity, corporate
structure or federal taxpayer identification number or other identification
number assigned by such Pledgor's jurisdiction of incorporation or formation.
5.6 Notices. Upon a Responsible Officer having knowledge of the
following, such Pledgor will advise the Collateral Trustee promptly, in
reasonable detail, of:
(a) any Lien (other than a Permitted Lien) on any of the
Collateral; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
5.7 Pledged Securities; Securities Accounts; Deposit Accounts. (a)
If such Pledgor shall become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a stock
dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any
19
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Subsidiary of the Company, whether in
addition to, in substitution of, as a conversion of, or in exchange for, any
shares of the Pledged Stock, or otherwise in respect thereof, such Pledgor shall
accept the same as the agent of the Collateral Trustee and the other Secured
Parties, hold the same in trust for the Collateral Trustee and the other Secured
Parties and, subject to the following sentence, deliver the same promptly to the
Collateral Trustee in substantially the same form received, duly indorsed by
such Pledgor to the Collateral Trustee, if required, together with an undated
stock power covering such certificate duly executed in blank by such Pledgor and
with, if the Collateral Trustee (or pursuant to the following sentence, the
Administrative Agent) so reasonably requests, signature guaranteed, to be held
by the Collateral Trustee, subject to the terms hereof, as additional collateral
security for the Securities Obligations. During any First Lien Obligation
Period, the Collateral Trustee hereby directs each Pledgor to deliver, endorse
or pay over any stock certificate, option or right in respect of any Capital
Stock required to be delivered, endorsed or paid over to the Collateral Trustee
pursuant to this clause (a) to the Administrative Agent as Collateral Trustee's
agent and bailee pursuant to the Intercreditor Agreement.
(b) If any shares of Pledged Stock now or hereafter
acquired by any Pledgor are uncertificated and are issued to such Pledgor or its
nominee directly by the Issuer thereof, such Pledgor shall promptly notify the
Collateral Trustee thereof and, at the reasonable request and option of the
Administrative Agent (or if no First Lien Obligation Period then exists, the
Collateral Trustee), pursuant to an agreement in form and substance reasonably
satisfactory to the Administrative Agent (or if no First Lien Obligation Period
then exists, the Collateral Trustee), cause the Issuer to agree to comply with
instructions from the Administrative Agent, as agent of the Collateral Trustee
pursuant to the Intercreditor Agreement (or if no First Lien Obligation Period
then exists, the Collateral Trustee) as to such Pledged Stock, without further
consent of such Pledgor or nominee.
(c) If such Pledgor shall now or hereafter have rights in
any Securities Account that is a Same-Institution Account, such Pledgor shall
promptly notify the Collateral Trustee thereof and provide the Account Agent (or
if no First Lien Obligation Period then exists, the Collateral Trustee) with a
Permitted Control Agreement within the time period required by Section 5.16.
(d) If such Pledgor shall now or hereafter have rights in
any Included Deposit Account, such Pledgor shall promptly notify the Collateral
Trustee thereof and provide the Account Agent (or if no First Lien Obligation
Period then exists, the Collateral Trustee) with a Permitted Control Agreement
within the time period required by Section 5.16.
(e) The Collateral Trustee agrees, and shall cause the
Account Agent to agree, with each of the Pledgors that the Collateral Trustee
(and the Account Agent) shall not give or direct the Account Agent to give any
such entitlement orders, instructions or directions to any such Issuer (in the
case of clause (b) above) or any Account Institution (in the case of clauses (c)
and (d) above) and shall not withhold its
20
consent to the exercise of any withdrawal or dealing right by any Pledgor,
unless a Control Event has occurred and is continuing, or, after giving effect
to any such investment and withdrawal rights, would occur.
(f) During the existence of an Event of Default and so
long as no First Lien Obligation Period then exists, any sums paid upon or in
respect of the Pledged Stock upon the liquidation or dissolution of any Issuer
shall be paid over to the Collateral Trustee to be held by it hereunder during
the existence of an Event of Default as additional collateral security for the
Securities Obligations. During the existence of an Event of Default, if any sums
of money or property so paid or distributed in respect of the Pledged Securities
shall be received by such Pledgor, such Pledgor shall, until such money or
property is paid or delivered to the Administrative Agent during the existence
of a First Lien Obligation Period or the Collateral Trustee if no First Lien
Obligation Period then exists, hold such money or property in trust for the
Secured Parties, segregated from other funds of such Pledgor, as additional
collateral security for the Securities Obligations. If all Events of Default
cease to exist, any property, sums or other amounts previously received by the
Collateral Trustee pursuant to this clause (f) and still held by the Collateral
Trustee at the time all Events of Default cease shall be promptly distributed to
the applicable Pledgor by the Collateral Trustee.
(g) In the case of each Pledgor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Security issued by it and will comply with such terms insofar as
such terms are applicable to it in its capacity as an Issuer and (ii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it.
(h) In the event a Pledgor is obligated to enter into a
Permitted Control Agreement pursuant to Section 5.7(c) or (d) the Company shall,
simultaneously with the execution of such Permitted Control Agreement, deliver
an opinion of legal counsel in form and substance reasonably satisfactory to the
Collateral Trustee stating that the terms of such Permitted Control Agreement
are enforceable against such Pledgor and, in the case of a Permitted Control
Agreement to be entered into pursuant to Section 5.7(d), the execution of such
Permitted Control Agreement creates a valid and perfected security interest in
the Included Deposit Account of such Pledgor; provided, that the Company shall
only be required to deliver to the Collateral Trustee such opinion of legal
counsel with respect to any Permitted Control Agreement which is required to be
delivered pursuant to Section 5.16(b), (c) or (d) if so requested by the
Collateral Trustee.
5.8 Receivables. Other than in the ordinary course of business or
consistent with its past practice, such Pledgor will not (i) grant any extension
of the time of payment of any Receivable other than Other Receivables, (ii)
compromise or settle any Receivable other than Other Receivables for less than
the full amount thereof, (iii) release, wholly or partially, any Person liable
for the payment of any Receivable other than Other Receivables, (iv) allow any
credit or discount whatsoever on any Receivable other than Other Receivables or
(v) amend, supplement or modify any
21
Receivable other than Other Receivables in any manner that could materially
adversely affect the value thereof.
5.9 Intellectual Property. (a) Such Pledgor (either itself or
through licensees) will (i) continue to use each Material Trademark on each and
every trademark class of goods applicable to its product or service line in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) use such Trademark with the
statutorily required notice of registration and all other notices and legends
required by applicable Requirements of Law, (iv) not adopt or use any xxxx which
is confusingly similar or a colorable imitation of such Trademark unless the
Collateral Trustee, for the ratable benefit of the Secured Parties, shall obtain
a perfected security interest in such xxxx pursuant to this Agreement, and (v)
not (and not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby such Trademark may become invalidated or
its enforceability impaired in any way.
(b) Such Pledgor will not do, or knowingly permit its
licensees to do, any act, or omit to do any act, whereby any Material Patent may
become forfeited, abandoned or dedicated to the public.
(c) Such Pledgor will not do, or direct its licensees to
do, any act that knowingly infringes the material intellectual property rights
of any other Person in any material respect.
(d) Such Pledgor will notify the Collateral Trustee
immediately if it knows, or has reason to know, that any application or
registration relating to any Material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office or the United States Copyright Office other than routine
non-final office actions) regarding such Pledgor's ownership of, or the validity
of, any Material Intellectual Property or such Pledgor's right to register the
same or to own and maintain the same.
(e) Whenever such Pledgor, either by itself or through
any agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office or the United States Copyright Office, such Pledgor shall
report such filing to the Collateral Trustee within five Business Days after the
last day of the fiscal quarter in which such filing occurs. Upon request of the
Collateral Trustee, such Pledgor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Collateral
Trustee may request to evidence the Collateral Trustee's security interest in
such Intellectual Property.
(f) Such Pledgor will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United States
Patent and Trademark Office or the United States Copyright Office, to maintain
and pursue each
22
application (and to obtain the relevant registration) and to maintain each
registration of the Material Intellectual Property, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability.
(g) In the event that any Material Intellectual Property
is infringed, misappropriated or diluted by a third party, such Pledgor shall
(i) take such actions as such Pledgor shall reasonably deem appropriate under
the circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Collateral Trustee after it learns thereof and, after taking reasonable and
customary measures to stop such infringement xxx for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
5.10 Electronic Chattel Paper and Transferable Records. If any
Pledgor at any time holds or acquires an interest in any Electronic Chattel
Paper, such Pledgor shall promptly notify the Collateral Trustee thereof and, at
the request of the Collateral Trustee, shall take such action as the Collateral
Trustee may reasonably request to vest in the Administrative Agent, as agent of
the Collateral Trustee pursuant to the terms of the Intercreditor Agreement (or
if no First Lien Obligation Period then exists, the Collateral Trustee) control
under UCC Section 9-105 of such Electronic Chattel Paper. The Collateral Trustee
agrees with such Pledgor that the Collateral Trustee will arrange, pursuant to
procedures reasonably satisfactory to the Collateral Trustee and so long as such
procedures will not result in the Administrative Agent's (or if no First Lien
Obligation Period then exists, the Collateral Trustee's) loss of control, for
the Pledgor to make alterations to the Electronic Chattel Paper permitted under
UCC Section 9-105 for a party in control to allow without loss of control,
unless an Event of Default has occurred and is continuing or would occur after
taking into account any action by such Pledgor with respect to such Electronic
Chattel Paper.
5.11 FCC Compliance. Each Pledgor covenants that, upon the
occurrence and during the continuance of an Event of Default and subject to the
Intercreditor Agreement, upon request of the Collateral Trustee, it will cause
to be filed such applications and take such other action (or use its
commercially reasonable efforts to assist the Collateral Trustee in such
applications and such other action), at its own cost, as may be requested by the
Collateral Trustee to obtain consent or approval of the FCC to any action
contemplated by this Agreement and to give effect to the security interest of
the Collateral Trustee, including, without limitation, the preparation,
execution and filing of an application for consent by the FCC to an assignment
or transfer involving a change in ownership or control of any FCC License
pursuant to the provisions of the Communications Act.
5.12 Letter-of-Credit Rights. If any Pledgor is at any time a
beneficiary under any letter of credit now or hereafter issued in favor of such
Pledgor, other than a Letter of Credit issued pursuant to the Credit Agreement,
in amounts in the aggregate for all Pledgors in excess of $1,000,000, such
Pledgor shall promptly notify the Collateral Trustee thereof and such Pledgor
shall, at the request of the Collateral Trustee if no First Lien Obligation
Period then exists, pursuant to an agreement in form and substance
23
reasonably satisfactory to the Collateral Trustee, use commercially reasonable
efforts to either (i) arrange for the issuer and any confirmer of such letters
of credit to consent to an assignment to the Collateral Trustee of the proceeds
of any drawing under such letters of credit or (ii) arrange for the Collateral
Trustee to become the transferee beneficiary of such Letters of Credit, with the
Collateral Trustee agreeing, in each case, that the proceeds of any drawing
under such Letters of Credit are to be applied as provided in the Intercreditor
Agreement, and if no First Lien Obligation Period then exists, the Indenture.
5.13 Commercial Tort Claims. If any Pledgor shall at any time hold
or acquire any Commercial Tort Claim, which might reasonably result in awarded
damages (less any and all legal and other expenses incurred or reasonably
expected to be incurred by such Pledgor) in excess of $500,000, such Pledgor
shall promptly notify the Collateral Trustee in writing signed by such Pledgor
of the brief details thereof and grant to the Collateral Trustee in such writing
a security interest therein and in the Proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance reasonably
satisfactory to the Collateral Trustee.
5.14 Alexandria Regulatory Reserve Account. Alexandria Indemnity
hereby agrees that it shall maintain in the Alexandria Regulatory Reserve
Account amounts no greater than are necessary to satisfy the requirements of
applicable law and of any contractual obligations relating to the maintenance of
reserve accounts and agrees that the Alexandria Regulatory Reserve Account shall
be maintained as a segregated account at all times. Furthermore, Alexandria
Indemnity hereby agrees to provide to the Collateral Trustee on a quarterly
basis, if requested by the Collateral Trustee, a statement in form and substance
reasonably satisfactory to the Collateral Trustee setting forth (i) the amount
required to be maintained in the Alexandria Regulatory Reserve Account by
applicable law and by any contractual obligation relating to the maintenance of
reserve accounts and (ii) the amount in the Alexandria Regulatory Reserve
Account as of such date.
5.15 License-Only Subsidiaries. Each Guarantor that is a
License-Only Subsidiary agrees that it shall not, and the Company agrees that it
shall not allow any such Guarantor that is a License-Only Subsidiary to engage
in any business activity other than (i) holding and acquiring FCC Licenses and
conducting business activities incidental to holding and acquiring FCC Licenses
(which, for the avoidance of doubt, shall include transactions with other
Guarantors under management and license agreements that are consistent with past
practice but shall not include the operation of wireless communications networks
or any other operating business) and (ii) holding and acquiring other assets
(but not liabilities other than as may be permitted under Section 5.15(d) of
this Agreement) that may be transferred into such License-Only Subsidiary
pursuant to the Indenture (but not the operation of any business relating to
such other assets); except that, subject to Section 5.15(b), TLA Spectrum shall
be permitted to acquire Associated Operations and Liabilities after the Issue
Date and operate such Associated Operations and Liabilities.
24
(b) To the extent that Associated Operations and
Liabilities are acquired by TLA Spectrum, the Company and TLA Spectrum shall use
commercially reasonable efforts to promptly transfer to the Company or any
Guarantor other than a License-Only Subsidiary such Associated Operations and
Liabilities that would not be permitted to be held by a License-Only Subsidiary
under Section 5.15(a).
(c) If any regulatory approval is required for any of the
transfers described in Section 5.15(b), the Company and the Guarantors shall use
commercially reasonable efforts to obtain such approval as promptly as
practicable. Any such transfer described in Section 5.15(b) shall not be
required during such time as any regulatory consent from a Governmental Entity
that is necessary for such transfer cannot be obtained after the prompt use of
commercially reasonable efforts to obtain such approval; provided, however, that
if a change in law or circumstance occurs that would remove such impediment,
then the Company and the Guarantors shall use commercially reasonable efforts to
effect such transfer as soon as practicable after such change.
(d) Each Guarantor that is a License-Only Subsidiary
agrees that it shall not, and the Company agrees that it shall not allow any
such Guarantor that is a License-Only Subsidiary to Incur or suffer to exist any
Indebtedness or other liabilities other than (i) Guarantees of First Lien
Obligations and Second Lien Obligations, (ii) Intercompany Indebtedness
permitted by Section 10.08(c) of the Indenture, (iii) liabilities (other than
for borrowed money) imposed by the Communications Act, (iv) various fees, taxes
and other charges owed directly by such License-Only Subsidiary that have been
imposed by a Governmental Entity and (v) other Indebtedness or other liabilities
not exceeding $5,000,000 in the aggregate for all License-Only Subsidiaries at
any one time outstanding (excluding Indebtedness and other liabilities of TLA
Spectrum that constitute Associated Operations and Liabilities). In addition,
TLA Spectrum may incur Indebtedness and other liabilities constituting
Associated Operations and Liabilities, subject to Section 5.15(b).
(e) The Company shall cause each License-Only Subsidiary
to satisfy all of its liabilities when due and perform all of its obligations
when required, except in each case where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect, and shall provide
such License-Only Subsidiary all funds necessary to do so.
(f) The Company and the Guarantors shall not make a
transfer of an FCC License to the Company or any Subsidiary of the Company
except for (a) a transfer of an FCC License to a License-Only Subsidiary other
than TLA Spectrum or a Dropdown Subsidiary and (b) a transfer of an FCC License
that is required to be made by RCC Holdings or RCC Atlantic as provided in
Section 5.15(j).
(g) Each Guarantor that is a License-Only Subsidiary
agrees that it shall not, and the Company agrees that it shall not allow such
Guarantor that is a License-Only Subsidiary to, merge with or into or
consolidate with the Company or any Subsidiary of the Company other than another
License-Only Subsidiary other than TLA Spectrum or a Dropdown Subsidiary. For
the avoidance of doubt, the restriction
25
contained in this Section 5.15(g) shall not restrict or limit the transfer of
any assets that do not constitute Collateral (it being understood that FCC
Licenses constitute Collateral).
(h) With respect to any FCC License acquired after the
Issue Date, (i) the Company and the Guarantors shall use commercially reasonable
efforts to acquire initially such FCC License in a License-Only Subsidiary other
than a Dropdown Subsidiary or TLA Spectrum, unless such acquisition would result
in a Material Adverse Tax Effect; and (ii) if the acquisition described in
clause (i) above is not completed at the time of the acquisition of such FCC
License, the Company and the Guarantors shall use commercially reasonable
efforts to transfer, as promptly as practicable, such FCC License to a
License-Only Subsidiary other than a Dropdown Subsidiary or TLA Spectrum unless
such transfer would result in a Material Adverse Tax Effect; provided that, in
either case, if such FCC License is a Restricted PCS Block C or F License, such
FCC License may be acquired by TLA Spectrum, subject to Section 5.15(b).
(i) If any regulatory approval is required for any of the
acquisitions or transfers described in Section 5.15(h), the Company and the
Guarantors shall use commercially reasonable efforts to obtain such approval as
promptly as practicable. Any such acquisition or transfer described in Section
5.15(h) shall not be required during such time as any regulatory consent from a
Governmental Entity that is necessary for such acquisition or transfer cannot be
obtained after the prompt use of commercially reasonable efforts to obtain such
approval; provided, however, that if a change in law or circumstance occurs that
would remove such impediment, then the Company and the Guarantors shall use
commercially reasonable efforts to effect such acquisition or transfer as soon
as practicable after such change.
(j) The Company and RCC Atlantic shall use commercially
reasonable efforts to cause RCC Atlantic to transfer, as promptly as practicable
and within 90 days after the Issue Date, all FCC Licenses held by RCC Atlantic
to one or more Dropdown Subsidiaries. The Company and RCC Holdings shall use
commercially reasonable efforts to cause RCC Holdings to transfer, as promptly
as practicable and within 90 days after the Issue Date, all FCC Licenses held by
RCC Holdings to RCC Minnesota or to one or more Dropdown Subsidiaries if such
transfer to RCC Minnesota would result in a Material Adverse Tax Effect. If any
regulatory approval is required for any transfers described in the preceding two
sentences, the Company and the Guarantors shall use commercially reasonable
efforts to obtain such approval as promptly as practicable. Any such transfer by
RCC Atlantic or RCC Holdings shall not be required during such time as any
regulatory consent from a Governmental Entity that is necessary for such
transfer cannot be obtained after the prompt use of commercially reasonable
efforts to obtain such approval; provided, however, that if a change in law or
circumstance occurs that would remove such impediment, then the Company and the
Guarantors shall use commercially reasonable efforts to effect such transfer as
soon as practicable after such change.
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5.16 Permitted Control Agreement.
(a) The Permitted Control Agreement for all Existing
Controlled Deposit Accounts and any other Deposit Accounts or (subject to clause
(e) below) any Securities Accounts existing on the date hereof that are
Same-Institution Accounts shall have substantially the same terms as the
Existing Control Agreement (but consistent with the terms of Section 5.7(e) of
this Agreement) and will be provided as soon as reasonably practicable but in
any event no later than 60 days after the date hereof.
(b) With respect to any other Controlled Account, the
Company shall use commercially reasonable efforts to provide a Permitted Control
Agreement with respect to each such account on substantially the same terms as
the Existing Control Agreement, with such changes as the Account Agent may
consent to, such consent not to be unreasonably withheld, conditioned or
delayed, or on such other terms that are reasonably acceptable to the Account
Agent.
(c) If the Company is unable to provide the control
agreement contemplated by clause (b) above with respect to any account within 60
days after creating such account (or in the case of an account that is not
initially a Controlled Account, within 60 days after such account becomes a
Controlled Account), then the Company shall be obligated to provide on or before
the 30th day following the end of such 60-day period a Permitted Control
Agreement with respect to such account which meets the requirements set forth in
clause (f) below.
(d) Notwithstanding the foregoing, during the occurrence
and continuance of a Default or Event of Default, the Company shall be obligated
to provide a Permitted Control Agreement (i) for any newly opened Controlled
Account prior to the time that any funds are transferred into such account, and
(ii) for any other account that becomes a Controlled Account prior to the time
that any new funds are transferred into such account (other than funds or
financial assets that would otherwise have been deposited or credited to that
account in the ordinary course of business consistent with past practice so long
as the Company is complying with clause (b) or (c) above, as applicable).
(e) For purposes of any Securities Account, the terms of
the Existing Control Agreement (or any control agreement based on it) shall be
conformed to the UCC definition of control for Securities Accounts and any other
UCC specific differences with respect to Securities Accounts.
(f) If paragraph (c) of this Section 5.16 is applicable
with respect to any Controlled Account, then within the time period set forth in
such paragraph (c) the Company shall be obligated to provide a control agreement
with respect to such account executed by the Account Institution that:
(i) meets the requirements for control set forth
in Section 8-106(d)(2) or 9-104(a)(2) of the UCC, as applicable;
27
(ii) shall allow any applicable Pledgor to retain
the rights contemplated by Section 8-106(f) or 9-104(b) of the UCC, as
applicable, provided that the Account Agent has the right to terminate such
rights of any applicable Pledgor by notice to the Account Institution upon the
occurrence and during the continuance of a Control Event;
(iii) need not contain any subordination or
release of the Account Institution's statutory, common law or contractual right
or claim of offset or lien or rights of recoupment or deduction;
(iv) if requested by the Account Institution,
shall contain an indemnity by the Account Agent in favor of the Account
Institution and a disclaimer by the Account Institution of liability for any
indirect damages, lost profits, or special, punitive or consequential damages
relating to the control agreement, provided that such indemnity and disclaimer
are either (x) in substantially the form of Section 6 of the Existing Control
Agreement, (y) in such other form that would not be reasonably likely to result
in a material increase in exposure of the Secured Parties to liability, loss,
damage or expense than would the provisions contained in Section 6 of the
Existing Control Agreement or (z) if neither clause (x) nor clause (y) is
applicable, otherwise in form reasonably satisfactory to the Account Agent (it
being understood that no such indemnity or disclaimer shall in any way operate
to release the Company from its indemnification obligations to the Account Agent
and shall not impair any rights or remedies of the Account Agent in respect
thereof against the Company); and
(v) may contain such additional provisions as
may be reasonably requested by the Account Institution to protect its interests
(including, without limitation, permitting the Account Institution to debit the
applicable account for returned items, fees and other amounts and requiring the
Account Agent to reimburse the Account Institution for returned items), provided
that such other provisions are either (x) in substantially the form of the
comparable provisions of the Existing Control Agreement, if any, (y) not
materially more burdensome on the Account Agent and do not materially increase
the exposure of the Secured Parties to liability, loss, damage or expense than
would the provisions contained in the Existing Control Agreement taken as a
whole or (z) if neither clause (x) nor clause (y) is applicable, otherwise
reasonably satisfactory to the Account Agent.
(g) No Pledgor shall enter into any control agreement
with respect to any Securities Accounts with any Person other than the Account
Agent or, if no First Lien Obligation Period then exists, the Collateral
Trustee.
5.17 Insurance. The Company will, and will cause each of its
Subsidiaries to do each of the following:
(a) 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 insured against by companies engaged
in the same or a similar
28
business in the same or similar locations, and furnish to the Collateral
Trustee, upon written request, certification as to the insurance carried;
(b) cause all such insurance covering any Collateral to
be endorsed or otherwise amended to include a customary lender's loss payable
endorsement, in form and substance reasonably satisfactory to the Collateral
Trustee;
(c) cause each such policy to provide that it shall not
be canceled or not renewed (i) by reason of nonpayment of premium upon not less
than ten days' prior written notice thereof by the insurer to the Collateral
Trustee or (ii) for any reason upon not less than 30 days' prior written notice
thereof by the insurer to the Collateral Trustee; and
(d) deliver to the Collateral Trustee, promptly after the
end of the then-current term or any earlier cancellation, or nonrenewal of any
such policy of insurance, evidence of renewal or replacement of such policy
together with evidence reasonably satisfactory to the Collateral Trustee of
payment of the premium therefor.
5.18 Real Estate. The Company will, and will cause each of its
Subsidiaries to, grant a mortgage or deed of trust, as applicable, to the
Collateral Trustee securing the Obligations under the Secured Documents in form
and substance reasonably satisfactory to the Collateral Trustee covering any
single parcel of owned real estate or contiguous parcels of owned real estate
acquired after the Issue Date having a fair market value (as determined in good
faith by the board of directors of the Company based on the price which could be
negotiated in an arms'-length free market transaction between a willing seller
and a willing buyer, neither of whom is under undue pressure or compulsion to
complete the transaction) in excess of $5,000,000 individually or in a series of
one or more related transactions. For the purpose of determining the amount of
any mortgage registration tax or similar tax or fee payable in connection with
recording any mortgage to be delivered hereunder or under any other Collateral
Document, the amount of the debt secured by the mortgage or deed of trust, as
applicable, shall be no greater than 115% of the fair market value of the real
property subject to the mortgage. The Company shall, and shall cause each of its
Subsidiaries to, deliver to the Collateral Trustee all documentation, including,
without limitation, opinions of counsel and policies of title insurance, which
the Collateral Trustee may reasonably request in connection with each such
grant, including phase I environmental reports.
SECTION 6
REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) At any time after
the occurrence and during the continuance of an Event of Default, upon the
Collateral Trustee's request and at the expense of the relevant Pledgor, such
Pledgor shall cause independent public accountants or others reasonably
satisfactory to the Collateral Trustee to furnish to the Collateral Trustee
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables.
29
(b) The Collateral Trustee hereby authorizes each Pledgor
to collect such Pledgor's Receivables and, provided that no First Lien
Obligation Period then exists, the Collateral Trustee may curtail or terminate
said authority at any time after the occurrence and during the continuance of a
Control Event. If required by the Collateral Trustee at any time after the
occurrence and during the continuance of an Event of Default and provided that
no First Lien Obligation Period then exists, any payments of Receivables, when
collected by any Pledgor, (i) shall be promptly (and, in any event, within two
Business Days) deposited by such Pledgor in substantially the same form
received, duly indorsed by such Pledgor to the Collateral Trustee if required,
in a Collateral Account maintained under the sole dominion and control of the
Collateral Trustee, subject to withdrawal by the Collateral Trustee for the
account of the Secured Parties only as provided in Section 6.5 and subject to
the Intercreditor Agreement, and (ii) until so turned over, shall be held by
such Pledgor in trust for the Collateral Trustee and the other Secured Parties,
segregated from other funds of such Pledgor. Each such deposit of Proceeds of
Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit. If all Control
Events cease to exist, any amounts then held in the Collateral Account by the
Collateral Trustee shall be promptly distributed by the Collateral Trustee to
the Company.
(c) After the occurrence and during the continuation of
an Event of Default, at the Collateral Trustee's reasonable request, the Company
shall deliver to the Collateral Trustee such documents evidencing, and relating
to, the agreements and transactions which gave rise to the Receivables,
including, without limitation, all invoices and weekly billing reports with
respect to the Receivables.
6.2 Communications with Obligors; Pledgors Remain Liable. (a)
Provided that no First Lien Obligation Period then exists, the Collateral
Trustee in its own name or in the name of others may at any time after the
occurrence and during the continuance of an Event of Default communicate with
obligors under the Receivables to verify with them to the Collateral Trustee's
satisfaction the existence, amount and terms of any Receivables.
(b) Upon the request of the Collateral Trustee at any
time after the occurrence and during the continuance of an Event of Default
(other than during a First Lien Obligation Period), each Pledgor shall notify
obligors on the Receivables that the Receivables have been assigned to the
Collateral Trustee, for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Collateral Trustee.
(c) Anything herein to the contrary notwithstanding, each
Pledgor shall remain liable under each of the Receivables, Contracts and Leases
to observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise to such Receivable or such Contract or Lease. Neither the Collateral
Trustee nor any other Secured Party shall have any obligation or liability under
any Receivable (or any agreement giving rise thereto) or any Contract or Lease
by reason of or arising out of this
30
Agreement or the receipt by the Collateral Trustee or any other Secured Party of
any payment relating thereto, nor shall the Collateral Trustee or any other
Secured Party be obligated in any manner to perform any of the obligations of
any Pledgor under or pursuant to any Receivable (or any agreement giving rise
thereto) or any Contract or Lease, to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, 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 it or to which it may be entitled
at any time or times.
6.3 Pledged Securities. (a) Subject to Section 6.3(b), each
Pledgor shall be permitted to receive all dividends paid in respect of the
Pledged Stock and all payments made in respect of the Pledged Notes, in each
case, to the extent permitted in the Indenture and subject to the requirements
of Section 5.7 hereof, and to exercise all voting and corporate or other
organizational rights with respect to the Pledged Securities; provided, however,
that no vote shall be cast or corporate or other organizational right exercised
or other action taken which, in the Collateral Trustee's reasonable judgment,
would materially impair the Collateral or which would result in any violation of
any provision of the Indenture, this Agreement or any other Secured Document.
(b) Provided that no First Lien Obligation Period then
exists, if an Event of Default shall occur and be continuing and the Collateral
Trustee shall give notice of its intent to exercise such rights pursuant to this
Section 6.3(b) to the relevant Pledgor or Pledgors, (i) the Collateral Trustee
shall have the right to receive any and all cash dividends, payments or other
Proceeds paid in respect of the Pledged Securities and make application thereof
to the Securities Obligations in the order as the Collateral Trustee may
determine, and/or (ii) any or all of the Pledged Securities shall be registered
in the name of the Collateral Trustee or its nominee, and the Collateral Trustee
or its nominee may during the existence of an Event of Default and provided that
no First Lien Obligation Period then exists exercise (x) all voting, corporate
and other rights pertaining to such Pledged Securities at any meeting of
shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all
rights of conversion, exchange and subscription and any other rights, privileges
or options pertaining to such Pledged Securities as if it were the absolute
owner thereof (including, without limitation, the right to exchange at its
discretion any and all of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate or
other organizational structure of any Issuer, or upon the exercise by any
Pledgor or the Collateral Trustee of any right, privilege or option pertaining
to such Pledged Securities, and in connection therewith, the right to deposit
and deliver any and all of the Pledged Securities with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Collateral Trustee may reasonably determine), all without
liability except pursuant to Section 7.2(a), but the Collateral Trustee shall
have no duty to any Pledgor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing. Each
Pledgor hereby appoints the Collateral Trustee, which appointment shall be
exercisable only upon the occurrence and during the continuance of an Event of
Default and provided that no First Lien Obligation Period then exists, such
Pledgor's true and lawful attorney-in-fact
31
and grants to the Collateral Trustee an IRREVOCABLE PROXY to exercise any action
contemplated by the immediately preceding sentence in any manner the Collateral
Trustee reasonably deems advisable for or against all matters submitted or which
may be taken by the shareholders. The power-of-attorney granted hereby is
coupled with an interest and shall be irrevocable.
(c) Each Pledgor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Pledgor hereunder to, if the
Collateral Trustee has exercised its rights under and in accordance with Section
6.3(b), (i) comply with any instruction received by it from the Collateral
Trustee in writing that (x) states that an Event of Default has occurred and is
continuing and no First Lien Obligation Period then exists and (y) is otherwise
in accordance with the terms of this Agreement, without any other or further
instructions from such Pledgor, and each Pledgor agrees that each Issuer shall
be fully protected in so complying, and (ii) pay any dividends or other payments
with respect to the Pledged Securities directly to the Collateral Trustee.
(d) If all Events of Default cease to exist, any
property, funds or other amounts previously received by the Collateral Trustee
pursuant to this Section 6.3 and still held by the Collateral Trustee at the
time all Events of Default cease shall be promptly distributed by the Collateral
Trustee to the Company.
6.4 Proceeds to be Turned Over to Collateral Trustee. In addition
to the rights of the Collateral Trustee specified in Section 6.1 with respect to
payments of Receivables, if an Event of Default shall occur and be continuing
and no First Lien Obligation Period then exists, upon the Collateral Trustee's
request, all Proceeds received by any Pledgor consisting of cash, checks and
other near-cash items shall be held by such Pledgor in trust for the Collateral
Trustee for the benefit of the other Secured Parties, segregated from other
funds of such Pledgor, and shall, promptly upon receipt by such Pledgor, be
turned over to the Collateral Trustee in substantially the same form received by
such Pledgor (duly indorsed by such Pledgor to the Collateral Trustee if
required). All such Proceeds received by the Collateral Trustee hereunder shall
be held by the Collateral Trustee in a Collateral Account maintained under its
sole dominion and control. All Proceeds while held by the Collateral Trustee in
a Collateral Account (or by such Pledgor in trust for the Collateral Trustee for
the benefit of the other Secured Parties) shall continue to be held as
collateral security for all the Securities Obligations and shall not constitute
payment thereof until applied as provided in Section 6.5 hereof. If all Events
of Default cease to exist, any amounts then held in the Collateral Account by
the Collateral Trustee shall be promptly distributed by the Collateral Trustee
to the Company.
6.5 Application of Proceeds. If an Event of Default shall have
occurred and be continuing and no First Lien Obligation Period then exists, at
any time at the Collateral Trustee's election, the Collateral Trustee may apply
all or any part of Proceeds constituting Collateral, whether or not held in any
Collateral Account, in payment of the Securities Obligations in such order as
the Collateral Trustee may elect, and any part of such funds which the
Collateral Trustee elects not so to apply shall, subject to the following
sentence, continue to be held as collateral security for the
32
Securities Obligations. Any balance of such Proceeds remaining after the
Termination Date or after all Events of Default cease to exist shall be paid
over to the Company or to whomsoever may be lawfully entitled to receive the
same.
6.6 Code and Other Remedies. Subject to the Intercreditor
Agreement, if an Event of Default shall occur and be continuing, the Collateral
Trustee, on behalf of the Secured Parties, may exercise, in addition to all
other rights and remedies granted to it in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Securities
Obligations, all rights and remedies of a secured party under the UCC or any
other applicable law. Without limiting the generality of the foregoing, if no
First Lien Obligation Period then exists, the Collateral Trustee, without demand
of performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Pledgor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Collateral Trustee or any other Secured Party or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Collateral Trustee or any other Secured Party shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Pledgor,
which right or equity is hereby waived and released. Provided that no First Lien
Obligation Period then exists, each Pledgor further agrees, at the Collateral
Trustee's request, to assemble the Collateral and make it available to the
Collateral Trustee at places which the Collateral Trustee shall reasonably
select, whether at such Pledgor's premises or elsewhere. The Collateral Trustee
shall apply the net proceeds of any action taken by it pursuant to this Section
6.6, after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Collateral Trustee and the other Secured Parties hereunder, including, without
limitation, reasonable attorneys' fees and reasonable disbursements in
accordance with Section 6.07 of the Indenture, to the payment in whole or in
part of the Obligations securing the Secured Documents, in such order as the
Collateral Trustee may elect, and only after such application and after the
payment by the Collateral Trustee of any other amount required by any provision
of law, including, without limitation, Section 9-615(a)(3) and (4) of the UCC,
need the Collateral Trustee account for the surplus, if any, to any Pledgor. To
the extent permitted by applicable law, each Pledgor waives all claims, damages
and demands it may acquire against the Collateral Trustee or any other Secured
Party arising out of the exercise by them of any rights hereunder. If any notice
of a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.
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6.7 Private Sale.
(a) Each Pledgor recognizes that the Collateral Trustee
may be unable to effect a public sale of any or all the Pledged Stock, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that no such private sale shall be
deemed to have been made in a commercially unreasonable manner solely because it
has had such a result. The Collateral Trustee shall be under no obligation to
delay a sale of any of the Pledged Stock for the period of time necessary to
permit the Issuer thereof to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if such Issuer
would agree to do so.
(b) Each Pledgor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section 6.7
valid and binding and in compliance with any and all applicable law (including
under the Communications Act).
6.8 Deficiency. Each Pledgor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Securities Obligations.
6.9 Grant of License to Use Intellectual Property. For the purpose
of enabling the Collateral Trustee to exercise rights and remedies under this
Agreement at such time as the Collateral Trustee shall be lawfully entitled to
exercise such rights and remedies, each Pledgor, to the extent it can lawfully
do so, hereby grants to the Collateral Trustee an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to the
Pledgors) to use, license or sublicense any of the Collateral consisting of
Intellectual Property now owned or hereafter acquired by such Pledgor, and
wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof. The license (i) shall be subject to those exclusive Copyright Licenses,
Patent Licenses, and Trademark Licenses granted by the Pledgors in effect on the
date hereof and those granted by any Pledgor hereafter, as permitted under the
Secured Documents, to the extent conflicting, (ii) may be exercised, at the
option of the Collateral Trustee, only upon the occurrence and during the
continuation of an Event of Default if no First Lien Obligation Period then
exists, provided, that any license, sublicense or other transaction entered into
by the Collateral Trustee in accordance herewith shall be binding upon the
Pledgors notwithstanding any subsequent cure of an Event of Default, and (iii)
apply to the use of the Trademarks in connection with goods and services of
similar type and quality to those theretofore sold by such Pledgor under such
Trademark.
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6.10 Bankruptcy. The Collateral Trustee shall have the right,
subject to the Intercreditor Agreement, in connection with the issuance of any
order for relief in a bankruptcy proceeding, to petition the bankruptcy court
for the transfer of control or assignment of the FCC Licenses to a receiver,
trustee, transferee, or similar official or to any purchaser of the Collateral
pursuant to any public or private sale, foreclosure or other exercise of
remedies available to the Collateral Trustee, all as permitted by applicable
law. All amounts realized or collected through the exercise of remedies
hereunder shall, subject to the Intercreditor Agreement, be applied to the
Securities Obligations as provided in the Indenture in such order as the
Collateral Trustee may elect.
6.11 Changes in Applicable Law. The parties acknowledge their
intent that, upon the occurrence of an Event of Default and during the
continuance thereof, subject to the Intercreditor Agreement, the Collateral
Trustee shall receive, to the fullest extent permitted by applicable law and
governmental policy (including, without limitation, the rules, regulations, and
policies of the FCC), all rights necessary or desirable to obtain, use or sell
the Collateral and, subject to the Intercreditor Agreement, to exercise all
remedies available to it under this Agreement, the Uniform Commercial Code as in
effect in any applicable jurisdiction, or other applicable law. The parties
further acknowledge and agree that, in the event of changes in law or
governmental policy occurring subsequent to the date hereof that affect in any
manner the Collateral Trustee's rights of access to, or use or sale of, the
Collateral, or the procedures necessary to enable the Collateral Trustee to
obtain such rights of access, use or sale, the Collateral Trustee and the
Pledgors shall amend this Agreement in such manner as the Collateral Trustee
shall reasonably request in order to provide the Collateral Trustee such rights
to the greatest extent possible consistent with applicable law and governmental
policy.
SECTION 7
THE COLLATERAL TRUSTEE
7.1 Collateral Trustee's Appointment as Attorney-in-Fact, etc. (a)
Each Pledgor hereby irrevocably constitutes and appoints the Collateral Trustee
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of such Pledgor and in the name of such Pledgor or in its 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
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Pledgor
hereby gives the Collateral Trustee the power and right, on behalf of such
Pledgor, without notice to or assent by such Pledgor, to do any or all of the
following, each such power of attorney to be coupled with an interest; provided
that the Collateral Trustee agrees that it will not exercise any rights under
the power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing and no First Lien Obligation
Period then exists:
35
(i) in the name of such Pledgor or its own name,
or otherwise, take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due under any
Receivable or with respect to any other Collateral and file any claim or take
any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Collateral Trustee for the purpose of collecting any and all
such moneys due under any Receivable or with respect to any other Collateral
whenever payable, all as the Collateral Trustee may reasonably determine;
(ii) in the case of any Intellectual Property,
execute and deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Collateral Trustee may request to evidence the
Collateral Trustee security interest in such Intellectual Property and the
goodwill of such Pledgor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or
placed on the Collateral, effect any repairs or any insurance called for by the
terms of this Agreement or any other Secured Document and pay all or any part of
the premiums therefor and the costs thereof, all as the Collateral Trustee may
reasonably determine;
(iv) execute, in connection with any sale
provided for in Section 6.6 or 6.7, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral;
(v) direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Collateral Trustee or as the Collateral
Trustee shall direct;
(vi) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral, all as
the Collateral Trustee may reasonably determine;
(vii) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral;
(viii) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral;
(ix) defend any suit, action or proceeding
brought against such Pledgor with respect to any Collateral, all as the
Collateral Trustee may reasonably determine;
(x) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the
36
Collateral Trustee may deem appropriate, all as the Collateral Trustee may
reasonably determine;
(xi) assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such Trademark pertains)
as fully and completely as though the Collateral Trustee were the absolute owner
thereof for all purposes;
(xii) xxx on, modify or terminate and waive or
release the performance or observance of any obligation under the Contracts or
the Leases;
(xiii) seek all governmental approvals (including,
to the maximum extent permitted by law, FCC approvals) required for the
operation of the business of such Pledgor; and
(xiv) in accordance with and to the extent
permitted by applicable law, generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Collateral Trustee were the absolute owner thereof
for all purposes, and do, at the Collateral Trustee's option and such Pledgor's
expense (including reasonable attorney's fees), at any time, or from time to
time, all acts and things which the Collateral Trustee deems necessary to
protect, preserve or realize upon the Collateral and the Collateral Trustee's
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Pledgor might do.
(b) If any Pledgor fails to perform or comply with any of
its agreements contained herein or with any condition contained in any of the
Contracts or the Leases, the Collateral Trustee, at its option, so long as no
First Lien Obligation Period exists but without any obligation so to do, may
perform or comply, or otherwise cause performance or compliance, with such
agreement.
(c) The expenses of the Collateral Trustee incurred in
connection with actions undertaken as provided in this Section 7.1 shall be
payable in accordance with the Indenture.
(d) Each Pledgor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof to the extent done or
caused to be done in accordance herewith.
7.2 Duties of Collateral Trustee. The Collateral Trustee's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall
be to deal with it in the same manner as the Collateral Trustee deals with
similar property for its own account.
(b) Neither the Collateral Trustee, any other Secured
Party nor any of its officers, directors, employees or agents shall be liable
for failure to demand, collect or realize upon any 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
37
Pledgor or any other Person or to take any other similar action whatsoever with
regard to the Collateral or any part thereof.
(c) The powers conferred on the Collateral Trustee
hereunder are solely to protect the interests of the Collateral Trustee for the
benefit of the Secured Parties in the Collateral and shall not impose any duty
upon the Collateral Trustee or any Secured Party to exercise any such powers.
Subject to Section 7.2(a), the Collateral Trustee and the other Secured Parties
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Pledgor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.
(d) Notwithstanding anything herein which may be
construed to the contrary, (i) no action shall be taken by the Collateral
Trustee in accordance with this Agreement which may require the consent or
approval of the FCC, and the proxy granted in Section 6.3(b) shall not become
effective, unless and until all requirements of applicable law, including
without limitation, any required approval, or any notification required to be
given, under the Communications Act have been satisfied and (ii) no action shall
be taken by the Collateral Trustee with respect to the FCC Licenses unless and
until an Event of Default exists and all requirements of applicable law,
including, without limitation, any required approval, or any notification
required to be given, under the Communications Act, have been satisfied.
7.3 Filing of Financing Statements. Each Pledgor authorizes the
Collateral Trustee to file or record financing statements, any amendments
thereto and other filing or recording documents or instruments with respect to
the Collateral without the signature of such Pledgor in such form and in such
offices as the Collateral Trustee reasonably determines appropriate to perfect
the security interests of the Collateral Trustee under this Agreement including,
without limitation, any financing statement describing the collateral as "all
assets," "all personal property" or any similar description. A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction to the extent permitted by law. In addition, each
Pledgor listed on Schedule 4.10 as of the date hereof or added to Schedule 4.10
pursuant to Section 1 of the form of Assumption Agreement attached hereto as
Annex I authorizes the Collateral Trustee upon filing or recording any financing
statement to indicate on such financing statement that such Pledgor is a
"transmitting utility" as such term is defined in Section 9-102(a)(80) of the
UCC and to file any addendum required to be attached thereto.
7.4 Authority of Collateral Trustee. Each Pledgor acknowledges
that the rights and responsibilities of the Collateral Trustee under this
Agreement with respect to any action taken by the Collateral Trustee or the
exercise or non-exercise by the Collateral Trustee of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Collateral Trustee and the
other Secured Parties, be governed by the Indenture and by such other agreements
with respect thereto as may exist from time to time among them,
38
but, as between the Collateral Trustee and the Pledgors, the Collateral Trustee
shall be conclusively presumed to be acting as agent for the Secured Parties
with full and valid authority so to act or refrain from acting, it being
understood that the Collateral Trustee shall be the only party entitled to
exercise remedies under this Agreement; and no Pledgor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
SECTION 8
MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by each affected Pledgor and the Collateral Trustee;
provided that (i) any provision of this Agreement imposing obligations on any
Pledgor may be waived by the Collateral Trustee in a written instrument executed
by the Collateral Trustee, (ii) any addition of any additional Pledgor pursuant
to Section 8.15 shall not require the consent of any Secured Party, (iii) the
updating or amending of the Schedules to this Agreement pursuant to the terms of
this Agreement (including, without limitation, pursuant to Section 8.16 hereof)
and (iv) any addition of any additional Secured Party pursuant to Section 8.18
shall not require the consent of the Collateral Trustee (except in the case of
clause (iv)) or any Secured Party.
8.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile or, subject to the last sentence of this
Section 8.2 by electronic mail and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made on the date of receipt,
addressed as follows in the case of the Collateral Trustee, and as set forth on
Schedule 8.2 in the case of the Pledgors, or to such other address as may be
hereafter notified by the respective parties hereto:
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Services
Fax: 000-000-0000
Any party hereto may change its address or facsimile number for notices
and other communications hereunder by notice to the other parties hereto.
Electronic mail and Internet and intranet websites may be used only to
distribute Collateral Documents for execution by the parties thereto, and may
not be used for any other purpose unless consented to by the Company and the
Collateral Trustee in writing prior to any applicable distribution, notice or
other communication.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. The
Collateral Trustee shall not by any act (except by a written instrument pursuant
to
39
Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of the
Collateral Trustee any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Collateral Trustee of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Collateral Trustee otherwise have on any
future occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Pledgor agrees
to pay, reimburse, indemnify and hold harmless the Collateral Trustee, to the
same extent and on the same terms that the Company is required to do so in
accordance with Section 6.07 of the Indenture.
(b) Each Pledgor agrees to pay, and to save the
Collateral Trustee harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
similar taxes which may be payable or determined to be payable with respect to
any of the Collateral or in connection with any of the transactions contemplated
by this Agreement.
(c) The agreements in this Section 8.4 shall survive
repayment of the Securities Obligations and all other amounts payable under the
Indenture and the other Secured Documents.
8.5 Successors and Assigns. The Pledgors agree that this Agreement
and the rights hereunder may in the discretion of the Secured Parties, or any of
them, as applicable, be assigned in whole or in part in connection with any
sale, transfer or other assignment of the Senior Secured Notes or the
Indebtedness evidenced thereby, as permitted under the Indenture. This Agreement
shall be binding upon the successors and assigns of each Pledgor and shall inure
to the benefit of the Collateral Trustee and the other Secured Parties and their
permitted successors and assigns; provided, that no Pledgor may assign, transfer
or delegate any of its rights or obligations under this Agreement without the
prior written consent of the Collateral Trustee and any purported assignment,
transfer or delegation in violation of this Section 8.5 shall be null and void.
8.6 Intentionally Omitted.
8.7 Counterparts; Binding Effect. This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. This
Agreement shall become effective as to any Pledgor when a counterpart hereof
executed on behalf of such Pledgor shall have been delivered to the Collateral
Trustee and a counterpart hereof shall have been executed on behalf of the
Collateral Trustee, and thereafter shall be binding upon such Pledgor and
40
the Collateral Trustee and their respective successors and assigns permitted
under Section 8.5, and shall inure to the benefit of such Pledgor, the
Collateral Trustee and their respective successors and assigns permitted under
Section 8.5.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Secured Documents
represent the agreement of the Pledgors, the Collateral Trustee and the other
Secured Parties with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the Collateral
Trustee or any other Secured Party relative to subject matter hereof and thereof
not expressly set forth or referred to herein or in the other Secured Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Pledgor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Secured Documents
to which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Pledgor at its address referred to in Section 8.2 or at such other address of
which the Collateral Trustee shall have been notified pursuant thereto;
41
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or consequential
damages.
8.13 Acknowledgments. Each Pledgor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Secured Documents to
which it is a party;
(b) neither the Collateral Trustee nor any other Secured
Party has any fiduciary relationship with or duty to any Pledgor arising out of
or in connection with this Agreement or any of the other Secured Documents, and
the relationship between the Pledgors, on the one hand, and the Collateral
Trustee and other Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Secured Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Pledgors and the Secured Parties.
8.14 WAIVER OF JURY TRIAL. EACH PLEDGOR AND THE COLLATERAL TRUSTEE
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
8.15 Additional Pledgors. Each Subsidiary of the Company that is
required to become a party to this Agreement pursuant to Section 10.21 of the
Indenture shall become a Pledgor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in
substantially the form of Annex I hereto. Upon the execution and delivery by any
Subsidiary of the Company of an Assumption Agreement, the supplemental schedules
attached to such Assumption Agreement shall be incorporated into and become a
part of and supplement the Schedules to this Agreement and each reference to
such Schedules shall mean and be a reference to such Schedules as supplemented
pursuant to each Assumption Agreement.
8.16 Releases. (a) The Collateral shall be released in whole from
the Liens created hereby in accordance with Section 13.03(b) of the Indenture
and, in part, in accordance with Section 13.03(c) of the Indenture.
8.17 Benefit of Secured Parties. All Liens granted or contemplated
hereby shall be for the benefit of the Collateral Trustee and the Secured
Parties, and all proceeds or payments realized from Collateral in accordance
herewith shall be applied to
42
the Securities Obligations in accordance with the terms of the Intercreditor
Agreement and the Indenture.
8.18 Amendment for New Parties. Upon the Incurrence of Pari Passu
Indebtedness secured by Liens permitted under clause (3) or (4) of the
definition of Permitted Liens ("Additional Second Lien Obligations"), the
holders of such Pari Passu Indebtedness or the trustee or agent on behalf of
such holders shall execute and deliver a joinder, amendment or supplement to
this Agreement to provide that the new holder(s) (and/or the trustee or agent
for such holder(s)) shall be "Secured Parties" hereunder, which joinder,
amendment or supplement may provide for the appointment of the Collateral
Trustee as agent for such holder(s) and/or provide for the grant of a security
interest in the Collateral by the Pledgors in form and substance reasonably
satisfactory to the Collateral Trustee. Upon the execution and delivery by such
holder(s) (or trustee or agent) and the other parties thereto of such joinder,
amendment or supplement, such holder(s) shall become a "Secured Party" hereunder
with the same force and effect as if it were originally a party to this
Agreement and named as a "Secured Party" herein. The execution and delivery of
such joinder, amendment or supplement shall not require the consent of any other
Secured Party hereunder (other than the Collateral Trustee), and the rights and
obligations of each Secured Party hereunder shall remain in full force and
effect notwithstanding the addition of any new Secured Party as a party to this
Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused this Collateral
Agreement to be duly executed and delivered as of the date first above written.
RURAL CELLULAR CORPORATION
By: _________________________________
Name:
Title:
RCC MINNESOTA, INC.
By: _________________________________
Name:
Title:
RCC HOLDINGS, INC.
By: _________________________________
Name:
Title:
BMCT EQUIPMENT COMPANY, L.L.C.
By: _________________________________
Name:
Title:
FERRY EQUIPMENT COMPANY, L.L.C.
By: _________________________________
Name:
Title:
RCC PAGING, INC.
By: _________________________________
Name:
Title:
RGI GROUP, INC.
By: _________________________________
Name:
Title:
TLA SPECTRUM, LLC
By: _________________________________
Name:
Title:
RCC NETWORK, INC.
By: _________________________________
Name:
Title:
RCC TRANSPORT, INC.
By: _________________________________
Name:
Title:
RCC ATLANTIC LONG DISTANCE, INC.
By: _________________________________
Name:
Title:
RCC ATLANTIC, INC.
By: _________________________________
Name:
Title:
ALEXANDRIA INDEMNITY
CORPORATION
By: _________________________________
Name:
Title:
AGREED AND ACCEPTED
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Trustee
By: ______________________________
Name:
Title:
Schedule 4.2
FILINGS REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]
Sched. 4.2 - Page 1
Schedule 4.3
JURISDICTION OF ORGANIZATION AND LOCATION OF CHIEF
EXECUTIVE OFFICE
Location of Chief
Pledgor Jurisdiction Executive Office
------- ------------ -----------------
Sched. 4.3 - Page 1
Schedule 4.4
INVENTORY AND EQUIPMENT
Debtor State
------ -----
Sched. 4.4 - Page 1
Schedule 4.5
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
Registered Stock Number and Class of Percentage of
Owner Issuer Certificate No. Shares Equity Interest
---------- ------ --------------- ------------------- ---------------
PLEDGED NOTES:
Date of Maturity
Issuer Payee Principal Amount Note Date
------ ----- ---------------- ------- --------
Sched. 4.5 - Page 1
Schedule 4.7
COPYRIGHTS AND COPYRIGHT LICENSES OWNED BY [NAME OF PLEDGOR]
[Make a separate page of Schedule 4.7 for each Pledgor and state if no
copyrights are owned. List in numerical order by Registration No.]
U.S. Copyright Registrations
Title Reg. No. Author
----- -------- ------
Pending U.S. Copyright Applications for Registration
Title Author Class Date Filed
----- ------ ----- ----------
Copyright Licenses
Jurisdiction Licensor Licensee Description of License
------------ -------- -------- ----------------------
PATENTS AND PATENT LICENSES OWNED BY [NAME OF PLEDGOR]
[Make a separate page of Schedule 4.7 for each Pledgor and state if no patents
are owned. List in numerical order by Patent No./Patent Application No.]
U.S. Patent Registrations
Patent Numbers Issue Date
-------------- ----------
Sched. 4.7 - Page 1
U.S. Patent Applications
Patent Application No. Filing Date
---------------------- -----------
Patent Licenses
Jurisdiction Licensor Licensee Description of License
------------ -------- -------- ----------------------
Sched. 4.7 - Page 2
TRADEMARK, TRADEMARK LICENSES AND TRADE NAMES OWNED BY
[NAME OF PLEDGOR]
[Make a separate page of Schedule 4.7 for each Pledgor and state if no
trademarks/trade names are owned. List in numerical order by Trademark
Registration/Application no.]
U.S. Trademark Registrations
Xxxx Reg. Date Reg. No.
---- --------- --------
U.S. Trademark Applications
Xxxx Filing Date Application No.
---- ----------- ---------------
State Trademark Registrations
[List in alphabetical order by state/numerical order by Registration no. within
each state]
State Xxxx Reg. Date Reg. No.
----- ---- --------- --------
State Trademark Applications
[List in alphabetical order by state/numerical order by Application no. within
each state]
State Xxxx Reg. Date Reg. No.
----- ---- --------- --------
Trademark Licenses
Jurisdiction Xxxx Licensor Licensee
------------ ---- -------- --------
Sched. 4.7 - Page 3
Trade Names
Country(s) Where Used Trade Names
--------------------- -----------
Sched. 4.7 - Page 4
Schedule 4.8
DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS
Sched. 4.8 - Page 1
Schedule 4.9
FCC LICENSES
Sched. 4.9 - Page 1
Schedule 4.10
TRANSMITTING UTILITIES
Sched. 4.10 - Page 1
Schedule 4.11
COMMERCIAL TORT CLAIMS
Sched. 4.11 - Page 1
Schedule 4.12
LETTER-OF-CREDIT RIGHTS
Sched. 4.12 - Page 1
Schedule 8.2
NOTICE ADDRESSES OF PLEDGORS
Name Address
---- -------
Sched. 8.2 - Page 1
ANNEX I TO
COLLATERAL AGREEMENT
ASSUMPTION AGREEMENT, dated as of ________________, 200_ (this
"Assumption Agreement"), made by ______________________________, a
______________ (the "Additional Pledgor"), in favor of ___________________, as
Collateral Trustee for the benefit of the Secured Parties. All capitalized terms
not defined herein shall have the meaning ascribed to them in the Collateral
Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, the Company, the other Pledgors and U.S. Bank National
Association, as trustee, have entered into an Indenture, dated as of March 25,
2004 (as amended, supplemented or otherwise modified from time to time, the
"Indenture");
WHEREAS, in connection with the Indenture, the Company and certain of
its Subsidiaries (other than the Additional Pledgor) have entered into the
Collateral Agreement, dated as of March 25, 2004 (as amended, supplemented or
otherwise modified from time to time, the "Collateral Agreement") in favor of
the Collateral Trustee for the benefit of the Secured Parties;
WHEREAS, the Indenture requires the Additional Pledgor to become a
party to the Collateral Agreement; and
WHEREAS, the Additional Pledgor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Pledgor, as provided in Section 8.15 of the
Collateral Agreement, hereby becomes a party to the Collateral Agreement as a
Pledgor thereunder with the same force and effect as if originally named therein
as a Pledgor and, without limiting the generality of the foregoing, hereby
expressly assumes all obligations and liabilities of a Pledgor thereunder. In
furtherance of the foregoing, the Additional Pledgor, as security for the
payment and performance in full of the Securities Obligations, does hereby
create and grant to the Collateral Trustee, its successors and assigns, for the
benefit of the other Secured Parties a security interest in all of the
Additional Pledgor's right, title and interest in and to the Collateral of the
Additional Pledgor. Each reference to a "Pledgor" or a "Guarantor" in the
Collateral Agreement shall be deemed to include the Additional Pledgor. The
Collateral Agreement is hereby incorporated herein by reference. The information
set forth in Annex 1-A hereto (A) is true and correct as of the date hereof in
all material respects and (B) is hereby added to
Page 1
the information set forth in Schedules ____________(1) to the Collateral
Agreement and the Schedules shall be deemed so amended. The Additional Pledgor
hereby represents and warrants that [(i)] each of the representations and
warranties contained in Section 4 of the Collateral Agreement applicable to it
is true and correct on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date [and, (ii) that it is
not a person primarily engaged in the business of transmitting communications
electrically, electromagnetically or by light].(2)
2. Intercreditor Agreement. By executing and delivering this
Assumption Agreement, the Additional Pledgor, as provided in Section 1.1 of the
Intercreditor Agreement, hereby becomes a party to the Intercreditor Agreement
with the same force and effect as if originally named therein as a party thereto
and, without limiting the generality of the foregoing, hereby expressly assumes
all obligations applicable to it thereunder.
3. Representations of Additional Pledgor. The Additional Pledgor
represents and warrants to the Collateral Trustee for the benefit of the Secured
Parties that this Assumption Agreement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
4. Counterparts; Binding Effect. This Assumption Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
taken together shall constitute a single contract. This Assumption Agreement
shall become effective when (a) the Collateral Trustee shall have received a
counterpart of this Assumption Agreement that bears the signature of the
Additional Pledgor and (b) the Collateral Trustee has executed a counterpart
hereof. Delivery of an executed counterpart of a signature page of this
Assumption Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Assumption Agreement.
5. Full Force and Effect. Except as expressly supplemented
hereby, the Collateral Agreement shall remain in full force and effect.
6. Severability. Any provision of this Assumption Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability in
such jurisdiction of the remaining provisions
------------------
(1) Refer to each Schedule which needs to be supplemented.
(2) If the Additional Pledgor is a "Transmitting Utility," delete this
sub-clause and add such Additional Pledgor to Schedule 4.10.
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hereof and of the Collateral Agreement; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
7. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 8.2 of the Collateral Agreement. All
communications and notices hereunder to the Additional Pledgor shall be given to
it at the address set forth under its signature below.
8. Fees and Expenses. The Additional Pledgor agrees to reimburse
the Collateral Trustee for its reasonable out-of-pocket expenses in connection
with the extension and delivery of this Assumption Agreement, including the
reasonable fees and disbursements of outside counsel for the Collateral Trustee.
9. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
Page 3
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL PLEDGOR]
By: ______________________________
Name:
Title:
AGREED TO AND ACCEPTED
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Trustee
By: _____________________________
Name:
Title:
Page 4
COLLATERAL AGREEMENT
made by
RURAL CELLULAR CORPORATION
and
the other Pledgors named herein
in favor of
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Trustee
Dated as of March 25, 2004
TABLE OF CONTENTS
Page
----
SECTION 1 DEFINED TERMS............................................................. 2
1.1 Definitions........................................................... 2
1.2 Other Definitional Provisions......................................... 11
SECTION 2 INTERCREDITOR AGREEMENT................................................... 11
SECTION 3 GRANT OF SECURITY INTEREST................................................ 11
3.1 Grant of Security Interest............................................ 11
3.2 Exclusions............................................................ 13
SECTION 4 REPRESENTATIONS AND WARRANTIES............................................ 14
4.1 Title; No Other Liens................................................. 14
4.2 Perfected Second Priority Liens....................................... 14
4.3 Jurisdiction of Organization; Chief Executive Office.................. 15
4.4 Inventory and Equipment............................................... 15
4.5 Pledged Securities.................................................... 15
4.6 Receivables........................................................... 16
4.7 Intellectual Property................................................. 16
4.8 Deposit Accounts; Securities Accounts................................. 16
4.9 FCC Licenses.......................................................... 16
4.10 Transmitting Utility.................................................. 17
4.11 Commercial Tort Claims................................................ 17
4.12 Letter-of-Credit Rights............................................... 17
4.13 Material Collateral................................................... 17
SECTION 5 COVENANTS................................................................. 17
5.1 Covenants in Indenture................................................ 17
5.2 Delivery of Instruments and Chattel Paper............................. 17
5.3 Intentionally Omitted................................................. 18
5.4 Maintenance of Perfected Security Interest; Further Documentation..... 18
5.5 Changes in Locations, Name, etc....................................... 18
5.6 Notices............................................................... 18
5.7 Pledged Securities; Securities Accounts; Deposit Accounts............. 18
5.8 Receivables........................................................... 20
5.9 Intellectual Property................................................. 21
5.10 Electronic Chattel Paper and Transferable Records..................... 22
5.11 FCC Compliance........................................................ 22
5.12 Letter-of-Credit Rights............................................... 22
5.13 Commercial Tort Claims................................................ 23
5.14 Alexandria Regulatory Reserve Account................................. 23
5.15 License-Only Subsidiaries............................................. 23
5.16 Permitted Control Agreement........................................... 26
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TABLE OF CONTENTS
(Continued)
Page
----
5.17 Insurance............................................................. 27
5.18 Real Estate........................................................... 28
SECTION 6 REMEDIAL PROVISIONS....................................................... 28
6.1 Certain Matters Relating to Receivables............................... 28
6.2 Communications with Obligors; Pledgors Remain Liable.................. 29
6.3 Pledged Securities.................................................... 30
6.4 Proceeds to be Turned Over to Collateral Trustee...................... 31
6.5 Application of Proceeds............................................... 31
6.6 Code and Other Remedies............................................... 32
6.7 Private Sale.......................................................... 33
6.8 Deficiency............................................................ 33
6.9 Grant of License to Use Intellectual Property......................... 33
6.10 Bankruptcy............................................................ 34
6.11 Changes in Applicable Law............................................. 34
SECTION 7 THE COLLATERAL TRUSTEE.................................................... 34
7.1 Collateral Trustee's Appointment as Attorney-in-Fact, etc............. 34
7.2 Duties of Collateral Trustee.......................................... 36
7.3 Filing of Financing Statements........................................ 37
7.4 Authority of Collateral Trustee....................................... 37
SECTION 8 MISCELLANEOUS............................................................. 38
8.1 Amendments in Writing................................................. 38
8.2 Notices............................................................... 38
8.3 No Waiver by Course of Conduct; Cumulative Remedies................... 38
8.4 Enforcement Expenses; Indemnification................................. 39
8.5 Successors and Assigns................................................ 39
8.6 Intentionally Omitted................................................. 39
8.7 Counterparts; Binding Effect.......................................... 39
8.8 Severability.......................................................... 40
8.9 Section Headings...................................................... 40
8.10 Integration........................................................... 40
8.11 GOVERNING LAW......................................................... 40
8.12 Submission To Jurisdiction; Waivers................................... 40
8.13 Acknowledgments....................................................... 41
8.14 WAIVER OF JURY TRIAL.................................................. 41
8.15 Additional Pledgors................................................... 41
8.16 Releases.............................................................. 41
8.17 Benefit of Secured Parties............................................ 41
8.18 Amendment for New Parties............................................. 42
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TABLE OF CONTENTS
(Continued)
SCHEDULES
4.2 - Filings Required To Perfect Security Interests
4.3 - Jurisdiction of Organization and Location of Chief Executive Office
4.4 - Inventory and Equipment
4.5 - Description of Pledged Securities
4.7 - Intellectual Property
4.8 - Deposit Accounts and Securities Accounts
4.9 - FCC Licenses
4.10 - Transmitting Utilities
4.11 - Commercial Tort Claims
4.12 - Letter-of-Credit Rights
8.2 - Notice Addresses of Pledgors
ANNEXES
I - Form of Assumption Agreement
EXHIBIT
Exhibit A - Form of Existing Control Agreement
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