EXHIBIT 10.30
FORM
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of October __, 2002 (as amended,
supplemented or otherwise modified from time to time, this "SECURITY
AGREEMENT"), among FLAG ASIA LIMITED, a corporation organized under the laws of
Bermuda (the "DEBTOR/PAYOR"), FLAG TELECOM ASIA LIMITED, a corporation organized
under the laws of Hong Kong ("FLAG TELECOM ASIA"), FLAG TELECOM TAIWAN LIMITED,
a corporation organized under the laws of the Republic of China ("FLAG TELECOM
TAIWAN") and FLAG TELECOM JAPAN LIMITED, a corporation organized under the laws
of Japan ("FLAG TELECOM JAPAN") (Flag Telecom Asia, FLAG Telecom Taiwan, and
Flag Telecom Japan, collectively the "RELATED OPERATING COMPANIES"), AND EACH
ADDITIONAL PARTY THAT BECOMES A GRANTOR HERETO PURSUANT TO SECTION 25 HEREOF
(the Debtor/Payor, the Related Operating Companies and each Additional Grantor,
together with their respective successors and assigns, collectively "GRANTORS"
and individually as a "GRANTOR"), and WILMINGTON TRUST COMPANY, a Delaware
banking corporation (the "COLLATERAL AGENT"), on behalf of and as collateral
agent for itself and xxx ("xxxx" and, together with the Collateral Agent and any
co-collateral agent appointed pursuant to SECTION 27 hereof, the "SECURED
PARTIES").
W I T N E S S T H:
WHEREAS, pursuant to that certain Senior Secured Note, dated as of the
date hereof, issued by the Debtor/Payor in favor of xxxx and its successors and
permitted assigns (including all annexes, exhibits and schedules thereto, as
from time to time amended, restated, supplemented or otherwise modified,
collectively, the "SENIOR NOTE"), the Debtor/Payor has agreed, for good and
valuable consideration (the receipt of which is hereby acknowledged by
Debtor/Payor), to unconditionally pay the amounts specified therein; and
WHEREAS, in order to induce the Secured Parties to accept the Senior
Note and other Loan Documents (as hereinafter defined), the Grantors have agreed
to grant a continuing first priority perfected Security Interest (as hereinafter
defined) on the Collateral (as hereinafter defined) to secure all of the Secured
Obligations (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS. All capitalized terms used but not otherwise
defined herein (including in the preamble and recitals hereof) have the meanings
given to them in the Senior Note. All other terms contained in this Security
Agreement, unless the context indicates otherwise, have the meanings provided
for by the Code (as hereinafter defined) to the extent the same are used or
defined therein.
(a) "ACCESS RIGHTS" means all ownership, easement, wayleave and/or
other property rights, from both private and governmental entities, both on land
and below the surface of the water (including, without limitation, agreements to
use bore pipes, conduits and ducts, and to install manholes) necessary (x) to
access, use and occupy Cable Buildings (including, without limitation, to land
and install the submarine cables and related equipment and to bring such cables
from the ocean to the Cable Stations) and (y) to establish, maintain and operate
interconnections and backhaul connections.
(b) [Intentionally Omitted.]
(c) "AFFILIATE" of any particular Person means any other Person
that directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such particular Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise. A Person
shall be deemed to control a corporation if such Person possesses, directly or
indirectly, the power (i) to vote 10% or more of the securities having ordinary
voting power for the election of directors (or equivalent managers) of such
corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise; PROVIDED, HOWEVER, that notwithstanding
any ownership of any securities of any Grantor, neither Secured Party nor any of
its Affiliates shall be deemed to be Affiliates of any Grantor.
(d) "CABLE BUILDING" means (i) each building in Hong Kong, Japan,
Korea and Taiwan in which a Cable Station is located; (ii) all associated Access
Rights; (iii) building infrastructure equipment necessary for the provision of
power, air conditioning, fire suppressant, security and access control, and
other related facilities as more fully set forth in, and contemplated by,
EXHIBIT J of the Submarine Cable System Development Agreement; and (iv) the land
under and around each building as described in (i) above.
(e) "CABLE STATION" means that portion of Grantors' right, title
and interest in and to the Net Technical Space in each Cable Building which
supports the FNAL System, together with the land, building, infrastructure
equipment such as air conditioning, pipes and electrical cables, ducts, bores
and manholes necessary to support and access such Net Technical Space.
(f) "CODE" means the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of New York; PROVIDED, that
to the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; PROVIDED, FURTHER, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment,
perfection or priority of, or remedies with respect to, Collateral Agent's or
any of its successors or assigns' Security Interests in any Collateral is
governed by the Uniform Commercial Code (or other similar law) as enacted and in
effect from time to time in a jurisdiction other than the State of New York, the
term "CODE" shall mean the Uniform Commercial Code (or other similar law) as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority or remedies
and for purposes of definitions related to such provisions.
(g) [Intentionally Omitted.]
(h) [Intentionally Omitted.]
(i) "FNAL FIBER PAIR" means one of the lit Debtor/Payor fiber
pairs which forms a continuous loop across the NACS and FWACS Systems connecting
the Cable Stations in Tong Fuk, Hong Kong, Wada, Japan, Pusan, Korea and
Toucheng, Taiwan, in accordance with the technical design specification of the
FNAL System (collectively, the "FIBER PAIR"), equipped with 4 + 1 wavelengths of
initial capacity and, including without limitation: (i) all associated in-line
optical components (e.g., amplifiers and filters) relevant to the Fiber Pair;
(ii) the SLTE at each Cable Station relating to the Fiber Pair, including,
without limitation, all components of the associated tributary equipment,
including, without limitation, 2 racks containing 4 tributary subracks, 4 racks
containing the common parts of the SLTEs, 1 rack containing the protection
tributary subrack and switching system, and all boards implemented in the racks,
and all engineering order wire relating solely to the Fiber Pair and
corresponding to any of the 2 Mbit/s channel inserted in the 10 Gbit/s signal
for operation and maintenance purposes.
(j) "FNAL O&M PLAN" means the manual which details the
responsibilities, methods and procedures to be employed for the operation and
maintenance of the FNAL System and which is included as Exhibit Q to the
Submarine Cable System Development Agreement.
(k) "FNAL SYSTEM" means the multi-terabit intra-Asia submarine
cable system integrating the FWACS System and the NACS Systems including without
limitation, and as more fully set forth in the FWACS Contract, the NACS Contract
and the Submarine Cable System Development Agreement, the following elements:
(i) the NACS System, (ii) the FWACS System, (iii) any equipment, software,
systems or infrastructure necessary for the integration of the NACS System and
the FWACS System, as described more fully in, and contemplated by, Exhibit A of
the Submarine Cable System Development Agreement, (iv) any Network Operations
Center assets provided by the NACS Contract or the FWACS Contract, and (v) all
upgrades or contract variances made pursuant to the FWACS Contract or NACS
Contract at any time and from time to time.
(l) "FWACS CONTRACT" means that certain Amended and Restated
Contract, dated as of October __, 2002, between FLAG Asia Limited, xxxx, Reach
Cable Networks Limited and Reach Networks KK, for the FLAG West Asia Cable
System.
(m) "FWACS SYSTEM" means the fiber optic cable system as
contemplated by the FWACS Contract, including without limitation, and as more
fully set forth in the FWACS Contract, (i) an undersea fiber optic cable system
from Wada, Japan to Pusan, Korea interlinked with an undersea fiber optic cable
system from Pusan, Korea to Tong Fuk (Hong Kong), China (ii) Cable Stations in
Hong Kong, Korea and Japan, and (iii) all related facilities in Hong Kong, Korea
and Japan, necessary for the landing of the submarine cable into the Cable
Stations, including, without limitation, (x) all directional bores, ducts and
other bore holes that connect the submarine cable to the relevant Cable Station
and (y) all beach manholes.
(n) "GOVERNMENTAL AUTHORITY" means any supranational, national,
federal, state, regional or local government or governmental authority charged
with the administration, interpretation or enforcement of any applicable law.
(o) "INTELLECTUAL PROPERTY" means any and all patents, copyrights
and trademarks (including any and all licenses for each of the foregoing)
required for the operation of the FNAL Fiber Pair.
(p) [Intentionally Omitted.]
(q) "NACS CONTRACT" means that certain Amended and Restated
Construction Contract, dated as of October __, 2002, between FLAG Asia Limited,
xxxx, Fujitsu Limited, Reach Cable Networks Limited and Reach Networks KK for
the North Asia Cable System.
(r) "NACS SYSTEM" means the optical fiber cable system as
contemplated by the NACS Contract, including, without limitation, and as more
fully set forth in the NACS Contract, (i) an undersea fiber optic cable segment
from Wada, Japan to Tong Fuk (Hong Kong), China, with a submersible branching
unit to the east of Taiwan, (ii) a second in-line branching unit to the east of
Taiwan, within one repeater span of the first branching unit, (iii) an installed
capacity of 2 x 40 Gbps plus 1 x 80 Gbps, (iv) a dual submarine connection from
the two branching units into a Cable Station in North Taiwan, (v) Cable Stations
in Hong Kong, Taiwan and Japan and (vi) all related facilities in Hong Kong,
Taiwan and Japan necessary for the landing of the submarine cable into the Cable
Stations, including, without limitation, (x) all directional bores, ducts and
other bore holes which connect the submarine cable to the relevant Cable Station
and (y) all beach manholes.
(s) "NET TECHNICAL SPACE" means the amount of space in each Cable
Building allocated to the FNAL System and which is suited for the location and
operation of fully supported telecommunications equipment, exclusive of any
infrastructure
equipment necessary to support such telecommunications equipment and the space
required to house any such infrastructure equipment.
(t) "NETWORK OPERATIONS CENTER" means all operation and maintenance
center equipment located in, or linked externally to a submarine terminal
station, including, without limitation, (i) all element management applications
and (ii) all Software monitoring or supervising the FNAL System.
(u) [Intentionally Omitted.]
(v) [Intentionally Omitted.]
(w) "PERSON" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, a governmental entity or any
department, agency or political subdivision thereof and any other entity.
(x) "PROCEEDS" means "proceeds," as such term is defined in the
Code, including (i) any and all proceeds of any insurance, indemnity, warranty
or guaranty payable to any Grantor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to any Grantor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any Governmental Authority (or any Person acting under color of
governmental authority), (iii) subject to the provisions of the Code relating to
commercial tort claims, any recoveries by any Grantor against third parties with
respect to any litigation or dispute concerning any of the Collateral including
claims arising out of the loss or nonconformity of, interference with the use
of, defects in, or infringement of rights in, or damage to, the Collateral, and
(iv) any and all other amounts, rights to payment or other property acquired
upon the sale, lease, license, exchange or other disposition of the Collateral
and all rights arising out of the Collateral.
(y) "PROCESS AGENT" means CT Corporation Systems.
(z) "SECURED OBLIGATIONS" means all of the Debtor/Payor's
obligations under the Senior Note and this Security Agreement.
(aa) "SECURITY INTERESTS" means the Liens in and the charges (fixed
or floating, as the case may be) over the Collateral granted hereunder securing
the Secured Obligations.
(bb) "SETTLEMENT AGREEMENT" means that certain Settlement
Agreement, dated as of October __, 2002, and effective as of May 16, 2002, by
and among (i) all of the Debtors, including without limitation FLAG Telecom
Holdings Limited and FLAG Asia Limited, (ii) Reach, Ltd., Reach Cable Networks
Limited and Reach Networks KK, and (iii) xxxx.
(cc) "SHARED PROPERTY" means the undivided ownership interest of
Debtor/Payor and/or Grantors in the assets set forth in Schedule 2.2 of the
Submarine Cable System Development Agreement, as in effect on the date hereof.
(dd) "SLTE" means submarine line terminating equipment as
contemplated by and described more fully in Volume 2, Technical Book 1,
Section 4.6 of the Supply Contract for the Flag North Asian Loop Cable System,
including, without limitation, each SLTE associated with the FNAL Fiber Pair
with factory inventory identifiers: SLT HKG S2F2, SLT PUS S2F2, SLT PUS S1F2 and
SLT WDA S1F2.
(ee) "SOFTWARE" means all "software" as such term is defined in the
Code, now owned or hereafter acquired by any Grantor, and necessary and
exclusively used for the delivery, installation, construction, commissioning,
operation or maintenance of the FNAL Fiber Pair and which is not owned or
licensed from xxxx.
(ff) "SUBMARINE CABLE SYSTEM DEVELOPMENT AGREEMENT" means the
agreement dated as of December 29, 2000, as amended and restated as of May 16,
2002, by and among the Debtor/Payor, Reach Cable Networks Limited and Reach
Networks KK, as amended from time to time.
(gg) [Intentionally Omitted.]
(hh) "TERMINATION DATE" means the date on which all Secured
Obligations are indefeasibly paid in full, in cash to the Secured Parties (or
any other Holder(s) of the Senior Note as the case may be).
(ii) [Intentionally Omitted.]
(jj) [Intentionally Omitted.]
(kk) "UNIFORM COMMERCIAL CODE JURISDICTION" means any jurisdiction
that had adopted all or substantially all of Article 9 as contained in the 2000
Official Text of the Uniform Commercial Code, as recommended by the National
Conference of Commissioners on Uniform State Laws and the American Law
Institute, together with any subsequent amendments or modifications to the
Official Text.
2. GRANT OF LIEN.
(a) To secure the prompt and complete payment, performance and
observance of all of the Secured Obligations, each Grantor hereby grants,
assigns, conveys, mortgages, pledges, hypothecates and transfers to Collateral
Agent, for the benefit of the Secured Parties, a first priority continuing
Security Interest upon all of its right, title and interest in the following
(all of which being hereinafter collectively referred to as the "COLLATERAL"):
(i) the FNAL Fiber Pair, regardless of where located;
(ii) a one third (1/3) interest in the Shared Property;
(iii) the Access Rights;
(iv) the Software;
(v) a one third (1/3) undivided interest in the Cable
Stations;
(vi) to the extent not otherwise included and for the
purpose of enabling the Secured Parties to realize upon the commercial
exploitation of the FNAL Fiber Pair and/or exercise their rights and
remedies under SECTION 7 hereof (including, without limiting the terms of
SECTION 7 hereof, in order to take possession of, operate, hold, preserve,
process, prepare for sale, market for sale, sell or otherwise dispose of
the Collateral as permitted herein or pursuant to applicable law,) at such
time as Collateral Agent shall be lawfully entitled to exercise such rights
and remedies, each Grantor hereby grants its Collateral Agent, for the
benefit of the Secured Parties, a Security Interest in all other property
or assets owned or leased by such Grantor necessary to effectuate the
foregoing; and
(vii) to the extent not otherwise included, all Proceeds,
insurance claims and other rights to payments not otherwise included in the
foregoing and products of the foregoing and all accessions to,
substitutions and replacements for, and rents and profits of, each of the
foregoing.
(b) The foregoing grant of a Security Interest shall not include
any service operator licenses or licenses granted by any governmental agency.
(c) The Security Interests are granted as security only and such
grant shall not subject the Secured Parties, or any of the Secured Parties'
successors or assigns to, or transfer or in any way affect or modify, any
obligation of any of the Grantors, with respect to any of the Collateral or any
transaction connected therewith.
(d) To secure the prompt and complete payment, performance and
observance of the Secured Obligations and in order to induce the Secured Parties
as aforesaid, each Grantor hereby grants to Collateral Agent a right of setoff
against the property of such Grantor held by Collateral Agent consisting of
property described above in SECTION 2(a) now or hereafter in the possession or
custody of or in transit to Collateral Agent, for any purpose, including
safekeeping, collection or pledge, for the account of such Grantor, or as to
which such Grantor may have any right or power.
(e) For the purpose of enabling Collateral Agent to exercise
rights and remedies under SECTION 7 hereof (including, without limiting the
terms of SECTION 7
hereof, in order to take possession of, operate, hold, preserve, process,
prepare for sale, market for sale, sell or otherwise dispose of the Collateral)
at such time as Collateral Agent shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants to Collateral Agent, for the
benefit of the Secured Parties, an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to such Grantor)
to use, license or sublicense any Intellectual Property wherever the same may be
located, and including in such license 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; PROVIDED that such
license shall allow the Collateral Agent to use the Intellectual Property solely
for purposes directly related to the maintenance, exploitation, and sale of the
Collateral and for no other purpose.
3. COLLATERAL AGENT'S RIGHTS; LIMITATIONS ON COLLATERAL AGENT'S
OBLIGATIONS.
(a) Collateral Agent shall not have any obligation or liability
with respect to any Collateral by reason of or arising out of this Security
Agreement or the granting herein of the Security Interests. Collateral Agent
shall not be required or obligated in any manner to perform or fulfill any of
the obligations of any Grantor under or with respect to any Collateral, or to
make any payment, or to make any inquiry as to the nature or the sufficiency of
any payment received by it or the sufficiency of any performance by any party
with respect to any Collateral.
(b) The Secured Parties shall during normal business hours and, so
long as no Event of Default has occurred, upon prior notice of five (5) Business
Days have full access to the Cable Buildings and/or Cable Stations for the
inspection of the Collateral, subject to the safety, security and access control
procedures established in the FNAL O&M Plan and, at the option of any Grantor or
Reach shall be accompanied by a representative of any Grantor or Reach.
4. REPRESENTATIONS AND WARRANTIES. Subject to the limitations
imposed by the Existing Cases and certain insolvency proceedings in Bermuda and
the resultant fact that their activities are subject to approval of the United
States Bankruptcy Court and the Supreme Court of Bermuda and the supervision and
oversight of the applicable joint provisional liquidators; PROVIDED, HOWEVER,
that the foregoing limitations shall cease to be applicable on and after the
earlier to occur of (i) the Plan Effective Date and (ii) October 31, 2002, each
Grantor, severally and not jointly, represents and warrants that:
(a) Each Grantor has rights in and the power to transfer each item
of the Collateral upon which it purports to grant a Security Interest hereunder
free and clear of any and all Liens other than Permitted Liens.
(b) No effective security agreement, financing statement,
equivalent security or Security Interest instrument or continuation statement
covering all or any part
of the Collateral is on file or of record in any public office, except such as
may have been filed (i) by any Grantor in favor of Collateral Agent pursuant to
this Security Agreement or the other Loan Documents and (ii) in connection with
any Permitted Lien.
(c) This Security Agreement is effective to create a valid and
continuing Security Interest on and, upon the filing of the appropriate
financing statements listed on SCHEDULE I hereto, a perfected Security Interest
in favor of Collateral Agent on the Collateral with respect to which a Security
Interest may be perfected by filing pursuant to the Code. Such Security Interest
is prior to all other Liens, except Permitted Liens or as otherwise expressly
provided by applicable law, if any, that would be prior to Security Interests in
favor of Collateral Agent, and is enforceable as such as against any and all
creditors of and purchasers from any Grantor (other than purchasers and lessees
of inventory or telecommunications or network services in the ordinary course of
business). Subject to the penultimate sentence of Section 5 of the Secured Note,
all action by any Grantor necessary or reasonably desirable to protect and
perfect such Security Interest on each item of the Collateral in accordance with
the terms hereof will be taken no later than December 31, 2002.
(d) Each Grantor's name as it appears in official filings in the
state or country (if not organized under the laws of any state of the United
States) of its incorporation or other organization, the type of entity of each
Grantor (including corporation, partnership, limited partnership or limited
liability company), organizational identification number issued by each
Grantor's state or country of incorporation or organization or a statement that
no such number has been issued, each Grantor's state of organization or
incorporation, the location of each Grantor's principal place of business, all
premises or locations where the Collateral is stored or located, and the
locations of its books and records concerning the Collateral are set forth on
SCHEDULE II hereto. Each Grantor has only one state or country of incorporation
or organization.
(e) The FNAL Fiber Pair is a lit fiber pair.
(f) As of the date hereof, excluding Flag Telecom Asia and Flag
Telecom Japan, no Affiliate or Subsidiary of Debtor/Payor has any ownership
rights or interests in the Collateral.
(g) As of the date hereof, there is no Intellectual Property owned
by the Grantors which is material to the operation of the FNAL Fiber Pair.
5. COVENANTS. Each Grantor, severally and not jointly, covenants
and agrees that, for the benefit of Collateral Agent and Secured Parties, from
and after the date of this Security Agreement and until the Termination Date:
(a) FURTHER ASSURANCES.
(i) At any time and from time to time, upon the written
request of Collateral Agent, and at the sole expense of the Grantors, each
Grantor shall promptly and duly execute and deliver any and all such
further instruments and documents and take such further actions as
Collateral Agent may reasonably deem desirable to obtain the full benefits
of this Security Agreement and of the rights and powers herein granted,
including (A) using its commercially reasonable efforts to secure all
consents and approvals necessary or appropriate to enforce the Security
Interests granted hereunder; and (B) filing any financing or continuation
statements under the Code with respect to the Security Interests granted
hereunder or under any other Loan Document as to those jurisdictions that
are not Uniform Commercial Code Jurisdictions.
(ii) Each Grantor hereby irrevocably authorizes Collateral
Agent or Secured Parties at any time and from time to time to file in any
filing office in any Uniform Commercial Code Jurisdiction any initial
financing statements and amendments thereto that (A) indicate the
Collateral and (B) contain any other information required by part 5 of
Article 9 of the Code for the sufficiency or filing office acceptance of
any financing statement or amendment, including (1) whether such Grantor is
an organization, the type of organization and any organization
identification number issued to such Grantor, and (2) in the case of a
financing statement filed as a fixture filing, a sufficient description of
real property to which the Collateral relates. Each Grantor agrees to
furnish any such information to Collateral Agent promptly upon reasonable
request. To the extent they relate to the Collateral, each Grantor also
ratifies its authorization for Collateral Agent to have filed in any
Uniform Commercial Code Jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.
(iii) Each Grantor shall promptly, and in any event within
ten (10) Business Days after the same is acquired by it, notify Collateral
Agent of any commercial tort claim (as defined in the Code) with respect to
the FNAL Fiber Pair acquired by it and unless otherwise consented by
Collateral Agent, such Grantor shall enter into a supplement to this
Security Agreement, granting to Collateral Agent a Security Interest on
such commercial tort claim.
(b) MAINTENANCE OF RECORDS. Grantors shall keep and maintain, at
their own cost and expense, satisfactory and complete records of the Collateral,
consistent with industry standards and practices. Grantors shall xxxx their
books and records pertaining to the Collateral to evidence this Security
Agreement and the Security Interests granted hereby.
(c) INDEMNIFICATION. In any suit, proceeding or action brought by
Collateral Agent relating to the Collateral for any sum owing with respect
thereto or to enforce any rights or claims with respect thereto, each Grantor
will save, indemnify and
keep Collateral Agent harmless from and against all reasonable expense
(including reasonable attorneys' fees and expenses, including those incurred in
enforcing this indemnification), loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction of liability whatsoever
of the Person obligated on the Collateral, arising out of a breach by any
Grantor of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to, or in favor of, such obligor or
its successors from such Grantor, except in the case of Collateral Agent, to the
extent such expense, loss, or damage is attributable solely to the gross
negligence or willful misconduct of Collateral Agent, any agent or Affiliate of
the Collateral Agent, any Secured Party, or any agent or Affiliate of any
Secured Party, as finally determined by a court of competent jurisdiction. All
such obligations of Grantors shall be and remain enforceable against and only
against Grantors and shall not be enforceable against Collateral Agent.
(d) COMPLIANCE WITH OBLIGATIONS RELATING TO COLLATERAL. In all
material respects, each Grantor will perform and comply with all obligations in
respect of the Collateral and all other agreements to which it is a party or by
which it is bound relating to the Collateral.
(e) LIMITATION ON LIENS ON COLLATERAL. No Grantor will create,
permit or suffer to exist, and each Grantor will defend the Collateral against,
and take such other action as is necessary to remove, any Lien on the Collateral
except Permitted Liens, and will defend the right, title and interest of
Collateral Agent in and to any of such Grantor's rights under the Collateral
against the claims and demands of all Persons whomsoever.
(f) LIMITATIONS ON DISPOSITION. No Grantor will sell, license,
lease, transfer or otherwise dispose of any of the Collateral or any interest
therein, or attempt or contract to do so, except (i) in connection with
furnishing networking or telecommunications services in Grantors' ordinary
course of business; PROVIDED that the parties hereto understand and acknowledge
that Grantors' ordinary course of business involves, without limitation, the
granting of leases of capacity and the granting of long-term rights of use to
capacity, (ii) to another Grantor or (iii) to Affiliates of the Grantor;
PROVIDED that any such Affiliate shall become an Additional Grantor hereunder
with respect to such Collateral; and PROVIDED, FURTHER, that any such Affiliate
that is organized under the laws of Korea shall not become an Additional Grantor
without the prior written consent of the Secured Parties. Notwithstanding
anything herein to the contrary, no Grantor shall grant, assign, convey,
mortgage, pledge, hypothecate or otherwise transfer for the benefit of any
creditor any of its rights, title or interest in any governmental licenses,
easements, wayleaves or other rights of way necessary for the operation of the
Collateral by the Secured Parties.
(g) FURTHER IDENTIFICATION OF COLLATERAL. Grantors will, if so
requested by Collateral Agent, furnish to Collateral Agent, as Collateral Agent
may reasonably request, statements and schedules further identifying and
describing the Collateral and
such other reports in connection with the Collateral as Collateral Agent may
reasonably request, all in such reasonable detail as Collateral Agent may
reasonably specify.
(h) NOTICES OF CLAIMS. Grantors will advise Collateral Agent
promptly upon receiving notice thereof, in reasonable detail, (i) of any Lien
(other than Permitted Liens) or claim made or asserted against any of the
Collateral, and (ii) 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 Interest created hereunder or under any other Loan
Document.
(i) GOOD STANDING CERTIFICATES. If any Grantor or Additional
Grantor is a Person organized under the laws of the United States (or any state
thereof), not less frequently than once during each calendar quarter, unless
Collateral Agent shall otherwise consent, provide to Collateral Agent a
certificate of good standing from its state or country of incorporation or
organization.
(j) NO REINCORPORATION. Without limiting the prohibitions on
mergers involving the Grantors contained in the Senior Note, no Grantor shall
reincorporate or reorganize itself under the laws of any jurisdiction other than
the jurisdiction in which it is incorporated or organized as of the date hereof
without the prior written consent of Collateral Agent which shall not be
unreasonably withheld or delayed.
(k) TERMINATIONS; AMENDMENTS NOT AUTHORIZED. Each Grantor
acknowledges that, for so long as this Security Agreement remains in effect, it
is not authorized to file any financing statement in connection with the
Collateral or amendment or termination statement with respect thereto without
the prior written consent of Collateral Agent and agrees that it will not do so
without the prior written consent of Collateral Agent, subject to such Grantor's
rights under Section 9-509(d) of the Code.
(l) INSURANCE. All insurance required to be maintained by the
Grantors pursuant to Section 6(a) of the Senior Note shall at all times name
Collateral Agent as an "additional insured" and/or "additional loss payee," as
the case may be with respect to the Collateral and the Grantors shall deliver to
the Collateral Agent confirmation thereof on each anniversary of the effective
date of the applicable insurance policy; PROVIDED, HOWEVER, upon the occurrence
of an Event of Default, Grantors shall deliver such confirmation at such
intervals as may be requested by the Collateral Agent.
(m) LIMITATION ON DESIGNATION OF FIBER PAIR. No Grantor shall
designate, or otherwise make reference to, the FNAL Fiber Pair in any
indefeasible right of use agreement or capacity right of use agreement.
6. COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
Each Grantor shall execute and deliver to Collateral Agent a power of
attorney (the "POWER OF ATTORNEY") substantially in the form attached hereto as
EXHIBIT A. The power of attorney granted pursuant to the Power of Attorney is a
power coupled with an interest and shall be irrevocable until the Termination
Date. The powers conferred on Collateral Agent, for the benefit of Secured
Parties, under the Power of Attorney are solely to protect Secured Parties'
interests in the Collateral and shall not impose any duty upon Collateral Agent
to exercise any such powers. Collateral Agent agrees that (a) except for the
powers granted in clause (h) of the Power of Attorney, it shall not exercise any
power or authority granted under the Power of Attorney unless an Event of
Default has occurred and is continuing, and (b) Collateral Agent shall account
for any moneys received by Collateral Agent in respect of any foreclosure on or
disposition of the Collateral pursuant to the Power of Attorney provided that
Collateral Agent shall not have any duty as to any Collateral, and Collateral
Agent shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers. COLLATERAL AGENT, ITS RESPECTIVE
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL NOT
BE RESPONSIBLE TO ANY GRANTOR FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER OF
ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR
OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR
CONSEQUENTIAL DAMAGES.
7. REMEDIES: RIGHTS UPON DEFAULT.
(a) In addition to all other rights and remedies authorized or
granted to it under this Security Agreement, the Senior Note, the other Loan
Documents and under any other instrument or agreement securing, evidencing or
relating to any of the Secured Obligations, if any Event of Default shall have
occurred and is continuing, Collateral Agent may exercise all rights and
remedies of a secured party under the Code (whether or not in effect in the
jurisdiction where such rights are exercised). Without limiting the generality
of the foregoing, each Grantor expressly agrees that in any such event
Collateral Agent, without demand of performance or other demand, advertisement
or notice of any kind (except the notice specified below of time and place of
public or private sale and all applicable notices if any required by the Senior
Note or applicable law) to or upon such Grantor or any other Person (all and
each of which demands, advertisements and notices are hereby expressly waived to
the maximum extent permitted by the Code and other applicable law) and subject
to applicable law may forthwith enter upon the premises of such Grantor where
any Collateral is located, including, without limitation, any Cable Building or
Cable Station, through self-help, without judicial process, without first
obtaining a final judgment or giving such Grantor or any other Person notice and
opportunity for a hearing on Collateral Agent's claim or action and may collect,
receive, assemble, process, appropriate and realize upon the Collateral, or any
part thereof, and may forthwith sell, lease, license, assign, give an option or
options
to purchase, or sell or otherwise dispose of and deliver said Collateral (or
contract to do so), or any part thereof, in one or more parcels at a public or
private sale or sales, at any exchange at such prices as it may deem acceptable,
for cash or on credit or for future delivery without assumption of any credit
risk; PROVIDED, HOWEVER, that any such actions must be made in accordance with
and subject to applicable law. Collateral Agent shall have the right upon any
such public sale or sales and, to the extent permitted by applicable law, upon
any such private sale or sales, to purchase for the benefit of Collateral Agent,
the whole or any part of said Collateral so sold, free of any right or equity of
redemption, which equity of redemption each Grantor hereby releases. Such sales
may be adjourned and continued from time to time with or without notice.
Collateral Agent shall have the right to conduct such sales on any Grantor's
premises or elsewhere and shall have the right to use any Grantor's premises
without charge for such time or times as Collateral Agent deems necessary or
advisable and subject to applicable law.
If any Event of Default shall have occurred and is continuing, and
until Collateral Agent is able to effect a sale, lease, or other disposition of
the Collateral, Collateral Agent shall have the right to hold or use the
Collateral, or any part thereof, to the extent that it deems appropriate for the
purpose of preserving the Collateral or its value or for any other purpose
deemed appropriate by Collateral Agent. Collateral Agent shall have no
obligation to any Grantor to maintain or preserve the rights of such Grantor as
against third parties with respect to the Collateral while the Collateral is in
the possession of Collateral Agent. Collateral Agent may, if it so elects, seek
the appointment of a receiver or keeper to take possession of Collateral and to
enforce any of Collateral Agent's remedies (for the benefit of Secured Parties),
with respect to such appointment without prior notice or hearing as to such
appointment. Collateral Agent shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale to the Secured
Obligations as provided in the Senior Note and this Security Agreement, and only
after so paying over such net proceeds, and after the payment by Collateral
Agent of any other amount required by any provision of law, need Collateral
Agent account for the surplus, if any, to any Grantor. To the maximum extent
permitted by applicable law, each Grantor waives all claims, damages, and
demands against Collateral Agent arising out of the repossession, retention or
sale of the Collateral except such as arise solely out of the gross negligence
or willful misconduct of Collateral Agent as finally determined by a court of
competent jurisdiction. Each Grantor agrees that ten (10) days prior notice by
Collateral Agent of the time and place of any public sale or of the time after
which a private sale may take place is reasonable notification of such matters.
Grantors shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all Secured Obligations,
including any reasonable attorneys' fees and other expenses incurred by
Collateral Agent to collect such deficiency.
(b) Intentionally Omitted.
(c) At any time after an Event of Default has occurred and is
continuing, without prior notice to any Grantor, Collateral Agent shall have
full Access Rights to any and all Cable Stations, without restriction (other
than the safety, security and access control procedures established in the FNAL
O&M Plan), and as may be necessary to enable the Collateral Agent to exercise
all incidents of ownership over the Collateral, including, without limitation,
(i) repairing, changing or adding equipment as Collateral Agent may deem proper,
in its sole discretion, (ii) arranging for or changing connections to
points-of-presence or backhaul suppliers, as Collateral Agent may deem proper,
in its sole discretion, and (iii) selling or reselling (as the case may be) any
and all capacity on the FNAL Fiber Pair for the sole benefit of Collateral
Agent.
(d) Except as otherwise specifically provided herein, each Grantor
hereby waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this Security
Agreement or any Collateral.
(e) To the extent that applicable law imposes duties on Collateral
Agent to exercise remedies in a commercially reasonable manner, each Grantor
acknowledges and agrees that it is not commercially unreasonable for Collateral
Agent (i) to fail to incur expenses reasonably deemed significant by Collateral
Agent to prepare the Collateral for disposition, (ii) to fail to obtain third
party consents for access to the Collateral to be disposed of, or to obtain or,
if not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of the Collateral to be collected or
disposed of, (iii) to remove Security Interests on or any adverse claims against
the Collateral, (iv) to exercise collection remedies against Persons obligated
on the Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of the Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (vi) to contact other Persons, whether or not in the
same business as any Grantor, for expressions of interest in acquiring all or
any portion of such the Collateral, (vii) to hire one or more professional
auctioneers to assist in the disposition of the Collateral, whether or not the
Collateral is of a specialized nature, (viii) to dispose of the Collateral by
utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale
rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure Collateral Agent against risks of loss, collection or
disposition of the Collateral or to provide to Collateral Agent a guaranteed
return from the collection or disposition of the Collateral, or (xii) to the
extent deemed appropriate by Collateral Agent, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist
Collateral Agent in the collection or disposition of any of the Collateral. Each
Grantor acknowledges that the purpose of this SECTION 7(e) is to provide
non-exhaustive indications of what actions or omissions by Collateral Agent
would not be commercially unreasonable in Collateral Agent's exercise of
remedies
against the Collateral and that other actions or omissions by Collateral Agent
shall not be deemed commercially unreasonable solely on account of not being
indicated in this SECTION 7(e). Without limitation upon the foregoing, nothing
contained in this SECTION 7(e) shall be construed to grant any rights to any
Grantor or to impose any duties on Collateral Agent that would not have been
granted or imposed by this Security Agreement or by applicable law in the
absence of this SECTION 7(e).
(f) Collateral Agent shall not be required to make any demand
upon, or pursue or exhaust any of its rights or remedies against, any Grantor,
any other obligor, guarantor, pledgor or any other Person with respect to the
payment of the Secured Obligations or to pursue or exhaust any of its rights or
remedies with respect to any Collateral therefor or any direct or indirect
guarantee thereof. Collateral Agent shall not be required to marshal the
Collateral or any guarantee of the Secured Obligations or to resort to the
Collateral or any such guarantee in any particular order, and all of its rights
hereunder or under any other Loan Document shall be cumulative. To the extent it
may lawfully do so, each Grantor absolutely and irrevocably waives and
relinquishes the benefit and advantage of, and covenants not to assert against
Collateral Agent, any valuation, stay, appraisement, extension, redemption or
similar laws and any and all rights or defenses it may have as a surety now or
hereafter existing which, but for this provision, might be applicable to the
sale of any Collateral made under the judgment, order or decree of any court, or
privately under the power of sale conferred by this Security Agreement, or
otherwise.
(g) Notwithstanding anything in this Security Agreement to the
contrary, all of the rights and remedies of the Secured Parties (including any
successor collateral agent or future holder of any part of the Secured
Obligations) set forth in this Security Agreement are expressly subject to the
provisions of Section 6.4 of the Settlement Agreement and any written agreement
executed in connection therewith by a Secured Party (including a successor
collateral agent or any future holder of any part of the Secured Obligations).
8. LIMITATION ON COLLATERAL AGENT'S DUTY IN RESPECT OF
COLLATERAL. Collateral Agent shall use reasonable care with respect to the
Collateral in its possession or under its control. Other than as set forth in
SECTION 7 or SECTION 8 hereof, Collateral Agent shall not have any other duty as
to any Collateral in its possession or control or in the possession or control
of any agent or nominee of Collateral Agent, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto, other than as provided under applicable law.
9. REINSTATEMENT. This Security Agreement shall remain in full
force and effect during the pendency of the Existing Cases and continue to be
effective should any petition be filed at any time after the Effective Date, by
or against any Grantor for liquidation or reorganization, should any Grantor
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be
appointed for all or any significant part of any Grantor's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Secured Obligations, whether as a
"voidable preference," "fraudulent conveyance," or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Secured
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
10. NOTICES. Every notice, demand, request, consent, approval,
declaration or other communication hereunder shall be in writing and shall be
given or made (i) by delivery in person, (ii) by a reputable international
overnight courier service or (iii) by telecopy to the respective parties at the
following addresses:
(a) if to any Grantor:
FLAG Asia Limited
Xxxxx Xxxxx, 00 Xxxxx Xxxxxx
Xxxxxxxx XX00, Xxxxxxx
Facsimile: (000) 000-0000
Attention: General Counsel
With a copy to:
FLAG Telecom Limited
0 Xxxxx Xxxxxx
Xxxxxx X0X 0XX, Xxxxxx Xxxxxxx
Facsimile: x00 000 000 0000
Attention: General Counsel
(b) if to Collateral Agent:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxx
Financial Services Officer
(c) if to xxxx:
xxxxx
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. With respect to the Grantors and
xxxx, every notice, demand, request, consent, approval, declaration or other
communication hereunder shall be deemed to have been validly served, given or
delivered (x) upon transmission, when sent by telecopy or other similar
facsimile transmission (with such telecopy or facsimile promptly confirmed by
delivery of a copy by personal delivery or mail as otherwise provided in this
SECTION 10), (y) two (2) Business Days after deposit with a reputable
international overnight carrier with all charges prepaid, or (z) when delivered,
if hand delivered. With respect to the Collateral Agent, every notice, demand,
request, consent, approval, declaration or other communication hereunder shall
be effective only upon actual receipt by the Collateral Agent.
11. SEVERABILITY; COMPLETE AGREEMENT. Whenever possible, each
provision of this Security Agreement shall be interpreted in a manner as to be
effective and valid under applicable law, but if any provision of this Security
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement. This Security Agreement is to be read, construed and applied
together with the Senior Note and the other Loan Documents which, taken
together, set forth the complete understanding and agreement of Secured Parties
and the Grantors with respect to the matters referred to herein and therein.
12. NO WAIVER; CUMULATIVE REMEDIES. Collateral Agent shall not by
any act, delay, omission or otherwise be deemed to have waived any of its rights
or remedies hereunder, and no waiver shall be valid unless in writing, signed by
Collateral Agent and then only to the extent therein set forth. A waiver by
Collateral Agent of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which Collateral Agent would
otherwise have had on any future occasion. Neither failure to exercise nor any
delay in exercising on the part of Collateral Agent, any right, power or
privilege hereunder, shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or future exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law. None of the terms or provisions of this Security
Agreement may be waived, altered, modified or amended except by an instrument in
writing, duly executed by Collateral Agent and Grantors.
13. LIMITATION BY LAW. All rights, remedies and powers provided in
this Security Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the provisions
of this Security Agreement are intended to be subject to all applicable
mandatory provisions of
law that may be controlling and to be limited to the extent necessary so that
they shall not render this Security Agreement invalid, unenforceable, in whole
or in part, or not entitled to be recorded, registered or filed under the
provisions of any applicable law.
14. TERMINATION OF THIS SECURITY AGREEMENT. On the Termination
Date, subject to SECTION 9 hereof, all Security Interests in the Collateral
granted hereunder shall terminate, this Security Agreement and the Power of
Attorney shall terminate, and all rights to the Collateral shall revert to the
Grantors. Upon any such termination of the Security Interests, Collateral Agent
will, within thirty (30) days of its receipt of a request from Grantors and at
the sole expense of the Grantors, assign, transfer, and deliver to Grantors any
Collateral in its possession or in the possession of any agent or bailee of
Collateral Agent, co-collateral agent or bailee and execute and deliver to
Grantors such documents (including without limitation, termination statements
provided for under the Code) as Grantors shall reasonably request to evidence
the termination of the Security Interest. The obligations of Collateral Agent
contained in this SECTION 14 shall survive the termination of this Security
Agreement and remain in effect until Collateral Agent has complied in all
material respects with all of such obligations.
15. SUCCESSORS AND ASSIGNS. This Security Agreement and all
obligations of Grantors hereunder shall be binding upon the successors and
assigns of each Grantor (including any debtor-in-possession on behalf of such
Grantor) and shall, together with the rights and remedies of Collateral Agent
hereunder, inure to the benefit of Collateral Agent, all future holders of any
instrument evidencing any of the Secured Obligations and their respective
successors and assigns. No sales of participations, other sales, assignments,
transfers or other dispositions of any agreement governing or instrument
evidencing the Secured Obligations or any portion thereof or interest therein
shall in any manner affect the Security Interest granted to Collateral Agent
hereunder. This Security Agreement and the obligations of the Secured Parties
referenced or set forth herein shall be binding upon the successors and assigns
of the Secured Parties (including any successor collateral agent and any future
holder of any part of the Secured Obligations). Notwithstanding anything herein
to the contrary, it shall be a condition to any assignment, transfer or other
disposition of all or any part of the Collateral Agent's or the Secured Parties'
rights under this Security Agreement, the security interest created hereunder or
any part of the Secured Obligations secured hereby that, and no such assignment,
transfer or other disposition shall be valid or effective unless, such assignee
or transferee shall have first executed and delivered to Reach a letter
agreement accepting and agreeing to the quiet enjoyment, assumption, right of
first refusal and other rights and provisions set forth in Section 6.4 of the
Settlement Agreement. No Grantor may assign, sell, hypothecate or otherwise
transfer any interest in or obligation under this Security Agreement.
16. COUNTERPARTS. This Security Agreement may be executed in any
number of separate counterparts, each of which shall collectively and separately
constitute one agreement.
17. GOVERNING LAW. THIS SECURITY AGREEMENT AND ALL DISPUTES WITH
RESPECT HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK (OTHER THAN CHOICE OF LAW RULES THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION).
18. VENUE. EACH GRANTOR HEREBY CONSENTS AND AGREES THAT THE STATE
OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK
(INCLUDING, WITHOUT LIMITATION, THE UNITED STATES BANKRUPTCY COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK), SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN GRANTORS AND COLLATERAL AGENT
PERTAINING TO THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO
ANY MATTER ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS, PROVIDED, THAT COLLATERAL AGENT AND GRANTORS ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF NEW YORK COUNTY, AND, PROVIDED, FURTHER, NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO PRECLUDE COLLATERAL AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER COMPETENT JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF COLLATERAL AGENT.
19. SUBMISSION TO JURISDICTION; SERVICE. EACH GRANTOR AND EACH
SECURED PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO NON-EXCLUSIVE
JURISDICTION IN THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF
NEW YORK, NEW YORK, AND EACH GRANTOR AND EACH SECURED PARTY HEREBY WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS IN SUCH COURT AND HEREBY CONSENTS TO THE GRANTING
OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURTS. EACH
GRANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE IN ACCORDANCE WITH SECTION 20
HEREOF.
20. SERVICE OF PROCESS.
(a) Each Grantor hereby irrevocably designates, appoints and
empowers the Process Agent, as its designee, appointee and agent to receive,
accept and acknowledge for and on its behalf, and in respect of its property,
service of any and all legal process, summons, notices and documents which may
be served in any action or proceeding. If for any reason such designee,
appointee and agent shall cease to be available to act as such, each Grantor
agrees to designate a new designee, appointee and agent in New York City on the
terms and for the purposes of this provision satisfactory to the Collateral
Agent. Each Grantor further irrevocably consents to the service of process out
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, proper postage
prepaid, to each Grantor at the address set forth in SECTION 10 hereof, and that
service so made shall be deemed completed upon the earlier of actual receipt
thereof or seven (7) days after deposit in the U.S. mails, first class, proper
postage prepaid. Nothing herein shall affect the right of the Collateral Agent
or the Secured Parties to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against the Grantors in any
other jurisdiction.
(b) Each Grantor agrees, to the extent permitted by applicable
law, that in any legal action or proceeding arising out of or in connection with
this Security Agreement or any other Loan Document (the "PROCEEDINGS") anywhere
(whether for an injunction, specific performance, damages or otherwise), no
immunity (to the extent that it may at any time exist) from those Proceedings,
from attachment (whether in aid of execution, before judgment or otherwise), or
from judgment shall be claimed by it or on its behalf or with respect to the
Collateral. Each Grantor agrees, to the extent permitted by applicable law, that
it is and the Collateral is, and shall be, subject to such Proceedings,
attachment or execution in respect of the Secured Obligations under this
Security Agreement and each other Loan Document to which it is party.
21. SECTION TITLES. The Section titles contained in this Security
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
22. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Security Agreement. In the event
an ambiguity or question of intent or interpretation arises, this Security
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Security Agreement.
23. ADVICE OF COUNSEL. Each of the parties represents to each
other party hereto that it has discussed this Security Agreement and,
specifically, the provisions of SECTIONS 17, 18, 19 AND 20 with its counsel.
24. BENEFIT OF SUCCESSORS. All Security Interests granted or
contemplated hereby shall be for the benefit of Collateral Agent and Collateral
Agent's permitted successors and assigns, and all proceeds or payments realized
from Collateral in accordance herewith shall be applied to the Secured
Obligations in accordance with the terms of the Senior Note.
25. ADDITIONAL GRANTORS. The initial Grantors hereunder shall
include Debtor/Payor and the Related Operating Companies. From time to time
subsequent to the date hereof, additional direct Related Operating Companies may
become parties hereto, as additional Grantors (each, an "ADDITIONAL GRANTOR"),
by executing a counterpart of this Security Agreement substantially in the form
of EXHIBIT B attached hereto. Upon delivery of any such counterpart to
Collateral Agent, notice of which is hereby waived by the Grantors, each
Additional Grantor shall be a Grantor and shall be as fully a party hereto as if
such Additional Grantor were an original signatory hereto; PROVIDED, HOWEVER,
that any representation, warranty or covenant generally applicable to Grantors
shall only become applicable to an Additional Grantor on and as of the date such
Additional Grantor executes a counterpart of this Security Agreement. Each
Grantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Grantor hereunder
nor by any election of Collateral Agent not to cause any Related Operating
Companies of Debtor/Payor to become an Additional Grantor hereunder. This
Security Agreement shall be fully effective as to any Grantor that is or becomes
a party hereto regardless of whether any other Person becomes or fails to become
or ceases to be a Grantor hereunder.
26. COLLATERAL AGENT.
(a) Each Grantor hereby agrees to pay all fees and expenses of the
Collateral Agent, as when due, and as set forth on Schedule 1 of the Senior
Note, in connection with the performance of its duties under the Intercreditor
Agreement or this Security Agreement. Each Grantor agrees to indemnify the
Collateral Agent and its directors, employees and agents for, and to hold them
harmless against, any loss, liability or expense incurred without gross
negligence or willful misconduct on their part arising out of or in connection
with the acceptance or administration of the Collateral, including the
reasonable costs and expenses of defending themselves against any claim (whether
asserted by the Company, any Holder or any other Person) or liability in
connection with the exercise or performance of any of their powers or duties
hereunder, or in connection with enforcing the provisions of this SECTION 26,
except to the extent that any such loss, liability or expense was due to the
Collateral Agent's gross negligence or willful misconduct. If and only to the
extent that the Grantors shall fail to indemnify the Collateral Agent as
provided herein within thirty (30) days of the Collateral Agent's request for
such indemnification, then xxxx shall indemnify the Collateral Agent in
accordance with this SECTION 26(a) as if xxx were the primary obligor under this
SECTION 26(a).
(b) The Collateral Agent shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations or
warranties made, herein or in any of the other Loan Document (except those
specifically applicable to the Collateral Agent). The Collateral Agent makes no
representations or warranties of any kind or nature with respect to any Grantor,
this Security Agreement, the other Loan Documents or the Secured Obligations
(except those specifically applicable to the Collateral Agent). Notwithstanding
the right to do so, the Collateral Agent shall not be responsible for insuring
the Collateral or for the payment of taxes, charges or assessments or
discharging of Liens upon the Collateral or otherwise as to the maintenance of
the Collateral or for the recording, filing or depositing of any document or any
financing statement, or continuation statement containing a security interest in
the Collateral or to see the maintenance of such recording, filing or depositing
or to any re-recording, re-filing or re-depositing of any thereof.
(c) xxxx hereby appoints the Collateral Agent as collateral agent
pursuant to the terms hereof, and the Collateral Agent hereby accepts such
appointment. Except as expressly set forth in this Security Agreement, the
Collateral Agent has not otherwise made to xxxx, nor does the Collateral Agent
hereby make to xxxx, any representations or warranties, express or implied, nor
does the Collateral Agent assume any liability to with respect to: (i) the
enforceability, validity, value or collectibility of any of the Secured
Obligations or guarantee which may have been delivered to xxx in connection
therewith, (ii) the Collateral or the enforceability, validity, value or
collectibility of any Security Interest granted therein to xxx, (iii) any
insurance in respect of the Collateral or (iv) the Debtor/Payor's or any
Subsidiary of the Debtor/Payor's title to or right to grant a Security Interest
on the Collateral.
(d) Except as set forth in this Security Agreement, the Collateral
Agent shall not be required to take any other action under the Loan Documents or
to execute any additional agreement, including, without limitation, any action
to perfect, protect or preserve any Security Interest granted in this Security
Agreement or to administer any Collateral, unless instructed in writing to do so
by xxxx or any of xxx's successors or assigns. If Collateral Agent shall request
instructions from xxxx or any of xxxx's successors or assigns with respect to
any act or action (including failure to act) in connection with this Security
Agreement or any other Loan Document, then Collateral Agent shall be entitled to
refrain from such act or taking such action unless and until Collateral Agent
shall have received instructions in writing from xxxx or any of xxxx's
successors or assigns and Collateral Agent shall not incur liability to any
Person by reason of so refraining.
(e) The Collateral Agent shall not be required to ascertain or
inquire as to the performance by the any Grantor of any of the covenants or
agreements contained in any of the Loan Documents.
(f) Notwithstanding any other provision of this Security Agreement
or
the Loan Documents, the Collateral Agent shall not be liable for any action
taken or omitted to be taken by it in accordance with this Security Agreement or
the Loan Documents, including, without limitation, as a result of any
foreclosure on any Collateral, whether by public or private sale or otherwise,
except for its own gross negligence or willful misconduct. In no event shall the
Collateral Agent be liable for any special, indirect or consequential loss or
damage of any kind whatsoever, even if the Collateral Agent has been advised of
the likelihood of such loss or damage.
(g) The Collateral Agent may resign at any time by giving written
notice thereof to the Debtor/Payor and xxxx. If xxxx shall not have appointed a
successor Collateral Agent within sixty (60) days after the giving of such
notice of resignation, the resigning Collateral Agent may petition any court of
competent jurisdiction for the appointment of a successor Collateral Agent. The
Collateral Agent may be removed at any time by xxxx (or its permitted successors
and assigns) by notice delivered to the Collateral Agent and Debtor/Payor. Any
successor Collateral Agent shall be a bank, trust company, financial services
company or other Person with experience in performing the tasks required to be
performed hereunder by the Collateral Agent.
27. CO-COLLATERAL AGENT.
(a) At any time or times, for the purpose of meeting any legal
requirements of any jurisdiction in which any of the Collateral may at the time
be located, the Collateral Agent shall have the power to appoint any Person or
Persons either to act as co-collateral agent, or co-collateral agents, jointly
with the Collateral Agent of all or any part of the Collateral or to act as
separate collateral agent or separate collateral agents of all or any part of
the Collateral and to vest in such Person or Persons, in such capacity, such
title to the Collateral or any part thereof, and such rights, powers, duties or
obligations as the Collateral Agent may consider necessary or desirable, subject
to the other provisions of this SECTION 27.
(b) Unless otherwise provided in the instrument appointing such
co-collateral agent or separate collateral agent, every co-collateral agent or
separate collateral agent shall, to the extent permitted by law, be appointed
subject to the following terms, namely:
(i) All rights, powers, duties and obligations under this Security
Agreement conferred upon the Collateral Agent in respect of the custody,
control or management of the Collateral, shall be exercised solely by the
Collateral Agent;
(ii) All rights, powers, duties and obligations conferred or
imposed upon the collateral agents shall be conferred or imposed upon and
exercised or performed by the Collateral Agent, or by the Collateral Agent
and such co-collateral agent or co-collateral agents, or separate
collateral agent or separate collateral agents jointly, except to the
extent that, under the law of any jurisdiction in which any particular act
or acts are to be performed, the Collateral Agent shall be incompetent or
unqualified to perform such act or acts, in which event such act or acts
shall be performed by such co-collateral agent or co-collateral agents or
separate collateral agent or separate collateral agents;
(iii) Any request in writing by the Collateral Agent to any
co-collateral agent or separate collateral agent to take or to refrain from
taking any action hereunder shall be sufficient warrant for the taking, or
the refraining from taking, of such action by such co-collateral agent or
separate collateral agent;
(iv) Any co-collateral agent or separate collateral agent to the
extent permitted by law may delegate to the Collateral Agent the exercise
of any right, power, duty or obligation, discretionary or otherwise;
(v) The Collateral Agent at any time, by an instrument in writing,
may accept the resignation of, or remove, any co-collateral agent or
separate collateral agent appointed under this SECTION 27. A successor to
any co-collateral agent or separate collateral agent so resigned or removed
may be appointed in the manner provided in this SECTION 27;
(vi) No collateral agent hereunder shall be personally liable by
reason of any act or omission of any other collateral agent hereunder;
(vii) Any demand, request, direction, appointment, removal, notice,
consent, waiver or other action in writing delivered to the Collateral
Agent shall be deemed to have been delivered to each such co-collateral
agent or separate collateral agent; and
(viii) Any Collateral received by any such co-collateral agent or
separate collateral agent hereunder shall forthwith, so far as may be
permitted by law, be turned over to the Collateral Agent to be held
pursuant to the terms hereof.
(c) Upon the acceptance in writing of such appointment by any such
co-collateral agent or separate collateral agent, it or he shall be vested with
the estate, right, title and interest in the Collateral, or any portion thereof,
and with such rights, powers, duties, trusts or obligations, jointly or
separately with the Collateral Agent, all as shall be specified in the
instrument of appointment, subject to all the terms hereof.
(d) In case any co-collateral agent or separate collateral agent
shall become incapable of acting, resign or be removed, the right, title and
interest in the Collateral and all rights, powers, duties and obligations of
said co-collateral agent or separate collateral agent shall, so far as permitted
by law, vest in and be exercised by the Collateral Agent unless and until a
successor co-collateral agent or separate collateral agent shall be appointed
pursuant to this SECTION 27.
28. AMENDMENT. No amendment of any provision of this Security
Agreement shall be effective unless the same shall be in writing and signed by
or on behalf of the Grantors and the Collateral Agent.
29. ENGLISH LANGUAGE. Any translation of this Security Agreement
into another language shall have no interpretive effect. All documents or
notices to be delivered pursuant to or in connection with this Security
Agreement shall be in the English language, or, if any such document or notice
is not in the English language, accompanied by an English translation thereof,
and the English language version of any such document or notice shall control
for purposes hereof.
30. EFFECTIVE DATE. Notwithstanding anything herein to the
contrary, each of the parties hereto acknowledges and agrees that this Agreement
shall be effective for all purposes, and shall have been deemed to have been
continuously in effect, on and as of May 16, 2002, PROVIDED, HOWEVER, that to
the extent the representations and warranties, covenants and other agreements
contained herein are given by or apply to FLAG Telecom Taiwan, each shall be
effective for all purposes on and as of, and the covenants and other agreements
shall be deemed to have been continuously in effect from, September 30, 2002.
[END OF TEXT]
IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be executed and delivered by its duly authorized officer as of the
date first set forth above.
FLAG ASIA LIMITED
By:
---------------------------------
Name: Kees van Ophem
Title: Assistant Secretary
FLAG TELECOM ASIA LIMITED
By:
---------------------------------
Name: Xxxx Best
Title: Director
FLAG TELECOM JAPAN LIMITED
By:
---------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Director
FLAG TELECOM TAIWAN LIMITED
By:
---------------------------------
Name: Kees van Ophem
Title: Assistant Secretary
WILMINGTON TRUST COMPANY,
AS COLLATERAL AGENT
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SCHEDULE I
to
SECURITY AGREEMENT
FILING JURISDICTIONS
Washington, D.C.
SCHEDULE II
to
SECURITY AGREEMENT
SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL
AND RECORDS CONCERNING COLLATERAL
FLAG ASIA LIMITED
I. Grantor's official name: FLAG Asia Limited
II. Type of entity: corporation
III. Organizational identification number issued by Grantor's jurisdiction of
incorporation: 28214
IV. Jurisdiction of Incorporation or Organization: Bermuda
V. Registered Office: Xxxxx Xxxxx, 00 Xxxxx Xxxxxx, Xxxxxxxx XX00, Xxxxxxx
XX. Location of Collateral: Korea Pusan Landing Station: FNAL Room, 433-1,
Songjeong-Dong, Haeundae-Ku, Pusan, 612-040, Korea
VII. Locations of Records Concerning Collateral: Sovereign Court, 000 Xxxxxx
Xxxx, Xxxx Xxxxxxx, Xxxxxxxxx XX0 XXX, Xxxxxxx (Attention: Xxxxx Xxxxx)
FLAG TELECOM ASIA LIMITED
I. Grantor's official name: FLAG telecom Asia Limited
II. Type of entity : corporation
III. Organizational identification number issued by Grantor's jurisdiction of
incorporation: 645513
IV. Jurisdiction of Incorporation or Organization: Hong Kong
V. Registered Office: 6601-03, 66/F, The Center, 00 Xxxxx'x Xxxx, Xxxxxxx Xxxx
Xxxx
XX. Location of Collateral: Hong Kong Tong Fuk Landing Station: Lot 591SA in
XX000, Xxxx Xxx, Xxxxx Xxxxxx, Xxxx Xxxx
VII. Locations of Records Concerning Collateral: 6601-03, 66/F, The Center, 00
Xxxxx'x Xxxx, Xxxxxxx Xxxx Xxxx (Attention: Xxxxx Xx)
FLAG TELECOM JAPAN LIMITED
I. Grantor's official name: FLAG Telecom Japan Limited
II. Type of entity: corporation
III. Organizational identification number issued by Grantor's jurisdiction of
incorporation: 0000-00-000000
IV. Jurisdiction of Incorporation or Organization: Japan
V. Registered Office: Izumi Kojimachi Building, 0/X, 00-Xxxxxxxxx 0-xxxxx,
Xxxxxxx-Xx, Xxxxx 000-0000, Xxxxx
VI. Location of Collateral: Japan Wada Landing Station: 0000, Xxx-Xxxxxxxxxx,
Xxxxxxxx, Xxxx-xxx, Xxx-xxx, Xxxxx-xxx, Xxxxx
VII. Locations of Records Concerning Collateral: Izumi Xxxxxxxxx Xxxxxxxx, 0/X,
00-Xxxxxxxxx 0-xxxxx, Xxxxxxx-Xx, Xxxxx 000-0000, Xxxxx (Attention: Hiroshi
Shibatao)
FLAG TELECOM TAIWAN LIMITED
I. Grantor's official name: FLAG Telecom Taiwan Limited
II. Type of entity: corporation
III. Organizational identification number issued by Grantor's jurisdiction of
incorporation: 80342388
IV. Jurisdiction of Incorporation or Organization: Taiwan
V. Registered Office: Xx. 000, Xxx. 0, Xxxxxxx Xxxx, Xxxxxx, Xxxxxx, XXX
XX. Location of Collateral: Taiwan TouCheng Landing Station: Xx.000, Xx-Xxxxx
Xx, Xxxxxxxx, Xxxx Xxxxx 000, Xxxxxx, X.X.X. The postcode is "261"
VII. Locations of Records Concerning Collateral: Xx. 000, Xxx. 0, Xxxxxxx Xxxx,
Xxxxxx, Xxxxxx, XXX (Attention: Xxxx Xxx)
EXHIBIT A
POWER OF ATTORNEY
This Power of Attorney is executed and delivered by
______________________________, a ___________________________ corporation
("Grantor") to Wilmington Trust Company, a Delaware banking corporation
(hereinafter referred to as "Attorney"), under the Security Agreement, dated as
of October __, 2002, and other related documents, (the "Loan Documents"). No
person to whom this Power of Attorney is presented, as authority for Attorney to
take any action or actions contemplated hereby, shall be required (including in
respect of clauses (d) and (e) in the next succeeding paragraph) to inquire into
or seek confirmation from Grantor as to the authority of Attorney to take any
action described below, or as to the existence of or fulfillment of any
condition to this Power of Attorney, which is intended to grant to Attorney
unconditionally the authority to take and perform the actions contemplated
herein, and Grantor irrevocably waives any right to commence any suit or action,
in law or equity, against any person or entity which acts in reliance upon or
acknowledges the authority granted under this Power of Attorney. The power of
attorney granted hereby is coupled with an interest, and may not be revoked or
canceled by Grantor without Attorney's written consent.
Grantor hereby irrevocably constitutes and appoints Attorney (and all
officers, employees or agents designated by Attorney), with full power of
substitution, as Grantor's true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Grantor and in the
name of Grantor or in its own name, from time to time in Attorney's discretion,
to take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of the Loan Documents with respect to the Collateral and, without
limiting the generality of the foregoing, Grantor hereby grants to Attorney the
power and right, on behalf of Grantor, without notice to or assent by Grantor
(other than in connection with a change of address as specified in clause (a),
as to which Attorney shall use commercially reasonable efforts to give Grantor
concurrent notice thereof provided that failure to do so will not affect
Attorney's rights hereunder), and at any time, to do the following: (a) change
the mailing address of Grantor, open a post office box on behalf of Grantor,
open mail for Grantor, and ask, demand, collect, give acquittances and receipts
for, take possession of, endorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, and notices in connection with any property of Grantor which
constitutes Collateral; (b) effect any repairs to any asset of Grantor which
constitutes Collateral, or continue or obtain any insurance and pay all or any
part of the premiums therefor and costs thereof, and make, settle and adjust all
claims under such policies of insurance, and make all determinations and
decisions with respect to such policies, in each case, with respect to the
Collateral; (c) pay or discharge any taxes, liens, Security Interests, or other
encumbrances levied or placed on or threatened against Grantor or its property,
in each
case, with respect to the Collateral; (d) defend any suit, action or proceeding
brought against Grantor if Grantor does not defend such suit, action or
proceeding or if Attorney believes that Grantor is not pursuing such defense in
a manner that will maximize the recovery to Attorney, and settle, compromise or
adjust any suit, action, or proceeding described above and, in connection
therewith, give such discharges or releases as Attorney may deem appropriate,
provided that in connection with the foregoing (i) Attorney shall act in a
manner consistent with the terms of the Loan Documents to the extent explicitly
covered thereby and (ii) any such act shall be with respect to the Collateral;
(e) file or prosecute any claim, litigation, suit or proceeding in any court of
competent jurisdiction or before any arbitrator, or take any other action
otherwise deemed appropriate by Attorney for the purpose of collecting any and
all such moneys due to Grantor whenever payable and to enforce any other right
in respect of Grantor's property provided, in the case of any such claim,
litigation, suit or proceeding relating to product liability insurance, (i)
Attorney shall act in a manner consistent with the terms of the Loan Documents
to the extent explicitly covered thereby; to file such financing statements with
respect to the Security Agreement, with or without Grantor's signature, or to
file a photocopy of the Security Agreement in substitution for a financing
statement, as the Attorney may deem appropriate and to execute in Grantor's name
such financing statements and amendments thereto and continuation statements
which may require the Grantor's signature; and (i) execute, in connection with
any sale provided for in any Loan Document with respect to the Collateral, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral and to otherwise direct such sale or resale, all as
though Attorney were the absolute owner of the property of Grantor for all
purposes, and to do, at Attorney's option and Grantor's expense, at any time or
from time to time, all acts and other things that Attorney reasonably deems
necessary to perfect, preserve, or realize upon the Collateral, all as fully and
effectively as Grantor might do. Grantor hereby ratifies, to the extent
permitted by law, all that said Attorney shall lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor, and
Grantor has caused its seal to be affixed pursuant to the authority of its board
of directors this _____________ day of ______________________.
[ GRANTOR ]
By:
-------------------------
Name:
-----------------------
Title:
----------------------
NOTARY PUBLIC CERTIFICATE
On this _____ day of ______________, 2002, [officer's name] who is
personally known to me appeared before me in his/her capacity as the [title] of
[Grantor] ("GRANTOR") and executed on behalf of Grantor the Power of Attorney in
favor of Wilmington Trust Company to which this Certificate is attached.
----------------------------
Notary Public
EXHIBIT B
COUNTERPART TO SECURITY AGREEMENT
This counterpart, dated _____________,200__, is delivered pursuant to
SECTION 25 of that certain Security Agreement dated as of October __, 2002 (as
from time to time amended, modified or supplemented, the "SECURITY AGREEMENT";
the terms defined therein and not otherwise defined herein being used as therein
defined), among the Debtor/Payor, the other Grantors and Wilmington Trust
Company. The undersigned hereby agrees (i) that this counterpart may be attached
to the Security Agreement, and (ii) that the undersigned will comply with and be
subject to, including representations and warranties, all the terms and
conditions of the Security Agreement as if it were an original signatory
thereto.
[NAME OF ADDITIONAL GRANTOR]
By:
-------------------------
Name:
Title:
