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Exhibit 10.8
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AMENDED AND RESTATED SECURITY AGREEMENT
among
FAIRPOINT COMMUNICATIONS SOLUTIONS CORP.,
SUBSIDIARIES
OF FAIRPOINT COMMUNICATIONS SOLUTIONS CORP.
and
FIRST UNION NATIONAL BANK,
as Collateral Agent
Dated as of October 20, 1999, as
Amended and Restated as of March 27, 2000,
and as further amended and restated as of November 9, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I
SECURITY INTERESTS .................................................... 2
1.1. Grant of Security Interests ..................................... 2
1.2. Power of Attorney ............................................... 2
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS ..................... 3
2.1. Necessary Filings ............................................... 3
2.2. No Liens ........................................................ 3
2.3. Other Financing Statements ...................................... 3
2.4. Chief Executive Office; Records ................................. 3
2.5. Location of Inventory and Equipment ............................. 4
2.6. Recourse ........................................................ 4
2.7. Trade Names; Change of Name ..................................... 4
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS ............................. 5
3.1. Additional Representations and Warranties ....................... 5
3.2. Maintenance of Records .......................................... 5
3.3. Direction to Account Debtors; Contracting Parties; etc .......... 5
3.4. Modification of Terms; etc ...................................... 6
3.5. Collection ...................................................... 6
3.6. Instruments ..................................................... 6
3.7. Assignors Remain Liable Under Receivables ....................... 7
3.8. Assignors Remain Liable Under Contracts ......................... 7
3.9. Further Actions ................................................. 7
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS .............................. 7
4.1. Additional Representations and Warranties ....................... 7
4.2. Licenses and Assignments ........................................ 8
4.3. Infringements ................................................... 8
(i)
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4.4. Preservation of Marks ........................................... 8
4.5. Maintenance of Registration ..................................... 8
4.6. Future Registered Marks ......................................... 9
4.7. Remedies ........................................................ 9
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS ................................. 10
5.1. Additional Representations and Warranties ....................... 10
5.2. Licenses and Assignments ........................................ 10
5.3. Infringements ................................................... 10
5.4. Maintenance of Patents .......................................... 11
5.5. Prosecution of Patent Application ............................... 11
5.6. Other Patents and Copyrights .................................... 11
5.7. Remedies ........................................................ 11
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL .................................. 12
6.1. Protection of Collateral Agent's Security ....................... 12
6.2. Warehouse Receipts Non-Negotiable ............................... 12
6.3. Further Actions ................................................. 12
6.4. Financing Statements ............................................ 13
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT .......................... 13
7.1. Remedies; Obtaining the Collateral Upon Default ................. 13
7.2. Remedies; Disposition of the Collateral ......................... 14
7.3. Waiver of Claims ................................................ 15
7.4. Application of Proceeds ......................................... 16
7.5. Remedies Cumulative ............................................. 17
7.6. Discontinuance of Proceedings ................................... 17
ARTICLE VIII
INDEMNITY ............................................................. 17
8.1. Indemnity ....................................................... 17
8.2. Indemnity Obligations Secured by Collateral; Survival ........... 18
ARTICLE IX
DEFINITIONS ........................................................... 19
(ii)
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ARTICLE X
MISCELLANEOUS ......................................................... 24
10.1. Notices ........................................................ 24
10.2. Waiver; Amendment .............................................. 24
10.3. Obligations Absolute ........................................... 24
10.4. Successors and Assigns ......................................... 25
10.5. Headings Descriptive ........................................... 25
10.6. Governing Law .................................................. 25
10.7. Assignor's Duties .............................................. 25
10.8. Termination; Release ........................................... 25
10.9. Counterparts ................................................... 26
10.10. The Collateral Agent .......................................... 26
10.11. Additional Assignors .......................................... 26
10.12. Amendment and Restatement of Existing Security Agreement ...... 26
ANNEX A Schedule of Chief Executive Offices and other Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Trade and Fictitious Names
ANNEX D Security Interests in Intellectual Property
ANNEX E List of Patents and Applications
ANNEX F List of Copyrights and Applications
ANNEX G Grant of Security Interest in United States Trademarks and Patents
ANNEX H Grant of Security Interest in United States Copyrights
(iii)
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AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT, dated as of October 20,
1999, as amended and restated as of March 27, 2000, and as further amended and
restated as of November 9, 2000, among each of the undersigned assignors (each,
an "Assignor" and, together with any other entity that becomes a party hereto
pursuant to Section 10.11 hereof, the "Assignors") and First Union National
Bank, as Collateral Agent (the "Collateral Agent") for the benefit of the
Secured Creditors (as defined below). Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement (as defined
below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, FairPoint Communications Solutions Corp. (the "Borrower"),
the lenders from time to time party thereto (the "Lenders"), First Union
Securities, Inc. and Banc of America Securities LLC, as Co-Arrangers and Co-Book
Managers (each, a "Co-Arranger" and together, the "Co-Arrangers"), Bank of
America, N.A., as Syndication Agent (the "Syndication Agent"), Bankers Trust
Company, as Documentation Agent (the "Documentation Agent"), and First Union
National Bank, as Administrative Agent (together with any successor agent, the
"Administrative Agent," and together with the Collateral Agent, the Syndication
Agent, the Documentation Agent, the Co-Arrangers, the Issuing Lender and the
Lenders, the "Lender Creditors"), have entered into an Amended and Restated
Credit Agreement, dated as of October 20, 1999, as amended and restated as of
March 27, 2000, and as further amended and restated as of November 9, 2000 (as
amended, amended and restated, modified or supplemented from time to time, the
"Credit Agreement"), providing for the making of Loans to the Borrower and the
issuance of, and participation in, Letters of Credit for the account of the
Borrower, all as contemplated therein;
WHEREAS, the Borrower may at any time and from time to time enter
into one or more Interest Rate Agreements with one or more Lenders or affiliates
thereof (each such Lender or affiliate, even if the respective Lender
subsequently ceases to be a Lender under the Credit Agreement for any reason,
together with such Lender's or affiliate's successors and assigns, if any,
collectively, the "Other Creditors", and together with the Lender Creditors, are
herein called the "Secured Creditors");
WHEREAS, pursuant to the Amended and Restated Subsidiary Guaranty,
each Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all obligations and liabilities of the
Borrower under or with respect to the Credit Documents and the Interest Rate
Agreements;
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WHEREAS, it is a condition precedent to the making of Loans to the
Borrower and the issuance of Letters of Credit for the account of the Borrower
under the Credit Agreement that the Assignors shall have executed and delivered
to the Collateral Agent this Agreement; and
WHEREAS, each Assignor desires to execute this Agreement to satisfy
the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, each
Assignor hereby makes the following representations and warranties to the
Collateral Agent and hereby covenants and agrees with the Collateral Agent as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the prompt and
complete payment and performance when due of all of its Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent, and does
hereby pledge and grant to the Collateral Agent for the benefit of the Secured
Creditors, a continuing security interest of first priority in, all of the
right, title and interest of such Assignor in, to and under all of the
following, whether now existing or hereafter from time to time acquired: (i)
each and every Receivable, (ii) all Contracts, together with all Contract Rights
arising thereunder (other than Contracts which would be breached by the grant of
the security interests created therein pursuant to the terms of this Agreement),
(iii) all Inventory, (iv) all Equipment, (v) all Marks, together with the
registrations and right to all renewals thereof, and the goodwill of the
business of such Assignor symbolized by the Marks, (vi) all Patents and
Copyrights, (vii) all computer programs of such Assignor and all intellectual
property rights therein and all other proprietary information of such Assignor,
including, but not limited to, trade secrets, (viii) all other Goods, General
Intangibles, Chattel Paper, Documents and Instruments, (ix) the Cash Collateral
Account and all monies, securities and instruments deposited or required to be
deposited in such Cash Collateral Account, (x) all Books, (xi) all Investment
Property and (xii) all Proceeds and products of any and all of the foregoing
(all of the above, collectively, the "Collateral").
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Assignor or otherwise) to act, require, demand,
receive, compound and give acquittance for any and all monies and claims for
monies due or to become due to such Assignor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and to file any claims
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or take any action or institute any proceedings which the Collateral Agent may
deem to be reasonably necessary or advisable to protect the interests of the
Secured Creditors, which appointment as attorney is coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and recordings
necessary or appropriate to create, preserve and perfect the security interest
granted by such Assignor to the Collateral Agent hereby in respect of the
Collateral have been accomplished and the security interest granted to the
Collateral Agent pursuant to this Agreement in and to the Collateral creates a
perfected security interest therein prior to the rights of all other Persons
therein and subject to no other Liens (other than Permitted Liens) and is
entitled to all the rights, priorities and benefits afforded by the UCC or other
relevant law as enacted in any relevant jurisdiction to perfected security
interests, in each case to the extent that the Collateral consists of the type
of property in which a security interest may be perfected by filing a financing
statement under the UCC as enacted in any relevant jurisdiction or in the PTO or
United States Copyright Office.
2.2. No Liens. Such Assignor is, and as to Collateral acquired by it
from time to time after the date hereof such Assignor will be, the owner of, or
has rights in, all Collateral free from any Lien or other right, title or
interest of any Person (other than Permitted Liens), and such Assignor shall
defend the Collateral to the extent of its rights therein against all claims and
demands of all Persons at any time claiming the same or any interest therein
adverse to the Collateral Agent.
2.3. Other Financing Statements. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than financing statements filed in respect of
Permitted Liens), and so long as the Termination Date has not occurred, such
Assignor will not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) or statements relating to the Collateral, except
(a) financing statements filed or to be filed in respect of and covering the
security interests granted hereby by such Assignor or as permitted by the Credit
Agreement and (b) financing statements with respect to Permitted Liens.
2.4. Chief Executive Office; Records. The chief executive office of
such Assignor is located at the address or addresses indicated on Annex A hereto
for such Assignor. Such Assignor will not move its chief executive office except
to such new location as such Assignor may establish in accordance with the last
sentence of this Section 2.4. The originals of all documents evidencing all
Receivables and Contract Rights of such Assignor and the only original books of
account and records of such Assignor relating thereto are, and will continue to
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be, kept at such chief executive office, at one or more of the locations set
forth on Annex A hereto or at such new locations as such Assignor may establish
in accordance with the last sentence of this Section 2.4. All Receivables and
Contract Rights of such Assignor are, and will continue to be, maintained at,
and controlled and directed (including, without limitation, for general
accounting purposes) from, the office locations described above or such new
location established in accordance with the last sentence of this Section 2.4.
No Assignor shall establish new locations for such offices until it shall have
given to the Collateral Agent notice of its intention to do so unless (i) such
Assignor shall give to the Collateral Agent written notice of any such
relocation of its chief executive office within 10 days following such
relocation, clearly describing such new location and providing such other
information in connection therewith as the Collateral Agent may reasonably
request and (ii) with respect to such new location, it shall take all action,
reasonably satisfactory to the Collateral Agent, to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted hereby
at all times fully perfected and in full force and effect.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex B hereto for such Assignor (other than (i) immaterial
portions of Inventory (x) sold on consignment or held on display for
demonstration purposes or (y) transferred to another location in connection with
a sale of such Inventory in the ordinary course of business, so long as such
sale occurs within 60 days from the date of such transfer and (ii) various spare
parts held for maintenance or repair of Equipment). Each Assignor agrees that
all Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Annex B
hereto, or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.5 (other than (i) immaterial portions of
Inventory (x) sold on consignment or held on display for demonstration purposes
or (y) may be transferred to another location in connection with a sale of such
Inventory in the ordinary course of business, so long as such sale occurs within
30 days from the date of such transfer and (ii) various spare parts held for
maintenance or repair of Equipment). Any Assignor may establish a new location
for Inventory and Equipment only if (i) it shall have given to the Collateral
Agent written notice within 10 days following any such relocation clearly
describing such new location and providing such other information in connection
therewith as the Collateral Agent may request and (ii) with respect to such new
location, it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
2.6. Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the other
Credit Documents, in the Interest Rate Agreements and otherwise in writing in
connection herewith or therewith.
2.7. Trade Names; Change of Name. No Assignor has or operates in any
jurisdiction under, or in the preceding 12 months has had or has operated in any
jurisdiction under, any trade names, fictitious names or other names except its
legal name and such other trade or fictitious names as are listed on Annex C
hereto. No Assignor shall change its legal
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name or assume or operate in any jurisdiction under any trade, fictitious or
other name except those names listed on Annex C hereto and new names established
in accordance with the last sentence of this Section 2.7. No Assignor shall
assume or operate in any jurisdiction under any new trade, fictitious or other
name unless (i) it shall have given to the Collateral Agent written notice
within 10 days following any assumption of, or operation under, such new name
clearly describing such new name and the jurisdictions in which such new name
shall be used and providing such other information in connection therewith as
the Collateral Agent may reasonably request and (ii) with respect to such new
name, it shall have taken all action requested by the Collateral Agent, to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties. As of the time when
each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are what they purport to be, and that all
papers and documents (if any) relating thereto will be the only original
writings evidencing and embodying such obligation of the account debtor named
therein (other than copies or originals created for general accounting
purposes).
3.2. Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense accurate records of its Receivables and Contracts,
records of all payments received, all credits granted thereon, all merchandise
returned and all other dealings therewith, and such Assignor will make the same
available on such Assignor's premises to the Collateral Agent for inspection, at
such Assignor's own cost and expense, at any and all reasonable times upon prior
notice to an Authorized Officer of such Assignor. Upon the occurrence and during
the continuance of an Event of Default and at the request of the Collateral
Agent, such Assignor shall, at its own cost and expense, deliver all tangible
evidence of its Receivables and Contract Rights (including, without limitation,
all documents evidencing the Receivables and all Contracts) and such books and
records to the Collateral Agent or to its representatives (copies of which
evidence and books and records may be retained by such Assignor). Upon the
occurrence and during the continuance of an Event of Default and if the
Collateral Agent so directs, such Assignor shall legend, in form and manner
reasonably satisfactory to the Collateral Agent, the Receivables and the
Contracts, as well as books, records and documents (if any) of such Assignor
evidencing or pertaining to such Receivables and Contracts with an appropriate
reference to the fact that such Receivables and Contracts have been assigned to
the Collateral Agent and that the Collateral Agent has a security interest
therein.
3.3. Direction to Account Debtors; Contracting Parties; etc. Upon
the occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all
payments on account of the Receivables and
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Contracts to be made directly to the Cash Collateral Account, (y) that the
Collateral Agent may, at its option, directly notify the obligors with respect
to any Receivables and/or under any Contracts to make payments with respect
thereto as provided in the preceding clause (x) and (z) that the Collateral
Agent may enforce collection of any such Receivables and Contracts and may
adjust, settle or compromise the amount of payment thereof, in the same manner
and to the same extent as such Assignor. Without notice to or assent by any
Assignor, the Collateral Agent may apply any or all amounts then in, or
thereafter deposited in, the Cash Collateral Account which application shall be
effected in the manner provided in Section 7.4 of this Agreement. The costs and
expenses (including reasonable attorneys' fees) of collection, whether incurred
by the Assignor or the Collateral Agent, shall be borne by the relevant
Assignor. The Collateral Agent shall simultaneously deliver a copy of each
notice referred to in the preceding clause (y) to the relevant Assignor;
provided, that the failure by the Collateral Agent to so notify such Assignor
shall not affect the effectiveness of such notice or the other rights of the
Collateral Agent created by this Section 3.3.
3.4. Modification of Terms; etc. No Assignor shall rescind or cancel
any indebtedness evidenced by any Receivable or under any Contract, or modify in
any material respect any term thereof or make any material adjustment with
respect thereto, or extend or renew the same, or compromise or settle any
material dispute, claim, suit or legal proceeding relating thereto, or sell any
Receivable or Contract, or interest therein, without the prior written consent
of the Collateral Agent, except as permitted by Section 3.5 hereof or in the
Credit Agreement. Each Assignor will duly fulfill all obligations on its part to
be fulfilled under or in connection with the Receivables and Contracts and will
do nothing to impair the rights of the Collateral Agent in the Receivables or
Contracts.
3.5. Collection. Each Assignor shall endeavor in accordance with
reasonable business practices to cause to be collected from the account debtor
named in each of its Receivables or obligor under any Contract, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Receivable or Contract,
and apply forthwith upon receipt thereof all such amounts as are so collected to
the outstanding balance of such Receivable or under such Contract, except that,
prior to the occurrence and continuance of an Event of Default, any Assignor may
allow in the ordinary course of business as adjustments to amounts owing under
its Receivables and Contracts (i) an extension or renewal of the time or times
of payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly performed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, attorneys' fees) of
collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.6. Instruments. If any Assignor owns or acquires any Instrument
constituting Collateral (and not otherwise required to be pledged pursuant to
the Amended and Restated Pledge Agreement), such Assignor will within 10
Business Days notify the Collateral Agent
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thereof, and upon request by the Collateral Agent will promptly deliver such
Instrument to the Collateral Agent appropriately endorsed to the order of the
Collateral Agent as further security hereunder.
3.7. Assignors Remain Liable Under Receivables. Anything herein to
the contrary notwithstanding, the Assignors shall remain liable under each of
the Receivables to observe and perform all of 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 Receivables. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Collateral Agent or any other Secured
Creditor of any payment relating to such Receivable pursuant hereto, nor shall
the Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by them
or as to the sufficiency of any performance by any party under any Receivable
(or any agreement giving rise thereto), 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 them or to which they may be entitled at any
time or times.
3.8. Assignors Remain Liable Under Contracts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with and pursuant
to the terms and provisions of each Contract. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to such
contract pursuant hereto, nor shall the Collateral Agent or any other Secured
Creditor be obligated in any manner to perform any of the obligations of any
Assignor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any performance by any party
under any Contract, 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 them or to which they may be entitled at any time or times.
3.9. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
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ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use the registered Marks listed in Annex D hereto for such Assignor
and that said listed Marks constitute all the United States marks and
applications for United States marks registered in the PTO that such Assignor
presently owns or uses in connection with its business. Each Assignor further
warrants that it has no knowledge of any third party claim that any aspect of
such Assignor's present or contemplated business operations infringes or will
infringe any trademark, service mark or trade name. Each Assignor represents and
warrants that it is the true and lawful owner of or otherwise has the right to
use all U.S. trademark registrations and applications listed in Annex D hereto
and that said registrations are valid, subsisting, have not been cancelled and
that such Assignor is not aware of any third-party claim that any of said
registrations is invalid or unenforceable, or is not aware that there is any
reason that any of said registrations is invalid or unenforceable, or is not
aware that there is any reason that any of said applications will not pass to
registration. Each Assignor represents and warrants that upon the recordation of
a Grant of Security Interest in United States Trademarks and Patents in the form
of Annex G hereto in the United States Patent and Trademark Office, together
with filings on Form UCC-1 pursuant to this Agreement, all filings,
registrations and recordings necessary or appropriate to perfect the security
interest granted to the Collateral Agent in the United States Marks covered by
this Agreement under federal law will have been accomplished. Each Assignor
agrees to execute such a Grant of Security Interest in United States Trademark
and Patents covering all right, title and interest in each United States Mark,
and the associated goodwill, of such Assignor, and to record the same. Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of an Event of Default, any
document which may be required by the United States Patent and Trademark Office
in order to effect an absolute assignment of all right, title and interest in
each Mark, and record the same.
4.2. Licenses and Assignments. Except as otherwise permitted by the
Credit Agreement or this Agreement, each Assignor hereby agrees not to divest
itself of any right under any Mark absent prior written approval of the
Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who such Assignor believes is infringing or diluting or otherwise
violating in any material respect any of such Assignor's rights in and to any
Mark, or with respect to any party claiming that such Assignor's use of any Mark
violates in any material respect any property right of that party. Each Assignor
further agrees, unless otherwise agreed by the Collateral Agent, to prosecute
any Person infringing any Mark in accordance with commercially reasonable
business practices.
4.4. Preservation of Marks. Each Assignor agrees to use its Marks in
interstate commerce during the time in which this Agreement is in effect,
sufficiently to preserve such
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Marks as trademarks or service marks under the laws of the United States;
provided, that, to the extent permitted by the Credit Agreement, no Assignor
shall be obligated to preserve any Mark in the event such Assignor determines,
in its reasonable business judgment, that the preservation of such Mark is no
longer desirable in the conduct of its business.
4.5. Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C. ss.ss. 1051 et seq. to maintain trademark registrations, including but
not limited to affidavits of use and applications for renewals of registration
in the United States Patent and Trademark Office for all of its registered Marks
pursuant to 15 U.S.C. ss.ss. 1058(a), 1059 and 1065, and shall pay all fees and
disbursements in connection therewith and shall not abandon any such filing of
affidavit of use or any such application of renewal prior to the exhaustion of
all administrative and judicial remedies without prior written consent of the
Collateral Agent; provided, that no Assignor shall be obligated to maintain
registration of any Mark in the event that such Assignor determines, in its
reasonable business judgment, that such maintenance of such Mark is no longer
necessary or desirable in the conduct of its business. Each Assignor agrees to
notify the Collateral Agent three (3) months prior to the dates on which the
affidavits of use or the applications for renewal registration are due with
respect to any registered Mark that the affidavits of use or the renewal is
being processed or being abandoned, as the case may be.
4.6. Future Registered Marks. If any Mark registration issues
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within 30 days of
receipt of such certificate, such Assignor shall deliver to the Collateral Agent
a copy of such certificate, and a grant of security in such Mark, to the
Collateral Agent and at the expense of such Assignor, confirming the grant of
security in such Mark to the Collateral Agent hereunder, the form of such
security to be substantially the same as the form hereof or in such other form
as may be reasonably satisfactory to the Collateral Agent.
4.7. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks and the goodwill of the
business associated therewith, together with all trademark rights and rights of
protection to the same, vested in the Collateral Agent for the benefit of the
Secured Creditors, in which event such rights, title and interest shall
immediately vest in the Collateral Agent for the benefit of the Secured
Creditors, and the Collateral Agent shall be entitled to exercise the power of
attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged
and notarized and record said absolute assignment with the applicable agency;
(ii) take and use or sell the Marks and the goodwill of such Assignor's business
symbolized by the Marks and the right to carry on the business and use the
assets of such Assignor in connection with which the Marks have been used; and
(iii) direct such Assignor to refrain, in which event such Assignor shall
refrain, from using the Marks in any manner whatsoever, directly or indirectly,
and, if requested by the Collateral Agent, change such Assignor's corporate name
to eliminate therefrom any use of any Mark and execute such other and further
documents that the Collateral Agent may request to further confirm this and to
transfer ownership of the Marks and
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registrations and any pending trademark application in the United States Patent
and Trademark Office to the Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use (i) all material United States trade secrets and proprietary
information necessary to operate the business of the Assignor (the "Trade Secret
Rights"), (ii) the Patents listed in Annex E hereto for such Assignor and that
said Patents constitute all the United States patents and applications for
United States patents that such Assignor now owns or uses and (iii) the
Copyrights listed in Annex F hereto for such Assignor and that said Copyrights
all registrations of United States copyrights and applications for United States
include copyright registrations that such Assignor now owns or uses. Each
Assignor further warrants that it has no knowledge of any third party claim that
any aspect of such Assignor's present or contemplated business operations
infringes or will infringe any patent or any copyright of such Assignor has
misappropriated any trade secret or proprietary information. Each Assignor
represents and warrants that upon the recordation of a Grant of Security
Interest in United States Trademarks and Patents in the form of Annex G hereto
in the United States Patent and Trademark Office and the recordation of a Grant
of Security Interest in United States Copyrights in the form of Annex H hereto
in the United States Copyright Office, together with filings on Form UCC-1
pursuant to this Agreement, all filings, registrations and recordings necessary
or appropriate to perfect the security interest granted to the Collateral Agent
in the United States Patents and United States Copyrights covered by this
Agreement under federal law will have been accomplished. Each Assignor agrees to
execute such a Grant of Security Interest in United States Trademarks and
Patents covering all right, title and interest in each United States Patent of
such Assignor and to record the same, and to execute such a Grant of Security
Interest in United States Copyrights covering all right, title and interest in
each United States Copyright of such Assignor and to record the same. Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of any Event of Default,
any document which may be required by the United States Patent and Trademark
Office or the United States Copyright Office in order to effect an absolute
assignment of all right, title and interest in each Patent and Copyright, and to
record the same.
5.2. Licenses and Assignments. Except as otherwise permitted by the
Credit Agreement or this Agreement, each Assignor hereby agrees not to divest
itself of any right under any Patent or Copyright absent prior written approval
of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe any of such
Assignor's rights in and to any Patent or Copyright or to any claim that such
Assignor's
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practice of any Patent or use of any Copyright violates any property right of a
third party, or with respect to any misappropriation of any Trade Secret Right
or any claim that such Assignor's practice of any Trade Secret Right violates
any property right of a third party. Each Assignor further agrees, absent
direction of the Collateral Agent to the contrary, diligently to prosecute any
Person infringing any Patent or Copyright or any Person misappropriating any
Trade Secret Right in accordance with commercially reasonable business
practices.
5.4. Maintenance of Patents. At its own expense, each Assignor shall
make timely payment of all post-issuance fees required pursuant to 35 U.S.C. ss.
41 to maintain in force rights under each Patent, absent prior written consent
of the Collateral Agent; provided, that, to the extent permitted by the Credit
Agreement, no Assignor shall be obligated to maintain any Patent in the event
such Assignor determines, in its reasonable business judgment, that the
maintenance of such Patent is no longer necessary or desirable in the conduct of
its business.
5.5. Prosecution of Patent Application. At its own expense, each
Assignor shall diligently prosecute all applications for United States Patents
listed in Annex E hereto for such Assignor and shall not abandon any such
application prior to exhaustion of all administrative and judicial remedies,
absent written consent of the Collateral Agent; provided, that, to the extent
permitted by the Credit Agreement, no Assignor shall be obligated to prosecute
any application in the event such Assignor determines, in its reasonable
business judgment, that the prosecuting of such application is no longer
necessary or desirable in the conduct of its business.
5.6. Other Patents and Copyrights. Within 30 days of the acquisition
or issuance of a United States Patent, registration of a Copyright, or
acquisition of a registered Copyright, or of filing of an application for a
United States Patent or registration of Copyright, the relevant Assignor shall
deliver to the Collateral Agent a copy of said Copyright or certificate or
registration of, or application therefor, said Patents, as the case may be, with
an assignment for security as to such Patent or Copyright, as the case may be,
to the Collateral Agent and at the expense of such Assignor, confirming the
assignment for security, the form of such assignment for security to be
substantially the same as the form hereof or in such other form as may be
reasonably satisfactory to the Collateral Agent.
5.7. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may by written notice to the relevant Assignor, take any or
all of the following actions: (i) declare the entire right, title, and interest
of such Assignor in each of the Patents and Copyrights vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such right,
title, and interest shall immediately vest in the Collateral Agent for the
benefit of the Secured Creditors, in which case the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1 hereof to
execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such other
and further documents as the Collateral Agent may request further to confirm
this and to transfer ownership of the Patents and Copyrights to the Collateral
Agent for the benefit of the Secured Creditors.
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ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Each Assignor will
do nothing to impair the rights of the Collateral Agent in the Collateral except
to the extent such impairment shall be waived in accordance with the terms of
Section 10.2 hereof. Each Assignor will at all times keep its Inventory and
Equipment insured in favor of the Collateral Agent, at such Assignor's own
expense to the extent and in the manner provided in the Credit Agreement; all
policies or certificates with respect to such insurance (and any other insurance
maintained by such Assignor) (i) shall be endorsed to the Collateral Agent's
reasonable satisfaction for the benefit of the Collateral Agent (including,
without limitation, by naming the Collateral Agent as additional insured and
loss payee) and (ii) shall state that such insurance policies shall not be
cancelled or revised without 30 days' prior written notice thereof by the
insurer to the Collateral Agent; and certified copies of such policies or
certificates shall be deposited with the Collateral Agent. If any Assignor shall
fail to insure its Inventory and Equipment in accordance with the preceding
sentence, or if any Assignor shall fail to so endorse and deposit all policies
or certificates with respect thereto, the Collateral Agent shall have the right
following reasonable prior written notice to such Assignor (but shall be under
no obligation) to procure such insurance and such Assignor agrees to promptly
reimburse the Collateral Agent for all costs and expenses of procuring such
insurance. Except as otherwise permitted to be retained by the relevant Assignor
pursuant to the Credit Agreement, the Collateral Agent shall, at the time such
proceeds of such insurance are distributed to the Secured Creditors, apply such
proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all
liability and responsibility in connection with the Collateral acquired by it
and the liability of such Assignor to pay the Obligations shall in no way be
affected or diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to such
Assignor.
6.2. Warehouse Receipts Non-Negotiable. Each Assignor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory, such warehouse receipt or receipt in the
nature thereof shall not be "negotiable" (as such term is used in Section 7-104
of the Uniform Commercial Code as in effect in any relevant jurisdiction or
under other relevant law) or, if any warehouse receipt or any receipt in the
nature of a warehouse receipt is "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law) then the respective Assignor shall promptly take
all action as may be required under the relevant jurisdiction to grant a
perfected security interest in such Collateral to the Collateral Agent for the
benefit of the Secured Creditors.
6.3. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps
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relating to the Collateral and other property or rights covered by the security
interest hereby granted, which the Collateral Agent deems reasonably appropriate
or advisable to perfect, preserve or protect its security interest in the
Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are necessary or desirable in the opinion of the
Collateral Agent to establish and maintain a valid, enforceable, first priority
perfected security interest in the Collateral as provided herein and the other
rights and security contemplated hereby all in accordance with the Uniform
Commercial Code as enacted in any and all relevant jurisdictions or any other
relevant law. Each Assignor will pay any applicable filing fees, recordation
taxes and related expenses relating to its Collateral. Each Assignor hereby
authorizes the Collateral Agent to file any such financing statements without
the signature of such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the UCC in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument
or other obligation (including, without limitation, the Receivables and
the Contracts) constituting the Collateral to make any payment required by
the terms of such agreement, instrument or other obligation directly to
the Collateral Agent;
(iii) withdraw all monies, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof, or
direct the relevant Assignor to sell, assign or otherwise liquidate any or
all of the Collateral or any part thereof, and, in each case, take
possession of the proceeds of any such sale or liquidation;
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(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral Agent
reasonably convenient to the Collateral Agent and the Borrower, in which
event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered to
the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action by
the Collateral Agent as provided in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good
condition; and
(vi) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for
such term and on such conditions and in such manner as the Collateral
Agent shall in its sole judgment determine (taking into account such
provisions as may be necessary to protect and preserve such Marks, Patents
or Copyrights);
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Administrative Agent or the Collateral Agent, in each case acting upon
the instructions of the Required Secured Creditors and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent, as the case maybe, for the benefit
of the Secured Creditors upon the terms of this Agreement.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time at which such
disposition is to be made and the intended sale price or other
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consideration therefor, and shall be subject, for the 10 days after the giving
of such notice, to the right of the relevant Assignor or any nominee of such
Assignor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' written notice to
the relevant Assignor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Collateral Agent's option, be subject to reserve), after publication
of notice of such auction not less than 10 days prior thereto in two newspapers
in general circulation in the City of New York and Charlotte, North Carolina. To
the extent permitted by any such requirement of law, the Collateral Agent may
bid for and become the purchaser of the Collateral or any item thereof, offered
for sale in accordance with this Section without accountability to the relevant
Assignor. If, under mandatory requirements of applicable law, the Collateral
Agent shall be required to make disposition of the Collateral within a period of
time which does not permit the giving of notice to the relevant Assignor as
hereinabove specified, the Collateral Agent need give such Assignor only such
notice of disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law.
7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Assignor hereby further waives, to the extent
permitted by law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity
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against such Assignor and against any and all Persons claiming or attempting to
claim the Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent the Amended and Restated Pledge Agreement or
the additional Security Documents require proceeds of collateral under such
Security Documents to be applied in accordance with the provisions of this
Agreement or the Pledgee under such other Security Document) upon any sale or
other disposition of the Collateral, together with all other moneys received by
the Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing the Collateral
Agent of the type provided in clauses (iii) and (iv) of the definition of
Obligations;
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Obligations shall be paid to the Secured Creditors as provided in Section
7.4(c) hereof with each Secured Creditor receiving an amount equal to its
outstanding Obligations or, if the proceeds are insufficient to pay in
full all such Obligations, its Pro Rata Share of the amount remaining to
be distributed; and
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii) and following the
termination of this Agreement pursuant to Section 10.8 hereof, to the
relevant Assignor or, to the extent directed by such Assignor or a court
of competent jurisdiction, to whomever may be lawfully entitled to receive
such surplus.
(b) For purposes of this Agreement, "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Obligations and the
denominator of which is the then outstanding amount of all Obligations.
(c) All payments required to be made to the Lender Creditors
hereunder shall be made to the Administrative Agent under the Credit Agreement
for the account of the Lender Creditors and all payments required to be made to
the Other Creditors hereunder shall be made directly to the respective Other
Creditor.
(d) For purposes of applying payments received in accordance with
this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Other Creditors for
a determination (which the Administrative Agent, each Other Creditor and the
Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Obligations owed to the Lender Creditors or
the Other Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Lender Creditor or an Other Creditor)
to the contrary, the Administrative Agent under the Credit Agreement, in
furnishing information pursuant to the preceding sentence,
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and the Collateral Agent, in acting hereunder, shall be entitled to assume that
(x) no Credit Document Obligations other than principal, interest and regularly
accruing fees are owing to any Lender Creditor and (y) no Interest Rate
Agreements or Other Obligations in respect thereof are in existence.
(e) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the sums referred to in
clause (a) of this Section 7.4 with respect to the relevant Assignor.
7.5. Remedies Cumulative. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, under the
other Secured Debt Agreements or now or hereafter existing at law, in equity or
by statute and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time or
simultaneously and as often and in such order as may be deemed expedient by the
Collateral Agent. All such rights, powers and remedies shall be cumulative and
the exercise or the beginning of the exercise of one shall not be deemed a
waiver of the right to exercise any other or others. No delay or omission of the
Collateral Agent in the exercise of any such right, power or remedy and no
renewal or extension of any of the Obligations shall impair any such right,
power or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence therein. No notice to or demand on any Assignor in
any case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Collateral Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then in
such suit the Collateral Agent may recover reasonable expenses, including
attorneys' fees, and the amounts thereof shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective successors, permitted assigns, employees, agents and
servants (hereinafter in this Section 8.1
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referred to individually as "Indemnitee," and collectively as "Indemnitees")
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all reasonable
costs, expenses or disbursements (including reasonable attorneys' fees and
expenses) (for the purposes of this Section 8.1 the foregoing are collectively
called "expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement, any other Secured Debt Agreement or any other document executed in
connection herewith or therewith or in any other way connected with the
administration of the transactions contemplated hereby or thereby or the
enforcement of any of the terms of, or the preservation of any rights under any
thereof, provided that no Indemnitee shall be indemnified pursuant to this
Section 8.1(a) for losses, damages or liabilities to the extent caused by the
gross negligence or willful misconduct of such Indemnitee. Each Assignor agrees
that upon written notice by any Indemnitee of the assertion of such a liability,
obligation, damage, injury, penalty, claim, demand, action, suit or judgment,
the relevant Assignor shall assume full responsibility for the defense thereof.
Each Indemnitee agrees to use its best efforts to promptly notify the relevant
Assignor of any such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof, each
Assignor agrees, jointly and severally, to pay or reimburse the Collateral Agent
for any and all reasonable fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other reasonable fees,
costs and expenses in connection with protecting, maintaining or preserving the
Collateral and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b)
hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by any Assignor in this Agreement, any other
Secured Debt Agreement or in any writing contemplated by or made or delivered
pursuant to or in connection with this Agreement or any other Secured Debt
Agreement.
(d) If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in
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this Article VIII shall continue in full force and effect notwithstanding the
full payment of all the Notes issued under the Credit Agreement, the termination
of all Interest Rate Agreements and the payment of all other Obligations and
notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Administrative Agent" shall have the meaning provided in the
recitals to this Agreement.
"Agreement" shall mean this Amended and Restated Security Agreement
as the same may be modified, supplemented or amended from time to time in
accordance with its terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Books" shall mean all books, records and other written, electronic
or other documentation in whatever form maintained now or hereafter by or for
any Assignor in connection with the ownership of its assets or the conduct of
its business or evidencing or containing information relating to the Collateral,
including: (i) ledgers; (ii) records indicating, summarizing, or evidencing such
Assignor's assets, business operations or financial condition; (iii) computer
programs and software; (iv) computer discs, tapes, files, manuals, spreadsheets;
(v) computer printouts and output of whatever kind; (vi) any other computer
prepared or electronically stored, collected or reported information and
equipment of any kind; and (vii) any and all other rights now or hereafter
arising out of any contract or agreement between such Assignor and any service
bureau, computer or data processing company or other Person charged with
preparing or maintaining any of such Assignor's books or records or with credit
reporting, including with regard to such Assignor's Receivables.
"Borrower" shall have the meaning provided in the recitals to this
Agreement.
"Cash Collateral Account" shall mean a cash collateral account, if
any, maintained with, and in the sole dominion and control of, the Collateral
Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.
19
<PAGE>
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor (including,
without limitation, all rights to payment) under each Contract.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, each switch sharing
agreement with Parent, each interconnection agreement, each limited liability
company agreement or operating agreement, each partnership agreement and any
Interest Rate Agreements).
"Copyrights" shall mean any United States or foreign copyright owned
by any Assignor, including any registrations of any Copyrights, in the United
States Copyright Office or the equivalent thereof in any foreign country, other
than those countries outside the United States where the grant of a security
interest would invalidate such Copyrights, as well as any application for a
United States copyright registration now or hereafter made with the United
States Copyright Office or the equivalent thereof in any foreign country by any
Assignor.
"Credit Agreement" shall have the meaning provided in the recitals
to this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time,
or both, would constitute an Event of Default.
"Documentation Agent" shall have the meaning provided in the
recitals to this Agreement.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Assignor and any and
all additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
20
<PAGE>
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York and
shall in any event include all of any Assignor's claims, rights, powers,
privileges, authority, options, security interests, liens and remedies under any
limited liability company agreement, operating agreement or partnership
agreements to which such Assignor is a party or with respect to any limited
liability company of which such Assignor is a member or with respect to any
partnership of which such Assignor is a party.
"Goods" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from any Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor.
"Investment Property" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Lender Creditors" shall have the meaning provided in the recitals
to this Agreement.
"Lenders" shall have the meaning provided in the recitals to this
Agreement.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
"Marks" shall mean all right, title and interest in and to any
United States or foreign trademarks, service marks and trade names now held or
hereafter acquired by any Assignor, including any registration of any trademarks
and service marks in the United States Patent and Trademark Office, or the
equivalent thereof in any foreign country, other than those countries outside
the United States, where the grant of a security interest would invalidate such
Marks, and any trade dress including logos and/or designs used by any Assignor
in the United States or any foreign country.
21
<PAGE>
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Assignor, now existing or hereafter incurred under, arising out of or in
connection with each Credit Document to which such Assignor is a party
(including, in the case of each Subsidiary Guarantor, all such obligations and
liabilities of such Subsidiary Guarantor under the Amended and Restated
Subsidiary Guaranty) and the due performance and compliance by each Assignor
with the terms of each such Credit Document (all such obligations and
liabilities under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Interest Rate Agreements, being
herein collectively called the "Credit Document Obligations"); (ii) the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities of each Assignor now existing or hereafter incurred under,
arising out of or in connection with any Interest Rate Agreements including, in
the case of each Subsidiary Guarantor, all obligations of such Subsidiary
Guarantor under the Amended and Restated Subsidiary Guaranty in respect of
Interest Rate Agreements (all such obligations and liabilities under this clause
(ii) being herein collectively called the "Other Obligations"); (iii) any and
all sums advanced by the Collateral Agent in order to preserve the Collateral or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of each Assignor referred to in clauses (i) and (ii), after an
Event of Default shall have occurred and be continuing, the reasonable expenses
of re-taking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement.
"Other Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any United States or foreign patent to which
any Assignor now or hereafter has title and any divisions or continuations
thereof, as well as any application for a United States or foreign patent now or
hereafter made by any Assignor, except as to (i) patents or patent applications
in those countries where the granting of a security interest in such patents is
not permissible under the laws of that country and (ii) any "intent to use"
application pending or approved before the United States Patent and Trademark
Office (the "PTO") to the extent, and only to the extent that the grant of a
Lien thereon hereunder would render such application void as terminable by the
PTO.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity,
22
<PAGE>
warranty or guaranty payable to the Collateral Agent or any Assignor 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 Assignor 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) and (iii) any and
all other amounts from time to time paid or payable under or in connection with
any of the Collateral.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b)
of this Agreement.
"PTO" shall have the meaning provided in the definition of "Patents"
in this Article IX.
"Receivables" shall mean any "account" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, whether now in existence
or arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (a) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to secure
the foregoing, (b) all of any Assignor's right, title and interest in and to any
goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (e) all books, records, ledger cards, and invoices
relating thereto, (f) all evidences of the filing of financing statements and
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto and (h) all other writings
related in any way to the foregoing.
"Required Secured Creditors" shall mean (i) the Required Lenders
(or, to the extent required by Section 12.12 of the Credit Agreement, each of
the Lenders) under the Credit Agreement so long as any Credit Document
Obligations remain outstanding and (ii) in any situation not covered by
preceding clause (i), the holders of at least a majority of the outstanding
principal amount of the Other Obligations.
"Requisite Creditors" shall have the meaning provided in Section
10.2 of this Agreement.
"Secured Creditors" shall have the meaning provided in the recitals
to this Agreement.
"Secured Debt Agreements" shall mean and include this Agreement, the
other Credit Documents and the Interest Rate Agreements.
23
<PAGE>
"Syndication Agent" shall have the meaning provided in the recitals
to this Agreement.
"Termination Date" shall have the meaning provided in Section 10.8
of this Agreement.
"Trade Secret Rights" shall have the meaning provided in Section 5.1
of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed:
(a) if to any Assignor, at its address set forth opposite its
signature below;
(b) if to the Collateral Agent:
First Union National Bank
One First Union Center,
201 S. College Street, CP-06
Charlotte, North Carolina 28288-0760
Attention: Brand Hosford
Telephone No.: (704) 374-6355
Facsimile No.: (704) 374-4793
(c) if to any Lender Creditor (other than the Collateral Agent),
at such address as such Lender Creditor shall have specified
in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Assignor and
the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
10.2. Waiver; Amendment. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor directly affected thereby and the
Collateral Agent (with the consent of the Required Secured Creditors); provided,
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors
24
<PAGE>
of such Class of Secured Creditors. For the purpose of this Agreement the term
"Class" shall mean each class of Secured Creditors, i.e., whether (x) the Lender
Creditors as holders of the Credit Document Obligations or (y) the Other
Creditors as the holders of the Other Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of (x)
with respect to the Credit Document Obligations, the Required Lenders and (y)
with respect to the Other Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Agreements.
10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Secured Debt
Agreement; or (c) any amendment to or modification of any Secured Debt Agreement
or any security for any of the Obligations; whether or not any Assignor shall
have notice or knowledge of any of the foregoing.
10.4. Successors and Assigns. This Agreement shall be binding upon
each Assignor and its successors and assigns and shall inure to the benefit of
the Collateral Agent and the other Secured Creditors and its successors and
assigns; provided, that no Assignor may transfer or assign any or all of its
rights or obligations hereunder without the prior written consent of the
Collateral Agent. All agreements, statements, representations and warranties
made by each Assignor herein or in any certificate or other instrument delivered
by such Assignor or on its behalf under this Agreement shall be considered to
have been relied upon by the Secured Creditors and shall survive the execution
and delivery of this Agreement and the other Secured Debt Agreements regardless
of any investigation made by the Secured Creditors or on their behalf.
10.5. Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
10.7. Assignor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of each Assignor under or with
respect to any Collateral.
10.8. Termination; Release. (a) On the Termination Date, this
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section
25
<PAGE>
8.1 hereof shall survive such termination) and the Collateral Agent, at the
request and expense of the respective Assignor, will promptly execute and
deliver to such Assignor a proper instrument or instruments (including Uniform
Commercial Code termination statements on form UCC-3) acknowledging the
satisfaction and termination of this Agreement, and will duly assign, transfer
and deliver to such Assignor (without recourse and without any representation or
warranty) such of the Collateral as may be in the possession of the Collateral
Agent and as has not theretofore been sold or otherwise applied or released
pursuant to this Agreement. As used in this Agreement, "Termination Date" shall
mean the date upon which the Total Commitment and all Interest Rate Agreements
have been terminated, no Note or Letter of Credit is outstanding (other than
Letters of Credit, together with all Fees that have accrued and will accrue
thereon through the stated termination date of such Letters of Credit, which
have been supported in a manner satisfactory to the Issuing Lender in its sole
and absolute discretion) and all other Obligations (other than any indemnities
described in Section 8.1 hereof and in Section 12.13 of the Credit Agreement
which are not then due and payable) have been indefeasibly paid in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed of in connection with a sale or other disposition permitted
by Section 9.02 of the Credit Agreement or is otherwise released at the
direction of the Required Secured Creditors and the proceeds of such sale or
sales or from such release are applied in accordance with the provisions of the
Credit Agreement, to the extent required to be so applied, such Collateral will
be sold free and clear of the Liens created by this Agreement and the Collateral
Agent, at the request and expense of such Assignor, will duly release from the
security interest created hereby and assign, transfer and deliver to such
Assignor (without recourse and without any representation or warranty) such of
the Collateral as is then being (or has been) so sold or released and as may be
in the possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement.
(c) At any time that the respective Assignor desires that Collateral
be released as provided in the foregoing Section 10.8(a) or (b), it shall
deliver to the Collateral Agent a certificate signed by an Authorized Officer
stating that the release of the respective Collateral is permitted pursuant to
Section 10.8(a) or (b) hereof.
10.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Collateral Agent.
10.10. The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the obligations
of the Collateral Agent as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement and as provided in the Uniform
Commercial Code in the State of New York. The Collateral Agent shall act
hereunder on the terms and conditions set forth in Section 11 of the Credit
Agreement.
26
<PAGE>
10.11. Additional Assignors. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become an Assignor hereunder by executing a counterpart hereof and
delivering the same to the Collateral Agent.
10.12. Amendment and Restatement of Existing Security Agreement. On
and as of the occurrence of the Restatement Effective Date in accordance with
Section 12.10 of the Credit Agreement, the Existing Security Agreement shall be
deemed to be amended and restated in its entirety in the form of this Agreement,
and superseded by this Agreement.
* * *
27
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
Address:
c/o Fairpoint Communications, Inc. FAIRPOINT COMMUNICATIONS
521 East Morehead Street SOLUTIONS CORP.,
Suite 250 as an Assignor
Charlotte, North Carolina 28202
Attention: Timothy W. Henry By: /s/ Timothy W. Henry
Telephone: (704) 344-8150 Ext. 108 -------------------------------------
Fascimile: (704) 344-8121 Title: Vice President of Finance and
Treasurer
c/o Fairpoint Communications, Inc. FAIRPOINT COMMUNICATIONS CORP. -
521 East Morehead Street NEW YORK,
Suite 250 as an Assignor
Charlotte, North Carolina 28202
Attention: Timothy W. Henry By: /s/ Timothy W. Henry
Telephone: (704) 344-8150 Ext. 108 -------------------------------------
Fascimile: (704) 344-8121 Title: Vice President of Finance and
Treasurer
c/o Fairpoint Communications, Inc. FAIRPOINT COMMUNICATIONS CORP. -
521 East Morehead Street VIRGINIA,
Suite 250 as an Assignor
Charlotte, North Carolina 28202
Attention: Timothy W. Henry By: /s/ Timothy W. Henry
Telephone: (704) 344-8150 Ext. 108 -------------------------------------
Fascimile: (704) 344-8121 Title: Vice President of Finance and
Treasurer
28
<PAGE>
c/o Fairpoint Communications, Inc. FAIRPOINT SOLUTIONS CAPITAL, LLC,
521 East Morehead Street as an Assignor
Suite 250
Charlotte, North Carolina 28202
Attention: Timothy W. Henry By: /s/ Timothy W. Henry
Telephone: (704) 344-8150 Ext. 108 -------------------------------------
Fascimile: (704) 344-8121 Title: Vice President of Finance and
Treasurer
FIRST UNION NATIONAL BANK,
as Collateral Agent
By: /s/ Katherine A. Harkness
---------------------------------
Title: Vice President
29
<PAGE>
ANNEX A
to
SECURITY
AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
FairPoint Communications Solutions Corp.
521 East Morehead Street
Suite 220
Charlotte, North Carolina 28202
[OTHERS]
<PAGE>
ANNEX B
to
SECURITY
AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
FairPoint Communications Solutions Corp.
521 East Morehead Street
Suite 220
Charlotte, North Carolina 28202
[OTHERS]
<PAGE>
ANNEX C
to
SECURITY
AGREEMENT
TRADE AND FICTITIOUS NAMES
[TO BE PROVIDED BY BORROWER]
<PAGE>
ANNEX D
SECURITY INTERESTS IN INTELLECTUAL PROPERTY
<PAGE>
ANNEX E
to
SECURITY
AGREEMENT
LIST OF PATENTS AND APPLICATIONS
[TO BE PROVIDED BY BORROWER]
<PAGE>
ANNEX F
to
SECURITY
AGREEMENT
LIST OF COPYRIGHTS AND APPLICATIONS
[TO BE PROVIDED BY BORROWER]
<PAGE>
ANNEX G
GRANT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS AND PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of
which are hereby acknowledged, [Name of Grantor], a ___________________
[corporation] [limited liability company] ("the Grantor") with principal offices
at _______________________________, hereby grants to First Union National Bank,
as Collateral Agent, with principal offices at One First Union Center, 201 S.
College Street, CP-06, Charlotte, North Carolina 28288-0760 (the "Grantee"), a
security interest in (i) all of the Grantor's right, title and interest in and
to the United States trademarks, trademark registrations and trademark
applications (the "Marks") set forth on Schedule A attached hereto, (ii) all of
the Grantor's rights, title and interest in and to the United States patents
(the "Patents") set forth on Schedule B attached, in each case together with
(iii) all Proceeds (as such term is defined in the Security Agreement referred
to below) and products of the Marks and Patents, (iv) the goodwill of the
businesses with which the Marks are associated and (v) all causes of action
arising prior to or after the date hereof for infringement of any of the Marks
and Patents or unfair competition regarding the same.
THIS AGREEMENT is made to secure the satisfactory performance and
payment of all the Obligations of the Grantor, as such term is defined in the
Amended and Restated Security Agreement among Grantor, the other assignors from
time to time party thereto and the Grantee, dated as of October 20, 1999, as
amended and restated as of March 27, 2000, and as further amended and restated
as of November ___, 2000 (as amended from time to time, the "Security
Agreement"). Upon the occurrence of the Termination Date (as defined in the
Security Agreement), the Grantee shall, upon such satisfaction, execute,
acknowledge, and deliver to the
<PAGE>
ANNEX G
Page 2
Grantor an instrument in writing releasing the security interest in the Marks
and Patents acquired under this Agreement.
This Agreement has been granted in conjunction with the security
interest granted to the Grantee under the Security Agreement. The rights and
remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Agreement are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the ___ day of ______________, ____.
[NAME OF GRANTOR], as Grantor
By______________________________________
Title:
FIRST UNION NATIONAL BANK,
as Collateral Agent and Grantee
By______________________________________
Title:
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of ___________, ____, before me personally came
_________________ who, being by me duly sworn, did state as follows: that [s]he
is _______________ of [Name of Grantor], that [s]he is authorized to execute the
foregoing Agreement on behalf of said [corporation] [limited liability company]
and that [s]he did so by authority of the [Board of Directors] [Managing Member]
of said [corporation] [limited liability company].
________________________________________
Notary Public
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of ____________, ____, before me personally came
_____________________ who, being by me duly sworn, did state as follows: that
[s]he is __________________ of First Union National Bank, that [s]he is
authorized to execute the foregoing Agreement on behalf of said corporation and
that [s]he did so by authority of the Board of Directors of said corporation.
________________________________________
Notary Public
<PAGE>
SCHEDULE A
MARK REG. NO. REG. DATE
---- -------- ---------
<PAGE>
SCHEDULE B
PATENT PATENT NO. ISSUE DATE
------ ---------- ----------
<PAGE>
ANNEX H
GRANT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Name of Grantor], a _______________ [corporation] [limited
liability company] (the "Grantor"), having its chief executive office at
_________________________________, _____________________, is the owner of all
right, title and interest in and to the United States copyrights and associated
United States copyright registrations and applications for registration set
forth in Schedule A attached hereto;
WHEREAS, FIRST UNION NATIONAL BANK., as Collateral Agent, having its
principal offices at One First Union Center, 201 S. College Street, CP-06,
Charlotte, North Carolina 28288-0760 (the "Grantee"), desires to acquire a
security interest in said copyrights and copyright registrations and
applications therefor; and
WHEREAS, the Grantor is willing to grant to the Grantee a security
interest in and lien upon the copyrights and copyright registrations and
applications therefor described above;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and subject to the terms and conditions of the
Amended and Restated Security Agreement, dated as of October 20, 1999, as
amended and restated as of March 27, 2000, and as further amended and restated
as of November ___, 2000, made by the Grantor, the other assignors from time to
time party thereto and the Grantee (as amended from time to time, the "Security
Agreement"), the Grantor hereby grants to the Grantee a security interest in the
copyrights and copyright registrations and applications therefor set forth in
Schedule A attached hereto.
This Agreement has been granted in conjunction with the security
interest granted to the Grantee under the Security Agreement. The rights and
remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Agreement are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
<PAGE>
ANNEX H
Page 2
Executed at New York, New York, the ___ day of ________________, ____.
[NAME OF GRANTOR]
By______________________________________
Name:
Title:
FIRST UNION NATIONAL BANK,
as Collateral Agent and Grantee
By______________________________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of ___________, ____ before me personally came
_______________, who being duly sworn, did depose and say that [s]he is
___________________ of [Name of Grantor], that [s]he is authorized to execute
the foregoing Agreement on behalf of said [corporation] [limited liability
company] and that [s]he did so by authority of the [Board of Directors]
[Managing Member] of said [corporation] [limited liability company].
________________________________________
Notary Public
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of _____________, ____, before me personally came
_____________________ who, being by me duly sworn, did state as follows: that
[s]he is __________________ of First Union National Bank, that [s]he is
authorized to execute the foregoing Agreement on behalf of said corporation and
that [s]he did so by authority of the Board of Directors of said corporation.
________________________________________
Notary Public
<PAGE>
SCHEDULE A
U.S. COPYRIGHTS
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
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