Exhibit 10.2
 
SECURITY AGREEMENT
among
RCN CORPORATION,
CERTAIN SUBSIDIARIES OF RCN CORPORATION
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as COLLATERAL AGENT
 
Dated as of May 25, 2007
 
 

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SECURITY AGREEMENT
          SECURITY AGREEMENT, dated as of May 25, 2007, made by each of the
undersigned assignors (each, an “Assignor” and, together with any other entity
that becomes an assignor hereunder pursuant to Section 10.12 hereof, the
“Assignors”) in favor of Deutsche Bank Trust Company Americas, as collateral
agent (together with any successor collateral agent, the “Collateral Agent”),
for the benefit of the Secured Creditors (as defined below). Certain capitalized
terms as used herein are defined in Article IX hereof. Except as otherwise
defined herein, all 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, RCN Corporation (the “Borrower”), the lenders from time to
time party thereto (the “Lenders”) and Deutsche Bank Trust Company Americas, as
administrative agent (together with any successor Administrative Agent, the
“Administrative Agent”), have entered into a Credit Agreement, dated as of
May 25, 2007 (as amended, modified, restated and/or supplemented from time to
time, the “Credit Agreement”), providing for the making of Loans to, and the
issuance of, and participation in, Letters of Credit for the account of the
Borrower, all as contemplated therein (the Lenders, each Issuing Lender, the
Administrative Agent, the Collateral Agent and each other Agent are herein
called the “Lender Creditors”);
          WHEREAS, the Borrower and/or one or more of its Subsidiaries may at
any time and from time to time enter into one or more Interest Rate Protection
Agreements or Other Hedging Agreements with one or more Lenders or any affiliate
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, the
“Secured Creditors”);
          WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary
Guarantor has jointly and severally guaranteed to the Secured Creditors the
payment when due of all Guaranteed Obligations as described therein;
          WHEREAS, it is a condition precedent to the making of Loans to the
Borrower and the issuance of, and participation in, Letters of Credit for the
account of the Borrower under the Credit Agreement and to the Other Creditors
entering into Interest Rate Protection Agreements and Other Hedging Agreements
that each Assignor shall have executed and delivered to the Collateral Agent
this Agreement; and
          WHEREAS, each Assignor will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of, and participation in, Letters of
Credit for the account of the Borrower under the Credit Agreement and the
entering into by the Borrower and/or one or more of its Subsidiaries of Interest
Rate Protection Agreements or Other Hedging Agreements and, accordingly, desires
to execute this Agreement in order to satisfy the condition described in the
preceding paragraph and to induce the Lenders to make Loans to the Borrower and
issue, and/or

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participate in, Letters of Credit for the account of the Borrower and the Other
Creditors to enter into Interest Rate Protection Agreements or Other Hedging
Agreements with the Borrower and/or one or more of its Subsidiaries;
          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 for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors 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 in all of the right, title and
interest of such Assignor in, to and under all of the following personal
property and fixtures (and all rights therein) of such Assignor, or in which or
to which such Assignor has any rights, in each case whether now existing or
hereafter from time to time acquired:

  (i)   each and every Account;     (ii)   all cash and Cash Equivalents;    
(iii)   the Cash Collateral Account and all monies, securities, Instruments and
other investments deposited in the Cash Collateral Account;     (iv)   all
Tangible Chattel Paper and all Electronic Chattel Paper;     (v)   all
Commercial Tort Claims;     (vi)   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 all Software, and all Software
licensing rights, all writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses, and all recorded
data of any kind or nature, regardless of the medium of recording;     (vii)  
Contracts, together with all Contract Rights arising thereunder;     (viii)  
all Copyrights;     (ix)   all Deposit Accounts and all other demand, deposit,
time, savings, cash management and passbook accounts maintained by such Assignor
with any Person and all monies, securities, Instruments and other investments
deposited in any of the foregoing;

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  (x)   all Documents;     (xi)   all Domain Names;     (xii)   all Equipment;  
  (xiii)   all General Intangibles;     (xiv)   all Goods;     (xv)   all
Instruments;     (xvi)   all Inventory;     (xvii)   all Investment Property;  
  (xviii)   all Letter-of-Credit Rights (whether or not the respective letter of
credit is evidenced by a writing);     (xix)   all Marks;     (xx)   all
Patents;     (xxi)   all Permits;     (xxii)   all Supporting Obligations;    
(xxiii)   all Trade Secret Rights; and     (xxiv)   all Proceeds and products of
any and all of the foregoing and any item excluded pursuant to the next
succeeding sentence (except to the extent such proceeds would independently be
excluded pursuant to said sentence) (all of the above, the “Collateral”).

Notwithstanding anything to the contrary contained above, in no event shall the
Collateral include, and no Assignor shall be deemed to have granted a security
interest (unless and until as further provided below) in (a) any lease, license,
contract, property rights or agreement to which any Assignor is a party or any
of its rights or interests thereunder or property subject thereto if and for so
long as the grant of such security interest shall constitute or result in
(i) the abandonment, invalidation or unenforceability of same or (ii) a breach
or termination pursuant to the terms of, or a default under, any such lease,
license, contract, property rights or agreement (other than to the extent that
any such term in the case of preceding clause (i) or (ii), as applicable) would
be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC (or any successor provision or provisions) of any relevant jurisdiction or
any other applicable law (including the Bankruptcy Code) or principles of
equity), provided, however, that the security interests hereunder shall attach
(x) immediately to any portion of such lease, license, contract, property rights
or agreement that does not result in any of the consequences specified in (i) or
(ii) and (y) to any property or assets described above in this clause (a) on the
first date upon

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which the circumstances described in preceding clauses (i) and/or (ii) (as
relevant) no longer exist with respect thereto, or (b) more than 65% of the
Voting Equity Interests of any Foreign Corporation; provided that each Assignor
shall be required to pledge hereunder 100% of any Non-Voting Equity Interests at
any time and from time to time acquired by such Assignor of any Foreign
Corporation.
          (b) The security interest of the Collateral Agent under this Agreement
extends to all Collateral which any Assignor may acquire, or with respect to
which any Assignor may obtain rights, at any time during the term 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 moneys and claims for moneys 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 or take any action or institute any proceedings which the
Collateral Agent may deem to be 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, recordings and
other actions 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 (or will be accomplished within
ten days after the Initial Borrowing Date or, with respect to Marks, Patents and
Copyrights, within 30 days of the date of the Initial Borrowing Date) and the
security interest granted to the Collateral Agent pursuant to this Agreement in
and to the Collateral creates a valid and, together with all such filings,
registrations, recordings and other actions, a perfected security interest
therein subject to no Liens (other than Permitted Liens) and is entitled to all
the rights, priorities and benefits afforded by the Uniform Commercial Code 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 possession or
control (within the meaning of the UCC as in effect on the date hereof in the
State of New York), by filing a financing statement under the Uniform Commercial
Code as enacted in any relevant jurisdiction or by a filing of a Grant of
Security Interest in the respective form attached hereto in the United States
Patent and Trademark Office or in the United States Copyright Office. Each
Assignor hereby authorizes the Collateral Agent to make duplicate filings as if
such Assignor is a Transmitting Utility, or alternatively, as if such Assignor
is a Person which is not a Transmitting Utility.

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          2.2 No Liens. Such Assignor is, and as to all Collateral acquired by
it from time to time after the date hereof such Assignor will be, the owner of
all Collateral purported to be owned by it free from any Lien or other right,
title or interest of any Person (other than Permitted Liens), and such Assignor
shall defend such Collateral 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
financing statements filed or to be filed in respect of and covering the
security interests granted hereby by such Assignor or in connection with
Permitted Liens.
          2.4 Chief Executive Office, Record Locations. The chief executive
office of such Assignor is, on the date of this Agreement, located at the
address indicated on Annex A hereto for such Assignor. During the period of the
four calendar months preceding the date of this Agreement, the chief executive
office of such Assignor has not been located at any address other than that
indicated on Annex A in accordance with the immediately preceding sentence, in
each case unless each such other address is also indicated on Annex A hereto for
such Assignor.
          2.5 Location of Inventory and Equipment. All Inventory and Equipment
held on the date hereof, or held at any time during the four calendar months
prior to the date hereof, by each Assignor is located at one of the locations
shown on Annex B hereto for such Assignor.
          2.6 Legal Names; Type of Organization (and Whether a Registered
Organization); Jurisdiction of Organization; Location; Organizational
Identification Numbers; Changes Thereto; etc. The exact legal name of each
Assignor, the type of organization of such Assignor, whether or not such
Assignor is a Registered Organization, the jurisdiction of organization of such
Assignor, such Assignor’s Location and the organizational identification number
(if any) of such Assignor is listed on Annex C hereto for such Assignor. Such
Assignor shall not change its legal name, its type of organization, its status
as a Registered Organization (in the case of a Registered Organization), its
jurisdiction of organization, its Location, or its organizational identification
number (if any) from that used on Annex C hereto, except that any such changes
shall be permitted (so long as not in violation of the applicable requirements
of the Secured Debt Agreements and so long as same do not involve (x) a
Registered Organization ceasing to constitute same or (y) such Assignor changing
its jurisdiction of organization or Location from the United States or a State
thereof to a jurisdiction of organization or Location, as the case may be,
outside the United States or a State thereof) if (i) it shall have given to the
Collateral Agent not less than 15 days’ prior written notice of each change to
the information listed on Annex C (as adjusted for any subsequent changes
thereto previously made in accordance with this sentence), together with a
supplement to Annex C which shall correct all information contained therein for
such Assignor, and (ii) in connection with the respective such change or
changes, it shall have taken all action reasonably requested by the Collateral
Agent to maintain the security interests of the Collateral Agent in the
Collateral intended to be granted

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hereby at all times fully perfected and in full force and effect. In addition,
to the extent that such Assignor does not have an organizational identification
number on the date hereof and later obtains one, such Assignor shall promptly
thereafter notify the Collateral Agent of such organizational identification
number and shall take all actions reasonably satisfactory to the Collateral
Agent to the extent necessary to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby fully perfected
and in full force and effect.
          2.7 Trade Names; Etc. Such Assignor does not have or operate in any
jurisdiction under, and in the preceding five years has not had or operated in
any jurisdiction under, any trade names, fictitious names or other names except
its legal name as specified in Annex C and such other trade or fictitious names
as are listed on Annex D hereto for such Assignor. Such Assignor shall not
assume or operate in any jurisdiction under any new trade, fictitious or other
name until (i) it shall have given to the Collateral Agent not less than
15 days’ written notice of its intention so to do, clearly describing such new
name and the jurisdictions in which such new name will 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 reasonably 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.
          2.8 Certain Significant Transactions. During the one year period
preceding the date of this Agreement, no Person shall have merged or
consolidated with or into any Assignor, and no Person shall have liquidated
into, or transferred all or substantially all of its assets to, any Assignor, in
each case except as described in Annex E hereto. With respect to any
transactions so described in Annex E hereto, the respective Assignor shall have
furnished such information with respect to the Person (and the assets of the
Person and locations thereof) which merged with or into or consolidated with
such Assignor, or was liquidated into or transferred all or substantially all of
its assets to such Assignor, and shall have furnished to the Collateral Agent
such UCC lien searches as may have been requested with respect to such Person
and its assets, to establish that no security interest (excluding Permitted
Liens) continues perfected on the date hereof with respect to any Person
described above (or the assets transferred to the respective Assignor by such
Person), including without limitation pursuant to Section 9-316(a)(3) of the
UCC.
          2.9 Non-UCC Property. At any time and from time to time, promptly (and
in any event within 15 days) following the request of the Collateral Agent or
the Required Secured Creditors, the Assignors shall provide the Collateral Agent
a reasonably detailed list (which includes reasonable estimates of the fair
market value (as determined by the Assignors in good faith)) of all property
owned by all of the Assignors of the types described in clauses (1), (2) and
(3) of Section 9-311(a) of the UCC. At any time that the fair market value (as
determined by the Borrower or Collateral Agent in good faith or as shown in any
list delivered pursuant to the immediately preceding sentence) of the property
owned by all of the Assignors of the types described in clauses (1), (2) and
(3) of Section 9-311(a) of the UCC exceeds $2,000,000, the Assignors shall, but
only upon the written request of the Required Secured Creditors or the
Collateral Agent, within 60 days of such request (or such longer period as the
Required Secured Creditors or the Collateral Agent may agree to in writing) take
such actions (at their own cost and expense) as may be required under the
respective United States, State or other laws

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referenced in Section 9-311(a) of the UCC to perfect the security interests
granted herein in any Collateral where the filing of a financing statement does
not perfect the security interest in such property in accordance with the
provisions of Section 9-311(a) of the UCC.
          2.10 As-Extracted Collateral; Timber-to-be-Cut. On the date hereof,
such Assignor does not own, or expect to acquire, any property which
constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut.
If at any time after the date of this Agreement such Assignor owns, acquires or
obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such Assignor
shall furnish the Collateral Agent with prompt written notice thereof (which
notice shall describe in reasonable detail the As-Extracted Collateral and/or
Timber-to-be-Cut and the locations thereof) and shall take all actions as may be
deemed reasonably necessary or desirable by the Collateral Agent to perfect the
security interest of the Collateral Agent therein.
          2.11 Collateral in the Possession of a Bailee. If any Inventory or
other Goods are at any time in the possession of a bailee, such Assignor shall
promptly notify the Collateral Agent thereof and, if requested by the Collateral
Agent, shall use its commercially reasonable efforts to promptly obtain an
acknowledgment from such bailee, in form and substance reasonably satisfactory
to the Collateral Agent, that the bailee holds such Collateral for the benefit
of the Collateral Agent and shall act upon the instructions of the Collateral
Agent, without the further consent of such Assignor. The Collateral Agent agrees
with such Assignor that the Collateral Agent shall not give any such
instructions unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by the respective Assignor with
respect to any such bailee.
          2.12 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 Secured
Debt Agreements and otherwise in writing in connection herewith or therewith.
ARTICLE III
SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
          3.1 Additional Representations and Warranties. As of the time when
each of its material Accounts arises, each Assignor shall be deemed to have
represented and warranted that each such Account, and all records, papers and
documents relating thereto (if any) are genuine and what they purport to be, and
that all papers and documents (if any) relating thereto (i) will, to the
knowledge of such Assignor, represent the genuine, legal, valid and binding
obligation of the account debtor evidencing indebtedness unpaid and owed by the
respective account debtor arising out of the performance of labor or services or
the sale or lease and delivery of the merchandise listed therein, or both,
(ii) will be the only original writings evidencing and embodying such obligation
of the account debtor named therein (other than copies created for general
accounting purposes), (iii) will, to the knowledge of such Assignor, evidence
true and valid obligations, enforceable in accordance with their respective
terms, and (iv) will be in compliance and will conform in all material respects
with all applicable federal, state and local laws and applicable laws of any
relevant foreign jurisdiction.

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          3.2 Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense accurate records of its Accounts and Contracts,
including, but not limited to, originals of all documentation (including each
Contract) with respect thereto, 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 such Assignor and otherwise in
accordance with the Credit Agreement. 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 Accounts and Contract Rights (including, without limitation, all
documents evidencing the Accounts 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 satisfactory to the
Collateral Agent, the Accounts and the Contracts, as well as books, records and
documents (if any) of such Assignor evidencing or pertaining to such Accounts
and Contracts with an appropriate reference to the fact that such Accounts 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, if the Collateral
Agent so directs any Assignor, such Assignor agrees (x) to cause all payments on
account of the Accounts and 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 Accounts 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 Accounts 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, upon the occurrence and during
the continuance of an Event of Default, apply any or all amounts then in, or
thereafter deposited in, the Cash Collateral Account toward the payment of the
Obligations in the manner provided in Section 7.4 of this Agreement. The
reasonable costs and expenses of collection (including reasonable attorneys’
fees), whether incurred by an Assignor or the Collateral Agent, shall be borne
by the relevant Assignor. The Collateral Agent shall deliver a copy of each
notice referred to in the preceding clause (y) to the relevant Assignor,
provided that (x) 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 and (y) no such notice shall be
required if an Event of Default of the type described in Section 10.05 of the
Credit Agreement has occurred and is continuing.
          3.4 Modification of Terms; etc. Except in accordance with such
Assignor’s ordinary course of business and consistent with reasonable business
judgment or as permitted by Section 3.5, no Assignor shall rescind or cancel any
indebtedness evidenced by any Account or under any Contract, or modify any
material 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 Account or Contract, or
interest therein, without the prior written consent of the Collateral Agent. No
Assignor will do anything to impair the rights of the Collateral Agent in the
Accounts or Contracts.

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          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 Accounts 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 Account or Contract, and
apply forthwith upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Account or under such Contract. Except as otherwise
directed by the Collateral Agent after the occurrence and during the
continuation of an Event of Default, any Assignor may allow in the ordinary
course of business as adjustments to amounts owing under its Accounts 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, reasonable 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 in
excess of $100,000 constituting Collateral (other than checks and other payment
instruments received and collected in the ordinary course of business), such
Assignor will within 10 Business Days notify the Collateral Agent 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.
          3.7 Assignors Remain Liable Under Accounts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Accounts 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 Accounts. Neither the Collateral Agent nor any
other Secured Creditor shall have any obligation or liability under any Account
(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 Account 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 Account
(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 Account (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

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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 Deposit Accounts; Etc. (a) No Assignor maintains, or at any time
after the date of this Agreement shall establish or maintain, any demand, time,
savings, passbook or similar account, except for such accounts maintained with a
bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined in
accordance with Section 9-304 of the UCC) is within a State of the United
States. Annex F hereto accurately sets forth, as of the date of this Agreement,
for each Assignor, each Deposit Account maintained by such Assignor (including a
description thereof and the respective account number), the name of the
respective bank with which such Deposit Account is maintained, and the
jurisdiction of the respective bank with respect to such Deposit Account. For
each Deposit Account (other than the Cash Collateral Account, any other Deposit
Account maintained with the Collateral Agent and, subject to the terms contained
in the definition thereof, any Designated Account), the respective Assignor
shall cause the bank with which the Deposit Account is maintained to execute and
deliver to the Collateral Agent, within 45 days after the date of this Agreement
(as such date may be extended by the Collateral Agent) or, if later, at the time
of the establishment of the respective Deposit Account, a “control agreement” in
the form of Annex G hereto (appropriately completed), with such changes thereto
as may be acceptable to the Collateral Agent. If any bank with which a Deposit
Account is maintained refuses to, or does not, enter into such a “control
agreement”, then the respective Assignor shall promptly (and in any event within
45 days after the date of this Agreement or, if later, 30 days after the
establishment of such account) close the respective Deposit Account and transfer
all balances therein to the Cash Collateral Account or another Deposit Account
meeting the requirements of this Section 3.9. If any bank with which a Deposit
Account is maintained refuses to subordinate all its claims, subject to
customary exceptions, with respect to such Deposit Account to the Collateral
Agent’s security interest therein on terms satisfactory to the Collateral Agent,
then the Collateral Agent, at its option, may (x) require that such Deposit
Account be terminated in accordance with the immediately preceding sentence or
(y) agree to a “control agreement” without such subordination, provided that in
such event the Collateral Agent may at any time, at its option, subsequently
require that such Deposit Account be terminated (within 30 days after notice
from the Collateral Agent, as such date may be extended by the Collateral
Agent).
          (b) After the date of this Agreement, no Assignor shall establish any
new demand, time, savings, passbook or similar account, except for Deposit
Accounts established and maintained with banks and meeting the requirements of
preceding clause (a). At the time any such Deposit Account is established, the
appropriate “control agreement” shall be entered into in accordance with the
requirements of preceding clause (a) and the respective Assignor shall furnish
to the Collateral Agent a supplement to Annex F hereto containing the relevant
information with respect to the respective Deposit Account and the bank with
which same is established.

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          3.10 Letter-of-Credit Rights. If any Assignor is at any time a
beneficiary under a letter of credit with a stated amount of $1,000,000 or more,
such Assignor shall promptly notify the Collateral Agent thereof and, at the
request of the Collateral Agent, such Assignor shall, pursuant to an agreement
in form and substance reasonably satisfactory to the Collateral Agent, use its
reasonable best efforts to (i) arrange for the issuer and any confirmer of such
letter of credit to consent to an assignment to the Collateral Agent of the
proceeds of any drawing under such letter of credit or (ii) arrange for the
Collateral Agent to become the transferee beneficiary of such letter of credit,
with the Collateral Agent agreeing, in each case, that the proceeds of any
drawing under the letter of credit are to be applied as provided in this
Agreement after the occurrence and during the continuance of an Event of
Default.
          3.11 Commercial Tort Claims. All Commercial Tort Claims of each
Assignor in existence on the date of this Agreement are described in Annex H
hereto. If any Assignor shall at any time after the date of this Agreement
acquire a Commercial Tort Claim in an amount (taking the greater of the
aggregate claimed damages thereunder or the reasonably estimated value thereof)
of $1,000,000 or more, such Assignor shall promptly notify the Collateral Agent
thereof in a writing signed by such Assignor and describing the details thereof
and shall grant to the Collateral Agent in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance reasonably satisfactory to the
Collateral Agent.
          3.12 Chattel Paper. Upon the request of the Collateral Agent made at
any time or from time to time, each Assignor shall promptly furnish to the
Collateral Agent a list of all Electronic Chattel Paper held or owned by such
Assignor. Furthermore, if requested by the Collateral Agent, each Assignor shall
promptly take all actions which are reasonably practicable so that the
Collateral Agent has “control” of all Electronic Chattel Paper in accordance
with the requirements of Section 9-105 of the UCC. Each Assignor will promptly
(and in any event within 10 days) following any request by the Collateral Agent,
deliver all of its Tangible Chattel Paper to the Collateral Agent.
          3.13 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, certificates, reports
and other assurances or instruments and take such further steps, including any
and all actions as may be necessary or required under the Federal Assignment of
Claims Act, relating to its Accounts, Contracts, Instruments and other property
or rights covered by the security interest hereby granted, as the Collateral
Agent may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES
          4.1 Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of all right, title
and interest in and to the registered Marks and Domain Names listed in Annex I
hereto for such Assignor and that said listed Marks and Domain Names include all
United States marks and applications for United States marks

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owned or purported to be owned by such Assignor registered in the United States
Patent and Trademark Office, as well as all Domain Names that such Assignor owns
or purports to own as of the date hereof. Each Assignor represents and warrants
that it owns, is licensed to use or otherwise has the right to use any
trademarks, service marks or other indicia of origin, including trade dress, and
any Internet domain names, that it uses. Each Assignor further warrants that it
has no knowledge of any third party claim received by it that any aspect of such
Assignor’s present or contemplated business operations infringes or will
infringe any trademark, service mark or trade name of any other Person other
than as could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each Assignor represents and
warrants that the registrations of Marks listed in Annex I hereto are valid,
subsisting, have not been canceled and that such Assignor is not aware of any
third-party claim that any of said registrations is invalid or unenforceable,
and is not aware that there is any reason that any of said registrations is
invalid or unenforceable, and is not aware that there is any reason that any of
said applications will not mature into registrations, other than as could not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. 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 or similar registrar in order to
effect an absolute assignment of all right, title and interest in each Mark
and/or Domain Name, and record the same.
          4.2 Licenses and Assignments. Except as otherwise permitted by the
Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any Mark or Domain Name 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, or is likely to be, infringing or
diluting or otherwise violating any of such Assignor’s rights in and to any Mark
or Domain Name in any manner that could reasonably be expected to have a
Material Adverse Effect, or with respect to any party claiming that such
Assignor’s use of any Mark or Domain Name material to such Assignor’s business
violates in any material respect any property right of that party. Each Assignor
further agrees to prosecute diligently in accordance with reasonable business
practices any Person infringing any Mark or Domain Name in any manner that could
reasonably be expected to have a Material Adverse Effect.
          4.4 Preservation of Marks and Domain Names. Each Assignor agrees to
use its Marks and Domain Names which are material to such Assignor’s business in
interstate commerce during the time in which this Agreement is in effect and to
take all such other actions as are reasonably necessary to preserve such Marks
as trademarks or service marks under the laws of the United States (other than
any such Marks which Assignor reasonably determines are no longer used or useful
in its business or operations).
          4.5 Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents reasonably required to maintain all
Mark and/or Domain Name 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 material registered

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Marks, 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 (other than with respect
to registrations and applications deemed by such Assignor in its reasonable
business judgment to be no longer prudent to pursue).
          4.6 Future Registered Marks and Domain Names. If any Mark registration
is issued hereafter to any Assignor as a result of any application now or
hereafter pending before the United States Patent and Trademark Office or any
Domain Name is registered by Assignor, within 60 days of receipt of such
certificate or similar indicia of ownership, such Assignor shall deliver to the
Collateral Agent a copy of such registration certificate or similar indicia of
ownership, and a grant of a security interest in such Mark and/or Domain Name,
to the Collateral Agent and at the expense of such Assignor, confirming the
grant of a security interest in such Mark and/or Domain Name to the Collateral
Agent hereunder, the form of such security to be substantially in the form of
Annex L hereto 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 Domain Names, 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 or registrar; (ii) take and use or sell the Marks or
Domain Names and the goodwill of such Assignor’s business symbolized by the
Marks or Domain Names and the right to carry on the business and use the assets
of such Assignor in connection with which the Marks or Domain Names have been
used; and (iii) direct such Assignor to refrain, in which event such Assignor
shall refrain, from using the Marks or Domain Names in any manner whatsoever,
directly or indirectly, and such Assignor shall execute such further documents
that the Collateral Agent may reasonably request to further confirm this and to
transfer ownership of the Marks or Domain Names and registrations and any
pending trademark applications in the United States Patent and Trademark Office
or applicable Domain Name registrar 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 all rights in
(i) the Trade Secret Rights, (ii) all right, title and interest in and to the
Patents listed in Annex J hereto for such Assignor and that said Patents include
all the United States patents and applications for United States patents that
such Assignor owns as of the date hereof and (iii) all right, title and interest
in and to the registered Copyrights listed in Annex K hereto for such Assignor
and that said Copyrights include all the United States copyrights registered
with the United States Copyright Office and

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applications to United States copyrights that such Assignor owns as of the date
hereof. 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 of any other Person or such
Assignor has misappropriated any trade secret or proprietary information which,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Each Assignor represents and warrants that the Patents
listed in Annex J hereto are valid, subsisting, have not been canceled and that
such Assignor is not aware of any third-party claim that any of said Patents are
invalid or unenforceable, and is not aware that there is any reason that any of
said Patents are invalid or unenforceable, and is not aware that there is any
reason that any of said Patent applications will not mature into issued Patents.
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 or
Copyright, and to record the same.
          5.2 Licenses and Assignments. Except as otherwise permitted by the
Secured Debt Agreements, 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 or other violation of
such Assignor’s rights in any Patent or Copyright or to any claim that the
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 practice of any Trade Secret Right violates any property right
of a third party, in each case, in any manner which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
Each Assignor further agrees, absent direction of the Collateral Agent to the
contrary, to diligently prosecute, in accordance with its reasonable business
judgment, any Person infringing any Patent or Copyright or any Person
misappropriating any Trade Secret Right, in each case to the extent that such
infringement or misappropriation, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
          5.4 Maintenance of Patents or Copyrights. At its own expense, each
Assignor shall make timely payment of all post-issuance fees required to
maintain in force its rights under each Patent or Copyright, absent prior
written consent of the Collateral Agent (other than any such Patents or
Copyrights which are no longer used or are deemed by such Assignor in its
reasonable business judgment to no longer be useful in its business or
operations).
          5.5 Prosecution of Patent Applications. At its own expense, each
Assignor shall diligently prosecute all material applications for the United
States Patents listed in Annex J hereto, in each case for such Assignor and
shall not abandon any such application prior to exhaustion of all administrative
and judicial remedies (other than applications that are deemed by such Assignor
in its reasonable business judgment to no longer be necessary in the conduct of
the Assignor’s business), absent written consent of the Collateral Agent.

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          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 Copyright, the relevant Assignor shall deliver to the Collateral Agent
a copy of said Copyright or Patent, or certificate or registration of, or
application therefor, as the case may be, with a grant of a security interest as
to such Patent or Copyright, as the case may be, to the Collateral Agent and at
the expense of such Assignor, confirming the grant of a security interest, the
form of such grant of a security interest to be substantially in the form of
Annex M or N hereto, as appropriate, 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 further
documents as the Collateral Agent may reasonably 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.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
          6.1 Protection of Collateral Agent’s Security. Except as otherwise
permitted by the Secured Debt Agreements, each Assignor will do nothing to
impair the rights of the Collateral Agent in the Collateral. Each Assignor will
at all times maintain insurance, at such Assignor’s own expense to the extent
and in the manner provided in the Secured Debt Agreements. Except to the extent
otherwise permitted to be retained by such Assignor or applied by such Assignor
pursuant to the terms of the Secured Debt Agreements, the Collateral Agent
shall, at the time any 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. To the extent practicable, 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 Assignor
shall request that 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).

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          6.3 Additional Information. Each Assignor will, at its own expense,
from time to time upon the reasonable request of the Collateral Agent, promptly
(and in any event within 10 days after its receipt of the respective request)
furnish to the Collateral Agent such information with respect to the Collateral
(including the identity of the Collateral or such components thereof as may have
been requested by the Collateral Agent, the value and location of such
Collateral, etc.) as may be requested by the Collateral Agent. Without limiting
the forgoing, each Assignor agrees that it shall promptly (and in any event
within 10 days after its receipt of the respective request) furnish to the
Collateral Agent such updated Annexes hereto as may from time to time be
reasonably requested by the Collateral Agent.
          6.4 Further Actions. Each Assignor will, at its own expense and upon
the reasonable request of the Collateral Agent, 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, certificates, reports and other
assurances or instruments and take such further steps 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.
          6.5 Financing Statements. Each Assignor agrees to authorize 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 reasonably necessary or desirable in the
opinion of the Collateral Agent to establish and maintain a valid, enforceable,
perfected security interest in the Collateral as provided herein and the other
rights and security contemplated hereby. 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 (and
such authorization includes describing the Collateral as “all assets” of such
Assignor).
ARTICLE VII
REMEDIES UPON OCCURRENCE OF AN 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 the other provisions of this Agreement, shall have all
rights as a secured creditor under any UCC, and such additional rights and
remedies to which a secured creditor is entitled under the laws in effect 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

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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 Accounts 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 and
may exercise any and all remedies of such Assignor in respect of such
Collateral;
     (iii) instruct all banks which have entered into a control agreement with
the Collateral Agent to transfer all monies, securities and instruments held by
such depositary bank to the Cash Collateral Account;
     (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 such 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;
     (v) take possession of the Collateral or any part thereof, by directing
such Assignor in writing to deliver the same to the Collateral Agent at any
reasonable place or places designated by the Collateral Agent, 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 security
and maintenance services as shall be reasonably necessary to protect the same
and to preserve and maintain it in good condition;

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     (vi) subject to any exclusive license issued prior to the Event of Default,
license or sublicense, whether on an exclusive or nonexclusive basis, any Marks,
Domain Names, 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; provided in the case of Marks to the maintenance of quality
standards, not less than comparable to the standards in place at the time of the
Event of Default;
     (vii) apply any monies constituting Collateral or proceeds thereof in
accordance with the provisions of Section 7.4; and
     (viii) take any other action as specified in clauses (1) through (5),
inclusive, of Section 9-607 of the UCC;
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. By
accepting the benefits of this Agreement and each other Security Document, the
Secured Creditors expressly acknowledge and agree that this Agreement and each
other Security Document may be enforced only by the action of the Collateral
Agent 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 Collateral Agent or the holders of at least a majority of the outstanding
Other Obligations, as the case may be, for the benefit of the Secured Creditors
upon the terms of this Agreement and the other Security Documents. Furthermore,
each Assignor agrees to, upon the occurrence and continuance of an Event of
Default, use its commercially reasonable efforts to assist the Collateral Agent
in obtaining any approvals or assignments or licenses from any relevant
Governmental Authority that may be necessary for the exercise of the rights and
remedies of the Collateral Agent with respect to the Collateral.
          7.2 Remedies; Disposition of the Collateral. If any Event of Default
shall have occurred and be continuing, then 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 sale, lease or other disposition may be effected by means
of a public disposition or private disposition, effected in accordance with the
applicable requirements (in each case if and to the extent applicable) of
Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements
of applicable law as may apply to the respective disposition. The Collateral
Agent may, without notice or publication, adjourn any public or private
disposition or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the disposition, and such disposition may be
made

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at any time or place to which the disposition may be so adjourned. To the extent
permitted by any such requirement of law, the Collateral Agent may bid for and
become the purchaser (and may pay all or any portion of the purchase price by
crediting Obligations against the purchase price) of the Collateral or any item
thereof, offered for disposition in accordance with this Section 7.2 without
accountability to the relevant Assignor. If, under applicable law, the
Collateral Agent shall be permitted 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 required by such applicable law.
Each Assignor agrees to do or cause to be done all such other acts and things as
may be reasonably necessary to make such disposition or dispositions of all or
any portion of the Collateral valid and binding and in compliance with any and
all applicable laws, regulations, orders, writs, injunctions, decrees or awards
of any and all courts, arbitrators or governmental instrumentalities, domestic
or foreign, having jurisdiction over any such sale or sales, all at such
Assignor’s expense.
          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 each Assignor hereby further waives, to the extent
permitted by law:
     (i) all damages occasioned by such taking of possession or any such
disposition except any damages which are the direct result of the Collateral
Agent’s gross negligence or willful misconduct (as determined by a court of
competent jurisdiction in a final and non-appealable decision);
     (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 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 Pledge Agreement or any other Security
Document requires proceeds of collateral under such other Security Document to
be applied in accordance with the provisions of

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this Agreement, the Pledgee or Collateral Agent 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 amounts owing the Collateral Agent of the
type described in clauses (iii), (iv) and (v) of the definition of
“Obligations”;
     (ii) second, to the extent proceeds remain after the application pursuant
to the preceding clause (i), to the payment of all amounts owing to any Agent of
the type described in clauses (v) and (vi) of the definition of “Obligations”;
     (iii) third, to the extent proceeds remain after the application pursuant
to the preceding clauses (i) and (ii), an amount equal to the outstanding
Primary Obligations shall be paid to the Secured Creditors as provided in
Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to
its outstanding Primary Obligations or, if the proceeds are insufficient to pay
in full all such Primary Obligations, its Pro Rata Share of the amount remaining
to be distributed;
     (iv) fourth, to the extent proceeds remain after the application pursuant
to the preceding clauses (i) through (iii), inclusive, an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured Creditors as
provided in Section 7.4(e) hereof, with each Secured Creditor receiving an
amount equal to its outstanding Secondary Obligations or, if the proceeds are
insufficient to pay in full all such Secondary Obligations, its Pro Rata Share
of the amount remaining to be distributed; and
     (v) fifth, to the extent proceeds remain after the application pursuant to
the preceding clauses (i) through (iv), inclusive, and following the termination
of this Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor
or to whomever may be lawfully entitled to receive such surplus.
          (b) For purposes of this Agreement, (x) “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 Primary Obligations
or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations,
as the case may be, (y) “Primary Obligations” shall mean (i) in the case of the
Credit Document Obligations, all principal of, premium, fees and interest on,
all Loans, all Unpaid Drawings, the Stated Amount of all outstanding Letters of
Credit and all Fees and (ii) in the case of the Other Obligations, all amounts
due under each Interest Rate Protection Agreement and each Other Hedging
Agreement with an Other Creditor (other than indemnities, fees (including,
without limitation, attorneys’ fees) and similar obligations and liabilities)
and (z) “Secondary Obligations” shall mean all Obligations other than Primary
Obligations.
          (c) When payments to Secured Creditors are based upon their respective
Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall
be applied (for purposes of making determinations under this Section 7.4 only)
(i) first, to their Primary Obligations and (ii) second, to their Secondary
Obligations. If any payment to any Secured Creditor of

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its Pro Rata Share of any distribution would result in overpayment to such
Secured Creditor, such excess amount shall instead be distributed in respect of
the unpaid Primary Obligations or Secondary Obligations, as the case may be, of
the other Secured Creditors, with each Secured Creditor whose Primary
Obligations or Secondary Obligations, as the case may be, have not been paid in
full to receive an amount equal to such excess amount multiplied by a fraction
the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Creditor and the denominator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of all Secured Creditors entitled to such distribution.
          (d) Each of the Secured Creditors, by their acceptance of the benefits
hereof and of the other Security Documents, agrees and acknowledges that if the
Lender Creditors receive a distribution on account of undrawn amounts with
respect to Letters of Credit issued under the Credit Agreement (which shall only
occur after all outstanding Revolving Loans under the Credit Agreement and
Unpaid Drawings have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the equal
and ratable benefit of the Lender Creditors, as cash security for the repayment
of Obligations owing to the Lender Creditors as such. If any amounts are held as
cash security pursuant to the immediately preceding sentence, then upon the
termination of all outstanding Letters of Credit under the Credit Agreement, and
after the application of all such cash security to the repayment of all
Obligations owing to the Lender Creditors after giving effect to the termination
of all such Letters of Credit, if there remains any excess cash, such excess
cash shall be returned by the Administrative Agent to the Collateral Agent for
distribution in accordance with Section 7.4(a) hereof.
          (e) All payments required to be made hereunder shall be made (x) if to
the Lender Creditors, to the Administrative Agent for the account of the Lender
Creditors and (y) if to the Other Creditors, to the trustee, paying agent or
other similar representative (each, a “Representative”) for the Other Creditors
or, in the absence of such a Representative, directly to the Other Creditors.
          (f) 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 and (ii) the Representative or, in the absence of such a
Representative, upon the Other Creditors for a determination (which the
Administrative Agent, each Representative and the Other Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Lender Creditors or
the Other Creditors, as the case may be. Unless it has received written notice
from a Lender Creditor or an Other Creditor to the contrary, the Administrative
Agent and each Representative, in furnishing information pursuant to the
preceding sentence, and the Collateral Agent, in acting hereunder, shall be
entitled to assume that no Secondary Obligations are outstanding. Unless it has
written notice from an Other Creditor to the contrary, the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements or Other Hedging Agreements are in existence.
          (g) 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 Obligations.

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          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 to the Collateral Agent under this
Agreement, 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 thereof. 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
reasonable 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, assigns, employees, affiliates and agents
(hereinafter in this Section 8.1 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 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, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects,

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whether or not discoverable); 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 (as
determined by a court of competent jurisdiction in a final and non-appealable
decision). 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 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 by any Assignor
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.

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          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 this Article VIII shall
continue in full force and effect notwithstanding the full payment of all of the
other Obligations and notwithstanding the full payment of all the Notes issued,
and Loans made, under the Credit Agreement, the termination of all Letters of
Credit issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements and Other Hedging Agreements entered into with the Other
Creditors and the payment of all other Obligations and notwithstanding the
discharge thereof and the occurrence of the Termination Date.
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.
          “Account” 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, and in any event shall include, but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance,
(i) for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term “account” shall include all
Health-Care-Insurance Receivables.
          “Administrative Agent” shall have the meaning provided in the recitals
of this Agreement.
          “Agreement” shall mean this Security Agreement as the same may be
amended, modified, restated and/or supplemented from time to time in accordance
with its terms.
          “As-Extracted Collateral” shall mean “as-extracted collateral” as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
          “Assignor” shall have the meaning provided in the first paragraph of
this Agreement.
          “Borrower” shall have the meaning provided in the recitals of this
Agreement.

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          “Cash Collateral Account” shall mean a cash collateral account
maintained with, and in the sole dominion and control of, the Collateral Agent
for the benefit of the Secured Creditors.
          “Chattel Paper” shall mean “chattel paper” as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term “Chattel Paper” shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
          “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.
          “Collateral Agent” shall have the meaning provided in the first
paragraph of this Agreement.
          “Commercial Tort Claims” shall mean “commercial tort claims” as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
          “Contract Rights” shall mean all rights of any Assignor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
          “Contracts” shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreements, Other Hedging Agreements, licensing agreements and any
partnership agreements, joint venture agreements and limited liability company
agreements).
          “Copyrights” shall mean any United States or foreign copyright now or
hereafter owned by any Assignor, including any registrations of any copyrights
in the United States Copyright Office or any foreign equivalent office, as well
as any application for a copyright registration now or hereafter made with the
United States Copyright Office or any foreign equivalent office by any Assignor.
          “Credit Agreement” shall have the meaning provided in the recitals of
this Agreement.
          “Credit Document Obligations” shall have the meaning provided in the
definition of “Obligations” in this Article IX.
          “Deposit Accounts” shall mean all “deposit accounts” as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
          “Designated Accounts” shall mean those Deposit Accounts set forth on
Part B of Annex F hereto; provided that at such time as any Designated Account
shall cease to secure

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exclusively the obligations described therein with respect to such Designated
Account, the respective Assignor shall promptly (and in any event within three
Business Days) provide the Collateral Agent with written notice thereof, and the
Collateral Agent, at its option, may require that such Assignor cause the
institution with which such Designated Account is maintained to execute and
deliver to the Collateral Agent within 45 days a “control agreement” as
described in Section 3.9 hereof or otherwise to comply with the requirements of
said Section with respect to such Designated Account.
          “Documents” shall mean “documents” as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
          “Domain Names” shall mean all Internet domain names and associated URL
addresses in or to which any Assignor now or hereafter has any right, title or
interest.
          “Electronic Chattel Paper” shall mean “electronic chattel paper” as
such term is defined 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, and in any event shall include, but shall not be limited to, all
machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned
by any Assignor and any and all additions, substitutions and replacements of any
of the foregoing and all accessions thereto, 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 include, without
limitation, any payment default on any of the Obligations after the expiration
of any applicable grace period.
          “General Intangibles” shall mean “general intangibles” as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
          “Goods” shall mean “goods” as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
          “Health-Care-Insurance Receivable” shall mean any
“health-care-insurance receivable” as such term is defined 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(a) of this
Agreement.
          “Instrument” shall mean “instruments” as such term is defined 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 and all accessions thereto,
wherever located, together with

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all goods, supplies, incidentals, packaging materials, labels, materials and any
other items used or to be used 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, 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.
          “Investment Property” shall mean “investment property” as such term is
defined 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 of
this Agreement.
          “Lenders” shall have the meaning provided in the recitals of this
Agreement.
          “Letter-of-Credit Rights” shall mean “letter-of-credit rights” as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
          “Location” of any Assignor shall mean such Assignor’s “location” as
determined pursuant to Section 9-307 of the UCC.
          “Marks” shall mean all right, title and interest in and to any
trademarks, service marks, trade names, trade dress, logos, fictitious business
names, and other business identifiers, including the goodwill of the business of
such Assignor associated with each of the foregoing, now held or hereafter
acquired by any Assignor, the right to sue for past or future infringement
thereof and including any registration or application for registration or
renewals thereof of any trademarks and service marks now held or hereafter
acquired by any Assignor, which are registered or filed in the United States
Patent and Trademark Office or the equivalent thereof in any state of the United
States or any equivalent foreign office or agency.
          “Material Adverse Effect” shall mean a material adverse effect on the
business, property, assets, liabilities (actual or contingent), operations or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole.
          “Obligations” shall mean and include, as to any Assignor, all of the
following:
     (i) the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, principal, premium, interest (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Assignor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding), reimbursement obligations under Letters of
Credit, fees, costs and indemnities) of such Assignor to the Lender Creditors,
whether now existing or hereafter incurred under, arising out of, or in
connection with, the Credit Agreement and the other Credit Documents to which
such Assignor is a party (including,

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without limitation, in the event such Assignor is a Guarantor, all such
obligations, liabilities and indebtedness of such Assignor under its Guaranty)
and the due performance and compliance by such Assignor with all of the terms,
conditions and agreements contained in the Credit Agreement and in such other
Credit Documents (all such obligations, liabilities and indebtedness under this
clause (i), except to the extent consisting of obligations or indebtedness with
respect to Interest Rate Protection Agreements or Other Hedging Agreements,
being herein collectively called the “Credit Document Obligations”);
     (ii) the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, all interest that accrues after the commencement
of any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Assignor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by such Assignor to the Other
Creditors, now existing or hereafter incurred under, arising out of or in
connection with any Interest Rate Protection Agreement or Other Hedging
Agreement, whether such Interest Rate Protection Agreement or Other Hedging
Agreement is now in existence or hereinafter arising (including, without
limitation, in the case of an Assignor that is a Guarantor, all obligations,
liabilities and indebtedness of such Assignor under its Guaranty in respect of
the Interest Rate Protection Agreements and Other Hedging Agreements), and the
due performance and compliance by such Assignor with all of the terms,
conditions and agreements contained in each such Interest Rate Protection
Agreement and Other Hedging Agreement (all such obligations, liabilities and
indebtedness 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 such Assignor referred to in
clauses (i) and (ii) above, after an Event of Default shall have occurred and be
continuing, the reasonable expenses of retaking, 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;
     (v) all amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement under Section 8.1 of this Agreement; and
     (vi) all amounts owing by any Assignor to any Agent pursuant to any of the
Credit Documents in its capacity as such;
it being acknowledged and agreed that the “Obligations” shall include extensions
of credit of the types described above, whether outstanding on the date of this
Agreement or extended from time to time after the date of this Agreement.

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          “Other Creditors” shall have the meaning provided in the recitals of
this Agreement.
          “Other Obligations” shall have the meaning provided in the definition
of “Obligations” in this Article IX.
          “Patents” shall mean any patent in or to which any Assignor now or
hereafter has any right, title or interest therein, and any divisions,
continuations (including, but not limited to, continuations-in-parts) and
improvements thereof, including the right to sue for any past or future
infringement thereof, as well as any application for a patent now or hereafter
made by any Assignor.
          “Permits” shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
          “Primary Obligations” shall have the meaning provided in
Section 7.4(b) of this Agreement.
          “Pro Rata Share” shall have the meaning provided in Section 7.4(b) of
this Agreement.
          “Proceeds” shall mean all “proceeds” as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, 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.
          “Registered Organization” shall have the meaning provided in the
Uniform Commercial Code as in effect in the State of New York.
          “Representative” shall have the meaning provided in Section 7.4(e) of
this Agreement.
          “Required Secured Creditors” shall mean (i) at any time when any
Credit Document Obligations are outstanding or any Commitments under the Credit
Agreement exist, the Required Lenders (or, to the extent provided in
Section 13.12 of the Credit Agreement, each of the Lenders) and (ii) at any time
after all of the Credit Document Obligations have been paid in full and all
Commitments under the Credit Agreement have been terminated and no further
Commitments may be provided thereunder, the holders of a majority of the Other
Obligations.
          “Requisite Creditors” shall have the meaning provided in Section 10.2
of this Agreement.

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          “Secondary Obligations” shall have the meaning provided in
Section 7.4(b) of this Agreement.
          “Secured Creditors” shall have the meaning provided in the recitals of
this Agreement.
          “Secured Debt Agreements” shall mean and include this Agreement, the
other Credit Documents and the Interest Rate Protection Agreements and Other
Hedging Agreements entered into with an Other Creditor.
          “Software” shall mean “software” as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
          “Supporting Obligations” shall mean any “supporting obligation” 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, or in
which any Assignor has any rights, and, in any event, shall include, but shall
not be limited to, all of such Assignor’s rights in any Letter-of-Credit Right
or secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
          “Tangible Chattel Paper” shall mean “tangible chattel paper” as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
          “Termination Date” shall have the meaning provided in Section 10.8(a)
of this Agreement.
          “Timber-to-be-Cut” shall mean “timber-to-be-cut” as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
          “Trade Secrets” shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design, manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of an Assignor worldwide whether
written or not.
          “Trade Secret Rights” shall mean the rights of an Assignor in any
Trade Secret it holds.
          “Transmitting Utility” shall have the meaning given such term in
Section 9-102(a)(80) of the UCC.
          “UCC” shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
ARTICLE X
MISCELLANEOUS

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          10.1 Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
courier service and all such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, cable company
or overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Collateral Agent or any Assignor shall
not be effective until received by the Collateral Agent or such Assignor, as the
case may be. All notices and other communications shall be in writing and
addressed as follows:

         
 
  (a)   if to any Assignor, c/o:
 
       
 
      c/o RCN Corporation
 
      196 Van Buren Street
 
      Herndon, VA 20170
 
      Attention: Edward O’Hara
 
      Telephone No.: (703) 434-8249
 
      Telecopier No.: (703) 434-8437
 
       
 
      With a copy to:
 
       
 
      RCN Corporation
 
      196 Van Buren Street
 
      Herndon, VA 20170
 
      Attention: Benjamin R. Preston
 
      Telephone No.: (703) 434-8440
 
      Telecopier No.: (703) 434-8461
 
       
 
  (b)   if to the Collateral Agent, at:
 
       
 
      60 Wall Street
 
      New York, New York 10005
 
      Attention: Anca Trifan
 
      Telephone No.: (212) 250-6142
 
      Telecopier No.: (212) 797-5692

     (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 or addressed to such other individual as shall have
been furnished in writing by any Person described above to the party required to
give notice hereunder.
          10.2 Waiver; Amendment. Except as provided in Sections 10.8 and 10.12,
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

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(it being understood that the addition or release of any Assignor hereunder
shall not constitute a change, waiver, discharge or termination affecting any
Assignor other than the Assignor so added or released) and the Collateral Agent
(with the written consent of the Required Secured Creditors); provided, however,
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) also shall require the written consent of the
Requisite Creditors of such affected Class. 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
(or, to the extent provided in Section 13.12 of the Credit Agreement, each of
the Lenders), and (y) with respect to the Other Obligations, the holders of at
least a majority of the aggregate notional amount of all Other Obligations
outstanding from time to time.
          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 such Assignor shall
have notice or knowledge of any of the foregoing.
          10.4 Successors and Assigns. This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and
effect, subject to release and/or termination as set forth in Section 10.8,
(ii) be binding upon each Assignor, its successors and assigns; provided,
however, that no Assignor shall assign any of its rights or obligations
hereunder without the prior written consent of the Collateral Agent (with the
prior written consent of the Required Secured Creditors), and (iii) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Collateral Agent, the other Secured Creditors and their
respective successors, transferees and assigns. 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; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) 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. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS

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AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN
EACH CASE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH ASSIGNOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH ASSIGNOR HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH ASSIGNOR, AND
AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID
COURTS THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH ASSIGNOR. EACH ASSIGNOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH ASSIGNOR
AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH ASSIGNOR HEREBY IRREVOCABLY
WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES
AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER
OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY
INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL
AGENT UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY ASSIGNOR IN ANY OTHER JURISDICTION.
          (b) EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
          (c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
          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

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Page 34

Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of any Assignor under or with
respect to any Collateral.
          10.8 Termination; Release. (a) After the Termination Date, this
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 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 under the Credit Agreement has been terminated and all Interest Rate
Protection Agreements and Other Hedging Agreements entered into with any Other
Creditor have been terminated, no Note under the Credit Agreement is outstanding
and all Loans thereunder have been repaid in full, all Letters of Credit issued
under the Credit Agreement have been terminated and all Obligations then due and
payable have been paid in full.
          (b) In the event that any part of the Collateral is sold or otherwise
disposed of (to a Person other than a Credit Party) (x) at any time prior to the
time at which all Credit Document Obligations have been paid in full and all
Commitments and Letters of Credit under the Credit Agreement have been
terminated, in connection with a sale or disposition permitted by Section 9.02
of the Credit Agreement or is otherwise released at the direction of the
Required Lenders (or all the Lenders if required by Section 13.12 of the Credit
Agreement) or (y) at any time thereafter, to the extent permitted by the other
Secured Debt Agreements, and in the case of clauses (x) and (y), the proceeds of
such sale or disposition (or from such release) are applied in accordance with
the terms of the Credit Agreement or such other Secured Debt Agreement, as the
case may be, to the extent required to be so applied, the Collateral Agent, at
the request and expense of such Assignor, will duly release from the security
interest created hereby (and will execute and deliver such documentation,
including termination or partial release statements and the like in connection
therewith) 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 otherwise disposed of, or released, and as may be
in the possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement. Furthermore, upon the release of any Subsidiary
Guarantor from the Subsidiaries Guaranty in accordance with the provisions
thereof, such Assignor (and the Collateral at such time assigned by the
respective Assignor pursuant hereto) shall be released from this Agreement.
          (c) If the Borrower designates any of its Subsidiaries as an
Unrestricted Subsidiary in accordance with Section 8.17 of the Credit Agreement,
then the Collateral Agent, at the request and expense of the Borrower, shall
release from the security interest created hereby the Collateral owned by such
Unrestricted Subsidiary (and will execute and deliver such documentation,
including termination or partial release statements and the like in connection
therewith) and shall assign, transfer and deliver to such Unrestricted
Subsidiary (without recourse and without any representation or warranty) such
Collateral as may be in the possession of the Collateral Agent and has not
theretofore been released pursuant to this Agreement.

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          (d) At any time that an Assignor desires that the Collateral Agent
take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 10.8(a), (b) or (c), such Assignor shall
deliver to the Collateral Agent a certificate signed by a principal executive
officer of such Assignor stating that the release of the respective Collateral
is permitted pursuant to such Section 10.8(a), (b) or (c). At any time that the
Borrower or the respective Assignor desires that a Subsidiary of the Borrower
which has been released from the Subsidiaries Guaranty be released hereunder as
provided in the last sentence of Section 10.8(b), it shall deliver to the
Collateral Agent a certificate signed by a principal executive officer of the
Borrower and the respective Assignor stating that the release of the respective
Assignor (and its Collateral) is permitted pursuant to such Section 10.8(b). If
reasonably requested by the Collateral Agent (although the Collateral Agent
shall have not obligation to make such request), the relevant Assignor shall
furnish appropriate legal opinions (from counsel, reasonably acceptable to the
Collateral Agent) to the effect set forth in this Section 10.8(d).
          (e) The Collateral Agent shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with (or which the Collateral Agent in the absence of gross
negligence and willful misconduct believes to be in accordance with) this
Section 10.8.
          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 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
          10.11 The Collateral Agent and the other Secured Creditors. 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 in Section 12 of the Credit Agreement. The Collateral Agent shall
act hereunder on the terms and conditions set forth herein and in Section 12 of
the Credit Agreement.
          10.12 Additional Assignors. It is understood and agreed that any
Subsidiary Guarantor that desires to become an Assignor hereunder, or is
required to execute a counterpart of this Agreement after the date hereof
pursuant to the requirements of the Credit Agreement or any other Credit
Document, shall become an Assignor hereunder by executing a counterpart hereof
and delivering same to the Collateral Agent, or by executing an assumption
agreement in form and substance satisfactory to the Collateral Agent,
(y) delivering supplements to Annexes A through F, inclusive, and H through K,
inclusive, hereto as are necessary to cause such Annexes to be complete and
accurate with respect to such additional Assignor on such date and (z) taking

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Page 36

all actions as specified in this Agreement as would have been taken by such
Assignor had it been an original party to this Agreement, in each case with all
documents required above to be delivered to the Collateral Agent and with all
documents and actions required above to be taken to the reasonable satisfaction
of the Collateral Agent.
          10.13 Compliance with Laws. Each Assignor agrees, following the
occurrence and during the continuance of an Event of Default, to use
commercially reasonable efforts, including taking any action which the
Collateral Agent and the Secured Creditors may reasonably request, to assist in
obtaining any required consent or approval of the Federal Communications
Commission (the “FCC”) or any other governmental or other authority for any sale
or transfer of control of the Collateral contemplated by the Security Documents
pursuant to the exercise of the rights and remedies of the Collateral Agent and
the Secured Creditors thereunder, including, upon request, to prepare, sign and
file with the FCC the assignor’s or transferor’s and licensee’s portions of any
applications required under the rules of the FCC for consent to the assignment
or transfer of control of any FCC construction permit, license or other
authorization.
          Each Assignor further consents, subject to obtaining any necessary
approvals, following the occurrence and during the continuance of an Event of
Default, to the assignment or transfer of control of any FCC or other
governmental construction permit, license, or other authorization to operate, to
a receiver, trustee, or similar official or to any purchaser of the Collateral
pursuant to any public or private sale, judicial sale, foreclosure, or exercise
of other remedies available to Collateral Agent and the Secured Creditors as
permitted by applicable law. Notwithstanding anything herein which may be
construed to the contrary, no action shall be taken by any of the Collateral
Agent and the Secured Creditors with respect to any license of the FCC unless
and until any applicable rules and regulations thereunder, requiring the consent
to or approval of such action by the FCC or any governmental or other authority,
have been satisfied.
[Remainder of this page intentionally left blank; signature page follows]

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          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.

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RCN CORPORATION
21ST CENTURY TELECOM SERVICES, INC.
BRAINSTORM NETWORKS, INC.
HOT SPOTS PRODUCTIONS, INC.
ON TV, INC.
RCN-BECOCOM, INC.
RCN CABLE TV OF CHICAGO, INC.
RCN DIGITAL SERVICES LLC
     By: [       ], its managing member
RCN ENTERTAINMENT, INC.
RCN FINANCE, LLC
     By: RCN Corporation, its managing member
RCN FINANCIAL MANAGEMENT, INC.
RCN INTERNATIONAL HOLDINGS, INC.
RCN INTERNET SERVICES, INC.
RCN NEW YORK COMMUNICATIONS, LLC
     By: [       ], its managing member
RCN TELECOM SERVICES, INC.
RCN TELECOM SERVICES OF ILLINOIS, LLC
     By: RCN Corporation, its managing member
RCN TELECOM SERVICES OF MASSACHUSETTS, INC.
RCN TELECOM SERVICES OF PHILADELPHIA, INC.
RCN TELECOM SERVICES OF VIRGINIA, INC.
RCN TELECOM SERVICES OF WASHINGTON D.C., INC.
RFM 2, LLC
     By: RCN Corporation, its managing member
RLH PROPERTY CORPORATION
STARPOWER COMMUNICATIONS, LLC
     By: RCN Telecom Services of Washington D.C., Inc., its managing member
TEC AIR, INC.
UNET HOLDING, INC.,
as Assignors

         
By:
       
Name:
 
 
   
Title:
 
 
   

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Accepted and Agreed to:
DEUTSCHE BANK TRUST COMPANY
     AMERICAS,
as Collateral Agent

         
By:
       
Name:
 
 
   
Title:
 
 
   
 
       
By:
       
Name:
 
 
Title:
 
 
       

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ANNEX A
SCHEDULE OF CHIEF EXECUTIVE OFFICES

          Name of Assignor   Addresses of Chief Executive Office  
 
       

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ANNEX B
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS

              Assignor   State   County   City
 
           

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ANNEX C
SCHEDULE OF LEGAL NAMES, TYPE OF ORGANIZATION
(AND WHETHER A REGISTERED ORGANIZATION), JURISDICTION OF ORGANIZATION,
LOCATION AND ORGANIZATIONAL IDENTIFICATION NUMBERS

                                          Assignor’s     Type of          
Assignor’s   Organization     Organization (or,           Location (for  
Identification     if the Assignor is   Registered       purposes of NY   Number
(or, if it     an Individual, so   Organization?   Jurisdiction of   UCC   has
none, so Exact Legal Name of Each Assignor   indicate)   (Yes/No)   Organization
  § 9-307)   indicate)
 
                   

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ANNEX D
SCHEDULE OF TRADE AND FICTITIOUS NAMES

      Name of Assignor   Trade and/or Fictitious Names
 
   

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ANNEX E
DESCRIPTION OF CERTAIN SIGNIFICANT TRANSACTIONS OCCURRING WITHIN
ONE YEAR PRIOR TO THE DATE OF THE SECURITY AGREEMENT

          Description of any Transactions as required Name of Assignor   by
Section 2.8 of the Security Agreement
 
   

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ANNEX F
SCHEDULE OF DEPOSIT ACCOUNTS
Part A

                      Legal Entity on             Account Name   Account  
Account Number   Bank   Description
 
               

Part B – Designated Accounts

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ANNEX G
Form of Control Agreement Regarding Deposit Accounts
          AGREEMENT (as amended, modified, restated and/or supplemented from
time to time, this “Agreement”), dated as of [___ ______, ___], among the
undersigned assignor (the “Assignor”), Deutsche Bank Trust Company Americas, not
in its individual capacity but solely as Collateral Agent under the Security
Agreement referred to below (in such capacity, the “Collateral Agent”) and [___]
(the “Deposit Account Bank”), as the bank (as defined in Section 9-102 of the
UCC as in effect on the date hereof in the State of New York (the “UCC”)) with
which one or more deposit accounts (as defined in Section 9-102 of the UCC) are
maintained by the Assignor (with all such deposit accounts now or at any time in
the future maintained by the Assignor with the Deposit Account Bank being herein
called the “Deposit Accounts”).
W I T N E S S E T H:
          WHEREAS, the Assignor, various other Assignors and the Collateral
Agent have entered into a Security Agreement, dated as of May 25, 2007 (as
amended, restated, modified and/or supplemented from time to time, the “Security
Agreement”), under which, among other things, in order to secure the payment of
the Obligations (as defined in the Security Agreement), the Assignor has granted
a security interest to the Collateral Agent for the benefit of the Secured
Creditors (as defined in the Security Agreement) in all of the right, title and
interest of the Assignor in and into any and all deposit accounts (as defined in
Section 9-102 of the UCC) and in all monies, securities, instruments and other
investments deposited therein from time to time (collectively, herein called the
“Collateral”);
          NOW THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
          1. Assignor’s Dealings with Deposit Accounts; Notice of Exclusive
Control. Until the Deposit Account Bank shall have received from the Collateral
Agent a Notice of Exclusive Control (as defined below), the Assignor shall be
entitled to present items drawn on and otherwise to withdraw or direct the
disposition of funds from the Deposit Accounts and give instructions in respect
of the Deposit Accounts; provided, however, that the Assignor may not, and the
Deposit Account Bank agrees that it shall not permit the Assignor to, close any
Deposit Account, in any case without the prior written consent of the Collateral
Agent. If the Collateral Agent shall give to the Deposit Account Bank a notice
of the Collateral Agent’s exclusive control of the Deposit Accounts, which
notice states that it is a “Notice of Exclusive Control” (a “Notice of Exclusive
Control”), only the Collateral Agent shall be entitled to withdraw funds from
the Deposit Accounts, to give any instructions in respect of the Deposit
Accounts and any funds held therein or credited thereto or otherwise to deal
with the Deposit Accounts.

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ANNEX G
Page 2
          2. Collateral Agent’s Rights to Give Instructions as to Deposit
Accounts. (a) Notwithstanding the foregoing or any separate agreement that the
Assignor may have with the Deposit Account Bank, the Collateral Agent shall be
entitled, for purposes of this Agreement, at any time to give the Deposit
Account Bank instructions as to the withdrawal or disposition of any funds from
time to time credited to any Deposit Account, or as to any other matters
relating to any Deposit Account or any other Collateral, without further consent
from the Assignor or any other Person. The Assignor hereby irrevocably
authorizes and instructs the Deposit Account Bank, and the Deposit Account Bank
hereby agrees, to comply with any such instructions from the Collateral Agent
without any further consent from the Assignor or any other Person. Such
instructions may include the giving of stop payment orders for any items being
presented to any Deposit Account for payment. The Deposit Account Bank shall be
fully entitled to rely on, and shall comply with, such instructions from the
Collateral Agent even if such instructions are contrary to any instructions or
demands that the Assignor may give to the Deposit Account Bank. In case of any
conflict between instructions received by the Deposit Account Bank from the
Collateral Agent, on the one hand, and the Assignor, on the other hand, the
instructions from the Collateral Agent shall prevail.
          (b) It is understood and agreed that the Deposit Account Bank’s duty
to comply with instructions from the Collateral Agent regarding the Deposit
Accounts is absolute, and the Deposit Account Bank shall be under no duty or
obligation, nor shall it have the authority, to inquire or determine whether or
not such instructions are in accordance with the Security Agreements or any
other Credit Document (as defined in each of the Security Agreements), nor seek
confirmation thereof from the Assignor or any other Person.
          3. Assignor’s Exculpation and Indemnification of Depository Bank. The
Assignor hereby irrevocably authorizes and instructs the Deposit Account Bank to
follow instructions from the Collateral Agent regarding the Deposit Accounts
even if the result of following such instructions from the Collateral Agent is
that the Deposit Account Bank dishonors items presented for payment from any
Deposit Account. The Assignor further confirms that the Deposit Account Bank
shall have no liability to the Assignor for wrongful dishonor of such items in
following such instructions from the Collateral Agent. The Deposit Account Bank
shall have no duty to inquire or determine whether the Assignor’s obligations to
the Collateral Agent are in default or whether the Collateral Agent is entitled,
under any separate agreement between the Assignor and the Collateral Agent to
give any such instructions. The Assignor further agrees to be responsible for
the Deposit Account Bank’s customary charges and to indemnify the Deposit
Account Bank from and to hold the Deposit Account Bank harmless against any
loss, cost or expense that the Deposit Account Bank may sustain or incur in
acting upon instructions which the Deposit Account Bank believes in good faith
to be instructions from the Collateral Agent.
          4. Subordination of Security Interests; Deposit Account Bank’s
Recourse to Deposit Accounts. The Deposit Account Bank hereby subordinates any
claims and security interests it may have against, or with respect to, any
Deposit Account at any time established or maintained with it by the Assignor
(including any amounts, investments, instruments or other Collateral from time
to time on deposit therein) to the security interests of the Collateral Agent
(for the benefit of the Secured Creditors under, and as defined in, the Security
Agreement) and agrees that no amounts shall be charged by it to, or withheld or
set-off or otherwise recouped by

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ANNEX G
Page 3
it from, any Deposit Account of the Assignor or any amounts, investments,
instruments or other Collateral from time to time on deposit therein; provided
that the Deposit Account Bank may, however, from time to time debit the Deposit
Accounts for any of its customary charges in maintaining the Deposit Accounts or
for reimbursement for the reversal of any provisional credits granted by the
Deposit Account Bank to any Deposit Account, to the extent, in each case, that
the Assignor has not separately paid or reimbursed the Deposit Account Bank
therefor.
          5. Representations, Warranties and Covenants of Deposit Account Bank.
The Deposit Account Bank represents and warrants to the Collateral Agent (for
the benefit of the Secured Creditors under, and as defined in, the Security
Agreement) and hereby agrees that:
          (a) The Deposit Account Bank constitutes a “bank” (as defined in
Section 9-102 of the UCC) and that the jurisdiction (determined in accordance
with Section 9-304 of the UCC) of the Deposit Account Bank for purposes of each
Deposit Account maintained by the Assignor with the Deposit Account Bank is
                    .
          (b) The Deposit Account Bank shall not permit any Assignor to
establish any demand, time, savings, passbook or other account with it which
does not constitute a “deposit account” (as defined in Section 9-102 of the
UCC).
          (c) The Deposit Account Bank will not, without the prior written
consent of the Collateral Agent, amend any account agreement between it and the
Assignor governing any Deposit Account so that the Deposit Account Bank’s
jurisdiction for purposes of Section 9-304 of the UCC is other than the
jurisdiction specified in the preceding clause (a). All account agreements in
respect of each Deposit Account in existence on the date hereof are listed on
Annex F hereto and copies of all such account agreements have been furnished to
the Collateral Agent. The Deposit Account Bank will promptly furnish to the
Collateral Agent a copy of the account agreement for each Deposit Account
hereafter established by the Deposit Account Bank for the Assignor.
          (d) The Deposit Account Bank has not entered and will not enter, into
any agreement with any other Person by which the Deposit Account Bank is
obligated to comply with instructions from such other Person as to the
disposition of funds from any Deposit Account or other dealings with any Deposit
Account or other of the Collateral.
          (e) On the date hereof, the Deposit Account Bank maintains no Deposit
Accounts for the Assignor other than the Deposit Accounts specifically
identified in Annex F hereto.
          (f) Any items or funds received by the Deposit Account Bank for the
Assignor’s account will be credited to said Deposit Accounts specified in
paragraph (e) above or to any other Deposit Accounts hereafter established by
the Deposit Account Bank for the Assignor in accordance with this Agreement.
          (g) The Deposit Account Bank will promptly notify the Collateral Agent
of each Deposit Account hereafter established by the Deposit Account Bank for
the Assignor (which notice shall specify the account number of such Deposit
Account and the location at

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ANNEX G
Page 4
which the Deposit Account is maintained), and each such new Deposit Account
shall be subject to the terms of this Agreement in all respects.
          6. Deposit Account Statements and Information. The Deposit Account
Bank agrees, and is hereby authorized and instructed by the Assignor, to furnish
to the Collateral Agent at its address indicated below, copies of all account
statements and other information relating to each Deposit Account that the
Deposit Account Bank sends to the Assignor and to disclose to the Collateral
Agent all information requested by the Collateral Agent regarding any Deposit
Account.
          7. Conflicting Agreements. This Agreement shall have control over any
conflicting agreement between the Deposit Account Bank and the Assignor.
          8. Merger or Consolidation of Deposit Account Bank. Without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, any bank into which the Deposit Account Bank may be merged or
with which it may be consolidated, or any bank resulting from any merger to
which the Deposit Account Bank shall be a party, shall be the successor of the
Deposit Account Bank hereunder and shall be bound by all provisions hereof which
are binding upon the Deposit Account Bank and shall be deemed to affirm as to
itself all representations and warranties of the Deposit Account Bank contained
herein.
          9. Notices. (a) All notices and other communications provided for in
this Agreement shall be in writing (including facsimile) and sent to the
intended recipient at its address or telex or facsimile number set forth below:
If to the [First-Lien] Collateral Agent, at:
60 Wall Street
New York, New York 10005
Attention: Alexander Richarz
Telephone: (212) 250-6142
Facsimile: (212) 797-5692
If to the Assignor, at:
C/o RCN Corporation
196 Van Buren Street
Herndon, VA 08540
Attention: Edward O’ Hara
Telephone: (703) 434-8249
Facsimile: (703) 434-8437
With a copy to:
RCN Corporation
196 Van Buren Street
Herndon, VA 20170
Telephone: (703) 434-8440

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ANNEX G
Page 5
Facsimile: (703) 434-8461
If to the Deposit Account Bank, at:
                    
                    
                    
or, as to any party, to such other address or telex or facsimile number as such
party may designate from time to time by notice to the other parties.
          (b) Except as otherwise provided herein, all notices and other
communications hereunder shall be delivered by hand or by commercial overnight
courier (delivery charges prepaid), or mailed, postage prepaid, or telexed or
faxed, addressed as aforesaid, and shall be effective (i) three business days
after being deposited in the mail (if mailed), (ii) when delivered (if delivered
by hand or courier) and (iii) or when transmitted with receipt confirmed (if
telexed or faxed); provided that notices to the Collateral Agent shall not be
effective until actually received by such Collateral Agent.
          10. Amendment. This Agreement may not be amended, modified or
supplemented except in writing executed and delivered by all the parties hereto.
          11. Binding Agreement. This Agreement shall bind the parties hereto
and their successors and assigns and shall inure to the benefit of the parties
hereto and their successors and assigns. Without limiting the provisions of the
immediately preceding sentence, the Collateral Agent may at any time or from
time to time designate in writing to the Deposit Account Bank a successor
Collateral Agent or (at such time, if any, as such entity becomes the
“Collateral Agent” under the Security Agreement, or at any time thereafter), and
such successor shall thereafter succeed to the rights of the existing Collateral
Agent hereunder and shall be entitled to all of the rights and benefits provided
hereunder.
          12. Continuing Obligations. The rights and powers granted herein to
the Collateral Agent have been granted in order to protect and further perfect
its security interests in the Deposit Accounts and other relevant Collateral and
are powers coupled with an interest and will not be affected by any purported
revocation by the Assignor of this Agreement or the rights granted to the
Collateral Agent hereunder or by the bankruptcy, insolvency, conservatorship or
receivership of the Assignor, the Deposit Account Bank, the Collateral Agent or
by the lapse of time. The rights of the Collateral Agent hereunder and in
respect of the Deposit Accounts and the other Collateral, and the obligations of
the Assignor and Deposit Account Bank hereunder, shall continue in effect until
the security interests of the Collateral Agent in the Deposit Accounts and such
other Collateral have been terminated and the Collateral Agent has notified the
Deposit Account Bank of such termination in writing.
          13. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

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ANNEX G
Page 6
          14. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
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Annex G

Page 7

          IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.

            Assignor:

[NAME OF ASSIGNOR]
      By:           Name:           Title:        

            Collateral Agent:

DEUTSCHE BANK TRUST COMPANY AMERICAS
      By:           Name:           Title:                 By:           Name:  
        Title:        

            Deposit Account Bank:

[NAME OF DEPOSIT ACCOUNT BANK]
      By:           Name:           Title:        

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ANNEX H
DESCRIPTION OF COMMERCIAL TORT CLAIMS

      Name of Assignor   Description of Commercial Tort Claims

None.

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ANNEX I
SCHEDULE OF MARKS AND APPLICATIONS;
INTERNET DOMAIN NAME REGISTRATIONS
1. Marks and Applications:

--------------------------------------------------------------------------------

 

 

ANNEX J
SCHEDULE OF PATENTS

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ANNEX K
SCHEDULE OF COPYRIGHTS

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ANNEX L
GRANT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS
          FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Name of Grantor], a                     
                     (the “Grantor”) with principal offices at
                                        , hereby grants to Deutsche Bank Trust
Company Americas, as Collateral Agent, with principal offices at 60 Wall Street,
New York, New York 10005, (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 Proceeds (as such term is defined in the
Security Agreement referred to below) and products of the Marks, (iii) the
goodwill of the businesses with which the Marks are associated and (iv) all
causes of action arising prior to or after the date hereof for infringement of
any of the Marks or unfair competition regarding the same.
          THIS GRANT is made to secure the satisfactory performance and payment
of all the Obligations of the Grantor, as such term is defined in the Security
Agreement among the Grantor, the other assignors from time to time party thereto
and the Grantee, dated as of May 25, 2007 (as amended, modified, restated and/or
supplemented from time to time, the “Security Agreement”). Upon the occurrence
of the Termination Date (as defined in the Security Agreement), the Grantee
shall execute, acknowledge, and deliver to the Grantor an instrument in writing
releasing the security interest in the Marks acquired under this Grant.
          This Grant 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 as 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

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Annex L

Page 2

Grant are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.
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Annex L

Page 3

          IN WITNESS WHEREOF, the undersigned have executed this Grant as of the
___day of                     ,                     .

            [NAME OF GRANTOR], Grantor
      By           Name:           Title:           DEUTSCHE BANK TRUST COMPANY
AMERICAS, as       as Collateral Agent and Grantee     By           Name:      
    Title:                 By           Name:           Title:        

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STATE OF                         )
) ss:
COUNTY OF                      )
          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 Grant on behalf of said                      and that
[s]he did so by authority of the [Board of Directors] of said
                    .

                     
 
Notary Public    

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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 Deutsche Bank Trust
Company Americas, that [s]he is authorized to execute the foregoing Grant on
behalf of said banking corporation and that [s]he did so by authority of the
Board of Directors of said banking corporation.

                     
 
Notary Public    

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SCHEDULE A

          MARK   REG. NO.   REG. DATE          

--------------------------------------------------------------------------------

 

 

ANNEX M
GRANT OF SECURITY INTEREST
IN UNITED STATES PATENTS
          FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Name of Grantor], a                     
                     (the “Grantor”) with principal offices at
                    , hereby grants to Deutsche Bank Trust Company Americas, as
Collateral Agent, with principal offices at 60 Wall Street, New York, New York
10005 (the “Grantee”), a security interest in (i) all of the Grantor’s rights,
title and interest in and to the United States patents (the “Patents”) set forth
on Schedule A attached hereto, in each case together with (ii) all Proceeds (as
such term is defined in the Security Agreement referred to below) and products
of the Patents, and (iii) all causes of action arising prior to or after the
date hereof for infringement of any of the Patents or unfair competition
regarding the same.
          THIS GRANT is made to secure the satisfactory performance and payment
of all the Obligations of the Grantor, as such term is defined in the Security
Agreement among the Grantor, the other assignors from time to time party thereto
and the Grantee, dated as of May 25, 2007 (as amended, modified, restated and/or
supplemented from time to time, the “Security Agreement”). Upon the occurrence
of the Termination Date (as defined in the Security Agreement), the Grantee
shall execute, acknowledge, and deliver to the Grantor an instrument in writing
releasing the security interest in the Patents acquired under this Grant.

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Annex M

Page 2

          This Grant 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 as 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 Grant
are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.
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Annex M

Page 3

          IN WITNESS WHEREOF, the undersigned have executed this Grant as of the
___ day of                     ,                     .

            [NAME OF GRANTOR], Grantor
      By           Name:           Title:           DEUTSCHE BANK TRUST COMPANY
AMERICAS, as       Collateral Agent and Grantee
      By           Name:           Title:                 By           Name:    
      Title:        

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STATE OF                        )
                                           ) ss.:
COUNTY OF                    )
     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 Grant on behalf of said                      and that
[s]he did so by authority of the Board of Directors of said
                    .

                     
 
Notary Public    

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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 Deutsche Bank Trust
Company Americas, that [s]he is authorized to execute the foregoing Grant on
behalf of said banking corporation and that [s]he did so by authority of the
Board of Directors of said banking corporation.

                     
 
Notary Public    

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SCHEDULE A

          PATENT   PATENT NO.   ISSUE DATE          

--------------------------------------------------------------------------------

 

ANNEX  N 
GRANT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
          WHEREAS, [Name of Grantor], a                     
                     (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, Deutsche Bank Trust Company Americas, as Collateral Agent,
having its principal offices at 60 Wall Street, New York, New York 10005 (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
Security Agreement, dated as of May 25, 2007, made by the Grantor, the other
assignors from time to time party thereto and the Grantee (as amended, modified,
restated and/or supplemented from time to time, the “Security Agreement”), the
Grantor hereby assigns to the Grantee as collateral security, and grants to the
Grantee a security interest in, the copyrights and copyright registrations and
applications therefor set forth in Schedule A attached hereto.
          This Grant 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 as 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 Grant
are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.
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Annex N

Page 2

          IN WITNESS WHEREOF, the undersigned have executed this Grant as of the
___ day of                     ,                     .

            [NAME OF GRANTOR], Grantor
      By           Name:           Title:           DEUTSCHE BANK TRUST COMPANY
AMERICAS, as       Collateral Agent and Grantee      By           Name:        
  Title:                 By           Name:           Title:        

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STATE OF                        )
                                           ) ss:
COUNTY OF                    )
     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 Grant on behalf of said corporation and that
[s]he did so by authority of the Board of Directors of said corporation.

                     
 
Notary Public    

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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
Deutsche Bank Trust Company Americas, that [s]he is authorized to execute the
foregoing Grant on behalf of said banking corporation and that [s]he did so by
authority of the Board of Directors of said banking corporation.

                     
 
Notary Public    

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TABLE OF CONTENTS

              Page
ARTICLE I SECURITY INTERESTS
    2    
1.1 Grant of Security Interests
    2  
1.2 Power of Attorney
    4  
 
       
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
    4    
2.1 Necessary Filings
    4  
2.2 No Liens
    5  
2.3 Other Financing Statements
    5  
2.4 Chief Executive Office, Record Locations
    5  
2.5 Location of Inventory and Equipment
    5  
2.6 Legal Names; Type of Organization (and Whether a Registered Organization);
Jurisdiction of Organization; Location; Organizational Identification Numbers;
Changes Thereto; etc.
    5  
2.7 Trade Names; Etc.
    6  
2.8 Certain Significant Transactions.
    6  
2.9 Non-UCC Property
    6  
2.10 As-Extracted Collateral; Timber-to-be-Cut
    7  
2.11 Collateral in the Possession of a Bailee
    7  
2.12 Recourse
    7  
 
       
ARTICLE III SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
    7    
3.1 Additional Representations and Warranties
    7  
3.2 Maintenance of Records
    8  
3.3 Direction to Account Debtors; Contracting Parties; etc.
    8  
3.4 Modification of Terms; etc.
    8  
3.5 Collection
    9  
3.6 Instruments
    9  
3.7 Assignors Remain Liable Under Accounts
    9  
3.8 Assignors Remain Liable Under Contracts
    9  
3.9 Deposit Accounts; Etc.
    10  
3.10 Letter-of-Credit Rights
    11  
3.11 Commercial Tort Claims
    11  
3.12 Chattel Paper
    11  
3.13 Further Actions
    11  
 
       
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES
    11    
4.1 Additional Representations and Warranties
    11  

(i)

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              Page
4.2 Licenses and Assignments
    12  
4.3 Infringements
    12  
4.4 Preservation of Marks and Domain Names
    12  
4.5 Maintenance of Registration
    12  
4.6 Future Registered Marks and Domain Names
    13  
4.7 Remedies
    13  
 
       
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS
    13    
5.1 Additional Representations and Warranties
    13  
5.2 Licenses and Assignments
    14  
5.3 Infringements
    14  
5.4 Maintenance of Patents or Copyrights
    14  
5.5 Prosecution of Patent Applications
    14  
5.6 Other Patents and Copyrights
    15  
5.7 Remedies
    15  
 
       
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL
    15    
6.1 Protection of Collateral Agent’s Security
    15  
6.2 Warehouse Receipts Non-Negotiable
    15  
6.3 Additional Information
    16  
6.4 Further Actions
    16  
6.5 Financing Statements
    16  
 
       
ARTICLE VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
    16    
7.1 Remedies; Obtaining the Collateral Upon Default
    16  
7.2 Remedies; Disposition of the Collateral
    18  
7.3 Waiver of Claims
    19  
7.4 Application of Proceeds
    19  
7.5 Remedies Cumulative
    22  
7.6 Discontinuance of Proceedings
    22  
 
       
ARTICLE VIII INDEMNITY
    22    
8.1 Indemnity
    22  
8.2 Indemnity Obligations Secured by Collateral; Survival
    24  
 
       
ARTICLE IX DEFINITIONS
    24  
 
       
ARTICLE X MISCELLANEOUS
    30    
10.1 Notices
    31  
10.2 Waiver; Amendment
    31  
10.3 Obligations Absolute
    32  
10.4 Successors and Assigns
    32  
10.5 Headings Descriptive
    32  

(ii)

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              Page
10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL
    32  
10.7 Assignor’s Duties
    33  
10.8 Termination; Release
    34  
10.9 Counterparts
    35  
10.10 Severability
    35  
10.11 The Collateral Agent and the other Secured Creditors
    35  
10.12 Additional Assignors
    35  
10.13 Compliance with Laws
    36  

     
ANNEX A
  Schedule of Chief Executive Offices Address(es)
ANNEX B
  Schedule of Inventory and Equipment Locations
ANNEX C
  Schedule of Legal Names, Type of Organization (and Whether a Registered
Organization), Jurisdiction of Organization, Location and Organizational
Identification Numbers
ANNEX D
  Schedule of Trade and Fictitious Names
ANNEX E
  Description of Certain Significant Transactions Occurring Within One Year
Prior to the Date of the Security Agreement
ANNEX F
  Schedule of Deposit Accounts
ANNEX G
  Form of Control Agreement Regarding Deposit Accounts
ANNEX H
  Schedule of Commercial Tort Claims
ANNEX I
  Schedule of Marks and Applications; Internet Domain Name Registrations
ANNEX J
  Schedule of Patents
ANNEX K
  Schedule of Copyrights
ANNEX L
  Grant of Security Interest in United States Trademarks
ANNEX M
  Grant of Security Interest in United States Patents
ANNEX N
  Grant of Security Interest in United States Copyrights

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(iii)