Exhibit 10.9

 

 

 

DEBTOR-IN-POSSESSION SECURITY AGREEMENT

 

By

 

FAIRPOINT COMMUNICATIONS, INC.,

 

and

 

ITS SUBSIDIARIES PARTY HERETO,
as Grantors,

 

and

 

BANK OF AMERICA, INC.,

as Collateral Agent

 

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Dated as of October 30, 2009

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I

 

 

 

DEFINITIONS

 

 

 

 

SECTION 1.01.

Uniform Commercial Code Defined Terms

2

SECTION 1.02.

Credit Agreement Defined Terms

2

SECTION 1.03.

Definition of Certain Terms Used Herein

2

SECTION 1.04.

Rules of Construction

6

 

 

 

ARTICLE II

 

 

 

AUTHORITY OF COLLATERAL AGENT

 

 

 

 

SECTION 2.01.

General Authority of the Collateral Agent over the Collateral

6

SECTION 2.02.

Remedies Not Exclusive

7

SECTION 2.03.

Waiver and Estoppel

7

SECTION 2.04.

Limitation on Collateral Agents’ Duty in Respect of Collateral

8

 

 

 

ARTICLE III

 

 

 

SECURITY INTERESTS

 

 

 

 

SECTION 3.01.

Security Interests

8

SECTION 3.02.

Perfection and Priority

9

SECTION 3.03.

Claim Priorities

9

SECTION 3.04.

Modifications

10

SECTION 3.05.

 

10

SECTION 3.06.

No Assumption of Liability

10

 

 

 

ARTICLE IV

 

 

 

REPRESENTATIONS AND WARRANTIES

 

 

 

 

SECTION 4.01.

Title and Authority

11

SECTION 4.02.

Validity of Security Interest

11

SECTION 4.03.

Limitations on and Absence of Other Liens

11

SECTION 4.04.

Jurisdiction of Organization

11

SECTION 4.05.

Instruments and Tangible Chattel Paper

11

SECTION 4.06.

Deposit Accounts and Investment Property

12

SECTION 4.07.

Real Estate Interests

12

 

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ARTICLE V

 

 

 

COVENANTS

 

 

 

 

SECTION 5.01.

Protection of Security

13

SECTION 5.03.

Taxes; Encumbrances

13

SECTION 5.04.

Assignment of Security Interest

14

SECTION 5.05.

Continuing Obligations of the Grantors

14

SECTION 5.06.

Use and Disposition of Collateral

14

SECTION 5.07.

Limitation on Modification of Accounts

14

SECTION 5.08.

Insurance

14

SECTION 5.09.

Certain Covenants and Provisions Regarding Patent, Trademark and Copyright
Collateral

14

SECTION 5.10.

Other Actions

16

 

 

 

ARTICLE VI

 

 

 

REMEDIES

 

 

 

 

SECTION 6.01.

Remedies upon Default

19

SECTION 6.02.

Application of Proceeds

21

SECTION 6.03.

Grant of License to Use Intellectual Property

21

 

 

 

ARTICLE VII

 

 

 

MISCELLANEOUS

 

 

 

 

SECTION 7.01.

Notices

22

SECTION 7.02.

Survival of Agreement

22

SECTION 7.03.

Binding Effect

22

SECTION 7.04.

Successors and Assigns

23

SECTION 7.05.

GOVERNING LAW

23

SECTION 7.06.

Waivers; Amendment; Several Agreement

23

SECTION 7.07.

Severability

24

SECTION 7.08.

Counterparts

24

SECTION 7.09.

Headings

24

SECTION 7.10.

Termination

24

SECTION 7.11.

Financing Statements

24

SECTION 7.12.

Collateral Agent Appointed Attorney-in-Fact

25

 

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ANNEXES

 

 

 

 

Annex I

Form of Issuer Acknowledgement

 

 

 

 

SCHEDULES

 

 

 

 

Schedule 1

Copyrights

 

Schedule 2

Licenses

 

Schedule 3

Patents

 

Schedule 4

Trademarks

 

Schedule 5

Commercial Tort Claims

 

Schedule 6

Jurisdiction of Organization

 

Schedule 7

Deposit Accounts

 

Schedule 8

Securities and Commodities Accounts

 

Schedule 9

Real Estate Interests

 

 

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DEBTOR-IN-POSSESSION SECURITY AGREEMENT

 

This  DEBTOR-IN-POSSESSION SECURITY AGREEMENT (as amended, amended and restated,
supplemented or otherwise modified from time to time, this “Agreement”), dated
as of October 30, 2009 among FAIRPOINT COMMUNICATIONS, INC., a Delaware
corporation and a debtor and debtor-in-possession under Chapter 11 of the
Bankruptcy Code (as defined in the Credit Agreement referred to below) 
(“FairPoint”), FairPoint Logistics, Inc., a South Dakota corporation and a
debtor and debtor-in-possession under Chapter 11 of the Bankruptcy Code
(“FairPoint Logistics”; and together with FairPoint, each a “Borrower” and
collectively the “Borrowers”), each Subsidiary of FairPoint listed on the
signature pages hereto, each a debtor and debtor-in-possession under Chapter 11
of the Bankruptcy Code  (together with the Borrowers, the “Grantors”) and BANK
OF AMERICA, N.A., as Collateral Agent (in such capacity, and together with any
successors and assigns in such capacity, the “Collateral Agent”) for the benefit
of the Secured Creditors (as defined below).

 

R E C I T A L S

 

WHEREAS, the Borrowers and each of the other Grantors have filed in the United
States Bankruptcy Court for the Southern District of New York (the “Bankruptcy
Court”) a voluntary petition for relief under Chapter 11 of the Bankruptcy Code
and have continued in the possession of their assets and in the management of
their businesses pursuant to Sections 1107 and 1108 of the Bankruptcy Code, and
such reorganization cases are being jointly administered under Case Number
09-16335-brl (the “Cases”).

 

WHEREAS, the Borrowers, the lenders from time to time party thereto (the
“Lenders”) and Bank of America, N.A., as Administrative Agent, have entered into
a Debtor-In-Possession Credit Agreement, dated as of October 27, 2009 (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 Borrowers and/or one
or more of their Subsidiaries, all as contemplated therein (the Lenders, the
Letter of Credit Issuer, the Administrative Agent, the Collateral Agent and the
Pledgee referred to in the Pledge Agreement are herein called the “Secured
Creditors”).

 

WHEREAS, it is a condition precedent to the making of Loans and the issuance of,
and participation in, Letters of Credit under the Credit Agreement that each
Grantor shall have executed and delivered to the Collateral Agent this
Agreement.

 

WHEREAS, each Grantor desires to execute this Agreement to satisfy the condition
described in the preceding paragraph.

 

NOW THEREFORE, in consideration of the foregoing and other benefits accruing
each Grantor, the receipt and sufficiency of which are hereby acknowledged, each
Grantor 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:

 

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ARTICLE I

DEFINITIONS

 

SECTION 1.01.                 Uniform Commercial Code Defined Terms.  Unless
otherwise defined herein, terms used herein that are defined in the UCC shall
have the meanings assigned to them in the UCC, including the following which are
capitalized herein:

 

“Accounts”; “Bank”; “Certificates of Title”; “Chattel Paper”; “Commercial Tort
Claim”; “Commodity Account”; “Commodity Contract”; “Commodity Customer”;
“Commodity Intermediary”; “Deposit Accounts”; “Documents”; “Electronic Chattel
Paper”; “Entitlement Holder”; “Entitlement Order”; “Equipment”; “Financial
Asset”; “Fixtures”; “Goods”; “Instruments” (as defined in Article 9 rather than
Article 3); “Inventory”; “Investment Property”; “Letter-of-Credit Rights”;
“Letters of Credit”; “Securities”; “Securities Account”; “Securities
Intermediary”; “Security Entitlement”; “Supporting Obligations”; and “Tangible
Chattel Paper”.

 

SECTION 1.02.                 Credit Agreement Defined Terms.  Capitalized terms
used but not otherwise defined herein that are defined in the Credit Agreement
shall have the meanings given to them in the Credit Agreement.

 

SECTION 1.03.                 Definition of Certain Terms Used Herein.  As used
herein, the following terms shall have the following meanings:

 

“Account Debtor” shall mean any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an Account.

 

“Accounts Receivable” shall mean all Accounts and all right, title and interest
in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.

 

“Bankruptcy Court” shall have the meaning assigned to such term in the Recitals
of this Agreement.

 

“Books and Records” shall mean all instruments, files, records, ledger sheets
and documents evidencing, covering or relating to any of the Collateral.

 

“Borrowers” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.

 

“Cases” shall have the meaning assigned to such term in the Recitals of this
Agreement.

 

“Charges” shall mean any and all property and other taxes, assessments and
special assessments, levies, fees and all governmental charges imposed upon or
assessed against, and all claims (including, without limitation, landlords’,
carriers’, mechanics’, maritime, workmen’s,

 

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repairmen’s, laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and
other claims arising by operation of law) against, all or any portion of the
Collateral.

 

“Collateral Agent” shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.

 

“Collateral Estate” shall have the meaning assigned to such term in
Section 2.01(c).

 

“Commodity Account Control Agreement” shall mean an agreement in form and
substance reasonably satisfactory to the Collateral Agent establishing the
Collateral Agent’s Control with respect to a Commodity Account.

 

“Control” shall mean (i) in the case of each Deposit Account, “control,” as such
term is defined in Section 9-104 of the UCC, (ii) in the case of any Security
Entitlement, “control,” as such term is defined in Section 8-106(d) of the UCC,
and (iii) in the case of any Commodity Contract, “control,” as such term is
defined in Section 9-106(b) of the UCC.

 

“Control Agreement” shall mean, collectively, the Deposit Account Control
Agreements, the Securities Account Control Agreements and the Commodity Account
Control Agreements.

 

“Copyright License” shall mean each agreement, now or hereafter in effect,
granting any right to any third party under any Copyright now or hereafter owned
by any Grantor or which such Grantor otherwise has the right to license, or
granting any right to such Grantor under any Copyright now or hereafter owned by
any third party, and all rights of such Grantor under any such agreement.

 

“Copyrights” shall mean, collectively, with respect to each Grantor, all
copyrights (whether statutory or common law, whether registered or unregistered
and whether published or unpublished) and all copyright registrations and
applications made by such Grantor in the United States, in each case, whether
now owned or hereafter created or acquired by or assigned to such Grantor,
including, without limitation, the copyrights, registrations and applications
listed in Schedule 1 to this Agreement, together with any and all (i) rights and
privileges arising under applicable law with respect to such Grantor’s use of
such copyrights, (ii) reissues, renewals, continuations and extensions thereof,
(iii) income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof and (iv) rights to
sue for past, present or future infringements thereof.

 

“Credit Agreement” shall have the meaning assigned to such term in the Recitals
of this Agreement.

 

“Deposit Account Control Agreement” shall mean an agreement that is in form and
substance reasonably satisfactory to the Collateral Agent establishing the
Collateral Agent’s Control with respect to any Deposit Account.

 

“General Intangibles” shall mean, collectively, all “general intangibles,” as
such term is defined in the UCC, and in any event shall include, without
limitation, all choses in action and causes of action and all other intangible
personal property of any Grantor of every kind and nature

 

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now owned or hereafter acquired by any Grantor, including all rights and
interests in partnerships, limited partnerships, limited liability companies and
other unincorporated entities, corporate or other business records,
indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, and other agreements), Intellectual Property,
goodwill, registrations, franchises and tax refund claims.

 

“Intellectual Property” shall mean all intellectual property of every kind and
nature now owned in the United States by a Grantor, or hereafter acquired by any
Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how or other confidential or proprietary data or information,
software and databases.

 

“Lenders” shall have the meaning assigned to such term in the Recitals of this
Agreement.

 

“License” shall mean any United States Patent License, Trademark License or
Copyright License or other United States license or sublicense in respect of
Intellectual Property to which any Grantor is a party including, without
limitation, those listed on Schedule 2 to this Agreement.

 

“Patent License” shall mean any agreement, now or hereafter in effect, granting
to any third party any right to make, use or sell any invention covered by a
Patent, now or hereafter owned by any Grantor or which any Grantor otherwise has
the right to license, or granting to any Grantor any right to make, use or sell
any invention a Patent, now or hereafter owned by any third party, and all
rights of any Grantor under any such agreement.

 

“Patents” shall mean all of the following now owned or hereafter acquired in the
United States by a Grantor:  (a) all letters patent and all applications for
letters patent, including registrations, recordations and pending applications
in the United States Patent and Trademark Office, including those listed on
Schedule 3 to this Agreement, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.

 

“Permit” shall mean any permit, approval, authorization, license, variance or
permission required from a governmental authority under an applicable law.

 

“Pledge Agreement” means the Debtor-In-Possession Pledge Agreement, dated as of
the date hereof, made by FairPoint and certain of its Subsidiaries party thereto
in favor of the Collateral Agent, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

 

“Pledge Agreement Collateral” shall “Collateral” under and as defined in the
Pledge Agreement.

 

“Proceeds” shall mean, collectively, all “proceeds,” as such term is defined in
the UCC, and in any event shall include, without limitation, any consideration
received from the sale, exchange, license, lease or other disposition of any
asset or property that constitutes Collateral, any

 

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value received as a consequence of the possession of any Collateral and any
payment received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property that constitutes Collateral, and shall include
(a) all cash and negotiable instruments received by or held on behalf of the
Collateral Agent, (b) any claim of any Grantor against any third party for (and
the right to sue and recover for and the rights to damages or profits due or
accrued arising out of or in connection with) (i) past, present or future
infringement of any Patent now or hereafter owned by any Grantor, or licensed
under a Patent License, (ii) past, present or future infringement or dilution of
any Trademark now or hereafter owned by any Grantor or licensed under a
Trademark License or injury to the goodwill associated with or symbolized by any
Trademark now or hereafter owned by any Grantor, (iii) past, present or future
breach of any License and (iv) past, present or future infringement of any
Copyright now or hereafter owned by any Grantor or licensed under a Copyright
License and (c) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.

 

“Real Estate Interests” means, with respect to a Grantor, all Real Property
Owned and all Real Property Leaseholds, whether now owned or held, or hereafter
acquired.

 

“Real Property Leaseholds” means all leases now or hereafter owned or held by a
Grantor, of real property whether improved or unimproved and all rights,
interests and estates, real and personal, arising under or in connection with
such leases and such real property, including without limitation all buildings
and all personal property and fixtures included under such leases.

 

“Real Property Owned” means all parcels of land now or hereafter owned by a
Grantor, together with the right, title and interest of such Grantor in and to
adjacent streets, the air space and development rights, all rights of way,
privileges, tenements, hereditaments and appurtenances thereto, and fixtures,
easements, all royalties and rights pertaining to the use of the real property,
including, without limitation, all alleys, vaults and drainage together with all
buildings and other improvements now or hereafter erected thereon and all
fixtures and personal property appertaining thereto and all additions thereto
and all substitutions and replacements thereof.

 

“Secured Creditors” shall have the meaning assigned to such term in the Recitals
of this Agreement.

 

“Securities Account Control Agreement” shall mean an agreement in form and
substance reasonably satisfactory to the Collateral Agent establishing the
Collateral Agent’s Control with respect to any Securities Account.

 

“Security Interests” shall  mean the Liens and security interests granted in
Section 3.01 of this Agreement to secure the Obligations.

 

“Trademark License” shall mean any agreement, now or hereafter in effect,
granting to any third party any right to use any Trademark now or hereafter
owned by any Grantor or that any Grantor otherwise has the right to license, or
granting to any Grantor any right to use any Trademark now or hereafter owned by
any third party, and all rights of any Grantor under any such agreement.

 

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“Trademarks” shall mean all of the following now owned or hereafter acquired in
the United States by a Grantor:  (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordations thereof, and all applications filed
in connection therewith, including registrations and registration applications
in the United States Patent and Trademark Office or any State of the United
States, and all extensions or renewals thereof, including those listed on
Schedule 4 to this Agreement and, (b) all goodwill associated therewith or
symbolized thereby.

 

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that if by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of the
Collateral Agent’s and the Secured Creditors’ security interest in any item or
portion of the Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, the term “UCC” shall
mean the Uniform Commercial Code as in effect on the date hereof in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions relating to such
provisions.

 

SECTION 1.04.                 Rules of Construction.  Unless the context
otherwise requires:

 

(1)                                  A TERM HAS THE MEANING ASSIGNED TO IT;

 

(2)                                  AN ACCOUNTING TERM NOT OTHERWISE DEFINED
HAS THE MEANING ASSIGNED TO IT IN ACCORDANCE WITH GAAP;

 

(3)                                  “OR” IS NOT EXCLUSIVE;

 

(4)                                  WORDS IN THE SINGULAR INCLUDE THE PLURAL,
AND IN THE PLURAL INCLUDE THE SINGULAR;

 

(5)                                  WHERE THE CONTEXT REQUIRES, PROVISIONS
RELATING TO ANY COLLATERAL, WHEN USED IN RELATION TO A GRANTOR, SHALL REFER TO
SUCH GRANTOR’S COLLATERAL OR ANY RELEVANT PART THEREOF.

 

ARTICLE II

AUTHORITY OF COLLATERAL AGENT

 

SECTION 2.01.                 General Authority of the Collateral Agent over the
Collateral.  The Collateral Agent hereby agrees that it holds and will hold all
of its right, title and interest in, to and under this Agreement and the
Collateral granted to the Collateral Agent hereunder whether now existing or
hereafter arising (all such right, title and interest being hereinafter referred
to as the “Collateral Estate”) under and subject to the conditions set forth in
this Agreement; and the Collateral Agent further agrees that it will hold such
Collateral Estate for the benefit of the Secured Creditors, for the enforcement
of the payment of all Obligations (subject to the limitations and priorities set
forth herein and in the Financing Orders) and as security for the performance of

 

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and compliance with the covenants and conditions of this Agreement and each of
the Credit Documents.

 

SECTION 2.02.                 Remedies Not Exclusive No remedy conferred upon or
reserved to the Collateral Agent herein or in the other Credit Documents is
intended to be exclusive of any other remedy or remedies, but every such remedy
shall be cumulative and shall be in addition to every other remedy conferred
herein or in any other Credit Document or now or hereafter existing at law or in
equity or by statute.

 

No delay or omission by the Collateral Agent to exercise any right, remedy or
power hereunder or under any other Credit Document shall impair any such right,
remedy or power or shall be construed to be a waiver thereof, and every right,
power and remedy given by this Agreement or any Credit Document to the
Collateral Agent may be exercised from time to time and as often as may be
deemed expedient by the Collateral Agent.

 

If the Collateral Agent shall have proceeded to enforce any right, remedy or
power under this Agreement or under any other Credit Document and the proceeding
for the enforcement thereof shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Collateral Agent, then the
Grantors, the Collateral Agent and the other Secured Creditors shall, subject to
any determination in such proceeding, severally and respectively be restored to
their former positions and rights hereunder or thereunder with respect to the
Collateral Estate and in all other respects, and thereafter all rights, remedies
and powers of the Collateral Agent shall continue as though no such proceeding
had been taken.

 

SECTION 2.03.                 Waiver and Estoppel.  Subject to the terms of the
Credit Documents, each Grantor agrees, to the extent it may lawfully do so, that
it will not at any time in any manner whatsoever claim, or take the benefit or
advantage of, any appraisement, valuation, stay, extension, moratorium, turnover
or redemption law, or any law permitting it to direct the order in which the
Collateral shall be sold, now or at any time hereafter in force, which may
delay, prevent or otherwise affect the performance or enforcement of this
Agreement or any Credit Document and hereby waives all benefit or advantage of
all such laws and covenants that it will not hinder, delay or impede the
execution of any power granted to the Collateral Agent in this Agreement or any
Credit Document but will suffer and permit the execution of every such power as
though no such law were in force.

 

Each Grantor, to the extent it may lawfully do so, on behalf of itself and all
who may claim through or under it, including without limitation any and all
subsequent creditors, vendees, assignees and licensors, waives and releases all
rights to demand or to have any marshaling of the Collateral upon any sale,
whether made under any power of sale granted herein or in any other Credit
Document or pursuant to judicial proceedings or upon any foreclosure or any
enforcement of this Agreement or any Credit Document and consents and agrees
that all the Collateral may at any such sale be offered and sold as an entirety.

 

EACH GRANTOR WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, PRESENTMENT,
DEMAND, PROTEST AND ANY NOTICE OF ANY KIND (EXCEPT NOTICES EXPLICITLY REQUIRED
HEREUNDER OR UNDER ANY CREDIT DOCUMENT OR THE FINANCING ORDERS) IN CONNECTION
WITH THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND ANY ACTION TAKEN BY THE
COLLATERAL AGENT WITH RESPECT TO THE COLLATERAL.

 

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SECTION 2.04.                 Limitation on Collateral Agents’ Duty in Respect
of Collateral.  Beyond its duties as to the custody thereof expressly provided
herein or in any other Credit Document and to account to the Secured Creditors
and the Grantors for moneys and other property received by it hereunder or under
any Credit Document and any other express duties specified in the Credit
Documents, the Collateral Agent shall have no duty to the Grantors or to the
Secured Creditors as to any Collateral in its possession or control or in the
possession or control of any of its agents or nominees, or any income thereon or
as to the preservation of rights against prior parties or any other rights
pertaining thereto. In addition, the Collateral Agent shall in no way be
responsible for the payment of any costs incurred in connection with preserving
or disposing of Collateral pursuant to Section 506(c) of the Bankruptcy Code and
the Collateral may not be charged for the incurrence of any such cost.

 

ARTICLE III

SECURITY INTERESTS

 

SECTION 3.01.                 Security InterestsAs security for the payment and
performance, as the case may be, in full of the Obligations, each Grantor hereby
sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and
transfers to the Collateral Agent, for the ratable benefit of the Secured
Creditors, and hereby grants to the Collateral Agent, for the ratable benefit of
the Secured Creditors, a security interest in, all of such Grantor’s right,
title and interest in, to and under the following property, together with the
Real Estate Interests and all other property or interests therein covered by any
of the Financing Orders, wherever located, and whether now existing or hereafter
arising or acquired from time to time (the “Collateral”):(a) Accounts
Receivable;

 

(b)                                 Books and Records;

 

(c)                                  cash and Deposit Accounts;

 

(d)                                 Chattel Paper;

 

(e)                                  Commercial Tort Claims described on
Schedule 5 to this Agreement;

 

(f)                                    Documents;

 

(g)                                 Equipment;

 

(h)                                 Fixtures;

 

(i)                                     General Intangibles;

 

(j)                                     Goods;

 

(k)                                  Instruments;

 

(l)                                     Inventory;

 

(m)                               Investment Property;

 

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(n)                                 Letter-of-Credit Rights;

 

(o)                                 Letters of Credit;

 

(p)                                 Supporting Obligations;

 

(q)                                 Intellectual Property;

 

(r)                                    to the extent not covered by
clauses (a) through (r) of this definition, all other personal property, whether
tangible or intangible; and

 

(s)                                  all Proceeds and products of any and all of
the foregoing and all accessions to, substitutions and replacements for, and
rents, profits and products of, each of the foregoing, and any and all Proceeds
of any insurance, indemnity, warranty or guaranty payable to such Grantor from
time to time with respect to any of the foregoing;

 

provided that, notwithstanding the foregoing, “Collateral” shall not include
(i) Pledge Agreement Collateral or any equity interests in an Excluded Entity
(as defined in the Pledge Agreement), (ii) any Causes of Action (as defined in
the Financing Orders) but, subject to the entry of the Final Order, the
Collateral shall include any Proceeds or property recovered in respect of any
Causes of Action and (iii) FCC licenses and PUC authorizations to the extent
(and only to the extent) that any Grantor is prohibited from granting a lien and
security interest therein pursuant to applicable law, but the Collateral shall
include, to the maximum extent permitted by law, all rights incident or
appurtenant to all FCC licenses and PUC authorizations and the right to receive
all proceeds derived from or in connection with the sale, assignment or transfer
of such FCC licenses and PUC authorizations.

 

SECTION 3.02.                 Perfection and Priority.  Upon the entry of the
Interim Order and the Final Order, as applicable, all Liens and security
interests granted to the Collateral Agent hereunder shall constitute valid and
perfected Liens on all of the Collateral having the priority specified therein
and shall automatically, and without further action by any Person, perfect such
Liens and security interests against the Collateral; provided, however, nothing
herein shall prevent the Collateral Agent, from otherwise perfecting,
maintaining, protecting or enforcing the Liens and security interests in the
Collateral granted hereunder. Notwithstanding any failure on the part of any
Grantor to take any action required by this Agreement, or perform or fulfill any
of the obligations of such Grantor under or pursuant to this Agreement, the
Liens and security interests granted herein shall be deemed valid, enforceable
and perfected by entry of each Financing Order.  No financing statement, notice
of lien, mortgage, deed of trust or similar instrument in any jurisdiction or
filing office need be filed or any other action taken in order to validate and
perfect the Liens and security interest granted by or pursuant to this Agreement
or the Financing Orders.

 

SECTION 3.03.                 Claim Priorities.  All Obligations shall
constitute, in accordance with Section 364(c)(1) of the Bankruptcy Code, claims
against each Grantor in its Case that are administrative expense claims having
priority over any and all administrative expenses of the kind specified in
Sections 503(b) or 507(b) of the Bankruptcy Code, subject only to the Carve-Out.

 

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SECTION 3.04.                 Modifications.

 

(A)                                  THE LIENS, LIEN PRIORITY, ADMINISTRATIVE
PRIORITIES AND OTHER RIGHTS AND REMEDIES GRANTED TO THE COLLATERAL AGENT
PURSUANT TO THIS AGREEMENT AND THE FINANCING ORDERS (INCLUDING THE EXISTENCE,
PERFECTION AND PRIORITY OF THE LIENS PROVIDED HEREIN AND THEREIN AND THE
ADMINISTRATIVE PRIORITY PROVIDED HEREIN AND THEREIN) SHALL NOT BE MODIFIED,
ALTERED OR IMPAIRED IN ANY MANNER BY ANY OTHER FINANCING OR EXTENSION OF CREDIT
OR INCURRENCE OF ANY INDEBTEDNESS BY ANY OF THE GRANTORS (PURSUANT TO
SECTION 364 OF THE BANKRUPTCY CODE OR OTHERWISE), OR BY ANY DISMISSAL OR
CONVERSION OF ANY CASE, OR BY ANY OTHER ACT OR OMISSION WHATSOEVER.  WITHOUT
LIMITATION, NOTWITHSTANDING ANY SUCH ORDER, FINANCING, EXTENSION, INCURRENCE,
DISMISSAL, CONVERSION, ACT OR OMISSION:

 

(1)                                  EXCEPT FOR THE CARVE-OUT HAVING PRIORITY
OVER THE OBLIGATIONS, NO COSTS OR EXPENSES OF ADMINISTRATION THAT HAVE BEEN OR
MAY BE INCURRED IN ANY OF THE CASES OR ANY CONVERSION OF THE SAME OR IN ANY
OTHER PROCEEDINGS RELATED THERETO, AND NO PRIORITY CLAIMS, ARE OR SHALL BE PRIOR
TO OR ON A PARITY WITH ANY CLAIM OF THE SECURED CREDITORS AGAINST THE GRANTORS
IN RESPECT OF ANY OBLIGATION;

 

(2)                                  THE LIENS GRANTED HEREIN AND IN THE ORDERS
SHALL CONSTITUTE VALID AND PERFECTED FIRST PRIORITY LIENS AND SECURITY INTERESTS
AND SHALL BE PRIOR TO ALL OTHER LIENS, NOW EXISTING OR HEREAFTER ARISING, IN
FAVOR OF ANY OTHER CREDITOR OR ANY OTHER PERSON WHATSOEVER (SUBJECT ONLY TO
(A) VALID, PERFECTED, NONAVOIDABLE AND ENFORCEABLE LIENS EXISTING AS OF THE
PETITION DATE, (B) THE EXTENT SUCH POSTPETITION PERFECTION IS EXPRESSLY
PERMITTED BY THE BANKRUPTCY CODE, VALID, NONAVOIDABLE AND ENFORCEABLE LIENS
EXISTING AS OF THE PETITION DATE, BUT PERFECTED AFTER THE PETITION DATE, AND
(C) THE CARVE-OUT);

 

(3)                                  THE LIENS GRANTED HEREUNDER SHALL
CONSTITUTE VALID AND PERFECTED WITHOUT THE NECESSITY THAT FINANCING STATEMENTS
BE FILED OR THAT ANY OTHER ACTION BE TAKEN UNDER APPLICABLE NONBANKRUPTCY LAW;
AND

 

(4)                                  NOTWITHSTANDING ANY FAILURE ON THE PART OF
ANY CREDIT PARTY OR THE SECURED CREDITORS TO PERFECT, MAINTAIN, PROTECT OR
ENFORCE THE LIENS IN THE COLLATERAL GRANTED HEREUNDER, THE FINANCING ORDERS
SHALL, AUTOMATICALLY AND WITHOUT FURTHER ACTION BY ANY PERSON, PERFECT SUCH
LIENS AGAINST THE COLLATERAL.

 

SECTION 3.05.                 Without limiting the foregoing, the Collateral
Agent is hereby authorized to file one or more financing statements (including
fixture filings), continuation statements, filings with the United States Patent
and Trademark Office, United States Copyright Office or other documents for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
Security Interests granted by each Grantor, without the signature of any
Grantor, and naming any Grantor or the Grantors as debtors and the Collateral
Agent as secured party.

 

SECTION 3.06.                 No Assumption of Liability.  The Security
Interests are granted as security only and shall not subject the Collateral
Agent or any other Secured Creditor to, or in any way alter or modify, any
obligation or liability of any Grantor with respect to or arising out of the
Collateral.

 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

The Grantors jointly and severally represent and warrant to the Collateral Agent
and other the Secured Creditors that:

 

SECTION 4.01.                 Title and Authority.  Each Grantor has good and
valid rights in and title to the Collateral with respect to which it has
purported to grant the Security Interests hereunder and, subject to the entry of
the Financing Orders by the Bankruptcy Court, has full power and authority to
grant to the Collateral Agent, for the benefit of the Secured Creditors, the
Security Interests in such Collateral pursuant hereto and to execute, deliver
and perform its obligations in accordance with the terms of this Agreement,
without the consent or approval of any other Person other than any consent or
approval which has been obtained.

 

SECTION 4.02.                 Validity of Security Interest.  The Security
Interests constitute legal and valid security interests in all the Collateral
securing the payment and performance of the Obligations.  As of the date hereof,
all information set forth herein, including the Schedules annexed hereto is
correct and complete.  As of the date hereof, the Collateral described on the
Schedules annexed hereto constitutes all of the property of such type of
Collateral owned or held by the Grantors.

 

SECTION 4.03.                 Limitations on and Absence of Other Liens.  The
Collateral is owned by the Grantors free and clear of any Lien, except for
Permitted Liens and subject to the Carve-Out.  The Grantors have not filed or
consented to the filing of (a) any financing statement or analogous document
under the UCC or any other applicable laws covering any Collateral, (b) any
assignment in which any Grantor assigns any Collateral or any security agreement
or similar instrument covering any Collateral with the United States Patent and
Trademark Office and the United States Copyright Office or (c) any assignment in
which any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with any foreign governmental, municipal or
other office, which financing statement or analogous document, assignment,
security agreement or similar instrument is still in effect, except, in each
case, for Permitted Liens.

 

SECTION 4.04.                 Jurisdiction of Organization.  As of the Closing
Date, Schedule 6 hereto identifies each Grantor’s corporate (or, if not a
corporation, legal) name, its jurisdiction of incorporation or organization, the
type of entity it was organized as and the state organization identification
number of such Grantor (if the state of its incorporation or organization
provides such organization number).  No Grantor will change its name, the state
in which it is organized or its type of organization.

 

SECTION 4.05.                 Instruments and Tangible Chattel Paper.  As of the
date hereof, each Instrument and each item of Tangible Chattel Paper has been
properly endorsed, assigned and delivered to the Collateral Agent, and, if
necessary, accompanied by instruments of transfer or assignment duly executed in
blank.  If any amount individually in excess of $250,000 or in the aggregate in
excess of $1,000,000 payable under or in connection with any of the Collateral
shall be evidenced by any Instrument or Tangible Chattel Paper, the Grantor
acquiring such Instrument or Tangible Chattel Paper shall forthwith endorse,
assign and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the Collateral
Agent may from time to time specify.

 

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SECTION 4.06.                 Deposit Accounts and Investment Property.  (i) 
Each Grantor hereby represents and warrants that as of the date hereof (1) it
has neither opened nor maintains any Deposit Accounts other than the accounts
listed in Schedule 7 to this Agreement, (2) it has neither opened nor maintains
any Securities Accounts or Commodity Accounts other than those listed in
Schedule 8 to this Agreement and (3) it does not hold, own or have any interest
in any certificated securities or uncertificated securities other than those
constituting Pledge Agreement Collateral or those maintained in Securities
Accounts or Commodity Accounts listed in Schedule 8 to this Agreement.

 

SECTION 4.07.                 Real Estate Interests.  Each Grantor has good and
marketable title to, or valid leasehold interests in, all Real Estate Interests
owned or leased by it, including, without limitation, the Real Estate Interests
listed on Schedule 9 to this Agreement, and none of such properties and assets
is subject to any Lien, except Permitted Liens.

 

(A)                                  SET FORTH ON SCHEDULE 9 IS A COMPLETE AND
ACCURATE LIST OF (I) ALL REAL PROPERTY OWNED, (II) THE CHIEF EXECUTIVE OFFICE
AND PRINCIPAL PLACE OF BUSINESS OF EACH GRANTOR AND ANY OTHER LOCATION IN WHICH
ANY GRANTOR’S BOOKS AND RECORDS ARE LOCATED AND (III) ALL OTHER REAL PROPERTY
LEASEHOLDS IN WHICH THE AGGREGATE FAIR MARKET VALUE OF COLLATERAL LOCATED AT
EACH SUCH REAL PROPERTY LEASEHOLD EXCEEDS $1,000,000, IN EACH CASE SHOWING AS OF
THE CLOSING DATE THE CURRENT STREET ADDRESS (INCLUDING, WHERE APPLICABLE,
COUNTY, STATE AND OTHER RELEVANT JURISDICTIONS) AND RECORD OWNER.

 

(B)                                 ALL PERMITS REQUIRED TO HAVE BEEN ISSUED OR
APPROPRIATE TO ENABLE ALL REAL ESTATE INTERESTS OF THE GRANTORS TO BE LAWFULLY
OCCUPIED AND USED FOR ALL OF THE PURPOSES FOR WHICH THEY ARE CURRENTLY OCCUPIED
AND USED HAVE BEEN LAWFULLY ISSUED AND ARE IN FULL FORCE AND EFFECT, OTHER THAN
THOSE THAT WOULD NOT REASONABLY BE EXPECTED TO HAVE, INDIVIDUALLY OR IN THE
AGGREGATE, A MATERIAL ADVERSE EFFECT.

 

(C)                                  NO REAL ESTATE INTEREST CURRENTLY, OR TO
THE KNOWLEDGE OF THE GRANTORS, PREVIOUSLY OWNED, OPERATED, LEASED BY OR FOR THE
GRANTORS, IS SUBJECT TO ANY PENDING OR, TO THE KNOWLEDGE OF SUCH GRANTOR,
THREATENED, CLAIM ORDER, AGREEMENT, NOTICE OF VIOLATION, NOTICE OF POTENTIAL
LIABILITY OR PURSUANT TO ENVIRONMENTAL LAWS OTHER THAN THOSE THAT WOULD NOT
REASONABLY BE EXPECTED TO HAVE, INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL
ADVERSE EFFECT.

 

(D)                                 NO GRANTOR HAS RECEIVED ANY NOTICE, OR HAS
ANY KNOWLEDGE, OF ANY PENDING, THREATENED OR CONTEMPLATED CONDEMNATION
PROCEEDING AFFECTING ANY REAL ESTATE INTERESTS OF SUCH GRANTOR OR ANY PART
THEREOF, EXCEPT THOSE WHICH, IN THE AGGREGATE, WOULD NOT HAVE A MATERIAL ADVERSE
EFFECT.

 

(E)                                  THERE ARE NO MATERIAL FACTS, CIRCUMSTANCES
OR CONDITIONS ARISING OUT OF OR RELATING TO THE OPERATIONS OR OWNERSHIP OF REAL
ESTATE INTERESTS OWNED, OPERATED OR LEASED BY THE GRANTORS THAT ARE NOT
SPECIFICALLY INCLUDED IN THE INFORMATION FURNISHED TO THE COLLATERAL AGENT.

 

SECTION 4.08.                 Intellectual Property.

 

(A)                                  SCHEDULE 1 ATTACHED HERETO CONTAINS A
COMPLETE AND ACCURATE LIST, AS OF THE DATE HEREOF, OF ALL COPYRIGHTS OWNED BY
EACH GRANTOR.

 

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(B)                                 SCHEDULE 2 ATTACHED HERETO CONTAINS A
COMPLETE AND ACCURATE LIST, AS OF THE DATE HEREOF, OF (I) ALL LICENSES UNDER
WHICH ANY GRANTOR HAS LICENSED TO A THIRD PARTY ANY OF ITS RIGHTS OR INTERESTS
IN ANY INTELLECTUAL PROPERTY AND (II) ALL MATERIAL LICENSES UNDER WHICH ANY
GRANTOR IS THE LICENSEE OR SUBLICENSEE (OTHER THAN LICENSES IN RESPECT OF
GENERAL SOFTWARE OR TELEPHONE SWITCH SOFTWARE, WHICH LICENSES ARE NOT, TO THE
GRANTORS’ KNOWLEDGE, ASSIGNABLE BY SUCH GRANTOR).

 

(C)                                  SCHEDULE 3 ATTACHED HERETO CONTAINS A
COMPLETE AND ACCURATE LIST, AS OF THE DATE HEREOF, OF ALL PATENTS OWNED BY EACH
GRANTOR.

 

(D)                                 SCHEDULE 4 ATTACHED HERETO CONTAINS A
COMPLETE AND ACCURATE LIST, AS OF THE DATE HEREOF, OF ALL TRADEMARKS OWNED BY
EACH GRANTOR.

 

ARTICLE V

COVENANTS

 

SECTION 5.01.                 Protection of Security.  Each Grantor shall, at
its own cost and expense, take any and all actions reasonably necessary to
defend the Security Interests of the Collateral Agent in the Collateral and the
priority thereof against any Lien other than Permitted Liens.

 

SECTION 5.02.                 Further Assurances.  Each Grantor agrees, at its
own expense, to execute, acknowledge, deliver and cause to be duly filed all
such further instruments and documents and take all such actions as the
Collateral Agents may from time to time reasonably request to better assure,
preserve, protect and perfect the Security Interests and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interests and the filing of any financing statements or other
documents in connection herewith or therewith.

 

SECTION 5.03.                 Taxes; Encumbrances.  At its option, the
Collateral Agent may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Collateral except to the extent the same constitute Permitted Liens, and may
pay for the maintenance and preservation of the Collateral to the extent any
Grantor fails to do so as required by this Agreement and each Grantor jointly
and severally agrees to reimburse the Collateral Agent on demand for any payment
made or any expense incurred by the Collateral Agent pursuant to the foregoing
authorization, together with interest thereon at the rate then in effect in
respect of the Loans, and such amounts shall constitute Obligations secured by
the Collateral; provided, however, that nothing in this Section 5.03 shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Creditor to cure or perform,
any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Credit Documents.  Performance
of such Grantor’s obligations as permitted under this Section 5.03 shall in no
way constitute for the purpose of the Cases a violation of the automatic stay
provided by Section 362 of the Bankruptcy Code and each Grantor hereby waives
applicability thereof.

 

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SECTION 5.04.                 Assignment of Security Interest.  If at any time
any Grantor shall take a security interest in any property of an Account Debtor
or any other Person to secure payment and performance of an Account in an amount
in excess of $250,000, such Grantor shall promptly assign such security interest
to the Collateral Agent.  Such assignment need not be filed of public record
unless necessary to continue the perfected status of the security interest
against creditors of and transferees from the Account Debtor or other Person
granting the security interest.

 

SECTION 5.05.                 Continuing Obligations of the Grantors.  Each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Collateral, all in accordance with the terms and
conditions thereof, and each Grantor jointly and severally agrees to indemnify
and hold harmless the Collateral Agent and the Secured Creditors from and
against any and all liability for such performance except to the other extent
resulting from the gross negligence or willful misconduct of the Collateral
Agent or the other Secured Creditors, as applicable.

 

SECTION 5.06.                 Use and Disposition of Collateral.  None of the
Grantors shall grant any Lien in respect of the Collateral other than Liens
securing the Obligations and Permitted Liens.

 

SECTION 5.07.                 Limitation on Modification of Accounts.  None of
the Grantors will, without the Collateral Agent’s prior written consent, grant
any extension of the time of payment of any of the Accounts Receivable,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any Person liable for the payment thereof or allow
any credit or discount whatsoever thereon, other than extensions, credits,
discounts, compromises or settlements granted or made in the ordinary course of
business and consistent with its past practices and in accordance with such
prudent and standard practices used in industries in which such Grantor is
engaged.

 

SECTION 5.08.                 Insurance.  The Grantors, at their own expense,
shall maintain or cause to be maintained insurance covering physical loss or
damage to the Collateral in accordance with Section 6.03 of the Credit
Agreement.  Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact)
for the purpose, during the continuance of an Event of Default, of making,
settling and adjusting claims in respect of Collateral under policies of
insurance, endorsing the name of such Grantor on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto.

 

SECTION 5.09.      Certain Covenants and Provisions Regarding Patent, Trademark
and Copyright Collateral. Each Grantor agrees that it will not, nor will it
permit any of its licensees to, do any act, or knowingly omit to do any act,
whereby any Patent which is material to the conduct of such Grantor’s business
may become invalidated or dedicated to the public.

 

(B)                                 EACH GRANTOR (EITHER ITSELF OR THROUGH ITS
LICENSEES OR ITS SUBLICENSES) WILL, FOR EACH TRADEMARK MATERIAL TO THE CONDUCT
OF SUCH GRANTOR’S BUSINESS,  (I) MAINTAIN SUCH TRADEMARK IN FULL FORCE FREE FROM
ANY CLAIM OF ABANDONMENT OR INVALIDITY FOR NONUSE, (II) MAINTAIN THE QUALITY OF
PRODUCTS AND SERVICES OFFERED UNDER SUCH TRADEMARK, (III) NOT KNOWINGLY USE OR
KNOWINGLY

 

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PERMIT THE USE OF SUCH TRADEMARK IN VIOLATION OF ANY THIRD PARTY RIGHTS IN A
MANNER THAT, INDIVIDUALLY OR IN THE AGGREGATE, COULD REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT.

 

(C)                                  EACH GRANTOR SHALL NOTIFY THE COLLATERAL
AGENTS AS SOON AS PRACTICABLE IF IT KNOWS OR HAS REASON TO KNOW THAT ANY PATENT,
TRADEMARK OR COPYRIGHT MATERIAL TO THE CONDUCT OF ITS BUSINESS BECOMES OR IS
REASONABLY LIKELY TO BECOME ABANDONED, FORFEITED OR DEDICATED TO THE PUBLIC, OR
OF ANY ADVERSE DETERMINATION OR DEVELOPMENT INCLUDING THE INSTITUTION OF, OR ANY
SUCH DETERMINATION OR DEVELOPMENT IN, ANY PROCEEDING IN THE UNITED STATES PATENT
AND TRADEMARK OFFICE OR UNITED STATES COPYRIGHT OFFICE REGARDING SUCH GRANTOR’S
OWNERSHIP OF ANY PATENT, TRADEMARK OR COPYRIGHT MATERIAL TO THE CONDUCT OF ITS
BUSINESS, OR ITS RIGHT TO REGISTER THE SAME, OR TO KEEP AND MAINTAIN THE SAME.

 

(D)                                 EACH GRANTOR HEREBY AGREES THAT WITH RESPECT
TO ALL INTELLECTUAL PROPERTY OWNED BY SUCH GRANTOR ON THE DATE HEREOF, IT WILL,
IF REQUESTED BY THE COLLATERAL AGENT, EXECUTE AND DELIVER ANY AND ALL
AGREEMENTS, INSTRUMENTS OR DOCUMENTS AS THE COLLATERAL AGENT MAY REASONABLY
REQUEST TO EVIDENCE THE COLLATERAL AGENT’S SECURITY INTEREST IN SUCH
INTELLECTUAL PROPERTY, WHICH AGREEMENTS, INSTRUMENTS OR DOCUMENTS MAY BE FILED
WITH THE UNITED STATES PATENT AND TRADEMARK OFFICE, UNITED STATES COPYRIGHT
OFFICE OR ANY OFFICE OR AGENCY IN ANY POLITICAL SUBDIVISION OF THE UNITED
STATES.

 

(E)                                  IN THE EVENT THAT ANY GRANTOR, EITHER
ITSELF OR THROUGH ANY AGENT, EMPLOYEE, LICENSEE OR DESIGNEE, FILES AN
APPLICATION FOR OR, FOLLOWING THE CLOSING DATE, BECOMES THE REGISTERED OWNER OF,
ANY PATENT, TRADEMARK OR COPYRIGHT (OR FOR THE REGISTRATION OF ANY TRADEMARK OR
COPYRIGHT) WITH THE UNITED STATES PATENT AND TRADEMARK OFFICE, UNITED STATES
COPYRIGHT OFFICE OR ANY OFFICE OR AGENCY IN ANY POLITICAL SUBDIVISION OF THE
UNITED STATES, SUCH GRANTOR SHALL PROMPTLY (AND IN ANY EVENT WITHIN THIRTY (30)
DAYS) NOTIFY THE COLLATERAL AGENT OF SUCH OCCURRENCE, AND SHALL EXECUTE AND
DELIVER ANY AND ALL AGREEMENTS, INSTRUMENTS, DOCUMENTS AND PAPERS AS THE
COLLATERAL AGENT MAY REASONABLY REQUEST TO EVIDENCE THE COLLATERAL AGENT’S
SECURITY INTEREST IN SUCH PATENT, TRADEMARK OR COPYRIGHT OR APPLICATION
THEREFOR, AND EACH GRANTOR HEREBY APPOINTS THE COLLATERAL AGENT AS ITS
ATTORNEY-IN-FACT TO EXECUTE AND FILE SUCH WRITINGS SOLELY FOR THE FOREGOING
PURPOSES, ALL ACTS OF SUCH ATTORNEY BEING HEREBY RATIFIED AND CONFIRMED; SUCH
POWER, BEING COUPLED WITH AN INTEREST, IS IRREVOCABLE UNTIL THIS AGREEMENT IS
TERMINATED.

 

(F)                                    EACH GRANTOR WILL TAKE ALL NECESSARY
STEPS THAT ARE CONSISTENT WITH ITS REASONABLE BUSINESS JUDGMENT IN ANY
PROCEEDING BEFORE THE UNITED STATES PATENT AND TRADEMARK OFFICE, UNITED STATES
COPYRIGHT OFFICE OR ANY OFFICE OR AGENCY IN ANY POLITICAL SUBDIVISION OF THE
UNITED STATES TO MAINTAIN AND PURSUE EACH MATERIAL APPLICATION RELATING TO THE
PATENTS, TRADEMARKS AND/OR COPYRIGHTS (AND TO OBTAIN THE RELEVANT GRANT OR
REGISTRATION) AND TO MAINTAIN EACH ISSUED PATENT AND EACH REGISTRATION OF THE
TRADEMARKS OR COPYRIGHTS THAT IS MATERIAL TO THE CONDUCT OF ANY GRANTOR’S
BUSINESS, INCLUDING TIMELY FILINGS OF APPLICATIONS FOR RENEWAL, AFFIDAVITS OF
USE, AFFIDAVITS OF INCONTESTABILITY AND PAYMENT OF MAINTENANCE FEES, AND, IF
CONSISTENT WITH ITS REASONABLE BUSINESS JUDGMENT, TO INITIATE OPPOSITION,
INTERFERENCE AND CANCELLATION PROCEEDINGS AGAINST THIRD PARTIES.

 

(G)                                 IN THE EVENT THAT ANY GRANTOR HAS REASON TO
BELIEVE THAT ANY COLLATERAL CONSISTING OF A PATENT, TRADEMARK OR COPYRIGHT WHICH
IS MATERIAL TO ITS BUSINESS HAS BEEN OR IS ABOUT TO BE INFRINGED,
MISAPPROPRIATED OR DILUTED BY A THIRD PARTY, SUCH GRANTOR PROMPTLY SHALL NOTIFY
THE

 

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COLLATERAL AGENT AND SHALL, IF CONSISTENT WITH ITS REASONABLE BUSINESS JUDGMENT,
PROMPTLY SUE FOR INFRINGEMENT, MISAPPROPRIATION OR DILUTION AND TO RECOVER ANY
AND ALL DAMAGES FOR SUCH INFRINGEMENT, MISAPPROPRIATION OR DILUTION, AND TAKE
SUCH OTHER ACTIONS AS ARE APPROPRIATE UNDER THE CIRCUMSTANCES TO PROTECT SUCH
COLLATERAL.

 

(H)                                 TO EACH GRANTOR’S KNOWLEDGE, ON AND AS OF
THE DATE HEREOF, SUCH GRANTOR IS NOT INFRINGING UPON ANY PATENT, TRADEMARK OR
COPYRIGHT OF ANY OTHER PERSON OTHER THAN SUCH INFRINGEMENT THAT, INDIVIDUALLY OR
IN THE AGGREGATE, WOULD NOT (OR WOULD NOT REASONABLY BE EXPECTED TO) RESULT IN A
MATERIAL ADVERSE EFFECT AND NO PROCEEDINGS HAVE BEEN INSTITUTED OR ARE PENDING
AGAINST SUCH GRANTOR OR, TO SUCH GRANTOR’S KNOWLEDGE, THREATENED, AND NO CLAIM
AGAINST SUCH GRANTOR HAS BEEN RECEIVED BY SUCH GRANTOR, ALLEGING ANY SUCH
VIOLATION.

 

(I)                                     UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT (BUT SUBJECT TO THE FINANCING ORDERS), EACH
GRANTOR SHALL UPON THE WRITTEN REQUEST OF THE COLLATERAL AGENT USE ITS
COMMERCIALLY REASONABLE EFFORTS TO OBTAIN ALL REQUISITE CONSENTS OR APPROVALS BY
THE LICENSOR OF EACH COPYRIGHT LICENSE, PATENT LICENSE OR TRADEMARK LICENSE TO
EFFECT THE ASSIGNMENT OF ALL OF SUCH GRANTOR’S RIGHT, TITLE AND INTEREST
THEREUNDER TO THE COLLATERAL AGENT OR ITS DESIGNEE.

 

(J)                                     UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF A DEFAULT OR EVENT OF DEFAULT, EACH GRANTOR SHALL, UPON THE
WRITTEN REQUEST OF THE COLLATERAL AGENT, PROVIDE A LIST TO THE COLLATERAL AGENT
OF ALL MATERIAL LICENSES TO WHICH EACH GRANTOR IS A PARTY.

 

SECTION 5.10.                 Other Actions.  In order to further ensure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent’s security interests in the Collateral, each
Grantor agrees, in each case at such Grantor’s own expense, to take the
following actions with respect to the following Collateral:

 

(A)                                  IN THE EVENT THE GRANTORS HAVE CASH,
INVESTMENT PROPERTY OR OTHER FUNDS MAINTAINED IN ANY DEPOSIT ACCOUNTS (OTHER
THAN (I) A DEPOSIT ACCOUNT EXCLUSIVELY USED FOR PAYROLL, PAYROLL TAXES AND OTHER
EMPLOYEE WAGE AND BENEFIT PAYMENTS TO OR FOR THE BENEFIT OF A GRANTOR’S SALARIED
EMPLOYEES AND (II) THE FAIRPOINT LOGISTICS, INC. DUAL POLE FUND DEPOSIT ACCOUNT
ENDING WITH THE LAST FOUR DIGITS 2606, MAINTAINED BY FAIRPOINT LOGISTICS AT
FIDELITY INVESTMENTS, SO LONG AS THE AMOUNT OF CASH CONTAINED THEREIN DOES NOT
AT ANY TIME EXCEED THE LESSER OF (A) THE AMOUNT REQUIRED TO COMPLY WITH THE PUC
ORDER ISSUED PRIOR TO THE DATE HEREOF IN WHICH THE CASH CONTAINED THEREIN
RELATES AND (B) $2,100,000) AND/OR SECURITY ACCOUNTS, BORROWER SHALL PROMPTLY
NOTIFY THE COLLATERAL AGENT AND, IF REQUESTED BY THE COLLATERAL AGENT,  THE
GRANTORS SHALL PROMPTLY ENTER INTO CONTROL AGREEMENTS IN FAVOR OF THE COLLATERAL
AGENT WITH THE BANKS, SECURITIES INTERMEDIARIES OR COMMODITY INTERMEDIARIES WITH
WHICH SUCH DEPOSIT ACCOUNTS AND SECURITY ACCOUNTS ARE MAINTAINED GRANTING TO THE
COLLATERAL AGENTS CONTROL OVER SUCH ACCOUNTS.  EACH COLLATERAL AGENT AGREES WITH
EACH GRANTOR THAT, IN THE CASE OF A DEPOSIT ACCOUNT SUBJECT TO THE COLLATERAL
AGENT’S CONTROL, THE COLLATERAL AGENT SHALL NOT GIVE ANY INSTRUCTIONS DIRECTING
THE DISPOSITION OF FUNDS FROM TIME TO TIME CREDITED TO ANY DEPOSIT ACCOUNT OR
WITHHOLD ANY WITHDRAWAL RIGHTS FROM SUCH GRANTOR WITH RESPECT TO FUNDS FROM TIME
TO TIME CREDITED TO ANY DEPOSIT ACCOUNT OR, IN THE CASE OF A SECURITIES ACCOUNT
OR COMMODITY ACCOUNT SUBJECT TO EACH COLLATERAL AGENT’S CONTROL, THE COLLATERAL
AGENT SHALL NOT GIVE ANY ENTITLEMENT ORDERS OR INSTRUCTIONS OR DIRECTIONS TO ANY
SECURITIES INTERMEDIARY OR COMMODITY INTERMEDIARY, AND SHALL NOT WITHHOLD ITS
CONSENT TO THE EXERCISE OF ANY WITHDRAWAL OR DEALING RIGHTS BY SUCH GRANTOR,
UNLESS, IN EACH CASE AND SUBJECT

 

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TO THE FINANCING ORDERS, AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR,
AFTER GIVING EFFECT TO ANY WITHDRAWAL, WOULD OCCUR.

 

(B)                                 IF ANY GRANTOR SHALL AT ANY TIME HOLD OR
ACQUIRE ANY CERTIFICATED SECURITIES CONSTITUTING INVESTMENT PROPERTY THAT ARE
NOT PLEDGE AGREEMENT COLLATERAL, SUCH GRANTOR SHALL PROMPTLY (AND IN ANY EVENT
WITH FIFTEEN (15) BUSINESS DAYS) ENDORSE, ASSIGN AND DELIVER THE SAME TO THE
COLLATERAL AGENT, ACCOMPANIED BY SUCH INSTRUMENTS OF TRANSFER OR ASSIGNMENT DULY
EXECUTED IN BLANK, ALL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
COLLATERAL AGENT.  IF ANY SECURITIES NOW OR HEREAFTER ACQUIRED BY ANY GRANTOR
CONSTITUTING INVESTMENT PROPERTY THAT ARE NOT PLEDGED AGREEMENT COLLATERAL ARE
UNCERTIFICATED AND ARE NOT HELD IN ACCOUNTS REQUIRED TO BE SUBJECT TO A CONTROL
AGREEMENT, SUCH GRANTOR SHALL PROMPTLY (AND IN ANY EVENT WITHIN FIFTEEN (15)
BUSINESS DAYS) NOTIFY THE COLLATERAL AGENT THEREOF AND, IF REQUESTED BY THE
COLLATERAL AGENT, SHALL USE COMMERCIALLY REASONABLE EFFORTS TO CAUSE THE ISSUER
TO AGREE TO COMPLY WITH INSTRUCTIONS FROM THE COLLATERAL AGENT AS TO SUCH
SECURITIES, WITHOUT FURTHER CONSENT OF ANY GRANTOR PURSUANT TO AN ISSUER’S
ACKNOWLEDGEMENT IN THE FORM ATTACHED HERETO AS ANNEX I.

 

(C)                                  AS BETWEEN THE COLLATERAL AGENT AND THE
GRANTORS, THE GRANTORS SHALL BEAR THE INVESTMENT RISK WITH RESPECT TO THE
INVESTMENT PROPERTY, AND THE RISK OF LOSS OF, DAMAGE TO OR THE DESTRUCTION OF
THE INVESTMENT PROPERTY, WHETHER IN THE POSSESSION OF, OR MAINTAINED AS A
SECURITY ENTITLEMENT OR DEPOSIT BY, OR SUBJECT TO THE CONTROL OF, THE COLLATERAL
AGENT, A SECURITIES INTERMEDIARY, A COMMODITY INTERMEDIARY, ANY GRANTOR OR ANY
OTHER PERSON; PROVIDED, HOWEVER, THAT NOTHING CONTAINED IN THIS
SECTION 5.10(C) SHALL RELEASE OR RELIEVE ANY SECURITIES INTERMEDIARY OR
COMMODITY INTERMEDIARY OF ITS DUTIES AND OBLIGATIONS TO THE GRANTORS OR ANY
OTHER PERSON UNDER ANY CONTROL AGREEMENT OR UNDER APPLICABLE LAW.

 

(D)                                 EACH GRANTOR SHALL PROMPTLY PAY ALL CHARGES
AND FEES ARISING ON OR AFTER THE DATE HEREOF WITH RESPECT TO THE INVESTMENT
PROPERTY PLEDGED BY IT UNDER THIS AGREEMENT, EXCEPT THAT NO SUCH CHARGE OR FEE
NEED BE PAID IF THE AMOUNT OR VALIDITY THEREOF IS CURRENTLY BEING CONTESTED IN
GOOD FAITH BY APPROPRIATE PROCEEDINGS, RESERVES IN CONFORMITY WITH GAAP WITH
RESPECT THERETO HAVE BEEN PROVIDED ON THE BOOKS OF SUCH GRANTOR AND SUCH
PROCEEDINGS COULD NOT REASONABLY BE EXPECTED TO RESULT IN THE SALE, FORFEITURE
OR LOSS OF ANY MATERIAL PORTION OF THE COLLATERAL OR ANY INTEREST THEREIN.  IN
THE EVENT ANY GRANTOR SHALL FAIL TO MAKE SUCH PAYMENT CONTEMPLATED IN THE
IMMEDIATELY PRECEDING SENTENCE, THE COLLATERAL AGENT MAY DO SO FOR THE ACCOUNT
OF SUCH GRANTOR AND THE GRANTORS SHALL PROMPTLY REIMBURSE AND INDEMNIFY THE
COLLATERAL AGENT FROM ALL COSTS AND EXPENSES INCURRED BY THE COLLATERAL AGENT
UNDER THIS SECTION 5.10(D), TOGETHER WITH INTEREST THEREON AT THE RATE THEN IN
EFFECT IN RESPECT OF THE LOANS, AND SUCH AMOUNTS SHALL CONSTITUTE OBLIGATIONS
SECURED BY THE COLLATERAL.  PERFORMANCE OF SUCH GRANTOR’S OBLIGATIONS AS
PERMITTED UNDER THIS SECTION 5.10(D) SHALL IN NO WAY CONSTITUTE FOR THE PURPOSE
OF THE CASES A VIOLATION OF THE AUTOMATIC STAY PROVIDED BY SECTION 362 OF THE
BANKRUPTCY CODE AND EACH GRANTOR HEREBY WAIVES APPLICABILITY THEREOF.

 

(E)                                  ELECTRONIC CHATTEL PAPER AND TRANSFERABLE
RECORDS.  IF ANY AMOUNT INDIVIDUALLY IN EXCESS OF $250,000 OR IN THE AGGREGATE
IN EXCESS OF $1,000,000 PAYABLE UNDER OR IN CONNECTION WITH ANY OF THE
COLLATERAL SHALL BE EVIDENCED BY ANY ELECTRONIC CHATTEL PAPER OR ANY
“TRANSFERABLE RECORD,” AS THAT TERM IS DEFINED IN SECTION 201 OF THE FEDERAL
ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT, OR IN SECTION 16 OF
THE UNIFORM ELECTRONIC TRANSACTIONS ACT AS IN EFFECT IN ANY RELEVANT
JURISDICTION, THE GRANTOR ACQUIRING SUCH ELECTRONIC CHATTEL PAPER OR
TRANSFERABLE

 

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RECORD SHALL PROMPTLY NOTIFY THE COLLATERAL AGENT THEREOF AND SHALL TAKE SUCH
ACTION AS THE COLLATERAL AGENT MAY REASONABLY REQUEST TO VEST IN THE COLLATERAL
AGENT CONTROL UNDER UCC SECTION 9-105 OF SUCH ELECTRONIC CHATTEL PAPER OR
CONTROL UNDER SECTION 201 OF THE FEDERAL ELECTRONIC SIGNATURES IN GLOBAL AND
NATIONAL COMMERCE ACT OR, AS THE CASE MAY BE, SECTION 16 OF THE UNIFORM
ELECTRONIC TRANSACTIONS ACT, AS SO IN EFFECT IN SUCH JURISDICTION, OF SUCH
TRANSFERABLE RECORD.  THE COLLATERAL AGENT AGREES WITH SUCH GRANTOR THAT THE
COLLATERAL AGENT WILL ARRANGE, PURSUANT TO PROCEDURES REASONABLY SATISFACTORY TO
THE COLLATERAL AGENT AND SO LONG AS SUCH PROCEDURES WILL NOT RESULT IN THE
COLLATERAL AGENT’S LOSS OF CONTROL, FOR THE GRANTOR TO MAKE ALTERATIONS TO THE
ELECTRONIC CHATTEL PAPER OR TRANSFERABLE RECORD PERMITTED UNDER UCC
SECTION 9-105 OR, AS THE CASE MAY BE, SECTION 201 OF THE FEDERAL ELECTRONIC
SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT OF SECTION 16 OF THE UNIFORM
ELECTRONIC TRANSACTIONS ACT FOR A PARTY IN CONTROL TO ALLOW WITHOUT LOSS OF
CONTROL, UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD
OCCUR AFTER TAKING INTO ACCOUNT ANY ACTION BY SUCH GRANTOR WITH RESPECT TO SUCH
ELECTRONIC CHATTEL PAPER OR TRANSFERABLE RECORD.

 

(F)                                    LETTER-OF-CREDIT RIGHTS.  IF ANY GRANTOR
IS AT ANY TIME A BENEFICIARY UNDER A LETTER OF CREDIT NOW OR HEREAFTER ISSUED IN
FAVOR OF SUCH GRANTOR IN AN AMOUNT INDIVIDUALLY IN EXCESS OF $250,000 OR IN THE
AGGREGATE IN EXCESS OF $1,000,000, SUCH GRANTOR SHALL PROMPTLY NOTIFY THE
COLLATERAL AGENT AND, IF REQUESTED BY THE COLLATERAL AGENT, SUCH GRANTOR SHALL
USE COMMERCIALLY REASONABLE EFFORTS TO PURSUANT TO AN AGREEMENT IN FORM AND
SUBSTANCE SATISFACTORY TO THE COLLATERAL AGENT, EITHER (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 THE LETTER OF CREDIT
OR (II) ARRANGE FOR THE COLLATERAL AGENT TO BECOME THE TRANSFEREE BENEFICIARY OF
SUCH LETTER OF CREDIT.

 

(G)                                 COMMERCIAL TORT CLAIMS.  AS OF THE DATE
HEREOF EACH GRANTOR HEREBY REPRESENTS AND WARRANTS THAT IT HOLDS NO COMMERCIAL
TORT CLAIMS OTHER THAN THOSE LISTED ON SCHEDULE 5 TO THIS AGREEMENT.  IF ANY
GRANTOR SHALL AT ANY TIME HOLD OR ACQUIRE A COMMERCIAL TORT CLAIM HAVING A VALUE
INDIVIDUALLY IN EXCESS OF $250,000 OR IN THE AGGREGATE IN EXCESS OF $1,000,000
SUCH GRANTOR SHALL PROMPTLY NOTIFY THE COLLATERAL AGENT THEREOF AND, IF
REQUESTED BY THE COLLATERAL AGENT, GRANT TO THE COLLATERAL AGENT IN WRITING
SIGNED BY SUCH GRANTOR 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.

 

(H)                                 MOTOR VEHICLES.  UPON THE REQUEST OF THE
COLLATERAL AGENT, EACH GRANTOR SHALL DELIVER TO THE COLLATERAL AGENT ORIGINALS
OF THE CERTIFICATES OF TITLE OR OWNERSHIP FOR THE MOTOR VEHICLES (AND ANY OTHER
EQUIPMENT COVERED BY CERTIFICATES OF TITLE OR OWNERSHIP) OWNED BY IT WITH EACH
COLLATERAL AGENT LISTED AS A LIENHOLDER THEREIN.  SUCH REQUIREMENT SHALL APPLY
TO THE GRANTORS IF ANY SUCH MOTOR VEHICLE (OR ANY SUCH OTHER EQUIPMENT) IS
VALUED OVER $250,000, PROVIDED THAT THE VALUE OF ALL SUCH MOTOR VEHICLES (AND
SUCH EQUIPMENT) AS TO WHICH ANY GRANTOR HAS NOT DELIVERED A CERTIFICATE OF TITLE
OR OWNERSHIP IS OVER $250,000.

 

(I)                                     LANDLORD’S ACCESS AGREEMENTS/BAILEE
LETTERS.  WITH RESPECT TO EACH REAL PROPERTY LEASEHOLD AND EACH WAREHOUSE OR
OTHER STORAGE FACILITY LOCATED IN THE UNITED STATES OF AMERICA OWNED BY ANY
PERSON OTHER THAN A GRANTOR, IF INVENTORY, EQUIPMENT OR OTHER PERSONAL PROPERTY
OF ANY GRANTOR WITH A FAIR MARKET VALUE IN EXCESS OF $500,000 IS REGULARLY
MAINTAINED AT SUCH LOCATION, BORROWERS SHALL NOTIFY THE COLLATERAL AGENTS
THEREOF AND, IF REQUESTED BY THE COLLATERAL

 

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AGENT, WILL USE ITS COMMERCIALLY REASONABLE EFFORTS TO DELIVER A LANDLORD WAIVER
AND ACCESS AGREEMENT OR BAILEE LETTER, AS APPLICABLE, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COLLATERAL AGENT.

 

ARTICLE VI

REMEDIES

 

SECTION 6.01.                 Remedies upon Default.  After the occurrence and
during the continuance of an Event of Default, upon five (5) days’ notice to the
Grantors (with a copy to counsel for the Committee and to the United States
Trustee for the Southern District of New York), the Collateral Agent shall have
the right to take any of or all the following actions at the same or different
times:  (a) with respect to any Collateral consisting of Intellectual Property,
on demand, to cause the Security Interest to become an assignment, transfer and
conveyance of any of or all such Collateral by the applicable Grantors to the
Collateral Agent, or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or nonexclusive basis, any such
Collateral throughout the world on such terms and conditions and in such manner
as the Collateral Agent shall determine (other than in violation of applicable
law or any then existing licensing arrangements to the extent that waivers
cannot be obtained), and (b) with or without legal process and with or without
prior notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured creditor under
the UCC or other applicable law.  Without limiting the generality of the
foregoing, each Grantor agrees that the Collateral Agent shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise
dispose of all or any part of the Collateral, at public or private sale or at
any broker’s board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate.  The Collateral
Agent shall be authorized at any such sale (if it deems it advisable to do so)
to restrict the prospective bidders or purchasers to Persons who will represent
and agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold.  Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.

 

The Collateral Agent shall give a Grantor ten (10) Business Days’ prior written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the UCC) of the Collateral Agent’s intention to make any sale
or other disposition of such Grantor’s Collateral.  Such notice, in the case of
a public sale, shall state the time and place for such sale and, in the case of
a sale at a broker’s board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Collateral,
or portion thereof, will first be offered for sale at such board or exchange. 
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent may fix and
state in the notice of such sale.  At any such sale, the Collateral, or portion

 

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thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion)
determine.  Neither Collateral Agent shall be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given.  The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned.  In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such Collateral
may be sold again upon like notice.  At any public (or, to the extent permitted
by law, private) sale made pursuant to this Section, any Secured Creditor may
bid for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
Obligation then due and payable to such Secured Creditor from any Grantor as a
credit against the purchase price, and such Secured Creditor may, upon
compliance with the terms of sale, hold, retain and dispose of such property
without further accountability to any Grantor therefor.  For purposes hereof, a
written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Collateral Agent shall be free to carry out such
sale pursuant to such agreement and no Grantor shall be entitled to the return
of the Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Collateral Agent shall have entered into such an agreement
all Events of Default shall have been remedied and the Obligations paid in
full.  As an alternative to exercising the power of sale herein conferred upon
it, the Collateral Agent may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.  Any
sale pursuant to the provisions of this Section shall be deemed to conform to
the commercially reasonable standards as provided in Section 9-611 of the UCC.

 

The Secured Creditors agree that this Agreement may be enforced only by the
action of the Collateral Agent, 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 for the
benefit of the Secured Creditors upon the terms of this Agreement.  Exercise by
the Collateral Agent of the powers granted under this Agreement is not a
violation of the automatic stay provided by Section 362 of the Bankruptcy Code
and each Grantor waives the applicability thereof.  The Secured Creditors shall
be entitled to all of the rights and benefits of section 552(b) of the
Bankruptcy Code, and the “equities of the case” exception under section
552(b) of the Bankruptcy Code shall not apply to the Secured Creditors with
respect to proceeds, product, offspring or profits of any of the Collateral.

 

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SECTION 6.02.                 Application of Proceeds.

 

(A)                                  ALL MONEYS COLLECTED BY THE COLLATERAL
AGENT UPON ANY SALE OR OTHER DISPOSITION OF THE COLLATERAL, TOGETHER WITH ALL
OTHER MONEYS RECEIVED BY THE COLLATERAL AGENT OR THE COLLATERAL AGENT HEREUNDER,
SHALL BE APPLIED AS FOLLOWS:

 

(1)                                  FIRST, TO ANY FEES, INDEMNITIES OR EXPENSE
REIMBURSEMENTS THEN DUE AND OWING TO THE ADMINISTRATIVE AGENT, THE COLLATERAL
AGENT OR THE PLEDGEE UNDER THE PLEDGE AGREEMENT;

 

(2)                                  SECOND, TO THE EXTENT PROCEEDS REMAIN AFTER
THE APPLICATION PURSUANT TO PRECEDING CLAUSE (I), AN AMOUNT EQUAL TO THE
OUTSTANDING OBLIGATIONS TO THE SECURED CREDITORS SHALL BE PAID TO THE SECURED
CREDITORS, WITH EACH SECURED CREDITOR RECEIVING AN AMOUNT EQUAL TO ITS
OUTSTANDING OBLIGATIONS OR, IF THE PROCEEDS ARE INSUFFICIENT TO PAY IN FULL ALL
SUCH OBLIGATIONS, ITS PRO RATA SHARE OF THE AMOUNT REMAINING TO BE DISTRIBUTED
TO BE APPLIED, WITH RESPECT TO THE OBLIGATIONS, FIRSTLY, TO THE PAYMENT OF
INTEREST IN RESPECT OF THE UNPAID PRINCIPAL AMOUNT OF LOANS OUTSTANDING,
SECONDLY, TO THE PAYMENT OF PRINCIPAL OF LOANS OUTSTANDING, THEN TO THE OTHER
OBLIGATIONS; AND

 

(3)                                  THIRD, TO THE EXTENT PROCEEDS REMAIN AFTER
THE APPLICATION PURSUANT TO THE PRECEDING CLAUSES (I) AND (II) AND FOLLOWING THE
TERMINATION OF THIS AGREEMENT PURSUANT TO SECTION 7.10 HEREOF, TO THE RELEVANT
GRANTOR OR, TO THE EXTENT DIRECTED BY SUCH GRANTOR OR A COURT OF COMPETENT
JURISDICTION, TO WHOMEVER MAY BE LAWFULLY ENTITLED TO RECEIVE SUCH SURPLUS.

 

(B)                                 FOR PURPOSES OF THIS AGREEMENT, “PRO RATA
SHARE” SHALL MEAN, WHEN CALCULATING A SECURED CREDITOR’S PORTION OF ANY
DISTRIBUTION OR AMOUNT, THE AMOUNT (EXPRESSED AS A PERCENTAGE) EQUAL TO A
FRACTION THE NUMERATOR OF WHICH IS THE THEN OUTSTANDING AMOUNT OF THE RELEVANT
OBLIGATIONS OWED SUCH SECURED CREDITOR AND THE DENOMINATOR OF WHICH IS THE THEN
OUTSTANDING AMOUNT OF ALL OBLIGATIONS.

 

(C)                                  ALL PAYMENTS REQUIRED TO BE MADE TO THE
SECURED CREDITORS HEREUNDER SHALL BE MADE TO THE ADMINISTRATIVE AGENT FOR THE
ACCOUNT OF THE RESPECTIVE SECURED CREDITORS.

 

(D)                                 IT IS UNDERSTOOD THAT EACH GRANTOR SHALL
REMAIN JOINTLY AND SEVERALLY LIABLE TO THE EXTENT OF ANY DEFICIENCY BETWEEN
(X) THE AMOUNT OF THE OBLIGATIONS FOR WHICH IT IS LIABLE DIRECTLY OR AS A
GUARANTOR THAT ARE SATISFIED WITH PROCEEDS OF THE COLLATERAL AND (Y) THE
AGGREGATE OUTSTANDING AMOUNT OF THE OBLIGATIONS.

 

SECTION 6.03.                 Grant of License to Use Intellectual Property. 
For the purpose of enabling the Collateral Agent to exercise rights and remedies
under this Article at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent a nonexclusive license (exercisable without payment of royalty
or other compensation to the Grantors) to use, license or sublicense any of the
Collateral, except to the extent that such license may not be granted as a
result of a pre-existing exclusive license arrangement, consisting of
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer

 

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software and programs used for the compilation or printout thereof.  The use of
such license by the Collateral Agent shall be exercised, at the option of the
Collateral Agent, after the occurrence and during the continuation of an Event
of Default; provided that any license, sublicense or other transaction entered
into by the Collateral Agent in accordance herewith shall be binding upon the
Grantors notwithstanding any subsequent cure of an Event of Default.  Such
license shall be irrevocable until this Agreement is terminated.

 

ARTICLE VII

MISCELLANEOUS

 

SECTION 7.01.                 Notices. All notices and other communications
hereunder shall be in writing (including telegraphic, telex, telecopier,
facsimile or cable communication) and shall be delivered, telegraphed, telexed,
telecopied, faxed, cabled, or mailed (by first class mail, postage prepaid):

 

(1)                                  IF TO ANY GRANTOR, AT ITS ADDRESS SET FORTH
OPPOSITE ITS SIGNATURE BELOW;

 

(2)                                  IF TO THE COLLATERAL AGENT, AT:

 

Bank of America, N.A.
901 Main Street
Dallas, TX 75202
Attention:  Garrett Dolt
Fax:  (214) 530-3008

 

(3)                                  IF TO ANY SECURED CREDITOR (OTHER THAN THE
COLLATERAL AGENT), EITHER (X) TO THE ADMINISTRATIVE AGENT, AT THE ADDRESS OF THE
ADMINISTRATIVE AGENT SPECIFIED IN THE CREDIT AGREEMENT OR (Y) AT SUCH ADDRESS AS
SUCH SECURED CREDITOR SHALL HAVE SPECIFIED IN THE CREDIT AGREEMENT;

 

or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.

 

SECTION 7.02.                 Survival of Agreement.  All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Credit Document shall be considered to
have been relied upon by the Collateral Agents and the other Secured Creditors
and shall survive the making by the Lenders of the Loans and the Lenders’
issuance of and participations in Letters of Credit, regardless of any
investigation made by the Secured Creditors or on their behalf, and shall
continue in full force and effect until this Agreement shall terminate.

 

SECTION 7.03.                 Binding Effect.  This Agreement shall become
effective as to any Grantor when a counterpart hereof executed on behalf of such
Grantor shall have been delivered to the Collateral Agent and a counterpart
hereof shall have been executed on behalf of the Collateral Agent, and
thereafter shall be binding upon such Grantor and the Collateral Agents and
their respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral

 

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Agent and the other Secured Creditors and their respective successors and
assigns, except that no Grantor shall have the right to assign or transfer its
rights or obligations hereunder or any interest herein or in the Collateral (and
any such assignment or transfer shall be void) except as expressly permitted by
each of the other Credit Documents.

 

SECTION 7.04.                 Successors and Assigns.  Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.

 

SECTION 7.05.                 GOVERNING LAW.

 

(A)                                  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.  EXCEPT FOR MATTERS WITHIN THE
EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT, ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH GRANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS.  EACH GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
EACH GRANTOR AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY OF THE SECURED CREDITORS TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY GRANTOR IN ANY OTHER JURISDICTION.

 

(B)                                 EXCEPT FOR MATTERS WITHIN THE EXCLUSIVE
JURISDICTION OF THE BANKRUPTCY COURT, EACH GRANTOR 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 SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(C)                                  EACH GRANTOR AND THE COLLATERAL AGENT
HEREBY IRREVOCABLY WAIVE 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.

 

SECTION 7.06.                 Waivers; Amendment; Several Agreement.  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 the Collateral
Agent (with the consent of the Required

 

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Lenders or, to the extent required by Section 11.11 of the Credit Agreement, all
of the Lenders) and each Grantor affected thereby, provided that  no such
change, waiver, modification or variance shall be made to Section 6.02 hereof of
this Section 7.06 without the consent of each Secured Creditor adversely
affected thereby.

 

SECTION 7.07.                 Severability.  In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction).  The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.  It is understood and agreed among the parties that this Agreement
shall create separate security interests in the Collateral securing the
Obligations as provided in Section 3.01, and that any determination by any court
with jurisdiction that the security interest securing any Obligation or class of
Obligations is invalid for any reason shall not in and of itself invalidate the
security interest securing any other Obligations hereunder.

 

SECTION 7.08.                 Counterparts.  This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute a single contract and shall become
effective as provided in Section 7.03. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.

 

SECTION 7.09.                 Headings.  Article and Section headings used
herein are for the purpose of reference only, are not part of this Agreement and
are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.

 

SECTION 7.10.                 Termination. After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein shall survive any such termination) and the Collateral Agent,
at the request and expense of the Grantors, will, if requested by the Grantors,
execute and deliver to the Grantors a proper instrument or instruments
acknowledging the satisfaction and termination of this Agreement as provided
above, and will duly assign, transfer and deliver to such Grantor (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, together with
any moneys at the time held by the Collateral Agent hereunder.  As used in this
Agreement, “Termination Date” shall mean the date upon which the Total Revolving
Commitment has been terminated, no Note under the Credit Agreement is
outstanding (and all Loans have been paid in full), all Letters of Credit have
been cancelled (or have expired, undrawn) or collateralized to the satisfaction
of the Administrative Agent and all other Obligations have been paid in full
(other than arising from indemnities for which no request has been made).

 

SECTION 7.11.                 Financing Statements.  Each Grantor hereby
irrevocably authorizes the Collateral Agent at any time and from time to time to
file in any relevant jurisdiction any initial financing statements and
amendments thereto that contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment relating to the Collateral, including
(i) whether such Grantor is

 

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an organization, the type of organization and any organizational identification
number issued to such Grantor, (ii) any financing or continuation statements or
other documents without the signature of such Grantor where permitted by law,
including the filing of a financing statement describing the Collateral as “all
assets now owned or hereafter acquired by the Grantor or in which Grantor
otherwise has rights” and (iii) in the case of a financing statement filed as a
fixture filing or covering Collateral constituting minerals or the like to be
extracted or timber to be cut, a sufficient description of the real property to
which such Collateral relates.

 

SECTION 7.12.                 Collateral Agent Appointed Attorney-in-Fact. Each
Grantor hereby appoints the Collateral Agent the attorney-in-fact of such
Grantor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable until this Agreement is terminated and coupled with an interest. 
Without limiting the generality of the foregoing, the Collateral Agent shall
have the right, after the occurrence and during the continuance of an Event of
Default (but subject to the terms of the Financing Orders), with full power of
substitution either in the Collateral Agent’s name or in the name of such
Grantor, (a) to receive, endorse, assign or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment relating
to the Collateral or any part thereof; (b) to demand, collect, receive payment
of, give receipt for and give discharges and releases of all or any of the
Collateral; (c) to ask for, demand, sue for, collect, receive and give
acquittance for any and all moneys due or to become due under and by virtue of
any Collateral; (d) to sign the name of any Grantor on any invoice or bill of
lading relating to any of the Collateral; (e) to send verifications of Accounts
to any Account Debtor; (f) to commence and prosecute any and all suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral; (g) to settle, compromise, compound, adjust
or defend any actions, suits or proceedings relating to all or any of the
Collateral; (h) to notify, or to require any Grantor to notify, Account Debtors
to make payment directly to the Collateral Agent; and (i) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral, and to do all other acts and things necessary to carry
out the purposes of this Agreement, as fully and completely as though the
Collateral Agent were the absolute owner of the Collateral for all purposes;
provided, that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral Agent, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby.  The Collateral Agent and the other
Secured Creditors shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their respective own
gross negligence or willful misconduct.

 

[Signatures on Following Page]

 

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[SIGNATURE PAGES OMITTED]

 

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Annex 1 to the
Debtor-In-Possession Security Agreement

 

[Form of]

 

ISSUER’S ACKNOWLEDGMENT AGREEMENT

 

AGREEMENT (as amended, modified, restated and/or supplemented from time to time,
this “Agreement”), dated as of [ , 20 ], among the undersigned grantor (the
“Grantor”), BANK OF AMERICA, N.A., not in its individual capacity but solely as
Collateral Agent (the “Collateral Agent”), and [ ], as the issuer of the
Investment Property (the “Issuer”).

 

W I T N E S S E T H :

 

WHEREAS, the Grantor, certain of its affiliates and the Collateral Agent have
entered into a Debtor-In-Possession Security Agreement, dated as of October 30,
2009 (as amended, modified, restated and/or supplemented from time to time, the
“Security Agreement”), (a) under which, among other things, in order to secure
the payment of the Obligations, the Grantor has pledged o the Collateral Agent
for the benefit of the Secured Creditors, and has granted a security interest in
favor of the Collateral Agent for the benefit of the Secured Creditors in, all
of the right, title and interest of the Grantor in and to substantially all of
its assets, including all Investment Property from time to time issued by the
Issuer, whether now existing or hereafter from time to time acquired by the
Grantor (with all of such Investment Property being herein collectively called
the “Issuer Pledged Interests”); and

 

WHEREAS, the Grantor desires the Issuer to enter into this Agreement in order to
vest in the Collateral Agent control of the Issuer Pledge Interests and to
provide for the rights of the parties under this Agreement;

 

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.                                       The Grantor hereby irrevocably
authorizes and directs the Issuer, and the Issuer hereby agrees, to comply with
any and all instructions and orders originated by the Collateral Agent (and its
successors and assigns) regarding any and all of the Issuer Pledged Interests
without the further consent by the registered owner (including the Grantor),
and, following its receipt of a notice from the Collateral Agent stating that
the Collateral Agent is exercising exclusive control of the Issuer Pledged
Interests, not to comply with any instructions or orders regarding

 

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(a) Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Security Agreement.

 

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any or all of the Issuer Pledged Interests originated by any person or entity
other than the Collateral Agent (and its successors and assigns) or a court of
competent jurisdiction.

 

2.                                       The Issuer hereby certifies that (i) no
notice of any security interest, lien or other encumbrance or claim affecting
the Issuer Pledged Interests (other than the security interest of the Collateral
Agent) has been received by it, and (ii) the security interest of the Collateral
Agent in the Issuer Pledged Interests has been registered in the books and
records of the Issuer.

 

3.                                       The Issuer hereby represents and
warrants that (i) the pledge by the Grantor of, and the granting by the Grantor
of a security interest in, the Issuer Pledged Interests to the Collateral Agent,
for the benefit of the Secured Creditors, does not violate the charter, by-laws,
partnership agreement, membership agreement or any other agreement governing the
Issuer or the Issuer Pledged Interests, and (ii) the Issuer Pledged Interests
consisting of capital stock of a corporation are fully paid and nonassessable.

 

4.                                       All notices, statements of accounts,
reports, prospectuses, financial statements and other communications to be sent
to the Grantor by the Issuer in respect of the Issuer will also be sent to the
Collateral Agent at the following address:

 

[  ]

[  ]

Attention:  [  ]

Telephone No.:  [  ]

Telecopier No.:  [  ]

 

5.                                       Following its receipt of a notice from
the Collateral Agent stating that the Collateral Agent is exercising exclusive
control of the Issuer Pledged Interests and until the Collateral Agent shall
have delivered written notice to the Issuer that all of the Obligations have
been paid in full and this Agreement is terminated, the Issuer will send any and
all redemptions, distributions, interest or other payments in respect of the
Issuer Pledged Interests from the Issuer for the account of the Collateral Agent
only by wire transfers to such account as the Collateral Agent shall instruct.

 

6.                                       Except as expressly provided otherwise
in Sections 4 and 5, all notices, instructions, orders and communications
hereunder shall be sent or delivered by mail, telegraph, telex, telecopy, cable
or overnight courier service and all such notices and communications shall, when
mailed, telexed, telecopied, cabled or sent by overnight courier, be effective
when deposited in the mails or delivered to overnight courier, prepaid and
properly addressed for delivery on such or the next Business Day, or sent by
telex or telecopier, except that notices and communications to the Collateral
Agent or the Issuer shall not be effective until received.  All notices and
other communications shall be in writing and addressed as follows:

 

(a)                                  if to the Grantor, at:

 

Attention: 
Telephone No.: 
Fax No.:

 

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(b)                                 if to the Collateral Agent, at the address
given in Section 4 hereof;

 

(c)                                  if to the Issuer, at:

 

or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.  As used in this
Section 6, “Business Day” means any day other than a Saturday, Sunday, or other
day in which banks in New York are authorized to remain closed.

 

7.                                       This Agreement shall be binding upon
the successors and assigns of the Grantor and the Issuer and shall inure to the
benefit of and be enforceable by the Collateral Agent and its successors and
assigns.  This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which shall constitute one instrument. 
In the event that any provision of this Agreement shall prove to be invalid or
unenforceable, such provision shall be deemed to be severable from the other
provisions of this Agreement which shall remain binding on all parties hereto. 
None of the terms and conditions of this Agreement may be changed, waived,
modified or varied in any manner whatsoever except in writing signed by the
Collateral Agent, the Issuer and the Grantor.

 

8.                                       This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to its principles of conflict of laws.

 

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IN WITNESS WHEREOF, the Grantor, the Collateral Agent and the Issuer have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.

 

 

 

[                                      ],

 

 

as Grantor

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

[                                      ],

 

 

not in its individual capacity but solely

 

 

as Collateral Agent and Collateral Agent

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

[                                      ],

 

 

as the Issuer

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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