Exhibit 10.18


 


Execution Copy


 


SECURITY AND PLEDGE AGREEMENT


 


SECURITY AND PLEDGE AGREEMENT (“Agreement”)
dated as of August 15, 2005, by and between ICO North America, Inc.,
a Delaware corporation (the “Company”), ICO Satellite Management LLC, a
Delaware limited liability company (“Management”), ICO Satellite
Services G.P., a Delaware general partnership (“Services”), ICO Global
Communications (Canada) Inc., a Canadian corporation (“ICO Canada”) and
The Bank of New York, as the collateral agent for the Secured Parties under the
Collateral Trust Agreement referred to below (in such capacity, together with
its successors and assigns in such capacity, the “Collateral Agent”). The
Company, Management and Services are individually sometimes referred to herein
as a “Grantor” and collectively as the “Grantors.”  Management, Services and ICO Canada are
individually sometimes referred to herein as a “Guarantor” and
collectively as the “Guarantors.”


 


RECITALS:


 


WHEREAS, the Grantors, the Parent (as defined therein),
certain other Guarantors from time to time party thereto (as defined therein), The
Bank of New York, as Indenture Trustee (as defined therein), and the Collateral
Agent have entered into a Collateral Trust Agreement dated as of August 15,
2005 (as modified and supplemented and in effect from time to time, the “Collateral
Trust Agreement”); and


 


WHEREAS, this Agreement is one of the Security
Documents referred to in the Collateral Trust Agreement; and


 


WHEREAS, the Grantors have, subject to the terms and
conditions of this Agreement, agreed to grant a Lien and security interest in
the Pledged Collateral referred to herein;


 


AGREEMENT:


 


NOW, THEREFORE, for valuable consideration, receipt of
which is hereby acknowledged, the parties agree as follows:


 


Section 1.                                            Definitions.


 


1.1                                 Terms Generally. Terms used herein and not
otherwise defined herein are used herein as defined in the Collateral Trust
Agreement.


 


1.2                                 UCC. All terms used in this Agreement
that are defined in Article 9 of the UCC and not otherwise defined herein
have the meanings therein set forth.


 


1.3                                 Additional Definitions. In addition, as used herein, the
following defined terms shall have the following meanings:


 


“Agreement” means this Security and Pledge
Agreement, as amended, supplemented or otherwise modified from time to time.


 


“CRTC” means the Canadian Radiotelevision and
Telecommunications Commission.


 

















 


“CRTC Licence” means any paging, mobile
telephone, specialized mobile radio, microwave, personal communications
services or other license, permit, consent, certificate of compliance,
franchise, approval, waiver or authorization granted or issued by the CRTC,
including any of the foregoing authorization per permit the acquisition,
construction or operation of any Mobile Communications System.


 


“Contractual Obligation” means, as to any
Person, any provision of any material security issued by such Person or of any
material agreement, instrument or other undertaking to which such Person is a
party or by which it or any of its material property is bound.


 


“Copyrights” means any copyrights, copyright
registrations and copyright applications, and all renewals, extensions and
continuations of any of the foregoing, whether now owned or hereafter created or acquired by or assigned to
any Grantor attached hereto and made a part hereof, 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, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present or future
infringements thereof.


 


“Copyright Security Agreement” means an
agreement substantially in the form annexed hereto as Annex 10.


 


“Governmental Authority” means any nation or
government, any state, provincial or other political subdivision thereof and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.


 


 “Intellectual
Property” means, collectively, all Intellectual Property Licenses, Copyrights,
Patents, Trademarks, Trade Secrets and Software.


 


“Intellectual Property Collateral” has the
meaning ascribed thereto in Section 3.1.


 


“Intellectual Property Licenses” means all
license and distribution agreements with, and covenants not to sue, any other
party with respect to any Patent, Trademark, Copyright or other intellectual
property, including software license agreements with any other party, whether
Grantor is a licensee, licensor, distributor or distributee under any such
license or distribution agreement, together with any and all (i) renewals,
extensions, supplements and continuations thereof, (ii) income, fees,
royalties, damages, claims and payments now and hereafter due and/or payable
thereunder and with respect thereto including, without limitation, damages and
payments for past, present or future infringements or violations thereof, (iii) rights
to sue for past, present or future infringements or violations thereof and (iv) other
rights to use, exploit or practice any or all of the Patents, Trademarks or
Copyrights or any other intellectual property.


 


“Intellectual Property Security Agreements”
means the Patent Security Agreements, the Trademark Security Agreements and
Copyright Security Agreements.


 


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“Material
Adverse Effect” means any material adverse effect on the business,
properties, assets, operations, results of operations, financial condition or
prospects of a Person, taken as a whole, or on the transactions contemplated
hereby.


 


“Patent Security Agreement” means an agreement
substantially in the form annexed hereto as Annex 11.


 


“Patents” means any patents, patent
registrations and patent applications and all renewals, extensions and
continuations of any of the foregoing, and (i) all renewals thereof, (ii) all income, royalties,
damages and payments now and hereafter due and/or payable under and with
respect thereto, including, without limitation, payments under all licenses
entered into in connection therewith and damages and payments for past or
future infringements thereof, (iii) the right to sue for past, present and
future infringements thereof, and (iv) all of each Grantor’s rights
corresponding thereto throughout the world.


 


“Pledged Collateral” has the meaning ascribed
thereto in Section 3.1.


 


“Pledged Equity” means the shares of common and
preferred stock of, or partnership and other ownership interest in, the Share
Issuers identified in Annex 3 and all other shares of capital stock, or
partnership and other ownership interest, of whatever class or character
of any Share Issuer or any other Person, now or hereafter owned by any Grantor,
and all certificates evidencing the same.


 


“Receivable” means any right to payment for
goods sold or leased or for services rendered, whether or not such right is
evidenced by an Instrument or Chattel Paper and whether or not it has been
earned by performance (including any Account).


 


“Share Issuers” means, collectively, (a) the
respective corporations, partnerships or other entities identified on Annex 3
under the caption “Share Issuer” and (b) any other Subsidiary of any
Grantor.


 


“Software”
shall mean “software” as such term is defined in the Uniform Commercial
Code as in effect in the State of

New York.


 


“Trade Secrets” shall mean trade secrets,
confidential and proprietary information and know-how, including technical,
business, marketing and financial information and data, processes and
techniques, research and development information, discoveries and inventions
(whether or not patentable or reduced to practice), technology, formulae,
drawings, schematics, business methods, specifications, models, designs, plans,
proposals, pricing and cost information, business and marketing plans, and
customer and supplier lists.


 


“Trademark Security Agreement” means an
agreement substantially in the form annexed hereto as Annex 12.


 


“Trademarks” means any trade names, trademarks
and service marks, logos, trademark and service mark registrations, and
applications for trademark and service mark registrations, including, without
limitation, any renewals of trademark and service mark registrations, Internet
domain names, symbols, slogans and other indicia of source or origin, and (i) all renewals


 


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thereof, (ii) all
income, royalties, damages and payments now and hereafter due and/or payable
under and with respect thereto, including, without limitation, payments under
all licenses entered into in connection therewith and damages and payments for
past or future infringements or dilutions thereof, (iii) the right to sue
for past, present and future infringements and dilutions thereof, (iv) the
goodwill of any Grantor’s business symbolized by the foregoing and connected
therewith, and (v) all of Grantors’ rights corresponding thereto
throughout the world. Notwithstanding the foregoing, the term “Trademarks”
shall not include any intent-to-use United States trademark applications
for which an amendment to allege use or statement of use has not been filed
under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively,
or if filed, has not been deemed in conformance with 15 U.S.C. § 1051(a) or
examined and accepted, respectively, by the United States Patent and Trademark
Office; provided that the foregoing
exclusion shall in no way be construed to limit, impair, or otherwise affect
the Collateral Agent’s continuing security interests in and liens upon any
rights or interests of any Grantor in or to (i) monies due or to become
due under such intent-to-use applications (and all trademark applications and
registered trademarks maturing therefrom), or (ii) any proceeds from the
sale, license, lease or other disposition of such intent-to-use applications
(and all trademark applications and registered trademarks maturing therefrom); provided
further that upon the filing and acceptance of any such intent-to-use
applications, such intent-to-use applications shall be included in the
definition of Trademarks.


 


1.4                                 Interpretation. The rules of interpretation
set forth in Section 1.2 of the Collateral Trust Agreement shall
apply mutatis mutandis to this Agreement as if
set forth in full herein.


 


Section 2.                                            Representations and Warranties. Each Grantor represents and
warrants to the Collateral Agent as of the date hereof that:


 


2.1                                 Basic Representations.


 


(a)                                  Each Grantor is an entity duly
organized and validly existing in good standing under the laws of the
jurisdiction in which it is formed, and has the requisite organizational power
and authorization to own or lease its properties and to carry on its business
as now being conducted and as proposed to be conducted. Each Grantor is duly
qualified as a foreign entity to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business conducted
by it makes such qualification necessary, except to the extent that the failure
to be so qualified or be in good standing would not have a Material Adverse
Effect.


 


(b)                                 Each Grantor has the requisite
corporate power and authority to enter into and perform its obligations
under this Agreement. The execution and delivery of this Agreement by each
Grantor and the consummation by each Grantor of the transactions contemplated
hereby have been duly authorized by such Grantor’s Board of Directors, and (other
than the filing of appropriate UCC financing statements and analogous
registrations with the appropriate states, provinces and other authorities
pursuant to this Agreement and the consents set forth on Annex 5 no
further filing, consent, or authorization is required by any Grantor, their
respective Boards of Directors or their respective stockholders in connection
therewith. This Agreement has been duly executed and delivered by each Grantor
and constitute the legal, valid


 


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and
binding obligation of each Grantor, enforceable against each Grantor in
accordance its terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.


 


(c)                                  The execution, delivery and
performance of this Agreement by each Grantor and the consummation by each
Grantor of the transactions contemplated hereby will not (i) result in a
violation of the certificate of incorporation, bylaws or other organizational
documents of such Grantor, or (ii) result in, or require, the creation or
imposition of any Lien on any of its respective properties or revenues pursuant
to any requirement of law or Contractual Obligation (other than pursuant to
this Agreement), or (iii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any Contractual Obligation, or (iv) result in a violation
of any law, rule, regulation, order, judgment or decree applicable to such
Grantor, except, in the case of clauses (iii) and (iv), for such
violations as would not be reasonably expected to have a Material Adverse
Effect.


 


(d)                                 Except as disclosed on Annex 5,
there is no action, suit, proceeding, inquiry or investigation before or by any
court, public board, government agency, self-regulatory organization or body
pending or, to the best knowledge of such Grantor, threatened against or such
Grantor or any of such Grantor’s officers or directors in their capacities as
such, other than actions, suits, proceedings or investigations claiming
damages, fines, penalties or other payments which would not have a Material
Adverse Effect.


 


(e)                                  No Grantor is in violation of any
term of or in default under its Certificate of Incorporation, Bylaws or other
organizational document. No Grantor is in violation of any judgment, decree or
order or any statute, ordinance, rule or regulation applicable to it.


 


2.2                                 Title. Each Grantor is the legal and
beneficial owner of the Pledged Collateral in which it purports to grant a
security interest pursuant to Section 3 and to the Grantor’s
knowledge, no Lien exists upon such Pledged Collateral, except for the pledge
and security interest in favor of the Collateral Agent created or provided for
herein. The pledge and security interest in favor of the Collateral Agent
constitutes a first priority perfected pledge and security interest in and to
all of such Pledged Collateral.


 


2.3                                 Names, Etc.


 


(a)                                  The full and correct legal name,
type of organization, jurisdiction of organization, organizational ID number
(if applicable) and mailing address of each Grantor as of the date hereof are
correctly set forth in Annex 1. Annex 1 correctly specifies the
place of business of each Grantor or, if the Grantor has more than one place of
business, the location of the chief executive office of such Grantor.


 


(b)                                 On the date hereof, the Inventory
and the Equipment (other than mobile goods and goods in transit) of the Grantor
are kept at the locations listed on Annex 2.


 


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(c)                                  Annex 2 also lists (i) the Grantor’s
jurisdictions and types of organization, legal names and locations of chief
executive office or sole place of business for the five years preceding the
date hereof, if different from those referred to in Section 2.3(a), and (ii) the
locations of the Grantor’s Inventory and the Equipment (other than mobile goods
and goods in transit) for the four months preceding the date hereof, if
different from those referred to in Section 2.3(b).


 


2.4                                 Changes in Circumstances. Except as described in Annex 2,
no Grantor has (i) within the period of four months prior to the date
hereof, changed its location (as defined in Section 9-307 of the UCC), (ii) heretofore
changed its name, or (iii) heretofore become a “new debtor” (as defined in
Section 9-102(a)(56) of the UCC) with respect to a currently effective
security agreement previously entered into by any other Person.


 


2.5                                 Pledged Equity; Instruments. The Pledged Equity identified in Annex
3 hereto constitutes all of the issued and outstanding shares of Capital Stock
held by each Grantor on the date hereof, whether or not registered in the name
of such Grantor. Annex 3 hereto correctly identifies, as at the date
hereof, the respective Share Issuers of such Pledged Equity, and (in the case
of any corporate Share Issuer) the respective class and par value of the
shares comprising such Pledged Equity and the respective number of shares (and
registered owners thereof) represented by each such certificate. The Pledged
Equity identified in Annex 3 (a) is duly authorized, validly
existing, fully paid and non-assessable (in the case of any equity interest in
a corporation), (b) constitutes legal, valid and binding obligations of
the applicable Share Issuer (in the case of any equity interest in a
partnership) and (c) is duly issued and outstanding (in the case of any
equity interest in any other entity). Each Grantor is the record and beneficial
owner of, and has good and marketable title to, the Pledged Equity pledged by
it hereunder, free of any and all Liens or options in favor of, or claims of,
any other Person, except the security interest created by this Agreement. No
Grantor holds any Instruments on the date of this Agreement.


 


2.6                                 Intellectual
Property. No Grantor owns any registered Intellectual
Property Collateral. No Grantor holds any Intellectual Property Licenses (other
than licenses for commercial “off-the-shelf” or “shrink-wrap” Software that are
not material to the business, operations, condition (financial or otherwise) or
performance of the Grantor taken as a whole). Grantor exclusively owns all
right, title and interest in and to all Intellectual Property Collateral free
and clear of all Liens other than exclusive licenses and non-exclusive licenses
granted in the ordinary course of business. The Intellectual Property
Collateral is not subject to any outstanding order, judgment, decree or
agreement adversely affecting any Grantor’s use thereof or its rights thereto
and, to the Grantor’s knowledge, is valid, subsisting and enforceable. Grantors
do not and have not infringed or otherwise violated the Intellectual Property
rights of any third party, and to each Grantor’s knowledge, no Person is
infringing upon or otherwise violating any Intellectual Property rights of any Grantor other
than those violations alleged in a counterclaim by a licensee of the Grantors
to have been committed by Boeing Satellite Systems International Inc. and the
Boeing Company. Grantor has sufficient rights to use all Intellectual
Property used in its business as presently conducted, all of which rights shall
survive unchanged the consummation of the transactions contemplated by this
Agreement.


 


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2.7                                 Receivables. No amount payable to any Grantor
under or in connection with any Receivable is evidenced by any Instrument or
Chattel Paper. No more than $100,000.00 of Receivables in the aggregate are
owed to the Grantors by obligors that are governmental authorities.


 


2.8                                 Deposit Accounts; Securities Accounts. No Grantor has any Deposit
Accounts or Securities Accounts that are not listed on Annex 4.


 


2.9                                 Letters of Credit. On the date hereof, the Grantor is
not the beneficiary under any letter of credit.


 


2.10                           Commercial Tort Claims. No Grantor has any commercial tort
claims.


 


Section 3.                                            Pledged
Collateral.


 


3.1                                 Grant of Security Interest. As collateral security for the
prompt payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Grantors hereby pledge and grant to
the Collateral Agent as hereinafter provided, a security interest in all of the
Grantors’ respective right, title and interest in all of the personal property
of the Grantors, whether now owned by the Grantors or hereafter acquired and whether
now existing or hereafter coming into existence, including without limitation
the following (all of the property described in this Section 3.1
being collectively referred to herein as “Pledged Collateral”):


 


(a)                                  all Accounts, Instruments, Documents,
Chattel Paper (whether tangible or electronic), Deposit Accounts, Insurance,
Receivables, Inventory, Equipment, Goods, Payment Intangibles, Letter-of-Credit
Rights, Fixtures, Supporting Obligations, Software and other General
Intangibles;


 


(b)                                 all Investment Property, including
all Pledged Equity;


 


(c)                                  all Intellectual Property, and the
right to recover for past, present and future infringements or
misappropriations thereof and all other rights of any kind whatsoever accruing
thereunder or pertaining thereto (collectively, the “Intellectual Property
Collateral”);


 


(d)                                 all rights of the Grantors under or
relating to FCC Licenses and CRTC Licenses and the proceeds from the sale of
any FCC Licenses or CRTC Licenses or any goodwill or other intangible rights or
benefits associated therewith, but only at the times and to the extent
permitted by law; and


 


(e)                                  all Proceeds, products, accessions,
rents, profits, income, benefits, substitutions and replacements of and to any
of the Pledged Collateral and, to the extent related to any Pledged Collateral,
all books, correspondence, credit files, records, invoices and other papers
(including without limitation all tapes, cards, computer runs and other papers
and documents in the possession or under the control of the Grantors or any
computer bureau or service company from time to time acting for the Grantors).


 


3.2                                 Limitations. Notwithstanding anything to the
contrary in Section 3.1:


 


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(a)                                  In no event shall the security interest
granted under Section 3.1 attach to any lease, license, contract,
property rights or agreement to which any Grantor is a party (or to any of its
rights or interests thereunder) if the grant of such security interest would (i) constitute
or result in the abandonment, invalidation or unenforceability of any right,
title or interest of the Grantor therein; (ii) constitute or result in a
breach or termination pursuant to the terms of, or a default under, any such
lease, license, contract, property rights or agreement; or (iii) require
the consent of any third party, in each case except than to the extent that any
such term would be rendered ineffective pursuant to Sections 9-406, 9-407,
9-408 or 9-409 of the UCC;


 


(b)                                 In no event shall the security interest
granted under Section 3.1 extend at any time to any FCC Licenses or
CRTC Licenses to the extent (but only to the extent) that at such time the
Collateral Agent may not validly possess a security interest therein
pursuant to applicable U.S. and Canadian Federal law, including the
Communications Act of 1934 (U.S.), as amended, and the Telecommunications Act
(Canada), as amended, and the regulations promulgated thereunder, as in effect
at such time, but such security interest does include the right to receive all
Proceeds derived from or in connection with the sale, lease, assignment,
transfer or any other disposition of, or assignment of rights under, the FCC
Licenses and CRTC Licenses; and


 


(c)                                  The security interest granted under Section 3.1
shall not extend to any Escrowed Interest, any Investment Property in which the
Escrowed Interest is now or hereafter may be invested, any earnings
thereon, any securities account or deposit account in which the Escrowed
Interest is now or hereafter may be held, and all Proceeds of all of the
foregoing, in each case pledged solely to secure any Series of Secured
Debt as described in Section 2.4 of the Collateral Trust Agreement.


 


Section 4.                                            Covenants. In furtherance
of the grant of the pledge and security interest pursuant to Section 3.1,
the Grantors hereby covenant and agree with the Collateral Agent that, from and
after the date of this Agreement until the Secured Obligations Termination Date:


 


4.1                                 General. The Grantors will comply with any
restrictions on or prohibitions against the sale, assignment, transfer,
exchange, disposition, or grants of options in the Pledged Collateral or any
portion thereof contained in the Secured Debt Documents (and solely for
purposes of this sentence, the term “Secured Debt Documents” shall not include
this Agreement or any other Security Agreement in favor of the Collateral
Agent). No Grantor shall create, incur or permit to exist any Lien or option in
favor of, or any claim of any Person with respect to, any of the Pledged
Collateral or any interest therein, except for Liens defined as “Permitted
Liens” in all Secured Debt Documents (other than the Collateral Trust
Agreement) that contain a definition of “Permitted Liens.”  No Grantor shall enter into any agreement or
undertaking restricting the right or ability of the Grantor or the Collateral
Agent to sell, assign or transfer or vote any of the Pledged Collateral or any
interest therein, except as permitted by the Secured Debt Documents.


 


4.2                                 Notices. The Grantors will advise the Collateral
Agent promptly, in reasonable detail, of:


 


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(a)                                  any Lien (other than security
interests created hereby or Liens permitted under the Collateral Trust
Agreement) on any of the Pledged Collateral; and


 


(b)                                 of the occurrence of any other event
which could reasonably be expected to have a material adverse effect on the
security interests created hereby.


 


4.3                                 Payment of Obligations. The Grantors will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental
charges or levies imposed upon the Pledged Collateral or in respect of income
or profits therefrom, as well as all claims of any kind (including claims for
labor, materials and supplies) against or with respect to the Pledged
Collateral, except that no such charge tax or assessment 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 the Grantors and (unless the collateral
Agent is provided with security reasonably acceptable to it) such proceedings
could not reasonably be expected to result in the sale, forfeiture or loss of
any material portion of the Pledged Collateral or any interest therein.


 


4.4                                 Insurance. The Grantors will maintain such
insurance as may be required under the terms of any Secured Debt Documents.
All such insurance shall (x) provide that no cancellation, material reduction
in amount or material change in coverage thereof shall be effective until at
least 30 days after receipt by the Collateral Agent of written notice thereof,
(y) name the Collateral Agent as insured party or loss payee, (z) if requested
by the Collateral Agent, include a breach of warranty clause. The Grantors
shall provide the Collateral Agent from time to time with such evidence of
insurance coverage as the Collateral Agent may request, and shall provide
the Collateral Agent with copies of any insurance certificates, insurance
reports and other information regarding insurance it provides to any Secured
Debt Representative, as and when provided to such Secured Debt Representative.


 


4.5                                 Recordation. Prior to or concurrently with the
execution and delivery of this Agreement, the Grantors shall file such
financing statements and other documents in such offices as the Collateral
Agent may request to perfect the security interests granted by Section 3.1
of this Agreement. The Grantors consent that Uniform Commercial Code
financing statements may be filed describing the Pledged Collateral as “all
assets” or “all personal property” of the Grantors.


 


4.6                                 Delivery and Other Perfection. The Grantors shall:


 


(a)                                  promptly deliver to the Collateral
Agent all certificates and instruments representing the Pledged Equity endorsed
in blank or accompanied by such instruments of assignment and transfer in such form and
substance as the Collateral Agent may request, all of which thereafter
shall be held by the Collateral Agent, pursuant to the terms of this Agreement,
as part of the Pledged Collateral; or take such other action as the
Collateral Agent shall reasonably deem necessary or appropriate to duly record
or otherwise perfect the Lien created hereunder in such Pledged Equity under
the law of the United States or a jurisdiction thereof;


 


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(b)                                 if any of the Investment Property
pledged by the Grantors in an aggregate amount in excess of $100,000 is
received by the Grantors, either (i) deliver to the Collateral Agent such
Investment Property (together with the certificates or instruments for any such
Investment Property duly endorsed in blank or accompanied by such instruments
of assignment and transfer in such form and substance as the Collateral
Agent may request), all of which thereafter shall be held by the
Collateral Agent, pursuant to the terms of this Agreement, as part of the
Pledged Collateral, or (ii) take such other action as shall be necessary
or as the Collateral Agent shall reasonably deem necessary or appropriate to
duly record or otherwise perfect the Lien created hereunder in such Investment
Property under the law of the United States or a jurisdiction thereof;


 


(c)                                  deliver and pledge to the Collateral
Agent any and all Instruments in an aggregate amount in excess of $100,000,
endorsed and/or accompanied by such instruments of assignment and transfer in
such form and all Instruments, endorsed and/or accompanied by such
instruments of assignment and transfer in such form and substance as the
Collateral Agent may request; provided that so long as no Actionable
Default shall have occurred and be continuing, the Grantors may collect
any Instruments and the Collateral Agent shall, promptly upon request of either
Grantor, make appropriate arrangements for making any Instrument pledged by the
Grantors available to the Grantors, for purposes of presentation, collection or
renewal (any such arrangement to be effected, to the extent deemed appropriate
by the Collateral Agent, against trust receipt or like document);


 


(d)                                 execute, deliver, and record the
Intellectual Property Security Agreements, in substantially the form set
forth in Annexes 10-12 hereto, as applicable, or otherwise in form and
substance satisfactory to the Collateral Agent for recording the security
interest granted hereunder in such Intellectual Property Collateral with the
United States Patent and Trademark Office, the United States Copyright Office
and any other Governmental Authority necessary to perfect the security interest
granted hereunder in such Intellectual Property Collateral; provided, however,
that nothing in this Agreement shall be construed to require any Grantor to
file any Intellectual Property Security Agreements or otherwise record or
register the Collateral Agent’s security interest in the Intellectual Property
Collateral any jurisdiction other than the United States and the United Kingdom,
except with respect to any material Intellectual Property Collateral.


 


(e)                                  give, execute, deliver, file,
record, authorize or obtain all such other financing statements, notices,
instruments, documents, agreements or consents or other papers as may be
necessary or desirable (in the judgment of the Collateral Agent) to create, preserve,
perfect or validate the security interest granted pursuant hereto under the law
of the United States or a jurisdiction thereof or to enable the Collateral
Agent to exercise and enforce its rights hereunder with respect to such pledge
and security interest;


 


(f)                                    maintain the security interest
created by this Agreement as a perfected security interest in favor of the
Collateral Agent and defend such security interest against the claims and
demands of all Persons whomsoever;


 


(g)                                 furnish to the Collateral Agent from
time to time statements and schedules further identifying and describing the
Pledged Collateral and such other reports in


 


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connection
with the Pledged Collateral as the Collateral Agent may reasonably
request, all in reasonable detail;


 


(h)                                 keep full and accurate books and
records relating to the Pledged Collateral, and stamp or otherwise mark such
books and records in such manner as the Collateral Agent may reasonably
require in order to reflect the security interests granted by this Agreement;


 


(i)                                     permit representatives of the
Collateral Agent, upon reasonable notice, at any time during normal business
hours to inspect and make abstracts from its books and records pertaining to
the Pledged Collateral, and permit representatives of the Collateral Agent to
be present at the Grantor’s place of business to receive copies of all
communications and remittances relating to the Pledged Collateral, and forward
copies of any notices or communications received by the Grantor with respect to
the Pledged Collateral, all in such manner as the Collateral Agent may require;


 


(j)                                     at the sole expense of the Grantors,
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as are required for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted or as the Collateral Agent may reasonably
request, including (1) the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in
effect in any jurisdiction with respect to the security interests created
hereby and (2) in the case of Investment Property, Deposit Accounts,
Letter-of-Credit Rights and any other relevant Pledged Collateral, taking any
actions necessary to enable the Collateral Agent to obtain “control” (within
the meaning of the applicable Uniform Commercial Code) with respect
thereto;


 


(k)                                  provide the Collateral Agent with at
least 30 days’ prior written notice of a change (i) in its location (as
defined in Section 9-307 of the UCC), (ii) in the place or places
where it maintains any of its books and records relating to the Pledged
Collateral, or (iii) in its name, in each case, together with all
additional financing statements and other documents requested by the Collateral
Agent to maintain the validity, perfection and priority of the security
interest granted pursuant hereto.


 


4.7                                 Other Financing Statements and Liens. Except with respect to Liens
included in the definition of “Permitted Liens” under all Secured Debt
Documents (other than the Collateral Trust Agreement) that contain a definition
of “Permitted Liens,” each Grantor shall not file or suffer to be on file, or
authorize or permit to be filed or to be on file, in any jurisdiction, any
financing statement or like instrument with respect to the Pledged Collateral
in which the Collateral Agent is not named as the sole secured party. Except as
otherwise permitted under the Collateral Trust Agreement, the Grantor shall not
permit any Person other than the Collateral Agent to have Control of any
Deposit Account or Investment Property included in the Pledged Collateral.


 


4.8                                 Pledged Equity. So long as no Actionable Default
shall have occurred and be continuing and except as otherwise provided in the
Collateral Trust Agreement, the Grantor shall have the right to exercise all
voting, consensual and other powers of ownership pertaining to the Pledged
Equity for all purposes not inconsistent with the terms of this Agreement, the


 


11

















 


Indenture
and the Collateral Trust Agreement or any other instrument or agreement
referred to herein or therein, provided that the Grantors agree that they will
not vote the Pledged Equity in any manner that is inconsistent with the terms
of this Agreement, any Secured Debt Document or the Collateral Trust Agreement;
and the Collateral Agent shall execute and deliver to the Grantor or cause to
be executed and delivered to the Grantors all such proxies, powers of attorney,
dividend and other orders, and all such instruments, without recourse, as the
Grantor may reasonably request for the purpose of enabling the Grantor to
exercise the rights and powers which its is entitled to exercise pursuant to
this Section 4.7. Except as otherwise provided in this Agreement or
the Collateral Trust Agreement, the Grantors shall be entitled to receive and
retain any non-liquidating dividends, distributions or proceeds on the Pledged
Equity paid in cash, and shall be entitled to receive any liquidating
distributions, dividends and proceeds on the Pledged Equity paid in cash to the
extent permitted by the Collateral Trust Agreement and all applicable Secured
Debt Documents.


 


4.9                                 Securities Accounts; Deposit
Accounts.


 


(a)                                  If any Grantor shall now or
hereafter have rights in any Securities Account with any securities
intermediary, the Grantor shall immediately notify the Collateral Agent thereof
and, pursuant to a control agreement in form and substance reasonably
satisfactory to the Collateral Agent, cause such securities intermediary to
agree to comply with entitlement orders or other instructions originated by the
Collateral Agent to such securities intermediary as to the securities or other
financial assets contained therein without consent from the Grantor.


 


(b)                                 The Grantors shall enter into a
control agreement with the depository bank maintaining the Deposit Accounts
described in Annex 4 within 15 days after the date hereof, in form and
substance reasonably satisfactory to the Collateral Agent, wherein such bank shall
agree to comply with instructions to such bank originated by the Collateral
Agent directing the disposition of funds in such Deposit Account without
consent from the Grantor. If any Grantor shall hereafter have rights in any
Deposit Account maintained with any bank, the Grantor shall immediately notify
the Collateral Agent thereof and, pursuant to a control agreement in form and
substance reasonably satisfactory to the Collateral Agent, cause such bank to
agree to comply with instructions to such bank originated by the Collateral
Agent directing the disposition of funds in such Deposit Account without
consent from the Grantor.


 


4.10                           Receivables.


 


(a)                                  Other than in the ordinary course of
business consistent with its past practice, the Grantors will not (v) grant
any extension of the time of payment of any Receivable, (w) compromise or
settle any Receivable for less than the full amount thereof, (x) release,
wholly or partially, any Person liable for the payment of any Receivable,
(y) allow any credit or discount whatsoever on any Receivable or
(z) amend, supplement or modify any Receivable in any manner that could
adversely affect the value thereof.


 


(b)                                 The Grantors will deliver to the
Collateral Agent a copy of each material demand, notice or document received by
it that questions or calls into doubt the validity or enforceability of more
than 5% of the aggregate amount of the then outstanding Receivables.


 


12

















 


4.11                           Intellectual Property.


 


(a)                                  In the event that the Grantors
become aware that any item of Intellectual Property Collateral is being
infringed, misappropriated or otherwise violated by a third party, Grantors
shall promptly notify the Collateral Agent and shall take all reasonable and
appropriate actions, at its expense, to protect or enforce such Intellectual
Property Collateral, including suing for infringement or misappropriation and
for an injunction against such infringement or misappropriation if Grantor
determines such suit to be reasonable and appropriate.


 


(b)                                 With respect to each item of its registered
Intellectual Property Collateral, each Grantor agrees, in each case to the
extent it believes it reasonable or necessary to do so in its reasonable
business judgment, to maintain, at its expense, (i) such registered
Intellectual Property Collateral in full force and effect, and (ii) each
registered Patent, Trademark and Copyright now or hereafter included in such
Intellectual Property Collateral of Grantor, including the payment of required
fees and taxes, the filing of applications for renewal or extension, and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings. Each Grantor
shall take all reasonable and appropriate steps to preserve and protect each
item of the foregoing Intellectual Property Collateral,
including maintaining the quality of any and all products or services used or provided
in connection with any of the Trademarks, consistent with the quality of the
products and services as of the date hereof, and ensuring that all licensed
users of any of the Trademarks use such consistent standards of quality.


 


(c)                                  No Grantor shall, without the
written consent of the Collateral Agent, discontinue use of or otherwise
abandon any registered and/or material Intellectual Property Collateral, unless
Grantor shall have previously reasonably determined that such use or the
pursuit or maintenance of such Intellectual Property Collateral is no longer
necessary in the conduct of Grantor’s business and that the loss thereof would
not be reasonably likely to have a Material Adverse Effect, in which case, such
Grantor will give prompt notice of any such abandonment to the Collateral
Agent.


 


(d)                                 Each Grantor agrees promptly to
notify the Collateral Agent if Grantor becomes aware (i) that any item of
its Intellectual Property Collateral may have become abandoned, placed in
the public domain, invalid or unenforceable, or (ii) of any adverse
determination or the institution of any proceeding (including, without
limitation, the institution of any proceeding in the United States Patent and
Trademark Office or any court) regarding any item of Intellectual Property
Collateral. The Grantors shall not do or permit any act or knowingly omit to do
any act whereby any of its material Intellectual Property Collateral may lapse
or become invalid or unenforceable or placed in the public domain.


 


(e)                                  Each Grantor agrees that should it
obtain an ownership interest in any item of Intellectual Property that is not
on the date hereof a part of the Intellectual Property Collateral (“Additional
Intellectual Property”), (i) the provisions of this Agreement shall
automatically apply thereto, and (ii) any such Additional Intellectual
Property shall automatically become part of the Intellectual Property
Collateral subject to the terms and conditions of this Agreement. Each Grantor
shall give prompt written notice to the Collateral Agent reasonably


 


13

















 


identifying
any Additional Intellectual Property, and each Grantor shall execute and
deliver to the Collateral Agent with such written notice, or otherwise
authenticate, an agreement substantially in the form of Annexes 10-12
hereto, as applicable or otherwise in form and substance reasonably
satisfactory to the Collateral Agent covering such Additional Intellectual
Property, which agreement shall be recorded with the United States Patent and
Trademark Office, United States Copyright Office and any other Governmental Authority
necessary to perfect the security interest granted hereunder in such Additional
Intellectual Property.


 


(f)                                    For the purpose of enabling the
Collateral Agent to exercise its rights and remedies under Section 5
of this Agreement at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Grantor hereby grants to the Collateral Agent, to the extent assignable, an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to the Grantor) to use, assign, license or sublicense the
Intellectual Property Collateral, 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 programs used for the compilation or printout thereof.


 


(g)                                 Subject to and upon the terms hereof
and of any Secured Debt Document that limits the right of each Grantor to
dispose of its property, so long as no Actionable Default shall have occurred
and be continuing, the Grantor will be permitted to exploit, use, enjoy,
protect, license non-exclusively and sublicense non-exclusively the
Intellectual Property Collateral, solely in the ordinary course of the business
of such Grantor.


 


(h)                                 Upon release of the Collateral Agent’s
Lien on the Pledged Collateral pursuant to the Collateral Trust Agreement, the
license granted pursuant to Section 4.10(f) shall terminate.


 


4.12                           Electronic Chattel Paper and
Transferable Records. If any Grantor at any time holds or acquires an interest in 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, such Grantor shall promptly
notify the Collateral Agent thereof and, at the request of the Collateral
Agent, shall take such action as the Collateral Agent may reasonably
request to vest in the Collateral Agent control under New York 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 the Grantors 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 New York UCC Section 9-105 or, as
the case may be, Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of control,
unless an Actionable Default has occurred and is continuing or would occur
after taking into account any action by either Grantor with respect to such
Electronic Chattel Paper or transferable record.


 


14

















 


4.13                           Letter-of-Credit Rights. If any Grantor is at any time a
beneficiary under any letter of credit now or hereafter issued in favor of the
Grantor in amounts in the aggregate in excess of $100,000, such Grantor shall
promptly notify the Collateral Agent thereof and the Grantor shall, pursuant to
an agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (i) arrange for the issuer and any confirmer of
such letters of credit to consent to an assignment to the Collateral Agent of
the proceeds of any drawing under such letters of credit or (ii) arrange
for the Collateral Agent to become the transferee beneficiary of such letters
of credit, with the Collateral Agent agreeing, in each case, that the proceeds
of any drawing under such letters of credit are to be applied as provided in
the Collateral Trust Agreement. The Collateral Agent agrees that for so long as
no Actionable Default has occurred and is continuing, it will promptly remit
all proceeds from draws on letters of credit to the Grantors. The Collateral Agent
shall, at the written request of the Grantor, submit to the issuer of any such
letters of credit such requests for draws as may be required to draw under
the letter of credit.


 


4.14                           Commercial Tort Claims. Each Grantor shall advise the
Collateral Agent promptly in writing of any commercial tort claims held by the
Grantor individually or in the aggregate in excess of $100,000 and shall
promptly execute a supplement to this Agreement in form and substance as
shall be sufficient to grant a security interest in such commercial tort claim
to the Collateral Agent.


 


4.15                           No Exercise. The Collateral Agent agrees that
notwithstanding anything contained in this Agreement, the Collateral Agent
shall not be entitled to submit any entitlement orders or other instructions
with respect to Securities Accounts, Deposit Accounts or any Investment
Property or monies therein except when an Actionable Default has occurred and
is continuing.


 


4.16                           Notice of Creation  or Acquisition of Additional Pledged Collateral. Within 10 days after the end of
each fiscal quarter, each Grantor shall furnish the Collateral Agent with a
report listing for such quarter:


 


(a)                                  any
Subsidiary formed or acquired by the Grantor;


 


(b)                                 any
certificated securities or uncertificated securities not held in a securities
account acquired by the Grantor;


 


(c)                                  any
change in name, jurisdiction of organization or chief executive office of the
Grantor;


 


(d)                                 any
new location of Inventory or Equipment of the Grantor;


 


(e)                                  all
Promissory Notes, Instruments or Chattel Paper received by the Grantor with a
value in excess of $100,000;


 


(f)                                    any
securities account or deposit account opened by the Grantor;


 


(g)                                 all
applications for and registration received by the Grantor in respect of any
Intellectual Property;


 


15

















 


(h)                                 any
Letter of Credit Rights acquired by the Grantor; and


 


(a)                                  any Commercial Tort Claims acquired
by the Grantor.


 


4.17                           Excluded Pledged Collateral. The Grantors will use their
respective commercially reasonable efforts to ensure that all contracts,
agreements, leases and licenses acquired or entered into by any of them after
the date of this Agreement will not contain provisions that will cause them to
be excluded from the Pledged Collateral pursuant to Section 3.2.


 


Section 5.                                            Remedies.


 


5.1                                 Default. During the period during which an
Actionable Default shall have occurred and be continuing:


 


(a)                                  each Grantor shall, at the request
of the Collateral Agent, assemble the Pledged Collateral owned by it at such
place or places, reasonably convenient to the Collateral Agent and such Grantor,
designated in the Collateral Agent’s request;


 


(b)                                 the Collateral Agent may make
any reasonable compromise or settlement deemed desirable with respect to any of
the Pledged Collateral and may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of, any of the Pledged
Collateral;


 


(c)                                  the Collateral Agent shall have all
of the rights and remedies with respect to the Pledged Collateral of a secured
party under the UCC (whether or not the Uniform Commercial Code is in
effect in the jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled under the
laws in effect in any jurisdiction where any rights and remedies hereunder may be
asserted, including, without limitation, the right, to the maximum extent
permitted by law, to exercise all voting, consensual and other powers of
ownership pertaining to the Pledged Equity as if the Collateral Agent were the
sole and absolute owner thereof (and the Grantor agrees to take all such action
as may be appropriate to give effect to such right);


 


(d)                                 the Collateral Agent in its
discretion may, in its name or in the name of the Grantor or otherwise, demand,
sue for, collect or receive any money or property at any time payable or
receivable on account of or in exchange for any of the Pledged Collateral, but
shall be under no obligation to do so; and


 


(e)                                  the Collateral Agent may, upon ten
Business Days’ prior written notice to the Grantors of the time and place, with
respect to the Pledged Collateral or any part thereof which shall then be
or shall thereafter come into the possession, custody or control of the
Collateral Agent, sell, lease, assign or otherwise dispose of all or any part of
such Pledged Collateral, at such place or places as the Collateral Agent deems
best, and for cash or for credit or for future delivery (without thereby
assuming any credit risk), at public or private sale, without demand of
performance or notice of intention to effect any such disposition or of the
time or place thereof (except such notice as is required above or by applicable
statute and cannot be waived), and the Collateral Agent or any holder of any
Secured Obligation or anyone else


 


16

















 


may be
the purchaser, lessee, assignee or recipient of any or all of the Pledged
Collateral so disposed of at any public sale (or, to the extent permitted by
law, at any private sale) and thereafter hold the same absolutely, free from
any claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise), of the Grantors, any such demand, notice
and right or equity being hereby expressly waived and released. 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 the sale, and such sale may be made at any time or
place to which the sale may be so adjourned. Each Grantor recognizes that,
by reason of certain prohibitions contained in the Securities Act of 1933, as
amended, and applicable state securities laws, the Collateral Agent may be
compelled, with respect to any sale of all or any part of the Pledged
Equity, to limit purchasers to those who will agree, among other things, to
acquire the Pledged Equity for their own account, for investment and not with a
view to the distribution or resale thereof. The Grantors acknowledge that any
such private sales may be at prices and on terms less favorable to the
Collateral Agent than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agree that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Collateral Agent shall have no obligation to engage in
public sales and no obligation to delay the sale of any Pledged Equity for the
period of time necessary to permit the respective issuer thereof to register it
for public sale.


 


(f)                                    the Collateral Agent may, by written
notice to the relevant Grantor, declare the entire right, title and interest of
Grantor in and to all Intellectual Property Collateral, vested in the
Collateral Agent for the benefit of the Secured Parties, in which event such
rights, title and interest shall immediately vest, in the Collateral Agent for
the benefit of the Secured Parties, and the Collateral Agent shall be entitled
to exercise the power of attorney referred to in Section 5.10 hereof to
execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable governmental authority; (ii) take and use,
practice under or sell the Intellectual Property Collateral and the right to
carry on the business and use the assets of Grantor in connection with which
the Intellectual Property Collateral has been used; and (iii) direct
Grantor to refrain, in which event such Grantor shall refrain, from using or
practicing under the Intellectual Property Collateral in any manner whatsoever,
directly or indirectly, and such Grantor shall execute such further documents
that the Collateral Agent may reasonably request to further confirm this
and to transfer ownership of the Intellectual Property Collateral to the
Collateral Agent.


 


5.2                                 Certain matters Relating to
Receivables.
The Collateral Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and the Grantors shall furnish all such assistance and information
as the Collateral Agent may reasonably require in connection with such
test verifications. At any time and from time to time, upon the Collateral
Agent’s request and at the expense of the Grantors, the Grantors shall cause
independent public accountants or others satisfactory to the Collateral Agent
to furnish to the Collateral Agent reports showing reconciliations, aging and
test verifications of, and trial balances for, the Receivables.


 


17

















 


5.3                                 Communications with Obligors;
Grantors Remain Liable


 


(a)                                  The
Collateral Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Actionable Default
communicate with obligors under the Receivables to verify with them to the
Collateral Agent’s satisfaction the existence, amount and terms of any
Receivables.


 


(a)                                  Upon the request of the Collateral
Agent at any time after the occurrence and during the continuance of an
Actionable Default, the Grantors shall notify obligors on the Receivables that
the Receivables have been assigned to the Collateral Agent and that payments in
respect thereof shall be made directly to the Collateral Agent.


 


(b)                                 Anything herein to the contrary
notwithstanding, the Grantors shall remain liable under each of the Receivables
and all other contracts included in the Pledged Collateral to observe and perform all
the conditions and obligations to be observed and performed by it thereunder,
all in accordance with the terms of any agreement giving rise thereto. The
Collateral Agent shall not have any obligation or liability under any
Receivable (or any agreement giving rise thereto) or other contracts by reason
of or arising out of this Agreement or the receipt by the Collateral Agent of
any payment relating thereto, nor shall the Collateral Agent be obligated in
any manner to perform any of the obligations of any Grantor under or
pursuant to any Receivable (or any agreement giving rise thereto or other
contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at
any time or times.


 


5.4                                 Private Sale; Registration Rights.


 


(a)                                  The Collateral Agent and Secured
Parties shall incur no liability as a result of the sale of the Pledged
Collateral, or any part thereof, at any private sale conducted in a
commercially reasonable manner. The Grantor hereby waives any claims against
the Collateral Agent or any Secured Party arising by reason of the fact that
the price at which the Pledged Collateral may have been sold at such a
private sale was less than the price that might have been obtained at a public
sale or was less than the aggregate amount of the Secured Obligations, even if
the Collateral Agent accepts the first offer received and does not offer the
Pledged Collateral to more than one offeree.


 


(b)                                 If the Collateral Agent shall
determine to exercise its right to sell any or all of the Pledged Collateral,
and if in the opinion of the Collateral Agent it is necessary or advisable to
have the Pledged Collateral, or that portion thereof to be sold, registered
under the provisions of the Securities Act, the Grantors will, at any time and
from time to time, upon the written request of the Collateral Agent, use their
respective best efforts to take such action, and prepare, distribute and/or
file such documents, as are required or advisable in the reasonable opinion of
counsel for the Collateral Agent to permit the public sale of the Pledged
Collateral including to (i) execute and deliver all such agreements,
instruments and documents, and do or cause to be done all such other acts as may be,
in the opinion of the Collateral Agent, necessary or advisable to register and
sell the Pledged Collateral, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use their respective best efforts
to cause the registration statement relating thereto to become effective and to
remain effective for a period of one year


 


18

















 


from the
date of the first public offering of the Pledged Collateral, or that portion
thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Collateral Agent, are necessary
or advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission
applicable thereto or in the opinion of any underwriters selected by Collateral
Agent to effectuate such purchase. The Grantors further agree to indemnify,
defend and hold harmless the Collateral Agent, any underwriter and their
respective officers, directors, affiliates and controlling persons from and
against all loss, liability, expenses, costs of counsel (including reasonable
fees and other charges of legal counsel to the Collateral Agent), and claims
(including the costs of investigation) that they may incur insofar as such
loss, liability, expense or claim arises out of or is based upon any alleged
untrue statement of a material fact contained in any prospectus (or any
amendment or supplement thereto) or in any notification or offering circular,
or arises out of or is based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements in any
thereof not misleading, except insofar as the same may have been caused by
any untrue statement or omission based upon information furnished in writing to
the Grantors of the Pledged Collateral by the Collateral Agent expressly for
use therein. The Grantors further agree, upon written request, to use their
respective best efforts to qualify, file or register any of the Pledged
Collateral under the “Blue Sky” or other securities laws of such states as may be
requested by the Collateral Agent and keep effective, or cause to be kept
effective, all such qualifications, filings or registrations and (y) to
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of Section 11(a) of
the Securities Act. The Grantors will bear all costs and expenses of carrying
out its obligations under this Section.


 


(c)                                  The Grantors agree to use their best
efforts to do or cause to be done all such other acts as may be necessary
to make such sale or sales of all or any portion of the Pledged Collateral
pursuant to this section valid and binding and in compliance with any and
all applicable requirements of law.


 


5.5                                 Deficiency. The Grantors shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the
Pledged Collateral are insufficient to pay its Secured Obligations and the fees
and other charges of any attorneys employed by the Collateral Agent to collect
such deficiency.


 


5.6                                 Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization
of all or any part of the Pledged Collateral pursuant hereto, and any other
cash at the time held by the Collateral Agent under this Section 5
shall be applied by the Collateral Agent in accordance with Section 3.4 of
the Collateral Trust Agreement.


 


5.7                                 Proceeds of Accounts. If so requested by the Collateral
Agent at any time after the occurrence and during the continuance of an
Actionable Default, each Grantor shall instruct all account debtors in respect
of Accounts, Chattel Paper and General Intangibles and all obligors on
Instruments to make all payments in respect thereof either (a) directly to
the Collateral Agent (by instructing that such payments be remitted to a post
office box


 


19

















 


which
shall be in the name and under the control of the Collateral Agent) or (b) to
one or more other banks in the United States of America (by instructing that
such payments be remitted to a post office box which shall be in the name and
under the control of the Collateral Agent) under arrangements, in form and
substance satisfactory to the Collateral Agent, pursuant to which such Grantor
shall have irrevocably instructed such other bank (and such other bank shall
have agreed) to remit all proceeds of such payments directly to the Collateral
Agent. In addition to the foregoing, each Grantor agrees that, at any time
after the occurrence and during the continuance of an Actionable Default, if
the proceeds of any Pledged Collateral hereunder (including the payments made
in respect of Accounts) shall be received by it, the Grantor shall, upon the request
of the Collateral Agent, as promptly as possible remit such proceeds to the
Collateral Agent. Until so deposited, all such proceeds shall be held in trust
by the Grantor for and as the property of the Collateral Agent and shall not be
commingled with any other funds or property of the Grantor. Upon the occurrence
and during the continuance of any Actionable Default, upon request of the
Collateral Agent, the Grantor shall promptly notify (and the Grantor hereby
authorizes the Collateral Agent so to notify) each account debtor in respect of
any Accounts or Instruments that such Pledged Collateral has been assigned to
the Collateral Agent hereunder, and that any payments due or to become due in
respect of such Pledged Collateral are to be made directly to the Collateral
Agent.


 


5.8                                 Payments on Pledged Equity. If any Actionable Default shall
have occurred and be continuing, all dividends and other distributions of any
kind or nature on the Pledged Equity shall be paid directly to the Collateral
Agent and retained by it as part of the Pledged Collateral, subject to the
terms of this Agreement and the Collateral Trust Agreement, and, if the
Collateral Agent shall so request in writing, the Grantor agrees to execute and
deliver to the Collateral Agent appropriate additional dividend, distribution
and other orders and documents to that end.


 


5.9                                 Regulatory Matters.


 


(a)                                  At any time after the occurrence and
during the continuance of an Actionable Default, the Grantor shall take all
lawful action that the Collateral Agent may reasonably request in the
exercise of its rights and remedies hereunder with respect to the FCC Licenses and
the CRTC Licenses included in the Pledged Collateral, including without
limitation the right to require each Grantor to transfer or assign the FCC
Licenses and the CRTC Licenses held by it to any Person. In furtherance of this
right, each Grantor shall (i) cooperate fully with the Collateral Agent in
obtaining all approvals and consents from the FCC and each other Governmental
Authority that the Collateral Agent may deem necessary or advisable to
accomplish any such transfer or assignment of such FCC Licenses and the CRTC
Licenses, and (ii) prepare, execute and file with the FCC and the CRTC and
any other Governmental Authority any application, request for consent,
certificate or instrument that the Collateral Agent may deem necessary or
advisable to accomplish any such transfer or assignment of such FCC Licenses
and CRTC Licenses.


 


(b)                                 In furtherance of the authority
granted in Section 5.9 above, the Collateral Agent is authorized to
request the consent or approval of the FCC or the CRTC or any other
Governmental Authority to a voluntary or an involuntary transfer of control of
each Grantor or the voluntary or involuntary assignment of any FCC Licenses
held by the Grantor. In connection with the exercise of its remedies under this
Agreement, the Collateral Agent may obtain the appointment of a trustee or
receiver to assume control of such Grantor, subject to any required prior
approval of the FCC or any other Governmental Authority. Such trustee or


 


20

















 


receiver
shall have all rights and powers provided to it by law or by court order or
provided to the Collateral Agent under this Agreement.


 


(c)                                  Notwithstanding anything to the
contrary contained in this Agreement, (i) the Collateral Agent will not
take any action hereunder that would constitute or result in any transfer of
control or assignment of the FCC Licenses, the CRTC Licenses or the Grantor
without obtaining all necessary FCC, CRTC and other Governmental Authority
approvals, and (ii) the Collateral Agent shall not foreclose on, sell,
assign, transfer or otherwise dispose of, or exercise any right to control the
FCC Licenses and the CRTC Licenses as provided herein or take any other action
that would affect the operational, voting, or other control of the Grantor,
unless such action is taken in accordance with the provisions of the
Communications Act of 1934 (U.S.), as from time to time amended, the
Telecommunications Act (Canada), as amended from time to time, and the rules,
regulations and published policies of the FCC, the CRTC and any other
Governmental Authority.


 


5.10                           Attorney-in-Fact, etc.


 


(a)                                  The Grantors hereby irrevocably
constitute and appoint the Collateral Agent and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the Grantors and
in the name of the Grantors or in its own name, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, the Grantors hereby give the Collateral Agent
the power and right, on behalf of the Grantors, without notice to or assent by
the Grantors, to do any or all of the following:


 


(i)                                     in the name of the Grantors or its
own name, or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
under any Receivable or with respect to any other Pledged Collateral and file
any claim or take any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by the Collateral Agent for the purpose of
collecting any and all such moneys due under any Receivable or with respect to
any other Pledged Collateral whenever payable;


 


(ii)                                  in the case of any Intellectual
Property, execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Collateral Agent may reasonably
request to evidence the Collateral Agent’s security interest in such
Intellectual Property and the goodwill and general intangibles of the Grantor
relating thereto or represented thereby;


 


(iii)                               pay or discharge taxes and Liens
levied or placed on or threatened against any of the Pledged Collateral, effect
any insurance called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;


 


21

















 


(iv)                              execute, in connection with any sale
provided for in Section 5, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Pledged Collateral;


 


(v)                                 direct any party liable for any
payment under any of the Pledged Collateral to make payment of any and all
moneys due or to become due thereunder directly to the Collateral Agent or as
the Collateral Agent shall direct;


 


(vi)                              ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any
Pledged Collateral;


 


(vii)                           sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other documents
in connection with any of the Pledged Collateral;


 


(viii)                        commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Pledged Collateral or any portion thereof and to
enforce any other right in respect of any Pledged Collateral;


 


(ix)                                defend any suit, action or
proceeding brought against the Grantor with respect to any Pledged Collateral;


 


(x)                                   settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Collateral Agent may deem appropriate;


 


(xi)                                assign any Copyright, Patent or
Trademark (along with the goodwill of the business to which any such Trademark
pertains), throughout the world for such term or terms, on such conditions, and
in such manner, as the Collateral Agent shall in its sole discretion determine;
and


 


(xii)                             generally, sell, transfer, pledge
and make any agreement with respect to or otherwise deal with any of the
Pledged Collateral as fully and completely as though the Collateral Agent were
the absolute owner thereof for all purposes, and do, at the Collateral Agent’s
option and the Grantors’ expense (including reasonable attorneys’ fees), at any
time, or from time to time, all acts and things which the Collateral Agent
deems necessary to protect, preserve or realize upon the Pledged Collateral and
the Collateral Agent’s security interests therein and to effect the intent of
this Agreement, all as fully and effectively as the Grantors might do.


 


(b)                                 Anything in Section 5.10(a) to
the contrary notwithstanding, the Collateral Agent agrees that it will not
exercise any rights under the power of attorney provided for in this Section 5.10(a) unless
an Actionable Default  shall have
occurred and be continuing.


 


(c)                                  If the Grantors fail to perform or
comply with any of its agreements contained herein or in any contract included
in the Pledged Collateral, the Collateral


 


22

















 


Agent,
at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such agreement.


 


(d)                                 The expenses of the Collateral Agent
incurred in connection with actions undertaken as provided in this Section 5.10,
together with interest thereon at a rate per annum equal to the rate per annum
at which interest would then be payable on past due Second Priority Lien
Obligations pursuant to the Indenture, from the date of payment by the
Collateral Agent to the date reimbursed by the Grantor, shall be payable by the
Grantor to the Collateral Agent on demand.


 


(e)                                  The Grantors hereby ratify all that
said attorneys shall lawfully do or cause to be done by virtue hereof. All
powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.


 


5.11                           Filing of Financing Statements. Each Grantor authorizes the
Collateral Agent to file or record financing statements, any amendments thereto
and other filing or recording documents or instruments with respect to the
Pledged Collateral without the signature of such Grantor in such form and
in such offices as the Collateral Agent reasonably determines appropriate to
perfect the security interests of the Collateral Agent under this Agreement
including any financing statement describing the Pledged Collateral as “all
assets,” “all personal property” or any similar description. A photographic or
other reproduction of this Agreement shall be sufficient as a financing statement
or other filing or recording document or instrument for filing or recording in
any jurisdiction.


 


Section 6.                                            Termination and Release.


 


6.1                                 Termination. This Agreement shall terminate on
the Secured Obligations Termination Date, and upon compliance with the
provisions of Article V of the Collateral Trust Agreement, and at the
request and sole expense of the Grantors, the Collateral Agent shall forthwith
cause to be assigned, transferred and delivered, against receipt but without
any recourse, warranty or representation whatsoever, any remaining Pledged
Collateral and money received in respect thereof, to or on the order of the
Grantors.


 


6.2                                 Release of Guarantors. This Agreement shall terminate as
to either or both Guarantors upon the release of the Guarantors pursuant to Article V
of the Collateral Trust Agreement.


 


6.3                                 Release of Specific Pledged
Collateral. Upon
the sale, assignment, transfer or conveyance of any specific item or items of
Pledged Collateral in compliance with the provisions of clause (ii) or
clause (iii) of Section 5.1(a) of the Collateral Trust
Agreement, the Lien granted hereby shall terminate as to such Pledged
Collateral; provided that the Lien of the Collateral Agent in any Proceeds from
the sale, assignment, transfer or conveyance of such Pledged Collateral shall
continue unless otherwise specifically provided by any applicable Security
Document.


 


23

















 


Section 7.                                            Miscellaneous.


 


7.1                                 Notices. All notices, requests, consents
and demands hereunder shall be in writing and telecopied or delivered to the
intended recipient at its “Address for Notices” specified pursuant to Section 8.5
of the Collateral Trust Agreement and shall be deemed to have been given at the
times specified in said Section.


 


7.2                                 Further Assurances. The Grantors agree that, from time
to time upon the written request of the Collateral Agent, the Grantors will
execute and deliver such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order fully to effect the
purposes of this Agreement.


 


7.3                                 No Waiver. No failure on the part of the
Collateral Agent or any Secured Party to exercise, and no course of dealing
with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise by the Collateral Agent or any Secured Party of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies herein are cumulative and are
not exclusive of any remedies provided by law.


 


7.4                                 Amendments. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by
the Grantors and the Collateral Agent. Any such amendment or waiver shall be
binding upon the Collateral Agent, the Grantors, each other Secured Party and
each holder of Secured Obligations.


 


7.5                                 Collateral Trust Agreement Controls. In the event of any conflict
between any terms and provisions set forth in this Agreement and those set
forth in the Collateral Trust Agreement, the terms and provisions of the
Collateral Trust Agreement shall supersede and control the terms and provisions
of this Agreement. This Agreement supplements, but does not limit or
supersede, the security interests being concurrently granted by ICO Canada
under Canadian law or by the Company under English law.


 


7.6                                 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the successors and permitted assigns of the
Grantors and the Collateral Agent, each of the other Secured Parties and each
holder of any Secured Obligations.


 


7.7                                 Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties hereto may execute
this Agreement by signing any such counterpart.


 


7.8                                 Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New York. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is


 


24

















 


not
personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.


 


7.9                                 Captions. The captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.


 


7.10                           Severability. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (a) the other provisions hereof shall remain in full force and effect
in such jurisdiction and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.


 


7.11                           Modification of Indebtedness. The Guarantors shall remain
obligated hereunder, and the security interests granted hereunder shall remain
in full force and effect, notwithstanding that, without notice to or further
assent by the Secured Obligations or the liability of any other Person upon or
for any part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Secured Parties or the Collateral Agent,
and the Indenture and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole
or in part, as the Secured Parties or the Collateral Agent may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Secured Parties or the Collateral Agent for the
payment of the Secured Obligations may be sold, exchanged, waived,
surrendered or released. The Secured Parties and the Collateral Agent shall not
have any obligation to protect, secure, perfect or insure any Lien at any time
held by them as security for the Secured Obligations or any property subject
thereto.


 


[Signature
pages follow.]


 


25

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered as of the day and year first
above written.


 


	
   

  	
  ICO NORTH AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Craig Jorgens

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ICO SATELLITE MANAGEMENT LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  D. Schmitt

  	
   

  
	
   

  	
  Name:

  	
  Dennis
  Schmitt

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ICO SATELLITE SERVICES G.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  D. Schmitt

  	
   

  
	
   

  	
  Name:

  	
  Dennis
  Schmitt

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK, as Collateral

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  STACEY B. POINDEXTER

  	
   

  
	
   

  	
  Name:

  	
  STACEY
  B. POINDEXTER

  	
   

  
	
   

  	
  Title:

  	
  ASSISTANT
  VICE PRESIDENT

  	
   

  
							



 

















 


	
   

  	
  ICO GLOBAL COMMUNICATIONS (CANADA) INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  D. Schmitt

  	
   

  
	
   

  	
  Name:

  	
  Dennis
  Schmitt

  	
   

  
	
   

  	
  Title:

  	
  CFO