SECURITY AGREEMENT
Exhibit 10.21
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SECURITY AGREEMENT, dated as of March 25, 2011 (the “Agreement”), between MAJESCOMASTEK INC., a California corporation, having its principal place of business at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxx Xxxxxx 00000 (“Debtor”), and ICICI BANK LIMITED, NEW YORK BRANCH (the “Secured Party”).
WHEREAS, the Debtor has borrowed money from the Secured Party and has executed in favor of the Secured Party a Credit Facility Agreement (the “Credit Facility Agreement”), a Revolving Credit Note in the principal amount of Five Million Dollars ($5,000,000) dated as of the date hereof (the “Note”) and certain other credit documents as noted in the Credit Facility Agreement; and
WHEREAS, it is a condition precedent to the Secured Party making the loans to the Debtor under the Credit Facility Agreement and the Note that the Debtor execute and deliver this Agreement to the Secured Party.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
(a) To secure the Debtor’s full and timely performance of the Obligations, the Debtor hereby grants to the Secured Party a continuing first priority Lien on and security interest (the “Security Interest”) in all of the Debtor’s right, title and interest in and to all of its personal property and assets (both tangible and intangible), including, without limitation, the following, whether now owned or hereafter acquired and wherever located: (a) all Receivables; (b) all Deposit Accounts, Accounts and Chattel Paper; (c) all Cash; (d) Debt Service Reserve Account; (e) all Investment Property; and (f) all Proceeds of each of the foregoing and all accessions to, and replacements for, each of the foregoing (collectively, the “Collateral”). The Security Interest shall be a first priority security interest in all of the Collateral.
(b) The following terms shall have the following meanings for purposes of this Agreement:
“Account” means any “Account,” as such term is defined in the UCC now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest and, in any event, shall include, without limitation, all accounts receivable, book debts, rights to payment and other forms of obligations (other than forms of obligations evidenced by Chattel Paper, Documents or Instruments) now owned or hereafter received or acquired by or belonging or owing to the Debtor whether or not arising out of goods or software sold or services rendered by the Debtor or from any other transaction, whether or not the same involves the sale
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of goods or services by the Debtor and all of the Debtor’s rights in, to and under all purchase orders or receipts now owned or hereafter acquired by it for goods or services, and all of the Debtor’s rights to any goods represented by any of the foregoing, and all monies due or to become due to the Debtor under all purchase orders and contracts for the sale of goods or the performance of services or both by the Debtor or in connection with any other transaction (whether or not yet earned by performance on the part of the Debtor), now in existence or hereafter occurring, including, without limitation, the right to receive the proceeds of said purchase orders and contracts, and all collateral security and guarantees of any kind given by any Person with respect to any of the foregoing.
“Cash” means all cash, money, currency, and liquid funds, wherever held, in which the Debtor now or hereafter acquires any right, title, or interest.
“Chattel Paper” means any “Chattel paper,” as such term is defined in the UCC, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest.
“Debt Service Reserve Account” means any present or future account(s) maintained by the Debtor with the Secured Party to service the principal and interest due under the Credit Facility Agreement and other Credit Documents, which account shall have on deposit an amount equal to initially at two hundred thousand dollars ($200,000), as such amount may be modified or increased from time to time at the request of the Secured Party.
“Deposit Accounts” means any “Deposit accounts,” as such term is defined in the UCC, and includes any checking account, savings account, or certificate of deposit, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest.
“Documents” means any “Documents,” as such term is defined in the UCC, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest.
“Instruments” means any “Instrument,” as such term is defined in the UCC, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest.
“Investment Property” means any “Investment property,” as such term is defined in the UCC, and includes certificated securities, uncertificated securities, money market funds and U.S. Treasury bills or notes, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest.
“Letter of Credit Right” means any “Letter of credit right,” as such term is defined in the UCC, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest, including any right to payment or performance under any letter of credit.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, xxxx, xxxx or charge of any kind, whether voluntarily
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incurred or arising by operation of law or otherwise, against any property, any conditional sale or other title retention agreement, any lease in the nature of a security interest, and the filing of any financing statement (other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the UCC or comparable law of any jurisdiction.
“Obligations” shall mean and include all loans, advances, debts, liabilities and obligations, howsoever arising, owed by the Debtor to the Secured Party of every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money), direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising pursuant to the terms of the Note owed by the Debtor to the Secured Party, whether in connection with the Note or otherwise, including without limitation all interest, fees, charges, expenses, attorneys’ fees and accountants’ fees chargeable to the Debtor or payable by the Debtor thereunder.
“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public benefit corporation, other entity or government (whether federal, state, county, city, municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or department thereof).
“Proceeds” means “Proceeds,” as such term is defined in the UCC and, in any event, shall include, without limitation, (a) any and all Accounts, Chattel Paper, Instruments, cash or other forms of money or currency or other proceeds payable to the Debtor from time to time in respect of the Collateral, (b) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Debtor from time to time with respect to any of the Collateral, (c) any and all payments (in any form whatsoever) made or due and payable to the Debtor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any Person acting under color of governmental authority), (d) the proceeds, damages, or recovery based on any claim of the Debtor against third parties (i) for past, present or future infringement of any copyright, patent or patent license or (ii) for past, present or future infringement or dilution of any trademark or trademark license or for injury to the goodwill associated with any trademark, trademark registration or trademark licensed under any trademark license and (e) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.
“Receivables” means all of the Debtor’s Accounts, Instruments, Documents, Chattel Paper, Supporting Obligations, and letters of credit and Letter of Credit Rights.
“Supporting Obligation” means any “Supporting obligation,” as such term is defined in the UCC, now owned or hereafter acquired by the Debtor or in which the Debtor now holds or hereafter acquires any interest.
“UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Secured Party’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “UCC”
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shall mean the Uniform Commercial Code as enacted and in effect, from time to time, in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.
3. DEBTOR’S REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants that:
4. GENERAL OBLIGATIONS OF DEBTOR.
4.2. Intentionally deleted.
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5.1. Material loss or theft, material damage or destruction or unauthorized sale or encumbrance of any portion of the Collateral, or the making of any levy on, or seizure or attachment of a material portion of the Collateral; or
5.2. The occurrence of an event of default under the Credit Facility Agreement.
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that Collateral has been assigned to Secured Party and that payments shall be made directly to Secured Party. If an event of default has occurred and is continuing, upon request of Secured Party, Debtor will so notify such account debtors and will indicate on all xxxxxxxx to such account debtors that their accounts must be paid to the Secured Party. If an event of default has occurred and is continuing, Debtor does hereby appoint the Secured Party and its agents as Debtor’s attorney-in-fact: to collect, compromise, endorse, sell or otherwise deal with the Collateral or proceeds thereof in its own name or in the name of the Debtor; to endorse the name of Debtor upon any notes, checks, drafts, money orders, or other instruments, documents, receipts or Collateral that may come into its possession and to apply the same in full or part payment of any amounts owing to the Secured Party; to sign and endorse the name of Debtor upon any documents, instruments, drafts against account debtors, assignments, verifications and notices in connection with Accounts, and any instrument or document relating thereto or to Debtor’s rights therein; and to give written notice to any office and officials of the United States Post Office to effect such change or changes of address that all mail addressed to Debtor may be delivered directly to Secured Party. If an event of default has occurred and is continuing, Debtor hereby grants to its said attorney-in-fact full power to do any and all things necessary to be done in and about the premises as fully and effectually as Debtor might or could do, and hereby ratifies all that its attorney-in-fact shall lawfully do or cause to be done by virtue hereof This power of attorney is coupled with an interest and is irrevocable for the term of this Agreement for all transactions hereunder and thereafter as long as the Debtor may be indebted to any Secured Party under the Note or the Credit Facility Agreement.
(a) With respect to any surplus proceeds of any Collateral then remaining, to the payment of the Obligations, including any interest thereon, and any costs, fees or expenses incurred in connection with the administration, collection or enforcement thereof, including, without limitation, reasonable attorney’s fees and other professionals’ out of pocket costs and fees, proportionately to the respective amounts then due and owing under their respective claims until payment and satisfaction in full thereof; and
(b) Any surplus remaining after application as provided in paragraph (a) above, shall be paid to the Debtor, or its successors or assigns, or to whomsoever may be lawfully entitled to receive the same.
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interests therein or thereto. All such expenses may be added to the principal amount of any indebtedness owed by Debtor to the Secured Party shall constitute part of the Obligations secured hereby.
8. INDEMNIFICATION. The Debtor agrees to indemnify and hold harmless the Secured Party and each of its officers, directors, agents, advisors and employees from and against any and all claims, damages, liabilities, costs and expenses (including without limitation, reasonable fees, expenses and disbursements of counsel) that may be incurred by or asserted against the Secured Party in connection with or arising out of any investigation, litigation or proceeding, whether threatened or initiated, relating to the Collateral or this Agreement, whether or not the Secured Party is a party thereto; provided however, that the Debtor shall not be required to indemnify any such person from or against any portion of such claims, damages, liabilities or expenses found by final judgment after all appeals by a court of competent jurisdiction to have arisen out of gross negligence or willful misconduct of such person.
9. CONTINUOUS PERFECTION. The Debtor will not change its name, identity or corporate structure in any manner and will not change its principal place of business or chief executive office or the places where it keeps the Collateral or the records concerning the Collateral, unless and until it obtains the written consent of the Secured Party to any such change. If the Secured Party grants its consent to any such change, the Debtor will take all action necessary or appropriate in the Secured Party’s sole discretion to amend each financing statement or continuation statement and otherwise to cause the Secured Party to continue to maintain its first perfected lien on, and security interest in, the Collateral.
12. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK.
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WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, THEREUNDER.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and year first above written.
| DEBTOR: | ||
| MAJESCOMASTEK INC. | ||
| By: | /s/ Xxxxxx Sattawalla | |
| Name: Xxxxxx Sattawalla | ||
| Title: DIRECTOR | ||
| SECURED PARTY: | ||
| ICICI BANK LIMITED | ||
| NEW YORK BRANCH | ||
| By: | /s/ Xxxxxx Xxxxx | |
| Name: Xxxxxx Xxxxx | ||
| Title: ASST. GENERAL MANAGER | ||
| Address: 000 Xxxxx Xxxxxx, 00xx Xxxxx | ||
| Xxx Xxxx, XX 00000 | ||
| Facsimile Number: | ||