EXHIBIT 10.15
Loan No.: ______________
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is made this 7th day of October, 1997, by
and between DA CONSULTING GROUP,INC., a Texas corporation ("Debtor"), whose
business address is 0000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 and XXXXXX
FINANCIAL, INC., a Delaware corporation ("Secured Party"), whose address is
Commercial Equipment Finance Division, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000.
WITNESSETH:
1. Secure Payment. To secure payment of indebtedness in the principal sum of up
to One Million and 00/ 100 Dollars ($1,000,000.00), as evidenced by a note or
notes executed and delivered by Debtor to Secured Party (the "Notes") and any
obligations arising under this Agreement, including all future advances or loans
which may be made at the option of Secured Party (all the foregoing hereinafter
called the "Indebtedness"), Debtor hereby grants and conveys to Secured Party a
first priority continuing lien and security interest in the personal property
described on any schedule(s) now or hereafter attached to or made a part hereof
by reference hereto (the "Schedules"), all products and proceeds (including
insurance proceeds) thereof, if any, and all substitutions, replacements,
attachments, additions, and accessions thereto (all of the foregoing hereinafter
called the "Collateral.") The Schedules may be supplemented from time to time to
evidence the Collateral subject to this Agreement.
Debtor shall request in writing each advance of principal under the Notes, which
request shall be satisfactory to Secured Party in form and substance. Each
advance shall be on and subject to the terms and conditions set forth in this
Agreement and shall otherwise be at Secured Party's sole discretion. Each Note
shall be in an amount not less than $50,000.00. No principal advance under any
Notes shall be made after January 4, 1998, and each advance shall reduce, dollar
for dollar, the amount that may be advanced under the Notes in the aggregate.
Amounts advanced and repaid may not be reborrowed.
2. Representations, Warranties and Covenants. Except as otherwise provided,
each representation and warranty made by Debtor in this Agreement shall be true,
correct and complete as of the date of this
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Agreement and as of the date of each advance of funds under a Note. Debtor
hereby represents, warrants and covenants as follows:
(a) Perform Obligations. Debtor shall pay as and when due all
Indebtedness secured by this Agreement and perform all of the obligations
contained in this Agreement according to its terms. Debtor shall use the loan
proceeds for business uses and not for personal, family, household, or
agricultural uses.
(b) Perfection. This Agreement and all necessary Uniform Commercial Code
filings together create a valid, perfected and first priority continuing lien
and security interest in the Collateral, securing the payment and performance of
the Indebtedness, and all filings and other actions necessary or desirable to
create, perfect and protect such security interest have been or will be duly
taken.
(c) Collateral Free and Clear. Except as may be set forth on a Schedule,
the Collateral is and shall remain free and clear of all liens, claims, charges,
encumbrances and other security interests of any kind (other than the security
interest granted hereby). Debtor shall defend the title to the Collateral
against all persons and against all claims and demands whatsoever.
(d) Possession and Operating Order of the Collateral. Debtor shall
retain possession of the Collateral at all times and shall not sell, exchange,
assign, loan, deliver, lease, mortgage, or otherwise dispose of the Collateral
or any part thereof without the prior written consent of Secured Party. Debtor
shall at all times keep the Collateral at the locations specified on the
Schedules (except for removals thereof in the usual course of business for
temporary periods). At Debtor's sole cost and expense, Debtor shall keep the
Collateral in good repair and condition and shall not misuse, abuse, waste or
otherwise allow it to deteriorate, except for normal wear and tear. Secured
Party may verify any Collateral in any reasonable manner which Secured Party may
consider appropriate, and Debtor shall furnish all reasonable assistance and
information and perform any acts which Secured Party may reasonably request in
connection therewith.
(e) Insurance. Debtor shall insure the Collateral against loss by fire
(including extended coverage), theft and other hazards, for its full insurable
value including replacement costs, with a deductible not to exceed Fifty
Thousand and 00/100 Dollars ($50,000.00) per occurrence and without
co-insurance. In addition, Debtor shall obtain liability insurance covering
liability for bodily injury, including death and property damage, in an amount
of at least Five Million and 00/100 Dollars ($5,000,000.00) per
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occurrence or such greater amount as may comply with general industry standards,
or in such other amounts as Secured Party may otherwise require. All policies of
insurance required hereunder shall be in such form, amounts, and with such
companies as Secured Party may approve; shall provide for at least thirty (30)
days prior written notice to Secured Party prior to any modification or
cancellation thereof; shall name Secured Party as loss payee or additional
insured, as applicable, and shall be payable to Debtor and Secured Party as
their interests may appear; shall waive any claim for premium against Secured
Party; and shall provide that no breach of warranty or representation or act or
omission of Debtor shall terminate, limit or affect the insurers' liability to
Secured Party. Certificates of insurance or policies evidencing the insurance
required hereunder along with satisfactory proof of the payment of the premiums
therefor shall be delivered to Secured Party. Debtor shall give immediate
written notice to Secured Party and to insurers of loss or damage to the
Collateral and shall promptly file proofs of loss with insurers. Debtor hereby
irrevocably appoints Secured Party as Debtor's attorney-in-fact, coupled with an
interest, for the purpose of obtaining, adjusting and canceling any such
insurance and endorsing settlement drafts. Debtor hereby assigns to Secured
Party, as additional security for the Indebtedness, all sums which may become
payable under such insurance.
In the event Debtor fails to provide Secured Party with evidence of the
insurance coverage required by this Agreement, Secured Party may purchase
insurance at Debtor's expense to protect Secured Party's interests in the
Collateral. This insurance may, but need not, protect Debtor's interests. The
coverage purchased by Secured Party may not pay any claim made by Debtor or any
claim that is made against Debtor in connection with the Collateral. Debtor may
later cancel any insurance purchased by Secured Party, but only after providing
Secured Party with evidence that Debtor has obtained insurance as required by
this Agreement. If Secured Party purchases insurance for the Collateral, Debtor
will be responsible for the costs of that insurance, including interest and
other charges imposed by Secured Party in connection with the placement of the
insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Indebtedness. The
costs of the insurance may be more than the cost of insurance Debtor is able to
obtain on its own.
(f) If Collateral Attaches to Real Estate. If the Collateral or any part
thereof has been attached to or is to be attached to real estate, an accurate
description of the real estate and the name and address of the record owner is
set forth on the Schedules. Debtor shall, on demand of Secured Party, furnish
Secured Party with a disclaimer or waiver of any interest in any such Collateral
satisfactory to Secured Party and signed by all persons having an
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interest in the real estate. Notwithstanding the foregoing, the Collateral shall
remain personal property and shall not be affixed to realty without the prior
written consent of Secured Party.
(g) Financial Statements. Debtor shall furnish to Secured Party, as soon
as practicable, and in any event within forty-five (45) days after the end of
each fiscal quarter of Debtor and each guarantor of all or any part of the
Indebtedness (each, a "Guarantor"), respectively, Debtor's and each Guarantor's
unaudited financial statements including in each instance, balance sheets,
income statements, and statements of cash flow, on a consolidated and
consolidating basis, as appropriate, and separate profit and loss statements as
of and for the quarterly period then ended and for the respective person's
fiscal year to date, prepared in accordance with generally accepted accounting
principles, consistently applied ("GAAP"). Debtor shall also furnish to Secured
Party, as soon as practicable, and in any event within one hundred twenty (120)
days after the end of each fiscal year of Debtor and each Guarantor,
respectively, Debtor's and each Guarantor's annual audited financial statements,
including balance sheets, income statements and statements of cash flow for the
fiscal year then ended, on a consolidated and consolidating basis, as
appropriate, which have been prepared by its independent accountants in
accordance with GAAP. Such audited financial statements shall be accompanied by
the independent accountant's opinion, which opinion shall be in form generally
recognized as "unqualified". In addition, Debtor shall furnish to Secured Party,
as soon as practicable, and in any event within forty-five (45) days after the
end of each fiscal quarter of Debtor other than the last fiscal quarter of each
fiscal year, and within one hundred twenty (120) days after the last fiscal
quarter of each fiscal year of Debtor, a compliance certificate in form and
substance satisfactory to Secured Party.
(h) Authorization. Debtor is now, and so long as the Indebtedness is
outstanding, will at all times remain, duly licensed, qualified to do business
and in good standing in every jurisdiction where failure to be so licensed or
qualified and in good standing would have a material adverse effect on its
business, properties or assets. The execution and delivery of this Agreement,
the Notes and any other documents and instruments executed contemporaneously
with or delivered pursuant to this Agreement and the Notes, all as amended from
time to time (collectively the "Loan Documents"), have been duly authorized by
Debtor and constitute legal, valid, and binding obligations of Debtor,
enforceable against Debtor in accordance with their respective terms. So long as
the Indebtedness is outstanding, Debtor shall preserve and maintain its
existence and shall not wind up its affairs or otherwise dissolve. Debtor shall
not, without thirty (30) days prior written notice to Secured Party, (1) change
its name or so change its structure such
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that any financing statement or other record notice becomes misleading or (2)
change its principal place of business or chief executive or accounting offices
from the address stated herein.
(i) Litigation. Except as disclosed by Debtor on a Schedule, there are
no judgments outstanding against or affecting Debtor, its officers, directors or
affiliates or any part of the Collateral and there ar no actions, charges,
claims, demands, suits, proceedings, or investigations pending or, to Debtor's
knowledge, threatened against Debtor or otherwise affecting any part of the
Collateral ("Litigation"). Debtor shall furnish to Secured Party all information
regarding any material Litigation as Secured Party shall reasonably request and
in any event shall promptly notify Secured Party in writing of any Litigation
against it which if decided against it would materially and adversely affect the
finances or operations of Debtor. For the purposes of this subsection 2(i), Five
Hundred Thousand and 00/100 Dollars ($500,000.00) shall be deemed material.
(j) No Conflicts. Debtor is not in violation of any material term or
provision of its by-laws, or of any material agreement or instrument, decree,
order, or any statute, rule, or governmental regulation applicable to it. The
execution, delivery, and performance of the Loan Documents do not and will not
violate, constitute a default under, or otherwise conflict with any such term or
provision or result in the creation of any security interest, lien, charge, or
encumbrance upon any of the properties or assets of Debtor, except for the
security interest created hereunder.
(k) Compliance with Laws. Debtor shall use and maintain the Collateral
in accordance with all applicable laws, regulations, ordinances, and codes and
shall otherwise comply in all material respects with all applicable laws, rules,
and regulations and duly observe and be in compliance in all material respects
with all valid requirements of all governmental authorities, and all statutes,
rules and regulations relating to its business as in effect from time to time
during the term of this Agreement.
(l) Taxes. Debtor has timely filed all tax returns (federal, state,
local, and foreign) required to be filed by it and has paid or established
reserves for all taxes, assessments, fees, and other governmental charges in
respect of its properties, assets, income and franchises. Debtor shall promptly
file, pay and discharge all taxes, assessments, license fees (related to the
Collateral) and other governmental charges prior to the date on which penalties
are attached thereto, establish adequate reserves for the payments of such
taxes, assessments, and other governmental charges and make all required
withholding and other tax deposits, and, upon request, provide Secured Party
with receipts or other proof that any or all of such taxes, assessments, license
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fees or governmental charges have been paid in a timely fashion; provided,
however, that nothing contained herein shall require the payment of any tax,
assessment, or other governmental charge so long as its validity is being
diligently contested in good faith and by appropriate proceedings diligently
conducted and Debtor has established cash reserves therefor in accordance with
GAAP. Should any stamp, excise, or other tax, including mortgage, conveyance,
deed, intangible, or recording taxes become payable in connection with or
respect of any of the Loan Documents, Debtor shall pay the same (including
interest and penalties, if any) and shall hold Secured Party harmless with
respect thereto.
(m) Environmental Laws/Compliance. Except as disclosed by Debtor on a
Schedule, Debtor (1) has not received any claim, summons, complaint, order, or
other notice that it is not in compliance with, or that any public authority is
investigating its compliance with, any federal, state, and local laws, rules,
regulations, orders, and decrees relating to pollution, hazardous substances,
waste, disposal or the protection of human health or safety, plant life or
animal life, natural resources or the environment, all as amended from time to
time (collectively, "Environmental Laws"), (2) has no knowledge of any material
violation of any Environmental Laws on or about its assets or property, and (3)
is not under any current clean up or other remediation program or order. Debtor
has obtained all environmental, health and safety permits necessary for the
operation of Debtor's business. Debtor is and shall remain in compliance, in all
respects, with the terms and conditions of all permits and with all applicable
Environmental Laws. Debtor shall provide Secured Party, promptly following
receipt, copies of any correspondence, notice, complaint, order, or other
document that it receives asserting or alleging a circumstance or condition
which requires or may require a cleanup, removal, remedial action or other
response by or on the part of Debtor under any Environmental Laws, or which
seeks damages or civil, criminal or punitive penalties from Debtor for an
alleged violation of any Environmental Laws. Debtor will promptly notify Secured
Party of any release, spill or material change in the nature or extent of any
hazardous substances or contaminants used, transported or stored by Debtor or
any subsidiary of Debtor, and allow no material change in the use thereof or of
Debtor's operations that would increase in any material amount the risk of
violation of any Environmental Laws without the express prior written approval
of Secured Party.
(n) Regulations. No proceeds of the loans or any other financial
accommodation hereunder will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security, as that term is defined in
Regulations G, T, U, X of the Board of Governors of the Federal Reserve System.
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(o) Books and Records. Debtor shall maintain, at all times, true and
complete books and records in accordance with GAAP and consistent with those
applied in the preparation of Debtor's financial statements. At all reasonable
times, upon reasonable notice, and during normal business hours, Debtor shall
permit Secured Party or its agents to audit, examine and make extracts from or
copies of any of its books, ledgers, reports, correspondence, and other records
relating to the Collateral.
(p) Setoff. Without limiting any other right of Secured Party, whenever
Secured Party has the right to declare any Indebtedness to be immediately due
and payable (whether or not it has so declared), Secured Party is hereby
authorized at any time and from time to time to the fullest extent permitted by
law, but shall not be obligated to, set off and apply against any and all
Indebtedness, any and all monies then or thereafter owed to Debtor by Secured
Party, whether or not the obligation to pay such monies owed by Secured Party is
then due. An election by Secured Party to exercise its right of setoff shall be
effective immediately upon such election even though any charge therefor is made
or entered on Secured Party's records subsequent thereto.
(q) Standard of Care; Notice of Claims. Debtor acknowledges and agrees
that Secured Party shall not be liable for any acts or omissions nor for any
error of judgment or mistake of fact or law other than as a sole and direct
result of Secured Party's gross negligence or willful misconduct. Debtor shall
give Secured Party written notice of any action or inaction by Secured Party or
any agent or attorney of Secured Party that may give rise to a claim against
Secured Party or any agent or attorney of Secured Party or that may be a defense
to payment of the Indebtedness or performance hereunder for any reason,
including commission of a tort (subject, in any event, to the first sentence of
this paragraph) or violation of any contractual duty or duty implied by law.
(r) Indemnity. Debtor shall indemnify, defend and hold Secured Party,
its parent, affiliates, officers, directors, agents, employees, consultants,
persons engaged by Secured Party to evaluate or monitor the Collateral, auditors
and attorneys harmless from and against any loss, cost, expense (including
reasonable attorneys' fees and costs and any consultants' or other experts' fees
and expenses), damage, penalty, fine, claim, lien, suit, judgment or liability
of every kind and nature arising directly or indirectly out of (i) any Loan
Document, (ii) the ownership, possession, lease, operation, use, condition,
sale, return, or other disposition of the Collateral, (iii) any Environmental
Laws, and (iv) the enforcement by Secured Party of its rights or remedies
hereunder, except to the extent the loss, expense, damage or
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liability arises solely and directly from Secured Party's gross negligence or
willful misconduct. Any payments required to be made hereunder shall be due and
payable on demand.
(s) Payments Set Aside. If any payment is made to Secured Party or
Secured Party enforces its security interest or exercises its right of set off,
and such payment or part, or any proceeds of such enforcement or set off are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery, the Indebtedness or part thereof originally intended to
be satisfied, and all liens, security interests, rights and remedies therefor,
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or set off had not occurred.
(t) Expenses and Attorneys' Fees. Debtor shall be liable for all charges,
costs, expenses and reasonable attorneys' fees incurred by Secured Party
(including, following the occurrence of an Event of Default, allocated costs of
internal counsel): (i) in perfecting, defending, protecting or terminating its
security interest in the Collateral, or any part thereof; (ii) in the
negotiation, execution, delivery, administration, amendment or enforcement of
the Loan Documents or the collection of any amounts due under any Note or other
Loan Document; (iii) in any lawsuit or other legal proceeding in any way
connected with any of the Loan Documents, including any contract or tort or
other actions, any arbitration or other alternative dispute resolution
proceeding, all appeals and judgement enforcement actions and any bankruptcy
proceeding (including any relief from stay and/or adequate protection motions,
cash collateral disputes, assumption/rejection motions and disputes or
objections to any proposed disclosure statement or reorganization plan).
(u) Complete Information. No representation or warranty made by Debtor in
any Loan Document and no other document or statement now or hereafter furnished
to Secured Party by or on behalf of Debtor contains or will contain any
misstatement of a material fact or omit to state any material fact which would
make the statements contained therein misleading as of the date made. Except as
expressly set forth in the Schedules, there is no fact known to Debtor that has
or is reasonably likely to have a materially adverse affect on the business,
operation, condition (financial or otherwise), performance, properties or
prospects of Debtor or Debtor's ability to timely pay all of the Indebtedness
and perform all of its other obligations contained in or secured by this
Agreement.
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(v) Collateral Documentation. Debtor shall deliver to Secured Party prior
to any advance, satisfactory documentation regarding the Collateral to be
financed, including such invoices, canceled checks evidencing payments, or other
documentation as may be reasonably requested by Secured Party. Additionally,
Debtor shall satisfy Secured Party that Debtor's business and financial
information is as has been represented and there has been no material change in
Debtor's business, financial condition, or operations.
(w) Dividend Restriction. Restricted Payments. If any Event of Default
exists (or would exist as a result of any payment described in this subsection
(w)), Debtor will not and will not permit any of its subsidiaries directly or
indirectly to declare, order, pay, make or set apart any sum for (i) any
dividend or other distribution, direct or indirect, on account of any shares of
any class of stock of Debtor or any of its subsidiaries now or hereafter
outstanding, except (A) a dividend payable solely in shares of that class of
stock to the holders of that class; or (B) subsidiaries of Debtor may make
payments with respect to their stock provided that such stock is 100% owned by
Debtor; (ii) any redemption, conversion, exchange, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of stock of Debtor or any of its subsidiaries now or
hereafter outstanding; and (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Borrower or any of its subsidiaries now or
hereafter outstanding; provided Debtor's wholly-owned subsidiaries may make
payments and distributions to Debtor.
(x) Tangible Net Worth. Debtor shall maintain at all times, on a
consolidated basis, Tangible Net Worth of at least $1,750,000. As used herein,
"Tangible Net Worth" means total assets of Debtor minus its total liabilities
(including contingent liabilities), minus all intangibles, expenses and other
items deducted in arriving at tangible net worth as determined by Debtor's
regular employed certified public accountant in a manner consistent with past
practice.
3. Prepayment. Upon forty-five (45) days prior written notice to Secured
Party, Debtor may prepay in whole, but not in part, the then entire unpaid
principal balance of any Note, together with all accrued and unpaid interest
thereon to the date of such prepayment, provided that in addition to such
prepayment, Debtor shall pay (i) any and all other sums then due under any of
the Loan Documents, and (ii) the prepayment fee and breakage fee as liquidated
damages and not as a penalty set forth in any Note. The prepayment fee
described in clause (ii) above shall also be due upon the acceleration of the
maturity date of any Note following the occurrence of any Event of Default.
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4. Events of Default. If any one of the following events (each of which is
herein called an "Event of Default") shall occur: (a) Debtor fails to pay any
part of the Indebtedness within ten (10) calendar days of its due date, or (b)
any warranty or representation of Debtor in any Loan Document is materially
untrue, misleading or inaccurate, or (c) Debtor or any Guarantor breaches or
defaults in the performance of any other agreement or covenant under any Loan
Document other than those contained in subsections 2(b) and 2(e) hereof and such
breaches or defaults are not cured within thirty (30) days after Debtor knew or
should have known of the occurrence (provided that the thirty (30) day cure
period shall not apply to the extent any breach or default is not curable in
Secured Party's opinion), or (d) Debtor or any Guarantor breaches or defaults in
the performance of any covenant contained in subsections 2(b) and 2(e) hereof,
or (e) Debtor or any Guarantor breaches or defaults in the payment or
performance of any debt or other obligation owed by it to Secured Party or any
affiliate of Secured Party, and Secured Party has (without being obligated to do
so) declared such event, an Event of Default hereunder, or (f) Debtor breaches
or defaults in the payment or performance of any debt or other obligation,
whether now or hereafter existing, with an outstanding principal balance in
excess of One Million and 00/100 Dollars ($1,000,000.00), and the same is
subsequently accelerated, or (g) there shall be a change in the beneficial
ownership and control, directly or indirectly, of the majority of the
outstanding voting securities or other interests entitled (without regard to the
occurrence of any contingency) to elect or appoint members of the board of
directors or other managing body of Debtor or any Guarantor ( a "change of
control"), or there is any merger, consolidation, dissolution, liquidation,
winding up or sale or other transfer of all or substantially all of the assets
of Debtor or any Guarantor pursuant to which there is a change of control or
cessation of Debtor or the Guarantor or the business of either without the prior
written consent of Secured Party, or (h) any money judgement is entered or filed
against Debtor or any Guarantor in excess of One Million and 00/100 Dollars
($1,000,000.00) execution against which is not stayed, bonded or insured pending
appeal in a manner reasonably satisfactory to Secured Party, or (i) Debtor or
any Guarantor shall file a voluntary petition in bankruptcy, shall apply for or
permit the appointment by consent or acquiescence of a receiver, conservator,
administrator, custodian or trustee for itself or all or a substantial part of
its property, shall make an assignment for the benefit of creditors or shall be
unable, fail or admit in writing its inability to pay its debts generally as
such debts become due, or (j) there shall have been filed against Debtor or any
Guarantor an involuntary petition in bankruptcy or Debtor or any Guarantor shall
suffer or permit the involuntary appointment of a receiver, conservator,
administrator, custodian or trustee for all or a substantial part of its
property or the issuance of a warrant of attachment, diligence, execution or
similar
process against all or any substantial part of its property; unless, in each
case, such petition, appointment or process is fully bonded against, vacated or
dismissed within sixty (60) days from its effective date, but no later than ten
(10) days prior to any proposed disposition of any assets pursuant to any such
proceeding, or (k) if there is a material adverse change in the business or
financial condition or prospects of Debtor, or any Guarantor, which affects the
net worth (as determined in accordance with GAAP) of either such party, in
Secured Party's opinion, in an amount equal to or greater than $500,000 then,
and in any such event, Secured Party shall have the right to exercise any one or
more of the remedies hereinafter provided.
5. Remedies. Upon the occurrence of an Event of Default, in addition to all
rights and remedies of a secured party under the Uniform Commercial Code,
Secured Party may, at its option, at any time (a) declare the Indebtedness to be
immediately due and payable; (b) without demand or legal process, enter the
premises where the Collateral may be found and take possession of and remove the
Collateral, all without charge to or liability on the part of Secured Party; or
(c) require Debtor to assemble the Collateral, render it unusable, and crate,
pack, ship, and deliver the Collateral to Secured Party in such manner and at
such place as Secured Party may require, all at Debtor's sole cost and expense.
DEBTOR HEREBY EXPRESSLY WAIVES ITS RIGHTS, IF ANY TO (1) PRIOR NOTICE OF
REPOSSESSION AND (2) A JUDICIAL OR ADMINISTRATIVE HEARING PRIOR TO SUCH
REPOSSESSION. Secured Party may, at its option, ship, store and repair the
Collateral so removed and sell any or all of the Collateral at a public or
private sale or sales. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Secured Party will give Debtor reasonable notice of the time and place
of any public sale thereof or of the time after which any private sale or any
other intended disposition thereof is to be made, it being understood and
agreed that Secured Party may be a buyer at any such sale and Debtor may not,
either directly or indirectly, be a buyer at any such sale. The requirements,
if any, for reasonable notice will be met if such notice is mailed postage
prepaid to Debtor at its address shown above, at least five (5) days before the
time of sale or disposition. After any such sale or disposition, Debtor shall
be liable for any deficiency of the Indebtedness remaining unpaid, with interest
thereon at the rate set forth in the related Notes.
6. Cumulative Remedies/Marshaling. All remedies of Secured Party hereunder are
cumulative, are in addition to any other remedies provided for by law or in
equity, or under any other provision of any of the Loan Documents, or under the
provisions of any other document, instrument or other writing executed by Debtor
or any third party in favor of Secured Party, all of which may, to the extent
permitted by law, be exercised
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concurrently or separately, and the exercise of any one remedy shall not be
deemed an election of such remedy or to preclude the exercise of any other
remedy. No failure on the part of Secured Party to exercise, and no delay in
exercising any right or remedy, shall operate as a waiver thereof or in any way
modify or be deemed to modify the terms of this Agreement or any other Loan
Document or the Indebtedness, nor shall any single or partial exercise by
Secured Party of any right or remedy preclude any other or further exercise of
the same or any other right or remedy. Secured Party shall not be under any
obligation to marshal any assets in favor of Debtor, any Guarantor or any other
person or against or in payment of any or all of the Indebtedness.
7. Assignment. Secured Party may transfer or assign all or any part of the
Indebtedness and the Loan Documents without releasing Debtor or the Collateral,
and upon such transfer or assignment the assignee or holder shall be entitled to
all the rights, powers, privileges and remedies of Secured Party to the extent
assigned or transferred. The obligations of Debtor shall not be subject, as
against any such assignee or transferee, to any defense, set-off, or
counter-claim available to Debtor against Secured Party and any such defense,
set-off, or counter-claim may be asserted only against Secured Party.
8. Time is of the Essence. Time and manner of performance by Debtor of its
duties and obligations under the Loan Documents is of the essence. If Debtor
shall fail to comply with any provision of any of the Loan Documents, Secured
Party shall have the right, but shall not be obligated, to take action to
address such non-compliance, in whole or in part, and all moneys spent and
expenses and obligations incurred or assumed by Secured Party shall be paid by
Debtor upon demand and shall be added to the Indebtedness. Any such action by
Secured Party shall not constitute a waiver of Debtor's default.
9. ENFORCEMENT. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. AT SECURED PARTY'S ELECTION
AND WITHOUT LIMITING SECURED PARTY'S RIGHT TO COMMENCE AN ACTION IN ANY OTHER
JURISDICTION, DEBTOR HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION AND VENUE OF
ANY COURT (FEDERAL, STATE OR LOCAL) HAVING SITUS WITHIN THE STATE OF ILLINOIS,
EXPRESSLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE BY
CERTIFIED MAIL, POSTAGE PREPAID, DIRECTED TO THE LAST KNOWN ADDRESS OF DEBTOR,
WHICH SERVICE SHALL BE DEEMED COMPLETED WITHIN TEN (10) DAYS AFTER THE DATE OF
MAILING THEREOF.
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10. Further Assurance; Notice. Debtor shall, at its expense, execute and
deliver such documents and do such further acts as Secured Party may from time
to time reasonably require to assure and confirm the rights created or intended
to be created hereunder, to carry out the intention or facilitate the
performance of the terms of the Loan Documents or to assure the validity,
perfection, priority or enforceability of any security interest created
hereunder. Debtor agrees to execute any instrument or instruments necessary or
expedient for filing, recording, perfecting, notifying, foreclosing, and/or
liquidating of Secured Party's interest in the Collateral upon reasonable
request of, and as determined by, Secured Party, and Debtor hereby specifically
authorizes Secured Party to prepare and file Uniform Commercial Code financing
statements and other documents and to execute same for and on behalf of Debtor
as Debtor's attorney-in-fact, irrevocably and coupled with an interest, for such
purposes. All notices required or otherwise given by either party shall be in
writing and shall be delivered by hand, by registered or certified first class
United States mail, return receipt requested, or by overnight courier to the
other party at its address stated herein or at such other address as the other
party may from time to time designate by written notice. All notices shall be
deemed given when received, when delivery is refused or when returned for
failure to be called for. Each provision of this Agreement shall remain in full
force and effect until all of the Indebtedness is fully, finally and
indefeasibly satisfied and, notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of Debtor and Secured Party set
forth in Sections 2(p), 2(r), 2(s), 2(t), 9 and 12 shall survive the full, final
and indefeasible satisfaction of the Indebtedness.
11. Joint and Several Obligation. If this Agreement is executed by more than
one person as Debtor, each such Debtor hereby acknowledges it is jointly and
severally liable for and unconditionally guarantees the prompt and full payment
and performance of all obligations of each other Debtor hereunder and under the
other Loan Documents.
12. WAIVER OF JURY TRIAL. DEBTOR AND SECURED PARTY HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS. DEBTOR AND SECURED PARTY
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THE
LOAN DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR
RELATED FUTURE DEALINGS. DEBTOR AND SECURED PARTY FURTHER WARRANT AND REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
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13. Complete Agreement. The Loan Documents embody the entire agreement among
the parties hereto superseding all prior commitments, agreements,
representations, and understandings, whether written or oral relating to the
subject matter hereof, and may not be contradicted or varied by evidence of
prior, contemporaneous, or subsequent oral agreements or discussions of the
parties hereto. The Loan Documents may not be altered, modified or terminated
in any manner except by a writing duly signed by the parties thereto. Debtor
and Secured Party intend the Loan Documents to be valid and binding and no
provisions hereof and thereof which may be deemed unenforceable shall in any way
invalidate any other provisions of the Loan Documents, all of which shall
remain in full force and effect. The Loan Documents shall be binding upon the
respective successors, legal representatives, and assigns of the parties. The
Schedules are incorporated herein by this reference and made a part hereof.
IN WITNESS WHEREOF, Secured Party and Debtor have each signed this Agreement as
of the day and year first above written.
XXXXXX FINANCIAL, INC. DA CONSULTING GROUP, INC.
a Delaware corporation a Texas corporation
By: /s/ XXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXXX
------------------------------ ------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
---------------------------- ----------------------------
Title: Vice President Title: CFO, EVP Finance & Administration
--------------------------- ---------------------------
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