EXECUTION COPY
Exhibit 10.7
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT, dated as of July 28, 2008 (as
amended, restated, supplemented or otherwise modified, this "AGREEMENT") made by
RAPTOR NETWORKS TECHNOLOGY, INC., a Colorado corporation (the "COMPANY"), and
the undersigned subsidiaries of the Company (each a "GRANTOR" and collectively
and together with the Company, the "GRANTORS"), in favor of CASTLERIGG MASTER
INVESTMENTS LTD., a company organized under the laws of the British Virgin
Islands, in its capacity as collateral agent (in such capacity, the "COLLATERAL
AGENT") party to the Securities Purchase Agreements referred to below.
W I T N E S S E T H:
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WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the 2006 SPA referred to below (collectively, the "2006
BUYERS") are parties to a Securities Purchase Agreement, dated as of July 30,
2006 (as amended, restated, supplemented or otherwise modified from time to
time, the "2006 SPA") pursuant to which the Company has sold, and the 2006
Buyers have purchased, the notes issued pursuant thereto (as such notes may be
amended, restated, replaced or otherwise modified from time to time in
accordance with the terms thereof, collectively, the "2006 NOTES");
WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the 2007 SPA referred to below (collectively, the "2007
BUYERS") are parties to a Securities Purchase Agreement, dated as of July 31,
2007 (as amended, restated, supplemented or otherwise modified from time to
time, the "2007 SPA") pursuant to which the Company has sold, and the 2007
Buyers have purchased, the notes issued pursuant thereto (as such notes may be
amended, restated, replaced or otherwise modified from time to time in
accordance with the terms thereof, collectively, the "2007 NOTES");
WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the March 2008 SPA referred to below (collectively, the
"MARCH 2008 BUYERS") are parties to the Securities Purchase Agreement, dated as
of March 31, 2008 (as amended, restated, supplemented or otherwise modified from
time to time, the "MARCH 2008 SPA"), pursuant to which the Company has sold, and
the March 2008 Buyers have purchased, the notes issued pursuant thereto (as such
notes may be amended, restated, replaced or otherwise modified from time to time
in accordance with the terms thereof, collectively, the "MARCH 2008 NOTES");
WHEREAS, in connection with the March 2008 SPA and the 2007 SPA and to
secure the 2007 Notes and the March 2008 Notes issued thereunder, (a) each
Grantor (other than the Company) has executed and delivered the Guaranty, dated
as of March 31, 2008 (the "ORIGINAL GUARANTY"), pursuant to which such Grantor
has guaranteed all of the obligations (collectively, the "ORIGINAL SECURED
OBLIGATIONS") of the Company under the 2007 SPA and the March 2008 SPA and the
other "Transaction Documents" (as such term is defined in each of the 2007 SPA
and the March 2008 SPA; such Transaction Documents as amended, restated,
supplemented or otherwise modified, are hereinafter referred to as the "ORIGINAL
SECURED TRANSACTION DOCUMENTS"), (b) each Grantor has executed and delivered the
Pledge Agreement, dated as of March 31, 2008 (the "ORIGINAL PLEDGE AGREEMENT"),
pursuant to which such Grantor has granted to the Collateral Agent, for the
benefit of the 2007 Buyers and the March 2008 Buyers, a perfected first priority
security interest in and a lien on the Collateral described in the Original
Pledge Agreement and (c) each Grantor has executed and delivered the Security
Agreement, dated as of March 31, 2008 (the "ORIGINAL SECURITY AGREEMENT" and,
together with the Original Guaranty and the Original Pledge Agreement,
collectively, the "ORIGINAL SECURITY DOCUMENTS"), pursuant to which such Grantor
has granted to the Collateral Agent, for the benefit of the 2007 Buyers and the
March 2008 Buyers, a perfected first priority security interest in and a lien on
the Collateral described in the Original Security Agreement;
WHEREAS, it being the intention of the parties hereto that (a) the
Original Secured Obligations outstanding as of the date hereof shall continue
and remain in effect pursuant to the Original Secured Transaction Documents (as
amended hereby) and (b) the Notes (as defined below) will rank senior to all
outstanding and future indebtedness of the Grantors;
WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the July 2008 SPA referred to below (collectively, the
"JULY 2008 BUYERS" and, together with the 2006 Buyers, the 2007 Buyers and the
March 2008 Buyers, each a "BUYER" and collectively, the "BUYERS") intend to
enter into that certain Securities Purchase Agreement, dated as of July __, 2008
(as amended, restated, supplemented or otherwise modified from time to time, the
"JULY 2008 SPA" and, together with the 2006 SPA, the 2007 SPA and the March 2008
SPA, each a "PURCHASE AGREEMENT", and collectively the "PURCHASE AGREEMENTS"),
pursuant to which the Company will sell, and the 2008 Buyers will purchase, the
notes issued pursuant thereto (as such notes may be amended, restated, replaced
or otherwise modified from time to time in accordance with the terms thereof,
collectively, the "JULY 2008 NOTES" and, together with the 2006 Notes, the 2007
Notes and the March 2008 Notes, each a "NOTE" and collectively, the "NOTES");
WHEREAS, it is a condition precedent to the July 2008 Buyers purchasing
the July 2008 Notes that (a) each Original Security Document shall have been
amended and restated in its entirety to secure the Original Secured Obligations
as well as all of the Company's obligations under the 2006 SPA, the 2006 Notes,
the July 2008 SPA, the July 2008 Notes and the other "Transaction Documents" (as
defined in the July 2008 SPA, such Transaction Documents, as amended, restated,
supplemented or otherwise modified, together with the Original Secured
Transaction Documents, collectively the "TRANSACTION DOCUMENTS") and (b) each of
the Grantors and, with respect to the Security Agreement and the Pledge
Agreement referred to below, the Company shall have executed and delivered to
the Collateral Agent for the benefit of itself and the Buyers (i) this
Agreement, which amends and restates the Original Security Agreement, granting
the Collateral Agent a perfected first priority security interest in, and a lien
on, such Grantor's interest in the Collateral (as defined below), (ii) the
Amended and Restated Guaranty, dated as of the date hereof (as amended,
restated, supplemented or otherwise modified, the "GUARANTY"), amending and
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restating the Original Guaranty and guaranteeing all present and future
obligations of the Company under the Purchase Agreements, the Notes and the
other Transaction Documents and (iii) the Amended and Restated Pledge Agreement,
dated as of the date hereof (as amended, restated, supplemented or otherwise
modified, the "PLEDGE AGREEMENT"), amending and restating the Original Pledge
Agreement and granting the Collateral Agent a perfected first priority security
interest in, and a lien on, such Grantor's personal property described in the
Pledge Agreement;
WHEREAS, the Grantors are mutually dependent on each other in the
conduct of their respective businesses as an integrated operation, with the
credit needed from time to time by each Grantor often being provided through
financing obtained by the other Grantors and the ability to obtain such
financing being dependent on the successful operations of all of the Grantors as
a whole; and
WHEREAS, each Grantor has determined that the execution, delivery and
performance of this Agreement directly benefits, and is in the best interest of,
such Grantor.
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Buyers to perform under the Purchase
Agreements, each Grantor agrees with the Collateral Agent, for the benefit of
the Buyers, as follows:
SECTION 1. DEFINITIONS.
(a) Reference is hereby made to the Purchase Agreements and the Notes
for a statement of the terms thereof. All capitalized terms used in this
Agreement and the recitals hereto which are defined in the Purchase Agreements,
the Notes or in Articles 8 or 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York (the "CODE"), and which are not otherwise
defined herein shall have the same meanings herein as set forth therein;
PROVIDED that terms used herein which are defined in the Code as in effect in
the State of New York on the date hereof shall continue to have the same meaning
notwithstanding any replacement or amendment of such statute.
(b) The following terms shall have the respective meanings provided for
in the Code: "Accounts", "Cash Proceeds", "Chattel Paper", "Commercial Tort
Claim", "Commodity Account", "Commodity Contracts", "Deposit Account",
"Documents", "Equipment", "Fixtures", "General Intangibles", "Goods",
"Instruments", "Inventory", "Investment Property", "Letter-of-Credit Rights",
"Noncash Proceeds", "Payment Intangibles", "Proceeds", "Promissory Notes",
"Security", "Record", "Security Account", "Software", and "Supporting
Obligations".
(c) As used in this Agreement, the following terms shall have the
respective meanings indicated below, such meanings to be applicable equally to
both the singular and plural forms of such terms:
"CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
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"COPYRIGHT LICENSES" means all licenses, contracts or other agreements,
whether written or oral, naming any Grantor as licensee or licensor and
providing for the grant of any right to use or sell any works covered by any
Copyright (including, without limitation, all Copyright Licenses set forth in
SCHEDULE II hereto).
"COPYRIGHTS" means all domestic and foreign copyrights, whether
registered or not, including, without limitation, all copyright rights
throughout the universe (whether now or hereafter arising) in any and all media
(whether now or hereafter developed), in and to all original works of authorship
fixed in any tangible medium of expression, acquired or used by any Grantor
(including, without limitation, all copyrights described in SCHEDULE II hereto),
all applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States or any
other country or any political subdivision thereof), and all reissues,
divisions, continuations, continuations in part and extensions or renewals
thereof.
"EVENT OF DEFAULT" shall have the meaning set forth in the Notes.
"GOVERNMENTAL AUTHORITY" means any nation or government, any Federal,
state, city, town, municipality, county, local or other political subdivision
thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code (Chapter 11 of Title 11 of
the United States Code) or under any other bankruptcy or insolvency law,
assignments for the benefit of creditors, formal or informal moratoria,
compositions, or extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.
"INTELLECTUAL PROPERTY" means the Copyrights, Trademarks and Patents.
"LICENSES" means the Copyright Licenses, the Trademark Licenses and the
Patent Licenses.
"LIEN" means any mortgage, lien, pledge, charge, security interest or
other encumbrance upon or in any Collateral (including accounts and contract
rights).
"PATENT LICENSES" means all licenses, contracts or other agreements,
whether written or oral, naming any Grantor as licensee or licensor and
providing for the grant of any right to manufacture, use or sell any invention
covered by any Patent (including, without limitation, all Patent Licenses set
forth in SCHEDULE II hereto).
"PATENTS" means all domestic and foreign letters patent, design
patents, utility patents, industrial designs, inventions, trade secrets, ideas,
concepts, methods, techniques, processes, proprietary information, technology,
know-how, formulae, rights of publicity and other general intangibles of like
nature, now existing or hereafter acquired (including, without limitation, all
domestic and foreign letters patent, design patents, utility patents, industrial
designs, inventions, trade secrets, ideas, concepts, methods, techniques,
processes, proprietary information, technology, know-how and formulae described
in SCHEDULE II hereto), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office, or in any similar office or
agency of the United States or any other country or any political subdivision
thereof), and all reissues, divisions, continuations, continuations in part and
extensions or renewals thereof.
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"PERSON" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
"SATISFACTION IN FULL OF THE OBLIGATIONS" means the satisfaction in
full of all indebtedness and other obligations owed by the Company to the Buyers
under the Notes and the other Transaction Documents (including, without
limitation, all principal, interest (including, without limitation, all interest
that accrues after the commencement of any Insolvency Proceeding of any Grantor,
whether or not the payment of such interest is unenforceable or is not allowable
due to the existence of such Insolvency Proceeding), and fees, but excluding
obligations under the Transaction Documents (other than the Notes) that may
arise after the payment or satisfaction in full of the Notes) by means of cash
payment, conversion into equity securities of the Company, waiver of obligations
by the Buyers, proceeds from Collateral paid to or retained by Buyers in
accordance with the Transaction Documents, and/or such other satisfaction as may
be contemplated by the Notes or the other Transaction Documents or as otherwise
agreed to by the Buyers, or any combination of the foregoing, in each case in
accordance with the Notes or the applicable Transaction Documents.
"TRADEMARK LICENSES" means all licenses, contracts or other agreements,
whether written or oral, naming any Grantor as licensor or licensee and
providing for the grant of any right concerning any Trademark, together with any
goodwill connected with and symbolized by any such trademark licenses, contracts
or agreements and the right to prepare for sale or lease and sell or lease any
and all Inventory now or hereafter owned by any Grantor and now or hereafter
covered by such licenses (including, without limitation, all Trademark Licenses
described in SCHEDULE II hereto).
"TRADEMARKS" means all domestic and foreign trademarks, service marks,
collective marks, certification marks, trade names, business names, d/b/a's,
Internet domain names, trade styles, designs, logos and other source or business
identifiers and all general intangibles of like nature, now or hereafter owned,
adopted, acquired or used by any Grantor (including, without limitation, all
domestic and foreign trademarks, service marks, collective marks, certification
marks, trade names, business names, d/b/a's, Internet domain names, trade
styles, designs, logos and other source or business identifiers described in
SCHEDULE II hereto), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state thereof or any other country or any political
subdivision thereof), and all reissues, extensions or renewals thereof, together
with all goodwill of the business symbolized by such marks and all customer
lists, formulae and other Records of any Grantor relating to the distribution of
products and services in connection with which any of such marks are used.
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SECTION 2. GRANT OF SECURITY INTEREST. As collateral security for all
of the "Obligations" (as defined in SECTION 3 hereof), each Grantor hereby
pledges and assigns to the Collateral Agent for the benefit of the Buyers, and
grants to the Collateral Agent for the benefit of the Buyers a continuing
security interest in, all personal property of each Grantor, wherever located
and whether now or hereafter existing and whether now owned or hereafter
acquired, of every kind and description, tangible or intangible (collectively,
the "COLLATERAL"), including, without limitation, the following:
(a) all Accounts;
(b) all Chattel Paper (whether tangible or electronic);
(c) the Commercial Tort Claims specified on Schedule VI hereto;
(d) all Deposit Accounts, all cash and other property from time to time
deposited therein and the monies and property in the possession or under the
control of the Collateral Agent or any Buyer or any affiliate, representative,
agent or correspondent of the Collateral Agent or such Buyer;
(e) all Documents;
(f) all Equipment;
(g) all Fixtures;
(h) all General Intangibles (including, without limitation, all Payment
Intangibles);
(i) all Goods
(j) all Instruments (including, without limitation, Promissory Notes
and each certificated Security);
(k) all Inventory;
(l) all Investment Property;
(m) all Copyrights, Patents and Trademarks, and all Licenses;
(n) all Letter-of-Credit Rights;
(o) all Supporting Obligations;
(p) all other tangible and intangible personal property of each Grantor
(whether or not subject to the Code), including, without limitation, all bank
and other accounts and all cash and all investments therein, all proceeds,
products, offspring, accessions, rents, profits, income, benefits, substitutions
and replacements of and to any of the property of any Grantor described in the
preceding clauses of this Section 2 (including, without limitation, any proceeds
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of insurance thereon and all causes of action, claims and warranties now or
hereafter held by each Grantor in respect of any of the items listed above), and
all books, correspondence, files and other Records, including, without
limitation, all tapes, desks, cards, Software, data and computer programs in the
possession or under the control of any Grantor or any other Person from time to
time acting for any Grantor, in each case, to the extent of such Grantors rights
therein, that at any time evidence or contain information relating to any of the
property described in the preceding clauses of this Section 2 or are otherwise
necessary or helpful in the collection or realization thereof; and
(q) all Proceeds, including all Cash Proceeds and Noncash Proceeds, and
products of any and all of the foregoing Collateral;
in each case howsoever any Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).
Notwithstanding anything herein to the contrary, the term "COLLATERAL" shall not
include, in the case of a Subsidiary (as defined in the Purchase Agreements) of
such Grantor organized under the laws of a jurisdiction other than the United
States, any of the states thereof or the District of Columbia (a "FOREIGN
SUBSIDIARY"), more than 65% (or such greater percentage that, due to a change in
applicable law after the date hereof, (i) would not reasonably be expected to
cause the undistributed earnings of such Foreign Subsidiary as determined for
United States federal income tax purposes to be treated as a deemed dividend to
such Foreign Subsidiary's United States parent and (ii) would not reasonably be
expected to cause any material adverse tax consequences) of the issued and
outstanding shares of Capital Stock entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) (it being understood and agreed that the
Collateral shall include 100% of the issued and outstanding shares of Capital
Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) or other equity interest of such Foreign Subsidiary).
The Grantors agree that the pledge of the shares of Capital Stock acquired by a
Grantor of any and all Persons now or hereafter existing who is a Foreign
Subsidiary may be supplemented by one or more separate pledge agreements, deeds
of pledge, share charges, or other similar agreements or instruments, executed
and delivered by the relevant Grantors in favor of the Collateral Agent, which
pledge agreements will provide for the pledge of such shares of Capital Stock in
accordance with the laws of the applicable foreign jurisdiction. With respect to
such shares of Capital Stock, the Collateral Agent may, at any time and from
time to time, in its sole discretion, take actions in such foreign jurisdictions
that will result in the perfection of the Lien created in such shares of Capital
Stock.
SECTION 3. SECURITY FOR OBLIGATIONS. The security interest created
hereby in the Collateral constitutes continuing collateral security for all of
the following obligations, whether now existing or hereafter incurred
(collectively, the "OBLIGATIONS"):
(a) Until the Satisfaction in Full of the Obligations, (i) the payment
by the Company, as and when due and payable (by scheduled maturity, required
prepayment, acceleration, demand or otherwise in accordance with the terms of
the Notes), of all amounts from time to time owing by it in respect of the
Purchase Agreements, the Notes and the other Transaction Documents, and (ii) in
the case of any Guarantors, the payment by such Grantors, as and when due and
payable of all "Guaranteed Obligations" under (and as defined in) the Guaranty,
including, without limitation, in both cases, (A) all principal of and interest
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on the Notes (including, without limitation, all interest that accrues after the
commencement of any Insolvency Proceeding of any Grantor, whether or not the
payment of such interest is unenforceable or is not allowable due to the
existence of such Insolvency Proceeding), and (B) all fees, commissions, expense
reimbursements, indemnifications and all other amounts due or to become due
under any of the Transaction Documents; and
(b) Until the Satisfaction in Full of the Obligations, the due
performance and observance by each Grantor of all of its other obligations from
time to time existing in respect of any of the Transaction Documents, including
without limitation, with respect to any conversion or redemption rights of the
Buyers under the Notes.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and
warrants as of the date of this Agreement as follows:
(a) Each Grantor (i) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing under
the laws of the state or jurisdiction of its organization, and (ii) has all
corporate, limited liability company or limited partnership power and authority
to execute, deliver and perform this Agreement.
(b) The execution, delivery and performance by each Grantor of this
Agreement (i) have been duly authorized by all necessary corporate, limited
liability company or limited partnership action, (ii) do not and will not
contravene its charter or bylaws, its limited liability company or operating
agreement or its certificate of partnership or partnership agreement, as
applicable, or any applicable law or any contractual restriction binding on or
affecting it or any of its properties, and (iii) do not and will not result in
or require the creation of any Lien upon or with respect to any of its
properties other than pursuant to this Agreement or the other Transaction
Documents.
(c) SCHEDULE I hereto sets forth (i) the exact legal name of each
Grantor, and (ii) the state of incorporation, organization or formation and the
organizational identification number of each Grantor in such state.
(d) There is no pending or written notice threatening any action, suit,
proceeding or claim affecting any Guarantor before any Governmental Authority or
any arbitrator, or any order, judgment or award issued by any Governmental
Authority or arbitrator, in each case, that may adversely affect the grant by
any Grantor, or the perfection, of the security interest purported to be created
hereby in the Collateral, or the exercise by the Collateral Agent of any of its
rights or remedies hereunder.
(e) All Federal, state and local tax returns and other reports required
by applicable law to be filed by any Grantor have been filed, or extensions have
been obtained, and all taxes, assessments and other governmental charges imposed
upon any Grantor or any property of any Grantor (including, without limitation,
all federal income and social security taxes on employees' wages) and which have
become due and payable on or prior to the date hereof have been paid, except to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof in accordance with generally accepted accounting principles consistently
applied ("GAAP").
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(f) All Equipment, Fixtures, Goods and Inventory of each Grantor now
existing are, and, unless otherwise permitted by this Agreement, all Equipment,
Fixtures, Goods and Inventory of each Grantor hereafter existing will be,
located and/or based at the addresses specified therefor in Schedule III hereto.
Each Grantor's chief place of business and chief executive office, the place
where each Grantor keeps its Records concerning Accounts and all originals of
all Chattel Paper are located at the addresses specified therefor in Schedule
III hereto. None of the Accounts is evidenced by Promissory Notes or other
Instruments. Set forth in Schedule IV hereto is a complete and accurate list, as
of the date of this Agreement, of (i) each Promissory Note, Security and other
Instrument owned by each Grantor and (ii) each Deposit Account, Securities
Account and Commodities Account of each Grantor, together with the name and
address of each institution at which each such account is maintained, the
account number for each such account and a description of the purpose of each
such account. Set forth in Schedule II hereto is a complete and correct list of
each trade name used by each Grantor.
(g) Each Grantor has delivered to the Collateral Agent complete and
correct copies of each License described in Schedule II hereto, including all
schedules and exhibits thereto, which represents all of the Licenses existing on
the date of this Agreement. Each such License sets forth the entire agreement
and understanding of the parties thereto relating to the subject matter thereof,
and there are no other agreements, arrangements or understandings, written or
oral, relating to the matters covered thereby or the rights of such Grantor or
any of its affiliates in respect thereof. Each material License now existing is,
and any material License entered into in the future will be, the legal, valid
and binding obligation of the parties thereto, enforceable against such parties
in accordance with its terms. No default under any material License by any such
party has occurred, nor does any defense, offset, deduction or counterclaim
exist thereunder in favor of any such party.
(h) Each Grantor owns and controls, or otherwise possesses adequate
rights to use, all Trademarks, Patents and Copyrights, which are the only
trademarks, patents, copyrights, inventions, trade secrets, proprietary
information and technology, know-how, formulae, rights of publicity necessary to
conduct its business in substantially the same manner as conducted as of the
date hereof. Schedule II hereto sets forth a true and complete list of all
registered copyrights, issued Patents, Trademarks, and Licenses owned or used by
each Grantor as of the date hereof. To the best knowledge of each Grantor, all
such Intellectual Property of each Grantor is subsisting and in full force and
effect, has not been adjudged invalid or unenforceable, is valid and enforceable
and has not been abandoned in whole or in part. Except as set forth in Schedule
II, no such Intellectual Property is the subject of any licensing or franchising
agreement. No Grantor has any knowledge of any conflict with the rights of
others to any such Intellectual Property and, to the best knowledge of each
Grantor, each Grantor is not now infringing or in conflict with any such rights
of others in any material respect, and to the best knowledge of each Grantor, no
other Person is now infringing or in conflict in any material respect with any
such properties, assets and rights owned or used by each Grantor. No Grantor has
received any notice that it is violating or has violated the trademarks,
patents, copyrights, inventions, trade secrets, proprietary information and
technology, know-how, formulae, rights of publicity or other intellectual
property rights of any third party.
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(i) Each Grantor is the sole and exclusive owner of, or otherwise has
and will have adequate rights in, the Collateral free and clear of any Liens. No
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording or filing office
except such as (i) may have been filed in favor of the Collateral Agent and/or
the Buyers relating to this Agreement or the other Transaction Documents or (ii)
are described on SCHEDULE 4(i) hereto.
(j) The exercise by the Collateral Agent of any of its rights and
remedies hereunder will not contravene any law or any contractual restriction
binding on or otherwise affecting each Grantor or any of its properties and will
not result in or require the creation of any Lien, upon or with respect to any
of its properties, other than Liens created by this Agreement or the other
Transaction Documents.
(k) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority, is required for (i) the grant by
each Grantor, or the perfection, of the security interest purported to be
created hereby in the Collateral, or (ii) the exercise by the Collateral Agent
of any of its rights and remedies hereunder, except for the filing under the
Uniform Commercial Code as in effect in the applicable jurisdiction of the
financing statements described in SCHEDULE V hereto (or a new SCHEDULE V
delivered by the Grantors to the Collateral Agent from time to time).
(l) This Agreement creates in favor of the Collateral Agent a legal,
valid and enforceable security interest in the Collateral, as security for the
Obligations. The filings described in clause (k) above result in the perfection
of such security interests. Such security interests are, or in the case of
Collateral in which each Grantor obtains rights after the date hereof, will be,
perfected, first priority security interests, subject only to (A) the filing
under the Uniform Commercial Code described in clause (k) above, (B) with
respect to Deposit Accounts, and all cash and other property from time to time
deposited therein, for the execution of a control agreement with the depository
institution with which such account is maintained, as provided in SECTION 5(i),
(C) with respect to Commodity Contracts, for the execution of a control
agreement with the commodity intermediary with which such commodity contract is
carried, as provided in SECTION 5(i), (D) with respect to the perfection of the
security interest created hereby in the United States Intellectual Property and
Licenses, for the recording of the appropriate Assignment for Security,
substantially in the form of EXHIBIT A hereto in the United States Patent and
Trademark Office or the United States Copyright Office, as applicable, (E) with
respect to the perfection of the security interest created hereby in foreign
Intellectual Property and Licenses, for registrations and filings in
jurisdictions located outside of the United States and covering rights in such
jurisdictions relating to such foreign Intellectual Property and Licenses, (F)
with respect to the perfection of the security interest created hereby in Titled
Collateral, for the submission of an appropriate application requesting that the
Lien of the Collateral Agent be noted on the Certificate of Title or certificate
of ownership, completed and authenticated by the applicable Grantor, together
with the Certificate of Title or certificate of ownership, with respect to such
Titled Collateral, to the appropriate Governmental Authority, (G) with respect
to the perfection of the security interest created hereby in any
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Letter-of-Credit Rights, for the consent of the issuer of the applicable letter
of credit to the assignment of proceeds as provided in the Uniform Commercial
Code as in effect in the applicable jurisdiction, (H) with respect to any action
that may be necessary to obtain control of Collateral constituting Deposit
Accounts, Commodity Contracts, Electronic Chattel Paper, Investment Property or
Letter-of-Credit Rights, the taking of such actions, and (I) the Collateral
Agent having possession of all Documents, Chattel Paper, Instruments and cash
constituting Collateral (subclauses (A), (B), (C), (D), (E), (F), G), (H) and
(I), each a "PERFECTION REQUIREMENT" and collectively, the "PERFECTION
REQUIREMENTS"). Such recordings and filings and all other action necessary to
perfect and protect such security interest have been duly taken or will be taken
pursuant to Section 5(m), and, in the case of Collateral in which each Grantor
obtains rights after the date hereof, will be duly taken, except for the
Collateral Agent's having possession of all Documents, Chattel Paper,
Instruments and cash constituting Collateral after the date hereof and the other
actions, filings and recordations described above, including the Perfection
Requirements.
(m) As of the date hereof, no Grantor holds any Commercial Tort Claims
or has knowledge of any pending Commercial Tort Claims, except for such
Commercial Tort Claims described in SCHEDULE VI.
SECTION 5. COVENANTS AS TO THE COLLATERAL. Until the Satisfaction in
Full of the Obligations, unless the Collateral Agent shall otherwise consent in
writing:
(a) FURTHER ASSURANCES. Each Grantor will at its expense, at any time
and from time to time, promptly execute and deliver all further instruments and
documents and take all further action that the Collateral Agent may reasonably
request in order to: (i) perfect and protect the security interest purported to
be created hereby; (ii) enable the Collateral Agent to exercise and enforce its
rights and remedies hereunder in respect of the Collateral; or (iii) otherwise
effect the purposes of this Agreement, including, without limitation: (A)
marking conspicuously all Chattel Paper and each License and, at the request of
the Collateral Agent, each of its Records pertaining to the Collateral with a
legend, in form and substance satisfactory to the Collateral Agent, indicating
that such Chattel Paper, License or Collateral is subject to the security
interest created hereby, (B) delivering and pledging to the Collateral Agent
each Promissory Note, Security, Chattel Paper or other Instrument, now or
hereafter owned by any Grantor, duly endorsed and accompanied by executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to the Collateral Agent, (C) executing and filing (to the extent,
if any, that any Grantor's signature is required thereon) or authenticating the
filing of, such financing or continuation statements, or amendments thereto, as
may be necessary or that the Collateral Agent may reasonably request in order to
perfect and preserve the security interest purported to be created hereby, (D)
furnishing to the Collateral Agent from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral in each case as the Collateral Agent may
reasonably request, all in reasonable detail, (E) if any Collateral shall be in
the possession of a third party, notifying such Person of the Collateral Agent's
security interest created hereby and obtaining a written acknowledgment from
such Person that such Person holds possession of the Collateral for the benefit
of the Collateral Agent, which such written acknowledgement shall be in form and
substance reasonably satisfactory to the Collateral Agent, (F) if at any time
after the date hereof, any Grantor acquires or holds any Commercial Tort Claim,
promptly notifying the Collateral Agent in a writing signed by such Grantor
setting forth a brief description of such Commercial Tort Claim and granting to
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the Collateral Agent a security interest therein and in the proceeds thereof,
which writing shall incorporate the provisions hereof and shall be in form and
substance satisfactory to the Collateral Agent, (G) upon the acquisition after
the date hereof by any Grantor of any motor vehicle or other Equipment subject
to a certificate of title or ownership (other than a Motor Vehicle or Equipment
that is subject to a purchase money security interest), causing the Collateral
Agent to be listed as the lienholder on such certificate of title or ownership
and delivering evidence of the same to the Collateral Agent in accordance with
Section 5(j) hereof; and (H) taking all actions required by any earlier versions
of the Uniform Commercial Code or by other law, as applicable, in any relevant
Uniform Commercial Code jurisdiction, or by other law as applicable in any
foreign jurisdiction.
(b) LOCATION OF EQUIPMENT AND INVENTORY. Each Grantor will keep the
Equipment and Inventory (i) at the locations specified therefor on Schedule III
hereto, (ii) at such other locations set forth on Schedule III (or a new
Schedule III delivered by the Grantors to Collateral Agent from time to time)
and with respect to which the Collateral Agent has filed financing statements
and otherwise fully perfected its Liens thereon, (iii) at such locations as
Equipment and/or Inventory may be shipped in accordance with the Company's
historical practice of allowing current or prospective clients to test products
prior to making a determination on whether or not to purchase such products or
(iv) at such other locations in the United States, provided that within 30 days
following the relocation of Equipment or Inventory to such other location or the
acquisition of Equipment or Inventory, such Grantor shall deliver to the
Collateral Agent a new Schedule III indicating such new locations.
(c) CONDITION OF EQUIPMENT AND OWNERSHIP OF COLLATERAL. (i) Each
Grantor will maintain or cause the Equipment (necessary or useful to its
business) to be maintained and preserved in good condition, repair and working
order, ordinary wear and tear excepted, and will forthwith, or in the case of
any loss or damage to any Equipment of any Grantor within a commercially
reasonable time after the occurrence thereof, make or cause to be made all
repairs, replacements and other improvements in connection therewith which are
necessary or desirable, consistent with past practice, or which the Collateral
Agent may reasonably request to such end. Any Grantor will promptly furnish to
the Collateral Agent a statement describing in reasonable detail any such loss
or damage in excess of $100,000 per occurrence to any Equipment.
(ii) Each Grantor will be at all time the sole and exclusive owner
of, or otherwise will have adequate rights in, the Collateral free and clear of
any Liens other than Permitted Liens.
(d) TAXES, ETC. Each Grantor agrees to pay promptly when due all
property and other taxes, assessments and governmental charges or levies imposed
upon, and all claims (including claims for labor, materials and supplies)
against, the Equipment and Inventory, except to the extent the validity thereof
is being contested in good faith by proper proceedings which stay the imposition
of any penalty, fine or Lien resulting from the non-payment thereof and with
respect to which adequate reserves in accordance with GAAP have been set aside
for the payment thereof.
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(e) INSURANCE.
(i) Each Grantor will, at its own expense, maintain insurance
(including, without limitation, commercial general liability and property
insurance) with respect to its assets in such amounts, against such risks, in
such form and with responsible and reputable insurance companies or associations
as is required by any Governmental Authority having jurisdiction with respect
thereto or as is carried generally in accordance with sound business practice by
companies in similar businesses similarly situated and in any event, in amount,
adequacy and scope reasonably satisfactory to the Collateral Agent. To the
extent requested by the Collateral Agent at any time and from time to time, each
such policy for liability insurance shall provide for all losses to be paid on
behalf of the Collateral Agent and any Grantor as their respective interests may
appear, and each policy for property damage insurance shall provide for all
losses to be adjusted with, and paid directly to, the Collateral Agent. To the
extent requested by the Collateral Agent at any time and from time to time, each
such policy shall in addition (A) name the Collateral Agent as an additional
insured party thereunder (without any representation or warranty by or
obligation upon the Collateral Agent) as their interests may appear, (B) contain
an agreement by the insurer that any loss thereunder shall be payable to the
Collateral Agent on its own account notwithstanding any action, inaction or
breach of representation or warranty by any Grantor, (C) provide that there
shall be no recourse against the Collateral Agent for payment of premiums or
other amounts with respect thereto, and (D) provide that at least 30 days' prior
written notice of cancellation, lapse, expiration or other adverse change shall
be given to the Collateral Agent by the insurer. Any Grantor will, if so
requested by the Collateral Agent, deliver to the Collateral Agent original or
duplicate policies of such insurance and, as often as the Collateral Agent may
reasonably request, a report of a reputable insurance broker with respect to
such insurance. Any Grantor will also, at the request of the Collateral Agent,
execute and deliver instruments of assignment of such insurance policies and
cause the respective insurers to acknowledge notice of such assignment.
(ii) Reimbursement under any liability insurance maintained by any
Grantor pursuant to this Section 5(e) may be paid directly to the Person who
shall have incurred liability covered by such insurance. Following an Event of
Default, in the case of any loss involving damage to Equipment or Inventory, any
proceeds of insurance maintained by any Grantor pursuant to this Section 5(e)
shall be paid to the Collateral Agent (except as to which paragraph (iii) of
this Section 5(e) is not applicable), any Grantor will make or cause to be made
the necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance maintained by any Grantor pursuant to this Section 5(e)
shall promptly be paid by the Collateral Agent to any Grantor as reimbursement
for the costs of such repairs or replacements.
(iii) Following and during the continuance of an Event of Default,
all insurance payments in respect of such Equipment, Inventory or any other
assets shall be paid to the Collateral Agent and applied as specified in SECTION
7(b) hereof.
(f) PROVISIONS CONCERNING THE ACCOUNTS AND THE LICENSES.
(i) Each Grantor will (A) give the Collateral Agent at least 30
days' prior written notice of any change in such Grantor's name, identity or
organizational structure, (B) maintain its jurisdiction of incorporation,
organization or formation as set forth in Schedule I hereto, (C) immediately
notify the Collateral Agent upon obtaining an organizational identification
number, if on the date hereof such Grantor did not have such identification
number, and (D) keep adequate records concerning the Accounts and Chattel Paper.
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(ii) Each Grantor will, except as otherwise provided in this
subsection (f), continue to collect, at its own expense, all amounts due or to
become due under the Accounts. In connection with such collections, any Grantor
may (and, at the Collateral Agent's direction, will) take such action as any
Grantor or the Collateral Agent may reasonably deem necessary or advisable to
enforce collection or performance of the Accounts; provided, however, that the
Collateral Agent shall have the right at any time, upon the occurrence and
during the continuance of an Event of Default, to notify the account debtors or
obligors under any Accounts of the assignment of such Accounts to the Collateral
Agent and to direct such account debtors or obligors to make payment of all
amounts due or to become due to any Grantor thereunder directly to the
Collateral Agent or its designated agent and, upon such notification and at the
expense of any Grantor and to the extent permitted by law, to enforce collection
of any such Accounts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as any Grantor might have
done. After receipt by any Grantor of a notice from the Collateral Agent that
the Collateral Agent has notified, intends to notify, or has enforced or intends
to enforce any Grantor's rights against the account debtors or obligors under
any Accounts as referred to in the proviso to the immediately preceding
sentence, (A) all amounts and proceeds (including Instruments) received by any
Grantor in respect of the Accounts shall be received in trust for the benefit of
the Collateral Agent hereunder, shall be segregated from other funds of any
Grantor and shall be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary endorsement) to be applied as specified
in Section 7(b) hereof, and (B) no Grantor will adjust, settle or compromise the
amount or payment of any Account or release wholly or partly any account debtor
or obligor thereof or allow any credit or discount thereon. In addition, upon
the occurrence and during the continuance of an Event of Default, the Collateral
Agent may (in its sole and absolute discretion) direct any or all of the banks
and financial institutions with which any Grantor either maintains a Deposit
Account or a lockbox or deposits the proceeds of any Accounts to send
immediately to the Collateral Agent by wire transfer (to such account as the
Collateral Agent shall specify, or in such other manner as the Collateral Agent
shall direct) all or a portion of such securities, cash, investments and other
items held by such institution. Any such securities, cash, investments and other
items so received by the Collateral Agent shall be applied as specified in
accordance with Section 7(b) hereof.
(iii) Upon the occurrence and during the continuance of any breach
or default under any material License referred to in Schedule II hereto by any
party thereto other than any Grantor, each Grantor party thereto will, promptly
after obtaining knowledge thereof, give the Collateral Agent written notice of
the nature and duration thereof, specifying what action, if any, it has taken
and proposes to take with respect thereto and thereafter will take reasonable
steps to protect and preserve its rights and remedies in respect of such breach
or default, or will obtain or acquire an appropriate substitute License.
(iv) Each Grantor will, at its expense, promptly deliver to the
Collateral Agent a copy of each notice or other communication received by it by
which any other party to any material License referred to in Schedule II hereto
purports to exercise any of its rights or affect any of its obligations
thereunder, together with a copy of any reply by such Grantor thereto.
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(v) Each Grantor will exercise promptly and diligently each and
every right which it may have under each material License (other than any right
of termination) and will duly perform and observe in all respects all of its
obligations under each material License and will take all action reasonably
necessary to maintain such Licenses in full force and effect. No Grantor will,
without the prior written consent of the Collateral Agent, cancel, terminate,
amend or otherwise modify in any respect, or waive any provision of, any
material License referred to in Schedule II hereto.
(g) TRANSFERS AND OTHER LIENS.
(i) Except as expressly permitted by the Purchase Agreements or
the other Transaction Documents, no Grantor will sell, assign (by operation of
law or otherwise), lease, license, exchange or otherwise transfer or dispose of
any of the Collateral, except (A) Inventory in the ordinary course of business,
and (B) worn out or obsolete assets, not necessary to the business.
(ii) Except as expressly permitted by the Purchase Agreements or
the other Transaction Documents, no Grantor will create, suffer to exist or
grant any Lien upon or with respect to any Collateral, other than the Liens
created by this Agreement or the other Transaction Documents.
(h) INTELLECTUAL PROPERTY.
(i) If applicable, any Grantor shall, upon the Collateral Agent's
written request, duly execute and deliver the applicable Assignment for Security
in the form attached hereto as Exhibit A. Each Grantor (either itself or through
licensees) will, and will cause each licensee thereof to, take all action
necessary to maintain all of the Intellectual Property in full force and effect,
including, without limitation, using the proper statutory notices and markings
and using the Trademarks on each applicable trademark class of goods in order to
so maintain the Trademarks in full force and free from any claim of abandonment
for non-use, and each Grantor will not (nor knowingly permit any licensee
thereof to) do any act or knowingly omit to do any act whereby any Intellectual
Property may become invalidated; provided, however, that so long as no Event of
Default has occurred and is continuing, no Grantor shall have an obligation to
use or to maintain any Intellectual Property (A) that relates solely to any
product or work, that has been, or is in the process of being, discontinued,
abandoned or terminated, (B) that is being replaced with Intellectual Property
substantially similar to the Intellectual Property that may be abandoned or
otherwise become invalid, so long as the failure to use or maintain such
Intellectual Property does not materially adversely affect the validity of such
replacement Intellectual Property and so long as such replacement Intellectual
Property is subject to the Lien created by this Agreement or (C) that is
substantially the same as another Intellectual Property that is in full force,
so long the failure to use or maintain such Intellectual Property does not
materially adversely affect the validity of such replacement Intellectual
Property and so long as such other Intellectual Property is subject to the Lien
and security interest created by this Agreement. Each Grantor will cause to be
taken all necessary steps in any proceeding before the United States Patent and
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Trademark Office and the United States Copyright Office or any similar office or
agency in any other country or political subdivision thereof to maintain each
registration of the Intellectual Property (other than the Intellectual Property
described in the proviso to the immediately preceding sentence), including,
without limitation, filing of renewals, affidavits of use, affidavits of
incontestability and opposition, interference and cancellation proceedings and
payment of maintenance fees, filing fees, taxes or other governmental fees. If
any Intellectual Property (other than Intellectual Property described in the
proviso to the second sentence of subsection (i) of this clause (h)) is
infringed, misappropriated, diluted or otherwise violated in any material
respect by a third party, each Grantor shall (x) upon learning of such
infringement, misappropriation, dilution or other violation, promptly notify the
Collateral Agent and (y) to the extent any Grantor shall deem appropriate under
the circumstances, promptly xxx for infringement, misappropriation, dilution or
other violation, seek injunctive relief where appropriate and recover any and
all damages for such infringement, misappropriation, dilution or other
violation, or take such other actions as such Grantor shall deem appropriate
under the circumstances to protect such Intellectual Property. Each Grantor
shall furnish to the Collateral Agent from time to time upon its request
statements and schedules further identifying and describing the Intellectual
Property and Licenses and such other reports in connection with the Intellectual
Property and Licenses as the Collateral Agent may reasonably request, all in
reasonable detail and promptly upon request of the Collateral Agent. Following
receipt by the Collateral Agent of any such statements, schedules or reports,
each Grantor shall modify this Agreement by amending Schedule II hereto to
include any Intellectual Property and/or License, as the case may be, which
becomes part of the Collateral under this Agreement and shall execute and
authenticate such documents and do such acts as shall be necessary or, in the
reasonable judgment of the Collateral Agent, desirable to subject such
Intellectual Property and/or Licenses to the Lien and security interest created
by this Agreement. Notwithstanding anything herein to the contrary, upon the
occurrence and during the continuance of an Event of Default, no Grantor may
abandon or otherwise permit any Intellectual Property to become invalid without
the prior written consent of the Collateral Agent, and if any Intellectual
Property is infringed, misappropriated, diluted or otherwise violated in any
material respect by a third party, each Grantor will take such action as the
Collateral Agent shall deem appropriate under the circumstances to protect such
Intellectual Property.
(ii) In no event shall any Grantor, either itself or through any
agent, employee, licensee or designee, file an application for the registration
of any Trademark or Copyright or the issuance of any Patent with the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, or in any similar office or agency of the United States or any
country or any political subdivision thereof unless it gives the Collateral
Agent prior written notice thereof. Upon request of the Collateral Agent, any
Grantor shall execute, authenticate and deliver any and all assignments,
agreements, instruments, documents and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent's security interest
hereunder in such Intellectual Property and the General Intangibles of any
Grantor relating thereto or represented thereby, and each Grantor hereby
appoints the Collateral Agent its attorney-in-fact to execute and/or
authenticate and file all such writings for the foregoing purposes, all acts of
such attorney being hereby ratified and confirmed, and such power (being coupled
with an interest) shall be irrevocable until the Satisfaction in Full of the
Obligations.
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(i) DEPOSIT, COMMODITIES AND SECURITIES ACCOUNTS. Upon the Collateral
Agent's written request, each Grantor shall cause each bank and other financial
institution with an account referred to in SCHEDULE IV hereto to execute and
deliver to the Collateral Agent a control agreement, in form and substance
reasonably satisfactory to the Collateral Agent, duly executed by each Grantor
and such bank or financial institution, or enter into other arrangements in form
and substance satisfactory to the Collateral Agent, pursuant to which such
institution shall irrevocably agree, INTER ALIA, that (i) it will comply at any
time with the instructions originated by the Collateral Agent to such bank or
financial institution directing the disposition of cash, Commodity Contracts,
securities, Investment Property and other items from time to time credited to
such account, without further consent of each Grantor, which instructions the
Collateral Agent will not give to such bank or other financial institution in
the absence of a continuing Event of Default, (ii) all Commodity Contracts,
securities, Investment Property and other items of each Grantor deposited with
such institution shall be subject to a perfected, first priority security
interest in favor of the Collateral Agent, (iii) any right of set off (other
than recoupment of standard fees), banker's Lien or other similar Lien, security
interest or encumbrance shall be fully waived as against the Collateral Agent,
and (iv) upon receipt of written notice from the Collateral Agent during the
continuance of an Event of Default, such bank or financial institution shall
immediately send to the Collateral Agent by wire transfer (to such account as
the Collateral Agent shall specify, or in such other manner as the Collateral
Agent shall direct) all such cash, the value of any Commodity Contracts,
securities, Investment Property and other items held by it. Without the prior
written consent of the Collateral Agent, no Grantor shall make or maintain any
Deposit Account, Commodity Account or Securities Account except for the accounts
set forth in Schedule IV hereto. The provisions of this paragraph 5(i) shall not
apply to (i) Deposit Accounts for which the Collateral Agent is the depositary
and (ii) Deposit Accounts specially and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for the benefit of each
Grantor's salaried or hourly employees.
(j) MOTOR VEHICLES.
(i) Upon the Collateral Agent's written request, each Grantor
shall deliver to the Collateral Agent originals of the certificates of title or
ownership for all motor vehicles owned by such Grantor with a value in excess of
$50,000, with the Collateral Agent listed as lienholder, for the benefit of the
Buyers.
(ii) Each Grantor hereby appoints the Collateral Agent as its
attorney-in-fact, effective the date hereof and terminating upon the termination
of this Agreement, for the purpose of (A) executing on behalf of such Grantor
title or ownership applications for filing with appropriate state agencies to
enable motor vehicles now owned or hereafter acquired by such Grantor to be
retitled and the Collateral Agent listed as lienholder thereof, (B) filing such
applications with such state agencies, and (C) executing such other documents
and instruments on behalf of, and taking such other action in the name of, such
Grantor as the Collateral Agent may reasonably deem necessary or advisable to
accomplish the purposes hereof (including, without limitation, for the purpose
of creating in favor of the Collateral Agent a perfected Lien on the motor
vehicles and exercising the rights and remedies of the Collateral Agent
hereunder). This appointment as attorney-in-fact is coupled with an interest and
is irrevocable until the Satisfaction in Full of the Obligations.
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(iii) Any certificates of title or ownership delivered pursuant to
the terms hereof shall be accompanied by odometer statements for each motor
vehicle covered thereby.
(iv) So long as no Event of Default shall have occurred and be
continuing, upon the request of any Grantor, the Collateral Agent shall execute
and deliver to any Grantor such instruments as any Grantor shall reasonably
request to remove the notation of the Collateral Agent as lienholder on any
certificate of title for any motor vehicle; PROVIDED, HOWEVER, that any such
instruments shall be delivered, and the release effective, only upon receipt by
the Collateral Agent of a certificate from any Grantor stating that such motor
vehicle is to be sold or has suffered a casualty loss (with title thereto in
such case passing to the casualty insurance company therefor in settlement of
the claim for such loss) and the amount that any Grantor will receive as sale
proceeds or insurance proceeds.
(k) CONTROL. Each Grantor hereby agrees to take any or all action that
may be necessary or that the Collateral Agent may reasonably request in order
for the Collateral Agent to obtain control in accordance with Sections 9-105 -
9-107 of the Code with respect to the following Collateral: (i) Electronic
Chattel Paper, (ii) Investment Property, and (iii) Letter-of-Credit Rights.
(l) INSPECTION AND REPORTING. Each Grantor shall permit the Collateral
Agent, or any agent or representatives thereof or such professionals or other
Persons as the Collateral Agent may designate, during normal business hours,
after reasonable prior notice, in the absence of an Event of Default and not
more than once a year in the absence of an Event of Default, (i) to examine and
make copies of and abstracts from any Grantor's records and books of account,
(ii) to visit and inspect its properties, (iii) to verify materials, leases,
Instruments, Accounts, Inventory and other assets of any Grantor from time to
time, and (iv) to conduct audits, physical counts, appraisals and/or valuations,
examinations at the locations of any Grantor. Each Grantor shall also permit the
Collateral Agent, or any agent or representatives thereof or such professionals
or other Persons as the Collateral Agent may designate to discuss such Grantor's
affairs, finances and accounts with any of its directors, officers, managerial
employees, independent accountants or any of its other representatives.
(m) FUTURE SUBSIDIARIES. If any Grantor shall hereafter create or
acquire any Subsidiary, simultaneously with the creation or acquisition of such
Subsidiary, such Grantor shall (i) cause such Subsidiary to become a party to
this Agreement as an additional "Grantor" hereunder, (ii) deliver to Collateral
Agent revised Schedules to this Agreement, as appropriate, (iii) cause such
Subsidiary to duly execute and deliver a guaranty of the Obligations in favor of
the Collateral Agent in form and substance reasonably acceptable to the
Collateral Agent, and (iv) shall duly execute and/or deliver such opinions of
counsel and other documents, in form and substance reasonably acceptable to the
Collateral Agent, as the Collateral Agent shall reasonably request with respect
thereto.
SECTION 6. ADDITIONAL PROVISIONS CONCERNING THE COLLATERAL.
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(a) To the maximum extent permitted by applicable law, and for the
purpose of taking any action that the Collateral Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, each Grantor hereby (i)
authorizes the Collateral Agent to execute any such agreements, instruments or
other documents in such Grantor's name and to file such agreements, instruments
or other documents in such Grantor's name and in any appropriate filing office,
(ii) authorizes the Collateral Agent at any time and from time to time to file,
one or more financing or continuation statements, and amendments thereto,
relating to the Collateral (including, without limitation, any such financing
statements that (A) describe the Collateral as "all assets" or "all personal
property" (or words of similar effect) or that describe or identify the
Collateral by type or in any other manner as the Collateral Agent may determine
regardless of whether any particular asset of such Grantor falls within the
scope of Article 9 of the Uniform Commercial Code or whether any particular
asset of such Grantor constitutes part of the Collateral, and (B) contain any
other information required by Part 5 of Article 9 of the Code for the
sufficiency or filing office acceptance of any financing statement, continuation
statement or amendment, including, without limitation, whether such Grantor is
an organization, the type of organization and any organizational identification
number issued to such Grantor) and (iii) ratifies such authorization to the
extent that the Collateral Agent has filed any such financing or continuation
statements, or amendments thereto, prior to the date hereof. A photocopy or
other reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
(b) Each Grantor hereby irrevocably appoints the Collateral Agent as
its attorney-in-fact and proxy, with full authority in the place and stead of
such Grantor and in the name of such Grantor or otherwise, from time to time in
the Collateral Agent's discretion, so long as an Event of Default shall have
occurred and is continuing, to take any action and to execute any instrument
which the Collateral Agent may reasonably deem necessary or advisable to
accomplish the purposes of this Agreement (subject to the rights of each Grantor
under Section 5 hereof), including, without limitation, (i) to obtain and adjust
insurance required to be paid to the Collateral Agent pursuant to Section 5(e)
hereof, (ii) to ask, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any Collateral, (iii) to receive, endorse, and collect any drafts or
other instruments, documents and chattel paper in connection with clause (i) or
(ii) above, (iv) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable for the
collection of any Collateral or otherwise to enforce the rights of the
Collateral Agent and the Buyers with respect to any Collateral, and (v) to
execute assignments, licenses and other documents to enforce the rights of the
Collateral Agent and the Buyers with respect to any Collateral. This power is
coupled with an interest and is irrevocable until the Satisfaction in Full of
the Obligations.
(c) For the purpose of enabling the Collateral Agent to exercise rights
and remedies hereunder, 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 any Grantor) to use, assign, license or sublicense any
Intellectual Property now owned or hereafter acquired by such Grantor, wherever
the same may be located, 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. Notwithstanding
anything contained herein to the contrary, but subject to the provisions of the
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Purchase Agreements that limit the right of any Grantor to dispose of its
property, and Section 5(g) and Section 5(h) hereof, so long as no Event of
Default shall have occurred and be continuing, any Grantor may exploit, use,
enjoy, protect, license, sublicense, assign, sell, dispose of or take other
actions with respect to the Intellectual Property in the ordinary course of its
business. In furtherance of the foregoing, unless an Event of Default shall have
occurred and be continuing, the Collateral Agent shall from time to time, upon
the request of any Grantor, execute and deliver any instruments, certificates or
other documents, in the form so requested, which such Grantor shall have
certified are appropriate (in such Grantor's judgment) to allow it to take any
action permitted by this Agreement (including relinquishment of the license
provided pursuant to this clause (c) as to any Intellectual Property). Further,
upon the Satisfaction in Full of the Obligations, the Collateral Agent (subject
to Section 10(e) hereof) shall release and reassign to any Grantor all of the
Collateral Agent's right, title and interest in and to the Intellectual
Property, and the Licenses, all without recourse, representation or warranty
whatsoever. The exercise of rights and remedies hereunder by the Collateral
Agent shall not terminate the rights of the holders of any licenses or
sublicenses theretofore granted by each Grantor in accordance with the second
sentence of this clause (c). Each Grantor hereby releases the Collateral Agent
from any claims, causes of action and demands at any time arising out of or with
respect to any actions taken or omitted to be taken by the Collateral Agent
under the powers of attorney granted herein other than actions taken or omitted
to be taken through the Collateral Agent's gross negligence or willful
misconduct, as determined by a final determination of a court of competent
jurisdiction.
(d) If any Grantor fails to perform any agreement or obligation
contained herein, the Collateral Agent may itself perform, or cause performance
of, such agreement or obligation, in the name of such Grantor or the Collateral
Agent, and the expenses of the Collateral Agent incurred in connection therewith
shall be payable by such Grantor pursuant to Section 8 hereof and shall be
secured by the Collateral.
(e) The powers conferred on the Collateral Agent hereunder are solely
to protect its interest in the Collateral and shall not impose any duty upon it
to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
the Collateral Agent shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral.
(f) Anything herein to the contrary notwithstanding (i) each Grantor
shall remain liable under the Licenses and otherwise with respect to any of the
Collateral to the extent set forth therein to perform all of its obligations
thereunder to the same extent as if this Agreement had not been executed, (ii)
the exercise by the Collateral Agent of any of its rights hereunder shall not
release any Grantor from any of its obligations under the Licenses or otherwise
in respect of the Collateral, and (iii) the Collateral Agent shall not have any
obligation or liability by reason of this Agreement under the Licenses or with
respect to any of the other Collateral, nor shall the Collateral Agent be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.
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SECTION 7. REMEDIES UPON EVENT OF DEFAULT. If any Event of Default
shall have occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the Collateral, in
addition to any other rights and remedies provided for herein or otherwise
available to it, all of the rights and remedies of a secured party upon default
under the Code (whether or not the Code applies to the affected Collateral), and
also may (i) take absolute control of the Collateral, including, without
limitation, transfer into the Collateral Agent's name or into the name of its
nominee or nominees (to the extent the Collateral Agent has not theretofore done
so) and thereafter receive, for the benefit of the Collateral Agent, all
payments made thereon, give all consents, waivers and ratifications in respect
thereof and otherwise act with respect thereto as though it were the outright
owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that
it will at its expense and upon request of the Collateral Agent forthwith,
assemble all or part of its respective Collateral as directed by the Collateral
Agent and make it available to the Collateral Agent at a place or places to be
designated by the Collateral Agent that is reasonably convenient to both
parties, and the Collateral Agent may enter into and occupy any premises owned
or leased by any Grantor where the Collateral or any part thereof is located or
assembled for a reasonable period in order to effectuate the Collateral Agent's
rights and remedies hereunder or under law, without obligation to any Grantor in
respect of such occupation, and (iii) without notice except as specified below
and without any obligation to prepare or process the Collateral for sale, (A)
sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Collateral Agent's offices or elsewhere, for cash,
on credit or for future delivery, and at such price or prices and upon such
other terms as the Collateral Agent may deem commercially reasonable and/or (B)
lease, license or dispose of the Collateral or any part thereof upon such terms
as the Collateral Agent may deem commercially reasonable. Each Grantor agrees
that, to the extent notice of sale or any other disposition of its respective
Collateral shall be required by law, at least ten (10) days' prior notice to any
Grantor of the time and place of any public sale or the time of any private sale
or other disposition of its respective Collateral is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated to make any
sale or other disposition of any Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against the Collateral Agent
and the Buyers arising by reason of the fact that the price at which its
respective Collateral may have been sold at a private sale was less than the
price which might have been obtained at a public sale or was less than the
aggregate amount of the Obligations, even if the Collateral Agent accepts the
first offer received and does not offer such Collateral to more than one
offeree, and waives all rights that any Grantor may have to require that all or
any part of such Collateral be marshaled upon any sale (public or private)
thereof. Each Grantor hereby acknowledges that (i) any such sale of its
respective Collateral by the Collateral Agent shall be made without warranty,
(ii) the Collateral Agent may specifically disclaim any warranties of title,
possession, quiet enjoyment or the like, and (iii) such actions set forth in
clauses (i) and (ii) above shall not adversely affect the commercial
reasonableness of any such sale of Collateral. In addition to the foregoing, (1)
upon written notice to any Grantor from the Collateral Agent after and during
the continuance of an Event of Default, such Grantor shall cease any use of the
Intellectual Property or any trademark, patent or copyright similar thereto for
any purpose described in such notice; (2) the Collateral Agent may, at any time
and from time to time after and during the continuance of an Event of Default,
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upon 10 days' prior notice to such Grantor, license, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any of the
Intellectual Property, throughout the universe for such term or terms, on such
conditions, and in such manner, as the Collateral Agent shall in its sole
discretion determine; and (3) the Collateral Agent may, at any time, pursuant to
the authority granted in Section 6 hereof (such authority being effective upon
the occurrence and during the continuance of an Event of Default), execute and
deliver on behalf of such Grantor, one or more instruments of assignment of the
Intellectual Property (or any application or registration thereof), in form
suitable for filing, recording or registration in any country.
(b) Any cash held by the Collateral Agent as Collateral and all Cash
Proceeds received by the Collateral Agent in respect of any sale of or
collection from, or other realization upon, all or any part of the Collateral
shall be applied (after payment of any amounts payable to the Collateral Agent
pursuant to SECTION 8 hereof) by the Collateral Agent against, all or any part
of the Obligations in such order as the Collateral Agent shall elect, consistent
with the provisions of the Transaction Documents. Any surplus of such cash or
Cash Proceeds held by the Collateral Agent and remaining after the Satisfaction
in Full of the Obligations shall be paid over to whomsoever shall be lawfully
entitled to receive the same or as a court of competent jurisdiction shall
direct.
(c) In the event that the proceeds of any such sale, collection or
realization are insufficient to pay all amounts to which the Collateral Agent
and the Buyers are legally entitled, each Grantor shall be liable for the
deficiency, together with interest thereon at the highest rate specified in the
Notes for interest on overdue principal thereof or such other rate as shall be
fixed by applicable law, together with the costs of collection and the
reasonable fees, costs, expenses and other client charges of any attorneys
employed by the Collateral Agent to collect such deficiency.
(d) Each Grantor hereby acknowledges that if the Collateral Agent
complies with any applicable state, provincial, or federal law requirements in
connection with a disposition of the Collateral, such compliance will not
adversely affect the commercial reasonableness of any sale or other disposition
of the Collateral.
(e) The Collateral Agent shall not be required to marshal any present
or future collateral security (including, but not limited to, this Agreement and
the Collateral) for, or other assurances of payment of, the Obligations or any
of them or to resort to such collateral security or other assurances of payment
in any particular order, and all of the Collateral Agent's rights hereunder and
in respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights, however existing or arising. To
the extent that any Grantor lawfully may, each Grantor hereby agrees that it
will not invoke any law relating to the marshaling of collateral which might
cause delay in or impede the enforcement of the Collateral Agent's rights under
this Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that it lawfully may, each Grantor hereby irrevocably waives the
benefits of all such laws.
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SECTION 8. INDEMNITY AND EXPENSES.
(a) Each Grantor agrees, jointly and severally, to defend, protect,
indemnify and hold the Collateral Agent and each of the Buyers, jointly and
severally, harmless from and against any and all claims, damages, losses,
liabilities, obligations, penalties, fees, costs and expenses (including,
without limitation, reasonable legal fees, costs, expenses, and disbursements of
such Person's counsel) to the extent that they arise out of or otherwise result
from this Agreement (including, without limitation, enforcement of this
Agreement), except to the extent resulting from such Person's gross negligence
or willful misconduct, as determined by a final judgment of a court of competent
jurisdiction.
(b) Each Grantor agrees, jointly and severally, to pay to the
Collateral Agent upon demand the amount of any and all costs and expenses,
including the reasonable fees, costs, expenses and disbursements of counsel for
the Collateral Agent and of any experts and agents (including, without
limitation, any collateral trustee which may act as agent of the Collateral
Agent), which the Collateral Agent may incur in connection with (i) the
preparation, negotiation, execution, delivery, recordation, administration,
amendment, waiver or other modification or termination of this Agreement, (ii)
the custody, preservation, use or operation of, or the sale of, collection from,
or other realization upon, any Collateral, (iii) the exercise or enforcement of
any of the rights of the Collateral Agent hereunder, or (iv) the failure by any
Grantor to perform or observe any of the provisions hereof.
SECTION 9. NOTICES, ETC. All notices and other communications provided
for hereunder shall be in writing and shall be mailed (by certified mail,
postage prepaid and return receipt requested), telecopied, or delivered, if to
any Grantor to the address of the Company set forth in each Purchase Agreement,
or if to the Collateral Agent or any Buyer, to it at its respective address set
forth in the Purchase Agreements; or as to any such Person, at such other
address as shall be designated by such Person in a written notice to such other
Person complying as to delivery with the terms of this Section 9. All such
notices and other communications shall be effective (i) if mailed (by certified
mail, postage prepaid and return receipt requested), when received or three
Business Days after deposited in the mails, whichever occurs first; (ii) if
telecopied, when transmitted and confirmation is received, provided same is on a
Business Day and, if not, on the next Business Day; or (iii) if delivered by
hand, upon delivery, provided same is on a Business Day and, if not, on the next
Business Day. For the avoidance of doubt, the Subsidiaries, as Grantors, hereby
appoint the Company as its agent for receipt of service of process and all
notices and other communications in the United States at the address specified
in the Purchase Agreements.
SECTION 10. MISCELLANEOUS.
(a) No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by each Grantor and the Collateral Agent, and
no waiver of any provision of this Agreement, and no consent to any departure by
each Grantor therefrom, shall be effective unless it is in writing and signed by
each Grantor and the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
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(b) No failure on the part of the Collateral Agent to exercise, and no
delay in exercising, any right hereunder or under any of the other Transaction
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The rights and remedies of the Collateral Agent or
any Buyer provided herein and in the other Transaction Documents are cumulative
and are in addition to, and not exclusive of, any rights or remedies provided by
law. The rights of the Collateral Agent or any Buyer under any of the other
Transaction Documents against any party thereto are not conditional or
contingent on any attempt by such Person to exercise any of its rights under any
of the other Transaction Documents against such party or against any other
Person, including but not limited to, any Grantor.
(c) Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
portions hereof or thereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
(d) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the Satisfaction
in Full of the Obligations, and (ii) be binding on each Grantor and all other
Persons who become bound as debtor to this Agreement in accordance with Section
9-203(d) of the Code and shall inure, together with all rights and remedies of
the Collateral Agent and the Buyers hereunder, to the benefit of the Collateral
Agent and the Buyers and their respective permitted successors, transferees and
assigns. Without limiting the generality of clause (ii) of the immediately
preceding sentence, without notice to any Grantor, the Collateral Agent and the
Buyers may assign or otherwise transfer their rights and obligations under this
Agreement and any of the other Transaction Documents in accordance with the
respective Transaction Documents, to any other Person and such other Person
shall thereupon become vested with all of the benefits in respect thereof
granted to the Collateral Agent and the Buyers herein or otherwise. Upon any
such assignment or transfer, all references in this Agreement to the Collateral
Agent or any such Buyer shall mean the assignee of the Collateral Agent or such
Buyer. None of the rights or obligations of any Grantor hereunder may be
assigned or otherwise transferred without the prior written consent of the
Collateral Agent, and any such assignment or transfer without the consent of the
Collateral Agent shall be null and void.
(e) Upon the Satisfaction in Full of the Obligations, (i) this
Agreement, the powers of attorney granted hereunder, and the security interests
created hereby shall terminate and all rights to the Collateral shall revert to
the respective Grantor that granted such security interests hereunder, and (ii)
the Collateral Agent will, upon any Grantor's request and at such Grantor's
expense, (A) return to such Grantor such of the Collateral as shall not have
been sold or otherwise disposed of or applied pursuant to the terms hereof, and
(B) execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination, all without any representation,
warranty or recourse whatsoever.
(f) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY
MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND
PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF
THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.
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(g) ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX
XXXX IN THE COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS THEREOF, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT.
(h) EACH GRANTOR AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS
AGREEMENT) THE COLLATERAL AGENT WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, ORAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE
PARTIES HERETO.
(i) Each Grantor and the Collateral Agent irrevocably consent to the
service of process of any of the aforesaid courts in any such action, suit or
proceeding by the mailing of copies thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, at its address
provided herein, such service to become effective when received or 10 days after
such mailing, whichever first occurs.
(j) Nothing contained herein shall affect the right of any party to
serve process in any other manner permitted by law or commence legal proceedings
or otherwise proceed against any party or any property in any other
jurisdiction.
(k) Each party irrevocably and unconditionally waives any right it may
have to claim or recover in any legal action, suit or proceeding referred to in
this Section 10 any special, exemplary, punitive or consequential damages.
(l) Section headings herein are included for convenience of reference
only and shall not constitute a part of this Agreement for any other purpose.
- 25 -
(m) This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
to be an original, but all of which taken together constitute one in the same
Agreement.
(n) This Agreement constitutes an amendment and restatement of the
Original Security Agreement. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby are not intended by the
parties to be, and shall not constitute, a novation or an accord and
satisfaction of the Obligations or any other obligations owing to Collateral
Agent or the Buyers under the Original Security Agreement or any other Original
Secured Transaction Document. Each of the parties hereto hereby acknowledges and
agrees that the grant of the security interests in the Collateral pursuant to
this Agreement and in any other Transaction Document is not intended to, nor
shall it be construed, as constituting a release of any prior security interests
granted by any Grantor in favor of Collateral Agent for the benefit of itself
and the Buyers in or to any Collateral or any other property of such Grantor,
but is intended to constitute a restatement and reconfirmation of the prior
security interests granted by the Grantors (as applicable) in favor of
Collateral Agent for the benefit of itself and the Buyers in and to the
Collateral and a grant of a new security interest in (i) any Collateral that was
not included in the grant of security interests by the Grantors party to the
Original Security Agreement and (ii) any Collateral of any Grantor party hereto
that was not a party to the Original Security Agreement, in each case, in favor
of Collateral Agent for the benefit of itself and the Buyers.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be
executed and delivered by its officer thereunto duly authorized, as of the date
first above written.
RAPTOR NETWORKS TECHNOLOGY,
INC., a Colorado corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxxxxxx
Title: Chairman and CEO
RAPTOR NETWORKS TECHNOLOGY INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxxxxxx
Title: Chairman and CEO
ACCEPTED BY:
-----------
CASTLERIGG MASTER INVESTMENTS LTD.
BY: XXXXXXX ASSET MANAGEMENT CORP.
By: /s/ Xxxxxxx X'Xxxxx
-----------------------------------
Name: Xxxxxxx X'Xxxxx
Title: Chief Financial Officer
- 27 -
