EXHIBIT 99.8
SECURITY AGREEMENT
(from National Auto Credit, Inc.)
AGREEMENT (this "AGREEMENT"), dated as of November 18, 2005, by and
among: NATIONAL AUTO CREDIT, INC. ("NAC" or the "GRANTOR"), a Delaware
corporation; FLEXNER XXXXXXXX & ASSOCIATES ("FWA"), a Nevada corporation; and
MEETINGNET INTERACTIVE, INC. ("MEETINGNET"), a Florida corporation. FWA and
MeetingNet are referred to herein collectively as the "SECURED PARTIES" and each
a "SECURED PARTY"). The Grantor and the Secured Parties are referred to herein
collectively as the "PARTIES" and each as a "PARTY."
WHEREAS, NAC and the Secured Parties entered into a certain Membership
Interest Purchase Agreement (the "PURCHASE AGREEMENT"), dated as of even date
herewith, pursuant to which (i) the parties thereto agreed, inter alia, upon the
terms and subject to the conditions set forth therein, that NAC would acquire
from the Secured Parties all of the units and membership interests in Option
Technologies Interactive LLC ("OTI") (such acquisition, the "PURCHASE") and (ii)
upon the closing of the transactions contemplated thereby, NAC has acquired all
of the units and membership interests in OTI (such units and membership
interests, the "INTERESTS");
WHEREAS, as provided in and contemplated by the Purchase Agreement,
NAC issued certain Promissory Notes (as defined in the Purchase Agreement) in
partial payment for the purchase of the Interests;
WHEREAS, as a condition to the consummation of the Purchase, the
Secured Parties required that, upon consummation of the Purchase, the Grantor
would secure its obligations under the Promissory Notes with a security interest
in the Interests; and
WHEREAS, in order to fulfill such condition, the Grantor has agreed,
as provided for herein, to secure payment of its obligations under the
Promissory Notes with a security interest in the Interests;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties, intending to be legally bound hereby, agree as follows:
1. DEFINITIONS. When used in this Agreement, the following terms shall
have the following respective meanings (it being agreed and understood that
terms used herein and defined in the Uniform Commercial Code as adopted in the
State of New York and in effect at the relevant time (the "UCC") are, unless
otherwise provided herein or the context otherwise requires, used herein with
the same respective meanings as ascribed thereto under the UCC):
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(A) "AGREEMENT" means this Security Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to this Agreement as the same may be in effect
at the time such reference becomes operative.
(B) "BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which banking institutions in the State of New York are required or
authorized to be closed.
(C) "COLLATERAL" of the Grantor means all of the Grantor's right,
title and interest in and to the following property of Grantor, whether any such
property is now existing or hereafter created or acquired:
(i) the Interests and such other units and membership interests (if
any) as the Grantor may hereinafter acquire in OTI;
(ii) all securities (whether or not certificated), if any, issued to
Grantor in exchange for, or otherwise on account of or with respect
to, the Interests;
(iii) all Contract Rights (as hereinafter defined) attendant to or
associated with the Interests;
(iv) all products and proceeds (including, without limitation,
proceeds of any insurance or under any surety or similar arrangement)
of any of the foregoing of every kind and nature and in whatever form,
including, without limitation, both cash and non-cash proceeds
resulting or arising from the sale or other disposition by the Grantor
of the Interests or other Collateral (such products and proceeds,
collectively, the "COLLATERAL PROCEEDS"); and
(v) all books and records relating to any of the foregoing.
(D) "CONTRACT RIGHTS" means rights of the Grantor to payment under
contracts or other agreements (whether or not written) not yet earned by
performance and not evidenced by instruments or chattel paper.
(E) "DEFAULT" means (i) the occurrence and continuance of an Event of
Default under and pursuant to one or more of the Promissory Notes or (ii) the
occurrence of a material default by the Grantor of any of its obligations under
this Agreement, which default continues for thirty (30) days after the Grantor
shall have received written notice from the Secured Parties setting forth such
default in reasonable detail and demanding its cure.
(F) "LIEN" means any lien, security interest, pledge, competing claim
or other encumbrance of any type or nature whatsoever.
(G) "PERMITTED LIEN" means any of the following: (i) any Lien in favor
of either or both of the Secured Parties; (ii) any Lien for taxes or other
assessments not yet due
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and payable; (iii) any Lien existing on or as of the date of this Agreement;
(iv) deposits, pursuant to any lease or otherwise; (v)any Lien consented to by
the Secured Parties; (vi) Liens (not otherwise included as a "Permitted Lien")
in an aggregate amount not exceeding one hundred thousand dollars ($100,000);
and (vii) any Lien being contested in good faith by or on behalf of the Grantor.
(H) "PERSON" means any individual, firm, corporation, limited
liability companies, partnership (limited or general), trust, association,
government, governmental body or agency or any other business, legal,
governmental or sovereign entity or body.
(I) "SECURED OBLIGATIONS" has the meaning assigned to such term in
Section 4 hereof.
(J) "TERMINATION DATE" means the date upon which the first of the
following events shall have occurred: (a) the Secured Obligations shall have
been paid or otherwise discharged; or (b) the date as of which NAC shall have
provided the Secured Parties with substitute collateral in accordance with and
as contemplated by Section 9 below.
(K) "UCC" means the Uniform Commercial Code as adopted in the State of
New York.
All other capitalized terms used herein and defined in the Purchase Agreement
are used herein with the respective meanings ascribed to them in the Purchase
Agreement, unless otherwise defined herein or the context herein otherwise
requires.
2. REPRESENTATIONS AND WARRANTIES OF THE GRANTOR. The Grantor
represents and warrants to the Secured Parties as follows:
(A) subject to the truth and accuracy of the representations and
warranties of the Secured Parties, and the full performance of their
obligations, under the Purchase Agreement, NAC owns beneficially and of record
all of the Interests;
(B) subject to the truth and accuracy of the representations and
warranties of the Secured Parties, and the full performance of their
obligations, under the Purchase Agreement, the Grantor has the requisite power
and authority to enter into this Agreement and to carry out its obligations
hereunder, and the Grantor is duly authorized and empowered to enter into and
perform this Agreement;
(C) all corporate and other actions necessary or appropriate on the
part of the Grantor to authorize it to enter into and perform this Agreement
have been taken, and all consents, approvals and permissions necessary or
appropriate to authorize the Grantor to enter into and perform this Agreement
have been obtained and remain in full force and effect; and
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(D) this Agreement has been duly executed and delivered by the Grantor
and constitutes a valid and binding obligation of the Grantor, enforceable
against the Grantor in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other similar
laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought, regardless of
whether such relief is considered at law or in equity.
3. REPRESENTATIONS AND WARRANTIES OF THE SECURED PARTIES. Each Secured
Party represents and warrants to the Grantor as follows:
(A) such Secured Party has the requisite power and authority to enter
into this Agreement and to carry out its obligations hereunder, and such Secured
Party is duly authorized and empowered to enter into and perform this Agreement;
(B) all actions necessary or appropriate on the part of such Secured
Party to authorize it to enter into and perform this Agreement have been taken,
and all consents, approvals and permissions necessary or appropriate to
authorize such Secured Party to enter into and perform this Agreement have been
obtained and remain in full force and effect; and
(C) this Agreement has been duly executed and delivered by such
Secured Party and constitutes a valid and binding obligation of such Secured
Party, enforceable against such Secured Party in accordance with its terms,
except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought, regardless of whether such relief is considered at law or in
equity.
4. GRANT OF SECURITY INTEREST. In order to secure the full and timely
payment and performance of the Grantor's obligations under and pursuant to the
Promissory Notes (such obligations, the "SECURED OBLIGATIONS"), the Grantor
hereby unconditionally and irrevocably grants, conveys and assigns to the
Secured Parties a perfected first priority security interest in and to, and a
lien on, the Grantor's right, title and interest in and to all of the Grantor's
Collateral (subject, however, to any Permitted Liens).
5. COVENANTS AS TO COLLATERAL AND RELATED MATTERS. The Grantor
covenants and agrees with the Secured Parties as follows:
(A) Without the prior written consent of the Secured Parties, the
Grantor will not, prior to the Termination Date, (i) pledge or otherwise
encumber any of its rights in or to any of the Collateral, except in favor of
the Secured Parties as provided herein or
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(in the case of any of the Collateral Proceeds) in accordance with the ordinary
course of the Grantor's business (provided, however, that the grant of any
Permitted Lien shall not be deemed a violation of this Agreement) or (ii) sell,
assign, transfer or otherwise dispose of any of its rights in or to any of the
Collateral (provided, however, that the Grantor shall be entitled to sell,
assign, transfer or otherwise dispose of any of the Collateral Proceeds in the
ordinary course of business).
(B) Prior to the Termination Date, the Grantor will, at its sole cost
and expense, promptly execute, acknowledge and deliver all such instruments and
take all such actions as the Secured Parties may from time to time reasonably
request in order to ensure to the Secured Parties the benefits in and to the
Collateral intended to be created by this Agreement.
(C) Prior to the Termination Date, the Grantor will warrant and defend
the Secured Parties' right to and interest in the Grantor's Collateral against
all claims and demands of all other Persons whatsoever (exclusive of any Person
holding a Permitted Lien). Without limiting the generality of the foregoing,
prior to the Termination Date the Grantor shall not grant, and shall allow or
permit to exist, any Lien on or with respect to the Collateral (or any part or
portion thereof), other any Permitted Liens.
(D) Prior to the Termination Date, the Grantor shall promptly make,
stamp or record such entries or legends on the Grantor's books and records or on
any of the Collateral as the Secured Parties may from time to time reasonably
request in order to indicate and disclose that the Secured Parties have a
security interest in such Collateral.
(E) Prior to the Termination Date, the Grantor shall hold all of its
books and records relating to its Collateral segregated from all of the
Grantor's other books and records in a manner reasonably satisfactory to the
Secured Parties and shall deliver to the Secured Parties from time to time after
the occurrence and during the continuance of any Default, promptly at the
written request of the Secured Parties, all contracts, instruments and any other
writings relating thereto; and the Grantor will deliver to the Secured Parties
promptly following their written request from time to time additional copies of
any or all of such other information with respect to any of the Grantor's
Collateral as the Secured Parties may in their reasonable discretion deem to be
necessary to evidence the Secured Parties' security interest in the Grantor's
Collateral or in order otherwise to monitor and/or preserve such Collateral.
(F) The Grantor shall at any time and from time to time prior to the
Termination Date take such steps as the Secured Parties may reasonably request
for the Secured Parties (i) to obtain an acknowledgement, in form and substance
reasonably satisfactory to the Secured Parties, of any bailee having possession
of any of the Grantor's Collateral that the bailee holds such Collateral for the
Secured Parties, (ii) to obtain "control" of any investment property, deposit
accounts, letter-of-credit rights or electronic chattel paper (as such terms are
defined in the UCC relating to what constitutes "control" for such items of such
Collateral) contained in or comprising
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Grantor's Collateral, with any agreements establishing control to be in form and
substance reasonably satisfactory to the Secured Parties, and (iii) otherwise to
insure the continued perfection and priority of the Secured Parties' security
interest in any of such Collateral and of the preservation of their rights
therein.
(G) The Secured Parties and their accountants, appraisers and other
representatives, at any time and from time to time prior to the Termination
Date, shall have the right, after reasonable notice, and the Grantor will permit
them:
(i) to examine, check, make copies of or extracts from any of the
Grantor's books, records and files (including, without limitation,
orders and original correspondence) relating to the Collateral;
(ii) to the extent relevant, to inspect and examine the Grantor's
Collateral and to check and test the same as to quality, quantity,
value and condition; and
(iii) to the extent relevant, to verify the Grantor's Collateral or
any portion or portions thereof and/or the Grantor's compliance with
the provisions of this Agreement.
(H) Prior to the Termination Date, the Grantor shall, as from time to
time reasonably requested in writing by the Secured Parties, take all such
actions and steps as may be necessary to perfect and maintain the perfection of
the security interest in the Grantor's Collateral granted pursuant to this
Agreement. Without limiting the generality of the foregoing, as soon as
possible, and in any event within five (5) Business Days, following the
execution and delivery of this Agreement, the Grantor shall execute and file, or
cause to be filed, financing statements (in a form reasonably acceptable to the
Grantor) in such appropriate offices as may be reasonably requested by the
Secured Parties. Additionally, within five (5) Business Days following the
execution and delivery of this Agreement, and thereafter promptly (and in any
event within five (5) Business Days) after any written request therefor from the
Secured Parties, the Grantor shall provide to the Secured Parties a copy of the
results of a current uniform commercial code, tax and lien search of the Grantor
in each of such appropriate offices and in each other location reasonably
requested by the Secured Parties. Without limiting the scope or generality of
the foregoing, if prior to the Termination Date, any of the Interests are
exchanged for, or otherwise become, certificated securities, then (upon the
request of the Secured Parties) the Grantor (i) shall enter into a pledge
agreement with the Secured Parties and Xxxx Plant Xxxxx & Xxxxxxx, P.A. (or such
other Person as is selected by the Secured Parties with the consent of the
Grantor, with such consent not to be unreasonably withheld or delayed), as the
pledge agent thereunder, which pledge agreement (A) shall be in such form and
substance as has been proposed by the Secured Parties and consented to by the
Grantor (with such consent not to be unreasonably withheld or delayed) and (B)
shall provide, inter alia, for the pledge of such certificated securities to the
Secured Parties to secure the Secured Obligations and for the pledge agent to
hold and (following and
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during the continuation of a Default) dispose of such certificated securities
and (ii) shall deliver and deposit with such pledge agent such certificated
securities.
(I) In order to preserve the condition and/or value of the Grantor's
Collateral, the Secured Parties may, at their option, from time to time prior to
the Termination Date, discharge Liens (other than Permitted Liens) on any of
such Collateral, or take any other action that the Secured Parties may
reasonably deem proper to maintain or preserve any of such Collateral.
(J) Whenever prior to the Termination Date the Secured Parties
reasonably deem it desirable that any legal action be instituted with respect to
any of the Grantor's Collateral or that any other action be taken in an attempt
to effectuate collection of any of the Grantor's Collateral, the Secured Parties
may reassign the item in question to the Grantor (and if the Secured Parties
shall execute any such reassignment, it shall automatically be deemed to be
without recourse to the Secured Parties in any event) and require the Grantor to
proceed with such legal or other action at the Grantor's sole liability, cost
and expense, in which event all amounts collected by the Grantor on such item
shall nevertheless be subject to the provisions of this Agreement.
(K) If the Grantor takes any of the following actions prior to the
Termination Date, it shall give the Secured Parties notice thereof prior to
taking such actions: (i) change its name, organization structure (by merger,
consolidation, change in organization form or otherwise), type of organization
or jurisdiction of organization or (ii) change the location of its principal
place of business.
(L) Prior to the Termination Date, the Grantor will not, without the
prior written consent of the Secured Parties, (a) permit OTI to admit any new
members or otherwise issue any additional units or membership interests or (b)
amend, supplement or otherwise modify the operating agreement or limited
liability agreement for OTI in any manner that would preclude the sale, transfer
or assignment of any unit or membership interest in OTI.
6. EXERCISE OF CERTAIN RIGHTS BY THE SECURED PARTIES DURING DEFAULT.
(A) Except after and during the continuation of any Default, the
Grantor may also receive all amounts due as proceeds of any of its Collateral.
(B) Unless a Default shall have occurred and be continuing, all
proceeds of and collections of any of the Grantor's Collateral may be retained
by the Grantor and shall be used solely for the ordinary and usual operation of
the Grantor's business. From and after notice by the Secured Parties following
and during the continuation of a Default, all proceeds of and collections of the
Grantor's Collateral shall be held in trust by the Grantor for the Secured
Parties and shall not be commingled with the Grantor's other funds or deposited
in any bank account of the Grantor; and after and during the continuation of any
Default, the Grantor agrees to deliver to the Secured Parties on the dates of
receipt thereof by the Grantor duly endorsed to the Secured Parties or to
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bearer, or assigned to the Secured Parties, as may be appropriate, all proceeds
of the Grantor's Collateral in the identical form received by the Grantor.
(C) Except as otherwise expressly provided in Section 7 below, the
Secured Parties shall bear any costs and expenses related to or associated with
their exercise of any rights, benefits or remedies hereunder (including, without
limitation, any rights, benefits or remedies set forth in Section 5 above)
except those costs and expenses that are incurred after and during the
continuation of a Default.
(D) Unless a Default shall have occurred and be continuing, the
registration of the Interests in the name of the Grantor as record and
beneficial owner thereof shall not be changed and the Grantor shall be entitled
to exercise all voting and other rights and powers pertaining to the Interests
for all purposes not inconsistent with the terms hereof. Upon the occurrence and
during the continuance of any Default, at the option of the Secured Parties
(which option may be exercised by written notice given to the Grantor and OTI),
all rights of the Grantor to exercise the voting or consensual rights and powers
that it is authorized to exercise pursuant to this subsection (c) shall cease,
and in such event the Grantor hereby appoints the Secured Parties as its
proxies, with full power of substitution, and hereby authorizes them, and each
of them acting singly, to vote and exercise all related rights as a member with
respect to the Interests during the continuance of any such Default, which proxy
is coupled with an interest and is irrevocable until the Secured Obligations
have been discharged in full or (if sooner) such Default is cured or remedied,
and the Grantor hereby agrees to provide such further proxies as the Secured
Parties may from time to time reasonably request; provided, however, that the
Secured Parties in their discretion may from time to time refrain from
exercising, and shall not be obligated to exercise, any such voting or
consensual rights or any such proxy.
7. THE SECURED PARTIES MAY PERFORM. If the Grantor fails to perform
any obligation undertaken by it hereunder (a "GRANTOR OBLIGATION") and such
failure to perform shall continue for thirty (30) Business Days after the
Grantor has received written instructions from the Secured Parties setting forth
in reasonable detail such obligation and demanding its performance, the Secured
Parties (in their sole and absolute discretion) may, but shall not be obligated
to, themselves perform, or cause performance of, such obligation, and the
reasonable expenses of the Secured Parties incurred in connection therewith
shall be payable by the Grantor upon demand.
8. REMEDIES UPON DEFAULT. If a Default shall have occurred and be
continuing:
(A) At the election of the Secured Parties, all of the Secured
Obligations shall become immediately due and payable.
(B) The Secured Parties may exercise in respect of the Collateral of
the Grantor, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party in
case of a default by a debtor under the UCC, and the Secured Parties may also,
without notice except as
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specified below, sell such Collateral or any part or portion thereof in one or
more parcels at public or private sale, at any exchange or broker's board, for
cash, on credit or for future delivery, and upon such other terms as may be
commercially reasonable.
(C) Any cash held by the Secured Parties (or either of them) as
Collateral and all cash proceeds received by the Secured Parties (or either of
them) in respect of any sale of, collection from, or other realization upon all
or any part of the Collateral shall be applied by the Secured Parties:
(i) First, to the payment of the reasonable costs and expenses of the
Secured Parties in enforcing their rights under this Agreement,
including, without limitation, reasonable attorneys' fees;
(ii) Next, to the Secured Parties, for the satisfaction and payment in
full of the Secured Obligations then due and owing; and
(iii) Finally, after satisfaction and payment in full of all the
Secured Obligations then due and owing, to the payment to the Grantor,
or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such proceeds.
(D) The Grantor, at its sole cost and expense, shall promptly take all
steps and actions reasonably requested from time to time by the Secured Parties
to marshal the Grantor's Collateral (or any specified part or portion thereof)
at the address of the Grantor and/or at such other location or locations as the
Secured Parties may reasonably request.
(E) At the expiration of such period of time after receipt by the
Secured Parties as is reasonably sufficient to allow for clearance or payment of
any items, the cash proceeds of the Grantor's Collateral shall (subject to the
prior application thereof in accordance with the foregoing subsection (C), be
credited against the Secured Obligations, it being specifically understood and
agreed, however, that an Contract Right or other non-cash proceeds shall not be
so credited until actual payment thereof.
(F) Anything contained herein to the contrary notwithstanding, the
Secured Parties may (to the extent permitted by applicable law) exercise all
rights and remedies available to them pursuant hereto or under law, which
remedies shall be deemed cumulative and not exclusive.
(G) The Grantor recognizes that, upon a foreclosure on the Interests
following the occurrence and during the continuance of a Default, the Secured
Parties may be unable to effect a public sale of the Interests by reason of
certain prohibitions contained in the Securities Act of 1933, as amended, and
applicable state law, and may be otherwise delayed or adversely affected in
effecting any sale of the Interests by reason of present or future restrictions
thereon imposed by governmental authorities, and that, as a consequence of such
prohibitions and restrictions, the Secured Parties may be
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compelled, in connection with a proposed sale of the Interests, (i) to resort to
one or more private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire the Interests for their own
account, for investment and not with a view to the distribution or resale
thereof, (ii) to seek regulatory approval of any proposed sale or sales, or
(iii) to limit the amount of Interests sold to any Person or group. The Grantor
acknowledges that private sales so made may be at prices and upon terms less
favorable to the Grantor than if the Interests were sold either at public sales
or at private sales not subject to other regulatory restrictions. The Grantor
further acknowledges that a ready market may not exist for the Interests because
they are not traded on a national securities exchange or quoted on an automated
quotation system.
9. CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing first priority security interest in all of the Collateral of the
Grantor and shall (a) remain in full force and effect until indefeasible payment
in full of the Secured Obligations has been made, (b) continue to be effective
or be reinstated, as the case may be, if at any time payment of the Secured
Obligations, or any part or portion thereof, is rescinded or reduced in amount
or must otherwise be restored or returned by any obligee of the Secured
Obligations, all as though such payment or performance had not been made, (c) be
binding upon the Grantor and its successors and assigns, and (d) inure, together
with the rights and remedies of the Secured Parties pursuant hereto, to the
benefit of the Secured Parties and their successors, transferees and permitted
assigns. Upon the payment in full of all of the Secured Obligations or, if
earlier, upon the Termination Date, the Grantor shall be entitled to the return,
upon its request, of such of the Collateral of the Grantor as shall not have
been sold or otherwise applied pursuant to the terms hereof, and to the prompt
release by the Secured Parties of the Lien and security interest granted to them
hereunder.
10. MODIFICATION OF THE SECURED OBLIGATIONS. The Grantor consents and
agrees that the Secured Parties may at any time, or from time to time, in their
sole and absolute discretion (a) renew, extend or change the time of payment,
and/or the manner, place or terms of payment of all or any part of the Secured
Obligations and (b) exchange, release and/or surrender all or any of the
Collateral, or any part(s) thereof, by whomsoever deposited, that is now or may
hereafter be held by the Secured Parties; all in such manner and upon such terms
as the Secured Parties may deem proper, and without notice to or further assent
from the Grantor except as provided for herein, it being hereby agreed that the
Grantor shall be and remain bound by this Agreement, irrespective of the
existence, value or condition of any of the Collateral, and notwithstanding any
such change, exchange, settlement, compromise, surrender, release, renewal or
extension.
11. SECURITY INTEREST GRANTED. This Agreement is intended to be a
security agreement pursuant to the UCC for each of the items specified herein as
constituting the Collateral of the Grantor. The Grantor hereby grants to the
Secured Parties a security interest in said items. The Grantor agrees, as from
time to time reasonably requested in writing by the Secured Parties, to execute
and file financing statements, as well as extensions, renewals and amendments
thereof, and reproductions of this
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Agreement, and do whatever may be necessary under the applicable UCC in the
appropriate state to perfect and continue the Secured Parties' security interest
in the Collateral of the Grantor, all at the expense of the Grantor. The Parties
agree that such financing statements will be filed in the name of the Secured
Parties. The Grantor shall pay all costs of filing such financing statements
covering any of its Collateral and any extensions, renewals, amendments and
releases thereof, and shall pay all reasonable costs and expenses of any record
searches for financing statements reasonably requested by the Secured Parties.
Without the prior written consent of the Secured Parties, Grantor shall not
create or allow to be created, pursuant to the UCC, any other security interest
in its Collateral (except for Permitted Liens) senior in priority to that of the
Secured Parties. Upon the occurrence and during the continuation of a Default,
the Secured Parties shall have the remedies of a secured party under the UCC
and, at the Secured Parties' option, may also invoke any other remedy provided
for in this Agreement. In exercising any of said remedies, the Secured Parties
may, at their sole option, utilize an agent and may proceed against any part of
the Collateral separately or together and in any order whatsoever, without in
any way affecting the availability of the Secured Parties' remedies under the
UCC.
12. RIGHT TO SUBSTITUTE COLLATERAL. Upon at least ten (10) days' prior
written notice to the Secured Parties, the Grantor may, in lieu and substitution
for the collateral otherwise provided for herein, provide Substitute Collateral
(as hereinafter defined) as security for the Secured Obligations hereunder, and
in such event the Secured Parties shall take such actions as the Grantor may
reasonably request (including, without limitation, the execution and filing of
appropriate UCC-3's termination statements) confirming and/or effecting the
release of the collateral for which the Substituted Collateral is being
substituted, and upon such substitution of collateral, the term "COLLATERAL," as
used herein, shall refer to the Substituted Collateral. As used herein,
"SUBSTITUTED COLLATERAL" means any of the following: (a) a letter of credit,
issued to the Secured Parties by a bank or other financial institution
reasonably acceptable to the Secured Parties and in an amount (net of the amount
of any Liens thereon securing obligations to any Persons other than the Secured
Parties) not less than the outstanding principal amount of the Promissory Notes;
(b) a certificate of deposit, issued by a bank or other financial institution
reasonably acceptable to the Secured Parties in an amount (net of the amount of
any Liens thereon securing obligations to any Persons other than the Secured
Parties) not less than the outstanding principal amount of the Promissory Notes;
and (c) such other property as may be selected by the Grantor with the consent
of the Secured Parties, with such consent not to be unreasonably withheld or
delayed. Without limiting the effect of any of the other provisions of this
Agreement, in the event the payment of or foreclosure on any Substituted
Collateral shall result in the receipt by the Secured Parties of an amount in
excess of the aggregate outstanding amounts of the Promissory Notes, the excess
thereof shall be promptly paid to the Grantor.
13. MISCELLANEOUS.
(A) Termination. All duties and obligations of the Grantor hereunder,
and all rights, remedies and benefits granted to the Secured Parties hereunder
(including,
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without limitation, the grant of any security interest in the Collateral), shall
terminate on the Termination Date, and as soon as reasonably practical following
the Termination Date the Secured Parties shall take all such actions (including,
without limitation, the execution, delivery and filing of appropriate UCC-3
termination statements) as the Grantor may reasonably request to evidence and
confirm the termination of such duties, obligations, rights, remedies and
benefits.
(B) Waiver. Except as otherwise expressly provided herein or in the
Promissory Notes and except for the notices provided for herein or therein, the
Grantor hereby waives (to the fullest extent permitted by law) notice of
nonpayment, demand, presentment, protest or notice of protest of or with respect
to the Grantor's Collateral or any of the Secured Obligations, and all other
notices, consents to any renewals or extensions of time of payment thereof. No
delay or omission of any Party in exercising or enforcing any of its rights,
powers, privileges, remedies, immunities or discretions hereunder shall
constitute a waiver thereof; and no waiver by any Party of any default by any
other Party shall operate as a waiver of any other default hereunder. No term or
provision hereof shall be waived, altered or modified except with the prior
written consent of the Party to be charged therewith.
(C) Expenses. Except as otherwise provided herein, each Party will
bear all of its own expenses in connection with the preparation and negotiation
of this Agreement and the consummation and performance of its obligations
thereunder.
(D) Notices. All notices, demands, requests, consents, approvals or
other communications required or permitted to be given hereunder or pursuant
hereto or that are given with respect to this Agreement to any Party shall be in
writing and shall be given as provided in Section 11.2 of the Purchase
Agreement.
(E) Entire Agreement. This Agreement is intended by the Parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the Parties, in
respect of the subject matter contained herein, constitutes the entire agreement
of the Parties with respect to the subject matter hereof and supersedes, and
merges herein, all prior and contemporaneous negotiations, discussions,
representations, understandings and agreements between or among the Parties,
whether oral or written, with respect such subject matter. No representation,
warranty, restriction, promise, undertaking or other agreement with respect to
such subject matter has been made or given by any Party other than those set
forth in this Agreement.
(F) Amendment and Waiver. This Agreement may be amended, modified or
supplemented only to the extent expressly set forth in writing that is signed by
the Party to be charged therewith. No waiver of any term, condition or provision
of this Agreement or of any breach or violation of this Agreement or any
provision hereof shall be effective except to the extent expressly set forth in
writing that is signed by the Party to be charged therewith. Without limiting
the generality of the foregoing, no failure to object or otherwise act, and no
conduct (including, without limitation, any failure or delay
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in enforcing this Agreement or any provision hereof or any acceptance or
retention of payment) or course of conduct or dealing, by any Party shall be
deemed (a) to constitute a waiver by such Party of the breach or violation of
this Agreement or of any provision hereof by any other Party or (b) to have
caused or reflected any amendment or other modification of this Agreement or of
any term or provision hereof. Any waiver may be made in advance or after the
right waived has arisen or the breach or default waived has occurred, and any
waiver may be conditional. No waiver of any breach or violation of any agreement
or provision herein contained shall be deemed a waiver of any preceding or
succeeding breach or violation thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligation or act shall be deemed a waiver or extension of the time for
performance of any other obligation or act.
(G) Assignment; No Third Party Beneficiaries. This Agreement and the
rights, duties and obligations hereunder may not be assigned or delegated by any
Party without the prior written consent of the other Parties. Any purported
assignment or delegation of rights, duties or obligations hereunder made by any
Party without the prior written consent of the other Parties shall be null and
void and of no effect. This Agreement and the provisions hereof shall be binding
upon and enforceable against each of the Parties and its successors and assigns
and shall inure to the benefit of and be enforceable by each of the Parties and
its successors and permitted assigns. Except as expressly provided for in this
Agreement, this Agreement is not intended to confer any rights or benefits on
any Persons other than the Parties and their respective successors and permitted
assigns.
(H) Severability. This Agreement and the terms and provisions hereof
shall be deemed severable, and the invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of this
Agreement or of any other term or provision hereof. In the event any term or
provision hereof shall be determined to be invalid or unenforceable as applied
to any situation or circumstance or in any jurisdiction, such invalidity or
unenforceability shall not apply or extend to any other situation or
circumstance or in any other jurisdiction or affect the validity or
enforceability of any other term or provision. It is the Parties' intent that
this Agreement and each term and provision hereof be enforceable in accordance
with its terms and to the fullest extent permitted by law. Accordingly, to the
extent any term or provision of this Agreement shall be determined or deemed to
be valid or unenforceable, such provision shall be deemed amended or modified to
the minimum extent necessary to make such provision, as so amended or modified,
valid and enforceable.
(I) Further Assurances. Each Party, upon the reasonable request of any
other Party, shall, as promptly as reasonably possible, do and perform all such
further acts and execute, acknowledge and deliver all such further instruments
and documents as may be necessary or desirable to carry out, evidence and
reflect the transactions contemplated hereby or otherwise carry out and perform
the provisions, and purpose and intent, of this Agreement. Without limiting the
generality of the foregoing, the Grantor (at its sole cost and expense) will
execute and deliver to the Secured Parties
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any writings, and do all things, reasonably requested by the Secured Parties to
carry into effect the provisions and intent of this Agreement or to vest more
fully in or assure to the Secured Parties (including, without limitation, all
steps to create and perfect) the security interest in the Collateral granted to
the Secured Parties by this Agreement or to comply with applicable statute or
law or to facilitate the collection of the Collateral, including the furnishing,
at such intervals as the Secured Parties may reasonably establish from time to
time, of reports, financial data and analyses reasonably satisfactory to the
Secured Parties. A carbon, photographic or other reproduction of this Agreement
or any financing statement executed pursuant to the terms hereof shall be
sufficient as a financing statement for the purpose of filing with the
appropriate authorities.
(J) Titles and Headings; Rules of Interpretation. Titles, captions and
headings of the sections and other subdivisions of this Agreement are for
convenience of reference only and shall not affect the construction or
interpretation of any provision of this Agreement. References to Sections and
subsections (or other parts or subdivisions) refer to such Sections and
subsections (or other parts or subdivisions) of this Agreement unless otherwise
stated. Words such as "herein," "hereinafter," "hereof," "hereto," "hereby" and
"hereunder," and words of like import, unless the context requires otherwise,
refer to this Agreement taken as a whole and not to any particular Section or
other provision hereof. As used in this Agreement, the masculine, feminine and
neuter genders shall be deemed to include the others if the context requires,
and if the context requires, the use of the singular shall include the plural
and visa versa. This Agreement is the product of mutual negotiations between and
among the Parties and their respective counsels, and no Party shall be deemed
the draftsperson hereof or of any portion or provision hereof. Accordingly, in
the event of any ambiguity or inconsistency in any provision of this Agreement,
the same shall not be interpreted against any Party as the party responsible for
drafting or providing such provision.
(K) Interrelationship Between Secured Parties. The Secured Parties
agree, as between themselves, that (i) they shall rank pari passu with respect
to the security interest granted hereunder, notwithstanding the order of
attachment or perfection of the security interest as to either Secured Party,
and that upon any foreclosure, sale or other disposition of or realization in
any manner upon all or any part of the Collateral, after deducting all expenses
of enforcement, including without limitation attorneys' fees, each Secured Party
shall be entitled to share in the resulting proceeds of such foreclosure, sale,
other disposition of or other realization upon the Collateral pro rata in that
proportion which the outstanding principal amount of the Secured Obligations to
such Secured Party bears to the aggregate outstanding principal amount of the
Secured Obligations to both Secured Parties, taken as a whole, and (ii) any
Collateral delivered to a Secured Party shall be held by such Secured Party as
agent for both itself and the other Secured Party. Grantor shall not be deemed
to be bound by this subsection (K).
(L) Miscellaneous Provisions. This Agreement is subject to certain
provisions, as to governing law and other matters, as set forth in Article 11 of
the Purchase Agreement.
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(M) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the Parties, intending to be bound hereby,
has executed this Agreement or caused this Agreement to be executed and
delivered on its behalf by an officer or other representative thereunto duly
authorized, all as of the date first above written.
OPTION TECHNOLOGIES
INTERACTIVE LLC
By;
-----------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Chief Financial Officer
FLEXNER XXXXXXXX & ASSOCIATES MEETINGNET INTERACTIVE, INC.
By; By;
----------------------------------- ----------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxx Xxxxxxxx
Title: President Title: President
By; By;
----------------------------------- ----------------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxx Xxxx
Title: Chief Financial Officer Title: Chief Financial Officer
127
