NOTES SECURITY AGREEMENT
THIS
NOTES SECURITY AGREEMENT (this "Agreement"),
dated
as of November 16, 2004, made by each of the signatories hereto as Debtors
(together with any other entity that may become a party hereto as provided
herein, the "Debtors"),
in
favor of Xxxxx Fargo Bank, N.A., as collateral trustee (in such capacity,
the
"Collateral
Trustee")
for
the benefit of the Secured Parties (as defined below).
WITNESSETH:
WHEREAS,
the Debtors have entered into an Indenture dated as of November 16, 2004
(as it
may be amended, amended and restated, supplemented or otherwise modified
from
time to time, the "Indenture")
with
Xxxxx Fargo Bank, N.A., as trustee (in such capacity, the "Trustee"),
pursuant to which Integrated Alarm Services Group, Inc., a Delaware corporation
(the "Company"),
has
authorized the issuance of its 12% Senior Secured Notes due 2011 (as such
notes
may hereafter be amended, amended and restated, supplemented or otherwise
modified from time to time, the "Notes");
WHEREAS,
pursuant to the Indenture, each Debtor (other than the Company) has
unconditionally and irrevocably guaranteed, jointly and severally, to each
holder of the Notes (the "Holders")
and to
the Trustee and its successors and assigns the full and punctual payment
and
performance of the Guaranteed Obligations (as defined in the Indenture);
WHEREAS,
pursuant to the Indenture, each Debtor is entering into this Agreement in
order
to grant to the Collateral Trustee for the ratable benefit of the Holders,
the
Collateral Trustee and the Trustee (collectively, the "Secured
Parties")
a
security interest in the Collateral (as defined below); and
WHEREAS,
the Notes will be issued in reliance on each Debtor's execution and delivery
of
this Agreement to the Collateral Trustee;
NOW,
THEREFORE, in consideration of premises and mutual covenants contained in
the
Indenture and for other good valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each Debtor hereby agrees with the Collateral
Trustee, for the benefit of the Secured Parties, as follows:
1. Definitions.
When
used herein: (a) the terms Account,
Account
Debtor,
Certificated
Security,
Chattel
Paper,
Commercial
Tort Claim,
Deposit
Account,
Document,
Electronic
Chattel Paper,
Equipment,
Financial
Asset,
Fixtures,
Goods,
Inventory,
Instrument,
Investment
Property,
Letter-of-Credit
Rights,
Payment
Intangibles,
Proceeds,
Security,
Security
Entitlement,
Supporting
Obligations
and
Uncertificated
Security
have the
respective meanings assigned thereto in the UCC (as defined below);
(b) capitalized terms which are not otherwise defined have the respective
meanings assigned thereto in the Indenture; and (c) the following
terms
have the following meanings (such definitions to be applicable to both the
singular and plural forms of such terms):
Agent
means
LaSalle Bank National Association in its capacity as the "Agent" under the
Credit Agreement, together with any successors and permitted assigns.
Alarm
Contract
shall
have the meaning set forth in the Indenture
Collateral
shall
have the meaning assigned to such term in Section 2.
Collateral
Assignment of Life Insurance
shall
mean, collectively, those forms of collateral assignment of life insurance
policies provided by the applicable insurance companies in respect of the
key
man life insurance policies issued on the lives of XxXxxx and Few.
Computer
Hardware
means,
with respect to any Debtor, all of such Debtor's rights (including rights
as
licensee and lessee) with respect to computer and other electronic data
processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical
supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware.
Computer
Software
means:
(i) all software programs designed for use on Computer Hardware, including
all
operating system software, utilities and application programs in whatsoever
form
(source code and object code in magnetic tape, disk or hard copy format or
any
other listings whatsoever); (ii) any firmware associated with any of the
foregoing; and (iii) any documentation for Computer Hardware, and for software
and firmware described in clauses (i) and (ii) above, including flow charts,
logic diagrams, manuals, specifications, training materials, charts and pseudo
codes.
Copyright
Licenses
means
any written agreement naming the Company or any Guarantor as licensor or
licensee granting any right under any Copyright, including, without limitation,
the grant of rights to manufacture, distribute, exploit and sell materials
derived from any Copyright.
Credit
Agreement
means
the Credit Agreement, dated as of November 16, 2004, among the Company,
Criticom International Corporation, Monital Signal Corporation, Integrated
Alarm
Services, Inc., Xxxxx Security Group, L.L.C., American Home Security, Inc.,
various financial institutions from time to time parties thereto and the
Agent,
as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
Event
of Default
means
the occurrence of any Event of Default under Section 6.01 of the
Indenture.
Excluded
Assets
means
the collective reference to: (i) any Intangible Asset, in each case only
to the
extent that the grant by the relevant Debtor of a security interest pursuant
to
this Agreement in such Debtor's right, title and interest in such Intangible
Asset (A) is prohibited by legally enforceable provisions of any contract,
agreement, instrument or indenture governing such Intangible Asset, (B) would
give any other party to such contract, agreement, instrument or indenture
a
legally enforceable right to terminate its obligations thereunder, or (C)
is
permitted with the consent of another party, if the requirement to obtain
such
consent is legally enforceable and such consent has not been obtained;
provided
that in
any event any Receivable or any money or other amounts due or to become due
under any such contract, agreement, instrument, indenture or Intangible Asset
shall not be Excluded Assets to the extent that any of the foregoing is (or
if
it contained a provision limiting the transferability or pledge thereof would
be) rendered ineffective by Section 9-406 of the UCC; and (ii) any Foreign
Subsidiary Voting Stock excluded from the definition of "Pledged Collateral"
(each as defined in the Pledge Agreement).
2
Few
means
Xxxxxx X. Few, Sr.
General
Intangibles
means,
with respect to any Debtor, all of such Debtor's "general intangibles" as
defined in the UCC and, in any event, includes (without limitation) all of
such
Debtor's trademarks, trade names, patents, copyrights, trade secrets, customer
lists, inventions, designs, Computer Software, goodwill, registrations,
licenses, franchises, tax refund claims, guarantee claims, Payment Intangibles,
security interests, books and records related to the Collateral and the Pledged
Collateral (as defined in the Pledge Agreement) and rights to
indemnification.
Intangible
Assets
means
any contract, General Intangible, Copyright License, Patent License or Trademark
License.
Intellectual
Property
means
all past, present and future: (i) trade secrets and other proprietary
information; (ii) trademarks, service marks, business names, Internet domain
names, designs, logos, trade dress, slogans, indicia and other source and/or
business identifiers, and the goodwill of the business relating thereto and
all
registrations or applications for registrations which have heretofore been
or
may hereafter be issued thereon throughout the world; (iii) copyrights
(including copyrights for computer programs and software) and copyright
registrations or applications for registrations which have heretofore been
or
may hereafter be issued throughout the world and all tangible property embodying
the copyrights; (iv) unpatented inventions (whether or not patentable); (v)
patent applications and patents; (vi) industrial designs, industrial design
applications and registered industrial designs; (vii) license agreements
related
to any of the foregoing and income therefrom; (viii) books, records, writings,
computer tapes or disks, flow diagrams, specification sheets, source codes,
object codes and other physical manifestations, embodiments or incorporations
of
any of the foregoing; (ix) the right to xxx for all past, present and future
infringements of any of the foregoing; and (x) all common law and other rights
throughout the world in and to all of the foregoing.
Loan
Documents
has the
meaning ascribed thereto in the Credit Agreement.
XxXxxx
means
Xxxxxxx X. XxXxxx.
Organizational
I.D. Number
means,
if applicable with respect to any Debtor, the organizational identification
number assigned to such Debtor by the applicable governmental unit or agency
of
the jurisdiction of organization for such Debtor.
Patent
License
means
all agreements, whether written or oral, providing for the grant by or to
any
Debtor of any right to manufacture, use or sell any invention covered in
whole
or in part by the Company.
3
Receivable
means
any right to a monetary payment for goods which have been sold, leased,
licensed, assigned or otherwise disposed of, or for services which have been
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including, without
limitation, any Account).
Trademark
License
means
any agreement, whether written or oral, providing for the grant by or to
any
Debtor of any right to use any Trademark.
Type
of Organization
means,
with respect to any Debtor, the legal nature (i.e., kind or type of entity)
of
such Debtor (e.g., such as a corporation or limited liability
company).
UCC
means
the Uniform Commercial Code as in effect in the State of New York on the
date of
this Agreement, as may be amended or modified from time to time; provided
that, as
used in Section
6
hereof,
"UCC"
shall
mean the Uniform Commercial Code as in effect from time to time in any
applicable jurisdiction.
2. Grant
of Security Interest.
As
security for the payment of all Note Obligations, each Debtor hereby grants
to
the Collateral Trustee for the benefit of the Secured Parties a lien on and
security interest in, and right of set-off against, and acknowledges and
agrees
that the Collateral Trustee has and shall continue to have for the benefit
of
the Secured Parties, a continuing lien on and security interest in, and right
of
set-off against, all right, title, and interest, whether now owned or existing
or hereafter created, acquired or arising, in and to all of the following
property of such Debtor (all being collectively referred to herein as the
"Collateral"):
(a) Accounts,
including, but not limited to, periodic and non-periodic payments under or
in
connection with Alarm Contracts;
(b) Certificated
Securities;
(c) Chattel
Paper, including Electronic Chattel Paper;
(d) Computer
Hardware and Computer Software and all rights with respect thereto, including
any and all licenses, options, warranties, service contracts, program services,
test rights, maintenance rights, support rights, improvement rights, renewal
rights and indemnifications, and any substitutions, replacements, additions
or
model conversions of any of the foregoing;
(e) Commercial
Tort Claims, as listed in Schedule 2(e) or in the notice to the Collateral
Trustee in the form of Attachment 1 to Schedule 2(e);
(f) Deposit
Accounts;
(g) Documents;
(h) Financial
Assets;
(i) General
Intangibles;
4
(j) Goods
(including all of its Equipment, Fixtures and Inventory), and all embedded
software, accessions, additions, attachments, improvements, substitutions
and
replacements thereto and therefor;
(k) Instruments;
(l) Intellectual
Property;
(m) Investment
Property;
(n) Letter-of-Credit
Rights;
(o) money
(of
every jurisdiction whatsoever);
(p) Security
Entitlements;
(q) Supporting
Obligations;
(r) Uncertificated
Securities;
(s) To
the
extent not included in the foregoing, all other personal property of any
kind or
description;
(t) Any
of
the above property of such Debtor and any interest therein, of any kind or
description now held by the Collateral Trustee (or a bailee therefor) or
at any
time hereafter transferred or delivered to, or coming into the possession,
custody or control of, the Collateral Trustee (or a bailee therefor), or
any
agent or affiliate of the Collateral Trustee (or a bailee therefor), whether
expressly as collateral security or for any other purpose (whether for
safekeeping, custody, collection or otherwise), and all dividends and
distributions on or other rights in connection with any such property; and
(v)
All
books, records, writings, data bases, information and other property relating
to, used or useful in connection with, or evidencing, embodying, incorporating
or referring to any of the foregoing, and all Proceeds, products, offspring,
rents, issues, profits and returns of and from any of the foregoing.
Notwithstanding
any other provision of this Agreement, the Collateral shall not include,
and
this Section 2 shall not grant any security interest in, any property or
asset
to the extent that, and for so long as, it constitutes an Excluded Asset;
provided
that (a)
if at any time such property or asset ceases to be an Excluded Asset, then
the
applicable Debtor shall at such time be deemed to have granted a security
interest in such property or asset in accordance with this Section 2 (as
applicable to such Debtor) and (b) the right to receive, and any interest
in,
all Proceeds of, or monies or other consideration received from or attributable
to the sale, transfer, assignment or other disposition of, any other Intangible
Asset shall not constitute Excluded Assets and shall be subject to the security
interests granted pursuant to this Section 2.
5
3. Warranties.
Each
Debtor, jointly and severally, warrants that: (a) no financing statement
other
than any which may have been filed on behalf of the Collateral Trustee or
in
connection with Permitted Liens, or other instrument similar in effect, covering
all or any part of the Collateral is on file in any public office; (b) such
Debtor is and will be the lawful owner of all the Collateral, free of all
Liens
whatsoever, other than the security interest hereunder and Permitted Liens,
with
full power and authority to execute this Agreement and perform such Debtor's
obligations hereunder, and to subject the Collateral to the security interest
hereunder; (c) such Debtor's chief executive office and principal place of
business are as set forth on Schedule
I
hereto
and, except as set forth on Schedule
I,
such
Debtor has not maintained its chief executive office and principal place
of
business at any other location at any time during the five years prior to
the
date of this Agreement, and each other location where such Debtor maintains
a
place of business is also set forth on Schedule
I
hereto;
(d) such Debtor is the Type of Organization stated on Schedule II hereto
and is
duly organized, validly existing and in good standing under the laws of the
state set forth on Schedule
II
hereto;
(e) except as set forth on Schedule
III
hereto,
such Debtor is not now known and during the five years preceding the date
hereof
has not previously been known by any trade name; (f) such Debtor's true legal
name as registered in the jurisdiction in which such Debtor is organized
or
incorporated, state of organization or incorporation, organizational
identification number as designated by the state of its incorporation or
organization, are as set forth on Schedule
II
hereto
and, except as set forth on Schedule
III
hereto,
during the five years preceding the date hereof, such Debtor has not been
known
by any different legal name and nor has such Debtor been the subject of any
merger or other corporate or partnership reorganization as applicable; (g)
Schedule
IV
hereto
contains a complete listing of all of such Debtor's Intellectual Property
which
is subject to registration statutes; (h) Schedule
V
hereto
contains a complete listing of all of each Debtor's Instruments, Investment
Property, Letter-of-Credit Rights, Chattel Paper, Documents and Commercial
Tort
Claims; (i) except as set forth on Schedule
VI
hereto,
each Debtor has no tangible Collateral located outside of the United States;
(j)
Schedule
VII
hereto
contains a complete listing of each Debtor's tangible Collateral located
with
any bailee, warehousemen or other third parties; (k) Schedule
VIII
hereto
contains a complete listing of all of each Debtor's Collateral which is subject
to certificate of title statutes; (l) Schedule
IX
hereto
contains a complete listing of all of each Debtor's Deposit Accounts and
other
bank accounts, including locations and applicable account numbers; (m) all
information with respect to the Collateral and the Account Debtors set forth
in
any schedule, certificate or other writing at any time heretofore or hereafter
furnished by such Debtor to the Collateral Trustee is and will be true and
correct in all material respects as of the date furnished; (n) such Debtor
is a
corporation, limited liability company or limited partnership, as applicable,
duly organized, validly existing and in good standing under the laws of the
state of its incorporation or organization; (o) the execution and
delivery
of this Agreement and the performance by such Debtor of its obligations
hereunder are within such Debtor's powers as a corporation, limited liability
company or limited partnership, as applicable, have been duly authorized
by all
necessary corporate, limited liability company or limited partnership action,
as
applicable, have received all necessary governmental approval (if any shall
be
required), and do not and will not contravene or conflict with any provision
of
law or of the organizational documents of such Debtor or of any agreement,
indenture, instrument or other document, or any material judgment, order
or
decree, which is binding upon such Debtor; (p) this Agreement is a
legal,
valid and binding obligation of such Debtor, enforceable in accordance with
its
terms, except that the enforceability of this Agreement may be limited by
bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at
law); and (q) such Debtor is in compliance with the requirements of all
applicable laws (including the provisions of the Fair Labor Standards Act),
rules, regulations and orders of every governmental authority, the
non-compliance with which would reasonably be expected to have a material
adverse effect on such Debtor's ability to perform its obligations arising
hereunder.
6
In
addition to the above, each Debtor warrants, jointly and severally, and
covenants that: (i) each Debtor has used, and will continue to use for the
duration of this Agreement, proper statutory notice in connection with its
use
of its
Intellectual Property;
and
(ii) each Debtor shall have the duty to the extent commercially reasonable,
through counsel acceptable to the Collateral Trustee, to prosecute diligently
any patent, trademark or copyright applications related to its Intellectual
Property pending as of the date of this Agreement or thereafter until the
termination of this Agreement, to make application on unpatented but patenable
inventions and unregistered but registrable trademarks or service marks and
copyrights (whenever it is commercially reasonable in the reasonable judgment
of
such Debtor to do so) and to preserve and maintain all rights in patent,
trademark, service xxxx and copyright applications and registrations of its
Intellectual Property, including, without limitation, the payment of all
registration, maintenance and renewal fees. Any expenses incurred in connection
with such an application or registration shall be borne by such
Debtor.
4. Collections,
etc.
Until
such time as the Collateral Trustee shall notify any Debtor of the revocation
of
such power and authority, such Debtor may grant, in the ordinary course of
business, to any party obligated on any of the Collateral, any rebate, refund
or
allowance to which such party may be lawfully entitled, and may accept, in
connection therewith, the return of Goods, the sale or lease of which shall
have
given rise to such Collateral. Until such time during the existence of an
Event
of Default as the Collateral Trustee shall notify any Debtor of the revocation
of such power and authority, such Debtor: (a) may, in the ordinary course
of its
business, at its own expense, sell, lease or furnish under contracts of service
any of the Inventory normally held by such Debtor for such purpose, use and
consume in the ordinary course of its business, any raw materials, work in
process or materials normally held by such Debtor for such purpose, and use
in
the ordinary course of its business (but subject to the terms of the Indenture),
the cash proceeds of the Collateral and other money which constitutes the
Collateral; and (b) will, at its own expense, use its best reasonable efforts
to
collect, as and when due, all amounts due under any of the Collateral, including
the taking of such action with respect to such collection as the Collateral
Trustee may request or, in the absence of such request, as such Debtor may
deem
advisable in accordance with good business practices.
The
Collateral Trustee, however, may, at any time that an Event of Default exists,
whether before or after any revocation of such power and authority or the
maturity of any of the Note Obligations, subject to the provisions set forth
in
the Intercreditor Agreement, notify an Account Debtor or other Person obligated
on the Collateral to make payment or otherwise render performance to or for
the
benefit of the Collateral Trustee (or a bailee therefor) and enforce, by
suit or
otherwise, the obligations of an Account Debtor or other Person obligated
on the
Collateral and exercise the rights of such Debtor with respect to the obligation
of the Account Debtor or other Person obligated on the Collateral to make
payment or otherwise render performance to the Debtor, and with respect to
any
property that secures the obligations of the Account Debtor or other Person
obligated on the Collateral. In connection with the exercise of such rights
and
remedies, the Collateral Trustee may surrender, release or exchange all or
any
part thereof, or compromise or extend or renew for any period (whether or
not
longer than the original period) any indebtedness thereunder or evidenced
thereby. Subject to the provisions of the Intercreditor Agreement, upon the
request of the Collateral Trustee during the existence of an Event of Default,
each Debtor will, at its own expense, immediately notify any or all parties
obligated on any of the Collateral to make payment to the Collateral Trustee
of
any amounts due or to become due thereunder.
7
Subject
to the provisions of the Intercreditor Agreement, upon request by the Collateral
Trustee during the existence of an Event of Default, each Debtor will forthwith
upon receipt, transmit and deliver to the Collateral Trustee, in the form
received, all cash, checks, drafts and other instruments or writings for
the
payment of money (properly endorsed, where required, so that such items may
be
collected by the Collateral Trustee) which may be received by such Debtor
at any
time in full or partial payment or otherwise as proceeds of any of the
Collateral. Except as the Collateral Trustee may otherwise consent in writing,
any such items which may be so received by any Debtor will not be commingled
with any other of its funds or property, but will be held separate and apart
from its own funds or property and upon express trust for the Collateral
Trustee
until delivery is made to the Collateral Trustee. Each Debtor will comply
with
the terms and conditions of any consent given by the Collateral Trustee pursuant
to the foregoing sentence.
The
Collateral Trustee (or any designee of the Collateral Trustee or any bailee
of
the Collateral Trustee) is authorized to endorse, in the name of the applicable
Debtor, any item, howsoever received by the Collateral Trustee, representing
any
payment on or other Proceeds of any of the Collateral.
5. Certificates,
Schedules and Reports.
Each
Debtor will from time to time, as the Collateral Trustee may request, deliver
to
the Collateral Trustee (or a bailee therefor) such schedules, certificates
and
reports respecting all or any of the Collateral at the time subject to the
security interest hereunder, and the items or amounts received by such Debtor
in
full or partial payment of any of the Collateral, as the Collateral Trustee
may
reasonably request. Any such schedule, certificate or report shall be executed
by an authorized officer of such Debtor and shall be in such form and detail
as
the Collateral Trustee may specify.
6. Agreements
of the Debtors.
Each
Debtor: (a) hereby irrevocably authorizes the Collateral Trustee at any time,
and from time to time, to file in any jurisdiction, any initial financing
statements and amendments thereto that: (i) indicate the Collateral as all
assets of such Debtor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article
9
of the UCC of the jurisdiction wherein such financing statement or amendment
is
filed and (ii) contain any other information required by Article 9 of the
UCC of
the jurisdiction wherein such financing statement or amendment is filed
regarding the sufficiency or filing office acceptance of any financing statement
or amendment, including (x) whether such Debtor is an organization, the Type
of
Organization, the Organization ID Number or Federal Employer Identification
Number issued to such Debtor and (y) in the case of a financing statement
filed
as a fixture filing or indicating the Collateral to be extracted collateral,
a
sufficient description of real property to which the
8
Collateral
relates; (b) shall keep all its Inventory at, and will not maintain any
place of
business at, any location other than its address(es) shown on Schedule
I
hereto
(or any amendment thereto); (c) shall keep its records concerning the Collateral
in such a manner as will enable the Collateral Trustee or its designees
to
readily determine at any time the status of the Collateral; (d) shall furnish
the Collateral Trustee such information concerning such Debtor, the Collateral
and the Account Debtors as the Collateral Trustee may from time to time
reasonably request; (e) shall permit the Collateral Trustee and its designees,
in accordance with the provisions of the Indenture, to inspect such Debtor's
Inventory and other Goods, and to inspect, audit and make copies of and
extracts
from all records and other papers in the possession of such Debtor pertaining
to
the Collateral and the Account Debtors, and shall, upon request of the
Collateral Trustee during the existence of an Event of Default, subject
to the
provisions set forth in the Intercreditor Agreement, immediately deliver
to the
Collateral Trustee all of such records and papers; (f) shall, upon request
of
the Collateral Trustee, stamp on its records concerning the Collateral,
and add
on all Chattel Paper and Instruments constituting a portion of the Collateral,
a
notation, in form satisfactory to the Collateral Trustee, of the security
interest of the Collateral Trustee hereunder; (g) except for the
sale or
lease of Inventory in the ordinary course of its business, sales of Equipment
which is no longer used or useful in its business or which is being replaced
by
similar Equipment or any other sale of the Collateral permitted under
Section 4.10 of the Indenture, shall not sell, lease, assign, create
or
permit to exist any Lien on any Collateral, other than Permitted Liens;
(h)
shall take such actions as are reasonably necessary to keep its Goods in
good
repair and condition (ordinary wear and tear excepted); (i) shall take
all such
actions as are reasonably necessary to keep its Equipment in good repair
and
condition and in good working order, ordinary wear and tear excepted; (j)
shall,
except to the extent otherwise permitted under the Indenture, promptly
pay when
due all license fees, registration fees, taxes, assessments and other charges
which may be levied upon or assessed against the ownership, operation,
possession, maintenance or use of its Equipment and other Goods; (k) shall
(x)
cause to be noted on the applicable certificate, in the event any of its
Equipment is covered by a certificate of title, the security interest of
the
Collateral Trustee in the Equipment covered thereby, and (y) deliver all
such
certificates to the Collateral Trustee or its designees; (l) shall take
all
steps necessary to protect, preserve and maintain all of its rights in
the
Collateral; (m) except as listed on Schedule
VI,
shall
keep all of the tangible Collateral in the United States of America; (n)
shall
promptly notify the Collateral Trustee in writing upon acquiring or otherwise
obtaining any Collateral after the date hereof consisting of Deposit Accounts,
Investment Property, Letter-of-Credit Rights or Electronic Chattel Paper
not
listed on the Schedules hereto and, upon the request of the Collateral
Trustee,
shall promptly execute such other documents, and do such other acts or
things
deemed appropriate by the Collateral Trustee to deliver to the Collateral
Trustee (or a bailee therefor) control with respect to such Collateral;
(o) shall promptly notify the Collateral Trustee in writing upon
acquiring
or otherwise obtaining any Collateral after the date hereof consisting
of
Documents or Instruments and, upon the reasonable request of the Collateral
Trustee, shall promptly execute such other documents, and do such other
acts or
things necessary to deliver to the Collateral Trustee (or a bailee therefor)
possession of such Documents which are negotiable and Instruments, and,
with
respect to nonnegotiable Documents, to have
9
such
nonnegotiable Documents issued in the name of the Collateral Trustee (or
a
bailee therefor); (p) with respect to the Collateral in the possession
of a
third party, other than Certificated Securities, Goods covered by a Document,
or
de
minimis
portions
of the Collateral temporarily in the possession of another in the ordinary
course of such third party's business, including as described on Schedule
VII,
shall
obtain an acknowledgment from the third party that it is holding the Collateral
for benefit of the Collateral Trustee; (q) shall promptly notify the Collateral
Trustee in writing upon incurring or otherwise obtaining a Commercial Tort
Claim
against any third party, and, upon the request of the Collateral Trustee,
shall
promptly enter into an amendment to this Agreement, and do such other acts
or
things deemed appropriate by the Collateral Trustee to give the Collateral
Trustee a security interest in such Commercial Tort Claim; (r) shall execute
and
deliver to the Collateral Trustee (or a bailee therefor) such documents
and take
other action as requested by the Collateral Trustee to insure the attachment,
perfection and second priority (or, after the Discharge of First Priority
Claims
(as defined in the Intercreditor Agreement), first priority) of, and the
ability
of the Collateral Trustee to enforce, free and clear of all Liens and claims
and
rights of third parties whatsoever (except Permitted Liens), the security
interests in any and all of the Collateral including, without limitation,
(i)
complying with any provision of any statute, regulation or treaty of the
United
States as to any Collateral if compliance with such provision is a condition
to
attachment, perfection or priority of, or ability of the Collateral Trustee
to
enforce, the security interests in such Collateral, (ii) obtaining governmental
and other third party consents and approvals, including, without limitation,
any
consent of any licensor, lessor or other Person obligated on the Collateral,
(iii) obtaining waivers from mortgagees and landlords in form and substance
satisfactory to the Collateral Trustee, (iv) taking all actions required
by the
UCC in effect from time to time or by other law, as applicable in any relevant
UCC jurisdiction, or by other law as applicable in any foreign jurisdiction
and
(v) within 60 days after the Issue Date, (A) cause to be delivered to the
Collateral Trustee and its counsel, certified copies of Uniform Commercial
Code
Requests for Information or Copies (Form UCC-11), or a similar search report
certified by a party reasonably acceptable to the Collateral Trustee, dated
a
date reasonably near to the Issue Date, listing all effective financing
statements which name each Debtor (under their present names and any previous
names) as debtor and which are filed in the jurisdictions in which filings
are
to be made pursuant to the Second Priority Documents (as well as in all
jurisdictions in which filings could have been made against any Debtor
under any
version of the Uniform Commercial Code in effect prior to July 1, 2001),
together with copies of such financing statements and (B) use its best
efforts
to provide to the Collateral Trustee and its counsel executed copies of
proper
Uniform Commercial Code Form UCC-3 termination statements (or, in lieu
thereof,
written authorization sufficient under Section 9-509(d)(1) of the Uniform
Commercial Code from each secured party of record authorizing the Collateral
Trustee or the appropriate Debtor to file such termination statements),
if any,
necessary to release all Liens and other rights of any Person in any collateral
previously granted by any Person, in each case other than Permitted Liens
(determined without giving effect to clause (6) of the definition thereof
in
Section 1.01 of the Indenture, except (x) to the extent any such Lien relates
to
the Company's $5,500,000 9% Secured Convertible Promissory Notes due 2005
outstanding on the Issue Date, (y) for Liens on the assets of Xxxxx Security
Group, L.L.C. ("Xxxxx")
securing the term loans of Xxxxx outstanding on the Issue Date under the
Credit
Agreement dated as of December 28, 2001 between Xxxxx and LaSalle Bank
N.A. and
(z) for Liens relating to Capital Lease Obligations or purchase money
obligations incurred in the ordinary course of business and outstanding
on the
Issue Date, provided that such Liens are limited to the assets financed
thereby
and proceeds of such assets); (s) shall not change its state of incorporation
or
organization or Type of Organization and will not change its legal name
without
providing the Collateral Trustee with at least 30 days' prior written notice;
and (t) shall pay and discharge or otherwise satisfy at or before maturity
or
before they become delinquent, as the case may be, all taxes, assessments
and
governmental charges or levies imposed upon the Collateral or in respect
of
income or profits therefrom, as well as all claims of any kind (including,
without limitation, claims for labor, materials and supplies) against or
with
respect to the Collateral, except that no such charge need be paid if the
amount
or validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have
been
provided on the books of such Debtor and such proceedings could not reasonably
expected to result in the sale, forfeiture or loss of any material portion
of
the Collateral or any interest therein.
10
In
addition, each Debtor shall maintain, and cause each of its Subsidiaries
to
maintain, insurance covering its properties and assets against loss or damage
by
fire and against such other insurable hazards as such assets are commonly
insured (including fire, extended coverage, property damage, workers'
compensation, public liability and business interruption insurance) and against
other risks (including errors and omissions) in such amounts as similar
properties and assets are insured by prudent companies in similar circumstances
carrying on similar businesses, and with reputable and financially sound
insurers, including self-insurance to the extent customary. At the request
of
the Collateral Trustee, each Debtor shall deliver to the Collateral Trustee
(x)
on the Closing Date and annually thereafter an original certificate of insurance
signed by such Debtor's independent insurance broker describing and certifying
as to the existence of the insurance on the Collateral required to be maintained
by this Agreement and the other Collateral Documents, together with a copy
of
the endorsement described in the next sentence attached to such certificate
and
(y) from time to time a summary schedule indicating all insurance then in
force
with respect to such Debtor. Each Debtor shall deliver to the Collateral
Trustee
such policies of insurance containing special endorsements (to the extent
provided to the Agent in the cases of clauses (iii), (iv), (v), (vi), (viii)
and
(ix)), which shall (i) specify the Collateral Trustee as an additional insured,
mortgagee and lender loss payee as its interests may appear, with the
understanding that any obligation imposed upon the insured (including the
liability to pay premiums) shall be the sole obligation of the applicable
Debtor
and not that of the Collateral Trustee, (ii) provide that the interest of
the
Collateral Trustee shall be insured regardless of any breach or violation
by the
applicable Debtor of any warranties, declarations or conditions contained
in
such policies or any action or inaction of such Debtor or others insured
under
such policies, (iii) provide a waiver of any right of the insurers to set
off or
counterclaim or any other deduction, whether by attachment or otherwise,
(iv)
provide that any and all rights of subrogation which the insurers may have
or
acquire shall be, at all times and in all respects, junior and subordinate
to
the prior payment in full of the Note Obligations and that no insurer shall
exercise or assert any right of subrogation until such time as all Note
Obligations have been paid in full, (v) provide, except in the case of public
liability insurance and worker's compensation insurance, that all insurance
proceeds for losses of less than $500,000 shall be adjusted with and payable
to
the applicable Debtor and that all insurance proceeds for losses of $500,000
or
more shall be adjusted with and payable to the Collateral Trustee, (vi) include
effective waivers by the insurer of all claims for insurance premiums against
the Collateral Trustee, (vii) provide that no cancellation of such policies
for
any reason (including non-payment of premium) nor any change therein shall
be
effective until at least thirty (30) days after receipt by the Collateral
Trustee of written notice of such cancellation or change, (viii) be primary
without right of contribution of any other insurance carried by or on behalf
of
any additional insureds with respect to their respective interests in the
Collateral, and (ix) provide that inasmuch as the policy covers more than
one
insured, all terms, conditions, insuring agreements and endorsements (except
limits of liability) shall operate as if there were a separate policy covering
each insured. Each Debtor shall notify the Collateral Trustee promptly of
any
occurrence causing a material loss or decline in value of the Collateral
and the
estimated (or actual, if available) amount of such loss or decline. Without
limiting the foregoing, the Company shall have, within 60 days after the
Closing
Date, $2,000,000 key-man insurance policies on each of the lives of XxXxxx
and
Few, which have been collaterally assigned to the Collateral Trustee pursuant
to
the Collateral Assignment of Life Insurance.
11
The
Company shall notify the Collateral Trustee of receipt of (i) any written
notice
from the Agent of an "Event of Default" under any of the Loan Documents or
a
written notice of demand for payment given to any Debtor, and (ii) any written
notice sent by the Agent to any Debtor stating such party's intention to
exercise any material enforcement rights or remedies against such Debtor,
including written notice pertaining to any foreclosure on all or any material
part of the Collateral or other judicial or non-judicial remedy in respect
thereof, and any legal process served or filed in connection therewith.
No
later
than 60 days after the Closing Date, the Company shall deliver to the Collateral
Trustee (i) executed copies of waivers from mortgagees and landlords delivered
to the Agent pursuant to Section 6.2 of the Credit Agreement and (ii)
copies of policies of key man life insurance along with the Collateral
Assignment of Life Insurance in respect of $2,000,000 of such coverage for
each
of XxXxxx and Few, along with evidence satisfactory to the Collateral Trustee
that such policies are in full force and effect and that all premiums then
due
thereon have been paid.
Each
Debtor shall, as soon as reasonably practicable after the Issue Date but
in any
case not later than 60 days after the Issue Date, cause all of the Deposit
Accounts set forth in Schedule
IX
hereto
to be subject to a control agreement, which shall be in form and substance
satisfactory to the Collateral Trustee and which shall be delivered by such
Debtor to the Collateral Trustee (which shall enter into same).
Any
expenses incurred in protecting, preserving or maintaining any Collateral
shall
be borne by the Debtors. Whenever an Event of Default shall be existing,
subject
to the provisions set forth in the Intercreditor Agreement, the Collateral
Trustee shall have the right to bring suit to enforce any or all of the
Intellectual Property or licenses thereunder, in which event the applicable
Debtor shall, at the request of the Collateral Trustee, do any and all lawful
acts and execute any and all proper documents required by the Collateral
Trustee
in aid of such enforcement, and such Debtor shall promptly, upon demand,
reimburse and indemnify the Collateral Trustee for all expenses incurred
by the
Collateral Trustee in the exercise of its rights under this Section 6.
Notwithstanding the foregoing, subject to Section 10 hereof, the Collateral
Trustee shall have no obligation or liability regarding the Collateral by
reason
of, or arising out of, this Agreement.
7. Default
and Remedies upon an Event of Default.
(a) If
an
Event of Default shall have occurred and be continuing, the Collateral Trustee
may, subject to the provisions set forth in the Intercreditor Agreement,
exercise (or cause its sub-agents to exercise) any or all of the remedies
available to it under this Agreement.
12
(b) Without
limiting the generality of the foregoing, if an Event of Default shall have
occurred and be continuing, the Collateral Trustee may, subject to the
provisions set forth in the Intercreditor Agreement, exercise, on behalf
of the
Secured Parties, all the rights of a secured party under the UCC (whether
or not
in effect in the jurisdiction where such rights are exercised) with respect
to
any Collateral and, in addition, the Collateral Trustee may, subject to the
provisions set forth in the Intercreditor Agreement, sell, lease, license
or
otherwise dispose of the Collateral or any part thereof. Any required notice
of
any such sale or other disposition shall be given to the relevant Debtors
as
required in Section 9 hereof.
8. Application
of Proceeds.
At
such
intervals as may be agreed upon by the Company and the Collateral Trustee,
or,
if an Event of Default shall have occurred and be continuing, at any time
at the
Collateral Trustee's election, the Collateral Trustee shall apply all or
any
part of Proceeds constituting the Collateral, whether or not held in any
Collateral Account, in payment of the Note Obligations in the order of
application provided for in accordance with the provisions of the Indenture,
subject to the Intercreditor Agreement.
9. Authority
to Administer Collateral.
Each
Debtor irrevocably appoints the Collateral Trustee its true and lawful attorney
with full power of substitution, in the name of such Debtor, for the sole
use
and benefit of the Secured Parties, but at Debtors' expense, to the extent
permitted by law, to exercise, at any time and from time to time while an
Event
of Default shall have occurred and be continuing, subject to the provisions
set
forth in the Intercreditor Agreement, all or any of the following powers
with
respect to all or any of such Debtor's Collateral:
(a) to
demand, xxx for, collect, receive and give acquittance for any and all monies
due or to become due upon or by virtue thereof;
(b) to
settle, compromise, compound, prosecute or defend any action or proceeding
with
respect thereto;
(c) to
sell,
lease, license or otherwise dispose of the same or the Proceeds thereof,
as
fully and effectually as if the Collateral Trustee were the absolute owner
thereof, and
(d) to
extend
the time of payment of any or all thereof and to make any allowance or other
adjustment with reference thereto;
provided
that,
except in the case of Collateral that is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
the
Collateral Trustee will give the relevant Debtor ten days' prior written
notice
of the time and place of any public sale thereof or the time after which
any
private sale or other intended disposition thereof will be made, and such
Debtor
hereby agrees that such notice shall be deemed reasonable.
10. Limitation
on Duty in Respect of Collateral.
Beyond
the exercise of reasonable care in the custody and preservation thereof,
the
Collateral Trustee will have no duty as to any Collateral in its possession
or
control or in the possession or control of any sub-agent or bailee or any
income
therefrom or as to the preservation of rights against prior parties or any
other
rights pertaining thereto. The Collateral Trustee will be deemed to have
exercised reasonable care in the custody and preservation of the Collateral
in
its possession or control if such Collateral is accorded treatment substantially
equal to that which it accords its own property, and will not be liable or
responsible for any loss or damage to any Collateral, or for any diminution
in
the value thereof, by reason of any act or omission of any sub-agent or bailee
selected by the Collateral Trustee in good faith or by reason of any act
or
omission by the Collateral Trustee, except to the extent that such liability
arises from the Collateral Trustee's gross negligence or willful
misconduct.
13
To
the
extent that applicable law imposes duties on the Collateral Trustee to exercise
remedies in a commercially reasonable manner, each Debtor acknowledges and
agrees that it is not commercially unreasonable for the Collateral Trustee:
(a)
to fail to incur expenses deemed significant by the Collateral Trustee to
prepare Collateral for disposition or otherwise to complete raw material
or
work-in-process into finished goods or other finished products for disposition,
(b) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against Account Debtors or other Persons obligated on Collateral
or to
remove Liens on or any adverse claims against Collateral, (d) to exercise
collection remedies against Account Debtors and other Persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not Collateral is
of a
specialized nature, (f) to contact other Persons, whether or not in the same
business as such Debtor, for expressions of interest in acquiring all or
any
portion of Collateral, (g) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the collateral is
of a
specialized nature, (h) to dispose of Collateral by utilizing Internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers
and
sellers of assets, (i) to dispose of assets in wholesale rather than retail
markets, (j) to disclaim disposition warranties, including, without limitation,
any warranties of title, (k) to purchase insurance or credit enhancements
to
insure the Collateral Trustee against risks of loss, collection or disposition
of Collateral, or to provide to the Collateral Trustee a guaranteed return
from
the collection or disposition of Collateral, or (l) to the extent deemed
appropriate by the Collateral Trustee, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist the Collateral
Trustee in the collection or disposition of any of Collateral. Each Debtor
acknowledges that the purpose of this Section 10 is to provide non-exhaustive
indications of what actions or omissions by the Collateral Trustee would
not be
commercially unreasonable in the Collateral Trustee's exercise of remedies
against Collateral and that other actions or omissions by the Collateral
Trustee
shall not be deemed commercially unreasonable solely on account of not being
indicated in this Section 10. Without limitation upon the foregoing, nothing
contained in this Section 10 shall be construed to grant any right to any
Debtor
or to impose any duties on the Collateral Trustee that would not have been
granted or imposed by this Agreement or by applicable law in the absence
of this
Section 10.
11. General.
(a) All
notices, requests, demands, directions and other communications (as used
in this
Section 11, collectively referred to as "notices") given to or made upon
any
party hereto under the provisions of this Agreement shall be in writing
(including facsimile communication) unless otherwise expressly permitted
hereunder and shall be delivered or sent by facsimile or via
nationally-recognized overnight courier, by hand or U.S. mail to the respective
parties at the addresses and numbers set forth under their respective names
on
Schedule
I
hereof
(for the Debtors), at the address set forth in the Indenture (for the Collateral
Trustee) or in accordance with any subsequent unrevoked written direction
from
any party to the
14
others
delivered pursuant to the requirements of this Section 11(a). All notices
shall,
except as otherwise expressly herein provided, be effective: (a) in the
case of
facsimile, when received, (b) in the case of hand-delivered notice, when
hand-delivered, (c) in the case of telephonic notice, when telephoned,
provided
however,
that in order to be effective, telephonic notices must be confirmed in
writing
no later than the next Business Day by letter or facsimile, (d) if given
by
mail, four days after such communication is deposited in the mail with
first-class postage prepaid, return receipt requested, and (d) if given
by any
other means (including by air courier), when delivered; provided,
that
any notices to the Collateral Trustee shall not be effective until received.
(b) Each
of
the Debtors agrees to pay all expenses, including reasonable attorney's fees
and
charges (including time charges of attorneys who are employees of the Collateral
Trustee) paid or incurred by the Collateral Trustee in endeavoring to collect
the Note Obligations of such Debtor, or any part thereof, and in enforcing
this
Agreement against such Debtor, and such obligations will themselves be Note
Obligations.
(c) No
delay
on the part of the Collateral Trustee in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by the
Collateral Trustee of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy.
(d) This
Agreement shall remain in full force and effect until all Note Obligations
have
been paid in full. If at any time all or any part of any payment theretofor
applied by the Collateral Trustee to any of the Note Obligations is or must
be
rescinded or returned by the Secured Parties for any reason whatsoever
(including the insolvency, bankruptcy or reorganization of any Debtor), such
Note Obligations shall, for the purposes of this Agreement, to the extent
that
such payment is or must be rescinded or returned, be deemed to have continued
in
existence, notwithstanding such application by the Collateral Trustee, and
this
Agreement shall continue to be effective or be reinstated, as the case may
be,
as to such Note Obligations, all as though such application by the Collateral
Trustee had not been made.
(e) This
Agreement shall be construed in accordance with and governed by the laws
of the
State of New York applicable to contracts made and to be performed entirely
within such State. Whenever possible, each provision of this Agreement shall
be
interpreted in such manner as to be effective and valid under applicable
law,
but if any provision of this Agreement shall be prohibited by or invalid
under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
(f) The
rights and privileges of the Collateral Trustee hereunder shall inure to
the
benefit of its successors and assigns.
15
(g) This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, and each such counterpart shall
be
deemed to be an original, but all such counterparts shall together constitute
one and the same Agreement. Each Subsidiary of the Company that is required
to
become a party to this Agreement pursuant to the Indenture shall become a
Debtor
for all purposes of this Agreement upon execution and delivery to the Collateral
Trustee by such Subsidiary of a counterpart of this Agreement together with
supplements to the Schedules hereto setting forth all relevant information
with
respect to such party as of the date of such delivery. Immediately upon such
execution and delivery (and without any further action), each such Subsidiary
will become a party to, and will be bound by all the terms of, this
Agreement.
(h) ANY
LEGAL
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR
THE
TRANSACTIONS CONTEMPLATED HEREBY ("RELATED PROCEEDINGS") MAY BE INSTITUTED
IN
THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN XXX XXXX XX
XXX
XXXX, XXXXXXX XX XXXXXXXXX, XX XXX XXXXXX XX XXX XXXXX XX XXX XXXX IN EACH
CASE
LOCATED IN THE CITY OF NEW YORK (COLLECTIVELY, THE "SPECIFIED COURTS"), AND
EACH
PARTY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS
IN
ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF ANY PROCESS, SUMMONS, NOTICE
OR
DOCUMENT BY MAIL (TO THE EXTENT ALLOWED UNDER ANY APPLICABLE STATUTE OR RULE
OF
COURT) TO SUCH PARTY'S ADDRESS SET FORTH ABOVE SHALL BE EFFECTIVE SERVICE
OF
PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT.
THE
PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING
OF
VENUE OF ANY SUIT, ACTION OR OTHER PROCEEDING IN THE SPECIFIED COURTS AND
IRREVOCABLY AND UNCONDITIONALLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN
ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(i) Each
Debtor hereby acknowledges that:
|
(b)
|
it
has been advised by counsel in the negotiation, execution and delivery
of
this Agreement, the other Collateral Documents, the Indenture and
the
Notes;
|
|
(c)
|
neither
the Collateral Trustee nor any Secured Party has any fiduciary
relationship with or duty to any Debtor arising out of or in connection
with this Agreement, the other Collateral Documents, the Indenture
or
Notes, and the relationship between the Debtors, on the one hand,
and the
Collateral Trustee and the Secured Parties, on the other hand,
in
connection herewith or therewith is solely that of debtor and
creditor.
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(j) This
Agreement, the other Collateral Documents, the Indenture and the Notes represent
the agreement of the Debtors, the Collateral Trustee and the Secured Parties
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Collateral Trustee
or any Secured Party relative to subject matter hereof and thereof not expressly
set forth or referred to herein, in the Indenture or in the Notes.
16
(k) None
of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except in accordance with the Indenture and the
Intercreditor Agreement.
(l) If
the
Subsidiary Guarantee is released as to any Debtor pursuant to the Indenture,
the
Collateral of such Debtor shall be released from the Liens created hereby,
and
this Agreement and all obligations (other than those expressly stated to
survive
such termination) of such Debtor hereunder shall terminate, all without delivery
of any instrument or performance of any act by any party (other than as set
forth in the Indenture), and all rights to such Collateral shall revert to
such
Debtor, and the Collateral Trustee, at the request and sole expense of such
Debtor, shall execute and deliver to such Debtor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby
on
such Collateral.
(m) In
connection with its appointment and acting hereunder, the Collateral Trustee
is
entitled to all rights, privileges, protections, immunities, benefits and
indemnities provided to it under the Indenture. All such indemnities shall
survive the termination of this Agreement or the Indenture, or the resignation
or removal of the Collateral Trustee.
(n) Notwithstanding
anything herein to the contrary, the lien and security interest granted to
the
Collateral Trustee pursuant to this Agreement and the exercise of any right
or
remedy by the Collateral Trustee hereunder are subject to the provisions
of the
Intercreditor Agreement. In the event of any conflict between the terms of
the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern and control.
[SIGNATURE
PAGES FOLLOW]
17
IN
WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year
first above written.
DEBTORS:
INTEGRATED
ALARM SERVICES GROUP, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Chairman
& CEO
CRITICOM
INTERNATIONAL CORPORATION
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
MONITAL
SIGNAL CORPORATION
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
MORLYN
FINANCIAL GROUP, L.L.C.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
XXXXX
SECURITY GROUP, L.L.C.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Manager
GUARDIAN
GROUP, LLC
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Manager
INTEGRATED
ALARM SERVICES, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Chairman
& CEO
MADISON
PROTECTION, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
MONITAL
FUNDING CORPORATION
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
INTEGRATED
ALARM AND SECURITY, LLC
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Manager
ALERT
ALARM COMPANY, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
AMERICAN
BURGLAR & FIRE ALARM CO.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
S-1
NORCO
ALARMS, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
SECURITY
GENERAL CORPORATION
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
AMERICAN
HOME SECURITY, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
SHIELD
SIGNAL CORP.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
TELEGUARD
SECURITY SYSTEMS INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
XXXXXX
XXXXXX, INCORPORATED
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
S-2
EVEREST
VIDEO SYSTEMS, L.L.C.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
S-3
XXXXX
FARGO BANK, N.A.,
as
Collateral Trustee
By:
/s/
Xxxxxx X. X'Xxxxxxx
Name:
Xxxxxx
X. X'Xxxxxxx
Title:
Assistant Vice President
S-4
Signature
Page for the Notes Security Agreement dated as of November 16, 2004 (as
amended,
amended restated, supplemented or otherwise modified from time to time,
the
"Security
Agreement"),
among
Integrated Alarm Services Group, Inc. (the "Company"), various subsidiaries
of
the Company and Xxxxx
Fargo Bank, N.A., as collateral trustee.
The
undersigned is executing a counterpart hereof as of ______, 200__ for
purposes
of becoming a party hereto (and attached to this signature page are supplements
to the Schedules to the Security Agreement setting forth all relevant
information with respect to the undersigned).
[NAME
OF
NEW DEBTOR]
By:
________________________________
Name:
______________________________
Title:
_______________________________
S-5
SCHEDULE
I
(To
Be Completed by Debtor)
CHIEF
EXECUTIVE OFFICES AND ADDRESSES OF DEBTOR
| 1. |
[Name
of Debtor]
|
Chief
Executive Office:
Other
Place of Business (or, if more than one, the Chief Executive
Office):
Notice
Address:
SCHEDULE
II
(To
Be Completed by Debtor)
STATE
OF INCORPORATION OR ORGANIZATION FOR EACH DEBTOR
Information
Required:
Exact
Legal Name: [Name
of Debtor]
State
or
Organization: [_____________]
Type
of
Organization: [_____________________________]
Organizational
I.D. Number: [________]
Federal
Employer Identification Number: [_________]
SCHEDULE
III
(To
Be Completed by Debtor)
DBAs:
SCHEDULE
IV
(To
Be Completed by Debtor)
INTELLECTUAL
PROPERTY
TRADEMARKS:
Trademarks
and service xxxx owned by or licensed to [_______________________]:
PATENTS:
(a) Copyrights:
(b) Internet
Web-Site Addresses:
SCHEDULE
V
(To
Be Completed by Debtor)
Instruments:
Investment
Property:
Letter-of-Credit
Rights:
Chattel
Paper:
Documents:
SCHEDULE
VI
(To
Be Completed by Debtor)
COLLATERAL
NOT LOCATED IN THE UNITED STATES
SCHEDULE
VII
(To
Be Completed by Debtor)
COLLATERAL
LOCATED WITH THIRD PARTIES
Alarm
panels, devices and other alarm related equipment that is currently installed
at
customer locations pursuant to numerous service agreements. As of [____________],
the
depreciated value of such Collateral totaled approximately [$___________].
SCHEDULE
VIII
(To
Be Completed by Debtor)
COLLATERAL
SUBJECT TO CERTIFICATE OF TITLE STATUTE
|
Title
Owner
|
VEH
#
|
Garage
Location
|
Year
|
Make
|
Model
|
VIN
#
|
Lic.
#
|
O
= Own
NP
= FMCC
|
SCHEDULE
IX
(To
Be Completed by Debtor)
LIST
OF DEPOSIT ACCOUNTS
|
Debtor
|
Bank
|
Account
Description
|
ABA
No.
|
Account
No.
|
SCHEDULE
2(e)
(To
Be Completed by Debtor)
COMMERCIAL
TORT CLAIMS
(Provide
a specific description of commercial tort claims currently in
existence
by
referring, for example, to a specific incident giving rise to the
claim.)
ATTACHMENT
1 TO SCHEDULE 2(E)
GRANT
OF SECURITY INTEREST
IN
COMMERCIAL TORT CLAIM
To: Xxxxx
Fargo Bank, N.A., as Collateral Trustee with respect to the
Security
Agreement described below.
Pursuant
to the terms of the Notes Security Agreement dated as of
November 16, 2004,
among us (the "Security
Agreement"),
we
submit this Grant of Security Interest in Commercial Tort Claim to you and
certify that the information set forth below is true, correct and complete
as of
the date hereof. Capitalized terms used herein and not otherwise defined
shall
have the meanings set forth in the Security Agreement.
We
hereby
notify you of and grant to the Collateral Trustee, as collateral security
for
the Note Obligations, a lien on and security interest in, and right of set-off
against, and acknowledge and agree that the Collateral Trustee has and shall
continue to have for the benefit of the Secured Parties a continuing lien
on and
security interest in, and right of set-off against, all right, title, and
interest, whether now owned or existing or hereafter created, acquired or
arising, in and to the following Commercial Tort Claim:
[Insert
a specific description for the commercial tort claim, followed by the words
"together with any and all proceeds and products thereof and all insurance
relating thereto and the proceeds thereof".]
The
Commercial Tort Claim, proceeds and products and insurance described herein
shall henceforth be included as part of the Collateral as described in the
Security Agreement and the other Collateral Documents.
DATED:
Very
truly yours,
[NAME
OF
APPLICABLE DEBTOR]
By:
______________________________________
Name:
__________________________________
Title:
___________________________________
