SECURITY AGREEMENT
Exhibit
10.3
THIS
SECURITY
AGREEMENT
(“Agreement”)
is
made as of March 14, 2007, by and among XXXXXXXX
XXXXX CO.,
a Utah
corporation (“Borrower”),
XXXXXXXX
XXXXX PRINTING, INC.,
a Utah
corporation, FRANKLIN
DEVELOPMENT CORPORATION,
a Utah
corporation (“Development”),
XXXXXXXX
XXXXX TRAVEL, INC.,
a Utah
corporation, XXXXXXXX
XXXXX CATALOG SALES, INC.,
a Utah
corporation, XXXXXXXX
XXXXX CLIENT SALES, INC.,
a Utah
corporation (“Client”),
XXXXXXXX
XXXXX PRODUCT SALES, INC.,
a Utah
corporation, XXXXXXXX
XXXXX SERVICES, L.L.C.,
a Utah
limited liability company (“Services”),
and
XXXXXXXX
XXXXX MARKETING, LTD.,
a Utah
limited partnership (“Marketing”)
(individually and collectively, as the context requires, “Guarantor”
and,
together with Borrower, individually and collectively, as the context requires,
“Debtor”),
JPMORGAN
CHASE BANK, N.A.,
a
national banking association (“Collateral
Agent”),
not
in its individual capacity, but solely as collateral agent for JPMORGAN
CHASE BANK, N.A.,
a
national banking association (“Chase”),
and
ZIONS
FIRST NATIONAL BANK,
a
national banking association (“Zions”
and,
together with Chase, individually and collectively, as the context requires,
the
“Secured
Party”),
in
conjunction with the Guaranty made by Guarantor in favor of Secured Party
and
the Loan made to Borrower by Secured Party pursuant to the Loan
Agreement.
WHEREAS,
Guarantor has executed the Guaranty in favor of Secured Party, pursuant to
which
Guarantor has agreed to guaranty repayment of the Loan;
WHEREAS,
Borrower and Secured Party, as lender, have entered into the Loan Agreement,
pursuant to which Secured Party, subject to the terms and conditions contained
therein, is to make the Loan to Borrower;
WHEREAS,
it is a condition precedent to Secured Party’s making any loans or otherwise
extending credit to Borrower under the Loan Agreement that Debtor execute
and
deliver to Secured Party a security agreement in substantially the form hereof
encumbering all of the personal property assets of Debtor; and
WHEREAS,
Debtor wishes to grant a security interest in favor of Collateral Agent in
all
of Debtor’s personal property assets as herein provided.
NOW,
THEREFORE, in consideration of the promises contained herein and for other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
All
capitalized terms used herein without definitions shall have the respective
meanings provided therefor in the Chase Loan Agreement. All terms defined
in the
Utah Uniform Commercial Code, Utah
Code Annotated
Sections
70A-9a-101 et
seq.,
and
used herein shall have the same definitions herein as specified therein.
However, if a term is defined in Article 9a of the Utah Uniform Commercial
Code
differently than in another Article of the Utah Uniform Commercial Code,
the
term has the meaning specified in Article 9a. In addition to the foregoing,
the
following terms as used herein (including, without limitation, in the Recitals
to this Agreement) are defined as follows:
1.1 “Chase
Guaranty”
means
that certain Repayment Guaranty of even date herewith from Guarantor in favor
of
Chase, as the same may be amended or modified from time to time.
1.2 “Chase
Loan”
means
the revolving line of credit extended by Chase to Borrower pursuant and subject
to the Chase Note, the Chase Loan Agreement and the other Chase Loan
Documents.
1.3 “Chase
Loan Agreement”
means
that certain Revolving Line of Credit Agreement of even date herewith by
and
between Borrower and Chase, as the same may be amended or modified from time
to
time.
1.4 “Chase
Loan Documents”
means,
collectively, the Chase Loan Agreement, the Chase Note, the Security Documents,
the Intercreditor Agreement and all other documents that from time to time
govern or evidence the Chase Obligations or secure payment or performance
thereof, as such documents may be amended or modified from time to
time.
1.5 “Chase
Note”
means
that certain Secured Promissory Note of even date herewith executed by Borrower
and payable to Chase in the maximum principal amount of $18,000,000, as the
same
may be amended or modified from time to time.
1.6 “Chase
Obligations”
means,
collectively, (a) payment of the Chase Loan; (b) with respect to Guarantor,
the
payment of the Guarantor Obligations (as defined in the Chase Guaranty);
(c) all
of the terms, conditions, agreements, stipulations, covenants, and provisions
of
this Agreement, all other Chase Loan Documents, and any other agreement,
document or instrument (and any and all renewals, replacements, amendments,
modifications or extensions thereof), given by Debtor to Chase to evidence
or to
secure the indebtedness secured hereby; (d) all late charges, default interest,
prepayment charges or premiums, loan fees, commitment fees and extension
fees
described in this Agreement and all other Chase Loan Documents and all costs
of
collecting the indebtedness or other amounts evidenced by this Agreement
and all
other Chase Loan Documents, including any and all costs and expenditures
of a
receiver in possession and reasonable attorneys’ fees; (e) payment of all sums
advanced by Chase to protect the Personal Property, with interest thereon
equal
to the highest default interest rate as provided by the Chase Note; and (f)
all
modifications, extensions and renewals of any of the obligations secured
hereby,
however evidenced. This Agreement shall also secure the payment and performance
of any additional loans that may hereafter be made by Chase to Debtor which
are
evidenced by a promissory note or notes or other writings stating that they
are
secured by this Agreement. This Agreement shall also secure all amounts,
including costs of collection, payable under any guarantee(s) now or hereafter
relating to the obligations secured hereby.
1.7 “Event
of Default”
means
the failure of Debtor to pay or perform any of the Obligations as and when
due
to be paid or performed under the terms of the Loan Documents.
1.8 “Guaranty”
means,
individually and collectively, as the context requires, the Chase Guaranty
and
the Zions Guaranty.
1.9 "Intercreditor
Agreement" means that certain Intercreditor Agreement of even date
herewith by and among Collateral Agent and Secured Party, as the same may
be
amended or modified from time to time.
1.10 “Loan”
means,
individually and collectively, as the context requires, the Chase Loan and
the
Zions Loan.
1.11 “Loan
Agreement”
means,
individually and collectively, as the context requires, the Chase Loan Agreement
and the Zions Loan Agreement.
1.12 “Loan
Documents”
means,
individually and collectively, as the context requires, the Chase Loan Documents
and the Zions Loan Documents.
1.13 “Note”
means,
individually and collectively, as the context requires, the Chase Note and
the
Zions Note.
1.14 “Obligations”
means,
individually and collectively, as the context requires, the Chase Obligations
and the Zions Obligations.
1.15 “Personal
Property”
means
all right, title, and interest of Debtor in (i) all personal property now
or
hereafter owned by Debtor, (ii) all other rights and interests of Debtor
now or
hereafter held in personal property, including, without limiting the foregoing,
all of Debtor’s present and future “Accounts,” “Cash Proceeds,” “Chattel Paper,”
“Collateral,” “Deposit Accounts,” “Electronic Chattel Paper,” “Equipment,”
“Fixtures,” “General Intangibles,” “Goods,” “Instruments,” “Inventory,”
“Investment Property,” “Letter-of-Credit Rights,” “Noncash Proceeds,” and
“Tangible Chattel Paper” (as such terms are defined in the Uniform Commercial
Code as in effect from time to time in the State of Utah, or any other
jurisdiction, as applicable (the “Uniform
Commercial Code”)),
(iii) all personal property and rights and interests in personal property
of
similar type or kind hereafter acquired by Debtor, (iv) all of Debtor’s right,
title and interest in and to all deposit accounts maintained with Secured
Party
or any affiliate of Secured Party, (v) all appurtenances and additions thereto
and substitutions or replacements thereof, and (vi) all proceeds thereof
(as
hereinafter provided).
1.16 “Zions
Guaranty”
means
that certain Repayment Guaranty of even date herewith from Guarantor in favor
of
Zions, as the same may be amended or modified from time to time.
1.17 “Zions
Loan”
means
the revolving line of credit extended by Zions to Borrower pursuant and subject
to the Zions Note, the Zions Loan Agreement and the other Zions Loan
Documents.
1.18
"Zions
Loan
Agreement" means that certain Revolving Line of Credit Agreement of
even date herewith by and between Borrower and Zions, as teh same may be
amended
or modified from time to time.
1.19
"Zions
Loan
Documents" means, collectively, the Zions Loan Agreement, the Zions
Note, the Security Documents, the Intercreditor Agreement and all other
documents that from time to time govern or evidence the Zions Obligations
or
secure payment of performance thereof, as such documents may be amended or
modified from time to time.
1.20
"Zions
Note" means
that certain Secured Promissory Note of even date herewith executed by Borrower
and payable to Zions in the maximum principal amount of $7,000,000, as the
same
may be amended or modified from time to time.
1.21 “Zions
Obligations”
means,
collectively, (a) payment of the Zions Loan; (b) with respect to Guarantor,
the
payment of the Guarantor Obligations (as defined in the Zions Guaranty);
(c) all
of the terms, conditions, agreements, stipulations, covenants, and provisions
of
this Agreement, all other Zions Loan Documents, and any other agreement,
document or instrument (and any and all renewals, replacements, amendments,
modifications or extensions thereof), given by Debtor to Zions to evidence
or to
secure the indebtedness secured hereby; (d) all late charges, default interest,
prepayment charges or premiums, loan fees, commitment fees and extension
fees
described in this Agreement and all other Zions Loan Documents and all costs
of
collecting the indebtedness or other amounts evidenced by this Agreement
and all
other Zions Loan Documents, including any and all costs and expenditures
of a
receiver in possession and reasonable attorneys’ fees; (e) payment of all sums
advanced by Zions to protect the Personal Property, with interest thereon
equal
to the highest default interest rate as provided by the Zions Note; and (f)
all
modifications, extensions and renewals of any of the obligations secured
hereby,
however evidenced. This Agreement shall also secure the payment and performance
of any additional loans that may hereafter be made by Zions to Debtor which
are
evidenced by a promissory note or notes or other writings stating that they
are
secured by this Agreement. This Agreement shall also secure all amounts,
including costs of collection, payable under any guarantee(s) now or hereafter
relating to the obligations secured hereby.
2. Grant
of Security Interest.
Debtor
hereby grants to Collateral Agent, to secure the payment and performance
in full
of all of the Obligations, a security interest in and so pledges and assigns
to
Collateral Agent all of the “Collateral” as described in the Loan Agreement,
together with all of Debtor’s Personal Property and all other personal property
assets of Debtor, wherever located, whether now owned or hereafter acquired
or
arising, and all proceeds and products thereof (all of the same being
hereinafter called the “Collateral”),
including, without limitation, “Accounts,” “Cash Proceeds,” “Chattel Paper,”
“Collateral,” “Deposit Accounts,” “Electronic Chattel Paper,” “Equipment,”
“Fixtures,” “General Intangibles,” “Goods,” “Instruments,” “Inventory,”
“Investment Property,” “Letter-of-Credit Rights,” “Noncash Proceeds,” and
“Tangible Chattel Paper,” as defined in the Uniform Commercial Code, as more
particularly described on Exhibit
A
hereto,
and all insurance claims and other proceeds or products thereof, whether
now
owned or existing or hereafter acquired or arising, wherever located and
whether
in Debtor’s possession and control or in the possession and control of a third
party. Collateral Agent acknowledges that the attachment of its security
interest in any additional commercial tort claim as original collateral is
subject to Debtor’s compliance with Section
4.7.
3. Authorization
to File Financing Statements.
Debtor
hereby irrevocably authorizes Collateral Agent at any time and from time
to time
to file in any filing office in any Uniform Commercial Code jurisdiction
any
initial financing statements and amendments thereto that (a) indicate the
Collateral (i) as all assets of Debtor or words of similar effect, regardless
of
whether any particular asset comprised in the Collateral falls within the
scope
of Article 9a of the Uniform Commercial Code, or (ii) as being of an equal
or
lesser scope or with greater detail, and (b) provide any other information
required by part 5 of Article 9a of the Uniform Commercial Code, for the
sufficiency or filing office acceptance of any financing statement or amendment,
including (i) whether Debtor is an organization, the type of organization
and
any organizational identification number issued to Debtor and, (ii) in the
case
of a financing statement filed as a fixture filing or indicating Collateral
as
as-extracted collateral or timber to be cut, a sufficient description of
real
property to which the Collateral relates. Debtor agrees to furnish any such
information to Collateral Agent promptly upon Collateral Agent’s request. Debtor
also ratifies its authorization for Collateral Agent to have filed in any
Uniform Commercial Code jurisdiction any like initial financing statements
or
amendments thereto if filed prior to the date hereof.
4. Other
Actions.
To
further the attachment, perfection and first priority of, and the ability
of
Collateral Agent to enforce, Collateral Agent’s security interest in the
Collateral, and without limitation on Debtor’s other obligations in this
Agreement, Debtor agrees, in each case at Debtor’s expense, to take the
following actions with respect to the following Collateral:
4.1 Promissory
Notes and Tangible Chattel Paper.
If
Debtor shall at any time hold or acquire any promissory notes or tangible
chattel paper having an original principal amount of $100,000 or more (but
excluding loans made pursuant to Borrower’s management common stock loan program
(as described on Schedule 5.20 to the Chase Loan Agreement)), Debtor shall
forthwith endorse, assign and deliver such promissory notes or tangible chattel
paper to Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as Collateral Agent may from time to time
specify.
4.2 Deposit
Accounts.
For
each deposit account that Debtor at any time opens or maintains, Debtor shall,
at Collateral Agent’s request and option, pursuant to an agreement in form and
substance satisfactory to Collateral Agent, either (a) cause the depositary
bank
to comply at any time with instructions from Collateral Agent to such depositary
bank directing the disposition of funds from time to time credited to such
deposit account, without further consent of Debtor, or (b) arrange for
Collateral Agent to become the customer of the depositary bank with respect
to
the deposit account, with Debtor being permitted, only with the consent of
Collateral Agent, to exercise rights to withdraw funds from such deposit
account. Collateral Agent agrees with Debtor that Collateral Agent shall
not
give any such instructions or withhold any withdrawal rights from Debtor,
unless
an Event of Default has occurred and is continuing, or would occur, if effect
were given to any withdrawal not otherwise permitted by the Loan Documents.
The
provisions of this paragraph shall not apply to (i) any deposit account for
which Debtor, the depositary bank and Collateral Agent have entered into
a cash
collateral agreement specially negotiated among Debtor, the depositary bank
and
Collateral Agent for the specific purpose set forth therein, (ii) a deposit
account for which Collateral Agent is the depositary bank and is in automatic
control, and (iii) deposit accounts specially and exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the
benefit
of Debtor’s salaried employees.
4.3 Investment
Property.
If
Debtor shall at any time hold or acquire any certificated securities in any
Guarantor, Debtor shall forthwith endorse, assign and deliver the same to
Collateral Agent, accompanied by such instruments of transfer or assignment
duly
executed in blank as Collateral Agent may from time to time specify. If any
securities now or hereafter acquired by Debtor are uncertificated and are
issued
to Debtor or its nominee directly by the issuer thereof, Debtor shall promptly
notify Collateral Agent thereof and, at Collateral Agent’s request and option,
pursuant to an agreement in form and substance satisfactory to Collateral
Agent,
either (a) cause the issuer to agree to comply with instructions from Collateral
Agent as to such securities, without further consent of Debtor or such nominee,
or (b) arrange for Collateral Agent to become the registered owner of the
securities. If any securities, whether certificated or uncertificated, or
other
investment property now or hereafter acquired by Debtor are held by Debtor
or
its nominee through a securities intermediary or commodity intermediary,
Debtor
shall promptly notify Collateral Agent thereof and, at Collateral Agent’s
request and option, pursuant to an agreement in form and substance satisfactory
to Collateral Agent, either (i) cause such securities intermediary or (as
the
case may be) commodity intermediary to agree to comply with entitlement orders
or other instructions from Collateral Agent to such securities intermediary
as
to such securities or other investment property, or (as the case may be)
to
apply any value distributed on account of any commodity contract as directed
by
Collateral Agent to such commodity intermediary, in each case without further
consent of Debtor or such nominee, or (ii) in the case of financial assets
or
other investment property held through a securities intermediary, arrange
for
Collateral Agent to become the entitlement holder with respect to such
investment property, with Debtor being permitted, only with the consent of
Collateral Agent, to exercise rights to withdraw or otherwise deal with such
investment property. Collateral Agent agrees with Debtor that Collateral
Agent
shall not give any such entitlement orders or instructions or directions
to any
such issuer, securities intermediary or commodity intermediary, and shall
not
withhold its consent to the exercise of any withdrawal or dealing rights
by
Debtor, unless an Event of Default has occurred and is continuing, or, after
giving effect to any such investment and withdrawal rights not otherwise
permitted by the Loan Documents, would occur. Without the prior written consent
of Lender, neither Borrower, Development, Client, Services nor Marketing
shall
(x) amend or cause to be amended the Guarantor Operating Documents of Services
or Marketing to provide that the membership interests of Services or the
partnership interests of Marketing are a security and are governed by Article
8
of the Uniform Commercial Code or (y) issue certificates evidencing the
ownership of the membership or partnership interests of Services or Marketing,
respectively. The provisions of this paragraph shall not apply to any financial
assets credited to a securities account for which Collateral Agent is the
securities intermediary.
4.4 Collateral
in the Possession of a Bailee.
If any
Collateral is at any time in the possession of a bailee, Debtor shall promptly
notify Collateral Agent thereof and, at Collateral Agent’s request and option,
shall promptly obtain an acknowledgement from the bailee, in form and substance
satisfactory to Collateral Agent, that the bailee holds such Collateral for
the
benefit of Collateral Agent, and that such bailee agrees to comply, without
further consent of Debtor, with instructions from Collateral Agent as to
such
Collateral. Collateral Agent agrees with Debtor that Collateral Agent shall
not
give any such instructions unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by Debtor
with
respect to the bailee.
4.5 Electronic
Chattel Paper and Transferable Records.
If
Debtor at any time holds or acquires an interest in any electronic chattel
paper
or any “transferable record,” as that term is defined in Section 201 of the
federal Electronic Signatures in Global and National Commerce Act, or in
Section
16 of the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, Debtor shall promptly notify Collateral Agent thereof and,
at the
request and option of Collateral Agent, shall take such action as Collateral
Agent may reasonably request to vest in Collateral Agent control, under Section
9a-105 of the Uniform Commercial Code, of such electronic chattel paper or
control under Section 201 of the federal Electronic Signatures in Global
and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. Collateral Agent agrees with Debtor that Collateral
Agent
will arrange, pursuant to procedures satisfactory to Collateral Agent and
so
long as such procedures will not result in Collateral Agent’s loss of control,
for Debtor to make alterations to the electronic chattel paper or transferable
record permitted under Section 9a-105 of the Uniform Commercial Code or,
as the
case may be, Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic Transactions
Act
for a party in control to make without loss of control, unless an Event of
Default has occurred and is continuing or would occur after taking into account
any action by Debtor with respect to such electronic chattel paper or
transferable record.
4.6 Letter-of-Credit
Rights.
If
Debtor is at any time a beneficiary under a letter of credit, Debtor shall
promptly notify Collateral Agent thereof and, at the request and option of
Collateral Agent, Debtor shall, pursuant to an agreement in form and substance
satisfactory to Collateral Agent, either (i) arrange for the issuer and any
confirmer or other nominated person of such letter of credit to consent to
an
assignment to Collateral Agent of the proceeds of the letter of credit, or
(ii)
arrange for Collateral Agent to become the transferee beneficiary of the
letter
of credit.
4.7 Commercial
Tort Claims.
If
Debtor shall at any time hold or acquire a commercial tort claim, Debtor
shall
promptly notify Collateral Agent in a writing signed by Debtor of the
particulars thereof and grant to Collateral Agent in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to
Collateral Agent.
4.8 Other
Actions as to Any and All Collateral.
Debtor
further agrees, at the request and option of Collateral Agent, to take any
and
all other actions Collateral Agent may determine to be necessary or useful
for
the attachment, perfection and first priority of, and the ability of Collateral
Agent to enforce, Collateral Agent’s security interest in any and all of the
Collateral, including, without limitation, (a) executing, delivering and,
where
appropriate, filing financing statements and amendments relating thereto
under
the Uniform Commercial Code, to the extent, if any, that Debtor’s signature
thereon is required therefor, (b) causing Collateral Agent’s name to be noted as
secured party on any certificate of title for a titled good if such notation
is
a condition to attachment, perfection or priority of, or ability of Collateral
Agent to enforce, Collateral Agent’s security interest in such Collateral, (c)
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 Collateral Agent to
enforce, Collateral Agent’s security interest in such Collateral, (d) using
commercially reasonable efforts to obtain governmental and other third party
waivers, consents and approvals in form and substance satisfactory to Collateral
Agent, including, without limitation, any consent of any licensor, lessor
or
other person obligated on Collateral, (e) using commercially reasonable efforts
to obtain waivers from mortgagees in form and substance satisfactory to
Collateral Agent, (f) taking all actions under any earlier versions of the
Uniform Commercial Code or under any other law, as reasonably determined
by
Collateral Agent to be applicable in any relevant Uniform Commercial Code
or
other jurisdiction, including any foreign jurisdiction, and (g) acknowledging
the Intercreditor Agreement (but not any amendments or other modifications
of
the Intercreditor Agreement). Borrower shall use commercially reasonable
efforts
to cause to be delivered to Collateral Agent, within sixty (60) days after
the
Closing Date, a landlord waiver and consent in a form reasonably acceptable
to
Collateral Agent, from each of (a) Franklin SaltLake LLC, the landlord of
the
premises leased by Development pursuant to that certain Master Lease Agreement
dated June 12, 2005, and (b) (i) CB Xxxxxxx Xxxxx Investors, L.L.C.
(“CBREI”),
the
master landlord of the premises leased by EDS Information Services L.L.C.
(“EDS”)
pursuant to that certain Lease Agreement dated as of June 26, 2001 with
Development, the landlord’s interest under which was assigned to CBREI by
Development pursuant to that certain Assignment of Lease dated as of June
26,
2001, and (ii) EDS, the sublandlord of the premises subleased by Borrower
pursuant to that certain Sublease Agreement dated as of June 26, 2001. Upon
the
execution of each other real property lease to which Borrower or Guarantor
is a
party as a tenant, Borrower shall use commercially reasonable efforts to
cause
to be delivered to Collateral Agent a landlord waiver and consent from the
landlord under each such lease, in a form reasonably acceptable to Collateral
Agent.
4.9 Contesting
Liens.
Borrower shall promptly discharge, or cause to be discharged, any liens or
claims of lien filed or otherwise asserted in writing against the Collateral
other than the Permitted Exceptions. If Borrower fails either to promptly
discharge or contest any such liens or claims of lien, then Collateral Agent
may, in its sole and absolute discretion, but shall not be required to, procure
the release and discharge of any such lien and any judgment or decree thereon,
and in furtherance thereof may, in its sole and absolute discretion, effect
any
settlement or compromise. All amounts expended by Collateral Agent in connection
with the provisions of this Section shall be deemed to constitute an Advance
under a Loan Agreement. In settling, compromising or arranging for the discharge
of any liens under this Section, Collateral Agent shall not be required to
establish or confirm the validity or amount of the lien.
5. Relation
to Other Loan Documents.
The
provisions of this Agreement supplement the provisions of any other Loan
Documents granted by Debtor to Collateral Agent which secures the payment
or
performance of any of the Obligations. Nothing contained in the other Loan
Documents shall derogate from any of the rights or remedies of Collateral
Agent
hereunder.
6. Intentionally
Omitted.
7. Representations
and Warranties Concerning Debtor’s Legal Status.
If
requested by Collateral Agent, Debtor shall complete and deliver to Collateral
Agent a certificate signed by Debtor and entitled “Perfection Certificate” (the
“Perfection
Certificate”).
Debtor represents and warrants to Collateral Agent as follows: (a) Debtor’s
exact legal name is that indicated in the introductory paragraph hereto and
in
the Perfection Certificate, if any, and on Exhibit
B
attached
hereto, (b) Debtor is an organization of the type, and is organized in the
jurisdiction set forth in the introductory paragraph hereto and in the
Perfection Certificate, if any, and on Exhibit
B
attached
hereto, (c) the Perfection Certificate, if any, and Exhibit
B
attached
hereto accurately set forth Debtor’s organizational identification number or
accurately state that Debtor has none, (d) the Perfection Certificate, if
any,
and Exhibit
B
attached
hereto accurately set forth Debtor’s place of business or, if more than one, its
chief executive office, as well as Debtor’s mailing address, if different, (e)
all other information set forth on the Perfection Certificate, if any,
pertaining to Debtor is accurate and complete as of the date on which it
was
executed by Debtor, and (f) Borrower will promptly notify Lender in writing
of a
change in any information provided in the Perfection Certificate since the
date
on which it was executed by Debtor.
8. Covenants
Concerning Debtor’s Legal Status.
Debtor
covenants with Collateral Agent as follows: (a) without providing at least
thirty (30) days’ prior written notice to Collateral Agent, Debtor will not
change its name, its place of business or, if more than one, chief executive
office, or its mailing address or organizational identification number if
it has
one, (b) if Debtor does not have an organizational identification number
and
later obtains one, Debtor shall forthwith notify Collateral Agent of such
organizational identification number, and (c) Debtor will not change its
type of
organization, jurisdiction of organization or other legal
structure.
9. Representations
and Warranties Concerning Collateral, etc.
Debtor
further represents and warrants to Collateral Agent as follows: (a) Debtor
is
the owner of or has other rights in or power to transfer the Collateral,
free
from any right or claim or any person or any adverse Lien or Encumbrance
or
security interest, except for Liens or Encumbrances and security interests
in
favor of Collateral Agent, Permitted Exceptions and other Liens or Encumbrances
permitted by the Loan Agreement, (b) none of the Collateral constitutes,
or is
the proceeds of, “farm products” as defined in Section 9-102(a)(34) of the
Uniform Commercial Code, (c) Debtor holds no commercial tort claim except
as
indicated on the Perfection Certificate, or as Debtor has notified Collateral
Agent in writing, (d) Debtor has at all times operated its business in
compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and with all applicable provisions of federal, state and
local
statutes and ordinances dealing with the control, shipment, storage or disposal
of hazardous materials or substances except, in each case where failure to
comply would not result in a Material Adverse Change, (e) all other information
set forth on the Perfection Certificate, if any, pertaining to the Collateral
is
accurate and complete in all material respects as of the date of such
certificate, and (f) the security interests granted herein are perfected
and are
of first priority, except to the extent of the Permitted
Exceptions.
10. Covenants
Concerning Collateral, etc.
Debtor
further covenants with Collateral Agent as follows except to the extent that
failure to do so would not cause a Material Adverse Change: (a) the Collateral,
to the extent not delivered to Collateral Agent pursuant to Section
4,
will be
kept at those locations listed on the Perfection Certificate, if any, and
on
Exhibit
B
attached
hereto and Debtor will not remove the Collateral from such locations, other
than
in the ordinary course of business or as permitted under the Loan Agreement
or
the Guaranty, without providing at least thirty (30) days’ prior written notice
to Collateral Agent, (b) except for the security interest herein granted
and
liens permitted by the Loan Documents, including without limitation the
Permitted Exceptions, Debtor shall be the owner of or have other rights in
the
Collateral free from any right or claim of any other person, lien, security
interest or other encumbrance, and Debtor shall defend the same against all
claims and demands of all persons at any time claiming the same or any interests
therein adverse to Collateral Agent, (c) Debtor shall not pledge, mortgage
or
create, or suffer to exist any right of any person in or claim by any person
to
the Collateral, or any security interest, lien or encumbrance in the Collateral
in favor of any person, other than Collateral Agent, except for liens permitted
by the Loan Documents, including without limitation the Permitted Exceptions,
(d) Debtor will keep the Collateral in good order and repair, normal wear
and
tear excepted, and will not use the same in violation of law, (e) Debtor
will
permit Collateral Agent, or its designee, upon reasonable prior notice, to
enter
upon any portion of the premises where any Collateral may be located for
purposes of inspection of the Collateral; provided,
however,
that
inspection by Collateral Agent (or by Collateral Agent’s inspector) of the
Collateral or any portion thereof is for the sole purpose of protecting the
security of Collateral Agent and is not to be construed as a representation
by
Collateral Agent that there has been compliance with applicable law or any
other
requirement or condition and Debtor may make or cause to be made such other
independent inspections as Debtor may desire for its own protection, and
nothing
contained herein shall be construed as requiring Collateral Agent to oversee
or
supervise the Collateral, (f) Debtor will pay promptly when due all taxes,
assessments, governmental charges and levies upon the Collateral or incurred
in
connection with the use or operation of such Collateral or incurred in
connection with this Agreement, (g) Debtor will continue to operate its business
in compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and with all applicable provisions of federal, state and
local
statutes and ordinances dealing with the control, shipment, storage or disposal
of hazardous materials or substances, and (h) unless such action would result
in
a Material Adverse Change (without taking into consideration subsections
(iii)
and (iv) of the definition of Material Adverse Change), Debtor may sell or
otherwise dispose, or offer to sell or otherwise dispose, of the Collateral
or
any interest therein except that Debtor shall not sell or otherwise dispose
of,
or offer to sell or otherwise dispose of, all or a substantial part of the
Collateral other than to Borrower or a Guarantor.
11. Insurance.
11.1 Maintenance
of Insurance.
Debtor
will maintain with financially sound and reputable insurers insurance with
respect to its properties and business against such casualties and contingencies
as shall be in accordance with general practices of businesses engaged in
similar activities in similar geographic areas. All such insurance policies
shall (a) be in such minimum amounts that Debtor will not be deemed a co-insurer
under applicable insurance laws, regulations and policies, (b) be issued
by an
insurance company licensed to do business in the state where the property
is
located having a rating of “A-” VIII or better by A.M. Best Co., in Best’s
Rating Guide, (c) name “JPMorgan Chase Bank, N.A., any and all subsidiaries as
their interest may appear” as additional insureds on all liability insurance,
(d) be endorsed to show that Borrower’s insurance shall be primary and all
insurance carried by Collateral Agent is strictly excess and secondary and
shall
not contribute with Borrower’s insurance, (e) be evidenced by a certificate of
insurance to be provided to Collateral, (f) include either policy or binder
numbers on the Accord form, and (g) otherwise shall be in such amounts, contain
such terms, be in such forms and be for such periods as may be reasonably
satisfactory to Collateral Agent. In addition, all such insurance shall be
payable to Collateral Agent as loss payee. Without limiting the foregoing,
Debtor will (x) keep all of its physical property insured with casualty or
physical hazard insurance on an “all risks” basis, with broad form flood and
earthquake coverages and electronic data processing coverage, with a full
replacement cost endorsement and an “agreed amount” clause in an amount equal to
100% of the full replacement cost of such property, (y) maintain all such
workers’ compensation or similar insurance as may be required by law, and (z)
maintain, in amounts and with deductibles equal to those generally maintained
by
businesses engaged in similar activities in similar geographic areas, general
public liability insurance against claims of bodily injury, death or property
damage occurring, on, in or about the properties of Debtor; and business
interruption insurance.
11.2 Insurance
Proceeds.
The
proceeds of any casualty insurance in respect of any casualty loss of any
of the
Collateral shall, subject to the rights, if any, of other parties with an
interest having priority in the property covered thereby, (a) so long as
no
Event of Default has occurred and is continuing, be disbursed to Debtor for
direct application by Debtor solely to the repair or replacement of Debtor’s
property so damaged or destroyed, and (b) in all other circumstances, be
held by
Collateral Agent as cash collateral for the Obligations. Collateral Agent
may,
at its reasonable option which option shall be exercised within ten (10)
Business Days of receipt of such proceeds, disburse from time to time all
or any
part of such proceeds so held as cash collateral, upon such terms and conditions
as Collateral Agent may reasonably prescribe, for direct application by Debtor
solely to the repair or replacement of Debtor’s property so damaged or
destroyed, or Collateral Agent may ratably distribute to each Secured Party
all
or any part of such proceeds for application to the Obligations.
11.3 Continuation
of Insurance.
All
policies of insurance shall provide for at least thirty (30) days’ prior written
cancellation notice to Collateral Agent. In the event of failure by Debtor
to
provide and maintain insurance as herein provided, Collateral Agent may,
at its
option, provide such insurance and charge the amount thereof to Debtor. Debtor
shall furnish Collateral Agent with certificates of insurance and policies
evidencing compliance with the foregoing insurance provision.
12. Collateral
Protection Expenses; Preservation of Collateral.
12.1 Expenses
Incurred by Collateral Agent or Secured Party.
In
Collateral Agent’s or any Secured Party’s sole and absolute discretion, if
Debtor fails to do so, Collateral Agent or such Secured Party may discharge
taxes and other encumbrances (other than Permitted Exceptions) at any time
levied or placed on any of the Collateral, unless such taxes and encumbrances
are being contested in good faith, maintain any of the Collateral, make repairs
thereto and pay any necessary filing fees or insurance premiums. Debtor agrees
to reimburse Collateral Agent or such Secured Party on demand for all
expenditures so made. Neither Collateral Agent nor any Secured Party shall
have
any obligation to Debtor to make any such expenditures, nor shall the making
thereof be construed as the waiver or cure of any Default or Event of
Default.
12.2 Collateral
Agent’s Obligations and Duties.
Anything herein to the contrary notwithstanding, Debtor shall remain obligated
and liable under each contract or agreement comprised in the Collateral to
be
observed or performed by Debtor thereunder. Collateral Agent shall not have
any
obligation or liability under any such contract or agreement by reason of
or
arising out of this Agreement or the receipt by Collateral Agent of any payment
relating to any of the Collateral, nor shall Collateral Agent be obligated
in
any manner to perform any of the obligations of Debtor under or pursuant
to any
such contract or agreement, to make inquiry as to the nature or sufficiency
of
any payment received by Collateral Agent in respect of the Collateral or
as to
the sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to Collateral Agent or to which Collateral Agent may be entitled
at any
time or times. Collateral Agent’s sole duty with respect to the custody, safe
keeping and physical preservation of the Collateral in its possession, under
Section 9a-207 of the Uniform Commercial Code or otherwise, shall be to deal
with such Collateral in the same manner as Collateral Agent deals with similar
property for its own account.
13. Securities
and Deposits.
Collateral Agent may at any time following and during the continuance of
an
Event of Default, at its sole option, transfer to itself or any nominee any
securities constituting Collateral, receive any income thereon and hold such
income as additional Collateral or apply it to the Obligations. Whether or
not
any Obligations are due, Collateral Agent may following and during the
continuance of an Event of Default, demand, xxx for, collect, or make any
settlement or compromise which it deems desirable with respect to the
Collateral. Regardless of the adequacy of Collateral or any other security
for
the Obligations and during the continuance of an Event of Default, any deposits
or other sums at any time credited by or due from Collateral Agent to Debtor
may
at any time be applied to or set off against any of the Obligations. If
Collateral Agent exercises such setoff right, Collateral Agent exercising
such
right agrees promptly to notify Debtor after any such setoff and application
made by Collateral Agent; provided,
however, that the failure to give such notice shall not affect the validity
of
such setoff and application.
14. Notification
to Account Debtors and Other Persons Obligated on Collateral.
If an
Event of Default shall have occurred and be continuing, Debtor shall, at
the
request and option of Collateral Agent, notify account debtors and other
persons
obligated on any of the Collateral of the security interest of Collateral
Agent
in any account, chattel paper, general intangible, instrument or other
Collateral and that payment thereof is to be made directly to Collateral
Agent
or to any financial institution designated by Collateral Agent as Collateral
Agent’s agent therefor, and Collateral Agent may itself, if an Event of Default
shall have occurred and be continuing, without notice to or demand upon Debtor,
so notify account debtors and other persons obligated on Collateral. After
the
making of such a request or the giving of any such notification, Debtor shall
hold any proceeds of collection of accounts, chattel paper, general intangibles,
instruments and other Collateral received by Debtor as trustee for Collateral
Agent without commingling the same with other funds of Debtor and shall turn
the
same over to Collateral Agent in the identical form received, together with
any
necessary endorsements or assignments. Collateral Agent shall ratably distribute
to each Secured Party the proceeds of collection of accounts, chattel paper,
general intangibles, instruments and other Collateral received by Collateral
Agent, for application by each Secured Party to the Obligations, such proceeds
to be immediately credited after final payment in cash or other immediately
available funds of the items giving rise to them.
15. Power
of Attorney.
15.1 Appointment
and Powers of Collateral Agent.
Debtor
hereby irrevocably constitutes and appoints Collateral Agent and any officer
or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of Debtor or in Collateral Agent’s own name, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and
to
execute any and all documents and instruments that may be necessary or useful
to
accomplish the purposes of this Agreement and, without limiting the generality
of the foregoing, hereby gives said attorneys the power and right, on behalf
of
Debtor, without notice to or assent by Debtor, to do the following:
(a) upon
the
occurrence and during the continuance of an Event of Default, generally to
sell,
transfer, pledge, make any agreement with respect to or otherwise dispose
of or
deal with any of the Collateral in such manner as is consistent with the
Uniform
Commercial Code and as fully and completely as though Collateral Agent were
the
absolute owner thereof for all purposes, and to do, at Debtor’s expense, at any
time, or from time to time, all acts and things which Collateral Agent deems
necessary or useful to protect, preserve or realize upon the Collateral and
Collateral Agent’s security interest therein, in order to effect the intent of
this Agreement, all at least as fully and effectively as Debtor might do,
including, without limitation, (i) the filing and prosecuting of registration
and transfer applications with the appropriate federal, state, local or other
agencies or authorities with respect to trademarks, copyrights and patentable
inventions and processes, (ii) upon written notice to Debtor, the exercise
of
voting rights with respect to voting securities, which rights may be exercised,
if Collateral Agent so elects, with a view to causing the liquidation of
assets
of the issuer of any such securities, and (iii) the execution, delivery and
recording, in connection with any sale or other disposition of any Collateral,
of the endorsements, assignments or other instruments of conveyance or transfer
with respect to such Collateral;
(b) to
the
extent that Debtor’s authorization given in Section
3
is not
sufficient, to file such financing statements with respect hereto, with or
without Debtor’s signature, or a photocopy of this Agreement in substitution for
a financing statement, as Collateral Agent may deem appropriate and to execute
in Debtor’s name such financing statements and amendments thereto and
continuation statements which may require Debtor’s signature; and
(c) to
file
for record, at Borrower’s cost and expense and in Borrower’s name, any notices
that Collateral Agent considers necessary or desirable to protect the
Collateral.
15.2 Ratification
by Debtor.
To the
extent permitted by law, Debtor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of attorney
is a
power coupled with an interest and is irrevocable.
15.3 No
Duty on Collateral Agent.
The
powers conferred on Collateral Agent hereunder are solely to protect its
interests in the Collateral and shall not impose any duty upon it to exercise
any such powers. Collateral Agent shall be accountable only for the amounts
that
it actually receives as a result of the exercise of such powers, and neither
it
nor any of its officers, directors, employees or agents shall be responsible
to
Debtor for any act or failure to act, except for Collateral Agent’s own gross
negligence or willful misconduct.
16. Rights
and Remedies.
If an
Event of Default shall have occurred and be continuing, Collateral Agent,
without any other notice to or demand upon Debtor, shall have in any
jurisdiction in which enforcement hereof is sought, in addition to all other
rights and remedies, the rights and remedies of a secured party under the
Uniform Commercial Code and any additional rights and remedies which may
be
provided to a secured party in any jurisdiction in which Collateral is located,
including, without limitation, the right to take possession of the Collateral,
and for that purpose Collateral Agent may, so far as Debtor can give authority
therefor, enter upon any premises on which the Collateral may be situated
and
remove the same therefrom. During continuance of an Event of Default, Collateral
Agent may in its discretion require Debtor to assemble all or any part of
the
Collateral at such location or locations within the jurisdiction(s) of Debtor’s
principal office(s) or at such other locations as Collateral Agent may
reasonably designate. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Collateral Agent shall give to Debtor at least ten Business Days
prior
written notice of the time and place of any public sale of Collateral or
of the
time after which any private sale or any other intended disposition is to
be
made. Debtor hereby acknowledges that ten Business Days prior written notice
of
such sale or sales shall be reasonable notice. In addition, Debtor waives
any
and all rights that it may have to a judicial hearing in advance of the
enforcement of any of Collateral Agent’s rights and remedies hereunder,
including, without limitation, its right following an Event of Default to
take
immediate possession of the Collateral and to exercise its rights and remedies
with respect thereto.
17. Standards
for Exercising Rights and Remedies.
To the
extent that applicable law imposes duties on Collateral Agent to exercise
remedies in a commercially reasonable manner, Debtor acknowledges and agrees
that it is not commercially unreasonable for Collateral Agent (a) to fail
to
incur expenses reasonably deemed significant by Collateral Agent to prepare
Collateral for disposition or otherwise to fail 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
fail to remove liens or encumbrances 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
the Collateral is of a specialized nature, (f) to contact other persons,
whether
or not in the same business as Debtor, for expressions of interest in acquiring
all or any portion of the 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, (k) to purchase
insurance or credit enhancements to insure Collateral Agent against risks
of
loss, collection or disposition of Collateral or to provide to Collateral Agent
a guaranteed return from the collection or disposition of Collateral, or
(l) to
the extent deemed appropriate by Collateral Agent, to obtain the services
of
other brokers, investment bankers, consultants and other professionals to
assist
Collateral Agent in the collection or disposition of any of the Collateral.
Debtor acknowledges that the purpose of this Section
17
is to
provide non-exhaustive indications of what actions or omissions by Collateral
Agent would fulfill Collateral Agent’s duties under the Uniform Commercial Code
or other law of the State of Utah or any other relevant jurisdiction in
Collateral Agent’s exercise of remedies against the Collateral and that other
actions or omissions by Collateral Agent shall not be deemed to fail to fulfill
such duties solely on account of not being indicated in this Section
17.
Without
limitation upon the foregoing, nothing contained in this Section
17
shall be
construed to grant any rights to Debtor or to impose any duties on Collateral
Agent that would not have been granted or imposed by this Agreement or by
applicable law in the absence of this Section
17.
18. No
Waiver by Collateral Agent, etc.
Collateral Agent shall not be deemed to have waived any of its rights or
remedies in respect of the Obligations or the Collateral unless such waiver
shall be in writing and signed by Collateral Agent. No delay or omission
on the
part of Collateral Agent in exercising any right or remedy shall operate
as a
waiver of such right or remedy or any other right or remedy. A waiver on
any one
occasion shall not be construed as a bar to or waiver of any right or remedy
on
any future occasion. All rights and remedies of Collateral Agent with respect
to
the Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly,
alternatively, successively or concurrently at such time or at such times
as
Collateral Agent deems expedient.
19. Suretyship
Waivers by Debtor.
Debtor
waives demand, notice, protest, notice of acceptance of this Agreement, notice
of loans made, credit extended, Collateral received or delivered or other
action
taken in reliance hereon and all other demands and notices of any description.
With respect to both the Obligations and the Collateral, Debtor assents to
any
extension or postponement of the time of payment or any other indulgence,
to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner
and at
such time or times as Collateral Agent may deem advisable. Collateral Agent
shall have no duty as to the collection or protection of the Collateral or
any
income therefrom, the preservation of rights against prior parties, or the
preservation of any rights pertaining thereto beyond the safe custody thereof
as
set forth in Section
12.2.
Debtor
further waives any and all other suretyship defenses.
20. Marshalling.
Collateral Agent shall not be required to marshal any present or future
collateral security (including but not limited to the Collateral) for, or
other
assurances of payment of, the Obligations or any of them or to resort to
such
collateral security or other assurances of payment in any particular order,
and
all of its rights and remedies hereunder and in respect of such collateral
security and other assurances of payment shall be cumulative and in addition
to
all other rights and remedies, however existing or arising. To the extent
that
it lawfully may, Debtor hereby agrees that it will not invoke any law relating
to the marshalling of collateral which might cause delay in or impede the
enforcement of Collateral Agent’s rights and remedies under this Agreement or
under any other instrument creating or evidencing any of the Obligations
or
under which any of the Obligations is outstanding or by which any of the
Obligations is secured or payment thereof is otherwise assured, and, to the
extent that it lawfully may, Debtor hereby irrevocably waives the benefits
of
all such laws.
21. Proceeds
of Dispositions; Expenses.
Debtor
shall pay to Collateral Agent on demand any and all expenses, including
reasonable attorneys’ fees and disbursements, incurred or paid by Collateral
Agent in protecting, preserving or enforcing Collateral Agent’s rights and
remedies under or in respect of any of the Obligations or any of the Collateral.
After deducting all of said expenses, the residue of any proceeds of collection
or sale or other disposition of the Collateral shall, to the extent actually
received in cash, be distributed ratably to each Secured Party, which shall
be
applied to the payment of the Obligations in such order or preference as
each
Secured Party may determine, proper allowance and provision being made for
any
Obligations not then due. Upon the final payment and satisfaction in full
of all
of the Obligations and after making any payments required by Sections
9-608(a)(1)(C) or 9a-615(a)(3) of the Uniform Commercial Code, any excess
shall
be returned to Debtor. In the absence of final payment and satisfaction in
full
of all of the Obligations, Debtor shall remain liable for any
deficiency.
22. Overdue
Amounts.
Until
paid, all amounts due and payable by Debtor hereunder shall be a debt secured
by
the Collateral and shall bear, whether before or after judgment, interest
at the
rate of interest for overdue principal set forth in the Loan
Documents.
23. CHOICE
OF LAW.
THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREUNDER SHALL BE GOVERNED BY
AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH WITHOUT GIVING
EFFECT
TO CONFLICT OF LAWS PRINCIPLES. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS MAY BE TRIED AND LITIGATED IN THE STATE AND FEDERAL COURTS LOCATED
IN
THE COUNTY OF SALT LAKE, STATE OF UTAH OR, IN ANY OTHER COURT IN WHICH A
PARTY
SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF DEBTOR AND COLLATERAL
AGENT
WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT
ANY PROCEEDING IS BROUGHT IN ANY STATE OR FEDERAL COURT LOCATED IN THE COUNTY
OF
SALT LAKE, STATE OF UTAH.
24. WAIVER
OF JURY TRIAL.
EACH OF
DEBTOR AND COLLATERAL AGENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED UPON CONTRACT, TORT OR ANY
OTHER
THEORY). EACH OF DEBTOR AND COLLATERAL AGENT (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
25. WAIVER
OF SPECIAL DAMAGES. TO
THE
EXTENT PERMITTED BY APPLICABLE LAW, DEBTOR SHALL NOT ASSERT, AND HEREBY WAIVES,
ANY CLAIM AGAINST COLLATERAL AGENT, ON ANY THEORY OF LIABILITY, FOR SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL
DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT
OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS, THE
LOAN
OR THE USE OF THE PROCEEDS THEREOF.
26. MISCELLANEOUS
WAIVERS.
WITH
RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS AGREEMENT (EACH,
A
“PROCEEDING”),
DEBTOR IRREVOCABLY (A) SUBMITS TO THE JURISDICTION OF THE STATE AND FEDERAL
COURTS HAVING JURISDICTION IN THE CITY OF SALT LAKE, COUNTY OF SALT LAKE
AND
STATE OF UTAH, AND (B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME
TO THE
LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM
THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER
WAIVES
THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES
NOT
HAVE JURISDICTION OVER SUCH PARTY. NOTHING IN THIS AGREEMENT SHALL PRECLUDE
COLLATERAL AGENT FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR
WILL
THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE
BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION. DEBTOR FURTHER AGREES
AND
CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED
FOR
UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY UTAH
STATE
OR UNITED STATES COURT SITTING IN THE CITY OF SALT LAKE AND COUNTY OF SALT
LAKE
MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED
TO DEBTOR AT THE ADDRESS INDICATED IN THE GUARANTY OR THE LOAN AGREEMENT,
AS THE
CASE MAY BE, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT
THAT IF
DEBTOR SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE
FIVE
(5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.
27. Miscellaneous.
The
headings of each section of this Agreement are for convenience only and shall
not define or limit the provisions thereof. This Agreement and all rights
and
obligations hereunder shall be binding upon Debtor and its respective successors
and assigns, and shall inure to the benefit of Collateral Agent and its
successors and assigns. If any term of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity of all other terms hereof
shall
in no way be affected thereby, and this Agreement shall be construed and
be
enforceable as if such invalid, illegal or unenforceable term had not been
included herein. Debtor acknowledges receipt of a copy of this Agreement.
All
notices required or permitted hereunder shall be made in the manner required
or
permitted by the Uniform Commercial Code and otherwise in accordance with
the
terms and at the addresses set forth in the Chase Loan Agreement and the
Chase
Guaranty. Debtor hereby authorizes Collateral Agent, at its sole discretion
and
without notice to or consent of Debtor, to disclose to Zions or Chase on
a
confidential basis any information, financial or otherwise, which it may
possess
concerning Debtor. Collateral Agent acknowledges that it is aware, and
Collateral Agent will advise its directors, officers, employees, agents and
advisors (collectively, “Representatives”) who are informed as to the matters
which are the subject of this Agreement, that the United States securities
laws
prohibit any Person who has received from an issuer material, non-public
information concerning such issuer from purchasing or selling securities
of such
issuer or from communicating such information to any other Person under
circumstances in which it is reasonably foreseeable that such Person is likely
to purchase or sell securities. Lender further agrees that it will keep,
and it
will advise its Representatives of its obligations to keep, confidential
any
material non-public information disclosed to Collateral Agent by Borrower
or any
Person acting on Borrower’s behalf. This Section is a confidentiality agreement
for purposes of Regulation FD promulgated under the Securities Exchange Act
of
1934.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, intending to be legally bound, Debtor has caused this Agreement
to be duly executed as of the date first above written.
| XXXXXXXX XXXXX CO. | ||
| |
|
a
Utah
corporation |
| By: | /s/ XXXXXXX XXXXXX | |
|
Name: Xxxxxxx Xxxxxx |
||
| Title: Treasurer and Vice President of Investor Relations | ||
| XXXXXXXX XXXXX PRINTING, INC. | ||
| |
|
a
Utah
corporation |
| By: | /s/ XXXXXXX XXXXXX | |
|
Name: Xxxxxxx Xxxxxx |
||
| Title: Treasurer | ||
| FRANKLIN DEVELOPMENT CORPORATION | ||
| |
|
a
Utah
corporation |
| By: | /s/ XXXXXXX XXXXXX | |
|
Name: Xxxxxxx Xxxxxx |
||
| Title:Vice President | ||
| XXXXXXXX XXXXX TRAVEL, INC. | ||
| |
|
a
Utah
corporation |
| By: | /s/ XXXXXXX XXXXXX | |
|
Name: Xxxxxxx Xxxxxx |
||
| Title: Treasurer | ||
| XXXXXXXX XXXXX CATALOG SALES, INC. | ||
| |
|
a
Utah
corporation |
| By: | /s/ XXXXXXX XXXXXX | |
|
Name: Xxxxxxx Xxxxxx |
||
| Title: Treasurer | ||
| XXXXXXXX XXXXX CLIENT SALES, INC | ||
| |
|
a
Utah
corporation |
| By: | /s/ XXXXXXX XXXXXX | |
|
Name: Xxxxxxx Xxxxxx |
||
| Title: Treasurer | ||
| XXXXXXXX XXXXX PRODUCT SALES, INC. | ||
| |
|
a
Utah
corporation |
| By: | /s/ XXXXXXX XXXXXX | |
|
Name: Xxxxxxx Xxxxxx |
||
| Title: Treasurer | ||
| XXXXXXXX XXXXX SERVICES, L.L.C. | ||
| |
|
a
Utah
liability company |
| By: |
XXXXXXXX
XXXXX
SERVICES, L.L.C.
a Utah
corporation, its member
/s/ XXXXXXX XXXXXX
|
|
|
Name: Xxxxxxx Xxxxxx |
||
| Title: Treasurer | ||
| XXXXXXXX XXXXX CO. | ||
| |
|
a
Utah
corporation |
| By: | /s/ XXXXXXX XXXXXX | |
|
Name: Xxxxxxx Xxxxxx |
||
| Title: Treasurer and Vice President of Investor Relations | ||
|
By:
|
XXXXXXXX XXXXX DEVELOPMENT CORPORATION | |
| |
|
a
Utah
corporation, its member |
| By: | /s/ XXXXXXX XXXXXX | |
|
Name: Xxxxxxx Xxxxxx |
||
| Title:Vice President | ||
| XXXXXXXX XXXXX CO. | ||
| |
|
a
Utah
corporation |
|
By:
|
FRANKLIN DEVELOPMENT CORPORATION | |
| a Utah corporation, its general partner | ||
| By: | /s/ XXXXXXX XXXXXX | |
|
Name: Xxxxxxx Xxxxxx |
||
|
Title:
Vice President
"Debtor"
|
||
| JPMORGAN CHASE BANK, N.A. | ||
| |
|
a national
banking association |
| By: | /s/ XXXX X. XXXXXXX | |
|
Name: Xxxx X. Xxxxxxx |
||
|
Title:
Senior Vice President
"Collateral
Agent"
|
||
EXHIBIT
A
DESCRIPTION
OF PERSONAL PROPERTY
All
of
Debtor’s assets, including, without limitation, “Accounts,” “Cash Proceeds,”
“Chattel Paper,” “Collateral,” “Deposit Accounts,” “Electronic Chattel Paper,”
“Equipment,” “Fixtures,” General Intangibles,” “Goods,” “Instruments,”
“Inventory,” “Investment Property,” “Letter-of-credit Rights,” “Noncash
Proceeds,” and “Tangible Chattel Paper,” as defined in the Uniform Commercial
Code. Such assets include, without limitation:
(a) All
personal property, (including, without limitation, all goods, supplies,
equipment, furniture, furnishings, fixtures, machinery, inventory, construction
materials and software embedded in any of the foregoing) in which Debtor
now or
hereafter acquires an interest or right, together with any interest of Debtor
in
and to personal property which is leased or subject to any superior security
interest, and all books, records, leases and other agreements, documents,
and
instruments of whatever kind or character, relating to such personal
property;
(b) All
fees,
income, rents, issues, profits, earnings, receipts, royalties, and revenues
which, after the date hereof and while any portion of the Obligations remains
unpaid or unperformed, may accrue from such personal property or any part
thereof, or which may be received or receivable by Debtor from any hiring,
using, letting, leasing, subhiring, subletting, subleasing, occupancy,
operation, or use thereof;
(c) All
of
Debtor’s present and future rights to receive payments of money, services, or
property, including, without limitation, rights to receive capital contributions
or subscriptions from Debtor’s partners or shareholders, amounts payable on
account of the sale of partnership interests in Debtor or the capital stock
of
Debtor, accounts and other accounts receivable, deposit accounts, chattel
paper
(whether tangible or electronic), notes, drafts, contract rights, instruments,
general intangibles, and principal, interest, and payments due on account
of
goods sold or leased, services rendered, loans made or credit extended, together
with title to or interest in all agreements, documents, and instruments
evidencing securing or guarantying the same;
(d) All
other
intangible property (and related software) and rights relating to the personal
property described in Paragraph
(a)
above or
the operation or use thereof, including, without limitation, all governmental
and private contracts, agreements, permits, licenses, and approvals relating
thereto, all names under or by which such property may at any time be sold,
marketed, operated or known, all rights to carry on business under any such
names, or any variant thereof, all trade names and trademarks, copyrights,
patents, trademark, patent and copyright applications and registrations,
patterns, designs, drawings, plans and specifications, other proprietary
information and intellectual property, and royalties relating in any way
thereto, and all goodwill and software in any way relating thereto;
(e) Debtor’s
rights under all insurance policies covering the Personal Property, or any
other
part of the Collateral, and any and all proceeds, loss payments, and premium
refunds payable regarding the same;
(f) All
causes of action, claims, compensation, and recoveries for any damage to,
destruction of, or condemnation or taking of the Personal Property, or any
other
part of the Collateral, or for any conveyance in lieu thereof, whether direct
or
consequential, or for any damage or injury to the Personal Property, or any
other part of the Collateral, or for any loss or diminution in value of the
Personal Property, or any other part of the Collateral;
(g) All
Debtor’s rights in proceeds of the Loan evidenced by the Note;
(h) All
of
Debtor’s rights under any agreements affecting the Personal Property, whether
now existing or hereafter arising; and
(i) All
proceeds from sale or disposition of any of the aforesaid
collateral.
As
used
in this Exhibit
A
the
terms “Obligations,” “Note,” “Collateral,” and “Personal Property” shall have
the meanings set forth in the Security Agreement to which this Exhibit
A
is
attached.
EXHIBIT
B
FINANCING
STATEMENT INFORMATION
The
Collateral Agent is:
JPMorgan
Chase Bank, N.A.
00
Xxxx
Xxxxxxxx, Xxxxx 000
Xxxx
Xxxx
Xxxx, Xxxx 00000
The
Debtor is:
|
Name,
Type of Organization and Jurisdiction
|
Address
|
Organizational
Identification No.
|
Employer
Identification No.
|
|
XXXXXXXX
XXXXX CO., a
Utah corporation
|
0000
Xxxx Xxxxxxx Xxxx.
Xxxx
Xxxx Xxxx, Xxxx 00000
|
852657-0142
|
00-0000000
|
|
XXXXXXXX
XXXXX PRINTING, INC., a
Utah corporation
|
0000
Xxxx Xxxxxxx Xxxx.
Xxxx
Xxxx Xxxx, Xxxx 00000
|
848770-0142
|
00-0000000
|
|
FRANKLIN
DEVELOPMENT CORPORATION, a
Utah corporation
|
0000
Xxxx Xxxxxxx Xxxx.
Xxxx
Xxxx Xxxx, Xxxx 00000
|
976652-0142
|
00-0000000
|
|
XXXXXXXX
XXXXX TRAVEL, INC., a
Utah corporation
|
0000
Xxxx Xxxxxxx Xxxx.
Xxxx
Xxxx Xxxx, Xxxx 00000
|
1303276-0142
|
00-0000000
|
|
XXXXXXXX
XXXXX CATALOG SALES, INC., a
Utah corporation
|
0000
Xxxx Xxxxxxx Xxxx.
Xxxx
Xxxx Xxxx, Xxxx 00000
|
1318674-0142
|
00-0000000
|
|
XXXXXXXX
XXXXX CLIENT SALES, INC., a
Utah corporation
|
0000
Xxxx Xxxxxxx Xxxx.
Xxxx
Xxxx Xxxx, Xxxx 00000
|
1318682-0142
|
00-0000000
|
|
XXXXXXXX
XXXXX PRODUCT SALES, INC., a
Utah corporation
|
0000
Xxxx Xxxxxxx Xxxx.
Xxxx
Xxxx Xxxx, Xxxx 00000
|
1318690-0142
|
00-0000000
|
|
XXXXXXXX
XXXXX SERVICES, L.L.C., a
Utah limited liability company
|
0000
Xxxx Xxxxxxx Xxxx.
Xxxx
Xxxx Xxxx, Xxxx 00000
|
2028086-0160
|
00-0000000
|
|
XXXXXXXX
XXXXX MARKETING, LTD., a
Utah limited partnership
|
0000
Xxxx Xxxxxxx Xxxx.
Xxxx
Xxxx Xxxx, Xxxx 00000
|
2115011-0180
|
00-0000000
|
The
Collateral is the Personal Property described on Exhibit
A
to the
Security Agreement.
