SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement") dated as of April 18,
2000 is made among XxxxxXxxxx.xxx Inc. (the "Obligor") and the Lenders referred
to below.
The Bridge Note and Warrant Purchase Agreement dated as of even date
herewith (the "Bridge Note Purchase Agreement") between the Obligor and the
lenders identified in the Bridge Note Purchase Agreement (the "Lenders")
provides, subject to its terms and conditions, for certain loans to the Obligor.
It is a condition to the obligations of the Lenders under the Bridge Note
Purchase Agreement that the Obligor executes and delivers, and grants the Liens
provided for in, this Agreement.
To induce the Lenders to enter into, and to extend credit under, the
Bridge Note Purchase Agreement and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Obligor agrees
to pledge and grant a security interest in the Collateral as security for the
Secured Obligations. Accordingly, the Obligor agrees with the Lenders as
follows: Article 1
DEFINITIONS
1.01 Certain Defined Terms. Unless otherwise defined, all
capitalized terms used in this Agreement that are defined in the Bridge Note
Purchase Agreement or the Bridge Notes (including terms incorporated by
reference) shall have the respective meanings assigned to them in the Bridge
Note Purchase Agreement or the Bridge Notes. In addition, the following terms
shall have the following meanings under this Agreement:
"Accounts" shall have the meaning assigned to that term in
Section 2.01(a).
"Basic Documents" shall mean the Bridge Note Purchase Agreement, the
Bridge Notes and this Agreement, collectively.
"Casualty Event" shall mean, with respect to any property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
property for which such Person receives insurance proceeds, or proceeds of a
condemnation award or other compensation.
"Collateral" shall have the meaning assigned to that term in
Section 2.01.
"Copyright Collateral" shall mean all Copyrights, whether now owned
or in the future acquired by the Obligor.
"Copyrights" shall mean, collectively, (a) all copyrights, copyright
registrations and applications for copyright registrations, (b) all renewals and
extensions of all copyrights, copyright registrations and applications for
copyright registration and (c) all rights, now existing or in the future coming
into existence, (i) to all income, royalties, damages and other payments
(including in respect of all past, present or future infringements) now or in
the future due or payable under or with respect to any of the foregoing, (ii) to
xxx for all past, present and future infringements with respect to any of the
foregoing and (iii) otherwise accruing under or pertaining to any of the
foregoing throughout the world.
"Documents" shall have the meaning assigned to that term in
Section 2.01(e).
"Equipment" shall have the meaning assigned to that term in
Section 2.01(d).
"Governmental Approvals" shall mean any authorization, application,
consent, approval, order, consent decree, license, franchise, lease, ruling,
permit, tariff, rate, certification, exemption, filing or registration by or
with any Governmental Authority.
"Governmental Authority" shall mean any government, governmental or
quasi-governmental department, ministry, commission, board, bureau, agency,
regulatory authority, instrumentality of any government (central or local),
judicial, legislative or administrative body, domestic or foreign, federal,
state or local, having jurisdiction over the Person or matter in question.
"Instruments" shall have the meaning assigned to that term in
Section 2.01(b).
"Intellectual Property" shall mean all Copyright Collateral, all
Patent Collateral and all Trademark Collateral, together with (a) all
inventions, processes, production methods, proprietary information, know-how and
trade secrets; (b) all licenses or user or other agreements granted to the
Obligor with respect to any of the foregoing, in each case whether now or in the
future owned or used, including the licenses or other agreements with respect to
the Copyright Collateral, the Patent Collateral or the Trademark Collateral; (c)
all information, customer lists, identification of suppliers, data, plans,
blueprints, specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards, processing
standards, performance standards, catalogs, computer and automatic machinery
software and programs; (d) all field repair data, sales data and other
information relating to sales or service of products now or in the future
manufactured; (e) all accounting information and all media in which or on which
any information or knowledge or data or records may be recorded or stored and
all computer programs used for the compilation or printout of that information,
knowledge, records or data; (f) all Governmental Approvals now held or in the
future obtained by the Obligor in respect of any of the foregoing; and (g) all
causes of action, claims and warranties now owned or in the future acquired by
the Obligor in respect of any of the foregoing. Intellectual Property shall
include all of the foregoing owned or acquired by the Obligor on a worldwide
basis.
"Inventory" shall have the meaning assigned to that term in
Section 2.01(c).
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
property or any agreement to give, or notice of, any of the foregoing.
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"Obligations" means all obligation of every nature of Obligor from
time to time owed to Lenders under the Basic Documents or for fees or expenses,
reimbursements and indemnifications and other amounts due or to become due
thereunder. Time is of the essence in the performance of all Obligations, except
as otherwise expressly provided in the Basic Documents.
"Patent Collateral" shall mean all Patents, whether now owned or in
the future acquired by the Obligor.
"Patents" shall mean, collectively, (a) all patents and patent
applications, (b) all reissues, divisions, continuations, renewals, extensions
and continuations-in-part of all patents or patent applications and (c) all
rights, now existing or in the future coming into existence, (i) to all income,
royalties, damages, and other payments (including in respect of all past,
present and future infringements) now or in the future due or payable under or
with respect to any of the foregoing, (ii) to xxx for all past, present and
future infringements with respect to any of the foregoing and (iii) otherwise
accruing under or pertaining to any of the foregoing throughout the world,
including all inventions and improvements described or discussed in all such
patents and patent applications.
"Secured Obligations" shall mean (a) any and all Obligations and (b)
any and all obligations of the Obligor for the performance of its agreements,
covenants and undertakings under or in respect of the Basic Documents.
"Trademark Collateral" shall mean all Trademarks, whether now owned
or in the future acquired by the Obligor. Notwithstanding the foregoing, the
Trademark Collateral shall not include any Trademark that would be rendered
invalid, abandoned, void or unenforceable by reason of its being included as
part of the Trademark Collateral.
"Trademarks" shall mean, collectively, (a) all trade names,
trademarks and service marks, logos, trademark and service xxxx registrations
and applications for trademark and service xxxx registrations, (b) all renewals
and extensions of any of the foregoing and (c) all rights, now existing or in
the future coming into existence, (i) to all income, royalties, damages and
other payments (including in respect of all past, present and future
infringements) now or in the future due or payable under or with respect to any
of the foregoing, (ii) to xxx for all past, present and future infringements
with respect to any of the foregoing and (iii) otherwise accruing under or
pertaining to any of the foregoing throughout the world, together, in each case,
with the product lines and goodwill of the business connected with the use of,
or otherwise symbolized by, each such trade name, trademark and service xxxx.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as
in effect in the State of California from time to time or, by reason of
mandatory application, any other applicable jurisdiction.
1.02 Interpretation. In this Agreement, unless otherwise indicated,
the singular shall include the plural and plural the singular; words importing
any gender shall include the other gender; references to statutes or regulations
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shall be construed as including all statutory or regulatory provisions
consolidating, amending or replacing the statute or regulation referred to;
references to "writing" shall include printing, typing, lithography and other
means of reproducing words in a tangible visible form; the words "including"
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; references to articles, sections (or subdivisions of sections),
exhibits, annexes or schedules are to this Agreement; references to agreements
and other contractual instruments shall be deemed to include all subsequent
amendments, extensions and other modifications to those instruments (without,
however, limiting any prohibition on any such amendments, extensions or
modifications by the terms of the Basic Documents); and references to Persons
shall include their respective successors and permitted assigns and, in the case
of Governmental Authorities, Persons succeeding to their respective functions
and capacities.
Article 2
COLLATERAL
2.01 Grant. As collateral security for the prompt payment in full
when due (whether at stated maturity, upon acceleration, on any optional or
mandatory prepayment date or otherwise) and performance of the Secured
Obligations, the Obligor hereby pledges and grants to the Lenders, a security
interest in all of the Obligor's right, title and interest in and to the
following property, whether now owned or in the future acquired by the Obligor
and whether now existing or in the future coming into existence (collectively,
the "Collateral"):
(a) all accounts and general intangibles (each as defined in the
Uniform Commercial Code) of the Obligor constituting a right to the payment
of money, whether or not earned by performance, including all moneys due
and to become due to the Obligor in repayment of any loans or advances, in
payment for goods (including Inventory and Equipment) sold or leased or for
services rendered, in payment of tax refunds and in payment of any
guarantee of any of the foregoing (collectively, the "Accounts");
(b) all instruments, chattel paper or letters of credit (each as
defined in the Uniform Commercial Code) of the Obligor evidencing,
representing, arising from or existing in respect of, relating to, securing
or otherwise supporting the payment of, any of the Accounts (collectively,
the "Instruments");
(c) all inventory (as defined in the Uniform Commercial Code) and all
other goods of the Obligor that are held by the Obligor for sale, lease or
furnishing under a contract of service (including to its Affiliates), that
are so leased or furnished or that constitute raw materials, work in
process or material used or consumed in its business, including all spare
parts and related supplies, all goods obtained by the Obligor in exchange
for any such goods, all products made or processed from any such goods and
all substances, if any, commingled with or added to any such goods
(collectively, the "Inventory");
(d) all equipment (as defined in the Uniform Commercial Code) and all
other goods of the Obligor that are used or acquired for use primarily in
its business, including all spare parts and related supplies, all goods
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obtained by the Obligor in exchange for any such goods, all substances, if
any, commingled with or added to those goods and all upgrades and other
improvements to those goods, in each case to the extent not constituting
Inventory (collectively, the "Equipment");
(e) all documents of title (as defined in the Uniform Commercial Code)
or other receipts of the Obligor covering, evidencing or representing
Inventory or Equipment (collectively, the "Documents");
(f) all contracts and other agreements of the Obligor relating to the
sale or other disposition of all or any part of the Inventory, Equipment or
Documents and all rights, warranties, claims and benefits of the Obligor
against any Person arising out of, relating to or in connection with all or
any part of the Inventory, Equipment or Documents of the Obligor, including
any such rights, warranties, claims or benefits against any Person storing
or transporting any such Inventory or Equipment or issuing any such
Documents;
(g) all other accounts or general intangibles of the Obligor not
constituting Accounts, including, to the extent related to all or any part
of the other Collateral, all books, correspondence, credit files, records,
invoices, tapes, cards, computer runs and other papers and documents in the
possession or under the control of the Obligor or any computer bureau or
service company from time to time acting for the Obligor;
(h) all other tangible and intangible property of the Obligor,
including all Intellectual Property; and
(i) all proceeds and products in whatever form of all or any part of
the other Collateral, including all proceeds of insurance and all
condemnation awards and all other compensation for any Casualty Event with
respect to all or any part of the other Collateral (together with all
rights to recover and proceed with respect to the same), and all
accessories to, substitutions for and replacements of all or any part of
the other Collateral
2.02 Perfection. Concurrently with the execution and delivery of
this Agreement, the Obligor will (i) file such financing statements and other
documents in such offices as are necessary or as the Lenders may reasonably
request to perfect and establish the priority of the Liens granted by this
Agreement, (ii) deliver and pledge to the Lenders any and all Instruments,
endorsed or accompanied by such instruments of assignment and transfer in such
form and substance as the Lenders may request, and (iii) take all such other
actions as are necessary or as the Lenders may request to perfect and establish
the priority of the Liens granted by this Agreement.
2.03 Preservation and Protection of Security Interests. The
Obligor will give, execute, deliver, file or record any and all financing
statements, notices, contracts, agreements or other instruments, obtain any and
all Governmental Approvals and take any and all steps that may be necessary or
as the Lenders reasonably may request to create, perfect, establish the priority
of, or to preserve the validity, perfection or priority of, the Liens granted by
this Agreement or to enable the Lenders to exercise and enforce their rights,
remedies, powers and privileges under this Agreement with respect to those
Liens.
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2.04 Use of Intellectual Property. So long as no Event of Default
has occurred and is continuing, the Obligor shall be permitted to exploit, use,
enjoy, protect, license, sublicense, assign, sell, dispose of or take other
actions with respect to the Intellectual Property in the ordinary course of the
business of the Obligor. In furtherance of the foregoing, so long as no Event of
Default has occurred and is continuing, the Lenders will from time to time, upon
the request of the Obligor, execute and deliver any instruments, certificates or
other documents, in the form so requested, which such Obligor certifies are
appropriate (in its judgment) to allow them to take any action permitted above.
The exercise of rights, remedies, powers and privileges under Section 5.01 by
the Lenders shall not terminate the rights of the holders of any licenses or
sublicenses previously granted by the Obligor in accordance with the first
sentence of this Section 2.04.
2.05 Instruments. So long as no Event of Default has occurred and
is continuing, the Obligor may retain for collection in the ordinary course of
business any Instruments obtained by it in the ordinary course of business, and
the Lenders will, promptly upon the request, and at the expense of, the Obligor,
make appropriate arrangements for making any Instruments pledged by the Obligor
available to the Obligor for purposes of presentation, collection or renewal.
Any such arrangement shall be effected, to the extent deemed appropriate by the
Lenders, against a trust receipt or like document.
2.06 Use of Collateral. So long as no Event of Default has occurred
and is continuing, the Obligor shall, in addition to its rights under Sections
2.05 and 2.06, in respect of the Collateral contemplated in those sections, be
entitled to use and possess the other Collateral and to exercise its rights,
title and interest in all contracts, agreements, licenses and Governmental
Approvals, subject to the rights, remedies, powers and privileges of the Lenders
under Article V and to that use, possession or exercise not otherwise
constituting an Event of Default.
2.07 Rights and Obligations.
(a) The Obligor shall remain liable to perform its duties and
obligations under the contracts and agreements included in the Collateral in
accordance with their respective terms to the same extent as if this Agreement
had not been executed and delivered. The exercise by the Lender of any right,
remedy, power or privilege in respect of this Agreement shall not release the
Obligor from any of its duties and obligations under those contracts and
agreements. No Lender shall have any duty, obligation or liability under those
contracts and agreements or in respect to any Governmental Approval included in
the Collateral by reason of this Agreement or any other Basic Document, nor
shall any Lender be obligated to perform any of the duties or obligations of the
Obligor under any such contract or agreement or any such Governmental Approval
or to take any action to collect or enforce any claim (for payment) under any
such contract or agreement or Governmental Approval.
(b) No Lien granted by this Agreement in the Obligor's right, title
and interest in any contract, agreement or Governmental Approval shall be deemed
to be a consent by any Lender to any such contract, agreement or Governmental
Approval.
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(c) No reference in this Agreement to proceeds or to the sale or
other disposition of Collateral shall authorize the Obligor to sell or otherwise
dispose of any Collateral.
(d) No Lender shall be required to take steps necessary to preserve
any rights against prior parties to any part of the Collateral.
2.08 Termination. When all Secured Obligations have been paid in
full, this Agreement shall automatically terminate, and the Lenders will
forthwith cause to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect of the Collateral, to or on the order
of the Obligor. The Lenders will also execute and deliver to the Obligor upon
that termination such Uniform Commercial Code termination statements and such
other documentation as is reasonably requested by the Obligor to effect the
termination and release of the Liens granted by this Agreement on the
Collateral.
ARTICLE 3
REPRESENTATIONS
As of the date hereof and as of the date of each extension of credit
by the Lenders, the Obligor represents and warrants to each Lender as follows:
3.01 Title. The Obligor is the sole beneficial owner of the
Collateral in which it purports to xxxxx x Xxxx pursuant to this Agreement, and
the Collateral is free and clear of all Liens, except for the Liens granted by
this Agreement and any Lien permitted to be prior to such granted Liens in the
following sentence. The Liens granted by this Agreement in favor of the Lenders
have attached and constitute a perfected security interest in all of that
collateral (other than Intellectual Property registered or otherwise located
outside of the United States of America) prior to all other Liens (other than
Liens imposed by for taxes, assessments or charges not yet due or which are
being contested in good faith; carriers', mechanics', warehouseman's, artisans',
service suppliers', depositaries' or other like Liens; pledges or deposits in
respect of workers' compensation, unemployment insurance and other social
security legislation; Liens to secure performance contracts, leases, statutory
obligations, surety and appeal bonds and other like obligations; easements,
rights or way, restrictions and other similar encumbrances; Liens to secure
purchase money indebtedness; and any extension renewal or replacement of any
such Liens.)
ARTICLE 4
COVENANTS
4.01 Books and Records. The Obligor will:
(a) keep full and accurate books and records relating to the
Collateral and stamp or otherwise xxxx those books and records in such manner
as the Lenders reasonably may require in order to reflect the Liens granted by
this Agreement;
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(b) prior to filing, either directly or through an
administrative agent, licensee or other designee, any application for any
Copyright, Patent or Trademark, furnish to the Lenders prompt notice of that
proposed filing; and
(c) permit representatives of the Lenders, upon reasonable
notice, at any time during normal business hours to inspect and make abstracts
from its books and records pertaining to the Collateral, permit representatives
of the Lenders to be present at the Obligor's place of business to receive
copies of all communications and remittances relating to the Collateral and
forward copies of any notices or communications received by the Obligor with
respect to the Collateral, all in such manner as the Lenders may request.
4.02 Removals, Etc. Without at least 30 days' prior written notice
to the Lenders, the Obligor will not (i) maintain any of its books and records
with respect to the Collateral at any office or maintain its principal place of
business at any place, or permit any Inventory or Equipment to be located
anywhere, other than at the address initially indicated for notices to it under
Section 6.02 or at the warehouse in Pennsylvania at which it currently keeps
Inventory and Equipment or in transit from one of those locations to another or
(ii) change its corporate name, or the name under which it does business, from
the name shown on the signature pages to this Agreement.
4.03 Sales and Other Liens. Except with the authorization of the
Lenders as specified in Section 6.01, the Obligor will not dispose of any
Collateral, create, incur, assume or suffer to exist any Lien upon any
Collateral or file or suffer to be on file or authorize to be filed, in any
jurisdiction, any financing statement or like instrument with respect to all or
any part of the Collateral in which the Lenders are not named as the sole
secured parties.
4.04 Further Assurances. The Obligor will, from time to time upon
the written request of the Lenders, execute and deliver such further documents
and do such other acts and things as the Lenders may reasonably request in order
fully to effect the purposes of this Agreement.
Article 5
REMEDIES
5.01 Events of Default, Etc. If any Event of Default has occurred
and is continuing:
(a) The Lenders in their discretion may require the Obligor
to, and the Obligor will, assemble the Collateral owned by it at such place or
places, reasonably convenient to both the Lenders and the Obligor, designated in
the Lenders request;
(b) the Lenders in their discretion may make any reasonable
compromise or settlement it deems desirable with respect to any of the
Collateral and may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, all or any part of the
Collateral;
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(c) the Lenders in their discretion may, in its name or in the name
of the Obligor or otherwise, demand, xxx for, collect or receive any money or
property at any time payable or receivable on account of or in exchange for all
or any part of the Collateral, but shall be under no obligation to do so;
(d) the Lenders in their discretion may, upon 5 business days'
prior written notice to the Obligor of the time and place, sell, lease or
otherwise dispose of all or any part of the Collateral that is then be or
subsequently comes into the possession, custody or control of any other
Lender or any of their respective agents, at such place or places as the
Lenders deem best, for cash, for credit or for future delivery (without
thereby assuming any credit risk) and at public or private sale, without demand
of performance or notice of intention to effect any such disposition or of the
time or place of any such sale (except such notice as is required above or by
applicable statute and cannot be waived), and any Lender or any other Person may
be the purchaser, lessee or recipient of all or any part of the Collateral so
disposed of at any public sale (or, to the extent permitted by law, at any
private sale) and thereafter hold the same absolutely, free from any claim or
right of whatsoever kind, including any right or equity of redemption
(statutory or otherwise), of the Obligor, and the Obligor hereby waives and
releases any such demand, notice and right or equity. In the event of any sale,
license or other disposition of any of the Trademark Collateral, the goodwill
connected with and symbolized by the Trademark Collateral subject to that
disposition shall be included, and the Obligor will supply to the Lenders or
their designee, for inclusion in that sale, assignment or other disposition,
all Intellectual Property relating to that Trademark Collateral. The Lenders
may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and that sale may be made at any time or
place to which the sale may be so adjourned; and
(e) the Lenders shall have, and in their discretion may exercise,
all of the rights, remedies, powers and privileges with respect to the
Collateral of a secured party under the Uniform Commercial Code (whether or not
the Uniform Commercial Code is in effect in the jurisdiction where those rights,
remedies, powers and privileges are asserted) and such additional rights,
remedies, powers and privileges to which a secured party is entitled under the
laws in effect in any jurisdiction where any rights, remedies, powers and
privileges in respect of this Agreement or the Collateral may be asserted,
including the right, to the maximum extent permitted by law, to exercise all
voting, consensual and other powers of ownership pertaining to the
Collateral as if the Lenders were the sole and absolute owners of the
Collateral (and the Obligor will take all such action as may be appropriate to
give effect to that right).
The proceeds of, and other realization upon, the Collateral by
virtue of the exercise of remedies under this Section 5.01 shall be applied in
accordance with Section 5.04.
5.02 Deficiency. If the proceeds of, or other realization upon, the
Collateral by virtue of the exercise of remedies under Section 5.01 are
insufficient to cover the costs and expenses of that exercise and the payment in
full of the other Secured Obligations, the Obligor shall remain liable for any
deficiency.
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5.03 Private Sale. No Lender shall incur any liability as a result
of the sale, lease or other disposition of all or any part of the Collateral at
any private sale pursuant to Section 5.01 conducted in a commercially reasonable
manner. The Obligor hereby waives any claims against any Lender that may arise
by reason of the fact that the price at which the Collateral may have been sold
at such a private sale was less than the price that might have been obtained at
a public sale or was less than the aggregate amount of the Secured Obligations,
even if the Lenders accept the first offer received and do not offer the
Collateral to more than one offeree.
5.04 Application of Proceeds. Except as otherwise expressly
provided in this Agreement, the proceeds of, or other realization upon, all or
any part of the Collateral by virtue of the exercise of remedies under Section
5.01 and any other cash at the time held by the Lenders under Section 5.01 shall
be applied by the Lenders:
First, to the payment of the costs and expenses of that exercise of
remedies, including reasonable out-of-pocket costs and expenses of the Lenders,
the fees and expenses of its agents and counsel and all other expenses incurred
and advances made by the Lenders in that connection;
Next, to the payment in full of the remaining Secured Obligations
equally and ratably in accordance with their respective amounts then due and
owing or as the Lenders holding the same may otherwise agree; and
Finally, subject to the rights of the other holder of any Lien in
the relevant Collateral, to the payment to the Obligor or as a court of
competent jurisdiction may direct of any surplus then remaining.
As used in this Section 5, "proceeds" of Collateral shall mean cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any property received under any bankruptcy,
reorganization or other similar proceeding as to the Obligor or any issuer of,
or account debtor or other obligor on, any of the Collateral.
ARTICLE 6
MISCELLANEOUS
6.01 Administration. Action permitted to be taken by Lenders under
this Agreement shall be permitted to be taken only upon approval of Lenders
holding not less than a majority of the aggregate outstanding principal amount
of the Bridge Notes.
6.02 Notices. All notices, requests and other communications
provided for in this Agreement shall be given or made in writing and delivered
by hand or courier service, mailed by certified or registered mail or sent by
telecopy to the intended recipient as specified below or, as to any party, at
such other address as is designated by that party in a notice to each other
party. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given or made upon receipt.
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To the Obligor: XxxxxXxxxx.xxx Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxx X
Xxxxxxxx Xxxxxxx, XX 00000
Telephone: 000.000.0000
Telecopy: 818.707.7132
Attention: President and General Counsel
To the Lenders: At the address set forth in the Purchase
Agreement.
6.03 Expenses, Etc. The Obligor will pay all out-of-pocket expenses
(including reasonable counsels' fees and expenses) of each Lender in connection
with any enforcement or collection proceeding (including any bankruptcy,
reorganization, restructuring, "work out" or other similar proceeding) as to any
of the obligations of the Obligor under this Agreement, the negotiation of any
restructuring or "work out"(whether or not consummated) or the enforcement of
this Section 6.03. All amounts due under this Agreement not paid when due shall
bear interest until paid at a rate per annum equal to the post-default rate
under the Bridge Notes.
6.04 Waiver. No failure or delay by any Lender in exercising any
remedy, right, power or privilege under this Agreement or any other Basic
Document shall operate as a waiver of that remedy, right, power or privilege,
nor shall any single or partial exercise of that remedy, right, power or
privilege preclude any other or further exercise of that remedy, right, power or
privilege or the exercise of any other remedy, right, power or privilege. The
remedies, rights, powers and privileges provided by this Agreement are
cumulative and not exclusive of any remedies, rights, powers or privileges
provided by the other Basic Documents or by law.
6.05 Amendments, Etc. No provision of this Agreement may be waived,
modified or supplemented except by an instrument in writing signed by the
Obligor and the Lenders (as specified in Section 6.01). Any modification,
supplement or waiver shall be for such period and subject to such conditions as
shall be specified in the written instrument effecting the same and shall be
binding upon each Lender and the Obligor, and any such waiver shall be effective
only in the specific instance and for the purpose for which given.
6.06 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of its parties and their respective successors and
assigns. The Obligor may not assign or transfer its rights or obligations under
this Agreement without the prior written consent of the Lenders (as specified in
Section 6.01).
6.07 Survival. Each representation and warranty made, or deemed to
be made by a notice of any extension of credit, in or pursuant to this Agreement
shall survive the making or deemed making of that representation and warranty,
and no Lender shall be deemed to have waived, by reason of making any extension
of credit, any Event of Default that may arise by reason of that representation
or warranty proving to have been false or misleading, notwithstanding that such
or any other Lender may have had notice or knowledge or reason to believe that
11
such representation or warranty was false or misleading at the time that
extension of credit was made.
6.08 Agreements Superseded. This Agreement supersedes all prior
agreements and understandings, written or oral, among the parties with respect
to the subject matter of this Agreement.
6.09 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of that prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable that provision in any other jurisdiction.
6.10 Captions. The table of contents, captions and section headings
appearing in this Agreement are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
6.11 Counterparts. This Agreement may be executed in any number of
counterparts, all of that taken together shall constitute one and the same
instrument, and any of the parties to the Agreement may execute this Agreement
by signing any such counterpart. Delivery of an executed counterpart of a
signature page to this Agreement by hand or by telecopy shall be effective as
the delivery of a fully executed counterpart of this Agreement.
6.12 Governing Law; Submission to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE STATE OF
CALIFORNIA. THE OBLIGOR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA AND OF ANY
CALIFORNIA STATE COURT SITTING IN LOS ANGELES, CALIFORNIA FOR THE PURPOSES OF
ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. THEOBLIGOR IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
IN THE FUTURE HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
6.13 Waiver of Jury Trial. THE OBLIGOR AND THE LENDERS HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
XXXXXXXXXX.XXX INC.
By: /s/ Xxxxx X. Xxxxx
Xxxxx Xxxxx
President and Chief Executive Officer
/s/ Xxxx Xxxxx
Xxxx Xxxxx
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
PALOMAR VENTURES I, L.P.
By: /s/ Xxx Xxxxx
Name: Xxx Xxxxx
Title: General Partner
Security Agreement Signature Page
Exhibit D
Insurance Coverage
The Company is in the process of obtaining denial of services insurance,
web crime insurance, intellectual property insurance and other web specific
insurance.
Through The Right Start, Inc., the Company has Property Insurance,
Crime Insurance, Excess Crime Insurance, Liability Insurance, Employee Benefits
Liability Insurance, Automobile Insurance, Commercial Umbrella Insurance,
Workers' Compensation/Employer's Liability Insurance, Directors & Officers'
Insurance and Employment Practices Liability Insurance. See the attached
description.
