EXHIBIT 10.2
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is made and entered
into as of November 30, 2005 by INFOCROSSING, INC., a Delaware corporation (the
"Borrower" and a "Grantor"), EACH OF THE UNDERSIGNED SUBSIDIARIES OF THE
BORROWER AND EACH OTHER PERSON WHO SHALL BECOME A PARTY HERETO BY EXECUTION OF A
SECURITY JOINDER AGREEMENT (each a "Guarantor" and a "Grantor", and collectively
with the Borrower, the "Grantors"), and BANK OF AMERICA, N.A., a national
banking association, as Administrative Agent (the "Administrative Agent") for
each of the Lenders now or hereafter party to the Credit Agreement defined below
(collectively with the Administrative Agent, and certain other Persons parties
to Related Credit Arrangements as more particularly described in Section 21
hereof, the "Secured Parties") now or hereafter party to the Credit Agreement
(as defined below). All capitalized terms used but not otherwise defined herein
or pursuant to Section 1 hereof shall have the respective meanings assigned
thereto in the Credit Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Secured Parties have agreed to provide to the Borrower a
term loan facility and a revolving credit facility with a letter of credit
sublimit and swing line facility pursuant to the Credit Agreement dated as of
November 30, 2005 by and among the Borrower, the Administrative Agent and the
Lenders (as from time to time amended, revised, modified, supplemented or
amended and restated, the "Credit Agreement"); and
WHEREAS, as collateral security for payment and performance of the
Obligations and the obligations and liabilities of the Borrower and any Loan
Party now existing or hereafter arising under Related Credit Arrangements, the
Borrower is willing to grant to the Administrative Agent for the benefit of the
Secured Parties a security interest in certain of its personal property and
assets pursuant to the terms of this Security Agreement; and
WHEREAS, each Guarantor will materially benefit from the Loans to be
made, and the Letters of Credit to be issued, under the Credit Agreement and
each Guarantor is a party (as signatory or by joinder) to a Guaranty pursuant to
which each Guarantor guarantees the Obligations of the Borrower; and
WHEREAS, as collateral security for payment and performance by each
Guarantor of its Guarantor's Obligations (as defined in the Guaranty to which
such Guarantor is a party), and the payment and performance of its obligations
and liabilities (whether now existing or hereafter arising) hereunder or under
any of the other Loan Documents to which it is now or hereafter becomes a party,
each Guarantor is willing to grant to the Administrative Agent for the benefit
of the Secured Parties a security interest in certain of its personal property
and assets pursuant to the terms of this Security Agreement; and
WHEREAS, the Secured Parties are unwilling to enter into the Loan
Documents unless the Borrower and the Guarantors enter into this Security
Agreement;
NOW, THEREFORE, in order to induce the Secured Parties to enter into
the Loan Documents and to make Loans and issue Letters of Credit, and in further
consideration of the premises and the mutual covenants contained herein, the
parties hereto agree as follows:
1. CERTAIN DEFINITIONS. Terms used in this Security Agreement, not
otherwise expressly defined herein or in the Credit Agreement, and for which
meanings are provided in the Uniform Commercial Code of the State of New York
(the "UCC"), shall have such meanings. The term "Qualifying Control Agreement"
shall have the meaning set forth on Schedule 1 hereto.
2. GRANT OF SECURITY INTEREST. The Borrower hereby grants as collateral
security for the payment, performance and satisfaction of all of the Obligations
and the obligations and liabilities of any Loan Party now existing or hereafter
arising under Related Credit Arrangements, and each Guarantor hereby grants as
collateral security for the payment, performance and satisfaction of all of its
Guarantor's Obligations (as defined in its Guaranty) and the payment and
performance of its obligations and liabilities (whether now existing or
hereafter arising) hereunder or under any of the other Loan Documents to which
it is now or hereafter becomes a party (such obligations and liabilities of the
Borrower and the other Grantors referred to collectively as the "Secured
Obligations"), to the Administrative Agent for the benefit of the Secured
Parties a continuing first priority security interest in and to, and
collaterally assigns to the Administrative Agent for the benefit of the Secured
Parties, all of the assets of such Grantor or in which such Grantor has or may
have or acquire an interest or the power to transfer rights therein, whether now
owned or existing or hereafter created, acquired or arising and wheresoever
located, including the following:
(a) All Accounts;
(b) All Inventory;
(c) All Equipment;
(d) All Goods;
(e) All Fixtures;
(f) All General Intangibles;
(g) All Deposit Accounts;
(h) All Chattel Paper (whether tangible or electronic);
(i) All Investment Property;
(j) All Instruments;
(k) All Documents;
(l) All Letter-of-Credit Rights, and all Supporting
Obligations;
(m) The commercial tort claims identified on Schedule 9(i)
hereto, as such Schedule may be supplemented from time to time in
accordance with the terms hereof (collectively referred to hereinafter
as "Commercial Tort Claims");
(n) All books and records relating to any of the forgoing
(including customer data, credit files, ledgers, computer programs,
printouts, and other computer materials and records (and all media on
which such data, files, programs, materials and records are or may be
stored)); and
(o) All Proceeds, products and replacements of, accessions to,
and substitutions for, any of the foregoing, including without
limitation proceeds of insurance policies insuring any of the
foregoing.
All of the property and interests in property described in subsections
(a) through (o) are herein collectively referred to as the "Collateral."
Notwithstanding the foregoing, the term Collateral shall not include: (i) any of
such property or property rights financed with Indebtedness permitted by Section
7.03(e) of the Credit Agreement and encumbered by a Lien of the provider of such
Indebtedness permitted by Section 7.01(i), to the extent and only so long as the
agreements creating such Indebtedness or such Lien prohibit any other Lien on
such property, (ii) any Equity Interest in a Direct Foreign Subsidiary to the
extent the same represents, for all Grantors in the aggregate, more than 65% of
the total combined Foreign Subsidiary Voting Stock of such Direct Foreign
Subsidiary, and (iii) any property that would otherwise constitute a General
Intangible to the extent that the grant of a security interest in such property
is prohibited by any requirement of law of a Governmental Authority, requires a
consent not obtained from any Governmental Authority pursuant to such
requirement of law or is prohibited by, or constitutes a breach or default under
or results in the termination of or requires any consent not obtained under, any
contract, license, permit, agreement, instrument or other document evidencing or
giving rise to such property or, in the case of any Investment Property, any
applicable shareholder, joint venture or similar agreement, except in each case
to the extent that such requirement of law or the term in such contract,
license, agreement, instrument or other document or shareholder, joint venture
or similar agreement providing for such prohibition, breach, default or
termination or requiring such consent is ineffective under applicable law;
provided, however, the exclusion in this clause (iii) shall not apply to Equity
Interests in joint venture investments or Subsidiaries acquired or created after
the Closing Date unless after reasonable best efforts the relevant Grantor is
unable either to avoid the conditions set forth in this clause (iii) or to
obtain consents, waivers or approvals thereof.
3. PERFECTION. As of the date of execution of this Security Agreement
or Security Joinder Agreement by each Grantor, as applicable (with respect to
each Grantor, its "Applicable Date"), such Grantor shall have:
(a) furnished the Administrative Agent with duly authorized
financing statements in form, number and substance suitable for filing,
sufficient under applicable law, and reasonably satisfactory to the
Administrative Agent in order that upon the filing of the same the
Administrative Agent, for the benefit of the Secured Parties, shall
have a duly perfected security interest in all Collateral in which a
security interest can be perfected by the filing of financing
statements;
(b) to the extent expressly required by the terms hereof or of
the Credit Agreement, or otherwise as the Administrative Agent may
request, furnished the Administrative Agent with properly executed
Qualifying Control Agreements, issuer acknowledgments of the
Administrative Agent's interest in Letter-of-Credit Rights, and
evidence of the placement of a restrictive legend on tangible Chattel
Paper (and the tangible components of Electronic Chattel Paper), and
taken appropriate action acceptable to the Administrative Agent
sufficient to establish the Administrative Agent's control of
Electronic Chattel Paper (and the electronic components of hybrid
Chattel Paper), as appropriate, with respect to Collateral in which
either (i) a security interest can be perfected only by control or such
restrictive legending, or (ii) a security interest perfected by control
or accompanied by such restrictive legending shall have priority as
against a lien creditor, a purchaser of such Collateral from the
applicable Grantor, or a security interest perfected by Persons not
having control or not accompanied by such restrictive legending, in
each case in form and substance reasonably acceptable to the
Administrative Agent and sufficient under applicable law so that the
Administrative Agent, for the benefit of the Secured Parties, shall
have a security interest in all such Collateral perfected by control;
(c) to the extent expressly required by the terms hereof or of
the Credit Agreement, delivered to the Administrative Agent or, if the
Administrative Agent shall specifically consent in each instance, an
agent or bailee of the Administrative Agent who has acknowledged such
status in a properly executed Qualifying Control Agreement possession
of all Collateral with respect to which either a security interest can
be perfected only by possession or a security interest perfected by
possession shall have priority as against Persons not having
possession, and including in the case of Instruments, Documents, and
Investment Property in the form of certificated securities, duly
executed endorsements or stock powers in blank, as the case may be,
affixed thereto in form and substance acceptable to the Administrative
Agent and sufficient under applicable law so that the Administrative
Agent, for the benefit of the Secured Parties, shall have a security
interest in all such Collateral perfected by possession;
with the effect that the Liens conferred in favor of the Administrative Agent
shall be and remain duly perfected and of first priority subject only, to the
extent applicable, to Liens allowed to exist and have priority under Section
7.01 of the Credit Agreement ("Permitted Liens"). All financing statements
(including all amendments thereto and continuations thereof), control
agreements, certificates, acknowledgments, stock powers and other documents,
electronic identification, restrictive legends, and instruments furnished in
connection with the creation, enforcement, protection, perfection or priority of
the Administrative Agent's security interest in Collateral, including such items
as are described above in this Section 3, are sometimes referred to herein as
"Perfection Documents". The delivery of possession of items of or evidencing
Collateral, causing other Persons to execute and deliver Perfection Documents as
appropriate, the filing or recordation of Perfection Documents, the
establishment of control over items of Collateral, and the taking of such other
actions as may be necessary or advisable in the determination of the
Administrative Agent to create, enforce, protect, perfect, or establish or
maintain the priority of, the security interest of the Administrative Agent for
the benefit of the Secured Parties in the Collateral is sometimes referred to
herein as "Perfection Action".
4. MAINTENANCE OF SECURITY INTEREST; FURTHER ASSURANCES.
(a) Each Grantor will from time to time at its own expense,
deliver specific assignments of Collateral or such other Perfection
Documents, and take such other or additional Perfection Action, as may
be required by the terms of the Loan Documents or as the Administrative
Agent may reasonably request in connection with the administration or
enforcement of this Security Agreement or related to the Collateral or
any part thereof in order to carry out the terms of this Security
Agreement, to perfect, protect, maintain the priority of or enforce the
Administrative Agent's security interest in the Collateral, subject
only to Permitted Liens, or otherwise to better assure and confirm unto
the Administrative Agent its rights, powers and remedies for the
benefit of the Secured Parties hereunder. Without limiting the
foregoing, each Grantor hereby irrevocably authorizes the
Administrative Agent to file (with, or to the extent permitted by
applicable law, without the signature of the Grantor appearing thereon)
financing statements (including amendments thereto and initial
financing statements in lieu of continuation statements) or other
Perfection Documents (including copies thereof) showing such Grantor as
"debtor" at such time or times and in all filing offices as the
Administrative Agent may from time to time determine to be necessary or
advisable to perfect or protect the rights of the Administrative Agent
and the Secured Parties hereunder, or otherwise to give effect to the
transactions herein contemplated, any of which Perfection Documents, at
the Administrative Agent's election, may describe the Collateral as or
including all assets of the Grantor. Each Grantor hereby irrevocably
ratifies and acknowledges the Administrative Agent's authority to have
effected filings of Perfection Documents made by the Administrative
Agent prior to its Applicable Date.
(b) With respect to any and all Collateral, each Grantor
agrees to do and cause to be done all things necessary to perfect,
maintain the priority of and keep in full force the security interest
granted in favor of the Administrative Agent for the benefit of the
Secured Parties, including, but not limited to, the prompt payment upon
demand therefor by the Administrative Agent of all fees and expenses
(including documentary stamp, excise or intangibles taxes) incurred in
connection with the preparation, delivery, or filing of any Perfection
Document or the taking of any Perfection Action to perfect, protect or
enforce a security interest in Collateral in favor of the
Administrative Agent for the benefit of the Secured Parties, subject
only to Permitted Liens. All amounts not so paid when due shall
constitute additional Secured Obligations and (in addition to other
rights and remedies resulting from such nonpayment) shall bear interest
from the date of demand until paid in full at the Default Rate.
(c) Each Grantor agrees to maintain among its books and
records appropriate notations or evidence of the security interest
granted hereunder to the Administrative Agent for the benefit of the
Secured Parties.
(d) Each Grantor agrees that, in the event any Proceeds (other
than goods) of Collateral shall be or become commingled with other
property not constituting Collateral, then such Proceeds may, to the
extent permitted by law, be identified by application of the lowest
intermediate balance rule to such commingled property.
5. RECEIPT OF PAYMENT. In the event an Event of Default shall occur and
be continuing and a Grantor (or any of its subsidiaries, directors, officers,
employees or agents) shall receive any Proceeds of Collateral, including without
limitation monies, checks, notes, drafts or any other items of payment, each
Grantor shall hold all such items of payment in trust for the Administrative
Agent for the benefit of the Secured Parties, and as the property of the
Administrative Agent for the benefit of the Secured Parties, separate from the
funds and other property of such Grantor, and no later than the first Business
Day following the receipt thereof, at the election of the Administrative Agent,
such Grantor shall cause such Collateral to be forwarded to the Administrative
Agent for its custody, possession and disposition on behalf of the Secured
Parties in accordance with the terms hereof and of the other Loan Documents.
6. PRESERVATION AND PROTECTION OF COLLATERAL.
(a) Except for the exercise of reasonable care in the custody
of any Collateral in its possession (it being understood that following
reasonable banking practices shall be deemed to be an exercise of
reasonably care), each Grantor shall be responsible for the safekeeping
of its Collateral in its possession. Neither the Administrative Agent,
any Secured Party, nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or
realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of any Grantor or otherwise.
(b) Each Grantor shall keep and maintain its tangible personal
property Collateral in good operating condition and repair, ordinary
wear and tear excepted.
(c) Each Grantor agrees (i) to pay when due all taxes, charges
and assessments against the Collateral in which it has any interest,
unless being contested in good faith by appropriate proceedings
diligently conducted and against which adequate reserves have been
established in accordance with GAAP, and (ii) to cause to be terminated
and released all Liens (other than Permitted Liens) on the Collateral.
Upon the failure of any Grantor to so pay or contest such taxes,
charges, or assessments, or cause such Liens to be terminated, the
Administrative Agent at its option may pay or contest any of them or
amounts relating thereto (the Administrative Agent having the sole
right to determine the legality or validity and the amount necessary to
discharge such taxes, charges, Liens or assessments) but shall not have
any obligation to make any such payment or contest. All sums so
disbursed by the Administrative Agent, including reasonable Attorneys'
Costs, court costs, expenses and other charges related thereto, shall
be payable promptly by the applicable Grantor to the Administrative
Agent and shall be additional Secured Obligations secured by the
Collateral, and any amounts not so promptly paid (in addition to other
rights and remedies resulting from such nonpayment) shall bear interest
from the date of demand until paid in full at the Default Rate.
7. STATUS OF GRANTORS AND COLLATERAL GENERALLY. Each Grantor represents
and warrants to, and covenants with, the Administrative Agent for the benefit of
the Secured Parties, with respect to itself and the Collateral as to which it
has or acquires any interest, that:
(a) It is at its Applicable Date (or as to Collateral acquired
after its Applicable Date will be upon the acquisition of the same)
and, except as permitted by the Credit Agreement and subsection (b) of
this Section 7, will continue to be, the owner of the Collateral, free
and clear of all Liens, other than the security interest hereunder in
favor of the Administrative Agent for the benefit of the Secured
Parties and Permitted Liens, and that it will at its own cost and
expense defend such Collateral and any products and Proceeds thereof
against all claims and demands of all Persons (other than holders of
Permitted Liens) in excess of $250,000 for any individual claim or
demand and $500,000 in the aggregate for all such claims or demands,
unless such Grantor shall have received the express prior written
consent of the Administrative Agent in each instance. Upon the failure
of any Grantor to so defend, the Administrative Agent may do so at its
option but shall not have any obligation to do so. All sums so
disbursed by the Administrative Agent, including reasonable Attorneys'
Costs, court costs, expenses and other charges related thereto, shall
be payable on demand by the applicable Grantor to the Administrative
Agent and shall be additional Secured Obligations secured by the
Collateral, and any amounts not so paid on demand (in addition to other
rights and remedies resulting from such nonpayment) shall bear interest
from the date of demand until paid in full at the Default Rate.
(b) It shall not (i) sell, assign, transfer, lease, license or
otherwise dispose of any of, or grant any option with respect to, the
Collateral, except for Dispositions permitted under the Credit
Agreement, (ii) create or suffer to exist any Lien upon or with respect
to any of the Collateral except for the security interests created by
this Security Agreement and Permitted Liens, or (iii) take any other
action in connection with any of the Collateral that would materially
impair the value of the interest or rights of such Grantor in the
Collateral taken as a whole or that would materially impair the
interest or rights of the Administrative Agent for the benefit of the
Secured Parties.
(c) It has full power, legal right and lawful authority to
enter into this Security Agreement (and any Security Joinder Agreement
applicable to it) and to perform its terms, including the grant of the
security interests in the Collateral herein provided for.
(d) No authorization, consent, approval or other action by,
and no notice to or filing with, any Governmental Authority or any
other Person which has not been given or obtained, as the case may be,
is required either (i) for the grant by such Grantor of the security
interests granted hereby or for the execution, delivery or performance
of this Security Agreement (or any Security Joinder Agreement) by such
Grantor, or (ii) for the perfection of or the exercise by the
Administrative Agent, on behalf of the Secured Parties, of its rights
and remedies hereunder, except for action required by the UCC to
perfect and exercise remedies with respect to the security interest
conferred hereunder.
(e) No effective financing statement or other Perfection
Document similar in effect, nor any other Perfection Action, covering
all or any part of the Collateral purported to be granted or taken by
or on behalf of such Grantor (or by or on behalf of any other Person
and which remains effective as against all or any part of the
Collateral) has been filed in any recording office, delivered to
another Person for filing (whether upon the occurrence of a contingency
or otherwise), or otherwise taken, as the case may be, except such as
pertain to Permitted Liens and such as may have been filed for the
benefit of, delivered to, or taken in favor of, the Administrative
Agent for the benefit of the Secured Parties in connection with the
security interests conferred hereunder.
(f) Schedule 7(f) attached hereto contains true and complete
information as to each of the following: (i) the exact legal name of
each Grantor as it appears in its Organizational Documents as of its
Applicable Date and at any time during the five (5) year period ending
as of its Applicable Date (the "Covered Period"), (ii) the jurisdiction
of formation and form of organization of each Grantor, and the
identification number of such Grantor in its jurisdiction of formation
(if any), (iii) each address of the chief executive office of each
Grantor as of its Applicable Date and at any time during the Covered
Period, (iv) all trade names or trade styles used by such Grantor as of
its Applicable Date and at any time during the Covered Period, (v) the
address of each location of such Grantor at which any tangible personal
property Collateral (including Account Records and Account Documents)
is located at its Applicable Date or has been located at any time
during the Covered Period, (vi) with respect to each location described
in clause (v) that is not owned beneficially and of record by such
Grantor, the name and address of the owner thereof; and (vii) the name
of each Person other than such Grantor and the address of such Person
at which any tangible personal property Collateral of such Grantor is
held under any warehouse, consignment, bailment or other arrangement as
of its Applicable Date. No Grantor shall change its name, change its
jurisdiction of formation (whether by reincorporation, merger or
otherwise), change the location of its place of business (as such term
is defined in the UCC) with respect to any Grantor that is an
unregistered organization, or utilize any additional location where
tangible personal property Collateral (including Account Records and
Account Documents) may be located, except in each case upon giving not
less than ten (10) days' prior written notice to the Administrative
Agent and taking or causing to be taken at such Grantor's expense all
such Perfection Action, including the delivery of such Perfection
Documents, as may be reasonably requested by the Administrative Agent
to perfect or protect, or maintain the perfection and priority of, the
Lien of the Administrative Agent for the benefit of the Secured Parties
in Collateral contemplated hereunder.
(g) No Grantor shall engage in any consignment transaction in
respect of any of the Collateral, whether as consignee or consignor,
without the prior written consent of the Administrative Agent in each
instance.
(h) No Grantor shall cause, suffer or permit any of the
tangible personal property Collateral (i) to be evidenced by any
document of title (except for shipping documents as necessary or
customary to effect the receipt of raw materials or components or the
delivery of inventory to customers, in each case in the ordinary course
of business) or (ii) to be in the possession, custody or control of any
warehouseman or other bailee without the prior written consent of the
Administrative Agent in each instance.
(i) The applicable Grantor shall use commercially reasonable
efforts to obtain from (i) the lessors of those locations set forth on
Schedule 7(f) attached hereto and located in (A) Leonia, New Jersey,
(B) Norcross, Georgia, (C) Brea, California, (D) Tempe, Arizona, (E)
Omaha, Nebraska and (F) 000 Xxxx Xxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxx and
(ii) upon the reasonable request of the Administrative Agent, any
lessor of property on which material tangible personal property
Collateral is or shall be located (excluding, however, office
equipment), an acknowledgment of the Lien in favor of the
Administrative Agent for the benefit of the Secured Parties conferred
hereunder and waiver such lessor's statutory and consensual liens and
rights with respect to such Collateral in form and substance reasonably
acceptable to the Administrative Agent and delivered in writing to the
Administrative Agent in accordance with the provisions of the following
sentence. Such Grantor shall have a period of sixty (60) days after the
opening of a new location or of an increase in tangible personal
property Collateral in any prior location such that the value of all
such Collateral at such new location or prior location is greater than
$100,000 to provide the Administrative Agent (at such Grantor's own
cost and expense) such additional Perfection Documents and take such
other Perfection Action as the Administrative Agent may deem reasonably
necessary or advisable to carry out the transactions contemplated by
this Security Agreement; provided, however, that with the
Administrative Agent's written consent, such sixty (60) day period may
be extended by thirty (30) days to enable such Grantor to obtain such
additional Perfection Documents and take such other Perfection Actions
so long as the applicable Grantor.
8. INSPECTION. The Administrative Agent (by any of its officers,
employees and agents), on behalf of the Secured Parties, shall have the right
upon prior notice to an executive officer of any Grantor, and at any reasonable
times during such Grantor's usual business hours (but, other than during the
continuance of an Event of Default, not more often than once per fiscal quarter
for each property of such Grantor), to inspect the Collateral, all records
related thereto (and to make extracts or copies from such records), and the
premises upon which any of the Collateral is located, to discuss such Grantor's
affairs and finances with any Person after giving the Grantor the opportunity to
be present at such meeting (other than Persons obligated on any Accounts
("Account Debtors") except as expressly otherwise permitted in the Loan
Documents) and to verify with any Person other than (except as expressly
otherwise permitted in the Loan Documents) Account Debtors the amount, quality,
quantity, value and condition of, or any other matter relating to, the
Collateral and, if an Event of Default has occurred and is continuing, to
discuss such Grantor's affairs and finances with such Grantor's Account Debtors
and to verify the amount, quality, value and condition of, or any other matter
relating to, the Collateral with such Account Debtors. Upon or after the
occurrence and during the continuation of an Event of Default, the
Administrative Agent may at any time and from time to time employ and maintain
on such Grantor's premises a custodian selected by the Administrative Agent who
shall have full authority to do all acts necessary to protect the Administrative
Agent's (for the benefit of the Secured Parties) interest. All expenses incurred
by the Administrative Agent, on behalf of the Secured Parties, by reason of the
employment of such custodian shall be paid by such Grantor on demand from time
to time and shall be added to the Secured Obligations secured by the Collateral,
and any amounts not so paid on demand (in addition to other rights and remedies
resulting from such nonpayment) shall bear interest from the date of demand
until paid in full at the Default Rate.
9. SPECIFIC COLLATERAL.
(a) ACCOUNTS. With respect to its Accounts whether now
existing or hereafter created or acquired and wheresoever located, each
Grantor represents, warrants and covenants to the Administrative Agent
for the benefit of the Secured Parties that:
(i) Each Grantor shall keep accurate and complete
records of its Accounts ("Account Records") and from time to
time shall furnish to the Administrative Agent at intervals as
requested by the Administrative Agent (but, other than during
the continuance of an Event of Default, not more often than
twice per fiscal year) a schedule of Accounts in form and
substance reasonably acceptable to the Administrative Agent
describing all Accounts created or acquired by such Grantor
("Schedule of Accounts"); provided, however, that such
Grantor's failure to execute and deliver any such Schedule of
Accounts shall not affect or limit the Administrative Agent's
security interest or other rights in and to any Accounts for
the benefit of the Secured Parties. Upon the occurrence of an
Event of Default, if requested by the Administrative Agent,
each Grantor shall furnish the Administrative Agent with
copies of proof of delivery and other documents relating to
the Accounts so scheduled, including without limitation
repayment histories and present status reports (collectively,
"Account Documents") and such other matter and information
relating to the status of then existing Accounts as the
Administrative Agent shall request.
(ii) All Account Records and Account Documents are
and shall at all times be located only at such Grantor's
current chief executive office as set forth on Schedule 7(f)
attached hereto, such other locations as are specifically
identified on Schedule 7(f) attached hereto as an "Account
Documents location," or as to which the Grantor has complied
with Section 7(f) hereof.
(iii) The Accounts are genuine, are in all respects
what they purport to be, are not evidenced by an instrument or
document or, if evidenced by an instrument or document, are
only evidenced by one original instrument or document.
(iv) The Accounts cover bona fide sales, leases,
licenses or other dispositions of property of such Grantor, or
the rendition by such Grantor of services, to an Account
Debtor.
(v) The amounts of the face value of any Account
shown or reflected on any Schedule of Accounts, invoice
statement, or certificate delivered to the Administrative
Agent, are actually owing to such Grantor and are not
contingent for any reason; and there are no setoffs,
discounts, allowances, claims, counterclaims or disputes of
any kind or description in an amount greater than $250,000 in
the aggregate, or greater than $100,000 individually, existing
or asserted with respect thereto and such Grantor has not made
any agreement with any Account Debtor thereunder for any
deduction therefrom, except as may be stated in the Schedule
of Accounts and reflected in the calculation of the face value
of each respective invoice related thereto.
(vi) Except for conditions generally applicable to
such Grantor's industry and markets, there are no facts,
events, or occurrences known to such Grantor pertaining
particularly to any Accounts which are reasonably expected to
materially impair in any way the validity, collectibility or
enforcement of Accounts that would reasonably be likely, in
the aggregate, to be of material economic value, or in the
aggregate materially reduce the amount payable thereunder from
the amount of the invoice face value shown on any Schedule of
Accounts, or on any certificate, contract, invoice or
statement delivered to the Administrative Agent with respect
thereto.
(vii) The property or services giving rise thereto
are not, and were not at the time of the sale or performance
thereof, subject to any Lien, claim, encumbrance or security
interest, except those of the Administrative Agent for the
benefit of Secured Parties and Permitted Liens.
(viii) In the event any amounts due and owing in
excess of $250,000 individually, or $500,000 in the aggregate
amount, are in dispute between any Account Debtor and a
Grantor (which shall include without limitation any dispute in
which an offset claim or counterclaim may result), such
Grantor shall provide the Administrative Agent with written
notice thereof as soon as practicable, explaining in detail
the reason for the dispute, all claims related thereto and the
amount in controversy.
(b) INVENTORY. With respect to its Inventory whether now
existing or hereafter created or acquired and wheresoever located, each
Grantor represents, warrants and covenants to the Administrative Agent
for the benefit of the Secured Parties that:
(i) Each Grantor shall keep accurate and complete
records itemizing and describing the kind, type, location and
quantity of Inventory, its cost therefor and the selling price
of Inventory held for sale, and the daily withdrawals
therefrom and additions thereto, and shall furnish to the
Administrative Agent from time to time at reasonable intervals
as reasonably requested by the Administrative Agent (but,
other than during the continuance of an Event of Default, not
more often than twice per fiscal year), a current schedule of
Inventory ("Schedule of Inventory") based upon its most recent
physical inventory and its daily inventory records. Each
Grantor shall conduct a physical inventory no less frequently
than annually, and shall furnish to the Administrative Agent
such other documents and reports thereof as the Administrative
Agent shall reasonably request with respect to the Inventory.
(ii) All Inventory, other than Inventory having a
value of less than $100,000 in the aggregate for all
locations, is and shall at all times be located only at such
Grantor's locations as set forth on Schedule 7(f) attached
hereto or at such other locations as to which such Grantor has
complied with Section 7(f) hereof. No Grantor shall, other
than in the ordinary course of business in connection with its
sale, lease, license or other Disposition permitted under the
Credit Agreement, remove any Inventory having an aggregate
value in excess of that stated in the preceding sentence from
such locations.
(iii ) If any Account Debtor returns any Inventory to
a Grantor after shipment thereof, and such return generates a
credit in excess of $100,000 on any individual Account or
$250,000 in the aggregate on any Accounts of such Account
Debtor, such Grantor shall notify the Administrative Agent in
writing of the same as soon as practicable.
(c) EQUIPMENT. With respect to its Equipment whether now
existing or hereafter created or acquired and wheresoever located, each
Grantor represents, warrants and covenants to the Administrative Agent
for the benefit of the Secured Parties that:
(i) The Grantors, as soon as practicable following a
request therefor by the Administrative Agent, shall deliver to
the Administrative Agent any and all evidence of ownership of
any of the Equipment (including without limitation
certificates of title and applications for title).
(ii) The Grantors shall maintain accurate, itemized
records describing the kind, type, quality, quantity and value
of its Equipment and shall furnish the Administrative Agent
upon request with a current schedule containing the foregoing
information, but, other than during the continuance of an
Event of Default, not more often than twice per fiscal year.
(iii) All Equipment, other than Equipment having a
value of less than $100,000 in the aggregate for all
locations, is and shall at all times be located only at such
Grantor's locations as set forth on Schedule 7(f) attached
hereto or at such other locations as to which such Grantor has
complied with Section 7(f) hereof. No Grantor shall, other
than as expressly permitted under the Credit Agreement, sell,
lease, transfer, dispose of or remove any Equipment having an
aggregate value in excess of that stated in the preceding
sentence from such locations.
(d) SUPPORTING OBLIGATIONS. With respect to its Supporting
Obligations whether now existing or hereafter created or acquired and
wheresoever located, each Grantor represents, warrants and covenants to
the Administrative Agent for the benefit of the Secured Parties that:
(i) Each Grantor shall upon the request of the
Administrative Agent from time to time following the
occurrence and during the continuance of any Default or Event
of Default, deliver to the Administrative Agent the originals
of all documents evidencing or constituting Supporting
Obligations, together with such other documentation (executed
as appropriate by the Grantor) and information as may be
necessary to enable the Administrative Agent to realize upon
the Supporting Obligations in accordance with their respective
terms or transfer the Supporting Obligations as may be
permitted under the Loan Documents or by applicable law.
(ii) With respect to each letter of credit giving
rise to Letter-of-Credit Rights that has an aggregate stated
amount available to be drawn in excess of $250,000, each
Grantor shall, at the request of the Administrative Agent,
cause the issuer thereof to execute and deliver to the
Administrative Agent a Qualifying Control Agreement.
(e) INVESTMENT PROPERTY. With respect to its Investment
Property whether now existing or hereafter created or acquired and
wheresoever located, each Grantor represents, warrants and covenants to
the Administrative Agent for the benefit of the Secured Parties that:
(i) Schedule 9(e) attached hereto contains a true and
complete description of (x) the name and address of each
securities intermediary with which such Grantor maintains a
securities account in which Investment Property is or may at
any time be credited or maintained, and (y) all other
Investment Property of such Grantor other than interests in
Subsidiaries in which such Grantor has granted a Lien to the
Administrative Agent for the benefit of the Secured Parties
pursuant to a Pledge Agreement.
(ii) Except with the express prior written consent of
the Administrative Agent in each instance, all Investment
Property other than interests in Subsidiaries in which such
Grantor has granted a Lien to the Administrative Agent for the
benefit of the Secured Parties pursuant to a Pledge Agreement
shall be maintained at all times in the form of (a)
certificated securities, which certificates shall have been
delivered to the Administrative Agent together with duly
executed undated stock powers endorsed in blank pertaining
thereto, or (b) security entitlements credited to one or more
securities accounts as to each of which the Administrative
Agent has received (1) copies of the account agreement between
the applicable securities intermediary and the Grantor and the
most recent statement of account pertaining to such securities
account (each certified to be true and correct by an officer
of the Grantor) and (2) a Qualifying Control Agreement from
the applicable securities intermediary which remains in full
force and effect and as to which the Administrative Agent has
not received any notice of termination. Without limiting the
generality of the foregoing, no Grantor shall cause, suffer or
permit any Investment Property to be credited to or maintained
in any securities account not listed on Schedule 9(e) attached
hereto except in each case upon giving not less than thirty
(30) days' prior written notice to the Administrative Agent
and taking or causing to be taken at such Grantor's expense
all such Perfection Action, including the delivery of such
Perfection Documents, as may be reasonably requested by the
Administrative Agent to perfect or protect, or maintain the
perfection and priority of, the Lien of the Administrative
Agent for the benefit of the Secured Parties in Collateral
contemplated hereunder.
(iii) All dividends and other distributions with
respect to any of the Investment Property shall be subject to
the security interest conferred hereunder, provided, however,
that cash dividends paid to a Grantor as record owner of the
Investment Property may be disbursed to and retained by such
Grantor so long as no Default or Event of Default shall have
occurred and be continuing, free from any Lien hereunder.
(iv) So long as no Default or Event of Default shall
have occurred and be continuing, the registration of
Investment Property in the name of a Grantor as record and
beneficial owner shall not be changed and such Grantor shall
be entitled to exercise all voting and other rights and powers
pertaining to Investment Property for all purposes not
inconsistent with the terms hereof or of any Qualifying
Control Agreement relating thereto.
(v) Upon the occurrence and during the continuance of
any Default or Event of Default, at the option of the
Administrative Agent, all rights of the Grantors to exercise
the voting or consensual rights and powers which it is
authorized to exercise pursuant to clause (iv) immediately
above shall cease and the Administrative Agent may thereupon
(but shall not be obligated to), at its request, cause such
Collateral to be registered in the name of the Administrative
Agent or its nominee or agent for the benefit of the Secured
Parties and/or exercise such voting or consensual rights and
powers as appertain to ownership of such Collateral, and to
that end each Grantor hereby appoints the Administrative Agent
as its proxy, with full power of substitution, to vote and
exercise all other rights as a shareholder with respect to
such Investment Property upon the occurrence and during the
continuance of any Default or Event of Default, which proxy is
coupled with an interest and is irrevocable until the Facility
Termination Date, and each Grantor hereby agrees to provide
such further proxies as the Administrative Agent may request;
provided, however, that the Administrative Agent in its
discretion may from time to time refrain from exercising, and
shall not be obligated to exercise, any such voting or
consensual rights or such proxy. For purposes of this Security
Agreement, "Facility Termination Date" means the date as of
which all of the following shall have occurred: (a) the
Borrower shall have permanently terminated the credit
facilities under the Loan Documents by final payment in full
of all Outstanding Amounts, together with all accrued and
unpaid interest and fees thereon, other than (i) the undrawn
portion of Letters of Credit and (ii) all letter of credit
fees relating thereto accruing after such date (which fees
shall be payable solely for the account of the L/C Issuer and
shall be computed (based on interest rates and the Applicable
Rate then in effect) on such undrawn amounts to the respective
expiry dates of the Letters of Credit), in each case as have
been fully Cash Collateralized or as to which other
arrangements with respect thereto satisfactory to the
Administrative Agent and the L/C Issuer shall have been made;
(b) all Commitments shall have terminated or expired; (c) the
obligations and liabilities of the Borrower and each other
Loan Party under all Related Credit Arrangements shall have
been fully, finally and irrevocably paid and satisfied in full
and the Related Credit Arrangements shall have expired or been
terminated, or other arrangements satisfactory to the
counterparties shall have been made with respect thereto; and
(d) the Borrower and each other Loan Party shall have fully,
finally and irrevocably paid and satisfied in full all other
Obligations (except for obligations consisting of continuing
indemnities and other contingent Obligations of the Borrower
or any Loan Party that may be owing to the Administrative
Agent and each of its Related Parties or any Lender pursuant
to the Loan Documents and expressly survive termination of the
Credit Agreement or any other Loan Document).
(vi) Upon the occurrence and during the continuance
of any Default or Event of Default, all rights of the Grantors
to receive and retain cash dividends and other distributions
upon or in respect to Investment Property pursuant to clause
(iii) above shall cease and shall thereupon be vested in the
Administrative Agent for the benefit of the Secured Parties,
and each Grantor shall, or shall cause, all such cash
dividends and other distributions with respect to the
Investment Property to be promptly delivered to the
Administrative Agent (together, if the Administrative Agent
shall request, with any documents related thereto) to be held,
released or disposed of by it hereunder or, at the option of
the Administrative Agent, to be applied to the Secured
Obligations.
(f) DEPOSIT ACCOUNTS. With respect to its Deposit Accounts
whether now existing or hereafter created or acquired and wheresoever
located, each Grantor represents, warrants and covenants to the
Administrative Agent for the benefit of the Secured Parties that:
(i) Schedule 9(f) attached hereto contains a true and
complete description of the name and address of each
depositary institution with which such Grantor maintains a
Deposit Account.
(ii) Except with the express prior written consent of
the Administrative Agent in each instance, all Deposit
Accounts in which collected balances or deposits in excess of
(A) $100,000 in any individual Deposit Account and (B)
$500,000 in the aggregate for all Deposit Accounts that are or
may at any time be credited or maintained with any depositary
institution shall be maintained at all times with depositary
institutions as to which the Administrative Agent shall have
received a Qualifying Control Agreement; provided, however,
that with respect to those Deposit Accounts existing on the
Closing Date, the Grantors shall have ninety (90) days from
the Closing Date to take or cause to be taken all Perfection
Actions and deliver or cause to be delivered all Perfection
Documents required under this Section 9(f)(ii). Without
limiting the generality of the foregoing, no Grantor shall
cause, suffer or permit (x) any deposit to be evidenced by a
certificate of deposit unless such certificate of deposit is a
negotiable instrument and immediately upon receipt thereof
such certificate shall have been delivered to the
Administrative Agent, together with a duly executed undated
assignment in blank affixed thereto, or (y) any Deposit
Account not listed on Schedule 9(f) attached hereto in which
collected balances or deposits in excess of (A) $100,000 in
any individual Deposit Account and (B) $500,000 in the
aggregate for all Deposit Accounts that are or may at any time
be credited or maintained with any depositary institution to
be opened or maintained except in each case upon giving not
less than thirty (30) days' prior written notice to the
Administrative Agent and taking or causing to be taken at such
Grantor's expense all such Perfection Action, including the
delivery of such Perfection Documents, as may be reasonably
requested by the Administrative Agent to perfect or protect,
or maintain the perfection and priority of, the Lien of the
Administrative Agent for the benefit of the Secured Parties in
Collateral contemplated hereunder.
(g) CHATTEL PAPER. With respect to its Chattel Paper whether
now existing or hereafter created or acquired and wheresoever located,
each Grantor represents, warrants and covenants to the Administrative
Agent for the benefit of the Secured Parties that:
(i) Each Grantor shall at all times retain sole
physical possession of the originals of all Chattel Paper
(other than Electronic Chattel Paper and the electronic
components of hybrid Chattel Paper); provided, however, that
upon the request of the Administrative Agent upon the
occurrence and during the continuance of any Default or Event
of Default, such Grantor shall promptly deliver physical
possession of such Chattel Paper to the Administrative Agent
or its designee.
(ii) All counterparts of all tangible Chattel Paper
(and the tangible components of hybrid Chattel Paper) shall
promptly upon the creation or acquisition thereof by any
Grantor be conspicuously legended as follows: "A FIRST
PRIORITY SECURITY INTEREST IN THIS CHATTEL PAPER HAS BEEN
GRANTED TO BANK OF AMERICA, N.A., FOR ITSELF AND AS
ADMINISTRATIVE AGENT FOR CERTAIN LENDERS PURSUANT TO A
SECURITY AGREEMENT DATED AS OF NOVEMBER 30, 2005, AS AMENDED
FROM TIME TO TIME. NO SECURITY INTEREST OR OTHER INTEREST IN
FAVOR OF ANY OTHER PERSON MAY BE CREATED BY THE TRANSFER OF
PHYSICAL POSSESSION OF THIS CHATTEL PAPER OR OF ANY
COUNTERPART HEREOF EXCEPT BY OR WITH THE CONSENT OF THE
AFORESAID ADMINISTRATIVE AGENT AS PROVIDED IN SUCH SECURITY
AGREEMENT." In the case of Electronic Chattel Paper (including
the electronic components of hybrid Chattel Paper), each
Grantor shall promptly take all actions which are reasonably
practicable so that the Administrative Agent has "control" of
all Electronic Chattel Paper in accordance with the
requirements of Section 9-105 of the UCC.
(h) INSTRUMENTS. With respect to its Instruments whether now
existing or hereafter created or acquired and wheresoever located, each
Grantor represents, warrants and covenants to the Administrative Agent
for the benefit of the Secured Parties that each Grantor shall upon the
request of the Administrative Agent from time to time following the
occurrence and during the continuance of any Default or Event of
Default, deliver to the Administrative Agent the originals of all such
Instruments, together with duly executed undated endorsements in blank
affixed thereto and such other documentation and information as may be
necessary to enable the Administrative Agent to realize upon the
Instruments in accordance with their respective terms or transfer the
Instruments as may be permitted under the Loan Documents or by
applicable law.
(i) COMMERCIAL TORT CLAIMS. With respect to its Commercial
Tort Claims whether now existing or hereafter created or acquired and
wheresoever located, each Grantor represents, warrants and covenants to
the Administrative Agent for the benefit of the Secured Parties that:
(i) Schedule 9(i) attached hereto contains a true and
complete list of all Commercial Tort Claims in which any
Grantor has an interest and which have been identified by a
Grantor as of its Applicable Date, and as to which the Pledgor
believes in good faith there exists the possibility of
recovery (including by way of settlement) of monetary relief
in excess of $100,000 ("Grantor Claims"). Each Grantor shall
furnish to the Administrative Agent from time to time upon its
request a certificate of an officer of such Grantor referring
to this Section 9(i) and (x) identifying all Grantor Claims
that are not then described on Schedule 9(i) attached hereto
and stating that each of such additional Grantor Claims shall
be deemed added to such Schedule 9(i) and shall constitute a
Commercial Tort Claim, a Grantor Claim, and additional
Collateral hereunder, and (y) summarizing the status or
disposition of any Grantor Claims that have been settled, or
have been made the subject of any binding mediation, judicial
or arbitral proceeding, or any judicial or arbitral order on
the merits, or that have been abandoned. With respect to each
such additional Grantor Claim, such Grantor Claim shall be and
become part of the Collateral hereunder from the date such
claim is identified to the Administrative Agent as provided
above without further action, and (ii) the Administrative
Agent is hereby authorized at the expense of the applicable
Grantor to execute and file such additional financing
statements or amendments to previously filed financing
statements, and take such other action as it may deem
necessary or advisable, to perfect the Lien on such additional
Grantor Claims conferred hereunder.
(j) INTERNET PROPERTY RIGHTS. With respect to its rights,
titles and interests in and to any internet domain names or
registration rights relating thereto, and any internet websites or the
content thereof (collectively, "Internet Property Rights") whether now
existing or hereafter created or acquired and wheresoever located, each
Grantor represents, warrants and covenants to the Administrative Agent
for the benefit of the Secured Parties that:
(i) Schedule 9(j) attached hereto contains a true and
complete description of each internet domain name registered
to such Grantor or in which such Grantor has ownership,
operating or registration rights. Upon the occurrence of an
Event of Default and at the request of the Administrative
Agent, such Grantor shall provide the Administrative agent
with a list of (u) the name and address of the registrar for
such internet domain name, (v) the registration identification
information for such internet domain name, (w) the name of
each internet website operated (whether individually or
jointly with others) by such Grantor, (x) the name and address
of each internet service provider through whom each such
website is operated, (y) the name and address of each operator
of each other internet site, internet search engine, internet
directory or Web browser with whom such Grantor maintains any
advertising or linking relationship which is material to the
operation of or flow of internet traffic to such Grantor's
website, and (z) each technology licensing and other agreement
that is material either to the operation of such Grantor's
website or to the advertising and linking relationships
described in clause (y), and the name and address of each
other party to such agreement.
(ii) Upon the occurrence of an Event of Default, such
Grantor shall cause to be delivered to the Administrative
Agent with respect to each internet domain name registered to
such Grantor an undated transfer document, duly executed in
blank by such Grantor and in the form required by the
applicable internet domain name registrar, sufficient to
effect the transfer of each internet domain name to the
transferee thereof named in such transfer form upon delivery
to such registrar. Without limiting the generality of the
foregoing, no Grantor shall acquire any rights to any internet
domain name not listed on Schedule 9(j) attached hereto except
in each case upon giving not less than ten (10) days' prior
written notice thereof to the Administrative Agent, which
notice shall be accompanied by an appropriate supplement to
Schedule 9(j) reflecting such additional name. Without
limiting the foregoing, each Grantor shall furnish to the
Administrative Agent and the Lenders such supplements to
Schedule 9(j) from time to time as requested by the
Administrative Agent as shall be necessary to keep such
Schedule true and complete at all times.
(iii) So long as no Default or Event of Default shall
have occurred and be continuing, the registration of Internet
Property Rights in the name of a Grantor shall not be changed
and such Grantor shall be entitled to exercise all rights and
powers with respect thereto not inconsistent with the terms
hereof .
(iv) Each Grantor hereby expressly authorizes the
Administrative Agent following the occurrence and during the
continuance of any Event of Default to (i) complete and tender
each internet domain name transfer document in its own name or
in the name, place and stead of the Grantor in order to effect
the transfer of any internet domain name registration, either
to the Administrative Agent or to another transferee, as the
case may be, and (ii) maintain, obtain access to, and continue
to operate, in its own name or in the name, place and stead of
such Grantor, such Grantor's internet website and the contents
thereof, and all related advertising, linking and technology
licensing and other contractual relationships, in each case in
connection with the maintenance, preservation, operation, sale
or other disposition of Collateral or for any other purpose
permitted under the Loan Documents or by applicable law.
10. CASUALTY AND LIABILITY INSURANCE REQUIRED.
(a) Each Grantor will keep the Collateral continuously insured
against such risks as are customarily insured against by Persons of
similar size, in the same general locality and engaged in the same or
similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.
(b) Each insurance policy obtained in satisfaction of the
requirements of Section 10(a):
(i) may be provided by blanket policies now or
hereafter maintained by each or any Grantor or by the
Borrower;
(ii) shall be issued by such insurer (or insurers) as
shall be financially responsible, of recognized standing and
reasonably acceptable to the Administrative Agent;
(iii) shall be in such form and have such provisions
(including without limitation the loss payable clause, the
waiver of subrogation clause, the deductible amount, if any,
and the standard mortgagee endorsement clause) as are
generally considered standard provisions for the type of
insurance involved;
(iv) shall prohibit cancellation or substantial
modification, termination or lapse in coverage by the insurer
without at least thirty (30) days' prior written notice to the
Administrative Agent;
(v) without limiting the generality of the foregoing,
all insurance policies where applicable under Section 10(a)(i)
carried on the Collateral shall name the Administrative Agent,
for the benefit of the Secured Parties, as lender loss payee
and the Administrative Agent and Lenders as additional insured
thereunder.
(c) Prior to expiration of any such policy, such Grantor shall
furnish the Administrative Agent with evidence satisfactory to the
Administrative Agent that the policy or certificate has been renewed or
replaced or is no longer required by this Security Agreement.
(d) Each Grantor hereby makes, constitutes and appoints the
Administrative Agent (and all officers, employees or agents designated
by the Administrative Agent), for the benefit of the Secured Parties,
as such Grantor's true and lawful attorney (and agent-in-fact) for the
purpose of making, settling and adjusting claims under such policies of
insurance, endorsing the name of such Grantor on any check, draft,
instrument or other item or payment for the Proceeds of such policies
of insurance and for making all determinations and decisions with
respect to such policies of insurance, which appointment is coupled
with an interest and is irrevocable; provided, however, that the powers
pursuant to such appointment shall be exercisable only upon the
occurrence and during the continuation of an Event of Default.
(e) In the event such Grantor shall fail to maintain, or fail
to cause to be maintained, the full insurance coverage required
hereunder or shall fail to keep any of its Collateral in good repair
and good operating condition, the Administrative Agent may (but shall
be under no obligation to), without waiving or releasing any Secured
Obligation or Default or Event of Default by such Grantor hereunder,
contract for the required policies of insurance and pay the premiums on
the same or make any required repairs, renewals and replacements; and
all sums so disbursed by Administrative Agent, including reasonable
Attorneys' Costs, court costs, expenses and other charges related
thereto, shall be payable on demand by such Grantor to the
Administrative Agent, shall be additional Secured Obligations secured
by the Collateral, and (in addition to other rights and remedies
resulting from such nonpayment) shall bear interest from the date of
demand until paid in full at the Base Rate plus the Applicable Rate;
provided, however, that before the Administrative Agent takes any such
action it will notify such Grantor thereof.
(f) In case of any material damage to, destruction or loss of,
or claim or proceeding against, all or any material part of the
Collateral pledged hereunder by a Grantor, such Grantor shall give
prompt notice thereof to the Administrative Agent.
11. RIGHTS AND REMEDIES UPON EVENT OF DEFAULT. Upon and after an Event
of Default, the Administrative Agent shall have the following rights and
remedies on behalf of the Secured Parties in addition to any rights and remedies
set forth elsewhere in this Security Agreement or the other Loan Documents, all
of which may be exercised with or, if allowed by law, without notice to a
Grantor:
(a) All of the rights and remedies of a secured party under
the UCC or under other applicable law, all of which rights and remedies
shall be cumulative, and none of which shall be exclusive, to the
extent permitted by law, in addition to any other rights and remedies
contained in this Security Agreement or any other Loan Document;
(b) The right to foreclose the Liens and security interests
created under this Security Agreement by any available judicial
procedure or without judicial process;
(c) The right to (i) enter upon the premises of a Grantor
through self-help and without judicial process, without first obtaining
a final judgment or giving such Grantor notice or opportunity for a
hearing on the validity of the Administrative Agent's claim and without
any obligation to pay rent to such Grantor, or any other place or
places where any Collateral is located and kept, and remove the
Collateral therefrom to the premises of the Administrative Agent or any
agent of the Administrative Agent, for such time as the Administrative
Agent may desire, in order effectively to collect or liquidate the
Collateral, (ii) require such Grantor or any bailee or other agent of
such Grantor to assemble the Collateral and make it available to the
Administrative Agent at a place to be designated by the Administrative
Agent that is reasonably convenient to both parties, and (iii) notify
any or all Persons party to a Qualifying Control Agreement or who
otherwise have possession of or control over any Collateral of the
occurrence of an Event of Default and other appropriate circumstances,
and exercise control over and take possession or custody of any or all
Collateral in the possession, custody or control of such other Persons;
(d) The right to (i) exercise all of a Grantor's rights and
remedies with respect to the collection of Accounts, Chattel Paper,
Instruments, Supporting Obligations and General Intangibles
(collectively, "Payment Collateral"), including the right to demand
payment thereof and enforce payment, by legal proceedings or otherwise;
(ii) settle, adjust, compromise, extend or renew all or any Payment
Collateral or any legal proceedings pertaining thereto; (iii) discharge
and release all or any Payment Collateral; (iv) take control, in any
manner, of any item of payment or Proceeds referred to in Section 5
above; (v) prepare, file and sign a Grantor's name on any Proof of
Claim in bankruptcy, notice of Lien, assignment or satisfaction of Lien
or similar document in any action or proceeding adverse to any obligor
under any Payment Collateral or otherwise in connection with any
Payment Collateral; (vi) endorse the name of a Grantor upon any chattel
paper, document, instrument, invoice, freight xxxx, xxxx of lading or
similar document or agreement relating to any Collateral; (vii) use the
information recorded on or contained on a Grantor's internet website or
otherwise in any data processing equipment and computer hardware and
software relating to any Collateral to which a Grantor has access;
(viii) open such Grantor's mail and collect any and all amounts due to
such Grantor from any Account Debtors or other obligor in respect of
Payment Collateral; (ix) take over such Grantor's post office boxes or
make other arrangements as the Administrative Agent, on behalf of the
Secured Parties, deems necessary to receive such Grantor's mail,
including notifying the post office authorities to change the address
for delivery of such Grantor's mail to such address as the
Administrative Agent, on behalf of the Secured Parties, may designate;
(x) notify any or all Account Debtors or other obligor on any Payment
Collateral that such Payment Collateral has been assigned to the
Administrative Agent for the benefit of the Secured Parties and that
Administrative Agent has a security interest therein for the benefit of
the Secured Parties (provided that the Administrative Agent may at any
time give such notice to an Account Debtor that is a department, agency
or authority of the United States government); each Grantor hereby
agrees that any such notice, in the Administrative Agent's sole
discretion, may (but need not) be sent on such Grantor's stationery, in
which event such Grantor shall co-sign such notice with the
Administrative Agent if requested to do so by the Administrative Agent;
and (xi) do all acts and things and execute all documents necessary, in
Administrative Agent's sole discretion, to collect the Payment
Collateral; and
(e) The right to sell all or any Collateral in its then
existing condition, or after any further manufacturing or processing
thereof, at such time or times, at public or private sale or sales,
with such notice as may be required by law, in lots or in bulk, for
cash or on credit, with or without representations and warranties, all
as the Administrative Agent, in its sole discretion, may deem
advisable. The Administrative Agent shall have the right to conduct
such sales on a Grantor's premises or elsewhere and shall have the
right to use a Grantor's premises without charge for such sales for
such time or times as the Administrative Agent may see fit. The
Administrative Agent may, if it deems it reasonable, postpone or
adjourn any sale of the Collateral from time to time by an announcement
at the time and place of such postponed or adjourned sale, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned. Each Grantor agrees that the Administrative
Agent has no obligation to preserve rights to the Collateral against
prior parties or to marshal any Collateral for the benefit of any
Person. The Administrative Agent for the benefit of the Secured Parties
is hereby granted an irrevocable fully paid license or other right
(including each Grantor's rights under any license or any franchise
agreement), each of which shall remain in full force and effect until
the Facility Termination Date, to use, without charge, each of the
labels, patents, copyrights, names, trade secrets, trade names,
trademarks and advertising matter, or any property of a similar nature
owned or licensed by any Grantor, as it pertains to the Collateral, in
completing production of, advertising for sale and selling any
Collateral, upon the occurrence of an Event of Default. If any of the
Collateral shall require repairs, maintenance, preparation or the like,
or is in process or other unfinished state, the Administrative Agent
shall have the right, but shall not be obligated, to perform such
repairs, maintenance, preparation, processing or completion of
manufacturing for the purpose of putting the same in such saleable form
as the Administrative Agent shall deem appropriate, but the
Administrative Agent shall have the right to sell or dispose of the
Collateral without such processing and no Grantor shall have any claim
against the Administrative Agent for the value that may have been added
to such Collateral with such processing. In addition, each Grantor
agrees that in the event notice is necessary under applicable law,
written notice mailed to such Grantor in the manner specified herein
ten (10) days prior to the date of public sale of any of the Collateral
or prior to the date after which any private sale or other disposition
of the Collateral will be made shall constitute commercially reasonable
notice to such Grantor. All notice is hereby waived with respect to any
of the Collateral which threatens to decline speedily in value or is of
a type customarily sold on a recognized market. The Administrative
Agent may purchase all or any part of the Collateral at public or, if
permitted by law, private sale, free from any right of redemption which
is hereby expressly waived by such Grantor and, in lieu of actual
payment of such purchase price, may set off the amount of such price
against the Secured Obligations. Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of certain
of the Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "Securities Act"), and
applicable state law, and may be otherwise delayed or adversely
affected in effecting any sale by reason of present or future
restrictions thereon imposed by governmental authorities ("Affected
Collateral"), and that as a consequence of such prohibitions and
restrictions the Administrative Agent may be compelled (i) to resort to
one or more private sales to a restricted group of purchasers who will
be obliged to agree, among other things, to acquire Affected Collateral
for their own account, for investment and not with a view to the
distribution or resale thereof, or (ii) to seek regulatory approval of
any proposed sale or sales, or (iii) to limit the amount of Affected
Collateral sold to any Person or group. Each Grantor agrees and
acknowledges that private sales so made may be at prices and upon terms
less favorable to such Grantor than if such Affected Collateral was
sold either at public sales or at private sales not subject to other
regulatory restrictions, and that the Administrative Agent has no
obligation to delay the sale of any Affected Collateral for the period
of time necessary to permit the Grantor or any other Person to register
or otherwise qualify them under or exempt them from any applicable
restriction, even if such Grantor or other Person would agree to
register or otherwise qualify or exempt such Affected Collateral so as
to permit a public sale under the Securities Act or applicable state
law. Each Grantor further agrees, to the extent permitted by applicable
law, that the use of private sales made under the foregoing
circumstances to dispose of Affected Collateral shall be deemed to be
dispositions in a commercially reasonable manner. Each Grantor hereby
acknowledges that a ready market may not exist for Affected Collateral
that is not traded on a national securities exchange or quoted on an
automated quotation system.
The net cash proceeds resulting from the collection, liquidation, sale,
or other disposition of the Collateral shall be applied first to the expenses
(including all reasonable Attorneys' Costs) of retaking, holding, storing,
processing and preparing for sale, selling, collecting, liquidating and the
like, and then to the satisfaction of all Secured Obligations in accordance with
the terms of Section 8.03 of the Credit Agreement. Each Grantor shall be liable
to the Administrative Agent, for the benefit of the Secured Parties, and shall
pay to the Administrative Agent, for the benefit of the Secured Parties, on
demand any deficiency which may remain after such sale, disposition, collection
or liquidation of the Collateral.
12. ATTORNEY-IN-FACT. Each Grantor hereby appoints the Administrative
Agent as the Grantor's attorney-in-fact for the purposes of carrying out the
provisions of this Security Agreement and taking any action and executing any
instrument which the Administrative Agent may deem necessary or advisable to
accomplish the purposes hereof, which appointment is irrevocable and coupled
with an interest; provided, that the Administrative Agent shall have and may
exercise rights under this power of attorney only upon the occurrence and during
the continuance of an Event of Default. Without limiting the generality of the
foregoing, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right and power
(a) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (a)
above;
(c) to endorse such Grantor's name on any checks, notes,
drafts or any other payment relating to or constituting Proceeds of the
Collateral which comes into the Administrative Agent's possession or
the Administrative Agent's control, and deposit the same to the account
of the Administrative Agent, for the benefit of the Secured Parties, on
account and for payment of the Secured Obligations.
(d) to file any claims or take any action or institute any
proceedings that the Administrative Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Administrative Agent, for the benefit of the
Secured Parties, with respect to any of the Collateral; and
(e) to execute, in connection with any sale or other
disposition of Collateral provided for herein, any endorsement,
assignments, or other instruments of conveyance or transfer with
respect thereto.
13. REINSTATEMENT. The granting of a security interest in the
Collateral and the other provisions hereof shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the Secured
Obligations is rescinded or must otherwise be returned by any Secured Party or
is repaid by any Secured Party in whole or in part in good faith settlement of a
pending or threatened avoidance claim, whether upon the insolvency, bankruptcy
or reorganization of any Grantor or any other Loan Party or otherwise, all as
though such payment had not been made. The provisions of this Section 13 shall
survive repayment of all of the Secured Obligations and the termination or
expiration of this Security Agreement in any manner, including but not limited
to termination upon occurrence of the Facility Termination Date.
14. CERTAIN WAIVERS BY THE GRANTORS. Each Grantor waives to the extent
permitted by applicable law (a) any right to require any Secured Party or any
other obligee of the Secured Obligations to (x) proceed against any Person or
entity, including without limitation any Loan Party, (y) proceed against or
exhaust any Collateral or other collateral for the Secured Obligations, or (z)
pursue any other remedy in its power; (b) any defense arising by reason of any
disability or other defense of any other Person, or by reason of the cessation
from any cause whatsoever of the liability of any other Person or entity, (c)
any right of subrogation unless and until 93 days immediately following the
Facility Termination Date shall have elapsed without the filing or commencement,
by or against any Loan Party, of any state or federal action, suit, petition or
proceeding seeking any reorganization, liquidation or other relief or
arrangement in respect of creditors of, or the appointment of a receiver,
liquidator, trustee or conservator in respect to, such Loan Party or its assets,
and (d) any right to enforce any remedy which any Secured Party or any other
obligee of the Secured Obligations now has or may hereafter have against any
other Person and any benefit of and any right to participate in any collateral
or security whatsoever now or hereafter held by the Administrative Agent for the
benefit of the Secured Parties. Each Grantor authorizes each Secured Party and
each other obligee of the Secured Obligations without notice (except notice
required by applicable law) or demand and without affecting its liability
hereunder or under the Loan Documents from time to time to: (i) take and hold
security, other than the Collateral herein described, for the payment of such
Secured Obligations or any part thereof, and exchange, enforce, waive and
release the Collateral herein described or any part thereof or any such other
security; and (ii) apply such Collateral or other security and direct the order
or manner of sale thereof as such Secured Party or obligee in its discretion may
determine.
The Administrative Agent may at any time deliver (without
representation, recourse or warranty) the Collateral or any part thereof to a
Grantor and the receipt thereof by such Grantor shall be a complete and full
acquittance for the Collateral so delivered, and the Administrative Agent shall
thereafter be discharged from any liability or responsibility therefor.
15. CONTINUED POWERS. Until the Facility Termination Date shall have
occurred, the power of sale and other rights, powers and remedies granted to the
Administrative Agent for the benefit of the Secured Parties hereunder shall
continue to exist and may be exercised by the Administrative Agent at any time
and from time to time irrespective of the fact that any of the Secured
Obligations or any part thereof may have become barred by any statute of
limitations or that any part of the liability of any Grantor may have ceased.
16. OTHER RIGHTS. The rights, powers and remedies given to the
Administrative Agent for the benefit of the Secured Parties by this Security
Agreement shall be in addition to all rights, powers and remedies given to the
Administrative Agent or any Secured Party under any other Loan Document or by
virtue of any statute or rule of law. Any forbearance or failure or delay by the
Administrative Agent in exercising any right, power or remedy hereunder shall
not be deemed to be a waiver of such right, power or remedy, and any single or
partial exercise of any right, power or remedy hereunder shall not preclude the
further exercise thereof; and every right, power and remedy of the Secured
Parties shall continue in full force and effect until such right, power or
remedy is specifically waived in accordance with the terms of the Credit
Agreement.
17. ANTI-MARSHALING PROVISIONS. The right is hereby given by each
Grantor to the Administrative Agent, for the benefit of the Secured Parties, to
make releases (whether in whole or in part) of all or any part of the Collateral
agreeable to the Administrative Agent without notice to, or the consent,
approval or agreement of other parties and interests, including junior lienors,
and each Grantor acknowledges that any such releases shall not impair in any
manner the validity of or priority of the Liens and security interests in the
remaining Collateral conferred hereunder, nor release any Grantor from liability
for the Secured Obligations. Notwithstanding the existence of any other security
interest in the Collateral held by the Administrative Agent, for the benefit of
the Secured Parties, the Administrative Agent shall have the right to determine
the order in which any or all of the Collateral shall be subjected to the
remedies provided in this Security Agreement. Each Grantor hereby waives any and
all right to require the marshaling of assets in connection with the exercise of
any of the remedies permitted by applicable law or provided herein or in any
other Loan Document.
18. ENTIRE AGREEMENT. This Security Agreement and each Security Joinder
Agreement, together with the Credit Agreement and other Loan Documents,
constitutes and expresses the entire understanding between the parties hereto
with respect to the subject matter hereof, and supersedes all prior
negotiations, agreements and understandings, inducements, commitments or
conditions, express or implied, oral or written, except as contained in the Loan
Documents. The express terms hereof and of the Security Joinder Agreements
control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof or thereof. Neither this Security
Agreement nor any Security Joinder Agreement nor any portion or provision hereof
or thereof may be changed, altered, modified, supplemented, discharged,
canceled, terminated, or amended orally or in any manner other than as provided
in the Credit Agreement.
19. THIRD PARTY RELIANCE. Each Grantor hereby consents and agrees that
all issuers of or obligors in respect of any Collateral, and all securities
intermediaries, warehousemen, bailees, public officials and other Persons having
any interest in, possession of, control over or right, privilege, duty or
discretion in respect of, any Collateral shall be entitled to accept the
provisions hereof and of the Security Joinder Agreements as conclusive evidence
of the right of the Administrative Agent, on behalf of the Secured Parties, to
exercise its rights hereunder or thereunder with respect to the Collateral,
notwithstanding any other notice or direction to the contrary heretofore or
hereafter given by any Grantor or any other Person to any of such Persons.
20. BINDING AGREEMENT; ASSIGNMENT. This Security Agreement and each
Security Joinder Agreement, and the terms, covenants and conditions hereof and
thereof, shall be binding upon and inure to the benefit of the parties hereto,
and to their respective successors and assigns, except that no Grantor shall be
permitted to assign this Security Agreement, any Security Joinder Agreement or
any interest herein or therein or, except as expressly permitted herein or in
the Credit Agreement, in the Collateral or any part thereof or interest therein.
Without limiting the generality of the foregoing sentence of this Section 20,
any Lender may assign to one or more Persons, or grant to one or more Persons
participations in or to, all or any part of its rights and obligations under the
Credit Agreement (to the extent permitted by the Credit Agreement); and to the
extent of any such assignment or participation such other Person shall, to the
fullest extent permitted by law, thereupon become vested with all the benefits
in respect thereof granted to such Lender herein or otherwise, subject however,
to the provisions of the Credit Agreement, including Article IX thereof
(concerning the Administrative Agent) and Section 10.06 thereof (concerning
assignments and participations). All references herein to the Administrative
Agent and to the Secured Parties shall include any successor thereof or
permitted assignee, and any other obligees from time to time of the Secured
Obligations.
21. RELATED CREDIT ARRANGEMENTS. All obligations of each Grantor under
or in respect of Related Credit Arrangements to which any Lender or its
Affiliates is a party shall be deemed to be Secured Obligations secured hereby,
and each Lender or Affiliate of a Lender party to any such Related Credit
Arrangement shall be deemed to be a Secured Party hereunder with respect to such
Secured Obligations; provided, however, that such obligations shall cease to be
Secured Obligations at such time, prior to the Facility Termination Date, as
such Person (or Affiliate of such Person) shall cease to be a "Lender" under the
Credit Agreement.
No Person who obtains the benefit of any Lien by virtue of the
provisions of this Section shall have any right to notice of any action or to
consent to, direct or object to any action hereunder or under any other Loan
Document or otherwise in respect of the Collateral (including the release or
impairment of any Collateral) other than in its capacity as a Lender and only to
the extent expressly provided in the Loan Documents. Each Secured Party not a
party to the Credit Agreement who obtains the benefit of this Security Agreement
by virtue of the provisions of this Section shall be deemed to have acknowledged
and accepted the appointment of the Administrative Agent pursuant to the terms
of the Credit Agreement, and that with respect to the actions and omissions of
the Administrative Agent hereunder or otherwise relating hereto that do or may
affect such Secured Party, the Administrative Agent and each of its Related
Parties shall be entitled to all the rights, benefits and immunities conferred
under Article IX of the Credit Agreement.
22. SEVERABILITY. The provisions of this Security Agreement are
independent of and separable from each other. If any provision hereof shall for
any reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity or enforceability of any other provision hereof,
but this Security Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.
23. COUNTERPARTS. This Security Agreement may be executed in any number
of counterparts each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Security
Agreement to produce or account for more than one such counterpart executed by
the Grantor against whom enforcement is sought. Without limiting the foregoing
provisions of this Section 23, the provisions of Section 10.10 of the Credit
Agreement shall be applicable to this Security Agreement.
24. TERMINATION. Subject to the provisions of Section 13, this Security
Agreement and each Security Joinder Agreement, and all obligations of the
Grantors hereunder (excluding those obligations and liabilities that expressly
survive such termination) shall terminate without delivery of any instrument or
performance of any act by any party on the Facility Termination Date. Upon such
termination of this Security Agreement, the Administrative Agent shall, at the
request and sole expense of the Grantors, promptly deliver to the Grantors such
termination statements and take such further actions as the Grantors may
reasonably request to terminate of record, or otherwise to give appropriate
notice of the termination of, any Lien conferred hereunder.
25. NOTICES. Any notice required or permitted hereunder shall be given
(a) with respect to the Borrower, at the address for the giving of notice then
in effect under the Credit Agreement, (b) with respect to any Grantor, at the
address then in effect for the giving of notices to such Grantor under the
Guaranty to which it is a party, and (c) with respect to the Administrative
Agent or a Lender, at the Administrative Agent's address indicated in Schedule
10.02 of the Credit Agreement. All such addresses may be modified, and all such
notices shall be given and shall be effective, as provided in Schedule 10.02 of
the Credit Agreement for the giving and effectiveness of notices and
modifications of addresses thereunder.
26. JOINDER. Each Person who shall at any time execute and deliver to
the Administrative Agent a Security Joinder Agreement substantially in the form
attached as Exhibit A hereto shall thereupon irrevocably, absolutely and
unconditionally become a party hereto and obligated hereunder as a Grantor and
shall have thereupon pursuant to Section 2 hereof granted a security interest in
and collaterally assigned to the Administrative Agent for the benefit of the
Secured Parties all Collateral in which it has at its Applicable Date or
thereafter acquires any interest or the power to transfer, and all references
herein and in the other Loan Documents to the Grantors or to the parties to this
Security Agreement shall be deemed to include such Person as a Grantor
hereunder. Each Security Joinder Agreement shall be accompanied by the
Supplemental Schedules referred to therein, appropriately completed with
information relating to the Grantor executing such Security Joinder Agreement
and its property. Each of the applicable Schedules attached hereto shall be
deemed amended and supplemented without further action by such information
reflected on the Supplemental Schedules.
27. RULES OF INTERPRETATION. The rules of interpretation contained in
Sections 1.02 and 1.05 of the Credit Agreement shall be applicable to this
Security Agreement and each Security Joinder Agreement and are hereby
incorporated by reference. All representations and warranties contained herein
shall survive the delivery of documents and any Credit Extensions referred to
herein or secured hereby.
28. GOVERNING LAW; WAIVERS.
(A) THIS SECURITY AGREEMENT AND EACH SECURITY JOINDER
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO
BE FULLY PERFORMED, IN SUCH STATE; PROVIDED THAT (I) WITH RESPECT TO
THOSE INSTANCES IN WHICH THE APPLICABLE CHOICE OF LAWS RULES OF SUCH
STATE, INCLUDING SECTION 9-301 OF THE UCC, REQUIRE THAT THE MANNER OF
CREATION OF A SECURITY INTEREST IN SPECIFIC COLLATERAL OR THE MANNER OR
EFFECT OF PERFECTION OR NONPERFECTION OR THE RULES GOVERNING PRIORITY
OF SECURITY INTERESTS ARE TO BE GOVERNED BY THE LAWS OF ANOTHER
JURISDICTION, THEN THE LAWS OF SUCH OTHER JURISDICTION SHALL GOVERN
SUCH MATTERS, (II) EACH CONTROL AGREEMENT (INCLUDING EACH QUALIFYING
CONTROL AGREEMENT) APPLICABLE TO ANY SECURITIES ACCOUNT OR DEPOSIT
ACCOUNT SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION SPECIFIED IN
SUCH CONTROL AGREEMENT, OR OTHERWISE BY THE LAWS OF THE JURISDICTION
THAT GOVERN THE SECURITIES ACCOUNT OR DEPOSIT ACCOUNT TO WHICH SUCH
CONTROL AGREEMENT RELATES, AND (III) IN THOSE INSTANCES IN WHICH THE
LAWS OF THE JURISDICTION IN WHICH COLLATERAL IS LOCATED GOVERN MATTERS
PERTAINING TO THE METHODS AND EFFECT OF REALIZING ON COLLATERAL, SUCH
LAWS SHALL BE GIVEN EFFECT WITH RESPECT TO SUCH MATTERS.
(B) EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS SECURITY AGREEMENT OR ANY SECURITY JOINDER AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE XXXXXX XX XXX XXXX, XXXXX XX XXX
XXXX, XXXXXX XXXXXX OF AMERICA AND, BY THE EXECUTION AND DELIVERY OF
THIS SECURITY AGREEMENT OR A SECURITY JOINDER AGREEMENT, EXPRESSLY
WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING OF
THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING.
(C) EACH GRANTOR AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH PARTY PROVIDED
IN SECTION 25 OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.
(D) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF SHALL
PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY
SECURITY JOINDER AGREEMENT OR THE OTHER LOAN DOCUMENTS IN THE COURTS OF
ANY PLACE WHERE ANY OTHER PARTY OR ANY OF SUCH PARTY'S PROPERTY OR
ASSETS MAY BE FOUND OR LOCATED.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS SECURITY AGREEMENT OR ANY
SECURITY JOINDER AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION WITH THE FOREGOING, EACH PARTY HEREBY AGREES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY EXPRESSLY
WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH
PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION, SUIT OR
PROCEEDING.
(F) EACH GRANTOR HEREBY EXPRESSLY WAIVES ANY OBJECTION IT MAY
HAVE THAT ANY COURT TO WHOSE JURISDICTION IT HAS SUBMITTED PURSUANT TO
THE TERMS HEREOF IS AN INCONVENIENT FORUM.
[SIGNATURE PAGES FOLLOW]
C749530.3
IN WITNESS WHEREOF, the parties have duly executed this Security
Agreement on the day and year first written above.
GRANTORS:
INFOCROSSING, INC.
By: /s/ XXXX XXXXXXXX
------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Executive Officer
ETG, INC.
INFOCROSSING SERVICES, INC.
INFOCROSSING SOUTHEAST, INC.
INFOCROSSING WEST, INC.
INFOCROSSING HEALTHCARE SERVICES, INC.
INFOCROSSING SERVICES SOUTHEAST, INC.
INFOCROSSING SERVICES WEST, INC.
By: /s/ XXXX XXXXXXXX
-----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Executive Officer
(i)STRUCTURE, LLC
By: /s/ XXXX XXXXXXXX
-----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Executive Officer
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ XXXXXXX XXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
