SECURITY AGREEMENT
Exhibit 10.2
THIS SECURITY AGREEMENT (this “Security Agreement”) dated as of May 10, 2006 is by and
among the parties identified as “Grantors” and such other parties as may become Grantors hereunder
after the date hereof (individually a “Grantor”, and collectively the “Grantors”)
and BANK OF AMERICA, N.A., as administrative agent (in such capacity, the “Administrative
Agent”) for the holders of the Secured Obligations referenced below.
W I T N E S S E T H
WHEREAS, a revolving credit facility and a term loan facility of up to $575,000,000 have been
established in favor of iPayment, Inc., a Delaware corporation (the “Borrower”), pursuant
to the terms of that certain Credit Agreement (as amended, restated, modified, supplemented and
extended from time to time, the “Agreement”) dated as of the date hereof among the
Borrower, the Guarantors identified therein, the Lenders identified therein and Bank of America,
N.A., as Administrative Agent; and
WHEREAS, this Security Agreement is required under the terms of the Agreement.
NOW, THEREFORE, in consideration of these premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Capitalized terms used and not otherwise defined herein shall have the meanings provided
in the Agreement.
(b) The following terms shall have the meanings assigned thereto in the Uniform Commercial
Code in effect in the State of New York on the date hereof: Accession, Account, As-Extracted
Collateral, Chattel Paper, Commercial Tort Claim, Commingled Goods, Consumer Goods, Deposit
Account, Document, Equipment, Farm Products, Fixtures, General Intangible, Goods, Instrument,
Inventory, Investment Property, Letter-of-Credit Right, Manufactured Home, Proceeds, Software,
timber to be cut, Supporting Obligation and Tangible Chattel Paper.
(c) As used herein, the following terms shall have the meanings set forth below:
“Collateral” has the meaning provided in Section 2 hereof.
“Copyright License” means with respect to any Grantor, any written agreement, naming such Grantor as licensor, granting any
right under any Copyright including, without limitation, any thereof referred to in Schedule 6.17 to the Agreement.
“Copyrights” means with respect to any Grantor, all copyrights, copyright applications, copyright registrations and like
protections in each work of authorship, whether registered or unregistered, whether published or unpublished, any renewals
and extensions thereof, all copyrights of works based on, incorporated in, derived from, or relating to works covered by
such copyrights in the United States and to the extent requested by the Administrative Agent or the Required Lenders, in
any other country, including, without limitation, registrations, recordings and applications in the United States Copyright
Office, including, without limitation, any thereof referred to in Schedule
6.17 to the Agreement,
together with all rights corresponding thereto and all other rights of any kind whatsoever
of such Grantor accruing thereunder or pertaining thereto.
“Patent License” means with respect to any Grantor any agreement, whether
written or oral, providing for the grant by or to such Grantor of any right to manufacture,
use or sell any invention covered by a Patent, including, without limitation, any thereof
referred to in Schedule 6.17 to the Agreement.
“Patents” means with respect to any Grantor (a) all letters patent of the
United States and to the extent requested by the Administrative Agent or the Required
Lenders, in any other country and all divisions, continuations, continuations-in-part,
reissues and extensions thereof, including, without limitation, any letters patent referred
to in Schedule 6.17 to the Agreement, and (b) all applications for letters patent of the
United States and to the extent requested by the Administrative Agent and the Required
Lenders, in any other country and all divisions, continuations, continuations-in-part,
thereof, including, without limitation, any thereof referred to in Schedule 6.17 to the
Agreement.
“Secured Obligations” means, without duplication, (i) all of the Obligations
and (ii) all costs and expenses incurred in connection with enforcement and collection of
the Obligations, including reasonable attorneys’ fees.
“Trademark License” means with respect to any Grantor any agreement, written
or oral, providing for the grant by or to such Grantor of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule 6.17 to the Agreement.
“Trademarks” means with respect to any Grantor (a) all trademarks, trade
names, certification marks, collective marks, trade dress, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers, whether or not registered, whether currently in use or not,
now existing or hereafter adopted or acquired, all registrations and recordings thereof,
and all applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any state thereof
or otherwise and to the extent requested by the Administrative Agent or the Required
Lenders, in any other country, including, without limitation, any thereof referred to in
Schedule 6.17 to the Agreement and all common law rights, goodwill associated therewith and
symbolized thereby, and all rights corresponding thereto and all other rights of any kind
whatsoever of any Grantor accruing thereunder or pertaining thereto, all rights therein
provided by international treaties or convention, and (b) all renewals thereof.
“Trade Secrets” means with respect to any Grantor all trade secrets of such
Grantor created under the laws of the United States or any state thereof and to the extent
requested by the Administrative Agent or the Required Lenders, in any other country,
including, without limitation, know-how, trade secrets, manufacturing and production
processes and techniques, inventions, research and development information, technical data,
financial marketing and business data, pricing and cost information, business and marketing
plans and customer and supplier lists and information.
“UCC” means the Uniform Commercial Code.
“Work” means any work that is subject to copyright protection pursuant to
Title 17 of the United States Code.
2. Grant of Security Interest in the Collateral. To secure the prompt payment and
performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or
otherwise, of the Secured
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Obligations, each Grantor hereby grants to the Administrative Agent, for
the benefit of the holders of the Secured Obligations, a continuing security interest in, and a
right to set off against, any and all right, title and interest of such Grantor in and to all of
the following, whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the “Collateral”):
(a) all Accounts;
(b) all cash and currency;
(c) all Chattel Paper;
(d) those Commercial Tort Claims identified on Schedule 2 attached hereto;
(e) all Copyrights;
(f) all Copyright Licenses;
(g) all Deposit Accounts;
(h) all Documents;
(i) all Equipment;
(j) all Fixtures;
(k) all General Intangibles;
(l) all Instruments;
(m) all Inventory;
(n) all Investment Property;
(o) all Letter-of-Credit Rights;
(p) all Patents;
(q) all Patent Licenses;
(r) all Software;
(s) all Supporting Obligations;
(t) all Trade Secrets;
(u) all Trademarks;
(v) all Trademark Licenses; and
(w) to the extent not otherwise included, all Accessions and all Proceeds of any and
all of the foregoing.
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Notwithstanding anything to the contrary contained herein, the security interests
granted under this Security Agreement shall not extend to (i) any Property that is subject
to a Lien securing purchase money Indebtedness permitted under the Agreement pursuant to
documents that prohibit such Grantor from granting any other Liens in such Property or (ii)
any lease, license or other contract if the grant of a security interest in such lease,
license or contract in the manner contemplated by this Security Agreement is prohibited by
the terms of such lease, license or contract or by law and would result in the termination
of such lease, license or contract, but only to the extent that (A) after reasonable
efforts, consent from the relevant party or parties has not been obtained and (B) any such
prohibition could not be rendered ineffective pursuant to the UCC or any other applicable
law (including Debtor Relief Laws) or principles of equity.
The Grantors and the Administrative Agent, on behalf of the holders of the Secured
Obligations, hereby acknowledge and agree that the security interest created hereby in the
Collateral (i) constitutes continuing collateral security for all of the Secured Obligations,
whether now existing or hereafter arising and (ii) is not to be construed as an assignment of any
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks or Trademark Licenses.
3. Provisions Relating to Accounts.
(a) Anything herein to the contrary notwithstanding, each of the Grantors shall remain liable
under each of the Accounts to observe and perform all the conditions and obligations to be observed
and performed by it thereunder, all in accordance with the terms of any agreement giving rise to
each such Account. Neither the Administrative Agent nor any holder of the Secured Obligations
shall have any obligation or liability under any Account (or any agreement giving rise thereto) by
reason of or arising out of this Security Agreement or the receipt by the Administrative Agent or
any holder of the Secured Obligations of any payment relating to such Account pursuant hereto, nor
shall the Administrative Agent or any holder of the Secured Obligations be obligated in any manner
to perform any of the obligations of a Grantor under or pursuant to any Account (or any agreement
giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency
of any payment received by it or as to the sufficiency of any performance by any party under any
Account (or any agreement giving rise thereto), to present or file any claim, to take any action to
enforce any performance or to collect the payment of any amounts that may have been assigned to it
or to which it may be entitled at any time or times.
(b) At any time after the occurrence and during the continuation of an Event of Default, (i)
the Administrative Agent shall have the right, but not the obligation, to make test verifications
of the Accounts in any manner and through any medium that it reasonably considers advisable, and
the Grantors shall furnish all such assistance and information as the Administrative Agent may
require in connection with such test verifications, (ii) upon the Administrative Agent’s request
and at the expense of the Grantors, the Grantors shall cause independent public accountants or
others satisfactory to the Administrative Agent to furnish to the Administrative Agent reports
showing reconciliations, aging and test verifications of, and trial balances for, the Accounts and
(iii) the Administrative Agent in its own name or in the name of others may communicate with
account debtors on the Accounts to verify with them to the Administrative Agent’s satisfaction the
existence, amount and terms of any Accounts.
4. Representations and Warranties. Each Grantor hereby represents and warrants to the
Administrative Agent, for the benefit of the holders of the Secured Obligations, that:
(a) Ownership. Each Grantor is the legal and beneficial owner of its interest
in the Collateral and has the right to pledge, sell, assign or transfer the same.
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(b) Security Interest. This Security Agreement creates a valid security
interest in favor of the Administrative Agent, for the benefit of the holders of the
Secured Obligations, in the Collateral of such Grantor and, when properly perfected by
filing, shall constitute a valid perfected security interest in such Collateral, to the
extent such security interest can be perfected by filing under the UCC, free and clear of
all Liens except for Permitted Liens.
(c) Types of Collateral. None of the Collateral consists of, or is the
Accessions or the Proceeds of, As-Extracted Collateral, Consumer Goods, Farm Products,
Manufactured Homes, or timber to be cut.
(d) Accounts. (i) Each Account of such Grantor and the papers and documents
relating thereto are genuine and in all material respects what they purport to be, (ii)
each Account of such Grantor arises out of (A) a bona fide sale of goods sold and delivered
by such Grantor (or is in the process of being delivered) or (B) services theretofore
actually rendered by such Grantor to, the account debtor named therein and (iii) no surety
bond was required or given in connection with any Account of such Grantor or the contracts
or purchase orders out of which they arose.
(e) Inventory. No Inventory of such Grantor is held by any Person other than
such Grantor pursuant to consignment, sale or return, sale on approval or similar
arrangement.
(f) Copyrights, Patents and Trademarks.
(i) Schedule 6.17 to the Agreement, includes all Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses owned by any
Grantor in its own name, or to which any Grantor is a party, as of the date hereof.
(ii) Except as set forth in Schedule 6.17 to the Agreement, none of the
material Copyrights, Patents and Trademarks of any Grantor is the subject of any
licensing agreement or similar agreement.
(g) Commercial Tort Claims. Schedule 2 hereto sets forth each
Commercial Tort Claim before any Governmental Authority by or in favor of such Grantor as
of the date hereof.
5. Covenants. Each Grantor covenants that, so long as any of the Secured Obligations
remains outstanding and until all of the commitments relating thereto have been terminated, such
Grantor shall at its own expense:
(a) Other Liens. Defend the Collateral against the claims and demands of all
other parties claiming an interest therein other than Permitted Liens.
(b) Instruments/Tangible Chattel Paper/Documents. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by any Instrument
or Tangible Chattel Paper, or if any property constituting Collateral shall be stored or
shipped subject to a Document, (i) ensure that such Instrument, Tangible Chattel Paper or
Document is either in the possession of such Grantor at all times or, if requested by the
Administrative Agent, is immediately delivered to the Administrative Agent, duly endorsed
in a manner satisfactory to the Administrative Agent and (ii) ensure that any Collateral
consisting of Tangible Chattel Paper is marked with a legend acceptable to the
Administrative Agent indicating the Administrative Agent’s security interest in such
Tangible Chattel Paper.
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(c) Perfection of Security Interest. Execute, acknowledge, deliver, record,
re-record, file, re-file, register, re-register any and all such further acts, deeds,
certificates, assurances and other instruments as the Administrative Agent may reasonably
require, deem necessary, appropriate or convenient (i) to assure to the Administrative
Agent the effectiveness and priority of its security interests hereunder, including (A)
such instruments as the Administrative Agent may from time to time reasonably request in
order to perfect and maintain the security interests granted hereunder or under any of the
Collateral Documents in accordance with the UCC, (B) with regard to Copyrights, a Notice of
Grant of Security Interest in Copyrights for filing with the United States Copyright Office
in the form of Schedule 5(c)(i) attached hereto, (C) with regard to Patents, a
Notice of Grant of Security Interest in Patents for filing with the United States Patent
and Trademark Office in the form of Schedule 5(c)(ii) attached hereto and (D) with
regard to Trademarks, a Notice of Grant of Security Interest in Trademarks for filing with
the United States Patent and Trademark Office in the form of Schedule 5(c)(iii)
attached hereto, (ii) to consummate the transactions contemplated hereby (iii) correct any
material defect or error that may be discovered in this Security Agreement or any of the
Collateral Documents or in the execution, acknowledgment, filing or recordation thereof and
(iv) to otherwise protect and assure the Administrative Agent of its rights and interests
hereunder. To that end, each Grantor authorizes the Administrative Agent to file one or
more financing statements (which may describe the collateral as “all assets” or “all
personal property”) disclosing the Administrative Agent’s security interest in any or all
of the Collateral of such Grantor without such Grantor’s signature thereon, and further
each Grantor also hereby irrevocably makes, constitutes and appoints the Administrative
Agent, its nominee or any other Person whom the Administrative Agent may designate, as such
Grantor’s attorney-in-fact with full power and for the limited purpose to sign in the name
of such Grantor any such financing statements (including renewal statements), amendments
and supplements, notices or any similar documents that in the Administrative Agent’s
reasonable discretion would be necessary, appropriate or convenient in order to perfect and
maintain perfection of the security interests granted hereunder, such power, being coupled
with an interest, being and remaining irrevocable so long as the Secured Obligations remain
unpaid and until the commitments relating thereto shall have been terminated. Each Grantor
hereby agrees that a carbon, photographic or other reproduction of this Security Agreement
or any such financing statement is sufficient for filing as a financing statement by the
Administrative Agent without notice thereof to such Grantor wherever the Administrative
Agent may in its sole discretion desire to file the same. In the event for any reason the
law of any jurisdiction other than New York becomes or is applicable to the Collateral of
any Grantor or any part thereof, or to any of the Secured Obligations, such Grantor agrees
to execute and deliver all such instruments and to do all such other things as the
Administrative Agent in its sole discretion reasonably deems necessary, appropriate or
convenient to preserve, protect and
enforce the security interests of the Administrative Agent under the law of such other
jurisdiction (and, if a Grantor shall fail to do so promptly upon the request of the
Administrative Agent, then the Administrative Agent may execute any and all such requested
documents on behalf of such Grantor pursuant to the power of attorney granted hereinabove).
If any Collateral is in the possession or control of a Grantor’s agents and the
Administrative Agent so requests, such Grantor agrees to notify such agents in writing of
the Administrative Agent’s security interest therein and, upon the Administrative Agent’s
request, instruct them to hold all such Collateral for the account of the holders of the
Secured Obligations and subject to the Administrative Agent’s instructions. Each Grantor
agrees to xxxx its books and records to reflect the security interest of the Administrative
Agent in the Collateral.
(d) Control. Execute and deliver all agreements, assignments, instruments or
other documents as the Administrative Agent shall reasonably request for the purpose of
obtaining and maintaining control within the meaning of the UCC with respect to any
Collateral consisting of Deposit Accounts, Investment Property, Letter-of-Credit Rights and
Electronic Chattel Paper.
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(e) Collateral held by Warehouseman, Bailee, etc. If at any time any material
portion of the Collateral is in the possession or control of one or more warehousemen,
bailees, agents or processors of the Grantors, (i) notify the Administrative Agent of such
possession or control, (ii) notify such Person of the Administrative Agent’s security
interest in such Collateral, (iii) instruct such Person to hold all such Collateral for the
Administrative Agent’s account and subject to the Administrative Agent’s instructions and
(iv) use its reasonable efforts to obtain an acknowledgment from such Person that it is
holding such Collateral for the benefit of the Administrative Agent.
(f) Treatment of Accounts. Not grant or extend the time for payment of any
Account, or compromise or settle any Account for less than the full amount thereof, or
release any Person or property, in whole or in part, from payment thereof, or allow any
credit or discount thereon, other than as normal and customary in the ordinary course of a
Grantor’s business or as required by law.
(g) Commercial Tort Claims.
(i) Promptly notify the Administrative Agent in writing of the initiation of
any Commercial Tort Claim in excess of the Threshold Amount before any Governmental
Authority by or in favor of such Grantor.
(ii) Execute and deliver such statements, documents and notices and do and
cause to be done all such things as the Administrative Agent may reasonably deem
necessary, appropriate or convenient, or as are required by law, to create, perfect
and maintain the Administrative Agent’s security interest in any Commercial Tort
Claim.
(h) Copyrights, Patents and Trademarks. Within 90 days after the end of each
calendar year, and with respect to Copyrights at the end of each fiscal quarter, notify the
Administrative Agent of any attainment of an ownership interest by such Grantor of any
United States Patent, Trademark or registered Copyright, in each case constituting
Collateral, and shall take such actions as may be reasonably requested by the
Administrative Agent (but only to the extent such actions are within such Grantor’s
control) to perfect the security interest granted to the Administrative Agent therein
to the extent provided in respect of Patents, registered Trademarks or registered
Copyrights constituting Collateral on the date hereof. Within 90 days after the end of
each calendar year, and with respect to Copyrights at the end of each fiscal quarter,
notify the Administrative Agent of any attainment of an ownership interest by such Grantor
of any foreign Patent, registered Trademark or registered Copyright.
6. Advances by Holders of the Secured Obligations. On failure of any Grantor to
perform any of the covenants and agreements contained herein, the Administrative Agent may, at its
sole option and in its sole discretion, perform the same and in so doing may expend such sums as
the Administrative Agent may reasonably deem advisable in the performance thereof, including,
without limitation, the payment of any insurance premiums, the payment of any taxes, a payment to
obtain a release of a Lien or potential Lien, expenditures made in defending against any adverse
claim and all other expenditures that the Administrative Agent may make for the protection of the
security hereof or that may be compelled to make by operation of law. All such sums and amounts so
expended shall be repayable by the Grantors on a joint and several basis (subject to Section 23
hereof) promptly upon timely notice thereof and demand therefor, shall constitute additional
Secured Obligations and shall bear interest from the date said amounts are expended at the Default
Rate for Base Rate Loans. No such performance of any covenant or agreement by the Administrative
Agent on behalf of any Grantor, and no such advance or expenditure therefor, shall relieve the
Grantors of any default under the terms of this Security Agreement, the other Loan Documents or any
other documents relating to the Secured Obligations. The Administrative Agent may make any payment
hereby authorized in accordance with any xxxx, statement or estimate procured from the appropriate
public office or holder of the
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claim to be discharged without inquiry into the accuracy of such
xxxx, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien,
title or claim except to the extent such payment is being contested in good faith by a Grantor in
appropriate proceedings and against which adequate reserves are being maintained in accordance with
GAAP.
7. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default and during the
continuation thereof, the Administrative Agent and the holders of the Secured Obligations shall
have, in addition to the rights and remedies provided herein, in the Loan Documents, in any other
documents relating to the Secured Obligations, or by law (including, without limitation, levy of
attachment and garnishment), the rights and remedies of a secured party under the UCC of the
jurisdiction applicable to the affected Collateral and, further, the Administrative Agent may, with
or without judicial process or the aid and assistance of others, (i) enter on any premises on which
any of the Collateral may be located and, without resistance or interference by the Grantors, take
possession of the Collateral, (ii) dispose of any Collateral on any such premises, (iii) require
the Grantors to assemble and make available to the Administrative Agent at the expense of the
Grantors any Collateral at any place and time designated by the Administrative Agent that is
reasonably convenient to both parties, (iv) remove any Collateral from any such premises for the
purpose of effecting sale or other disposition thereof, and/or (v) without demand and without
advertisement, notice, hearing or process of law, all of which each of the Grantors hereby waives
to the fullest extent permitted by law, at any place and time or times, sell and deliver any or all
Collateral held by or for it at public or private sale, by one or more contracts, in one or more
parcels, for cash, upon credit or otherwise, at such prices and upon such terms as the
Administrative Agent deems advisable, in its sole discretion (subject to any and all mandatory
legal requirements). Each of the Grantors acknowledges that any private sale referenced above may
be at prices and on terms less favorable to the seller than the prices and terms that might have
been obtained at a public sale and agrees that such private sale shall be deemed to have been made
in a commercially reasonable manner. Neither
the Administrative Agent’s compliance with applicable law nor its disclaimer of warranties relating
to the Collateral shall be considered to adversely affect the commercial reasonableness of any
sale. In addition to all other sums due the Administrative Agent and the holders of the Secured
Obligations with respect to the Secured Obligations, the Grantors shall pay the Administrative
Agent and each of the holders of the Secured Obligations all reasonable documented costs and
expenses incurred by the Administrative Agent or any such holder of the Secured Obligations,
including, but not limited to, reasonable attorneys’ fees and court costs, in obtaining or
liquidating the Collateral, in enforcing payment of the Secured Obligations, or in the prosecution
or defense of any action or proceeding by or against the Administrative Agent or the holders of the
Secured Obligations or the Grantors concerning any matter arising out of or connected with this
Security Agreement, any Collateral or the Secured Obligations, including, without limitation, any
of the foregoing arising in, arising under or related to a case under the Bankruptcy Code. To the
extent the rights of notice cannot be legally waived hereunder, each Grantor agrees that any
requirement of reasonable notice shall be met if such notice is personally served on or mailed,
postage prepaid, to the Borrower in accordance with the notice provisions of Section 11.02 of the
Agreement at least ten (10) Business Days before the time of sale or other event giving rise to the
requirement of such notice. The Administrative Agent and the holders of the Secured Obligations
shall not be obligated to make any sale or other disposition of the Collateral regardless of notice
having been given. To the extent permitted by law, any holder of the Secured Obligations may be a
purchaser at any such sale. To the extent permitted by applicable law, each of the Grantors hereby
waives all of its rights of redemption with respect to any such sale. Subject to the provisions of
applicable law, the Administrative Agent and the holders of the Secured Obligations may postpone or
cause the postponement of the sale of all or any portion of the Collateral by announcement at the
time and place of such sale, and such sale may, without further notice, to the extent permitted by
law, be made at the time and place to which the sale was postponed, or the Administrative Agent and
the holders of the Secured Obligations may further postpone such sale by announcement made at such
time and place.
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(b) Remedies relating to Accounts. Upon the occurrence of an Event of Default and
during the continuation thereof, whether or not the Administrative Agent has exercised any or all
of its rights and remedies hereunder, (i) each Grantor will promptly upon request of the
Administrative Agent instruct all account debtors to remit all payments in respect of Accounts to a
mailing location selected by the Administrative Agent and (ii) the Administrative Agent shall have
the right to enforce any Grantor’s rights against its customers and account debtors, and the
Administrative Agent or its designee may notify any Grantor’s customers and account debtors that
the Accounts of such Grantor have been assigned to the Administrative Agent or of the
Administrative Agent’s security interest therein, and may (either in its own name or in the name of
a Grantor or both) demand, collect (including without limitation by way of a lockbox arrangement),
receive, take receipt for, sell, xxx for, compound, settle, compromise and give acquittance for any
and all amounts due or to become due on any Account, and, in the Administrative Agent’s discretion,
file any claim or take any other action or proceeding to protect and realize upon the security
interest of the holders of the Secured Obligations in the Accounts. Each Grantor acknowledges and
agrees that the Proceeds of its Accounts remitted to or on behalf of the Administrative Agent in
accordance with the provisions hereof shall be solely for the Administrative Agent’s own
convenience and that such Grantor shall not have any right, title or interest in such Accounts or
in any such other amounts except as expressly provided herein. The Administrative Agent and the
holders of the Secured Obligations shall have no liability or responsibility to any Grantor for
acceptance of a check, draft or other order for payment of money bearing the legend “payment in
full” or words of similar import or any other restrictive legend or endorsement or be responsible
for determining the correctness of any remittance. Each Grantor hereby agrees to indemnify the
Administrative Agent and the holders of the Secured Obligations from and against all liabilities,
damages, losses, actions, claims, judgments, costs, expenses, charges and reasonable attorneys’
fees suffered or incurred by the Administrative Agent or
the holders of the Secured Obligations (each, an “Indemnified Party”) because of the
maintenance of the foregoing arrangements except as relating to or arising out of the gross
negligence or willful misconduct of an Indemnified Party or its officers, employees or agents. In
the case of any investigation, litigation or other proceeding, the foregoing indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought by a Grantor, its
directors, shareholders or creditors or an Indemnified Party or any other Person or any other
Indemnified Party is otherwise a party thereto.
(c) Access. In addition to the rights and remedies hereunder, upon the occurrence of
an Event of Default and during the continuation thereof, the Administrative Agent shall have the
right to enter and remain upon the various premises of the Grantors without cost or charge to the
Administrative Agent, and use the same, together with materials, supplies, books and records of the
Grantors for the purpose of collecting and liquidating the Collateral, or for preparing for sale
and conducting the sale of the Collateral, whether by foreclosure, auction or otherwise. In
addition, the Administrative Agent may remove Collateral, or any part thereof, from such premises
and/or any records with respect thereto, in order to effectively collect or liquidate such
Collateral.
(d) Nonexclusive Nature of Remedies. Failure by the Administrative Agent or the
holders of the Secured Obligations to exercise any right, remedy or option under this Security
Agreement, any other Credit Document, any other documents relating to the Secured Obligations, or
as provided by law, or any delay by the Administrative Agent or the holders of the Secured
Obligations in exercising the same, shall not operate as a waiver of any such right, remedy or
option. No waiver hereunder shall be effective unless it is in writing, signed by the party
against whom such waiver is sought to be enforced and then only to the extent specifically stated,
which in the case of the Administrative Agent or the holders of the Secured Obligations shall only
be granted as provided herein. To the extent permitted by law, neither the Administrative Agent,
the holders of the Secured Obligations, nor any party acting as attorney for the Administrative
Agent or the holders of the Secured Obligations, shall be liable hereunder for any acts or
omissions or for any error of judgment or mistake of fact or law other than their gross negligence
or willful misconduct hereunder. The rights and remedies of the Administrative Agents and the
holders of the Secured Obligations under this
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Security Agreement shall be cumulative and not
exclusive of any other right or remedy that the Administrative Agent or the holders of the Secured
Obligations may have.
(e) Retention of Collateral. To the extent permitted under applicable law, in
addition to the rights and remedies hereunder, upon the occurrence of an Event of Default, the
Administrative Agent may, after providing the notices required by Sections 9-620 and 9-621 of the
UCC or otherwise complying with the requirements of applicable law of the relevant jurisdiction,
accept or retain all or any portion of the Collateral in satisfaction of the Secured Obligations.
Unless and until the Administrative Agent shall have provided such notices, however, the
Administrative Agent shall not be deemed to have accepted or retained any Collateral in
satisfaction of any Secured Obligations for any reason.
(f) Deficiency. In the event that the proceeds of any sale, collection or realization
are insufficient to pay all amounts to which the Administrative Agent or the holders of the Secured
Obligations are legally entitled, the Grantors shall be jointly and severally liable for the
deficiency (subject to Section 23 hereof), together with interest thereon at the Default Rate for
Base Rate Loans, together with the costs of collection and reasonable attorneys’ fees. Any surplus
remaining after the full payment and satisfaction of the Secured Obligations shall be returned to
the Grantors or to whomsoever a court of competent jurisdiction shall determine to be entitled
thereto.
8. Rights of the Administrative Agent.
(a) Power of Attorney. In addition to other powers of attorney contained herein, each
Grantor hereby designates and appoints the Administrative Agent, on behalf of the holders of the
Secured Obligations, and each of its designees or agents, as attorney-in-fact of such Grantor,
irrevocably and with power of substitution, with authority to take any or all of the following
actions upon the occurrence and during the continuation of an Event of Default:
(i) to demand, collect, settle, compromise and adjust, and give discharges
and releases concerning the Collateral, all as the Administrative Agent may
reasonably deem appropriate;
(ii) to commence and prosecute any actions at any court for the purposes of
collecting any of the Collateral and enforcing any other right in respect thereof;
(iii) to defend, settle or compromise any action brought and, in connection
therewith, give such discharge or release as the Administrative Agent may
reasonably deem appropriate;
(iv) to receive, open and dispose of mail addressed to a Grantor and endorse
checks, notes, drafts, acceptances, money orders, bills of lading, warehouse
receipts or other instruments or documents evidencing payment, shipment or storage
of the goods giving rise to the Collateral on behalf of and in the name of such
Grantor, or securing, or relating to such Collateral;
(v) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral;
(vi) to direct any parties liable for any payment in connection with any of
the Collateral to make payment of any and all monies due and to become due
thereunder directly to the Administrative Agent or as the Administrative Agent
shall direct;
10
(vii) to receive payment of and receipt for any and all monies, claims, and
other amounts due and to become due at any time in respect of or arising out of
any Collateral;
(viii) in accordance with applicable law, to sell, assign, transfer, make any
agreement in respect of, or otherwise deal with or exercise rights in respect of,
any Collateral or the goods or services that have given rise thereto, as fully and
completely as though the Administrative Agent were the absolute owner thereof for
all purposes;
(ix) to adjust and settle claims under any insurance policy relating thereto;
(x) to execute and deliver all assignments, conveyances, statements,
financing statements, renewal financing statements, security and pledge
agreements, affidavits, notices and other agreements, instruments and documents
that the Administrative Agent may reasonably deem appropriate in order to perfect
and maintain the security interests and liens granted in this Security Agreement and
in order to fully consummate all of the transactions contemplated therein;
(xi) to institute any foreclosure proceedings that the Administrative Agent
may reasonably deem appropriate; and
(xii) to do and perform all such other acts and things as the Administrative
Agent may reasonably deem appropriate or convenient in connection with the
Collateral.
This power of attorney is a power coupled with an interest and shall be irrevocable for so
long as any of the Secured Obligations shall remain outstanding and until all of the commitments
relating thereto shall have been terminated. The Administrative Agent shall be under no duty to
exercise or withhold the exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Administrative Agent in this Security Agreement, and shall not be liable
for any failure to do so or any delay in doing so. The Administrative Agent shall not be liable
for any act or omission or for any error of judgment or any mistake of fact or law in its
individual capacity or its capacity as attorney-in-fact except acts or omissions resulting from its
gross negligence or willful misconduct. This power of attorney is conferred on the Administrative
Agent solely to protect, preserve and realize upon its security interest in the Collateral.
(b) The Administrative Agent’s Duty of Care. Other than the exercise of reasonable
care to assure the safe custody of the Collateral while being held by the Administrative Agent
hereunder, the Administrative Agent shall have no duty or liability to preserve rights pertaining
thereto, it being understood and agreed that the Grantors shall be responsible for preservation of
all rights in the Collateral, and the Administrative Agent shall be relieved of all responsibility
for the Collateral upon surrendering it or tendering the surrender of it to the Grantors. The
Administrative Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own property, which shall be
no less than the treatment employed by a reasonable and prudent agent in the industry, it being
understood that the Administrative Agent shall not have responsibility for taking any necessary
steps to preserve rights against any parties with respect to any of the Collateral. In the event
of a public or private sale of Collateral pursuant to Section 7 hereof, the Administrative
Agent shall have no obligation to clean, repair or otherwise prepare the Collateral for sale.
9. Rights of Required Lenders. All rights of the Administrative Agent hereunder, if
not exercised by the Administrative Agent, may be exercised by the Required Lenders.
11
10. Application of Proceeds. Upon the occurrence and during the continuation of an
Event of Default, any payments in respect of the Secured Obligations and any proceeds of the
Collateral, when received by the Administrative Agent or any of the holders of the Secured
Obligations in cash or its equivalent, will be applied in reduction of the Secured Obligations in
the order set forth in the Agreement or other document relating to the Secured Obligations, and
each Grantor irrevocably waives the right to direct the application of such payments and proceeds
and acknowledges and agrees that the Administrative Agent shall have the continuing and exclusive
right to apply and reapply any and all such payments and proceeds in the Administrative Agent’s
sole discretion, notwithstanding any entry to the contrary upon any of its books and records.
11. Continuing Agreement.
(a) This Security Agreement shall be a continuing agreement in every respect and shall remain
in full force and effect so long as any of the Secured Obligations remains outstanding (other than
contingent indemnity obligations that are not yet due and payable) and until all of the commitments
relating thereto have been terminated. Upon such payment and termination, this Security Agreement
and the Liens created hereby shall automatically terminate and the Administrative Agent shall, upon
the request and at the expense of the Grantors, execute and deliver all UCC termination statements
and/or other documents reasonably requested by the Grantors evidencing such termination.
Notwithstanding the foregoing, upon the consummation of any disposition of any Collateral permitted
by the Agreement, the security interest and Lien granted hereby in the Collateral subject to such
disposition shall automatically terminate and be released, and the Administrative Agent shall, upon
the request and at the expense of the Grantors, execute and deliver all UCC termination statements
and/or other documents reasonably requested by the Grantors evidencing such termination. Upon the
consummation of any disposition of any Grantor permitted by the Agreement, such Grantor shall by
automatically released from its obligations hereunder and the security interest and Lien in the
Collateral of such Grantor shall automatically terminate and be released, and the Administrative
Agent shall, upon the request and at the expense of the Grantors, execute and deliver all UCC
termination statements and/or other documents reasonably requested by the Grantors evidencing such
termination. Notwithstanding the foregoing, all releases and indemnities provided hereunder shall
survive termination of this Security Agreement.
(b) This Security Agreement shall continue to be effective or be automatically reinstated, as
the case may be, if at any time payment, in whole or in part, of any of the Secured Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent or any holder of
the Secured Obligations as a preference, fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar law, all as though such payment had not been made; provided that in the event
payment of all or any part of the Secured Obligations is rescinded or must be restored or returned,
all reasonable costs and expenses (including, without limitation, attorneys’ fees and
disbursements) incurred by the Administrative Agent or any holder of the Secured Obligations in
defending and enforcing such reinstatement shall be deemed to be included as a part of the Secured
Obligations.
12. Amendments and Waivers. This Security Agreement and the provisions hereof may not
be amended, waived, modified, changed, discharged or terminated except as set forth in Section
11.01 of the Agreement.
13. Successors in Interest. This Security Agreement shall create a continuing
security interest in the Collateral and shall be binding upon each Grantor, its successors and
assigns, and shall inure, together with the rights and remedies of the Administrative Agent and the
holders of the Secured Obligations hereunder, to the benefit of the Administrative Agent and the
holders of the Secured Obligations and their successors and permitted assigns; provided,
however, that none of the Grantors may assign its rights or delegate its duties hereunder without
the prior written consent of the requisite Lenders under the Agreement
12
(and any other attempted
assignment or transfer by any Grantor shall be null and void). To the fullest extent permitted by
law, each Grantor hereby releases the Administrative Agent and each holder of the Secured
Obligations, their respective successors and assigns and their respective officers, attorneys,
employees and agents, from any liability for any act or omission or any error of judgment or
mistake of fact or of law relating to this Security Agreement or the Collateral, except for any
liability arising from the gross negligence or willful misconduct of the Administrative Agent or
such holder, or their respective officers, attorneys, employees or agents.
14. Notices. All notices required or permitted to be given under this Security
Agreement shall be given as provided in Section 11.02 of the Agreement.
15. Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in making proof of this
Security Agreement to produce or account for more than one such counterpart.
16. Headings. The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of any provision of
this Security Agreement.
17. Governing Law; Submission to Jurisdiction; Venue; Service of Process.
(a) THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
(b) EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF
MANHATTAN AND OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS SECURITY AGREEMENT
SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS SECURITY AGREEMENT OR AGAINST ANY GRANTOR
OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT IN ANY COURT REFERRED TO
IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
13
(d) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 11.02 OF THE AGREEMENT. NOTHING IN THIS SECURITY AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
18. Waiver of Right to Trial by Jury.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS SECURITY
AGREEMENT, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
19. Severability. If any provision of this Security Agreement is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and the remaining
provisions shall remain in full force and effect and shall be construed without giving effect to
the illegal, invalid or unenforceable provisions.
20. Entirety. This Security Agreement, the other Loan Documents and the other
documents relating to the Secured Obligations represent the entire agreement of the parties hereto
and thereto with respect to the subject matter hereof and thereof, and supersede all prior
agreements and understandings, oral or written, if any, with respect to the subject matter hereof
and thereof, including any commitment letters or correspondence relating to the Loan Documents, any
other documents relating to the Secured Obligations, or the transactions contemplated herein and
therein.
21. Survival. All representations and warranties of the Grantors hereunder shall
survive the execution and delivery of this Security Agreement, the other Loan Documents and the
other documents relating to the Secured Obligations, the delivery of the Notes and the extension of
credit thereunder or in connection therewith.
22. Other Security. To the extent that any of the Secured Obligations are now or
hereafter secured by property other than the Collateral (including, without limitation, real
property and securities owned by a Grantor), or by a guarantee, endorsement or property of any
other Person, then the Administrative Agent and the holders of the Secured Obligations shall have
the right to proceed against such other property, guarantee or endorsement upon the occurrence of
any Event of Default, and the Administrative Agent and the holders of the Secured Obligations shall
have the right, in its sole discretion, to determine which rights, security, liens, security
interests or remedies the Administrative Agent and the holders of the Secured Obligations shall at
any time pursue, relinquish, subordinate, modify or take with respect thereto, without in any way
modifying or affecting any of them or the Secured Obligations or any of the rights of the
Administrative Agent or the holders of the Secured Obligations under this Security Agreement, under
any of the other Loan Documents or under any other document relating to the Secured Obligations.
14
23. Joint and Several Obligations of Grantors.
(a) Subject to subsection (c) of this Section 23, each of the Grantors is accepting
joint and several liability hereunder in consideration of the financial accommodation to be
provided by the holders of the Secured Obligations, for the mutual benefit, directly and
indirectly, of each of the Grantors and in consideration of the undertakings of each of the
Grantors to accept joint and several liability for the obligations of each of them.
(b) Subject to subsection (c) of this Section 23, each of the Grantors jointly and
severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Grantors with respect to the payment and
performance of all of the Secured Obligations arising under this Security Agreement, the other Loan
Documents and any other documents relating to the Secured Obligations, it being the intention of
the parties hereto that all the Secured Obligations shall be the joint and several obligations of
each of the Grantors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein, in any other of the Loan
Documents or in any other documents relating to the Secured Obligations, the obligations of each
Guarantor under the Agreement and the other Loan Documents shall be limited to an aggregate amount
equal to the largest amount that would not render such obligations subject to avoidance under
Section 548 of the Bankruptcy Code or any comparable provisions of any applicable state law.
[Signature Pages Follow]
15
Each of the parties hereto has caused a counterpart of this Security Agreement to be duly
executed and delivered as of the date first above written.
GRANTORS:
| iPAYMENT, INC., | ||||
| a Delaware corporation | ||||
| By: /s/ Xxxx
X. Xxxxxxx
|
||||
| Name: Xxxx X. Xxxxxxx | ||||
| Title: Chief Financial Officer and Treasurer | ||||
| iPAYMENT HOLDINGS, INC., | ||||
| a Delaware corporation | ||||
| By: /s/ Xxxxxxx
X. Daily
|
||||
| Name: Xxxxxxx X. Daily | ||||
| Title: President | ||||
| iPAYMENT OF CALIFORNIA, LLC, | ||
| a Tennessee limited liability company | ||
| CARDPAYMENT SOLUTIONS, L.L.C., | ||
| a Delaware limited liability company | ||
| iPAYMENT ACQUISITION SUB LLC, | ||
| a Delaware limited liability company | ||
| TS ACQUISITION SUB, LLC, | ||
| a Delaware limited liability company | ||
| PCS ACQUISITION SUB, LLC, | ||
| a Delaware limited liability company | ||
| NPMG ACQUISITION SUB, LLC, | ||
| a Delaware limited liability company |
| By: | iPAYMENT, INC., | |||||
| as sole Member |
| By: | /s/ Xxxx X. Xxxxxxx | |||||
| Name: Xxxx X. Xxxxxxx | ||||||
| Title: Chief Financial Officer and Treasurer | ||||||
| 1ST NATIONAL PROCESSING, INC., | ||
| a Nevada corporation | ||
| E-COMMERCE EXCHANGE, INC., | ||
| a Delaware corporation | ||
| iPAYMENT OF MAINE, INC., | ||
| a Delaware corporation | ||
| CARDSYNC PROCESSING, INC., | ||
| a California corporation | ||
| QUAD CITY ACQUISITION SUB, INC., | ||
| a Delaware corporation |
| By: | /s/ Xxxx X. Xxxxxxx | |||||
| Name: Xxxx X. Xxxxxxx | ||||||
| Title: Chief Financial Officer | ||||||
| ONLINE DATA CORP., | ||
| a Delaware corporation | ||
| iPAYMENT CENTRAL HOLDINGS, INC., | ||
| a Delaware corporation | ||
| iPAYMENT ICE HOLDINGS, INC., | ||
| a Delaware corporation |
| By: | /s/ Xxxxxxx X. Daily | |||||
| Name: Xxxxxxx X. Daily | ||||||
| Title: Chief Executive Officer | ||||||
iPayment Security Agreement
Accepted and agreed to as of the date first above written.
BANK OF AMERICA, N.A., as Administrative Agent
By: |
/s/ Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Assistant Vice President | |||
iPayment Security Agreement
Schedule 2
COMMERCIAL TORT CLAIMS
None.
Schedule 5(c)(i)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
COPYRIGHTS
United States Copyright Office
Ladies and Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of May 10, 2006 (as the
same may be amended, modified, extended or restated from time to time, the “Security
Agreement”) by and among the Grantors party thereto (each a “Grantor” and collectively,
the “Grantors”) and Bank of America, N.A., as Administrative Agent (the “Administrative
Agent”) for the holders of the Secured Obligations referenced therein, the undersigned Grantor
has granted a continuing security interest in and continuing lien upon, the copyrights and
copyright applications shown on Schedule 1 attached hereto to the Administrative Agent for
the ratable benefit of the holders of the Secured Obligations.
The undersigned Grantor and the Administrative Agent, on behalf of the holders of the Secured
Obligations, hereby acknowledge and agree that the security interest in the copyrights and
copyright applications set forth on Schedule 1 attached hereto (i) may only be terminated
in accordance with the terms of the Security Agreement and (ii) is not to be construed as an
assignment of any copyright or copyright application.
| Very truly yours, | ||||||
| [Grantor] | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Acknowledged and Accepted:
BANK OF AMERICA, N.A., as Administrative Agent
By: |
||||
| Name: | ||||
| Title: | ||||
Schedule 5(c)(ii)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
PATENTS
United States Patent and Trademark Office
Ladies and Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of May 10, 2006 (the
“Security Agreement”) by and among the Grantors party thereto (each a “Grantor” and
collectively, the “Grantors”) and Bank of America, N.A., as Administrative Agent (the
“Administrative Agent”) for the holders of the Secured Obligations referenced therein, the
undersigned Grantor has granted a continuing security interest in and continuing lien upon, the
patents and patent applications set forth on Schedule 1 attached hereto to the
Administrative Agent for the ratable benefit of the holders of the Secured Obligations.
The undersigned Grantor and the Administrative Agent, on behalf of the holders of the Secured
Obligations, hereby acknowledge and agree that the security interest in the patents and patent
applications set forth on Schedule 1 attached hereto (i) may only be terminated in
accordance with the terms of the Security Agreement and (ii) is not to be construed as an
assignment of any patent or patent application.
| Very truly yours, | ||||||
| [Grantor] | ||||||
| By:
|
||||||
| Name: | ||||||
| Title: | ||||||
Acknowledged and Accepted:
BANK OF AMERICA, N.A., as Administrative Agent
By: |
||||
| Name: | ||||
| Title: | ||||
Schedule 5(c)(iii)
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
TRADEMARKS
United States Patent and Trademark Office
Ladies and Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of May 10, 2006 (the
“Security Agreement”) by and among the Grantors party thereto (each a “Grantor” and
collectively, the “Grantors”) and Bank of America, N.A., as Administrative Agent (the
“Administrative Agent”) for the holders of the Secured Obligations referenced therein, the
undersigned Grantor has granted a continuing security interest in and continuing lien upon, the
trademarks and trademark applications set forth on Schedule 1 attached hereto to the
Administrative Agent for the ratable benefit of the holders of the Secured Obligations.
The undersigned Grantor and the Administrative Agent, on behalf of the holders of the Secured
Obligations, hereby acknowledge and agree that the security interest in the trademarks and
trademark applications set forth on Schedule 1 attached hereto (i) may only be terminated
in accordance with the terms of the Security Agreement and (ii) is not to be construed as an
assignment of any trademark or trademark application.
| Very truly yours, | ||||||
| [Grantor] | ||||||
| By:
|
||||||
| Name: | ||||||
| Title: | ||||||
Acknowledged and Accepted:
BANK OF AMERICA, N.A., as Administrative Agent
By: |
||||
| Name: | ||||
| Title: | ||||
