EXHIBIT 10.5
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of June 30, 1999, between
TRANSMEDIA NETWORK INC., a Delaware corporation ("Grantor"), and THE CHASE
MANHATTAN BANK, as Lender (the "Lender").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement dated as of
the date hereof by and between the Grantor and the Lender (including all
annexes, exhibits and schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"), the Lender has
agreed to make the Loans to the Grantor; and
WHEREAS, as a condition to making of the loans and other
extensions of credit under the Credit Agreement, and as security for the
obligations of Grantor under the Credit Agreement, the Lender is requiring that
the Grantor shall have executed and delivered this Security Agreement and
granted the security interests contemplated hereby;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINED TERMS. All capitalized terms used but not otherwise defined
herein have the meanings given to them in Annex X to the Credit Agreement. All
other undefined terms contained in this Security Agreement, unless the context
indicates otherwise, have the meanings provided for by Article 9 of the UCC to
the extent the same are used or defined therein.
2. GRANT OF LIEN.
(a) To secure the prompt and complete payment, performance and
observance of all of the Grantor's Obligations under the Credit Agreement,
Grantor hereby grants, assigns, conveys, mortgages, pledges, hypothecates and
transfers to the Lender, a Lien upon all of its right, title and interest in, to
and under all of its personal property (other than personal property of Grantor
transferred in connection with or subject to Liens granted pursuant to the
Existing Securitization Facility), whether now owned by or owing to, or
hereafter acquired by or arising in favor of Grantor (including under any trade
names (other than the "Transmedia" trade name and any other trade names which
have been assigned in whole or in part or licensed to TNI Funding I, L.L.C. in
connection with the Existing Securitization Facility), styles or derivations
thereof), and whether owned or consigned by or to, or leased from or to,
Grantor, and regardless of where located, including without limitation, the
following (all of which being hereinafter collectively referred to as the
"Collateral"):
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(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all Fixtures;
(vii) all General Intangibles;
(viii) all Goods;
(ix) all Instruments;
(x) all Inventory;
(xi) all Investment Property;
(xii) all bank accounts and all other deposit
accounts (including, but not limited to, the
Lock-Box Accounts, but excluding accounts
into which collections related to the
Existing Securitization Facility are
deposited) and all deposits therein;
(xiii) all money, cash or cash equivalents of
Grantor; and
(xiv) to the extent not otherwise included, all
Proceeds and products of the foregoing and
all accessions to, substitutions and
replacements for, and rents and profits of,
each of the foregoing.
(b) In addition, to secure the prompt and complete payment,
performance and observance of the Obligations and in order to induce the Lender
as aforesaid, Grantor hereby grants to the Lender, a right of setoff against the
property of Grantor held by the Lender, consisting of property described above
in Section 2(a) now or hereafter in the possession or custody of or in transit
to the Lender, for any purpose, including safekeeping, collection or pledge, for
the account of Grantor, or as to which Grantor may have any right or power.
3. LENDER'S RIGHTS; LIMITATIONS ON LENDER'S OBLIGATIONS.
(a) It is expressly agreed by Grantor that, anything herein to
the contrary notwithstanding, Grantor shall remain liable under each of its
Contracts and each of its Licenses to observe and perform all the conditions and
obligations to be observed and performed by it thereunder. The Lender shall have
no obligation or liability under any Contract or License by reason of or arising
out of this Security Agreement or the granting herein of a Lien thereon or the
receipt by the Lender of any payment relating to any Contract or License
pursuant hereto. The Lender shall not be required or obligated in any manner to
perform or fulfill any of the obligations of Grantor under or pursuant to any
Contract or License, or to make any payment, or to make any inquiry as to the
nature or the sufficiency of any payment received by it or the sufficiency of
any performance by any party under any Contract or License, or to present or
file any claims, or to take any action to collect or enforce any performance or
the payment of any amounts which may have been assigned to it or to which it may
be entitled at any time or times.
(Page 190 of 252 Pages)
(b) The Lender may, at any time after a Default or Event of
Default shall have occurred and be continuing, without prior notice to Grantor,
notify Account Debtors, parties to the Contracts and obligors in respect of
Instruments and Chattel Paper that the Accounts and the right, title and
interest of Grantor in and under such Contracts, Instruments and Chattel Paper
have been assigned to the Lender, and that payments shall be made directly to
the Lender. Upon the request of the Lender, Grantor shall so notify Account
Debtors, parties to Contracts and obligors in respect of Instruments and Chattel
Paper.
(c) The Lender may, at any time at which a Default or Event of
Default has occurred and is continuing, in the Lender's own name or in the name
of Grantor communicate with Account Debtors, parties to Contracts, obligors in
respect of Instruments and obligors in respect of Chattel Paper to verify with
such Persons, to the Lender's satisfaction, the existence, amount and terms of
any such Accounts, Contracts, Instruments or Chattel Paper. If a Default or
Event of Default shall have occurred and be continuing, Grantor, at its own
expense, shall cause the independent certified public accountants then engaged
by Grantor to prepare and promptly deliver to the Lender as often as may
reasonably be requested by the Lender the following reports with respect to Gra
ntor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii)
trial balances; and (iv) a test verification of such Accounts as the Lender may
request.
4. REPRESENTATIONS AND WARRANTIES. Grantor represents and warrants
that:
(a) Grantor is the sole owner of each item of the Collateral
upon which it purports to xxxxx x Xxxx hereunder, and has good and marketable
title thereto free and clear of any and all Liens other than Permitted
Encumbrances or other Liens permitted by Section 6.02 of the Credit Agreement.
(b) No effective security agreement, financing statement,
equivalent security or Lien instrument or continuation statement covering all or
any part of the Collateral is on file or of record in any public office, except
such as may have been filed (i) by Grantor in favor of the Lender pursuant to
this Security Agreement or the other Financing Agreements, and (ii) in
connection with any other Permitted Encumbrances or other Liens permitted by
Section 6.02 of the Credit Agreement.
(c) This Security Agreement is effective to create a valid and
continuing Lien on and, upon the filing of the appropriate financing statements
listed on Schedule I hereto, a perfected Lien in favor of the Lender on the
Collateral (other than the Collateral of Grantor located at Grantor's sales
offices and Restaurants) with respect to which a Lien may be perfected by filing
pursuant to the UCC. Such Lien is prior to all other Liens, except Permitted
Encumbrances or other Liens permitted by Section 6.02 of the Credit Agreement
that would be prior to Liens in favor of the Lender as a matter of law, and is
enforceable as such as against any and all creditors of and purchasers from
Grantor. All action by Grantor necessary or desirable to protect and perfect
such Lien on each item of the Collateral (other than the Collateral of Grantor
located at Grantor's sales offices and Restaurants) has been duly taken.
(Page 191 of 252 Pages)
(d) Schedule II hereto lists all Instruments and Chattel Paper
of Grantor that individually have an outstanding principal amount greater than
$10,000. All actions by Grantor necessary or desirable to protect and perfect
the Lien of the Lender on each item set forth on Schedule II (including the
delivery of all originals thereof to the Lender and the legending of all Chattel
Paper as required by Section 5(b) hereof) and on all Instruments and Chattel
Paper that have an aggregate outstanding principal amount greater than $100,000
have been duly taken (to the extent of any such outstanding principal amount
greater than $100,000). The Lien of the Lender on the Collateral listed on
Schedule II hereto and on all Instruments and Chattel Paper that have an
aggregate outstanding principal amount greater than $100,000 is prior to all
other Liens, except Permitted Encumbrances or other Liens permitted by Section
6.02 of the Credit Agreement that would be prior (to the extent of any such
outstanding principal amount greater than $100,000) to the Liens in favor of the
Lender as a matter of law, and is enforceable as such against any and all
creditors of and purchasers from Grantor.
(e) Grantor's chief executive office, principal place of
business, corporate offices, all warehouses and premises where Collateral is
stored or located (other than Collateral of Grantor located at Grantor's sales
offices and Restaurants), and the locations of all of its books and records
concerning the Collateral are set forth on Schedule III hereto.
(f) With respect to the Accounts, (i) they represent bona fide
rendering of services to Account Debtors in the ordinary course of Grantor's
business and no material portion thereof is evidenced by a judgment, Instrument
or Chattel Paper; (ii) there are no setoffs, claims or disputes existing or
asserted with respect to any material portion thereof and Grantor has not made
any agreement with any Account Debtors in connection with any material portion
thereof for any extension of time for the payment thereof, any compromise or
settlement for less than the full amount thereof, any release of any Account
Debtor from liability therefor, or any deduction therefrom except a discount or
allowance allowed by Grantor in the ordinary course of its business for prompt
payment, (iii) to Grantor's knowledge, there are no facts, events or occurrences
which in any way impair the validity or enforceability of any material portion
thereof or could reasonably be expected to reduce the amount payable of any
material portion thereunder as shown on Grantor's books and records and any
invoices and statements delivered to the Lender with respect thereto; (iv)
Grantor has not received any notice of proceedings or actions which are
threatened or pending against any Account Debtors in connection with any
material portion thereof; and (v) Grantor has no knowledge that any Account
Debtors in connection with any material portion thereof are unable generally to
pay its debts as they become due. Further with respect to the Accounts, except
for an immaterial portion of the Accounts, (x) the amounts shown on all invoices
and statements which may be delivered to the Lender with respect thereto are
actually and absolutely owing to Grantor as indicated thereon and are not in any
way contingent; (y) no payments have been or shall be made thereon except
payments immediately delivered to the Borrower's accounts or a Lock-Box Account;
and (z) to Grantor's knowledge, all Account Debtors have the capacity to
contract.
(g) Grantor does not have any interest in, or title to, any
Patent, Trademark or Copyright except as set forth in Schedule IV hereto (other
than the "Transmedia" Trademark and any
(Page 192 of 252 Pages)
other Patents, Trademarks and Copyrights that have been assigned in whole or in
part or licensed to TNI Funding I, L.L.C. in connection with the Existing
Securitization Facility (referred to herein as the "Assigned Intellectual
Property"). This Security Agreement shall be effective to create a valid and
continuing Lien on Grantor's Patents, Trademarks and Copyrights listed on
Schedule IV hereto.
5. COVENANTS. Grantor covenants and agrees with Lender that from and
after the date of this Security Agreement and until the payment in full of the
Obligations and termination of the Commitment:
(a) Further Assurances; Pledge of Instruments. At any time and
from time to time, upon the written request of the Lender and at the sole
expense of Grantor, Grantor shall promptly and duly execute and deliver any and
all such further instruments and documents and take such further actions as the
Lender may deem reasonably necessary to obtain the full benefits intended by
this Security Agreement and of the rights and powers intended to be herein
granted, including (i) using its best efforts to secure all consents and
approvals necessary or appropriate for the assignment to or for the benefit of
the Lender of (A) any License or Contract related to Receivables or Related
Security and (B) any other material License or Contract (excluding for the
purposes of this Section 5(a) any marketing agreements with financial
institutions and other corporate entities that provide for the solicitation by
Grantor of participants in programs sponsored by such financial institutions and
other entities to become Registered Card Members or to participate in other
programs sponsored by Grantor), in each case, held by Grantor or in which
Grantor has any rights not heretofore assigned, (ii) filing any financing or
continuation statements under the UCC with respect to the Liens granted
hereunder or under any other Financing Agreement (other than with respect to the
Collateral of Grantor located at Grantor's sales offices or Restaurants), and
(iii) with respect to Collateral that individually has an outstanding principal
amount greater than $10,000 or in the aggregate have an outstanding principal
amount greater than $100,000, transferring (to the extent of any such
outstanding principal amount greater than $100,000) such Collateral to the
Lender's possession if such Collateral consists of Chattel Paper, Instruments or
if a Lien on such Collateral can be perfected only by possession, or if
requested by the Lender. Grantor also hereby authorizes the Lender to file any
such financing or continuation statements without the signature of Grantor to
the extent permitted by applicable law (other than with respect to the
Collateral of Grantor located at Grantor's sales offices or Restaurants). If any
amount payable under or in connection with any of the Collateral is or shall
become evidenced by any Instrument, such Instrument, other than checks and notes
received in the ordinary course of business, shall be duly endorsed in a manner
satisfactory to the Lender immediately upon Grantor's receipt thereof.
(b) Maintenance of Records. Grantor shall keep and maintain,
at its own cost and expense, satisfactory and complete records of the
Collateral, including a record of any and all payments received and any and all
credits granted with respect to the Collateral and all other dealings with the
Collateral. Grantor shall xxxx its books and records pertaining to the
Collateral to evidence this Security Agreement and the Liens granted hereby. All
Chattel Paper that individually has an outstanding principal amount greater than
$10,000 or in the aggregate have an
(Page 193 of 252 Pages)
outstanding principal amount greater than $100,000 shall be marked (to the
extent of any such outstanding principal amount greater than $100,000) with the
following legend: "This writing and the obligations evidenced or secured hereby
are subject to the security interest of The Chase Manhattan Bank, as Lender."
(c) Covenants Regarding Patent, Trademark and Copyright
Collateral.
(i) Other than with respect to the Assigned
Intellectual Property, Grantor shall take all actions reasonably
necessary or reasonably requested by the Lender to maintain and pursue
each application, to obtain the relevant registration and to maintain
the registration of each of the Patents, Trademarks and Copyrights (now
or hereafter existing), including the filing of applications for
renewal, affidavits of use, affidavits of noncontestability and
opposition and interference and cancellation proceedings, unless
Grantor shall determine that such Patent, Trademark or Copyright is not
material to the conduct of its business.
(ii) In the event that any of the Patent, Trademark
or Copyright Collateral (other than the Assigned Intellectual Property)
is infringed upon, or misappropriated or diluted by a third party,
Grantor shall notify the Lender promptly after Grantor learns thereof.
Grantor shall, unless it shall reasonably determine that such Patent,
Trademark or Copyright Collateral is in no way material to the conduct
of its business or operations, promptly xxx for infringement,
misappropriation or dilution and to recover any and all damages for
such infringement, misappropriation or dilution, and shall take such
other actions as the Lender shall deem reasonably appropriate under the
circumstances to protect such Patent, Trademark or Copyright
Collateral.
(d) Indemnification. In any suit, proceeding or action brought
by the Lender or any Lender relating to any Account, Chattel Paper, Contract,
Document, General Intangible or Instrument for any sum owing thereunder or to
enforce any provision of any Account, Chattel Paper, Contract, Document, General
Intangible or Instrument, Grantor will save, indemnify and keep the Lender
harmless from and against all expense (including reasonable attorneys' fees and
expenses), loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by Grantor of any obligation thereunder or
arising out of any other agreement, indebtedness or liability at any time owing
to, or in favor of, such obligor or its successors from Grantor, except, in the
case of the Lender, to the extent such expense, loss, or damage is attributable
solely to the gross negligence or willful misconduct of the Lender as finally
determined by a court of competent jurisdiction. All such obligations of Grantor
shall be and remain enforceable against and only against Grantor and shall not
be enforceable against the Lender.
(e) Compliance with Terms of Accounts, etc. In all material
respects, Grantor will perform and comply with all obligations in respect of its
Accounts, Chattel Paper, Contracts and
(Page 194 of 252 Pages)
Licenses and all other agreements to which it is a party or by which it is bound
relating to the Collateral.
(f) Limitation on Liens on Collateral. Grantor will not
create, permit or suffer to exist, and will defend the Collateral against, and
take such other action as is necessary to remove, any Lien on the Collateral
except Permitted Encumbrances or other Liens permitted under Section 6.02 of the
Credit Agreement, and will defend the right, title and interest of the Lender in
and to any of Grantor's rights under the Collateral against the claims and
demands of all Persons whomsoever.
(g) Limitations on Disposition. Grantor will not sell, lease,
transfer or otherwise dispose of any of the Collateral, or attempt or contract
to do so except as permitted by the Credit Agreement.
(h) Further Identification of Collateral. Grantor will, if so
requested by the Lender, furnish to the Lender as often as the Lender reasonably
requests, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Lender may reasonably request, all in such detail as the Lender may specify.
(i) Notices. Grantor will advise the Lender promptly, in
reasonable detail, (i) of any Lien (other than Permitted Encumbrances or Liens
permitted pursuant to Section 6.02 of the Credit Agreement) or claim made or
asserted against any of the Collateral, and (ii) of the occurrence of any other
event which could reasonably be expected to have a material adverse effect on
the aggregate value of the Collateral or on the Liens created hereunder or under
any other Financing Agreement.
6. LENDER'S APPOINTMENT AS ATTORNEY-IN-FACT.
On the Effective Date, Grantor shall execute and deliver to
the Lender a power of attorney (the "Power of Attorney") substantially in the
form attached hereto as Exhibit A. The power of attorney granted pursuant to the
Power of Attorney is a power coupled with an interest and shall be irrevocable
until the payment in full of the Obligations and termination of the Commitment.
The powers conferred on the Lender under the Power of Attorney are solely to
protect the Lender's interests in the Collateral and shall not impose any duty
upon the Lender to exercise any such powers. The Lender agrees that (a) it shall
not exercise any power or authority granted under the Power of Attorney unless
an Event of Default has occurred and is continuing, and (b) the Lender shall
account for any moneys received by the Lender in respect of any foreclosure on
or disposition of Collateral pursuant to the Power of Attorney; provided that
the Lender shall not have any duty as to any Collateral, and the Lender shall be
accountable only for amounts they actually receive as a result of the exercise
of such powers. NEITHER THE LENDER NOR ITS AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO GRANTOR FOR ANY ACT
OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF
DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
AS FINALLY
(Page 195 of 252 Pages)
DETERMINED BY A COURT OF COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE,
EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.
7. REMEDIES; RIGHTS UPON DEFAULT.
(a) In addition to all other rights and remedies granted to it
under this Security Agreement, the Credit Agreement, the other Financing
Agreements and under any other instrument or agreement securing, evidencing or
relating to any of the Obligations, if any Event of Default shall have occurred
and be continuing, the Lender may exercise all rights and remedies of a secured
party under the UCC. Without limiting the generality of the foregoing, Grantor
expressly agrees that in any such event the Lender, without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
Grantor or any other Person (all and each of which demands, advertisements and
notices are hereby expressly waived to the maximum extent permitted by the UCC
and other applicable law), may forthwith enter upon the premises of Grantor
where any Collateral is located through self-help, without judicial process,
without first obtaining a final judgment or giving Grantor or any other Person
notice and opportunity for a hearing on the Lender's claim or action and may
collect, receive, assemble, process, appropriate and realize upon the
Collateral, or any part thereof, and may forthwith sell, lease, assign, give an
option or options to purchase, or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels
at a public or private sale or sales, at any exchange at such prices as it may
deem acceptable, for cash or on credit or for future delivery without assumption
of any credit risk. The Lender shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of the Lender, the whole or any part of said
Collateral so sold, free of any right or equity of redemption, which equity of
redemption Grantor hereby releases. Such sales may be adjourned and continued
from time to time with or without notice. The Lender shall have the right to
conduct such sales on Grantor's premises or elsewhere and shall have the right
to use Grantor's premises without charge for such time or times as the Lender
deems necessary or advisable.
(b) Grantor further agrees, at the Lender's request, to
assemble the Collateral and make it available to the Lender at places which the
Lender shall select, whether at Grantor's premises or elsewhere. Until the
Lender is able to effect a sale, lease, or other disposition of Collateral, the
Lender shall have the right to hold or use Collateral, or any part thereof, to
the extent that it deems reasonably appropriate for the purpose of preserving
Collateral or its value or for any other purpose deemed reasonably appropriate
by the Lender. The Lender shall have no obligation to Grantor to maintain or
preserve the rights of Grantor as against third parties with respect to
Collateral while Collateral is in the possession of the Lender. The Lender may,
if it so elects, seek the appointment of a receiver or keeper to take possession
of Collateral and to enforce any of the Lender's remedies, with respect to such
appointment without prior notice or hearing as to such appointment. The Lender
shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale to the Obligations as provided in the Credit
Agreement, and only after so paying over such net proceeds, and after the
payment by the Lender of any other amount
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required by any provision of law, need the Lender account for the surplus, if
any, to Grantor. To the maximum extent permitted by applicable law, Grantor
waives all claims, damages, and demands against the Lender arising out of the
repossession, retention or sale of the Collateral except such as arise solely
out of the gross negligence or willful misconduct of the Lender as finally
determined by a court of competent jurisdiction. Grantor agrees that ten (10)
days' prior notice by the Lender of the time and place of any public sale or of
the time after which a private sale may take place is reasonable notification of
such matters. Grantor shall remain liable for any deficiency if the proceeds of
any sale or disposition of the Collateral are insufficient to pay all
Obligations, including any attorneys' fees or other expenses incurred by the
Lender to collect such deficiency.
(c) Except as otherwise specifically provided herein, Grantor
hereby waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this Security
Agreement or any Collateral.
8. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For the purpose of
enabling the Lender to exercise rights and remedies under Section 7 hereof
(including, without limiting the terms of Section 7 hereof, in order to take
possession of, hold, preserve, process, assemble, prepare for sale, market for
sale, sell or otherwise dispose of Collateral) at such time as the Lender shall
be lawfully entitled to exercise such rights and remedies, Grantor hereby grants
to the Lender an irrevocable, non-exclusive license (exercisable without payment
of royalty or other compensation to Grantor) to use, license or sublicense any
Intellectual Property (other than the Assigned Intellectual Property) now owned
or hereafter acquired by Grantor, and wherever the same may be located, and
including in such license access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof.
9. LIMITATION ON LENDERS' DUTY IN RESPECT OF COLLATERAL. The Lender
shall use reasonable care with respect to the Collateral in its possession or
under its control. The Lender shall not have any other duty as to any Collateral
in its possession or control or in the possession or control of any agent or
nominee of the Lender, or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto.
10. REINSTATEMENT. This Security Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against Grantor for liquidation or reorganization, should Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of
Grantor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a "voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
(Page 197 of 252 Pages)
11. NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other party, or whenever any of the parties desires to give and
serve upon any other party any communication with respect to this Security
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be given in the manner, and
deemed received, as provided for in the Credit Agreement.
12. SEVERABILITY. Whenever possible, each provision of this Security
Agreement shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision of this Security Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Security
Agreement. This Security Agreement is to be read, construed and applied together
with the Credit Agreement and the other Financing Agreements which, taken
together, set forth the complete understanding and agreement of the Lender and
Grantor with respect to the matters referred to herein and therein.
13. NO WAIVER; CUMULATIVE REMEDIES. The Lender shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Lender and then only to the extent therein set forth. A waiver by the Lender
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Lender would otherwise have had on any
future occasion. No failure to exercise nor any delay in exercising on the part
of the Lender, any right, power or privilege hereunder, shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or future exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
hereunder provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights and remedies provided by law. None of the
terms or provisions of this Security Agreement may be waived, altered, modified
or amended except by an instrument in writing, duly executed by the Lender and
Grantor.
14. LIMITATION BY LAW. All rights, remedies and powers provided in this
Security Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Security Agreement are intended to be subject to all applicable mandatory
provisions of law that may be controlling and to be limited to the extent
necessary so that they shall not render this Security Agreement invalid,
unenforceable, in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable law.
15. TERMINATION OF THIS SECURITY AGREEMENT. Subject to Section 10
hereof, this Security Agreement shall terminate upon payment in full of the
Obligations and termination of the Commitment.
(Page 198 of 252 Pages)
16. SUCCESSORS AND ASSIGNS. This Security Agreement and all obligations
of Grantor hereunder shall be binding upon the successors and assigns of Grantor
(including any debtor-in-possession on behalf of Grantor) and shall, together
with the rights and remedies of the Lender hereunder inure to the benefit of the
Lender, all future holders of any instrument evidencing any of the Obligations
and their respective successors and assigns. No sales of participations, other
sales, assignments, transfers or other dispositions of any agreement governing
or instrument evidencing the Obligations or any portion thereof or interest
therein shall in any manner affect the Lien granted to the Lender hereunder.
Grantor may not assign, sell, hypothecate or otherwise transfer any interest in
or obligation under this Security Agreement.
17. COUNTERPARTS. This Security Agreement may be executed in any number
of separate counterparts, each of which shall collectively and separately
constitute one and the same agreement.
18. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
FINANCING AGREEMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS SECURITY AGREEMENT AND THE OBLIGATIONS ARISING
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. GRANTOR HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK, SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
GRANTOR AND THE LENDER PERTAINING TO THIS SECURITY AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS, PROVIDED, THAT THE
LENDER AND GRANTOR ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK,
AND, PROVIDED, FURTHER, NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE THE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
LENDER. GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND GRANTOR HEREBY WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. GRANTOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS,
(Page 199 of 252 Pages)
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO GRANTOR AT THE ADDRESS SET FORTH IN SECTION 8.01
OF THE CREDIT AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON
THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE
U.S. MAILS, PROPER POSTAGE PREPAID.
19. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTES
ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE LENDER AND GRANTOR
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED IN CONNECTION WITH, THIS SECURITY AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO.
20. SECTION TITLES. The Section titles contained in this Security
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
21. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Security Agreement. In the event
an ambiguity or question of intent or interpretation arises, this Security
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Security Agreement.
22. ADVICE OF COUNSEL. Each of the parties represents to each other
party hereto that it has discussed this Security Agreement and, specifically,
the provisions of Section 18 and Section 19, with its counsel.
23. BENEFIT OF LENDER. All Liens granted or contemplated hereby shall
be for the benefit of the Lender, and all proceeds or payments realized from
Collateral in accordance herewith shall be applied to the Obligations in
accordance with the terms of the Credit Agreement.
(Page 200 of 252 Pages)
IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be executed and delivered by its duly authorized officer
as of the date first set forth above.
TRANSMEDIA NETWORK INC., as Grantor
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK, as Lender
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
(Page 201 of 252 Pages)
