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Exhibit 6.9
GENERAL SECURITY AGREEMENT
GENERAL SECURITY AGREEMENT, dated February 28, 1997, but intended by the parties
to be effective as of January 1, 1997, made by WO Consulting, Inc., a Delaware
Corporation (the "Debtor"), in favor of Scottsdale Technologies-I, Ltd., a
Delaware limited partnership (the "Secured Party") in connection with the
purchase of the 12% Senior Convertible Promissory Note issued by Debtor.
W I T N E S S E T H:
WHEREAS, the Secured Party has agreed to make a loan to the Debtor in
an aggregate principal amount not to exceed $1,928,250 (the "Loan"), evidenced
by Debtor's 12% Senior Convertible Promissory Note payable to the Secured Party
dated as of the date hereof (as amended, supplemented or restated, the "Note");
and
WHEREAS, it is a condition precedent to the making of the Loan by the
Secured Party that the Debtor shall have executed and delivered to the Secured
Party, among other things, a security agreement granting to the Secured Party a
lien upon and a security interest in all tangible and intangible personal
property and fixtures of the Debtor including all intellectual property rights;
NOW, THEREFORE, in consideration of the promises herein contained, and
in order to induce the Secured Party to make and maintain the Loan, the parties
agree as follows:
1. Definitions. The terms "accounts," "chattel paper," "documents,"
"fixtures," "general intangibles," "goods," "instruments," "inventory," and any
other terms used herein, whether or not capitalized, and defined in the Uniform
Commercial Code as adopted and in effect in the State of Arizona (the "UCC") and
not otherwise defined herein shall have the respective meanings assigned to
those terms in the UCC.
Governmental Authority shall mean any nation or government, any state
or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
2. Grant of Lien and Security Interest. As collateral security for the
prompt satisfaction of all of the Obligations (as such term is defined in
Section 3 hereof), the Debtor hereby pledges and assigns to the Secured Party,
and grants to the Secured Party, a lien upon and a continuing security interest
(the "Security Interest") in, all personal property and fixtures of the Debtor,
wherever located, whether now or hereafter existing and whether now owned or
hereafter acquired of every kind and description, tangible or intangible, and
all products and proceeds thereof (the "Collateral"), including, without
limitation, the following (each of the following, whether now owned or hereafter
acquired, and each being listed without limiting the generality of any other of
the following listed items):
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(a) all of the Debtor's right, title and interest in and to all
accounts, contracts, contract rights, chattel paper, documents, instruments,
general intangibles and other rights, remedies, obligations or other intangibles
of any kind, including, without limitation:
(i) all of the Debtor's right, title and interest in and to
all of the foregoing arising out of or in connection with the sale or
lease of goods or the rendering of services or otherwise, including,
without limitation, all rights and remedies as seller of goods, and all
rights and remedies relating to any lease to which the Debtor is a
party as lessor or lessee, and all rights and remedies relating to the
performance by or for the Debtor of advisory, consulting or other
services, and all grants or assignments of servitudes and easements to
which the Debtor is a party or of which the Debtor is a beneficiary,
including, without limitation, all rents, issues, profits, royalties,
income, rights of use, rights of quiet enjoyment of any such leased
property, rights to sublease and assign and all other benefits derived
directly or indirectly from any such leased property or any activity
carried on in connection therewith or from any of the other Collateral;
(ii) all of the Debtor's right, title and interest in and to
all contracts or other agreements, including, without limitation, all
security agreements and leases, relating to any trade or business or
other activity of the Debtor, in each case as any of the foregoing may
be amended or otherwise modified from time to time and together with
all rights and remedies relating thereto;
(iii) all of the Debtor's right, title and interest in and to
the payment of money (whether arising from property sold or lent,
services rendered, money lent, or advances or deposits made);
(iv) to the fullest extent permitted by applicable law, all of
the Debtor's right, title and interest in and to all permits, licenses,
franchises, authorizations, approvals, allocations, entitlements,
accreditations and any other rights or benefits, from time to time
issued by or pertaining to any Governmental Authority, including,
without limitation, the federal government of the United States and the
State of Arizona, whether or not required for the Debtor lawfully to
acquire, own, lease, manage or operate any of its business or
properties, and all rights and remedies relating thereto (any and all
of the foregoing items referred to in this clause (iv) being
hereinafter referred to as "Governmental Rights");
(v) all of the Debtor's right, title and interest in and to
any and all names under or by which the Debtor's trade or business or
other activities may at any time be operated or known, and all rights
to carry on business under such names, all goodwill, trademarks, trade
names, patents, trade secrets, proprietary or confidential information,
inventions, technical information, procedures, designs, skills,
expertise, experience, processes and any other intellectual property or
other knowledge or know-how of any kind; and
(vi) all of the Debtor's right, title and interest in and to
all returned or unearned premiums that may be due upon cancellation by
the insurer of any policy of insurance for any reason whatsoever;
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including, in each case, all moneys due from time to time in respect thereof,
and all rights in and to all contracts or other agreements securing or otherwise
relating to any of the foregoing, including, without limitation, all security
agreements and leases;
(b) all of the Debtor's right, title and interest in and to all goods
and all other items of tangible personal property (the "Assigned Goods"),
including, without limitation:
(i) all of the Debtor's right, title and interest in and to
all raw materials, work in process and finished goods, and materials
used or consumed in any trade or business or other activity of the
Debtor, and all other inventory of any kind, including, without
limitation, goods returned to or repossessed by the Debtor and all
goods in which the Debtor has an interest in mass or a joint or other
interest or right of any kind, including goods in which the Debtor has
an interest or right as consignee), and all additions and accessions
thereto and products thereof; and
(ii) all of the Debtor's right, title and interest in and to
all other items of tangible personal property of any kind, including,
without limitation, all equipment of any kind, wherever located,
whether now owned or hereafter acquired, including, without limitation,
all manufacturing, distribution, selling, data processing and office
equipment and all appliances and trade fixtures (excluding equipment in
which Debtor's interest is a leasehold interest), together with all
increases, parts, fittings, accessories, equipment, and special tools
now or hereafter affixed to any part thereof and thereto, together with
all substitutes and replacements thereof, all accessions and
attachments thereto, and all tools, parts and equipment now or
hereafter added to or used in connection with the foregoing;
(c) all of the Debtor's right, title and interest in and to all
fixtures of any kind (including, without limitation, all such fixtures now or
hereafter attached to, installed in or used, whether temporarily or permanently,
in connection with any real estate now or hereafter owned or leased by the
Debtor), and all other articles of any kind that are, or in the future may be,
affixed or attached to any real estate;
(d) all of the Debtor's right, title and interest in and to all money,
whether in currency of the United States or any foreign country, and all deposit
accounts and all funds on deposit therein and all investments arising therefrom,
and all deposits with any contractors, subcontractors or suppliers for the
payment of goods or services not yet received;
(e) all of the Debtor's right, title and interest in and to all models,
drawings, blueprints, designs, plans, correspondence, memoranda, papers, books,
records, financial and accounting information, work papers and other documents
or writings of any kind whatsoever and all other information and data of any
kind and in any form, including, without limitation, any of the foregoing
whether hand-written, typed, printed, photographed, microfilmed, microfiched,
videotaped, audiotaped, recorded on computer tapes, disks, cards or other
computer records or otherwise visually or magnetically reproduced, and whether
expressed in ordinary or machine readable language or otherwise, and all
software, spread sheets and data bases of any kind and in any form; and
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(f) all of the Debtor's right, title and interest in and to all
replacements and substitutions for, and all proceeds, cash and noncash, and
products of, any of the foregoing Collateral described in the foregoing clauses
(a) through (e) of this Section 2, including, without limitation, proceeds in
the form of accounts, chattel paper, documents, fixtures, general intangibles,
goods and instruments, and, to the extent not otherwise included, all payments
under insurance contracts (whether or not the Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral or any
payments, proceeds or other rights in respect of any condemnation or similar
proceeding or settlement in respect thereof with respect to any of the foregoing
Collateral;
in each case, howsoever the Debtor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise). In furtherance
and not in limitation of all of the fore-going provisions of this Section 2, the
Debtor hereby pledges, assigns, transfers and sets over to the Secured Party all
of its right, title and interest in and to, and grants to the Secured Party, as
security for the Obligations, a lien upon and a security interest in, all
property of the Debtor of any kind held in the possession of or under control
of, or in transit to, the Debtor, the Secured Party or any keeper or other agent
or bailee therefor, including, without limitation, property held in safekeeping,
and all amounts that may be owing from time to time by the Secured Party to the
Debtor in any capacity, including, without limitation, any balance or share
belonging to the Debtor, which lien and security interest shall be independent
of, and in addition to, any right of set-off that the Secured Party may have.
3. Security for Obligations. The security inter-est created hereby in
the Collateral constitutes continuing collateral security for all of the
following obligations, whether now existing or hereafter incurred (the
"Obligations"):
(a) the prompt payment by the Debtor, as and when due and payable, of
all amounts from time to time owing by it in respect of the Note, this Agreement
and any other documents in connection with the Loan (together, the "Loan
Documents");
(b) the due performance and observance by the Debtor of all of its
other obligations from time to time existing hereunder or in respect of any Loan
Document; and
(c) all other liabilities of any kind of the Debtor to the Secured
Party, whether now existing or hereafter incurred, matured or unmatured, direct
or contingent, joint or several, evidenced by a writing or otherwise, including,
without limitation, any extensions, modifications or renewals thereof and
substitutions therefor.
4. Fraudulent Conveyance. Notwithstanding anything contained in this
Agreement to the contrary, Debtor agrees that if, but for the application of
this Section 4, the Obligations or any Security Interest would constitute a
preferential transfer under 11 U.S.C. Section 547, a fraudulent conveyance under
11 U.S.C. Section 548 (or any successor section of that Code) or a fraudulent
conveyance or transfer under any state fraudulent conveyance or fraudulent
transfer law or similar law in effect from time to time (each a "Fraudulent
Conveyance"), then the Obligations and each affected Security Interest will be
enforceable to the maximum extent possible without
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causing the Obligations or any Security Interest to be a Fraudulent Conveyance,
and shall be deemed to have been automatically amended to carry out the intent
of this Section 4.
5. Representations and Warranties. Debtor represents and warrants to
Secured Party that:
(a) Authority. (i) Debtor is duly organized, validly existing, and
in good standing in the jurisdiction of its formation, (ii) this
Agreement has been duly authorized and approved by all necessary
corporate action and no approval or consent of any Court or other
person or entity is required which has not been obtained and (iii) the
execution, delivery, and performance of and compliance with the terms
of this Agreement and the Note will not cause Debtor to be in violation
of or default under any applicable laws, or any material agreement,
document, or instrument to which Debtor is a party or by which any of
its assets may be bound.
(b) Place of Business; Location of Records. Schedule 1 to this
Agreement sets forth Debtor's place of business and chief executive
office, the present and foreseeable location of its books and records
concerning any of the Collateral that is accounts or general
intangibles, and the location of all other Collateral except for
certain inventory. Except as noted on Schedule 1, all such books,
records and Collateral are in its possession at the location set forth
thereon.
(c) No Prior Lien. Debtor has not executed any prior transfer,
assignment, pledge, security interest or hypothecation covering the
Collateral or any interest in the Collateral.
(d) Authority. Debtor has full power and authority to execute this
Agreement without breaching any material agreement to which Debtor is
party.
(e) Status of Receivables. The accounts receivable and other
tangible and intangible rights of Debtor arise from sales or the
performance of services by Debtor which have been performed in the
ordinary course of the Debtor's business.
The delivery at any time by Debtor to Secured Party of Collateral or of
additional specific descriptions of certain Collateral shall constitute a
representation and warranty by Debtor to Secured Party under this Agreement that
the representations and warranties of this Section 5 are true and correct with
respect to each item of such Collateral.
6. Covenants. Debtor further covenants and agrees with Secured Party
that until the Obligations are paid and performed in full, Debtor will:
(a) Relocation of Office or Books and Records; Change of Name or
Address: Give Secured Party 30 days prior written notice of any
proposed relocation of its principal place of business, chief executive
office, the place where its books and records relating to accounts and
general intangibles are kept or changing its name and the address to
which it is entitled to notice
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under the Note or this Agreement. The notice must include the street address,
zip code, telephone number, city, county or parish and state.
(b) Relocation of Collateral. Not relocate any of the
Collateral to any commonwealth, nation, territory, possession or country outside
the United States of America.
(c) Material Change. Promptly notify Secured Party of any
change in any material fact or circumstance represented or warranted by Debtor
with respect to the Collateral.
(d) Record of Collateral. Maintain, at the place where it is
entitled to receive notices under this Agreement, a current record of where all
Collateral is located, upon reasonable notice permit Secured Party's
representatives to inspect and make abstracts from such records at any
reasonable time during normal business hours.
(e) Adverse Claim. Promptly notify Secured Party of any claim,
action or proceeding challenging the Security Interest or affecting title to all
or any portion of the Collateral and, at Secured Party's request, appear in and
defend any such action or proceeding at Debtor's expense.
(f) Hold Collateral in Trust. Upon the occurrence and during
the continuation of a Default, hold in trust (and not commingle with its other
assets) for Secured Party all Collateral that is chattel paper, instruments or
documents of title at any time received by it and promptly deliver same to
Secured Party unless Secured Party at its option gives Debtor written permission
to retain that Collateral. Upon the occurrence and during the continuation of a
Default, at Secured Party's request, each chattel paper, instrument or document
of title so retained shall be marked to state that it is assigned to Secured
Party and each instrument shall be endorsed to the order of Secured Party (but
failure to so xxxx or endorse shall not impair the Security Interest).
(g) No Assignment. Not sell, assign or otherwise dispose of,
or permit the sale, assignment or disposition of, any Collateral except as
permitted by the Loan Documents or with the written consent of Secured Party.
(h) Permitted Liens. Not create or permit the creation of, or
allow the existence of, any lien upon or against any of the Collateral except
for liens permitted by the Loan Documents or approved by Secured Party in
writing.
(i) Further Assurances. From time to time promptly execute and
deliver to Secured Party all other assignments, certificates, supplemental
documents and financing statements, and do all other acts or things as Secured
Party may reasonably request in order to create, evidence, perfect, continue or
maintain the existence and priority of the Security Interest.
(j) Perform Obligations. Perform all of its obligations under
or in connection with the Collateral in accordance with customary business
practices.
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(k) Amendment. Not amend, alter or modify, or permit the
amendment, alteration or modification of, any material portion (individually or
collectively) of the Collateral without Secured Party's prior written consent as
to the form and content of the amendment, alteration or modification.
(l) Impairment of Collateral. Not do or permit any act which
would impair any portion of the Collateral.
(m) Default under Collateral. Promptly notify Secured Party of
any default or event of default by Debtor or any other party under or in
connection with any portion (individually or collectively) of the Collateral and
immediately use reasonable efforts to remedy the same or immediately demand that
the same be remedied.
(n) No Lien or Assignment. Except for liens approved by
Secured Party, not execute in favor of any other person or entity, any
assignment, pledge or hypothecation of, or security interest in, all or any
portion of the Collateral.
7. Default; Remedies. Upon the occurrence of a Default, subject to the
terms and conditions of the Note, Secured Party has the following cumulative
rights and remedies under this Agreement:
(a) Debtor's Agent. Secured Party shall be deemed to be
irrevocably appointed as Debtor's agent and attorney-in-fact with all right and
power to enforce all of Debtor's rights and remedies under or in connection with
the Collateral. All reasonable cost, expenses and liabilities incurred and all
payments made by Secured Party as Debtor's agent and attorney-in-fact,
including, without limitation, reasonable attorney's fees and expenses, shall be
considered a loan by Secured Party to Debtor which shall be repayable on demand
and shall accrue interest at the same rate as amounts due under the Note and
shall be part of the Obligations.
(b) Account Debtors and Obligors. Secured Party may notify or
require each account debtor or other obligor to make payment directly to Secured
Party and Secured Party may take control of the proceeds paid to Secured Party.
Until Secured Party elects to exercise these rights, Debtor is authorized to
collect and enforce the Collateral and to retain and expend all payments made on
Collateral. After Secured Party elects to exercise these rights, Secured Party
shall have the right in its own name or in the name of Debtor to (i) compromise
or extend time of payment with respect to all or any portion of the Collateral
for such amounts and upon such terms as Secured Party may reasonably determine,
(ii) demand, collect, receive, receipt for, xxx for, compound and give
acquittance for any and all amounts due or to become due with respect to
Collateral, (iii) take control of cash and other proceeds of any Collateral,
(iv) endorse Debtor's name on any notes, acceptances, checks, drafts, money
orders or other evidences of payment on Collateral that may come into Secured
Party's possession, and (v) do all other acts and things reasonably necessary to
carry out the intent of this Agreement. If any person owing money or other
remuneration to Debtor ("Obligor") fails to make payment on any Collateral when
due, Secured Party is authorized, in its sole discretion, either in its own name
or in Debtor's name, to take such action as Secured Party reasonably shall deem
appropriate for the collection
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of any amounts owed with respect to Collateral or upon which a delinquency
exists. Regardless of any other provision of this Agreement, however, Secured
Party shall never be liable for its failure to collect, or for its failure to
exercise diligence in the collection of, any amounts owed with respect to
Collateral except for its own fraud, gross negligence, willful misconduct or
violation of any law, nor shall it be under any duty whatever to anyone except
Debtor to account for funds that it shall actually receive under this Agreement.
A receipt given by Secured Party to any Obligor shall be a full and complete
release, discharge and acquittance to such Obligor, to the extent of any amount
so paid to Secured Party. Secured Party may apply or set off the deposits
against any liability of Debtor to Secured Party.
(c) UCC Rights. Secured Party may exercise any and all rights
available to a secured party under the UCC, in addition to any and all other
rights afforded by the Loan Documents, at law, in equity, or otherwise,
including, without limitation, (i) requiring Debtor to assemble all or part of
the Collateral and make it available to Secured Party at a place to be
designated by Secured Party which is reasonably convenient to Debtor and Secured
Party, (ii) applying by appropriate judicial proceedings for appointment of a
receiver for all or part of the Collateral, (iii) applying to the Obligations
any cash held by Secured Party under this Agreement, (iv) reducing any claim to
judgment, (v) exercising the rights of offset or banker's lien against the
interest of Debtor in and to every account and other property of Debtor in
Secured Party's possession to the extent of the full amount of the Obligations,
(vi) foreclosing the Security Interest and any other liens Secured Party may
have or otherwise realize upon any and all of the rights Secured Party may have
in and to the Collateral, or any part thereof, and (vii) bringing suit or other
proceedings before any tribunal either for specific performance of any covenant
or condition contained in any of the Loan Documents or in aid of the exercise of
any right granted to Secured Party in any of the Loan Documents.
(d) Notice. Reasonable notification of the time and place of
any public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is to be
made, shall be sent to Debtor and to any other Person entitled to notice under
the UCC; provided that, to the extent permitted by applicable law, if any of the
Collateral threatens to decline speedily in value or is of the type customarily
sold on a recognized market, Secured Party may sell or otherwise dispose of the
Collateral without notification, advertisement or other notice of any kind. It
is agreed that notice sent or given not less than ten calendar days prior to the
taking of the action to which the notice relates is reasonable notification and
notice for the purposes of this subparagraph. It shall not be necessary that the
Collateral be at the location of the sale.
(e) Application of Proceeds. Secured Party shall apply the
proceeds of any sale or other disposition of the Collateral under this Section 7
in the following order: First, to the payment of all its reasonable expenses
incurred in retaking, holding and preparing any of the Collateral for sale(s) or
other disposition, in arranging for such sale(s) or other disposition, and in
actually selling or disposing of the same (all of which are part of the
Obligations); second, toward repayment of amounts reasonably expended by Secured
Party under Section 8; third, toward payment of the balance of the Obligations
in the order and manner specified in the Note. Any surplus remaining shall be
delivered to Debtor or as a court of competent jurisdiction may direct.
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(f) Sale. Secured Party's sale of less than all the Collateral
shall not exhaust Secured Party's rights under this Agreement and Secured Party
is specifically empowered to make successive sales until all the Collateral is
sold. If the proceeds of a sale of less than all the Collateral shall be less
than the Obligations, this Agreement and the Security Interest shall remain in
full force and effect as to the unsold portion of the Collateral just as though
no sale had been made. In the event any sale under this Agreement is not
completed or is, in Secured Party's opinion, defective, such sale shall not
exhaust Secured Party's rights under this Agreement and Secured Party shall have
the right to cause a subsequent sale or sales to be made. Any and all statements
of fact or other recitals made in any xxxx of sale or assignment or other
instrument evidencing any foreclosure sale under this Agreement as to nonpayment
of the Obligations, or as to the occurrence of any Default, or as to Secured
Party's having declared all of such Obligations to be due and payable, or as to
notice of time, place and terms of sale and the properties to be sold having
been duly given, or as to any other act or thing having been duly done by
Secured Party, shall be taken as prima facie evidence of the truth of the facts
so stated and recited. Secured Party may appoint or delegate any one or more
persons as agent to perform any act or acts necessary or incident to any sale
held by Secured Party, including the sending of notices and the conduct of sale,
but such acts must be done in the name and on behalf of Secured Party.
(g) Existence of Default. Regarding the existence of any
Default for purposes of this Agreement, Debtor agrees that the obligors on any
Collateral may rely upon written certification from Secured Party that such a
Default exists. Debtor expressly agrees that Secured Party shall not be liable
to Debtor for any claims, damages, costs, expenses or causes of action of any
nature whatsoever in connection with, arising out of, or related to Secured
Party's exercise of any rights, powers or remedies under the Note or this
Agreement except for its own fraud, gross negligence, willful misconduct or
violation of any law.
8. Other Rights of Secured Party.
(a) Performance. In the event Debtor fails to preserve the
priority of the Security Interest in any of the Collateral, or, upon the
occurrence and during the continuance of a Default, otherwise fails to perform
any of its obligations under the Note or this Agreement with respect to the
Collateral, then Secured Party may (but is not required to) prosecute or defend
any suits in relation to the Collateral or take any other action which Debtor is
required to take under the Note or this Agreement, but has failed to take. Any
sum which may be reasonably expended or paid by Secured Party under this
subparagraph (including, without limitation, court costs and reasonable
attorneys' fees and expenses) shall bear interest from the date of expenditure
or payment at the same rate as amounts due under the Note until paid and,
together with such interest, shall be payable by such Debtor to Secured Party
upon demand and shall be part of the Obligations.
(b) Collateral in Secured Party's Possession. If, upon the
occurrence and during the continuance of a default, any Collateral comes into
Secured Party's possession, Secured Party may use such Collateral for the
purpose of preserving it or its value pursuant to the order of a court of
appropriate jurisdiction or in accordance with any other rights held by Secured
Party in respect of such Collateral. Debtor covenants to promptly reimburse and
pay to Secured
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Party, at Secured Party's request, the amount of all reasonable expenses
incurred by Secured Party in connection with its custody and preservation of
such Collateral, and all such expenses, costs, Taxes and other charges shall
bear interest at the same rate as amounts due under the Note until repaid and,
together with such interest, shall be payable by Debtor to Secured Party upon
demand and shall be part of the Obligations. However, the risk of accidental
loss or damage to, or diminution in value of, Collateral is on Debtor, except
for Secured Party's own fraud, gross negligence, willful misconduct or violation
of any law. Provided that Secured Party acts in accordance with all applicable
laws, Secured Party shall have no liability for failure to obtain or maintain
insurance, nor to determine whether any insurance ever in force is adequate as
to amount or as to the risks insured. With respect to Collateral that is in the
possession of Secured Party, except for its own fraud, gross negligence, willful
misconduct or violation of any law, Secured Party shall have no duty to fix or
preserve rights against prior parties to such Collateral and shall never be
liable for any failure to use diligence to collect any amount payable in respect
of such Collateral, but shall be liable only to account to Debtor for what it
may actually collect or receive thereon.
9. Miscellaneous.
(a) Term. Upon full and final payment of the Obligations
without Secured Party having exercised its rights under this Agreement, this
Agreement shall terminate; provided that no Obligor on any of the Collateral
shall be obligated to inquire as to the termination of this Agreement, but shall
be fully protected in making payment directly to Secured Party, which payment
shall be promptly paid over to Debtor after termination of this Agreement.
(b) Actions Not Releases. This Security Interest and Debtor's
obligation and Secured Party's Rights under this Agreement shall not be
released, diminished, impaired or adversely affected by the occurrence of any
one or more of the following events: (i) the taking or accepting of any other
security or assurance for any or all of the Obligations; (ii) any release,
surrender, exchange, subordination or loss of any security or assurance at any
time existing in connection with any or all of the Obligations; (iii) the
modification of, amendment to, or waiver of compliance with any terms of any of
the other Loan Documents without the consent of Debtor, except as required
therein; (iv) the insolvency, bankruptcy, or lack of corporate or trust power of
any party at any time liable for the payment of any or all of the Obligations,
whether now existing or hereafter occurring; (v) any renewal, extension or
rearrangement of the payment of any or all of the Obligations, either with or
without notice to or consent of Debtor, or any adjustment, indulgence,
forbearance, or compromise that may be granted or given by Secured Party to
Debtor; (vi) any neglect, delay, omission, failure or refusal of Secured Party
to take or prosecute any action in connection with any other agreement,
document, guaranty or instrument evidencing, securing or assuring the payment of
all or any of the Obligations; (vii) any failure of Secured Party to notify
Debtor of any renewal, extension or assignment of the Obligations or any part
thereof, or the release of any security under any other document or instrument,
or of any other action taken or refrained from being taken by Secured Party
against Debtor or any new agreement between Secured Party and Debtor, it being
understood that, except as expressly required by the Note, Secured Party shall
not be required to give Debtor any notice of any kind under any circumstances
whatsoever with respect to or in connection with the Obligations, including,
without limitation, notice of acceptance of this Agreement or any Collateral
ever
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delivered to or for the account of Secured Party under this Agreement;
(viii) the illegality, invalidity or unenforceability of all or any part of the
Obligations against any third party obligated with respect thereto by reason of
the fact that the Obligations, or the interest paid or payable with respect
thereto, exceeds the amount permitted by law, the act of creating the
Obligations, or any part thereof, is ultra xxxxx, or the officers, partners, or
trustees creating same acted in excess of their authority, or for any other
reason; or (ix) if any payment by any party obligated with respect thereto is
held to constitute a preference under applicable laws or for any other reason
Secured Party is required to refund such payment or pay the amount thereof to
someone else.
(c) Waivers. Except to the extent expressly otherwise provided
in this Agreement or in other Loan Documents, Debtor waives (i) any right to
require Secured Party to proceed against any other Person, to exhaust its rights
in Collateral, or to pursue any other right which Secured Party may have; (ii)
with respect to the Obligations, presentment and demand for payment, protest,
notice of protest and nonpayment, notice of acceleration and notice of the
intention to accelerate; and (iii) all rights of marshaling in respect of any
and all of the Collateral.
(d) Financing Statement. Secured Party shall be entitled at
any time to file this Agreement or a carbon, photographic, or other reproduction
of this Agreement, as a financing statement, but the failure of Secured Party to
do so shall not impair the validity or enforceability of this Agreement.
(e) Amendments. This Agreement may only be amended by a
writing executed by Debtor and Secured Party.
(f) Multiple Counterparts. This Agreement may be executed in
any number of identical counterparts. Each counterpart shall be deemed an
original for all purposes and all counterparts, collectively, shall constitute
one Agreement. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one set of counterpart signatures.
(g) Parties Bound. This Agreement shall be binding on Debtor
and its successors and assigns and shall inure to the benefit of Secured Party
and its successors and assigns. The obligations and agreements of Debtor under
this Agreement shall be binding upon its successors and assigns, and, except for
Secured Party's fraud, gross negligence, willful misconduct, and violation of
any applicable law, delivery or other accounting of Collateral to Debtor shall
discharge Secured Party of all liability therefor.
(h) Assignment. Debtor may not, without Secured Party's prior
written consent, assign any rights, duties or obligations under this Agreement.
(i) Notice. Any notice or communication required or permitted
under this Agreement must be given in writing (which may be by telex or
telecopy) to the parties at the following addresses or to such other address for
a party as such party may provide to the other in writing:
11
12
Debtor: WO Consulting, Inc.
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Secured Party: Scottsdale Technologies-I, Ltd.
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND, AS
APPLICABLE, THE LAWS OF THE UNITED STATES OF AMERICA.
EFFECTIVE as of the date set forth in the preamble.
DEBTOR:
WO CONSULTING, INC.
a Delaware corporation
By: /s/ XXXXXX X. XXXXX
---------------------------------------
Name: XXXXXX X. XXXXX
Title: Chief Financial Officer
SECURED PARTY:
SCOTTSDALE TECHNOLOGIES-I, LTD.,
a Delaware limited partnership
By: SOFTWARE FUNDING CORP., a Delaware
corporation, its sole general partner
By: /s/ XXXXXX X. XXXXX
------------------------------
Name: XXXXXX X. XXXXX
Title: Vice President
13
SCHEDULE 1
Location of Books and Records as to Accounts and Chief Executive
Offices:
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
