SECURITY AGREEMENT
Exhibit 10.3
This SECURITY AGREEMENT (this “Agreement”) is made as of July
__, 2017 by and among True Drinks Holdings, Inc., a Nevada
corporation (the “Grantor”), and each holder of the
Grantor’s Senior Secured Notes due ___ months following their
issuance, in the original aggregate principal amount of $_________
(the “Notes”)
(together with its endorsees, transferees and assigns, each a
“Secured Party”
and together, the “Secured
Parties”).
RECITALS
WHEREAS, the
Grantor issued and sold the Notes to the Secured Parties, which
Notes are dated on or around July __, 2017; and
WHEREAS, in order to induce the Secured Parties to extend
the loans evidenced by the Notes, the Grantor has agreed to execute
and deliver to the Secured Parties this Agreement and to grant the
Secured Parties, pari passu
with each other Secured Party, and
through the Collateral Agent (as defined in Section 17 hereof), a
security interest in all assets of the Grantor to secure the prompt
payment, performance and discharge in full of all of the
Grantor’s obligations under the Notes.
NOW,
THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Certain Definitions. As used in
this Agreement, the following terms shall have the meanings set
forth in this Section 1. Terms used but not otherwise defined in
this Agreement that are defined in Article 9 of the UCC (as defined
herein) (such as “general intangibles” and
“proceeds”) shall have the respective meanings given
such terms in Article 9 of the UCC. All capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in
the Note.
(a) “Collateral” means the collateral in which
the Collateral Agent on behalf of the Secured Parties is granted a
security interest by this Agreement and which shall include the
following, whether presently owned or existing or hereafter
acquired or coming into existence, and all additions and accessions
thereto and all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including, without
limitation, all proceeds from the sale or transfer of the
Collateral and of insurance covering the same and of any tort
claims in connection therewith:
(i) All goods,
including, without limitation, all machinery, equipment, computers,
motor vehicles, trucks, tanks, boats, ships, appliances, furniture,
special and general tools, fixtures, test and quality control
devices and other equipment of every kind and nature and wherever
situated, together with all documents of title and documents
representing the same, all additions and accessions thereto,
replacements therefor, all parts therefor, and all substitutes for
any of the foregoing and all other items, owned by the Grantor and
used in connection with the Grantor’s businesses and all
improvements thereto;
(ii) All
inventory of the Grantor;
(iii) All
of the Grantor’s contract rights and general intangibles,
including, without limitation, all partnership interests, stock or
other securities, licenses, distribution and other agreements,
computer software development rights, employee non-compete,
non-disclosure and assignment of rights agreements, leases,
franchises, customer lists, quality control procedures, grants and
rights, goodwill, deposit accounts, and income tax
refunds;
(iv) All
accounts of the Grantor including, without limitation, all
insurance proceeds, and rights to refunds or indemnification
whatsoever owing, together with all instruments, all documents of
title representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks which
any of the same may represent, and all right, title, security and
guarantees with respect to each receivable, including any right of
stoppage in transit;
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(v) All of the
Grantor’s Intellectual Property;
(vi) All
of Grantor’s investment property including, without
limitation, any and all equity interest in its Subsidiaries and
certificates evidencing such equity interest, and any shares of
stock (including, without limitation, a distribution in connection
with any reclassification, increase or reduction of capital or in
connection with any reorganization), or any option or right to
acquire shares of stock, in substitution of, or in exchange for,
any of such equity interest, or any stock dividend or split with
respect to such equity interest, and any distributions, whether
dividend or liquidating or otherwise, of any cash or property with
respect to such equity interest; and
(vii) All
of the Grantor’s documents, instruments and chattel paper,
files, records, books of account, business papers, computer
programs and the products and proceeds of all of the foregoing
Collateral set forth in paragraphs (i) through (vi), inclusive,
above.
(b) “Copyrights” shall mean all of the
following in which the Grantor now hold or hereafter acquires any
interest (i) all copyrights, whether registered or unregistered,
held pursuant to the laws of the United States, any State thereof
or any other country; (ii) registrations, applications and
recordings in the United States Copyright Office or in any similar
office or agency of the United States, any State thereof or any
other country; (iii) any continuations, renewals or extensions
thereof; (iv) any registrations to be issued in any pending
applications; (v) prior versions of works covered by copyright and
all works based upon, derived from or incorporating such works;
(vi) income, royalties, damages, claims and payments now and
hereafter due and/or payable with respect to copyrights, including,
without limitation, damages, claims and recoveries for past,
present or future infringement; (vii) rights to xxx for past,
present and future infringements of any copyright; (viii) any
rights in any material which is copyrightable or which is protected
by common law, United States copyright laws or similar laws, or any
law of any State; and (ix) any other rights corresponding to any of
the foregoing rights throughout the world.
(c) “Copyright License” shall mean any
agreement, written or oral, in which the Grantor now holds or
hereafter acquires any interest, granting any right in or to any
Copyright or Copyright registration (whether a Grantor is the
licensee or the licensor thereunder) including, without limitation,
licenses pursuant to which the Grantor has obtained the exclusive
right to use a copyright owned by a third party.
(d) “Intellectual Property” shall
mean, collectively, the Software Intellectual Property, Copyrights,
Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses and Trade Secrets, but shall exclude any and all direct
and/or indirect rights granted to and/or that the Grantor has
received directly and/or indirectly pursuant to any License
Agreement between the Grantor and (i) Disney Consumer Products,
Inc.; (ii) Marvel Characters B.V.; and (iii) Spider-Man
Merchandise, L.P.
(e) “Obligations” means all of the
Grantor’s direct and/or indirect obligations under this
Agreement, the Note and the other Transaction Documents, in each
case, whether now or hereafter existing, voluntary or involuntary,
direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later
decreased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any
part of such payment is avoided or recovered directly or indirectly
from the Secured Party as a preference, fraudulent transfer or
otherwise as such obligations may be amended, supplemented,
converted, extended or modified from time to time.
(f) “Patents” shall mean all of the
following in which the Grantor now holds or hereafter acquires any
interest: (i) all patents of the United States or any other
country, all registrations and recordings thereof and all
applications for patents of the United States or any other country,
including, without limitation, registrations, recordings and
applications in the United States Patent and Trademark Office or in
any similar office or agency of the United States, any State
thereof or any other country; (ii) all reissues, divisions,
continuations, renewals, continuations in part or extensions
thereof; (iii) all patents to issue in any such applications; (iv)
income, royalties, damages, claims and payments now and hereafter
due and/or payable with respect to patents, including, without
limitation, damages, claims and recoveries for past, present or
future infringement; and (v) rights to xxx for past, present and
future infringements of any patent.
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(g) “Patent License” shall mean any
agreement, whether written or oral, in which the Grantor now holds
or hereafter acquires any interest, granting any right with respect
to any Patent (whether a Grantor is the licensee or the licensor
thereunder).
(h) “Software Intellectual Property”
shall mean (i) all software programs (including, without
limitation, all source code, object code and all related
applications and data files), whether now owned, upgraded,
enhanced, licensed or leased or hereafter acquired by the Grantor;
(ii) all computers and electronic data processing hardware and
firmware associated therewith; (iii) all documentation (including,
without limitation, flow charts, logic diagrams, manuals, guides
and specifications) with respect to such software, hardware and
firmware described in the preceding subclauses (i) and (ii); and
(iv) all rights with respect to all of the foregoing, including,
without limitation, any and all upgrades, modifications,
copyrights, licenses, options, warranties, service contracts,
program services, test rights, maintenance rights, support rights,
improvement rights, renewal rights and indemnifications and
substitutions, replacements, additions, or model conversions of any
of the foregoing.
(i) “Subsidiaries” shall mean
collectively any and all direct and/or indirect and/or wholly-owned
and/or partially owned entities that the Grantor (i) has a direct
and/or indirect interest in, and (ii) may have and/or acquire
directly and or indirectly an ownership interest in following the
date hereof.
(j) “Subsidiary” shall mean each of
the Subsidiaries
(k) “Trademarks” shall mean any of the
following in which the Grantor now holds or hereafter acquires any
interest: (i) any trademarks, tradenames, corporate names, company
names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of
the foregoing have appeared or appear, designs and general
intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof and any
applications in connection therewith, including, without
limitation, registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office
or agency of the United States, any State thereof or any other
country (collectively, the “Marks”); (ii) any reissues,
extensions or renewals thereof; (iii) the goodwill of the business
symbolized by or associated with the Marks; (iv) income, royalties,
damages, claims and payments now and hereafter due and/or payable
with respect to the Marks, including, without limitation, damages,
claims and recoveries for past, present or future infringement; and
(v) rights to xxx for past, present and future infringements of the
Marks.
(l) “Trademark License” shall mean any
agreement, written or oral, in which the Grantor now holds or
hereafter acquires any interest, granting any right in and to any
Trademark or Trademark registration (whether a Grantor is the
licensee or the licensor thereunder).
(m) “Trade Secrets” shall mean common
law and statutory trade secrets and all other confidential or
proprietary or useful information and all know-how obtained by or
used in or contemplated at any time for use in the business of the
Grantor (all of the foregoing being collectively called a
“Trade
Secret”), whether or not such Trade Secret has been
reduced to a writing or other tangible form, including, without
limitation, all documents and things embodying, incorporating or
referring in any way to such Trade Secret, all Trade Secret
Licenses, and including, without limitation, the right to xxx for
and to enjoin and to collect damages for the actual or threatened
misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
(n) “Transaction Documents” means the
Notes and this Agreement and/or other documents, amendments,
supplements, relating to and/or attached to such agreements and/or
the transactions contemplated in and/or related to such documents
and/or agreements.
(o) “UCC” means the Uniform Commercial
Code, as the same may, from time to time, be in effect in the State
of California; provided,
however, in the event that,
by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Secured Party’s
security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State
of California, the term “UCC” shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment,
perfection of priority and for purposes of definitions related to
such provisions.
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2. Grant of Security Interest. As
a further inducement for the Secured Party to purchase the Note,
and to secure the complete and timely payment, performance and
discharge in full, as the case may be, of all of the Obligations,
the Grantor hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Collateral Agent, on behalf of the
Secured Parties, a continuing senior first priority security
interest in, and continuing lien upon, all right to possession and
disposition of, and a right of set-off against, in each case to the
fullest extent permitted by law, all of the Grantor’s right,
title and interest of whatsoever kind and nature in and to the
Collateral (the “Security
Interest”).
3. Representations, Warranties, Covenants
and Agreements of the Grantor. Except as set forth on
Schedule A attached
hereto, the Grantor represents and warrants to, and covenants and
agrees with, the Secured Party as follows:
(a) The Grantor has the
requisite corporate power and authority to enter into this
Agreement and otherwise carry out their obligations hereunder. The
execution, delivery and performance by the Grantor of this
Agreement and the filings contemplated herein have been duly
authorized by all necessary action on their part and no further
action is required by it. This Agreement constitutes a legal, valid
and binding obligation of the Grantor, enforceable in accordance
with its terms.
(b) The Grantor’s
place of business where all of their respective books of account
and records and other assets and Collateral are kept, stored and/or
located is set forth on Schedule A hereto. Other than
as set forth on Schedule
A hereto, there exists no other place of business or offices
where any such materials of the Grantor is kept, stored and/or
located;
(c) The Grantor is the
sole owner of the Collateral (except for non-exclusive licenses
granted by a Grantor in the ordinary course of its business), free
and clear of any liens, security interests, encumbrances, rights or
claims, and are fully authorized to grant the Security Interest in
and to pledge the Collateral. There is not on file in any
governmental or regulatory authority, agency or recording office an
effective financing statement, security agreement, license or
transfer or any notice of any of the foregoing covering or
affecting any of the Collateral. So long as this Agreement shall be
in effect, without the prior consent of the Secured Party, which
consent shall not be unreasonably withheld, the Grantor shall not
execute and shall not knowingly permit to be on file in any such
office or agency any such financing statement or other document or
instrument.
(d) No part of the
Collateral or rights in connection therewith has been judged, by
any governmental body with proper jurisdiction, to be invalid or
unenforceable. No written claim has been received alleging the
Grantor’s use of any Collateral violates the rights of any
third party. There has been no adverse decision to the
Grantor’s claims of ownership rights in or exclusive rights
to use the Collateral in any jurisdiction or to the Grantor’s
rights to keep and maintain such Collateral in full force and
effect, and there is no proceeding involving said rights pending or
threatened before any court, judicial body, administrative or
regulatory agency, arbitrator or other governmental
authority.
(e) The Grantor shall
at all times maintain its books of account and records relating to
the Collateral at the locations set forth on Schedule A attached hereto.
(f) This Agreement
creates in favor of the Collateral Agent, on behalf of the Secured
Parties a valid security interest in the Collateral securing the
payment and performance of the Obligations and, upon making the
filings described in the immediately following sentence, a
perfected first priority security interest in such Collateral and,
to the extent that it can be perfected through such filings, the
Intellectual Property. Except for the filing of financing
statements on Form UCC-1 under the UCC with the jurisdictions
indicated, or otherwise set forth, on Schedule A, attached hereto, no
authorization or approval of or filing with or notice to any
governmental authority or regulatory body is required either for
the grant by the Grantor of, or the effectiveness of, the Security
Interest granted hereby or for the execution, delivery and
performance of this Agreement by the Grantor or for the perfection
of, or exercise by the Collateral Agent, on behalf of the Secured
Parties of, their rights and remedies hereunder.
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(g) The Collateral
Agent is hereby authorized to file or cause to be filed one or more
executed UCC-1 financing statements on Form UCC-1, or other
necessary or required filings necessary to perfect the Secured
Parties Security Interest with the appropriate jurisdictions,
either prior to or after the execution of this Agreement.
Furthermore, upon request of the Collateral Agent, the Grantor
shall execute and deliver any and all agreements, instruments,
documents, and papers as the Secured Parties may reasonably request
to evidence the Secured Party’s security interest in the
Intellectual Property and the goodwill and general intangibles of
the Grantor relating thereto or represented thereby.
(h) The execution,
delivery and performance of this Agreement does not conflict with
or cause a material breach or default, or an event that with or
without the passage of time or notice, shall constitute a material
breach or default, under any agreement to which any of the Grantor
is a party or by which the Grantor is bound. No consent (including,
without limitation, from stockholders or creditors of the Grantor)
is required for the Grantor to enter into and perform its
obligations hereunder.
(i) The Grantor shall
at all times safeguard, protect and maintain the Collateral for the
account of the Collateral Agent, on behalf of the Secured Parties
until this Agreement and the Security Interest hereunder shall
terminate pursuant to Section 12. Without limiting the generality
of the foregoing, the Grantor shall pay all governmental fees and
taxes necessary to maintain the Collateral and the Security
Interest hereunder, and the Grantor shall obtain and furnish to the
Collateral Agent, on behalf of the Secured Parties, from time to
time, upon demand, such releases and/or subordinations of claims
and liens which may be required to maintain the priority of the
Security Interest hereunder.
(j) The Grantor will
not transfer, pledge, hypothecate, encumber, license, sell or
otherwise dispose of any of the Collateral without the prior
written consent of the Collateral Agent.
(k) The Grantor shall,
within ten (10) days of obtaining knowledge thereof, advise the
Collateral Agent promptly, in sufficient detail, of the occurrence
of any event which would have a material adverse effect on the
value of the Collateral or on the Secured Parties security interest
therein.
(l) The Grantor shall
promptly execute and deliver to the Collateral Agent, on behalf o
the Secured Parties, such further deeds, mortgages, assignments,
security agreements, financing statements or other instruments,
documents, certificates and assurances and take such further action
as the Collateral Agent may from time to time reasonably request
and in their sole discretion deem necessary to perfect, protect or
enforce the Security Interest.
(m) The Grantor shall
permit the Collateral Agent and its representatives and agents to
inspect the Collateral at any time and from time to time and to
make copies of records pertaining to the Collateral as may be
requested by the Collateral Agent from time to time.
(n) The Grantor will
take all steps reasonably necessary to diligently pursue and seek
to preserve, enforce and collect any rights, claims, causes of
action and accounts receivable in respect of the
Collateral.
(o) The Grantor shall
promptly notify the Collateral Agent in sufficient detail upon
becoming aware of any attachment, garnishment, execution or other
legal process levied against any Collateral and of any other
information received by the Grantor that may materially affect the
value of the Collateral, the Security Interest or the rights and
remedies of the Secured Parties hereunder.
(p) All information
supplied to the Collateral Agent by or on behalf of the Grantor
with respect to the Collateral is accurate and complete in all
material respects as of the date hereof, and all information
supplied after the date hereof to the Collateral Agent shall be
accurate in all material respects.
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(q) With respect to any
of the Grantor’s Intellectual Property:
(i) such Intellectual
Property is subsisting and the rights in connection with such
Intellectual Property have not been adjudged invalid or
unenforceable, in whole or in part;
(ii) the
rights in connection with such Intellectual Property are valid and
enforceable;
(iii) the
Grantor has made all necessary filings and recordations necessary
to protect its interest in such Intellectual Property, including,
without limitation, recordations of all of their interests in the
Patents, Patent Licenses, Trademarks and Trademark Licenses in the
United States Patent and Trademark Office and its claims to the
Copyrights and Copyright Licenses in the United States Copyright
Office;
(iv) the
Grantor is the exclusive owners of the entire and unencumbered
right, title and interest in and to such Intellectual Property and
no claim is currently being asserted that the use of such
Intellectual Property infringes on the asserted rights of any third
party; and
(v) the Grantor has
performed and will continue to perform all acts and have paid all
required fees and taxes to maintain their rights with respect to
each and every item of Intellectual Property in full force and
effect throughout the United States, as applicable.
(r) The Grantor
shall:
(i) maintain each
Trademark and Copyright in full force free from any claim of
abandonment for non-use, maintain as in the past the quality of
products and services offered under such Trademark or Copyright;
employ such Trademark or Copyright with the appropriate notice of
registration; not adopt or use any xxxx which is confusingly
similar or a colorable imitation of such Trademark or Copyright
unless the Secured Parties shall obtain a perfected security
interest in such xxxx pursuant to this Agreement; and not (and not
permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any Trademark or Copyright may
become invalidated;
(ii) not,
except with respect to any Patent that it shall reasonably
determine is of negligible economic value to it, do any act, or
omit to do any act, whereby any Patent may become abandoned;
and
(iii) notify
the Collateral Agent immediately if it knows, or has reason to
know, that any application or registration relating to any Patent,
Trademark or Copyright may become abandoned, or of any material
adverse determination or development (including, without
limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court
or tribunal in the United States) regarding its ownership of any
Patent, Trademark or Copyright or its right to register the same or
to keep and maintain the same.
(s) Whenever a Grantor,
either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any
Patent, Trademark or Copyright with the United States Patent and
Trademark Office or the United States Copyright Office or acquire
rights to any new Patent, Trademark or Copyright whether or not
registered, report such filing to the Secured Party within five (5)
business days after the last day of the fiscal quarter in which
such filing occurs.
(t) The Grantor shall
take all reasonable and necessary steps, including, without
limitation, in any proceeding before the United States Patent and
Trademark Office or the United States Copyright Office, to maintain
and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the Patents,
Trademarks and Copyrights, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability.
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(u) In the event that
any Patent, Trademark or Copyright included in the Intellectual
Property is infringed, misappropriated or diluted by a third party,
the Grantor shall promptly notify the Collateral Agent after a
Grantor learns thereof and shall, unless such Grantor shall
reasonably determine that such Patent, Trademark or Copyright is of
negligible economic value to it, which determination it shall
promptly report to the Collateral Agent: promptly xxx for
infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution, or take such other
actions as it shall reasonably deem appropriate under the
circumstances to protect such Patent, Trademark or Copyright. If a
Grantor lacks the financial resources to comply with this Section
3(u), such Grantor shall immediately so notify in express and
detailed writing the Collateral Agent and shall cooperate fully
with any enforcement action undertaken by the Collateral Agent on
behalf of the Grantor.
(v) None of such
Patents, Trademarks, Copyrights and Trade Secrets is the subject of
any licensing or franchise agreement as of the date of this
Agreement. No holding, decision or judgment has been rendered by
any governmental authority which would limit, cancel or question
the validity of any License, Patent, Trademark, Copyright and Trade
Secrets. No action or proceeding is pending (i) seeking to limit,
cancel or question the validity of any License, Patent, Trademark,
Copyright or Trade Secret, or (ii) which, if adversely determined,
would have a material adverse effect on the value of any License,
Patent, Trademark, Copyright or Trade Secret. The Grantor has used
and will continue to use for the duration of this Agreement, proper
statutory notice in connection with their use of the Patents,
Trademarks and Copyrights and consistent standards of quality in
products leased or sold under the Patents, Trademarks and
Copyrights.
Grantor’s
representations and warranties made in this Agreement will survive
its execution, delivery, and termination.
4. Defaults. The following events
shall be “Events of
Default”:
(a) The occurrence of
an Event of Default as defined in the Note;
(b) If any
representation or warranty of any Grantor in this Agreement proves
to be incorrect in any material respect when made; and
(c) The failure by any
Grantor to observe or perform any of its obligations hereunder
(including but not limited to, any provision, agreement, covenant
and other items) for five (5) business days.
5. Duty To Hold In Trust. Upon the
occurrence of an Event of Default, and at any and all times
thereafter, and subject in all respects to the Secured Party's
rights and remedies upon default under Section 6 hereof, the
Grantor shall, upon receipt by any of them of any revenue, income
or other sums subject to the Security Interest, whether payable
pursuant to the Note or otherwise, or of any check, draft, note,
trade acceptance or other instrument evidencing an obligation to
pay any such sum, hold the same in trust for the Secured Parties
and shall forthwith endorse and transfer any such sums or
instruments, or both, to the Collateral Agent, for the benefit of
the Secured Partiers, for application to the satisfaction of the
Obligations.
6. Rights and Remedies Upon
Default. Upon occurrence and continuance of any Event of
Default and at any and all times thereafter, the Collateral Agent
shall have the right to exercise all of the remedies conferred to
the Secured Party hereunder and under the Note, and the Collateral
Agent shall have all the rights and remedies of a secured party
under the UCC and/or any other applicable law (including the
Uniform Commercial Code of any jurisdiction in which any Collateral
is then subject). Without limitation, the Collateral Agent shall
have the following rights and powers:
(a) to have a third
party custodian take possession of the Collateral and, for that
purpose, enter, with the aid and assistance of any person, any
premises where the Collateral, or any part thereof, is or may be
placed and remove the same, and the Grantor shall assemble the
Collateral and make it available to the Collateral Agent for the
benefit of the Secured Parties at places which the Collateral Agent
shall reasonably select, whether at the Grantor’s premises or
elsewhere, and make available to the Collateral Agent, without
rent, all of the Grantor’s respective premises and facilities
for the purpose of the Collateral Agent taking possession of,
removing or putting the Collateral in saleable or disposable form
for the benefit of the Secured Parties; and
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(b) to operate the
business of the Grantor using the Collateral and shall have the
right to assign, sell, lease or otherwise dispose of and deliver
all or any part of the Collateral, at public or private sale or
otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such
parcel or parcels and at such time or times and at such place or
places, and upon such terms and conditions as the Collateral Agent
may deem commercially reasonable, all without (except as shall be
required by applicable statute and cannot be waived) advertisement
or demand upon or notice to any Grantor or right of redemption of
any Grantor, which are hereby expressly waived. Upon each such
sale, lease, assignment or other transfer of Collateral, the
Collateral Agent may, unless prohibited by applicable law which
cannot be waived, purchase all or any part of the Collateral being
sold, free from and discharged of all trusts, claims, right of
redemption and equities of the Grantor, which are hereby waived and
released.
7. Indemnification
of the Secured Party. Neither the Secured Party, the
Collateral Agent, nor any of their respective affiliates,
employees, agents and/or representatives will be liable for any
action taken or omitted to be taken by any of them under this
Agreement directly and/or indirectly and believed by them to be
within the discretion or power conferred upon them by this
Agreement or otherwise be responsible for the consequences of any
error of judgment (except for willful misconduct).
THE GRANTOR HEREBY EXPRESSLY AND
IRREVOCABLY INDEMNIFIES THE SECURED PARTY, THE COLLATERAL AGENT,
AND THEIR RESPECTIVE AFFILIATES, EMPLOYEES, AGENTS AND
REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND AGAINST ANY AND ALL
DIRECT AND/OR INDIRECT LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES AND
DISBURSEMENTS OF ANY KIND OR NATURE (INCLUDING, BUT NOT LIMITED TO,
LEGAL FEES WHEN INCURRED, WHICH THE GRANTOR SHALL PAY NO LATER THAN
THREE (3) BUSINESS DAYS AFTER ANY SECURED PARTY OR COLLATERAL AGENT
SO REQUESTS WITH ACCOMPANYING INVOICES) WHATSOEVER THAT MAY BE
IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THEM IN ANY WAY
DIRECTLY AND/OR INDIRECTLY RELATING TO AND/OR ARISING OUT OF THIS
AGREEMENT AND/OR ANY ACTION TAKEN OR OMITTED BY THEM UNDER THIS
AGREEMENT.
8. Applications of Proceeds. The
proceeds of any such sale, lease or other disposition of the
Collateral hereunder shall be applied first, to the expenses of
retaking, holding, storing, processing and preparing for sale,
selling, and the like (including, without limitation, any taxes,
fees and other costs incurred in connection therewith) of the
Collateral, to the reasonable attorneys’ fees and expenses
incurred by the Collateral Agent in enforcing the rights of Secured
Parties hereunder and in connection with collecting, storing and
disposing of the Collateral, and then to satisfaction of the
Obligations on a pro rata basis based on the Principal Amount of
each Secured Party’s Note at the time of the default, and to
the payment of any other amounts required by applicable law, after
which the Secured Parties shall pay to the Grantor any surplus
proceeds. If, upon the sale, license or other disposition of the
Collateral, the proceeds thereof are insufficient to pay all
amounts to which the Secured Parties are legally entitled, then the
Grantor will be liable for the deficiency, together with interest
thereon as set forth in the Note, and the reasonable fees of any
attorneys employed by the Collateral Agent to collect such
deficiency. To the extent permitted by applicable law, the Grantor
waives all claims, damages and demands against the Collateral Agent
arising out of the repossession, removal, retention or sale of the
Collateral.
-8-
9. Costs and Expenses. The Grantor
irrevocable and expressly agrees to pay any and all direct and/or
indirect out-of-pocket fees, costs and expenses (including, but not
limited to legal fees and expenses of all the Collateral
Agent’s attorneys) incurred (as and when incurred) in
connection with any filing required hereunder, including without
limitation, any financing statements, continuation statements,
partial releases and/or termination statements related thereto or
any expenses of any searches reasonably required by the Collateral
Agent. The Grantor shall also pay all other claims and charges
which would reasonably be expected to prejudice, imperil or
otherwise affect the Collateral or the Security Interest therein.
Upon the occurrence and continuance of an Event of Default, the
Grantor shall upon demand, pay to the Collateral Agent the amount
of any and all reasonable expenses, including the fees and expenses
of its counsel and of any experts and agents, which any of the
Secured Parties or Collateral Agent incurs direct, and/or indirect,
in connection with (a) the enforcement of this Agreement, (b)
the custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Collateral, or (c) the exercise
or enforcement of any of the rights of any Secured Party under the
Notes and/or other Transaction Documents, including, without
limitation, costs of collection. Until so paid, any fees payable
hereunder shall be added to the principal amount of the Notes and
shall bear interest as set forth in the Notes.
10. Responsibility for Collateral.
The Grantor assumes all liabilities and responsibility in
connection with all Collateral, and the obligations of the Grantor
hereunder or under the Notes shall in no way be affected or
diminished by reason of the loss, destruction, damage or theft of
any of the Collateral or its unavailability for any
reason.
11. Security Interest Absolute. All
rights of the Secured Party and all Obligations of the Grantor
hereunder, shall be absolute and unconditional, regardless of: (a)
any change in the time, manner or place of payment or performance
of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from
the Note or any other agreement entered into in connection with the
foregoing; (b) any exchange, release or nonperfection of any
of the Collateral, or any release or amendment or waiver of or
consent to departure from any other collateral for, or any
guaranty, or any other security, for all or any of the Obligations;
or (c) any action by the Secured Party to obtain, adjust,
settle and cancel in its sole discretion any insurance claims or
matters made or arising in connection with the Collateral. The
Grantor expressly waives presentment, protest and notice of
protest. In the event that at any time any transfer of any
Collateral or any payment received by the Secured Party hereunder
shall be deemed by final order of a court of competent jurisdiction
to have been a voidable preference or fraudulent conveyance under
the bankruptcy or insolvency laws of the United States, or shall be
deemed to be otherwise due to any party other than the Secured
Party, then, in any such event, the Grantor’s obligations
hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or
cancellation of this Agreement, but shall remain a valid and
binding obligation enforceable in accordance with the terms and
provisions hereof. The Grantor waives all right to require the
Secured Party to proceed against any other person or to apply any
Collateral which the Secured Party may hold at any time, or to
marshal assets, or to pursue any other remedy.
12. Term
of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Note have
been indefeasibly made in full and all other Obligations have been
indefeasibly paid and/or completed.
13. Other
Financings. In any other agreement that any Grantor enters
into with any party (other than a Secured Party), related to the
direct and/or indirect borrowing of funds by the Grantor, Grantor
shall ensure provisions are in each applicable loan and/or loan
related agreement expressly providing that all such borrowed third
party funds are subordinate in all respects to the Note and
Obligations and that upon any default, and/or Event of Default no
lender shall take any action, including, but not limited to,
declaring its loan documents and/or loan in default and/or in an
event of default until and unless all Obligations of the Grantor to
the Secured Parties are indefeasibly paid and/or completed, as the
case may be.
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14. Power of Attorney; Further
Assurances.
(a) The Grantor
authorizes the Collateral Agent, and do hereby make, constitute and
appoint the Collateral Agent, and its respective officers, agents,
successors or assigns with full power of substitution, as the
Grantor’s true and lawful attorney-in-fact, with power, in
their own name or in the name of any Grantor, to, after the
occurrence and during the continuance of an Event of Default,
endorse any Note, checks, drafts, money orders, or other
instruments of payment (including, without limitation, payments
payable under or in respect of any policy of insurance) in respect
of the Collateral that may come into possession of the Collateral
Agent; to sign and endorse any UCC financing statement or any
invoice, freight or express xxxx, xxxx of lading, storage or
warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other
documents relating to the Collateral; to pay or discharge
taxes, liens, security interests or other encumbrances at any time
levied or placed on or threatened against the Collateral; to
demand, collect, receipt for, compromise, settle and xxx for monies
due in respect of the Collateral; and generally, to do, at
the option of the Collateral Agent, and at the Grantor’s
expense, at any time, or from time to time, all acts and things
which the Collateral Agent deem necessary to protect, preserve and
realize upon the Collateral and the Security Interest granted
therein in order to effect the intent of this Agreement and the
Note, all as fully and effectually as the Grantor might or could
do; and the Grantor hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of
attorney is coupled with an interest and shall be irrevocable for
the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding.
(b) On a continuing
basis, the Grantor will cooperate in good faith and as requested by
each Secured Party with the Secured Party to make, execute,
acknowledge, deliver, file and record, as the case may be, in the
proper filing and recording places in any applicable jurisdiction,
all such instruments, and take all such action as may reasonably be
deemed necessary or advisable, or as reasonably requested by the
Collateral Agent, to perfect the Security Interest granted
hereunder and otherwise to carry out the intent and purposes of
this Agreement, or for assuring and confirming to the Collateral
Agent the grant or perfection of a security interest in all the
Collateral.
(c) The Grantor hereby
irrevocably appoints the Collateral Agent as the Grantor’s
attorney-in-fact, with full authority in the place and stead of the
Grantor and in the name of the Grantor, from time to time in the
Collateral Agent’s discretion, to take any action and to
execute any instrument which the Collateral Agent may deem
necessary or advisable in order to perfect the Security Interest,
including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto,
relative to any of the Collateral without the signature of the
Grantor where permitted by law.
15. Notices. All notices, requests,
demands and other communications hereunder shall be in writing,
with copies to all the other parties hereto, and shall be deemed to
have been duly given if delivered by hand, upon receipt of
proof of sending thereof if sent by facsimile, upon
receipt if sent by nationally recognized overnight delivery
service (receipt requested), the next business day, or if
mailed by first-class registered or certified mail, return receipt
requested, postage prepaid, four days after posting in the U.S.
mails, in each case if delivered to the following addresses: (A) if
to a Grantor, to the address set forth immediately below such
Grantor’s name on the signature pages hereto; and (B) if to a
Secured Party, to the address set forth in respect of such Secured
Party’s name as it appears in the Note. Each party shall
provide notice to all of the other parties of any change in
address.
16. Other Security. To the extent
that the Obligations are now or hereafter secured by property other
than the Collateral or by the guarantee, endorsement or property of
any other person, firm, corporation or other entity, then the
Collateral Agent shall have the right, in their sole discretion, to
pursue, relinquish, subordinate, modify or take any other action
with respect thereto, without in any way modifying or affecting any
of the Secured Party’ rights and remedies
hereunder.
17. Appointment of
Collateral Agent.
The Secured Parties hereby appoint
_________ to act as their agent (“Collateral
Agent”) for purposes of
exercising any and all rights and remedies of the Secured Parties
hereunder.
The Collateral Agent shall have the
rights, responsibilities and immunities set forth in
Annex
A hereto.
-10-
18. Miscellaneous.
(a) No course of
dealing between the Grantor and the Secured Party, nor any failure
to exercise, nor any delay in exercising, on the part of the
Secured Party, any right, power or privilege hereunder or under the
Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
(b) All of the rights
and remedies of the Collateral Agent with respect to the
Collateral, whether established hereby or by the Note or by any
other agreements, instruments or documents or by law shall be
cumulative and may be exercised singly or
concurrently.
(c) This Agreement
constitutes the entire agreement of the parties with respect to the
subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto.
Any term of this Agreement may be terminated or amended and the
observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively) only with written consent of the Grantor and the
holders of at least 50.1% of the then-outstanding principal amount
of the Notes (“Majority in
Interest”). Any termination, amendment or waiver
effected in accordance with this paragraph shall be binding upon
each holder of the Notes, each future holder of the Notes, their
successors and assigns, and the Grantor.
(d) In the event that
any provision of this Agreement is held to be invalid, prohibited
or unenforceable in any jurisdiction for any reason, unless such
provision is narrowed by judicial construction, this Agreement
shall, as to such jurisdiction, be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drawn
so as not to be invalid, prohibited or unenforceable. If,
notwithstanding the foregoing, any provision of this Agreement is
held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be
ineffective to the extent of such invalidity, prohibition or
unenforceability without invalidating the remaining portion of such
provision or the other provisions of this Agreement and without
affecting the validity or enforceability of such provision or the
other provisions of this Agreement in any other
jurisdiction.
(e) No waiver of any
breach or default or any right under this Agreement shall be
considered valid unless in writing and signed by the party giving
such waiver, and no such waiver shall be deemed a waiver of any
subsequent breach or default or right, whether of the same or
similar nature or otherwise.
(f) This Agreement
shall be binding upon and inure to the benefit of each party hereto
and its successors and assigns.
(g) Each party shall
take such further action and execute and deliver such further
documents as may be necessary or appropriate in order to carry out
the provisions and purposes of this Agreement.
-11-
(h) This Agreement and
all questions relating directly and/or indirectly to the
construction, validity, enforcement and interpretation of this
Agreement shall be governed solely and exclusively by the internal
laws of the State of California, without giving effect to any
choice of law or conflict of law provision or rule (whether of the
State of California or any other jurisdiction). Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the County of Orange,
California for any and
all disputes directly and/or indirectly hereunder or in connection
herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit,
action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address
for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by
law. In any action brought concerning and/or arising directly
and/or indirectly out of this Agreement, the prevailing party shall
be entitled to recover all of its legal fees and expenses incurred
by it with respect to any such legal action. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY. Each party hereto acknowledges that this waiver is a
material inducement for each party to enter into a business
relationship, that each party has relied on this waiver in entering
into this Agreement and that each party will continue to rely on
this waiver in their related future dealings. Each party further
warrants and represents that it has reviewed this waiver with its
legal counsel, and that such party has knowingly and voluntarily
waives its rights to a jury trial following such consultation. This
waiver is irrevocable, meaning that, notwithstanding anything
herein to the contrary, it may not be modified either orally or in
writing, and this waiver shall apply to any subsequent amendments,
renewals and supplements or modifications to this agreement. In the
event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
(i) The parties hereto
agree that this Agreement was the product of the mutual input and
drafting by all the parties hereto, and, accordingly, no party
shall make any claim against another party that a presumption
exists against any party because that party was the drafter of this
Agreement.
19. Counterparts. This Agreement
may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument.
20. Facsimile Signature. In the
event that any signature is delivered by facsimile transmission,
PDF, electronic signature or other similar electronic means, such
signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the
same force and effect as if such signature page were an original
thereof.
[Remainder
Of Page Left Blank]
-12-
IN WITNESS WHEREOF, the parties hereto
have caused this Security Agreement to be duly executed on the day
and year first above written.
GRANTOR:
TRUE DRINKS HOLDINGS, INC. (On behalf of itself and its
Subsidiaries, as defined herein)
By:
______________________________________
Name:
Title:
Notices
For Grantor:
00000
XxxXxxxxx Xxxxxxxxx
Xxxxx
000
Xxxxxx,
XX 00000
Telephone: (000)
000-0000
Fax
No: __________________
Attention: Chief
Financial Officer
SECURED PARTY:
_______________________________
By:
______________________________________
Name:
Title:
-13-
SCHEDULE A
-14-
ANNEX A
to
SECURITY
AGREEMENT
THE COLLATERAL AGENT
1. Appointment. The
Secured Parties (all capitalized terms used herein and not
otherwise defined shall have the respective meanings provided in
the Security Agreement to which this Annex A is attached (the
"Agreement")),
by their acceptance of the benefits of the Agreement, hereby
designate ____________ (“Collateral
Agent”) as the Collateral
Agent to act as specified herein and in the Agreement. Each Secured
Party shall be deemed irrevocably to authorize the Collateral Agent
to take such action on its behalf under the provisions of the
Agreement and any other Transaction Document and to exercise such
powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Collateral Agent by
the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Collateral Agent may perform any
of its duties hereunder by or through its agents or
employees.
2. Nature of
Duties. The Collateral Agent shall have no duties or
responsibilities except those expressly set forth in the Agreement.
Neither the Collateral Agent nor any of its partners, members,
shareholders, officers, directors, employees or agents shall be
liable for any action taken or omitted by it as such under the
Agreement or hereunder or in connection herewith or therewith, be
responsible for the consequence of any oversight or error of
judgment or answerable for any loss, unless caused solely by its or
their gross negligence or willful misconduct as determined by a
final judgment (not subject to further appeal) of a court of
competent jurisdiction. The duties of the Collateral Agent shall be
mechanical and administrative in nature; the Collateral Agent shall
not have by reason of the Agreement or any other Transaction
Document a fiduciary relationship in respect of the Grantor or any
Secured Party; and nothing in the Agreement or any other
Transaction Document, expressed or implied, is intended to or shall
be so construed as to impose upon the Collateral Agent any
obligations in respect of the Agreement or any other Transaction
Document except as expressly set forth herein and
therein.
3. Lack of Reliance on
the Collateral Agent.
Independently and without reliance upon the Collateral Agent, each
Secured Party, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the
financial condition and affairs of the Grantor in connection with
such Secured Party’s investment in the Grantor, the creation
and continuance of the Obligations, the transactions contemplated
by the Transaction Documents, and the taking or not taking of any
action in connection therewith, and (ii) its own appraisal of the
creditworthiness of the Grantor, and of the value of the Collateral
from time to time, and the Collateral Agent shall have no duty or
responsibility, either initially or on a continuing basis, to
provide any Secured Party with any credit, market or other
information with respect thereto, whether coming into its
possession before any Obligations are incurred or at any time or
times thereafter. The Collateral Agent shall not be responsible to
the Grantor or any Secured Party for any recitals, statements,
information, representations or warranties herein or in any
document, certificate or other writing delivered in connection
herewith, or for the execution, effectiveness, genuineness,
validity, enforceability, perfection, collectibility, priority or
sufficiency of the Agreement or any other Transaction Document, or
for the financial condition of the Grantor or the value of any of
the Collateral, or be required to make any inquiry concerning
either the performance or observance of any of the terms,
provisions or conditions of the Agreement or any other Transaction
Document, or the financial condition of the Grantor, or the value
of any of the Collateral, or the existence or possible existence of
any default or Event of Default under the Agreement, the Debentures
or any of the other Transaction Documents.
-15-
4. Certain Rights of the
Collateral Agent. The
Collateral Agent shall have the right to take any action with
respect to the Collateral, on behalf of all of the Secured Parties.
To the extent practical, the Collateral Agent shall request
instructions from the Secured Parties with respect to any material
act or action (including failure to act) in connection with the
Agreement or any other Transaction Document, and shall be entitled
to act or refrain from acting in accordance with the instructions
of a Majority in Interest; if such instructions are not provided
despite the Collateral Agent’s request therefor, the
Collateral Agent shall be entitled to refrain from such act or
taking such action, and if such action is taken, shall be entitled
to appropriate indemnification from the Secured Parties in respect
of actions to be taken by the Collateral Agent; and the Collateral
Agent shall not incur liability to any person or entity by reason
of so refraining. Without limiting the foregoing, (a) no Secured
Party shall have any right of action whatsoever against the
Collateral Agent as a result of the Collateral Agent acting or
refraining from acting hereunder in accordance with the terms of
the Agreement or any other Transaction Document, and the Grantor
shall have no right to question or challenge the authority of, or
the instructions given to, the Collateral Agent pursuant to the
foregoing and (b) the Collateral Agent shall not be required to
take any action which the Collateral Agent believes (i) could
reasonably be expected to expose it to personal liability or (ii)
is contrary to this Agreement, the Transaction Documents or
applicable law.
5. Reliance.
The Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, statement, certificate, email or
telecopier message, cablegram, order or other document or telephone
message signed, sent or made by the proper person or entity, and,
with respect to all legal matters pertaining to the Agreement and
the other Transaction Documents and its duties thereunder, upon
advice of counsel selected by it and upon all other matters
pertaining to this Agreement and the other Transaction Documents
and its duties thereunder, upon advice of other experts selected by
it. Anything to the contrary notwithstanding, the Collateral Agent
shall have no obligation whatsoever to any Secured Party to assure
that the Collateral exists or is owned by the Grantor or is cared
for, protected or insured or that the liens granted pursuant to the
Agreement have been properly or sufficiently or lawfully created,
perfected, or enforced or are entitled to any particular
priority.
6. Indemnification.
To the extent that the Collateral
Agent is not reimbursed and indemnified by the Grantor, the Secured
Parties will jointly and severally reimburse and indemnify the
Collateral Agent, in proportion to their initially purchased
respective principal amounts of Notes, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted
against the Collateral Agent in performing its duties hereunder or
under the Agreement or any other Transaction Document, or in any
way relating to or arising out of the Agreement or any other
Transaction Document except for those determined by a final
judgment (not subject to further appeal) of a court of competent
jurisdiction to have resulted solely from the Collateral Agent's
own gross negligence or willful misconduct. Prior to taking any
action hereunder as Collateral Agent, the Collateral Agent may
require each Secured Party to deposit with it sufficient sums as it
determines in good faith is necessary to protect the Collateral
Agent for costs and expenses associated with taking such
action.
7. Resignation by the
Collateral Agent.
(a)
The Collateral Agent may resign from the performance of all its
functions and duties under the Agreement and the other Transaction
Documents at any time by giving 30 days' prior written notice (as
provided in the Agreement) to the Grantor and the Secured Parties.
Such resignation shall take effect upon the appointment of a
successor Collateral Agent pursuant to clauses (b) and (c)
below.
(b) Upon any such notice of resignation, the
Secured Parties, acting by a Majority in Interest, shall appoint a
successor Collateral Agent hereunder.
(c)
If a successor Collateral Agent shall not have been so appointed
within said 30-day period, the Collateral Agent shall then appoint
a successor Collateral Agent who shall serve as Collateral Agent
until such time, if any, as the Secured Parties appoint a successor
Collateral Agent as provided above. If a successor Collateral Agent
has not been appointed within such 30-day period, the Collateral
Agent may petition any court of competent jurisdiction or may
interplead the Grantor and the Secured Parties in a proceeding for
the appointment of a successor Collateral Agent, and all fees,
including, but not limited to, extraordinary fees associated with
the filing of interpleader and expenses associated therewith, shall
be payable by the Grantor on demand.
8. Rights with respect to
Collateral. Each Secured Party agrees with all other Secured
Parties and the Collateral Agent (i) that it shall not, and shall
not attempt to, exercise any rights with respect to its security
interest in the Collateral, whether pursuant to any other agreement
or otherwise (other than pursuant to this Agreement), or take or
institute any action against the Collateral Agent or any of the
other Secured Parties in respect of the Collateral or its rights
hereunder (other than any such action arising from the breach of
this Agreement) and (ii) that such Secured Party has no other
rights with respect to the Collateral other than as set forth in
this Agreement and the other Transaction Documents. Upon the
acceptance of any appointment as Collateral Agent hereunder by a
successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent and the
retiring Collateral Agent shall be discharged from its duties and
obligations under the Agreement. After any retiring
Collateral Agent’s resignation or removal hereunder as
Collateral Agent, the provisions of the Agreement including this
Annex A shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Collateral
Agent.
-16-
