SECURITY AGREEMENT
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THIS SECURITY AGREEMENT (the "Security Agreement") is entered into as
of October 1, 2002, by and between CBL Acquisition Corp, a Utah corporation
("CBL"), Xxxxxx Xxxxxxx Xxxxxxxx, as collateral agent for the Lenders
described below ("Secured Party"), and Trinity Companies, Inc., a Utah
corporation and parent corporation of CBL ("Trinity") for purposes of
Section 5 only.
RECITALS
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A. Trinity, and CBL have entered into (i) an Agreement and Plan of
Reorganization ("Agreement and Plan of Reorganization") with Competency
Based Learning, Inc., a California corporation ("CBL-California"); (ii) a
Stock Purchase Agreement with Xxxxx Xxxxxxx in respect of his shares of
Competency Based Learning, Pty. Ltd. ACN 084 763 780, a registered company
under the Corporations Law of South Australia ("CBL-AU"); and (iii) a Stock
Purchase Agreement with Xxxxx Xxxxxxx ("Xxxxxxx") and Xxxxxx Xxxxxxx
Xxxxxxxx ("Xxxxxxxx")in respect of their shares of ACN 000 000 000 Pty.
Ltd., a registered company under the Corporations Law of South Australia
("ACN-AU"), each dated as of an even date herewith (the "Purchase
Agreements").
B. CBL, as successor by merger with CBL-California, is indebted to
Scammell and Xxxxxxx (the "Lenders"), the founders of CBL-California, in
the aggregate principal amount of USD $217,703.52 on account of prior
advances of funds by them to CBL-California for general working capital
purposes as evidenced by those certain Secured Promissory Notes dated as of
an even date herewith (the "Shareholder Loans").
C. Pursuant to the Purchase Agreements, CBL is indebted to Lenders
pursuant to two, like Secured Convertible Promissory Notes both of even
date herewith in the aggregate original principal amount of $1,000,000.00
(as amended, modified or otherwise supplemented from time to time, the
"Notes").
D. As security for its repayment obligations under the Shareholder
Loans and the Notes and its indemnity obligations under the Agreement and
Plan of Reorganization and the Purchase Agreements, CBL has agreed to grant
to Secured Party, as agent for and for the ratable benefit of the Lenders,
a continuing security interest in the Collateral described below.
E. As additional collateral for such obligations, Trinity has agreed
to grant to Secured Party, as agent for and for the ratable benefit of the
Lenders, a continuing security interest in the Shares (as defined below).
F. As additional security for its obligations under the Purchase
Agreements and the Agreement and Plan of Reorganization, CBL has agreed to
cause each of CBL-AU and ACN-AU to enter into a Deed of Charge and
Guarantee and Indemnity with Xxxxxxx and Xxxxxxxx together with Xxxxxxx,
respectively (the "Australian Security Agreements")
NOW, THEREFORE, to that end and in consideration of the premises,
covenants and agreements set forth below, and the mutual benefits to be
derived from this Security Agreement, and other good and valuable
consideration, the parties hereto agree as follows:
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1. Security Interest. To secure the payment and performance of
the "Obligations" (as defined below), CBL hereby transfers, conveys,
assigns, and grants to Secured Party a continuing security interest in all
right, title and interest of CBL in and to all of the following items, and
all proceeds, and products therefrom and improvements and accessions
thereto (hereinafter, collectively, the "Collateral"):
(a) General Intangibles. All of CBL's General Intangibles,
now existing or hereafter arising or acquired, together with the proceeds
therefrom. As used herein, the term "General Intangibles" means any
"general intangibles," as such term is defined in the UCC, including all
personal property (including things in action) other than goods, accounts,
chattel paper, documents, instruments, and money, and includes, but is not
limited to, business records, deposit accounts, inventions, intellectual
property, designs, patents, patent applications, trademarks, trademark
applications, trademark registrations, service marks, service xxxx
applications, service xxxx registrations, trade names, goodwill,
technology, know-how, confidential information, trade secrets, customer
lists, supplier lists, copyrights, copyright applications, copyright
registrations, licenses, permits, franchises, tax refund claims, and any
letters of credit, guarantee claims, security interests, or other security
held by CBL to secure any "Accounts" (as hereinafter defined).
(b) Accounts (including Accounts Receivable). All of CBL's
Accounts, whether now existing or hereafter arising or acquired, together
with the proceeds therefrom. As used herein, the term "Accounts" means any
"account" and any "right to payment" as such terms are defined in the UCC,
and any right of CBL to receive payment from another person or entity,
including payment for goods sold or leased, or for services rendered, no
matter how evidenced or arising, and regardless of whether yet earned by
performance. It includes, but is not limited to, accounts, accounts
receivable, contract rights, contracts receivable, purchase orders, notes,
drafts, acceptances, all rights to payment earned or unearned under any
contract and all rights incident to the contract, and other forms of
obligations and receivables.
(c) Inventory. All of CBL's Inventory, whether now owned
or hereafter acquired, together with the products and proceeds therefrom
and all packaging, manuals, and instructions related thereto. As used
herein, the term "Inventory" means any "inventory," as such term is defined
in the UCC, including all goods, merchandise, and personal property held
for sale or leased or furnished or to be furnished under contracts of
service, and all raw materials, work in process, or materials used or
consumed in CBL's business, wherever located and whether in the possession
of CBL, a warehouseman, a bailee, or any other person.
(d) Equipment. All of CBL's Equipment, now owned or
hereafter acquired, together with the products and proceeds therefrom, and
all substitutes and replacements therefor. As used herein, the term
"Equipment" means any "equipment" as such term is defined in the UCC, and
includes all equipment, machinery, tools, office equipment, supplies,
furnishings, furniture, or other items used or useful, directly or
indirectly, in CBL's business, all accessions, attachments, and other
additions thereto, all parts used in connection therewith, all packaging,
manuals, and instructions related thereto, and all leasehold or equitable
interests therein.
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(e) Goods. All of CBL's Goods (other than Inventory and
Equipment), now owned or hereafter acquired, together with the products and
proceeds therefrom, and all substitutes and replacements therefor. "Goods"
means any "goods," as such term is defined in the UCC.
(f) Fixtures. All of CBL's interest in and to all fixtures
and furnishings, now owned or hereafter acquired, together with the
products and proceeds therefrom, all substitutes and replacements therefor,
all accessories, attachments, and other additions thereto, all tools,
parts, and supplies used in connection therewith, and all packaging,
manuals, and instructions related thereto, located on or attached to CBL's
business premises
(g) Chattel Paper, Documents and Instruments. All of CBL's
right, title, and interest in any chattel paper, deposit accounts,
investment property, documents, or instruments, as such terms are defined
in the UCC, now owned or hereafter acquired or arising, or now or hereafter
coming into the possession, control, or custody of either Trinity, CBL or
Secured Party, together with all proceeds therefrom.
(h) Records. All of CBL's computer programs, software,
hardware, source codes and data processing information, all written
documents, books, invoices, ledger sheets, financial information and
statements, and all other writings concerning the Collateral.
Notwithstanding anything to the contrary contained herein,
"Collateral" shall not mean or include any personal property or other
assets acquired by CBL after the date hereof in an acquisition of all or
substantially all of the stock or assets of another entity, unless the
parties hereto have expressly agreed to include such property as Collateral
by a written amendment to this Agreement.
2. Obligation. The security interest granted hereunder is
given as security for the payment and performance of all indebtedness and
obligations owed by CBL to Secured Party, as collateral agent, and Lenders,
whether now existing or hereafter incurred, under or in connection with or
evidenced by the Notes, the Shareholder Loans, the indemnity obligations of
CBL and Trinity under Section 11 of the Agreement and Plan of
Reorganization and Section 12 of the Purchase Agreements, and/or this
Security Agreement, together with all extensions, modifications, or
renewals of any of the foregoing, including, without limitation, all unpaid
principal of the Notes, all interest accrued thereon, all fees and all
other amounts payable by CBL to Secured Party, as collateral agent, and
Lenders thereunder or in connection therewith (hereinafter referred to,
collectively, as the "Obligations"). The interest of any Lender in the
Collateral shall be on a parity with the interests of all other Lenders,
and the interest of each Lender in the Collateral shall be ratable in the
proportion that the aggregate indebtedness then outstanding and unpaid
under the Note (and if applicable, Shareholder Loan) held by such Lender
bears to the aggregate indebtedness then outstanding and unpaid under the
Notes and Shareholder Loans held by all Lenders (except to the extent the
Lenders agree to any other ratable interest therein). Any Lender holding
any instruments, certificated investment property or other Collateral
hereunder shall do so as agent for Secured Party and for the ratable
benefit of all Lenders.
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3. Proceeds; UCC Terms. As used in this Security Agreement,
the term "proceeds" means all proceeds and products of the Collateral and
the Shares and all additions and accessions to, replacements of, insurance
or condemnation proceeds of, and documents covering any of the Collateral
or the Shares, all property received wholly or partly in trade or exchange
for any of the Collateral or the Shares, all leases of any of the
Collateral, and all rents, revenues, issues, profits, and proceeds arising
from the sale, lease, license, encumbrance, collection, or any other
temporary or permanent disposition, of any of the Collateral or any
interest therein. As used in this Agreement, "UCC" means the Uniform
Commercial Code as the same may, from time to time, be in effect in the
State of Utah; provided, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of,
or remedies with respect to, the security interests of Secured Party on any
Collateral is governed by the Uniform Commercial Code as enacted and in
effect in a jurisdiction other than the State of Utah, the term "UCC" shall
mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions thereof relating to such
attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions. Unless otherwise defined herein,
terms that are defined in the UCC and used herein shall have the meanings
given to them in the UCC.
4. Title; Filing. CBL warrants that, (i) CBL is the owner of
the Collateral free and clear of all liens, claims, and encumbrances except
for Permitted Liens ("Permitted Liens") set forth on Exhibit A or, (ii) in
the case of after-acquired Collateral, at the time CBL acquires rights in
the Collateral, will be the owner thereof, free and clear of all liens,
claims and encumbrances except for Permitted Liens. CBL covenants that so
long as any portion of the Obligation remains unpaid, CBL will not execute
or file a financing statement or security agreement covering the Collateral
to anyone other than Secured Party, except with respect to Permitted Liens
or as unanimously approved by CBL's board of directors. CBL will not
assign or pay over any of its Accounts or instruments evidencing the same
to any person other than Secured Party, except for endorsements and
deposits in the ordinary course of collection for CBL's account or as
unanimously approved by CBL's board of directors. CBL agrees to sign and
deliver one or more financing statements or supplements thereto or other
instruments as Secured Party may from time to time require to comply with
the Uniform Commercial Code or other applicable law to preserve, protect
and enforce the security interest of Secured Party and to pay all costs of
filing such statements or instruments. In connection with the foregoing,
CBL authorizes Secured Party to prepare and file any financing statements
describing the Collateral without otherwise obtaining CBL's signature or
consent with respect to the filing of such financing statements. CBL will
cooperate with Secured Party in obtaining control (as defined in the UCC)
of Collateral consisting of deposit accounts, investment property, letter
of credit rights and electronic chatter paper, and will join with Secured
Party in notifying any third party who has possession of any Collateral of
Secured Party's security interest therein and obtaining an acknowledgment
from the third party that it is holding the Collateral for the benefit of
Secured Party. CBL will not create any chattel paper without placing a
legend on the chattel paper acceptable to Secured Party indicating that
Secured Party has a security interest in the chattel paper.
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5. Pledged Stock. As further security for the prompt payment
and performance of the Obligations, Trinity hereby pledges, assigns and
grants a security interest to Secured Party, all of Trinity's right, title
and interest in 1,000 shares of the Common Stock of CBL held by Trinity
(the "Shares"), and all dividends and distributions that may hereafter be
declared or paid upon the Shares, and any securities issued in subdivisions
or combinations thereof or in substitution therefor, and all additional
shares of stock of CBL from time to time acquired by Trinity in any manner,
and the certificates representing such additional shares. Trinity
represents and warrants that the Shares are all of the issued and
outstanding shares of capital stock of CBL, and that Trinity owns the
Shares free and clear of all liens, claims and encumbrances, and has full
corporate power and authority to pledge the Shares to Secured Party
hereunder. Trinity shall forthwith deliver to Secured Party any and all
such dividends, distributions and securities with respect to the Shares,
and any and all additional Shares or other securities representing the
capital stock of CBL or any interest thereon or right to subscribe
therefore, all to be held in accordance with terms of this Agreement. In
furtherance of this pledge, Trinity has delivered to Secured Party a duly
executed stock power with respect to the Shares and a certificate for the
Shares. Unless an Event of Default shall have occurred, and Secured Party
shall have given notice to Trinity of its intent to exercise its rights
pursuant to Section 5(b), Trinity shall be permitted (i) to receive all
dividends paid on the Shares, and (ii) to exercise all voting and corporate
rights with respect to the Shares; provided, however, (A) that Trinity
shall not exercise any voting or consensual rights with respect to the
commencement of a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to CBL or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of CBL or any substantial part of its property; (B)
that Trinity shall not amend or approve any material amendment to or
modification, alteration or repeal of the Articles or Certificate of
Incorporation or By-Laws of CBL without obtaining the prior written consent
of the Secured Party ; and (C) that Trinity shall not increase the number
of directors or modify in any way the composition of the board of directors
of CBL as same exists as of the date hereof without obtaining the prior
written consent of the Secured Party. Upon the occurrence and during the
continuance of an Event of Default, all rights of Trinity to exercise the
voting and other consensual rights which it would otherwise be entitled to
exercise and to receive the dividend payments which it would otherwise be
authorized to receive and retain shall cease and all such rights shall
thereupon become vested in Secured Party, who shall thereupon have the sole
right to exercise such voting and other consensual rights and to receive
and hold as collateral such dividend payments. Trinity agrees that it will
not (a) sell, transfer, hypothecate or otherwise dispose of, or grant any
option or right with respect to, any of the Shares without the prior
written consent of Secured Party which consent shall not be unreasonably
withheld; or (b) create or permit to exist any lien, security interest or
other charge or encumbrance upon or with respect to any of the Shares,
except for the security interest under this Agreement.
Upon fifteen-days notice to Trinity of the occurrence of an Event of
Default (during which time Trinity may cure such Event of Default), Secured
Party may, upon notice to Trinity, register in the stock transfer records
all of the Shares in the name Lenders, but Secured Party shall have no duty
to Trinity to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
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Upon the payment in full of the Obligations, Secured Party shall deliver
the Shares and any related stock powers to Trinity, this Agreement shall
terminate, and Trinity, Secured Party, and CBL shall have no further rights
and obligations hereunder
6. Care of Collateral. CBL will keep in effect all material
licenses, permits and franchises required by law or contract relating to
CBL's business (if applicable), property, or the Collateral; maintain
insurance on the Collateral; keep the Collateral in good repair and be
responsible for any loss or damage to it; at all times warrant and defend
CBL's ownership and possession of the Collateral; keep the Collateral free
from all liens, claims, encumbrances and security interests, other than
Permitted Liens; pay when due all taxes, license fees, and other charges
upon the Collateral or upon CBL's business, property or the income
therefrom; not enter into any agreement (including any license or royalty
agreement) pertaining to any of its intellectual property, including
patents, copyrights, trademarks, service marks and trade names, except for
non-exclusive licenses in the ordinary course of business; immediately
notify Secured Party if CBL holds or acquires (i) any commercial tort
claims, (ii) any chattel paper, including any interest in any electronic
chattel paper, or (iii) any letter-of-credit rights; and not misuse,
conceal or in any way use or dispose of the Collateral unlawfully or
contrary to the provisions of this Security Agreement or of any insurance
coverage in any material respect. Loss of, damage to, or uncollectability
of the Collateral or any part thereof will not release CBL from any of its
obligations hereunder.
7. Default. Each of the following shall constitute an event of
default ("Event of Default") under this Security Agreement:
(a) Default in Payment. If CBL fails to make any payment
due and payable under the terms of the Notes and/or the Shareholder Loans,
and such payment shall not have been made within ten (10) days of CBL
receipt of Secured Party's written notice to CBL of such failure to pay;
(b) Representations and Warranties. If any of the
representations and warranties made by CBL or Trinity herein or in the
Notes shall be false or misleading in any material respect when made;
(c) Covenants. If CBL or Trinity shall be in material
default under any of the terms, covenants, conditions, or obligations of
this Security Agreement and such default shall not have been cured within
thirty (30) days of CBL's or Trinity's receipt of Secured Party's written
notice of default;
(d) Impairment to Lien. If at any time the Collateral or
the Shares may be impaired by any lien, encumbrance or other defect other
than the Permitted Liens, and such lien, encumbrance or defect shall not
have been removed within thirty (30) days of CBL's or Trinity's receipt of
Secured Party's written notice thereof;
(e) Inconsistent Transfer. If at any time CBL transfers an
interest in any of the Collateral or Trinity transfers an interest in the
Shares contrary to the provisions hereof without the prior written consent
of Lenders other than in the ordinary course of business (as to the
Collateral), and such interest in the Collateral or the Shares shall not
have been retransferred or restored within thirty (30) days of CBL's or
Trinity's receipt of Secured Party's written notice thereof;
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(f) Voluntary Bankruptcy or Insolvency Proceedings. If CBL
or Trinity shall (i) apply for or consent to the appointment of a receiver,
trustee, liquidator or custodian of itself or of all or a substantial part
of its property, (ii) make a general assignment for the benefit of any of
its creditors, (iii) be dissolved or liquidated in full or in part,
suspends its normal business operations or otherwise fails to continue to
operate its business in the ordinary course, (iv) commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or consent to any such relief
or to the appointment of or taking possession of its property by any
official in an involuntary case or other proceeding commenced against it or
(v) take any action for the purpose of effecting any of the foregoing; or
(g) Involuntary Bankruptcy or Insolvency Proceedings. If
proceedings for the appointment of a receiver, trustee, liquidator or
custodian of CBL or Trinity, or of all or a substantial part of the
property thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to CBL or Trinity
or the debts of either of them under any bankruptcy, insolvency or other
similar law now or hereafter in effect shall be commenced, and an order for
relief entered or such proceeding shall not be dismissed or discharged
within sixty (60) days of commencement.
(h) Acquirer Indemnification. If CBL breaches its
obligations under Section 11 of the Agreement and Plan of Reorganization,
or Section 12 of either of the Purchase Agreements.
(i) Australian Security Agreements. If either of CBL-AU or
ACN-AU breaches its obligations under the Australian Security Agreements.
Waiver of any Event of Default will not constitute a waiver of any other or
subsequent Event of Default.
8. Remedies. Upon the occurrence of an Event of Default and
during the continuance of any such default at any time thereafter, Secured
Party shall, by written notice to CBL, be entitled to accelerate all unpaid
Obligations. Secured Party will have the remedies of a secured party under
the UCC or other applicable law, including internal laws of Australia.
Secured Party shall give CBL and Trinity such notice of any private or
public sales as may be required by the UCC or other applicable law.
Secured Party and each Lender shall have the right upon any such public
sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Collateral and/or the Shares so sold,
free of any right or equity of redemption, which right or equity of
redemption CBL and Trinity each hereby releases, to the extent permitted by
law. For the purpose of enabling Secured Party to exercise its rights and
remedies under this Section 7 or otherwise in connection with this
Agreement, CBL hereby grants to Secured Party an irrevocable, non-exclusive
and assignable license (exercisable without payment or royalty or other
compensation to CBL) to use, license or sublicense any intellectual
property Collateral after an Event of Default.
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9. Collateral Costs and Expenses. CBL agrees to pay on demand
all reasonable costs and expenses of Secured Party and each Lender, and the
reasonable fees and disbursements of counsel, in connection with the
enforcement of any rights or interests under this Agreement, including in
any out-of-court workout or other refinancing or restructuring or in any
bankruptcy case, and the protection, sale or collection of, or other
realization upon, any of the Collateral, including all expenses of taking,
collecting, holding, sorting, handling, preparing for sale, selling, or the
like, and other such expenses of sales and collections of Collateral. Any
amounts payable to Secured Party and the Lenders under this Section 9 or
otherwise under this Agreement if not paid upon demand shall bear interest
from the date of such demand until paid in full, at the default rate of
interest set forth in the Notes.
10. Shares Costs and Expenses. Trinity agrees to pay on demand
all reasonable costs and expenses of Secured Party and each Lender, and the
reasonable fees and disbursements of counsel, in connection with the
enforcement of any rights or interests under this Agreement with respect to
the Shares, including in any out-of-court workout or other refinancing or
restructuring or in any bankruptcy case, and the protection, sale or
collection of, or other realization upon, any of the Shares, including all
expenses of taking, collecting, holding, sorting, handling, preparing for
sale, selling, or the like, and other such expenses of sales and
collections of Shares. Any amounts payable to Secured Party and the
Lenders under this Section 10 or otherwise under this Agreement if not paid
upon demand shall bear interest from the date of such demand until paid in
full, at the default rate of interest set forth in the Notes.
11. General. The waiver by Secured Party of any breach of any
provision of this Security Agreement or warranty or representation herein
set forth will not be construed as a waiver of any subsequent breach. The
failure to exercise any right hereunder by Secured Party will not operate
as a waiver of such right. All rights and remedies herein provided are
cumulative. Neither Trinity nor CBL may assign its rights or delegate its
duties hereunder without Secured Party's written consent. This Security
Agreement may not be altered or amended except by a writing signed by all
the parties hereto. This Security Agreement shall be governed by, and
construed in accordance with, the law of the State of Utah, except as
required by mandatory provisions of law and to the extent the validity or
perfection of the security interests hereunder, or the remedies hereunder,
in respect of any Collateral are governed by the law of a jurisdiction
other than Utah. Any provision hereof found to be invalid will not
invalidate the remainder. All words used herein will be construed to be of
such gender and number as the circumstances require. This Security
Agreement binds Trinity, CBL, its successors and assigns, and inures to the
benefit of Secured Party and the Lenders, and their successors and assigns.
This Security Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute but one and the same agreement.
12. Notices. All notices or other communications hereunder
shall be in writing (including by facsimile transmission or by email) and
mailed, sent or delivered to the respective parties hereto at or to their
respective addresses, facsimile numbers or email addresses set forth below
their names on the signature pages hereof, or at or to such other address,
facsimile number or email address as shall be designated by any party in a
written notice to the other parties hereto. All such notices and other
communications shall be deemed to be delivered when a record (within the
meaning of the UCC) has been (i) delivered by hand; (ii) sent by mail upon
the earlier of the date of receipt or five business days after deposit in
the mail, first class (or air mail as to communications sent to or from the
United States); (iii) sent by facsimile transmission; or (iv) sent by
email.
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13. Termination. This Security Agreement shall automatically
terminate upon the later of (i) one year from the date of this Agreement
and (ii) full satisfaction of the Company's obligations under the Notes and
the Shareholder Loans.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Security
Agreement as of the date first written above.
TRINITY: TRINITY COMPANIES, INC.,
a Utah corporation
By:______________________________
Name:____________________________
Its:_____________________________
CBL: CBL ACQUISITION CORP.,
a Utah corporation
By:______________________________
Name:____________________________
Its:_____________________________
SECURED PARTY: Xxxxxx Xxxxxxx Xxxxxxxx, as
collateral agent for the Lenders
_________________________________
EXHIBIT A
PERMITTED LIENS
(i) statutory liens for taxes to the extent that the payment thereof is
not in arrears or otherwise due;
(ii) encumbrances in the nature of zoning restrictions, easements,
rights or restrictions on the use of property if the same do not
impair its use in the conduct of the business of the CBL and its
subsidiaries as currently conducted and as currently proposed to be
conducted;
(iii) statutory or common law liens to secure landlords, lessors or
renters under leases or rental agreements confined to the premises
rented to the extent that no payment or performance under any such
lease or rental agreement is in arrears or is otherwise due;
(iv) deposits or pledges made in connection with, or to secure payment
of, worker's compensation, unemployment insurance, old age pension
programs mandated under applicable Legal Requirements or other
social security;
(v) statutory or common law liens in favor of carriers, warehousemen,
mechanics and materialmen, statutory or common law liens to secure
claims for labor, materials, equipment or supplies and other like
liens, which secure obligations to the extent that payment thereof
is not in arrears or otherwise due;
(vi) liens incurred in connection with surety bonds, bids, performance
bonds and similar obligations for sums not overdue or being
contested in good faith by appropriate proceedings;
(vii) liens arising in connection with capital leases (and attaching only
to the property being leased), liens existing on property at the
time of the acquisition thereof by CBL (and not created in
contemplation of such acquisition) and liens that constitute
purchase money security interests on any property securing debt
incurred for the purpose of financing all or any part of the cost
of acquiring such property, provided that any such lien attaches to
such property within 60 days of the acquisition thereof and
attaches solely to the property so acquired; and
(viii) attachments, appeal bonds, judgments and other similar liens
arising in connection with court proceedings, provided the
execution or other enforcement of such liens is effectively stayed
and the claims secured thereby are being actively contested in good
faith and by appropriate proceedings.
(ix) Liens securing indebtedness held by a creditor that has agreed to
subordinate its (i) right to repayment, (ii) priority of liens
securing such indebtedness, and (iii) right to enforce remedies
against CBL following default to the liens of Lenders and the prior
payment of the Obligations to Lenders pursuant to a written
subordination agreement approved by Lenders, which approval shall
not be unreasonably withheld.
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