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EXHIBIT 10.46
SECURITY AGREEMENT
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CAMINUS/DC ACQUISITION CORP.
THIS SECURITY AGREEMENT, dated as of September 1, 1999 (the "Agreement"
or the "Security Agreement"), is between Caminus/DC Acquisition Corp., a
Delaware corporation, as debtor (the "Debtor"), and Fleet Bank, N.A., a national
banking association organized under the laws of the United States, as lender
(hereinafter, in such capacity, together with its successors in such capacity,
the "Lender") under the Credit Agreement referred to below.
Caminus LLC, a Delaware limited liability company (the "Company"), and
the Lender are parties to a Credit Agreement dated as of June 23, 1999 (such
Credit Agreement, as the same may be amended or supplemented from time to time
is referred to herein as the "Credit Agreement") providing, subject to the terms
and conditions thereof, for extensions of credit to be made by the Lenders to
the Company in an aggregate principal amount not exceeding $5,000,000.00 (the
"Loans"). The Loans made or to be made by the Lender to the Company shall be
evidenced by certain promissory notes (as exchanged, replaced, amended,
supplemented or modified from time to time, the "Notes") in substantially the
form of Exhibits A-1 and A-2 attached to the Credit Agreement, as guaranteed by
the Debtor pursuant to a certain Guarantee by the Debtor in favor of the Lender,
dated as of even date herewith (such Guarantee, as the same may be amended or
supplemented from time to time is referred to herein as the "Guarantee").
For other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Debtor has agreed to execute and deliver
this Agreement.
As used herein, "UCC" shall mean the Uniform Commercial Code of the
State of New York (except as otherwise defined in Section 7 hereof) as amended
and in effect as of the date hereof. All other capitalized terms, unless defined
herein or in the Schedules attached hereto and made a part hereof, shall have
the meanings set forth in the Credit Agreement.
SECTION 1. Security Interest.
1(a) As security for the prompt and complete payment, performance and
observance of all indebtedness, obligations, liabilities and agreements of the
Debtor to the Lender pursuant to, under or arising out of the Guarantee and any
amendments, extensions, renewals, increases, refundings or modifications thereto
or of any part thereof, whether now existing or hereafter incurred, matured or
unmatured, direct or contingent, together with interest and costs of enforcement
and collection thereof and of this Security Agreement, including all reasonable
actual attorneys' fees and disbursements incurred by the Lenders (collectively,
the "Liabilities"), the Debtor hereby grants to the Lender, a continuing
security interest of first priority in, and the Debtor hereby assigns and
pledges to the Lender, all of the Debtor's right, title and interest in the
property described on Schedule A-1 attached hereto, whether now owned by the
Debtor or hereafter coming into existence, and wherever located (all being
collectively referred to herein as the "Collateral").
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1(b) The Debtor irrevocably appoints the Lender as its lawful attorney
and agent to execute financing statements and amendments thereto (to the extent
permitted by applicable law), notices of any assignments of any of the
Collateral on the Debtor's behalf, and on its behalf to file financing
statements and amendments thereto in any appropriate public office.
1(c) This Security Agreement is in addition to and without limitation
of any right of the Lender and/or any of the other Lender under any other
security agreement, pledge or leasehold assignment, mortgage or guarantee
granted by the Debtor or any third party to the Lender.
1(d) Except as otherwise herein provided, this Security Agreement is
absolute and without any conditions. The Lender can enforce its rights in the
Collateral immediately upon an Event of Default without having first to attempt
any collection from the Debtor.
SECTION 2. Collection.
Upon the occurrence and continuation of an Event of Default pursuant to
Section 9(a) hereof, the Lender shall have the following rights and powers in
addition to those specified in Section 9(b) hereof:
2(a) The Lender shall have the right to notify the parties obligated on
any or all of the Debtor's Accounts, Contracts, Chattel Paper, Instruments,
Insurance, Documents or General Intangibles to make payment thereof directly to
the Lender, and the Lender may take control of all proceeds of any of the
Accounts, Contracts, Chattel Paper, Instruments, Insurance or General
Intangibles. The costs of collection and enforcement, including reasonable
attorney's fees and reasonable out-of-pocket expenses, shall be borne solely by
the Debtor, whether the same are incurred by the Lender or the Debtor. The
Debtor will not thereafter without the Lender's written consent make any
adjustment, extend or renew, compromise, compound or settle any of the Accounts,
Contracts, Chattel Paper, Instruments, Insurance or General Intangibles, or
release, wholly or partly, any person liable for payment thereof.
2(b) The Debtor hereby irrevocably appoints the Lender to be the
Debtor's true and lawful attorney, with full power of substitution, in the
Lender's name or the Debtor's name or otherwise for the Lender's sole use and
benefit, but at the Debtor's cost and expense, to exercise at any time all or
any of the following powers with respect to all or any of the Collateral:
(i) to demand, ▇▇▇ for, collect, receive and give acquittance for any
and all moneys due or to become due upon or by virtue thereof;
(ii) to receive, take, sign, endorse, assign and deliver any and all
checks, notes, drafts, acceptances, invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
negotiable and non-negotiable instruments and
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documents taken or received by the Lender in connection
therewith;
(iii) to receive, open and dispose of all mail addressed to the Debtor
and to notify the post office authorities to change the address
for delivery of mail addressed to the Debtor to such address as
the Lender may designate;
(iv) to sign the name of the Debtor on any Document, on invoices
relating to any Account or Contract, drafts against and notices
to account debtors or obligors of the Debtor, on financing
statements and other public records and on notices to customers;
(v) to execute endorsements, assignments or other instruments of
conveyance or transfer and proofs of claim and loss and to adjust
and compromise any claims under insurance policies or otherwise;
(vi) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto;
(vii) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds thereof and to apply for and obtain any required
consents of governmental authority for any sale or other
disposition of the Collateral, as full and effectually as if the
Lender were the absolute owner thereof; and
(viii) to apply any or all amounts then in, or thereafter deposited
in, the Company Account in the manner provided in Section
9(b)(iii) hereof; and
(ix) to make any allowances and other adjustments with reference
thereto and to take all other actions necessary or advisable in
the sole discretion of the Lender to carry out and enforce this
Security Agreement or the Liabilities.
All acts done under the foregoing authorization are hereby ratified and
approved by the Debtor and neither the Lender nor any designee or agent of the
Lender shall be liable for any acts of commission or omission (other than acts
committed or omitted through gross negligence or willful misconduct), for any
error of judgment or for any mistake of fact or law. The foregoing power of
attorney being coupled with an interest is irrevocable while any Liabilities
shall remain unpaid. The foregoing authorization shall not be construed in
limitation of any other similar authorization to the Lender under the Guarantee
or otherwise.
2(c) The Debtor will immediately deliver to the Lender all proceeds of
the Collateral and all original evidence of Accounts, Contracts, Chattel Paper,
Instruments,
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Insurance, Documents, Patents, Trademarks, Records or General Intangibles,
including without limitation all notes or other instruments or contracts for the
payment of money, appropriately endorsed to the Lender's order and, regardless
of the form of such endorsement, the Debtor hereby waives presentment, demand,
notice of dishonor, protest and notice of protest and all other notices with
respect thereto; and the Debtor hereby appoints the Lender as the Debtor's agent
and attorney-in-fact to make such endorsement on behalf of and in the name of
the Debtor.
2(d) The exercise by the Lender of or failure to so exercise any
authority granted hereinabove shall in no manner affect the Debtor's liability
to the Lender, and provided, further, that the Lender shall be under no
obligation or duty to exercise any of the powers hereby conferred upon it and it
shall be without liability for any act or failure to act in connection with the
collection of, or the preservation of any rights under any of, the Collateral.
SECTION 3. General Representations and Warranties.
In addition to the Debtor's representations made in the other Loan
Documents, the Debtor represents and warrants to the Lender, which
representations and warranties shall survive execution and delivery of this
Agreement, as follows:
3(a) All filings, registrations and recordings necessary or appropriate
to create, preserve, protect and perfect the security interest granted by the
Debtor to the Lender hereby in respect to the Collateral have been accomplished
and the security interest granted to the Lender pursuant to this Agreement in
and to the Collateral constitutes a perfected security interest therein superior
and prior to the rights of all other Persons therein (except for Liens permitted
under the Credit Agreement) and subject to no other Liens (except for Liens
permitted under the Credit Agreement), and is entitled to all the rights,
priorities and benefits afforded by the UCC or other relevant laws as enacted in
any relevant jurisdiction to perfected security interests.
3(b) The Debtor is, and as to Collateral acquired by it from time to
time after the date hereof the Debtor will be, the owner of all Collateral free
from any Lien, security interest, encumbrance or other right, title or interest
of any Person (other than Liens permitted under the Credit Agreement), and the
Debtor shall defend its Collateral against all claims and demands of all Persons
at any time claiming the same or any interest therein adverse to the Lender.
3(c) There is no financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) covering or
purporting to cover any interest of any kind in the Collateral except for
filings and recordings permitted under the Credit Agreement and filings and
recordings in favor of the Lender created or provided for herein, and so long as
any of the Liabilities remain unpaid the Debtor will not execute or authorize to
be filed in any public office any financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral, except (i) financing statements filed or to be filed
in respect of and covering the security interests granted hereby by the Debtor,
and (ii) financing statements to be filed in connection with the creation of
Liens permitted under the Credit Agreement.
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3(d) The office location(s) of the Debtor set forth on Schedule B
attached hereto as the Debtor's principal place of business and chief executive
office and all other places of business are true and correct.
3(e) Schedule B attached hereto contains a true and complete listing of
all of the locations of all the Collateral. In the case of Inventory, Schedule B
also sets forth each Warehouseman (as defined in the Uniform Commercial Code as
in effect in the state in which the warehouse owned or operated by such Person
is located) that from time to time holds Inventory of the Debtor and the
Permitted Inventory Location (as defined herein) at which such Inventory is so
held. In the case of such Inventory, the Debtor further represents and warrants
that none of the Inventory is subject to a negotiable warehouse receipt (as
defined in the Uniform Commercial Code as in effect in the state in which such
Inventory is located).
3(f) The Debtor further represents and warrants, as to any Inventory,
that all such Inventory, other than Inventory in transit in the normal course of
business, is held at a Permitted Inventory Location (as defined herein).
"Permitted Inventory Location" is defined herein to mean (i) a warehouse or
other storage facility owned or leased by the Debtor, or (ii) a warehouse or
other storage facility owned, leased or operated by a Warehouseman from whom the
Lender has received a warehouse bailment agreement in form and substance
satisfactory to the Lender with respect to Inventory there held, and, in either
case, in jurisdictions where appropriate UCC financing statements shall have
liens filed against the Debtor for the benefit of the Lender and the other
Lender.
SECTION 4. Special Provisions Concerning Accounts.
4(a) As of the time when each of its Accounts arises, the Debtor shall
be deemed to have represented and warranted that such Accounts and all records,
papers and documents relating thereto (if any) are genuine and in all respects
what they purport to be, and that all papers and documents (if any) relating
thereto (i) will represent the genuine, legal, valid and binding obligation of
the account debtor evidencing indebtedness unpaid and owed by such account
debtor arising out of the performance of labor or services or the sale or lease
and delivery of the merchandise listed therein, or both, (ii) will be the only
original writings evidencing and embodying such obligation of the account debtor
named therein (other than copies created for purposes other than general
accounting purposes), (iii) will evidence true and valid obligations,
enforceable in accordance with their respective terms, not subject to the
fulfillment of any contract or condition whatsoever or to any defenses, set offs
or counterclaims (except with respect to refunds, returns and allowances in the
ordinary course of business), or stamp or other taxes, and (iv) will be in
compliance and will conform with all applicable federal, state and local laws
and applicable laws of any relevant foreign jurisdiction.
4(b) The Debtor will keep and maintain at its own cost and expense
satisfactory and complete records of its Accounts, including, but not limited
to, records of all payments received, credits granted thereon, all merchandise
returned and all other dealings therewith, and the Debtor will make the same
available to the Lender for inspection, at the Debtor's own cost and expense, at
any and all reasonable times upon demand.
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4(c) The Debtor shall endeavor to cause to be collected from the
account debtor named in each of its Accounts, as and when due (including,
without limitation, Accounts which are delinquent, such Accounts to be collected
in accordance with generally accepted lawful collection procedures), any and all
amounts owing under or on account of such Accounts, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Accounts, except that, so long as no Event of Default exists and is
continuing, the Debtor may allow in the ordinary course of business as
adjustments to amounts owing under its Accounts an extension or renewal of the
time or times of payment, or settlement for less than the total unpaid balance,
which the Debtor finds appropriate in accordance with sound business judgment.
The costs and expenses (including, without limitation, attorneys' fees and
expenses) of collection, whether incurred by the Debtor or the Lender, shall be
borne by the Debtor.
4(d) If any of the Accounts becomes evidenced by an Instrument, the
Debtor will within ten (10) days notify the Lender thereof, and upon request by
the Lender promptly deliver such Instrument to the Lender appropriately endorsed
to the order of the Lender as further security hereunder.
4(e) The Debtor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Lender from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take such further steps relating to its
Accounts and other property or rights covered by the security interest hereby
granted, as the Lender may reasonably require which are consistent with the
terms hereunder.
SECTION 5. Special Provisions Concerning Contracts.
5(a) The Debtor represents and warrants that no consent of any party
(other than the Debtor) to any Contract is required, or purports to be required,
in connection with the execution, delivery and performance of this Security
Agreement. Each Contract is in full force and effect and is enforceable in
accordance with its respective terms and there is no default under any of the
terms thereof. The Debtor does hereby further represent and warrant that it has
not assigned or pledged, and hereby covenants that it will not assign or pledge,
except as permitted under the Credit Agreement, the whole or any part of the
rights hereby assigned to anyone other than the Lender, its successors or
assigns so long as this Security Agreement shall remain in effect. The Debtor
also covenants and agrees that it will not take any action or fail to take any
action or institute any proceedings the taking or omission of which might result
in the material alteration or impairment of this Security Agreement or any of
the material rights created by any of the Contracts or this Security Agreement.
Except as specified by a detailed notation corresponding to the applicable
Contract on Schedule A-2, the Debtor hereby further represents and warrants that
no consent or authorization of, filing with or other act by or in respect of any
Governmental Authority is required in connection with the execution, delivery,
performance, validity or enforceability of any of the Contracts by any party
thereto other than those which have been duly obtained, made or performed, are
in full force and effect and do not subject the scope of any such Contract to
any material adverse limitations, either specific or general in nature. The
right, title and interest of the Debtor in, to and under each Contract are not
subject to any defense, offset, counterclaim or claim which could reasonably be
expected to have a Material Adverse Effect, nor, as of the date of this Security
Agreement and to the best of the
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Debtor's knowledge, have any of the foregoing been asserted or alleged against
the Debtor as to any Contract. The Debtor has delivered to the Lender a complete
and correct copy of each Contract, including all amendments, supplements and
other modifications thereto. No amount payable to the Debtor under or in
connection with any Contract is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Lender.
The Debtor agrees that, so long as this Security Agreement is in
effect, it will not, without the prior written consent of the Lender, amend,
modify or permit to be amended or modified any of the Contracts or waive or
permit to be waived any material provisions of any of the Contracts, or exercise
any right to terminate or cancel any of the Contracts or consent or agree to, or
suffer or permit, the termination thereof whether or not on account of any
default therein specified if any such amendment, modification or waiver,
termination or cancellation could have a Material Adverse Effect.
SECTION 6. Rights and Obligations Concerning Accounts and Contracts.
6(a) Anything herein to the contrary notwithstanding, the Debtor shall
remain liable under each of the Accounts and Contracts to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise to
each such Account and in accordance with and pursuant to the terms and
provisions of each such Contract. The Lender shall have no obligation or
liability under any Account (or any agreement giving rise thereto) or under any
Contract by reason of or arising out of this Security Agreement or the receipt
by the Lender of any payment relating to such Account or Contract pursuant
hereto, nor shall the Lender be obligated in any manner to perform any of the
obligations of the Debtor under or pursuant to any Account (or any agreement
giving rise thereto) or under or pursuant to any Contract, to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment received
by it or as to the sufficiency of any performance by any party under any Account
(or any agreement giving rise thereto) or under any Contract, to present or file
any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
6(b) The Debtor hereby agrees that no liability shall be asserted or
enforced against the Lender in the exercise of the rights and powers granted to
the Lender hereunder, all such liability being hereby expressly waived and
released by the Debtor. Without limiting the application of Section 11(a)
hereof, the Debtor hereby agrees to indemnify and hold the Lender harmless for
and against any and all liability, expense, cost, loss or damage which the
Lender may incur by reason of any act or omission of the Debtor under any of the
Contracts ("Losses"), except to such extent such Losses arise by reason of the
gross negligence or willful misconduct of the Lender. Should the Lender incur
any liability, expense, cost, loss, or damage, (i) under the Contracts for which
it is to be indemnified by the Debtor as aforesaid, or (ii) by reason of the
exercise of the Lender's rights hereunder, the amount thereof, including costs,
expenses and reasonable actual attorney's fees and expenses, shall be secured
hereby and shall be immediately due and payable by the Debtor to the Lender.
6(c) The Lender has the right to make test verifications of the
Accounts in any manner and through any medium that it reasonably considers
advisable, and the Debtor shall
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furnish all such assistance and information as the Lender may require in
connection therewith. At any time and from time to time, upon the Lender's
request and at the expense of the Debtor, the Debtor shall cause independent
public accountants or others satisfactory to the Lender to furnish to the Lender
reports showing reconciliations, aging and test verifications of, and trial
balances, for, the Accounts. The Lender may in its own name or in the name of
others communicate with account debtors on the Accounts and parties to the
Contracts to verify with them to its satisfaction the existence, amount and
terms of any Accounts or Contracts, provided that, so long as no Event of
Default has occurred and is continuing, the Lender agrees to provide the Debtor
notice prior to initiating such verification.
6(d) The Debtor shall promptly notify the Lender of, and provide to the
Lender copies of, any default notices under any of the Contracts.
SECTION 7. Special Provisions Concerning Patents and Trademarks.
7(a) The Debtor represents and warrants that it is the true and lawful
exclusive owner of the entire and unencumbered right, title and interest in and
to each of the Trademarks listed on Schedule A-3 and the Patents listed on
Schedule A-4 attached hereto, free and clear of all liens and encumbrances
(including, without limitation, any covenant not to ▇▇▇ a third party); that the
Trademarks and Patents are subsisting, valid, enforceable, and have not been
adjudged invalid or unenforceable, in whole or in part; and that the Trademarks
and the Patents constitute all the registered trademarks and patents,
respectively, in the United States Patent and Trademark Office and
non-registered trademarks that the Debtor now owns or uses in connection with
its business.
7(b) The Debtor represents and warrants that it has made all necessary
filings and recordations to protect its interest in the Trademarks, Patents, and
its other intellectual property; that it has and will continue to pay all
required taxes, fees, and costs to maintain all of its rights in the Trademarks,
Patents, and its other intellectual property; and that it has received no notice
or claim that its use of any of the Trademarks, Patents, or other intellectual
property infringes the rights of any third party.
7(c) Prior to licensing or assigning any of the Trademarks, Patents, or
its other intellectual property, the Debtor will give the Lender written notice
of any such license or assignment plus a copy of the draft license agreement or
assignment, and, upon execution, a copy of any final agreement or assignment.
7(d) The Debtor shall, promptly upon learning thereof, notify the
Lender in writing of the name and address of, and furnish such pertinent
information that may be available with respect to, any party who may be
infringing or otherwise violating any of the Debtor's rights in and to any
Trademarks, Patents, or other intellectual property or of any party who makes a
claim that the use of any of the Trademarks, Patents, or other intellectual
property otherwise violates any property of any nature of that party or any
third party. Unless the Debtor shall reasonably determine that such Trademark,
Patents, or other intellectual property is not of material economic value to the
Debtor, the Debtor further shall diligently prosecute any and all persons who
infringe any of its Trademarks, Patents, or other intellectual property to
recover any and all damages and take such other actions as the Debtor shall deem
appropriate under the
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circumstances to protect such Trademarks, Patents, or other intellectual
property. The Lender shall have the option, but not the obligation, to
participate in any such action at Debtor's expense and to maintain suits against
parties for infringement or misappropriation if Lender believes the Debtor is
not diligently and vigorously proceeding in such action(s).
7(e) If any trademark or service ▇▇▇▇ registration or patent
registration is issued hereafter to the Debtor as a result of any application or
registration now or hereafter pending before the United States Patent and
Trademark Office or foreign equivalent thereof, the Debtor shall forthwith
execute and deliver a copy of the certificate of registration within thirty (30)
days of receipt of such certificate and a grant of security in such trademark,
service ▇▇▇▇ or patent to the Lender confirming the grant thereof hereunder, the
form of such confirmatory grant to be substantially the same as the form hereof.
7(f) The Debtor will perform all acts and execute all documents
including, without limitation, documents in form suitable for filing with the
United States Patent and Trademark Office, other governmental office, and any
foreign equivalent thereof, as reasonably requested by the Lender at any time to
evidence, perfect, maintain, record and enforce the Lender's interest in the
Trademarks, Patents, and the Debtor's other intellectual property or otherwise
in furtherance of the provisions of this Agreement. In the event of foreclosure
hereunder upon all or any part of the Collateral, the Debtor shall, and hereby
does, constitute the Lender as the Debtor's attorney-in-fact to transfer, in the
Debtor's name, the Trademarks (including all goodwill associated with the
Trademarks), the Patents, and the Debtor's other intellectual property to a
third party capable, in the Lender's judgment, of using and maintaining the
nature and quality of the Trademarks, the Patents, and the Debtor's other
intellectual property. Such power-of-attorney shall include, without limitation,
the right to execute all documents and to do all acts as the Lender considers
necessary to effect any of the foregoing, and all acts of such attorney are
hereby ratified and confirmed; such power being coupled with an interest which
is irrevocable until the Liabilities are paid in full.
7(g) Except to the extent that the Lender shall consent in writing, the
Debtor will, unless the Debtor shall reasonably determine that a Trademark is
not of material economic value to the Debtor, (i) continue to use each Trademark
in order to maintain each Trademark in full force free from any claim of
abandonment for non-use, (ii) employ each Trademark with the appropriate notice
of application or registration, (iii) not adopt or use any ▇▇▇▇ which is
confusingly similar or a colorable imitation of any Trademark, (iv) not use any
Trademark except for the uses for which registration or application for
registration of such Trademark has been made, (v) not (and not permit any
licensee or sublicensee thereof, if any, to) do any act or knowingly omit to do
any act whereby any Trademark may be subject to dilution, misappropriation, or
invalidation, and (vi) ensure and warrant that the quality of the goods and
services bearing each applicable Trademark will be maintained at not less than
the quality level thereof as exists as of the date of this Agreement, and in
that regard, during normal business hours the Lender and its representatives may
inspect the Debtor's books, records, and facilities which manufacture, inspect,
or store products to ensure that quality of the applicable goods and services
are being maintained.
7(h) The Debtor shall notify the Lender immediately if it knows, or has
reason to know, of any reason that any application or registration relating to
any Trademark,
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Patent, or other intellectual property of the Debtor may become abandoned or of
any 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 or any court) regarding the
Debtor's ownership of any Trademark, Patent, other intellectual property, its
right to register or use the same, or to keep and maintain the same.
7(i) In no event shall the Debtor, either itself or through any agent,
employee, licensee or designee, file an application for the registration of any
Trademark, Patent, or other intellectual property with the United States Patent
and Trademark Office, other governmental office, or any similar office or agency
in any other country or any political subdivision thereof, unless it promptly
informs the Lender, and, upon request of the Lender, executes and delivers any
and all agreements, instruments, documents and papers as the Lender may request
to evidence the Lender's security interest in such Trademark, Patent, or other
intellectual property and the goodwill and general intangibles of the Debtor
relating thereto or represented thereby, and the Debtor hereby constitutes the
Lender its attorney-in-fact to execute and file all such writings for the
foregoing purposes, including without limitation to modify this Agreement by
amending Schedule A-3 and/or Schedule A-4 (as the case may be) to include any
future Trademarks, Patents, and other intellectual property, all acts of such
attorney being hereby ratified and confirmed; such power being coupled with an
interest which is irrevocable until the Liabilities are paid in full.
7(j) The Debtor will take all commercially reasonable steps, including,
without limitation, in any proceeding before the United States Patent and
Trademark Office, any other governmental office, or any other office or agency
in any other country or any political subdivision thereof, to maintain and
pursue each application (and to obtain the relevant registration) and to
maintain each registration of the Trademarks and Patents, except to the extent
permitted under Section 7(g), including but not limited to the appropriate and
timely payment of any required fees and the appropriate and timely filing of any
documents or declarations necessary to maintain and renew such Trademarks and
Patents which may be necessary or appropriate under applicable federal, state,
and foreign law.
7(k) Upon the occurrence and during the existence of an Event of
Default, the Lender may, by written notice to the Debtor, take any or all of the
following actions: (i) declare the entire right, title and interest of the
Debtor in and to each of the Trademarks, Patents, and other intellectual
property, together with all related rights and rights of protection to the same,
vested, in which event such rights, title and interest shall immediately vest,
in the Lender, in which case the Debtor agrees to execute assignments in form
and substance satisfactory to the Lender, of all its rights, title and interest
in and to the Trademarks, Patents, and other intellectual property to the
Lender; (ii) take and use or sell the Trademarks, Patents, and other
intellectual property and the goodwill of the Debtor's business symbolized by
the Trademarks and the right to carry on the business of such Debtor in
connection with which the Trademarks have been used; and (iii) direct the Debtor
to refrain, in which event the Debtor shall refrain, from using the Trademarks,
Patents, and its other intellectual property in any manner whatsoever, directly
or indirectly, and, if requested by the Lender, change the Debtor's corporate
name to eliminate therefrom any use of any Trademarks and execute such other and
further documents that the Lender may request to further confirm this and to
transfer ownership of the Trademarks, Patents, and other intellectual property,
and any pending trademark and patent application(s) for
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trademarks, patents, and other intellectual property in the United States Patent
and Trademark Office, any other governmental office, and in any similar foreign
office to the Lender. After any Event of Default, the Debtor shall cooperate and
use its best efforts to obtain any consents, waivers, or agreements necessary to
enable the Lender to exercise its rights and remedies with respect to any
Trademark, Patent, and other intellectual property of the Debtor.
SECTION 8. Covenants of Debtor.
In addition to the Debtor's covenants contained in the Credit Agreement
and the Guarantee, the Debtor covenants that:
8(a) Subject to Section 3(e) and Section 3(f) hereof, the Collateral is
and will be located at the Debtor's chief executive office and such other places
of business and Permitted Inventory Locations as indicated on Schedule B
attached hereto. The Debtor's records of the Collateral will be located at the
Debtor's chief executive office. The chief executive office of the Debtor is
located at the address shown on Schedule B attached hereto. The Debtor will not
move its chief executive office, the location of the Collateral or any Records
Office (as defined below) except to such new location as the Debtor may
establish in accordance with the last sentence of this Section 8(a) and with
respect to Inventory, to Permitted Inventory Locations. The originals of all
documents and all electronically stored data and information evidencing all
Accounts and Contracts of the Debtor and the only original books of account and
records of the Debtor relating thereto are, and will continue to be, kept at its
chief executive office shown on Schedule B attached hereto (each, a "Records
Office"), or at such new Records Office as the Debtor may establish in
accordance with the last sentence of this Section 8(a). All Accounts, Contracts
and records of the Debtor are, and will continue to be, maintained at, and
controlled and directed (including, without limitation, for general accounting
purposes) from, such Records Office location shown above, or such new location
as the Debtor may establish in accordance with the last sentence of this Section
8(a). The Debtor shall not establish a new location for its chief executive
office, the location of the Collateral or any Records Office until (i) it shall
have given to the Lender not less than 45 days' prior written notice of its
intention so to do, clearly describing such new location and providing such
other information in connection therewith as the Lender may reasonably request,
and (ii) with respect to such new location, it shall have taken all action,
satisfactory to the Lender, to maintain the security interest of the Lender in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
8(b) The Collateral used or useful in its business, in whomever's
possession they may be, shall be kept in good repair, working order and
condition, and that from time to time there will be made to such Collateral all
needful and proper repairs, renewals, replacements, extensions, additions,
betterments and improvements thereto, to the extent and in the manner customary
for companies in similar lines of business under similar circumstances. The
Debtor will not encumber, sell, erase, transfer, assign, abandon or otherwise
dispose of the Collateral except for: (i) collection, discharge, discount,
compromise or expiration of the Accounts, Chattel Paper, Instruments or General
Intangibles in the ordinary course of the Debtor's business, (ii) sale or
transfer of Inventory in the ordinary course of business, (iii) dispositions of
items of Equipment no longer needed by the Debtor in the ordinary course of
business, (iv) Liens as permitted under the Credit Agreement and (v) trade-ins,
replacements or exchanges of items of Equipment for other items of Equipment to
the extent the same shall promptly be replaced by
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Equipment having an equal or greater value (in excess of purchase money liens on
such items) and useful in the Debtor's business. The inclusion of "products" and
"proceeds" of the Collateral under the security interest granted herein shall
not be deemed a consent by the Lender to any sale or other disposition of the
Collateral except as expressly permitted herein or in the Credit Agreement.
8(c) The Debtor will have and maintain insurance at its expense as
required of the Company pursuant to Section 6.04 of the Credit Agreement. The
Lender is authorized by the Debtor to act as its attorney in collecting,
adjusting, settling or canceling such insurance and endorsing any drafts drawn
by insurers. The Lender may apply any insurance proceeds received by it to the
Liabilities, whether due or not; provided, however, that the Lender will hold
such proceeds as a special deposit for use by the Debtor in replacing any
damaged Equipment which gave rise to such proceeds, so long as the Debtor is
taking steps to replace such Equipment with due diligence and in good faith and
so long as no Event of Default has occurred and is continuing hereunder. The
Debtor will immediately notify the Lender of any damage to or loss of the
Collateral in excess of $50,000. Not later than the expiration date of each
insurance policy then in effect, the Debtor shall deliver to the Lender a
certificate of insurance certifying as to (i) the extension of such policy or
the issuance of a renewal policy therefor, describing the same in reasonable
detail satisfactory to the Lender and (ii) the payment in full of the portion of
the premium therefor then due and payable (or accompanied by other proof of such
payment satisfactory to the Lender). The Debtor shall be required forthwith to
notify the Lender if the Debtor shall determine at any time not to, or at any
time be unable to, extend or renew any such insurance policy then in effect.
8(d) The Debtor will use the Collateral for business purposes and not
for personal, family, household or farming purposes and not in violation of any
statute or ordinance.
8(e) The Debtor will pay promptly when due all taxes, contributions,
charges or levies and assessments upon the Collateral owned by the Debtor or
upon its use or sale (other than those the amount or validity of which is
currently being contested in good faith by appropriate proceeding and with
respect to which appropriate reserves are maintained on the books of the Debtor
in accordance with GAAP). At its option the Lender may discharge taxes, liens or
other encumbrances at any time levied against or placed on the Collateral which
have not been stayed as to execution and contested with due diligence in
appropriate legal proceedings, and the Lender may pay for insurance on the
Collateral and maintenance and preservation of the Collateral if the Debtor
fails to do so. The Debtor shall reimburse the Lender on demand for any such
expense incurred by the Lender pursuant to the foregoing authorization, together
with interest thereon, from the date paid by the Lender until payment in full by
the Debtor, at the per annum rate of the Base Rate plus four percent (4%).
8(f) The Debtor will at all times and in all material respects keep
accurate and complete records of the Collateral. Subject to such notice required
pursuant to the Credit Agreement (if any), the Lender, or any of its agents,
shall have the right (in addition to the rights granted to the Lender pursuant
to Section 6(c) hereof) to call at the Debtor's place or places of business
during normal business hours, at intervals to be determined by the Lender, to
examine and inspect the Collateral and to inspect, audit, make test
verifications and otherwise check and
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make extracts from the books, records, journals, orders, receipts,
correspondence and other data relating to the Collateral or to any other
transactions between the parties hereto.
8(g) The Debtor agrees to stamp its books and records pertaining to
Accounts, Contracts, Chattel Paper, Instruments, Documents, Trademarks and
General Intangibles to evidence the Lender's security interest therein in form
satisfactory to the Lender immediately upon the Lender's written demand.
8(h) The Debtor will obtain the consent of any Governmental Authority
or other Person to the assignment hereunder of any of the Collateral if such
consent may be required by the terms of any contract or statute.
8(i) If any action or proceeding shall be commenced, other than any
action to collect the Liabilities, to which action or proceeding the Lender or
any Lender is made a party and in which it becomes necessary to defend or uphold
the Lender's security interest hereunder, all costs incurred by the Lender for
the expenses of such litigation (including reasonable actual attorney fees and
expenses) shall be deemed part of the Liabilities secured hereby, which the
Debtor agrees to pay or cause to be paid.
8(j) The Debtor agrees that if any warehouse receipt or receipt in the
nature of a warehouse receipt is issued with respect to any of its Inventory,
such warehouse receipt or receipt in the nature thereof shall not be
"negotiable" (as such term is used in Section 7-104 of the UCC).
8(k) The Debtor will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Lender from time to time such lists,
descriptions and designations of its Collateral, warehouse receipts, receipts in
the nature of warehouse receipts, bills of lading, documents of title, vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the security interest hereby
granted, which the Lender deems appropriate or advisable to perfect, preserve or
protect its security interest in the Collateral consistent with the terms
hereunder, and the Debtor hereby authorizes the Lender to execute and file at
any time and from time to time one or more financing statements or copies
thereof or of this Security Agreement with respect to the Collateral signed only
by the Lender.
8(l) If the Debtor is not the owner of any premises where any Equipment
is located, the Debtor will use its reasonable best efforts to furnish such
consents and waivers executed by the owners of such premises as the Lender shall
request.
SECTION 9. Events of Default.
9(a) An Event of Default ("Event of Default") shall have occurred under
this Agreement upon (i) the failure by the Debtor to pay when due any
Liabilities, whether by acceleration or otherwise, (ii) the occurrence of any
event, condition or act which is defined or described as an Event of Default in
any Loan Document, or (iii) the occurrence of any event, condition or act which
pursuant to the terms of any Loan Document gives the Lender, for the
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benefit of the Lender, the right to accelerate the payment of any Liabilities,
regardless of whether the Lender exercises such right.
9(b) Upon the occurrence and during the existence of an Event of
Default, the Lender shall have all of the rights, powers and remedies set forth
in the Credit Agreement, the Notes, this Agreement, the other Loan Documents and
any other instrument or other evidence of any of the Liabilities secured hereby,
together with the rights and remedies of a secured party under the Uniform
Commercial Code of the jurisdictions where the Collateral is located, and,
without limiting the foregoing, the Lender may:
(i) personally, or by agents or attorneys, immediately retake
possession of the Collateral or any part thereof, from the Debtor
or any other Person who then has possession of any part thereof
with or without notice or process of law, and for that purpose
may enter upon the Debtor's premises where any of the Collateral
is located and remove the same and use in connection with such
removal any and all services, supplies, aids and other facilities
of the Debtor; and
(ii) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Accounts and
the Contracts) constituting the Collateral to make any payment
required by the terms of such instrument or agreement directly to
the Lender; and
(iii) withdraw all monies, securities and instruments in the Company
Account or any other account for application to the Liabilities;
and
(iv) sell or otherwise liquidate, or direct the Debtor to sell or
otherwise liquidate, any or all investments made in whole or in
part with the Collateral or any part thereof, and take possession
of the proceeds of any such sale or liquidation; and
(v) take possession of the Collateral or any part thereof, by
directing the Debtor in writing to deliver the same to the Lender
at any place or places designated by the Lender, in which event
the Debtor shall at its own expense
(A) forthwith cause the same to be moved to the place or
places so designated by the Lender and there delivered to the
Lender,
(B) store and keep any Collateral so delivered to the Lender
at such place or places pending further action by the Lender as
provided in Section 9(c) hereof, and
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(C) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain them
in good condition;
it being understood that the Debtor's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly,
upon application to a court of equity having jurisdiction, the Lender
shall be entitled to a decree requiring specific performance by the
Debtor of said obligation.
9(c) Any Collateral repossessed by the Lender under or pursuant to
Section 7(k) or 9(b) and any other Collateral whether or not so repossessed by
the Lender, may be sold, leased or otherwise disposed of under one or more
contracts or as an entirety, and without the necessity of gathering at the place
of sale the property to be sold, and in general in such manner, at such time or
times, at such place or places and on such terms as the Lender may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the Lender
or after any overhaul or repair which the Lender shall determine to be
commercially reasonable at a public or private sale or proceeding, or otherwise,
by one or more contracts, in one or more parcels, at the same or different
times, for cash and/or credit and upon any terms, at such places and times and
to such persons as the Lender deems best, and for that purpose the Lender may
enter peaceably any premises on which the Collateral or any part thereof may be
situated and remove the same therefrom and the Debtor will not resist or
interfere with such action. If an Event of Default shall have occurred and be
continuing, the Lender may require the Debtor to assemble and/or remove the
Collateral and make it available to the Lender at a place to be designated by
the Lender which is reasonably convenient to both parties. The Debtor hereby
agrees that its address and the place or places of location of the Collateral
are places reasonably convenient to it to assemble the Collateral. Unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, if an applicable statute requires
reasonable notice of sale or other disposition, the Lender will send to the
Debtor reasonable notice of the time and place of any public sale or reasonable
notice of the time after which any private sale or any other disposition thereof
is to be made. The Debtor agrees that requirement of sending reasonable notice
shall be met if such notice is mailed, postage prepaid, to the Debtor at least
ten (10) days before the time of the sale or disposition. If an Event of Default
shall have occurred and be continuing, the Lender may at any time in its
discretion transfer any property constituting Collateral into its own name or
that of its nominee and receive the income thereon and hold the same as security
for the Liabilities. To the extent permitted by any law, the Lender may itself
bid for and purchase the Collateral or any item thereof offered for sale in
accordance with this Section without accountability to the Company (except to
the extent of surplus money received as provided in Section 9(f)).
9(d) The Debtor recognizes that the Collateral may not be readily
marketable and may not be marketable at all if an Event of Default has occurred.
Therefore, in order to enable the Lender to use such means as it may determine
necessary or advisable to realize upon the Collateral from time to time, the
Debtor consents that the Lender may use whatever means it
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may reasonably consider necessary or advisable to sell any or all of the
Collateral at any time or times after default thereunder, including but not
restricted to the giving of an option to purchase any or all of the Collateral
to any party and the extending of credit to any purchaser of such Collateral.
The Lender may sell any or all of the Collateral or commit itself to sale
without limiting the amount sold to the amount of indebtedness secured thereby,
plus costs and expenses of collection.
9(e) The Lender may appropriate, set off and apply to the payment of
the Liabilities, any Collateral in or coming into the possession of the Lender
or its agents, without notice to the Debtor and in such manner as the Lender may
in its discretion determine.
9(f) The proceeds of any Collateral obtained pursuant to Section 2(a),
7(k) or 9(b) or disposed of pursuant to Section 9(c) shall be applied as
follows:
(i) to the payment of any and all expenses and fees (including
reasonable actual attorneys' fees and expenses) incurred by the
Lender in obtaining, taking possession of, removing, insuring,
repairing, storing and disposing of Collateral and any and all
amounts incurred by the Lender in connection therewith;
(ii) next, any surplus then remaining to the payment of the
Liabilities in such order as the Lender may determine (subject to
any statutory requirements), and the Debtor shall remain liable
for, and shall pay on demand, any deficiency; and
(iii) after payment in full of all amounts due under subparagraphs
9(f)(i) and 9(f)(ii) above, any surplus then remaining shall be
paid to the Debtor, subject, however, to the rights of the holder
of any then existing Lien of which the Lender has actual notice
(without investigation).
9(g) Each and every right, power and remedy hereby specifically given
to the Lender shall be in addition to every other right, power and remedy
specifically given under this Agreement or under the other Security Documents or
now or hereafter existing at law or in equity, or by statute and each and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time or simultaneously and as often and in such
order as may be deemed expedient by the Lender. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of exercise of
one shall not be deemed a waiver of the right to exercise of any other or
others. The Lender may exercise its rights with respect to Collateral without
resorting to or regard to other Collateral or sources of reimbursement for any
of the Liabilities. No delay or omission of the Lender in the exercise of any
such right, power or remedy and no renewal or extension of any of the
Liabilities shall impair any such right, power or remedy or shall be construed
to be a waiver of any Default or Event of Default or an acquiescence therein. In
the event that the Lender shall bring any suit to enforce any of its rights
hereunder and shall be entitled to judgment, then in such suit the Lender
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may recover reasonable expenses, including attorneys' fees, and the amounts
thereof shall be included in such judgment.
9(h) In case the Lender shall have instituted any proceeding to enforce
any right, power or remedy under this Agreement by foreclosure, sale, entry or
otherwise, and such proceeding shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Lender, then and in every
such case the Debtor, the Lender and each holder of any of the obligations shall
be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Lender shall continue as if no such
proceeding had been instituted.
SECTION 10. Waivers.
10(a) Except as otherwise provided in this Agreement, THE DEBTOR HEREBY
WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE OR JUDICIAL HEARING IN
CONNECTION WITH THE LENDER'S TAKING POSSESSION OR THE LENDER'S DISPOSITION OF
ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE
AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE
DEBTOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED
STATES OR OF ANY STATE, and the Debtor hereby further waives:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Lender's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the
Lender's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any
applicable law in order to prevent or delay the enforcement of
this Agreement or the absolute sale of the Collateral or any
portion thereof, and the Debtor, for itself and all who may claim
under insofar as it or they, now or hereafter, lawfully may,
hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the Debtor therein and thereto, and shall
be a perpetual bar both at law and in equity against the Debtor and against any
and all Persons claiming or attempting to claim the Collateral so sold, optioned
or realized upon, or any part thereof, from, through and under the Debtor.
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10(b) The Debtor waives demand, notice, protest, notice of acceptance
of this Agreement, notice of loans made, credit extended, Collateral received or
delivered or other action taken in reliance hereon and all other demands and
notices of any description except as hereinbefore provided. With respect to
Liabilities and Collateral, the Debtor assents to any extension or postponement
of the time of payment or any other indulgence, to any substitution, exchange or
release of Collateral, to the addition or release of any party or person
primarily or secondarily liable, to the acceptance of partial payments thereon
and the settlement, compromising or adjusting of any thereof, all in such time
or times as the Lender may deem advisable. The Debtor waives all rules of
suretyship law and any other law whatsoever which is legally permitted to be
waived and which would, if not waived, impair the Lender's enforcement of its
security interests hereunder. By way of example, but not in limitation of the
Lender's rights under this Security Agreement, subject to the terms and
conditions of this Security Agreement and the Credit Agreement, the Lender may
do any of the following without notice to the Debtor (unless such notice or
other action is otherwise required pursuant to any of the Loan Documents to
which the Debtor is a party):
(i) change, renew or extend the time for payment of all or any part
of the Liabilities;
(ii) change any provision with respect to all or any part of the
Liabilities;
(iii) release, surrender, sell or otherwise dispose of any money or
property which is in the Lender's possession as collateral
security for the Liabilities;
(iv) fail to perfect a security interest in any property which is
pledged or mortgaged as security for payment of the Liabilities;
(v) release or discharge any party liable to the Lender in whole or
in part for the Liabilities, or accept any additional parties or
guarantors;
(vi) delay or refrain from exercising any of the Lender's rights;
(vii) settle or compromise any and all claims pertaining to the
Liabilities and the Collateral; and
(viii) apply any money or property of the Debtor or that of any other
party liable to the Lender for any part of the Liabilities in any
order the Debtor chooses.
10(c) The Lender shall have no duty as to the collection or protection
of Collateral not in the Lender's possession, and the Lender's duty with
reference to Collateral in its possession shall be to use reasonable care in the
custody and preservation of such Collateral, but such duty shall not require the
Lender to do any of the following (although the Lender is authorized to
reasonably undertake any such action if the Lender deems such action
appropriate):
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(i) exercise any rights under the Collateral or act upon any request
made by the Debtor;
(ii) collect any sums due on the Collateral;
(iii) notify the Debtor of any maturities or other similar matters
concerning the Collateral; or
(iv) preserve or protect the Debtor's rights in the Collateral or take
any action to protect any of the Collateral against claims of
others or to preserve rights against prior parties.
SECTION 11. Indemnity and Costs and Expenses.
11(a) The Debtor agrees to pay, or reimburse the Lender for any and all
fees, costs and expenses of whatever kind or nature incurred in connection with
(i) the enforcement or attempted enforcement of the Lender's rights under this
Security Agreement, and (ii) the creation, preservation or protection of the
Lender's Liens on, and security interest in, the Collateral, including, without
limitation, all fees and taxes in connection with the recording or filing of
instruments and documents in public offices, payment or discharge of any taxes
or Liens upon or in respect of the Collateral, premiums for insurance with
respect to the Collateral and all other fees, costs and expenses in connection
with protecting, maintaining or preserving the Collateral and the Lender's
interest therein, whether through judicial proceedings or otherwise, or in
defending or prosecuting any actions, suits or proceedings arising out of or
relating to the Collateral.
11(b) Without limiting the application of Section 11(a) hereof, the
Debtor agrees to pay, indemnify and hold the Lender (herein, the "Indemnitee")
harmless from and against any loss, costs, damages and expenses which any such
Indemnitee may suffer, expend or incur in consequence of or growing out of any
misrepresentation by the Debtor in this Agreement or any of the other Loan
Documents or in any statement or writing contemplated by or made or delivered
pursuant to or in connection with this Agreement or any of the other Security
Documents or any breach by the Debtor of this Agreement or any of the other Loan
Documents.
11(c) If and to the extent that the obligations of the Debtor under
this Section 11 are unenforceable for any reason, the Debtor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
11(d) Any amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement shall constitute Liabilities secured by the
Collateral. The indemnity obligations of the Debtor contained in this Section 11
shall continue in full force and effect notwithstanding the full payment of all
Liabilities and notwithstanding the discharge thereof.
SECTION 12. The Lender. Without limiting any provision hereof, the
Lender shall be entitled to the rights, powers, immunities, exculpations and
privileges set forth in Article IX of the Credit Agreement as if the same were
set forth in full in this Agreement. The Lender
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shall have no rights hereunder to realize upon the Collateral or otherwise
enforce the provisions of this Agreement, it being understood that such rights
and remedies may be exercised only by the Lender.
SECTION 13. Successors and Assigns. The covenants, representations,
warranties and agreements herein set forth shall be binding upon the Debtor, its
legal representatives, successors and assigns, and shall inure to the benefit of
the Lender and its successors and assigns. The successor of the Lender hereunder
shall forthwith become vested with and shall be entitled to exercise all the
powers and rights given by this Agreement to the Lender, as if said successor
were originally named as secured party herein.
SECTION 14. Lender May Perform. If Debtor fails to perform any
agreement contained herein, the Lender may itself perform, or cause performance
of, such agreement, and the expenses of the Lender incurred in connection
therewith shall be payable by Debtor on demand.
SECTION 15. No Waiver; Remedies. No failure on the part of the Lender
to exercise, and no delay in exercising, and no course of dealing with respect
to, any right, power, or remedy under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder and
under any of the other Loan Documents preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege. The remedies
provided herein and in the other Loan Documents are cumulative and not exclusive
of any remedies provided by law.
SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ANY CHOICE OF LAW RULES WHICH WOULD REQUIRE THE APPLICATION OF THE LAWS OF
ANY OTHER JURISDICTION EXCEPT TO THE EXTENT THAT THE LAWS OF THE JURISDICTIONS
WHERE THE COLLATERAL IS LOCATED APPLY TO THE CREATION, ATTACHMENT, PERFECTION,
PRIORITY AND ENFORCEMENT OF LIENS ON AND SECURITY INTERESTS IN THE COLLATERAL.
SECTION 17. Severability. If any provision hereof shall be held to be
invalid, illegal or unenforceable in any jurisdiction, then, to the fullest
extent permitted by law, (i) the other provisions hereof shall remain in full
force and effect in such jurisdiction, and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
SECTION 18. Amendments. None of the terms or provisions of this
Security Agreement may be waived, altered, modified, or amended except by an
agreement in writing signed by the Lender and the Debtor.
SECTION 18. Notices. All notices, statements, requests and demands
herein provided for shall be in writing and shall be deemed to have been given
or made when delivered to the respective addresses and in the manner specified
in Section 9.01 of the Credit Agreement,
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provided that all notices to the Debtor shall be addressed and delivered to the
address set forth below its signature.
SECTION 19. Counterparts. This Agreement may be executed in any number
of counterparts, all of which, when taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
SECTION 20. Termination. When all Liabilities shall have been paid in
full and the Guarantee has expired or been terminated, this Agreement shall
terminate, and the Lender shall cause to be assigned, transferred and delivered,
against receipt but without any recourse, warranty or representation whatsoever,
any remaining Collateral and money received in respect thereof, to or for the
account of the Debtor. The Lender shall also execute and deliver to the Debtor
upon such termination such UCC termination statements and such other
documentation as shall be reasonably requested as necessary by the Debtor to
effect the termination and release of the Liens on the Collateral, all at the
expense of the Debtor.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized officers as of the
date and year first above written.
CAMINUS/DC ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name:
Title:
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FLEET BANK, N.A.,
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
23
SCHEDULE A-1
to
Security Agreement and UCC-1 Financing Statement
in favor of
Fleet Bank, N.A.
as the Lender
granted by Caminus/DC Acquisition Corp.
as Debtor
(i) All equipment (as defined in the UCC) in all of its forms, wherever located,
now existing or hereafter acquired, including, without limitation, all machinery
and other goods, furniture, furnishings, trade fixtures, office supplies, motor
vehicles, tools, computers (including hardware and software), other office
equipment, all equipment and other goods and property more particularly
described in capital leases and any subleases or assignments thereof, and all
other tangible personal property used in connection with or related to the
operation of the Debtor's business, together with all parts, fittings, special
tools, alterations, attachments, additions, accessories, improvements,
substitutions, replacements and accessions thereto, and all proceeds and
products arising therefrom (the "Equipment");
(ii) All inventory (as defined in the UCC) and merchandise in all of its forms,
wherever located, now existing or hereafter acquired including, but not limited
to, (i) all raw materials and work in process therefor, finished goods thereof,
and materials used or consumed in the manufacture or production thereof, (ii)
goods in which the Debtor has an interest in mass or a joint or other interest
or right of any kind (including, without limitation, goods in which the Debtor
has an interest or right as consignee), and (iii) goods which are returned to or
repossessed by the Debtor, and all accessions thereto and products and proceeds
thereof and general intangibles arising therefrom (the "Inventory");
(iii) All of the Debtor's accounts (as defined in the UCC), whether now existing
or hereafter acquired, including without limitation any and all rights evidenced
by an account, note, contract, security agreement, chattel paper, or other
evidence of indebtedness or security, together with (a) all security pledged,
assigned, hypothecated or granted to or held by the Debtor to secure the
foregoing, (b) all of the Debtor's right, title and interest in and to any
goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (e) all books, records, ledger cards, and invoices
relating thereto, (f) all evidences of the filing of financing statements and
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto, and (h) all other writings
related in any way to the foregoing, and all proceeds and general intangibles
arising therefrom (the "Accounts");
(iv) All of the contracts and agreements of the Debtor listed on Schedule A-2
attached hereto, together with all schedules, exhibits, documents and
certificates referred to therein, as amended, supplemented or otherwise modified
from time to time, including without limitation, all rights of
24
the Debtor to (a) receive moneys due and to become due to it thereunder or in
connection therewith, (b) damages arising out of, or for, breach or default in
respect thereof, (c) compel performance of the terms thereof, (d) benefits and
claims under all warranty and indemnity provisions contained therein, (e) all
insurance payments provided therein and (f) any other moneys due and to become
due to the Debtor thereunder or in connection therewith (the "Contracts");
(v) All chattel paper (as defined in the UCC), now owned or hereafter acquired,
and all proceeds and general intangibles arising therefrom (the "Chattel
Paper");
(vi) All instruments (as defined in the UCC) of the Debtor, now owned or
hereafter acquired, and all proceeds and general intangibles arising therefrom
(the "Instruments");
(vii) All of the Debtor's now existing and hereafter acquired general
intangibles (as defined in the UCC), including without limitation all of the
Debtor's rights and interest in any contracts, franchises, licenses, leases,
easements, customer lists, methods of doing business, copyrights, the
Trademarks, the Patents, non-compete agreements, distribution agreements, and
all other general intangibles, and intellectual, proprietary and intangible
property and the proceeds of any of the foregoing (the "General Intangibles");
(viii) All of the Debtor's right, title and interest in, to and under any now
existing or hereafter created or acquired United States (or individual State
thereof) and foreign servicemarks and trademarks (including without limitation
the trademarks listed on Schedule A-3 attached hereto), trade names, trade
styles, logos and/or designs, and trade dress, including, without limitation,
the goodwill of the business to which each of the foregoing relates, all
registrations, recordings, and applications with respect to the foregoing, all
affidavits of use and incontestability, all renewals thereof, all licenses,
royalties, income, claims, damages, payments, and proceeds of suit now or
hereafter payable or due for past or future infringements of any of the
foregoing; the right (but not the obligation) to ▇▇▇ for past, present, and
future infringements of any of the foregoing; all rights corresponding to the
foregoing throughout the world; and all proceeds and general intangibles arising
therefrom (the "Trademarks");
(ix) All of the Debtor's right, title and interest in, to and under any now
existing or hereafter created or acquired United States and foreign patents,
patent applications, and patentable inventions, including, but not limited to,
each patent and patent application referred to in Schedule A-4 attached hereto;
all reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the foregoing; all licenses, royalties,
income, claims, damages, payments, and proceeds of suit now or hereafter payable
or due for past or future infringements of any of the foregoing; the right (but
not the obligation) to ▇▇▇ for past, present, and future infringements of any of
the foregoing; all rights corresponding to the foregoing throughout the world;
and all proceeds and general intangibles arising therefrom (the "Patents");
(x) All of the Debtor's books, records and other property relating to or
referring to any of the foregoing, including without limitation, all books,
records, ledger cards and other property and general intangibles at any time
evidencing or relating to the Accounts, Inventory, Instruments,
25
Chattel Paper, Documents, Trademarks, Patents and General Intangibles, and the
proceeds thereof (the "Records");
(xi) All insurance policies held by the Debtor or naming the Debtor as loss
payee (including, without limitation, casualty insurance, key-man life
insurance, property insurance and business interruption insurance), and all such
insurance policies entered into after the date hereof, and all proceeds and
general intangibles arising therefrom (the "Insurance");
(xii) All documents of title (as defined in the UCC) or other receipts of the
Debtor covering, evidencing or representing any Inventory or Equipment wherever
located, now owned or hereafter acquired, and all proceeds and general
intangibles arising therefrom (the "Documents");
(xiii) All of the Debtor's rights as a seller of goods under Article 2 of the
UCC or otherwise with respect to Inventory, and all goods represented by or
securing any of the Accounts, all of the Debtor's rights therein, including,
without limitation, rights as an unpaid vendor or lienor and including rights of
stoppage in transit, replevin and reclamation ("Other Rights");
(xiv) All guarantees, mortgages or security interests on real or personal
property, leases or other agreements or property now or hereafter securing or
relating to any of the items referred to above in favor of the Debtor, or now or
hereafter acquired for the purpose of securing and enforcing any of such items
in favor of the Debtor, and the proceeds thereof (the "Debtor's Security"); and
(xv) All sums at any time standing to Debtor's credit on the books of Lenders
and all moneys, securities, and other property of the Debtor at any time in the
Lender's possession, including, without limitation, all monies, securities and
instruments deposited or required to be deposited in the Company Account and any
other account, whether now existing or hereafter from time to time acquired, and
all proceeds and general intangibles arising therefrom ("Other Property").
26
SCHEDULE A-2
to
Security Agreement and UCC-1 Financing Statement
in favor of
Fleet Bank, N.A.
as the Lender
granted by Caminus/DC Acquisition Corp.
as Debtor
List of Contracts
-----------------
27
SCHEDULE A-3
to
Security Agreement and UCC-1 Financing Statement
in favor of
Fleet Bank, N.A.
as the Lender
granted by Caminus/DC Acquisition Corp.
as Debtor
Description of Trademarks
-------------------------
REG. NO. DESCRIPTION TITLE HOLDER ISSUED
-------- ----------- ------------ ------
28
SCHEDULE A-4
to
Security Agreement and UCC-1 Financing Statement
in favor of
Fleet Bank, N.A.
as the Lender
granted by Caminus/DC Acquisition Corp.
as Debtor
Description of Patents
----------------------
PATENT NO. DESCRIPTION TITLE HOLDER EXPIRATION
---------- ----------- ------------ ----------
29
Schedule B
to
Security Agreement
in favor of
Fleet Bank, N.A.
as the Lender
granted by Caminus/DC Acquisition Corp.
as Debtor
Principal Place of Business of Debtor:
--------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Office of Debtor (if different
from the Principal Place of Business):
--------------------------------------
All Other Places of Business of Debtor:
---------------------------------------
All Locations of Collateral (including Permitted Inventory Locations):
----------------------------------------------------------------------