Common use of Loan Security Clause in Contracts

Loan Security. The Term Notes, this Loan Agreement and all obligations under the other Loan Documents shall be secured by (i) a first priority security interest, subject to Permitted Liens, on all of the Collateral (the “Security Interest”) on the terms set forth in Section 3, (ii) a source code escrow agreement, with an independent third party, in a form and substance reasonably acceptable to the Lenders, (iii) a pledge of one hundred percent (100%) of all equity interests of Borrower’s domestic subsidiaries, and (iv) a pledge of sixty-five percent (65%) of all equity interests owned by the Borrower in the Foreign Subsidiaries. Up to Five Hundred Thousand Dollars ($500,000) of the Indebtedness shall be personally guaranteed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, pursuant to the Personal Guaranty. The Personal Guaranty shall be secured by a pledge by ▇▇. ▇▇▇▇▇▇▇▇ of all equity interests he owns in the Borrower. Notwithstanding anything to the contrary in the Loan Agreement, or under applicable law, if the grant of any security interests herein, the Guaranty or ▇▇. ▇▇▇▇▇▇▇▇’▇ pledge of SofTech Stock, would result in the termination or breach of a Contract to which the Borrower is a party, or the Intellectual Property, then the applicable Contract or Intellectual Property will not be subject to the Security Interest and will not be considered a part of the Collateral, but in each case only to the extent, and for as long as, such relevant term is not terminated or rendered unenforceable or otherwise deemed ineffective by the Code or any other applicable law or a consent or waiver to such grant with respect to such term is not obtained. Immediately upon the lapse, termination, unenforceability or ineffectiveness of any such term or the grant of a consent or waiver to such grant with respect to such term, the Collateral shall include, and the Borrower shall be deemed to have automatically granted a security interest in, any such Contract or Intellectual Property.