EXHIBIT 10.6
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is made as of August 3, 2005,
by VOIP ACQUISITION COMPANY, a Delaware corporation ("Grantor"), and CEDAR
BOULEVARD LEASE FUNDING, LLC, a Delaware limited liability company ("Lender").
1. Capitalized Terms. Capitalized terms used without definition in this
Agreement shall have the meanings assigned to them in Exhibit A attached hereto
and incorporated herein by this reference.
2. Grant of Security Interest. For valuable consideration, receipt and
sufficiency of which is hereby acknowledged, each Grantor hereby grants to
Lender a continuing security interest in and lien upon all of the personal
property of such Grantor including without limitation, such Grantor's right,
title and interest in the following described property of such Grantor, whether
now in existence or hereafter created or acquired and wheresoever situated, as
well as in the cash and non-cash proceeds thereof, including, without
limitation, insurance proceeds (all such property being hereinafter collectively
referred to as the "Collateral"):
(a) all Receivables;
(b) all Equipment;
(c) all Fixtures;
(d) all General Intangibles;
(e) all Intellectual Property;
(f) all Inventory;
(g) all Investment Property;
(h) all Deposit Accounts;
(i) all Cash;
(j) all other Goods and tangible and intangible personal property,
whether now or hereafter owned or existing, leased, consigned by or to, or
acquired by, Grantor and wherever located; and
(k) all Proceeds of each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits and products of
each of the foregoing.
The security interest granted hereby is to secure the payment and
performance of all liabilities and obligations of Grantor to Lender of every
kind and description, whether direct or indirect, joint or several, absolute or
contingent, secured or unsecured, due or to become due, now existing or
hereafter arising, including, without limitation: (i) all liabilities and
obligations now or hereafter owing by Grantor to Lender under that certain
Guaranty of even date herewith (the "Guaranty"); and (ii) all liabilities and
obligations now or thereafter owing by Grantor to Lender under this Agreement.
All such liabilities and obligations are hereinafter jointly referred to as the
"Indebtedness".
3. Covenants, Representations, and Warranties of Grantor. Each Grantor
hereby represents, covenants, warrants, and agrees to and with Lender as
follows:
(a) Grantor is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation or
formation (as the case may be), and as of the date hereof has its chief
executive office and principal place of business indicated at the
beginning of this Agreement.
(b) All risk of loss with respect to the Collateral hereunder shall
be upon Grantor, provided, however, that Lender shall bear the risk of
loss with respect to any Collateral in its possession.
(c) Grantor shall keep the Collateral free and clear from any and
all security interests, unpaid charges, attachments, levies, and liens of
every kind, except for (i) the lien and security interest granted
hereunder to Lender hereunder, and (ii) Permitted Liens.
(d) No Grantor shall dispose of any material item of Collateral
except for sales of inventory in the ordinary course of business.
(e) Grantor shall keep and maintain all tangible items of Collateral
in saleable condition, and Grantor agrees that (i) the Collateral may be
inspected and examined by Lender or its agents at any reasonable time,
upon reasonable notice, and (ii) upon two (2) business days' notice and at
any reasonable time, Lender shall have the right to inspect, audit,
examine, check, or make copies of, or extracts from, the books, files,
accounts, and all other records of Grantor pertaining to Grantor's
business or any of the Collateral.
(f) Grantor shall maintain, with financially sound and reputable
insurers, insurance with respect to its properties and business against
such casualties and contingencies of such type and in such amounts as is
customary in Grantor's business. In addition, Grantor shall cause its
insurers to deliver to Lender additional insured and lender loss payable
endorsements for all such insurance policies, in form satisfactory to
Lender.
(g) Grantor will execute, or cause to be executed, and deliver to
Lender upon Lender's request, any and all instruments or documents
necessary or desirable to give effect to this Agreement or to perfect
Lender's security interest in any Collateral, including specifically all
financing statements, control agreements, motor vehicle titles with
Lender's lien noted thereon, landlord waivers, mortgagee waivers and
subordination agreements and the delivery to Lender of stock certificates
evidencing any securities owned by Grantor, and Grantor shall reimburse
Lender for the cost of filing or recording any such documents in all
public offices deemed necessary by Lender.
(h) No Grantor shall change its corporate name, organizational form
or jurisdiction of formation without thirty (30) days' prior written
notice to Lender and hereby authorizes Lender to file amended financing
statements, in form satisfactory to Lender, to perfect or continue the
perfection of Lender's lien and security interest hereunder.
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(i) Exhibit B is a true, correct and complete list of (a) all banks
and other financial institutions at which Grantor maintains Deposit
Accounts and (b) institutions at which Grantor maintains accounts holding
Investment Property owned by Grantor, and such exhibit correctly
identifies the name, address and telephone number of each bank or other
institution, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor. Grantor
shall not maintain any Deposit Accounts or accounts holding Investment
Property owned by Grantor except (i) accounts identified in Exhibit B and
(ii) other accounts with respect to which Lender has a perfected security
interest in each such account. No Grantor shall transfer or cause to be
transferred any funds from any Deposit Account or account holding
Investment Property of any Borrower into any Deposit Account or account
holding Investment Property of any Grantor unless and until Lender has a
perfected security interest in such account.
(j) Grantor shall comply with the requirements of all applicable
laws, rules, regulations and orders of any governmental authority, the
noncompliance with which would materially and adversely affect its
properties, business or credit.
(k) Grantor promises to pay any and all reasonable attorneys' and
other professionals' fees and expenses incurred by Lender in connection
with or related to: (a) the administration, collection, or enforcement of
this Agreement or the Guaranty or the Indebtedness; (b) the amendment or
modification of this Agreement or the Guaranty or any other agreement
evidencing the Indebtedness; (c) any waiver, consent, release, or
termination under this Agreement or Guaranty or any other agreement
evidencing the Indebtedness; (d) the protection, preservation, sale,
lease, liquidation, or disposition of Collateral or the exercise of
remedies with respect to the Collateral; (e) any legal, litigation,
administrative, arbitration, or out of court proceeding in connection with
or related to Grantor or the Collateral, and any appeal or review thereof,
unless Grantor is the prevailing party; and (f) any bankruptcy,
restructuring, reorganization, assignment for the benefit of creditors,
workout, foreclosure, or other action related to Grantor, the Collateral,
this Agreement or Guaranty or any other agreement evidencing the
Indebtedness, including representing Lender in any adversary proceeding or
contested matter commenced or continued by or on behalf of Grantor's
estate, and any appeal or review thereof, unless Grantor is the prevailing
party. Lender's professional fees and expenses shall include reasonable
fees or expenses for Lender's attorneys, accountants, auctioneers,
liquidators, appraisers, investment advisors, environmental and management
consultants, or experts engaged by Lender in connection with the
foregoing. Grantor's promise to pay all of Lender's reasonable
professional fees and expenses is part of the Indebtedness under this
Agreement. For the purposes of this Section 3(k), attorneys' fees shall
include, without limitation, fees incurred in connection with the
following: (i) contempt proceedings; (ii) discovery; (iii) any motion,
proceeding or other activity of any kind in connection with an insolvency
proceeding; (iv) garnishment, levy, and debtor and third party
examinations; and (v) post-judgment motions and proceedings of any kind,
including without limitation any activity taken to collect or enforce any
judgment. All of the foregoing costs and expenses shall be payable upon
demand by Lender, and if not paid within thirty (30) days of presentation
of invoices shall bear interest at the Default Rate.
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(l) To the best of its knowledge after due inquiry and
investigation, there are no actions, suits or proceedings now pending or
threatened against any Grantor or affecting any of any Grantor's
properties as to which there is a reasonable likelihood of an adverse
determination and which, if adversely determined, could, individually or
in the aggregate, reasonably be expected to materially and adversely
affect its properties, business or credit.
(m) Grantor's present name, former names (if any), locations, and
other information are correctly set forth in Exhibit C.
(n) Exhibit D is a true, correct and complete list of each of
Grantor's Patents, Trademarks, Copyrights and Licenses, together with
application or registration numbers, as applicable.
(o) Exhibit E is a true and correct list identifying all
subsidiaries, parents and affiliates of Grantor.
(p) No Grantor shall (i) pay any dividends or make any distributions
on its Equity Securities; (ii) purchase, redeem, retire, defease or
otherwise acquire for value any of its Equity Securities (other than
repurchases by cancellation of indebtedness pursuant to the terms of
employee stock purchase plans, employee restricted stock agreements or
similar arrangements in an aggregate amount not to exceed $100,000); (iii)
return any capital to any holder of its Equity Securities as such; (iv)
make any distribution of assets, Equity Securities, obligations or
securities to any holder of its Equity Securities as such; or (v) set
apart any sum for any such purpose.
(q) VoIP shall provide the following to Lender, promptly as they are
available, (i) unaudited monthly consolidated and consolidating financial
statements (but in any event within 21 days of month end), (ii) audited
annual consolidated and consolidating financial statements (but in any
event within 90 days of year end), and (iii) such other financial
information as Lender may reasonably request from time to time and upon
reasonable advance written notice given to VoIP from Lender.
(r) All of the information and documents heretofore, concurrently
herewith or hereafter to be furnished to Lender pursuant to or in
connection with this Agreement and the Lender Agreement and the Lender
Loan Agreement are and will be true, correct, accurate and complete in all
material respects.
4. Events of Default. It is understood and agreed that an "Event of
Default" shall be deemed to have occurred under this Agreement, and Lender shall
be entitled to take such actions as are elsewhere provided herein, in the event
that:
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(a) Any Grantor fails to pay any of the Indebtedness to Lender on
the payment due date and any applicable cure period under the Guaranty or
other documentation evidencing the Indebtedness has expired; or (b) any
Grantor fails to keep or perform any of the covenants or agreements
contained herein or in any other existing agreement with Lender (other
than a covenant or agreement to pay); (c) any representation or warranty
of any Grantor herein shall prove to have been false, incorrect or
misleading in any material respect when made or furnished or is breached,
violated, or not complied with; (d) an event of default under the Guaranty
has occurred; and any applicable cure period has expired (e) any
bankruptcy petition with respect to any Grantor shall hereafter be filed
by such Grantor or any receiver, trustee or other custodian shall be
appointed for any Grantor or any of its properties upon such Grantor's
request, or (f) any bankruptcy petition with respect to any Grantor shall
hereafter be filed by a third party against such Grantor, or any receiver,
trustee or other custodian shall be appointed for any Grantor or any of
its properties upon a third party's request.
5. Rights and Remedies Upon Default. Upon and after the occurrence and
during the continuation of any one or more of the Events of Default specified in
Section 4 hereof, all of the Indebtedness shall, at the option of Lender and
without any notice to or demand upon any Grantor of any kind (other than any
required by applicable law, but only to the extent the waiver of such notice by
such Grantor hereunder is not legally enforceable), become immediately due and
payable, and Lender shall thereupon have any and all rights and remedies
afforded to a secured party under the UCC, together with every right and remedy
available to Lender under any other applicable law, including, the right to
release, hold, sell, lease, liquidate, collect, realize upon, or otherwise
dispose of all or any part of the Collateral and the right to occupy, utilize,
process and commingle the Collateral. All of Lender's rights and remedies shall
be cumulative and not exclusive and may be exercised concurrently or seriatim,
and are in addition to and not in lieu of any other rights of Lender at law, in
equity, under statute or under any other agreement with any Grantor. Upon the
occurrence and during the continuance of any Event of Default, Lender may, at
any time or from time to time, apply, collect, liquidate, sell in one or more
sales, lease or otherwise dispose of, any or all of the Collateral, in its then
condition or following any commercially reasonable preparation or processing, in
such order as Lender may elect. Lender acknowledges and agrees that Grantor
shall have the right to redeem the Collateral in accordance with the provisions
of Section 9-623 of the UCC and that Lender shall give Grantor five (5) calendar
days notice of any sale or other disposition of any of the Collateral pursuant
hereto.
6. Waivers. In addition to the other waivers contained herein and in any
other agreement between Grantor and Lender, each Grantor hereby expressly
waives, to the extent permitted by law, demand, protest, notice of protest,
notice of default or dishonor, notice of payments and nonpayments, or of any
default, release, compromise, settlement, extension or renewal of all commercial
paper, instruments or guaranties at any time held by Lender on which such
Grantor may in any way be liable, and notice of any action taken by Lender
unless expressly required by this Agreement or by law.
7. Indulgences Not Waivers. Neither the failure nor any delay on the part
of Lender to exercise any right, remedy, power or privilege hereunder shall
operate as a waiver thereof or give rise to any estoppel, nor be construed as an
agreement to modify the terms of this Agreement, nor shall any single or partial
exercise by Lender of any right, remedy, power or privilege preclude any other
or further exercise by Lender of the same or of any other right, remedy, power,
or privilege; nor shall any waiver by Lender of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver by a
party hereunder shall be effective unless it is in writing and signed by the
party making such waiver, and then only to the extent specifically stated in
such writing.
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8. Notices. Except as otherwise provided herein, any notice, demand,
request, consent, approval, declaration, service of process or other
communication (including the delivery of Financial Statements) that is required,
contemplated, or permitted under this Agreement or with respect to the subject
matter hereof shall be in writing, and shall be deemed to have been validly
served, given, delivered, and received upon the earlier of: (i) the first
business day after transmission by facsimile (receipt confirmed) or hand
delivery or deposit with an overnight express service or overnight mail delivery
service; or (ii) the fifth calendar day after deposit in the United States
mails, with proper first class postage prepaid, and shall be addressed to the
party to be notified as follows:
If to Lender: Cedar Boulevard Lease Funding LLC
Xxx Xxxx, Managing Partner
00 Xxxxx Xxxx Xx., Xxxxx 0
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
with copies to:
Winston & Xxxxxx LLP
Attention: Xxxx X. Xxxxxxxxxx, Esq.
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
If to Grantor:
or to such other address as each party may designate for itself by like notice.
9. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Illinois, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction. In the event of any dispute concerning, or action to enforce
this Agreement, each Grantor and Lender hereby consent to the venue and
jurisdiction of the state and federal courts located in Xxxx County, Illinois,
and waive any right to object thereto.
10. Entire Agreement. This Agreement constitutes and expresses the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, and the express terms hereof control
and supersede any course of performance and/or usage of the trade inconsistent
with any of the terms hereof. Neither this Agreement nor any portion or
provision hereof may be changed, altered, waived, modified, supplemented,
discharged, canceled, terminated, or amended orally or in any manner other than
by an agreement in writing signed by the parties hereto.
11. Paragraph Headings. The paragraph headings in this Agreement are for
convenience of reference only; they form no part of this Agreement and shall not
affect its interpretation.
12. Severability. The provisions of this Agreement are independent of and
separable from each other. If any provision hereof shall for any reason be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
the validity or enforceability of any other provision hereof, but this Agreement
shall be construed as if such invalid or unenforceable provision had never been
contained herein.
13. Successors and Assigns. The rights, remedies, powers, and privileges
of Lender hereunder shall inure to the benefit of the successors and assigns of
Lender, and the duties and obligations of Grantor hereunder shall bind the
heirs, executors, administrators, successors and assigns of Grantor. Lender may
assign, or sell participations in, its right, title and interest herein, in any
of the Indebtedness, in the Collateral, and in any agreements or instruments now
or hereafter evidencing or securing any agreements or instruments now or
hereafter evidencing or securing any of the Indebtedness at any time or times
without notice to or the consent of any Grantor. However, Grantor may rely on
Lender continuing to hold the Indebtedness and any agreements or instruments
evidencing or securing the Indebtedness until Grantor receive actual notice from
Lender of any such assignment.
14. Mutual Waiver Of Jury Trial. Because disputes arising in connection
with complex financial transactions are most quickly and economically resolved
by an experienced and expert person and the parties wish applicable state and
federal laws to apply (rather than arbitration rules), the parties desire that
their disputes be resolved by a judge applying such applicable laws. LENDER AND
EACH GRANTOR SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY
CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY
OTHER CLAIM ARISING OUT OF THIS AGREEMENT (COLLECTIVELY, "CLAIMS") ASSERTED BY
ANY GRANTOR AGAINST LENDER OR ITS ASSIGNEE OR BY LENDER OR ITS ASSIGNEE AGAINST
ANY GRANTOR. This waiver extends to all such Claims, including Claims that
involve Persons other than Grantor and Lender.
15. WAIVERS. EACH GRANTOR ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A
MATERIAL INDUCEMENT TO LENDER'S ENTERING INTO THIS AGREEMENT AND THAT LENDER IS
RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH GRANTOR. EACH
GRANTOR WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH
ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
16. Miscellaneous. Time is of the essence of this Agreement.
17. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so delivered shall be deemed an original, but all of which
counterparts shall constitute but one and the same instrument. Delivery of an
executed counterpart of a signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Lender and each Grantor have duly executed and
delivered this Agreement as of the day and year first above written.
GRANTOR: VOIP ACUISITION COMPANY
Signature: /s/ Xxxxxx Xxxxxxx
------------------------------
Print Name: Xxxxxx Xxxxxxx
GRANTOR'S SUBSIDIARIES, PARENTS AND AFFILIATES
LENDER: CEDAR BOULEVARD LEASE FUNDING, LLC
Signature: /s/ Xxxxxxxxxxx Zakolias
------------------------------
Print Name: Xxxxxxxxxxx Zakolias
Title: Authorized Signatory
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EXHIBIT A
TO
SECURITY AGREEMENT
DEFINITIONS
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"Account" means any "account," as such term is defined in the UCC, now owned or
hereafter acquired by any Grantor or in which any Grantor now holds or hereafter
acquires any interest and, in any event, shall include, without limitation, all
accounts receivable, book debts, rights to payment, and other forms of
obligations now owned or hereafter received or acquired by or belonging or owing
to any Grantor (including, without limitation, under any trade name, style or
division thereof), whether or not arising out of goods or software sold or
services rendered by any Grantor or from any other transaction (including,
without limitation, any such obligation that may be characterized as an account
or contract right under the UCC), and all of any Grantor's rights in, to and
under all purchase orders or receipts now owned or hereafter acquired by it for
goods or services, and all of any Grantor's rights to any goods represented by
any of the foregoing (including, without limitation, unpaid seller's rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), and all monies due or to become due
to any Grantor under all purchase orders and contracts for the sale of goods or
the performance of services or both by any Grantor or in connection with any
other transaction (whether or not yet earned by performance on the part of any
Grantor), now in existence or hereafter occurring, including, without
limitation, the right to receive the proceeds of said purchase orders and
contracts, and all collateral security and guarantees of any kind given by any
Person with respect to any of the foregoing.
"Agreement" means the Security Agreement dated as of August 3, 2005, by and
among Grantors and Lender, as the same may be amended, supplemented, restated,
or otherwise modified from time to time, in accordance with the terms hereof.
"Borrowers" means the Borrowers under that certain Subordinated Loan and
Security Agreement dated as of June 1, 2004, as amended by that certain First
Amendment to Subordinated Loan and Security Agreement dated as of July 22, 2004,
and that certain Second Amendment to Subordinated Loan and Security Agreement
dated as of August 27, 2004.
"Cash" means all cash, money, currency, and liquid funds, wherever held, in
which any Grantor now or hereafter acquires any right, title, or interest.
"Claims" shall have the meaning attributed to such term in Section 14 of this
Agreement.
"Collateral" shall have the meaning attributed to such term in Section 2 of this
Agreement.
"Chattel Paper" means any "chattel paper," as such term is defined in the UCC,
now owned or hereafter acquired by any Grantor or in which any Grantor now holds
or hereafter acquires any interest.
"Copyright License" means any written agreement granting any right to use any
Copyright or Copyright registration, now owned or hereafter acquired by any
Grantor or in which any Grantor now holds or hereafter acquires any interest.
A-1
"Copyrights" means all of the following property, now owned or hereafter
acquired by any Grantor or in which any Grantor now holds or hereafter acquires
any interest: (i) all copyrights, whether registered or unregistered, held
pursuant to the laws of the United States, any State thereof, or of any other
country; (ii) all registrations, applications and recordings in the United
States Copyright Office or in any similar office or agency of the United States,
of any State thereof, or of any other country; (iii) all continuations, renewals
or extensions thereof; and (iv) all registrations to be issued under any pending
applications.
"Default Rate" means 17.5%, but such rate shall in no event be more than the
highest rate permitted by applicable law.
"Deposit Accounts" means any "deposit accounts," as such term is defined in the
UCC, and includes any checking account, savings account, or certificate of
deposit now owned or hereafter acquired by any Grantor or in which any Grantor
now holds or hereafter acquires any interest.
"Documents" means any "documents," as such term is defined in the UCC, now owned
or hereafter acquired by any Grantor or in which any Grantor now holds or
hereafter acquires any interest.
"Equipment" means any "equipment," as such term is defined in the UCC, and any
and all additions, upgrades, substitutions, and replacements of the foregoing,
together with all attachments, components, parts, accessions, and accessories
installed thereon or affixed thereto, now owned or hereafter acquired by any
Grantor or in which any Grantor now holds or hereafter acquires any interest.
"Equity Securities" of any Person shall mean (a) all common stock, preferred
stock, participations, shares, partnership interests or other equity interests
in and of such Person (regardless of how designated and whether or not voting or
non-voting) and (b) all warrants, options and other rights to acquire any of the
foregoing.
"Event of Default" shall have the meaning attributed to such term in Section 4
of this Agreement.
"Fixtures" means any "fixtures," as such term is defined in the UCC, together
with all right, title and interest of any Grantor in and to all extensions,
improvements, betterments, accessions, renewals, substitutes, and replacements
of, and all additions and appurtenances to any of the foregoing property, and
all conversions of the security constituted thereby, immediately upon any
acquisition or release thereof or any such conversion, as the case may be, now
owned or hereafter acquired by any Grantor or in which any Grantor now holds or
hereafter acquires any interest.
"General Intangibles" means any "general intangibles," as such term is defined
in the UCC, and, in any event, shall include, without limitation, all right,
title and interest which any Grantor may now or hereafter have in or under any
rights to payment; payment intangibles; software; proprietary or confidential
information; business records and materials; customer lists; interests in
partnerships, joint ventures, business associations, corporations, and limited
liability companies; permits; claims in or under insurance policies (including
unearned premiums and retrospective premium adjustments); and rights to receive
tax refunds and other payments and rights of indemnification now owned or
hereafter acquired by any Grantor or in which any Grantor now holds or hereafter
acquires any interest.
A-2
"Goods" means any "goods," as such term is defined in the UCC, now owned or
hereafter acquired by any Grantor or in which any Grantor now holds or hereafter
acquires any interest.
"Grantor" and "Grantors" shall have the meanings assigned thereto in the
preamble to the Agreement.
"Indebtedness" shall have the meaning attributed to such term in Section 2 of
this Agreement.
"Instruments" means any "instrument," as such term is defined in the UCC, now
owned or hereafter acquired by any Grantor or in which any Grantor now holds or
hereafter acquires any interest.
"Intellectual Property" means all Copyrights; Trademarks; Patents; Licenses;
source codes developed by any Grantor; trade secrets; inventions (whether or not
patented or patentable); technical information, procedures, processes, designs,
knowledge, and know-how; data bases; models; drawings; skill, expertise, and
experience; websites, domain names, and URL's; and applications therefor and
reissues, extensions, or renewals thereof; and goodwill associated with any of
the foregoing; together with rights to xxx for past, present and future
infringement of Intellectual Property and the goodwill associated therewith.
"Inventory" means any "inventory," as such term is defined in the UCC, now owned
or hereafter acquired by any Grantor or in which any Grantor now holds or
hereafter acquires any interest, and, in any event, shall include, without
limitation, all Goods and personal property that are held by or on behalf of any
Grantor for sale or lease or are furnished or are to be furnished under a
contract of service, or that constitute raw materials, work in process or
materials used or consumed or to be used or consumed in any Grantor's business,
or the processing, packaging, promotion, delivery or shipping of the same, and
all finished goods, whether or not the same is in transit or in the
constructive, actual or exclusive possession of any Grantor or is held by others
for any Grantor's account, including, without limitation, all property covered
by purchase orders and contracts with suppliers and all Goods billed and held by
suppliers and all such property that may be in the possession or custody of any
carriers, forwarding agents, truckers, warehousemen, vendors, selling agents or
other Persons.
"Investment Property" means any "investment property," as such term is defined
in the UCC, and includes any certificated security, uncertificated security,
money market funds, bonds, mutual funds, and U.S. Treasury bills or notes, now
owned or hereafter acquired by any Grantor or in which any Grantor now holds or
hereafter acquires any interest.
"Letter of Credit Rights" means any "letter of credit rights," as such term is
defined in the UCC, now owned or hereafter acquired by any Grantor or in which
any Grantor now holds or hereafter acquires any interest, including any right to
payment or performance under any letter of credit.
"Licenses" means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by any
Grantor or in which any Grantor now holds or hereafter acquires any interest and
any renewals or extensions thereof.
A-3
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment for
security, security interest, encumbrance, xxxx, xxxx or charge of any kind,
whether voluntarily incurred or arising by operation of law or otherwise,
against any property, any conditional sale or other title retention agreement,
any lease in the nature of a security interest, and the filing of any financing
statement (other than a precautionary financing statement with respect to a
lease that is not in the nature of a security interest) under the UCC or
comparable law of any jurisdiction.
"Patent License" means any written agreement granting any right with respect to
any invention on which a Patent is in existence or a Patent application is
pending, in which agreement any Grantor now holds or hereafter acquires any
interest.
"Patents" means all of the following property, now owned or hereafter acquired
by any Grantor or in which any Grantor now holds or hereafter acquires any
interest: (a) all letters patent of, or rights corresponding thereto, in the
United States or in any other country, all registrations and recordings thereof,
and all applications for letters patent of, or rights corresponding thereto, in
the United States or any other country, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country; (b) all reissues, continuations,
continuations-in-part or extensions thereof; (c) all xxxxx patents, divisionals,
and patents of addition; and (d) all patents to be issued under any such
applications.
"Permitted Liens" means any and all of the following: (i) Liens in favor of
Lender; (ii) Liens for taxes, fees, assessments or other governmental charges or
levies, either not delinquent or being contested in good faith by appropriate
proceedings; provided, that such Liens do not have priority (or are being so
contested and any Grantor has bonded against such liens in full) over any of
Lender's Liens and any Grantor maintains adequate reserves therefor in
accordance with GAAP; (iii) Liens securing claims or demands of materialmen,
artisans, mechanics, carriers, warehousemen, landlords and other like Persons
arising in the ordinary course of any Grantor's business and imposed without
action of such parties; provided, that the payment thereof is not yet required;
(iv) Liens arising from judgments, decrees or attachments in circumstances which
do not constitute an Event of Default hereunder; (v) the following deposits, to
the extent made in the ordinary course of business: deposits under worker's
compensation, unemployment insurance, social security and other similar laws, or
to secure the performance of bids, tenders or contracts (other than for the
repayment of borrowed money) or to secure indemnity, performance or other
similar bonds for the performance of bids, tenders or contracts (other than for
the repayment of borrowed money) or to secure statutory obligations (other than
liens arising under ERISA or environmental liens) or surety or appeal bonds, or
to secure indemnity, performance or other similar bonds; and (vi) Liens on
insurance proceeds in favor of insurance companies granted solely as security
for financed premiums.
"Person" means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).
A-4
"Proceeds" means "proceeds," as such term is defined in the UCC and, in any
event, shall include, without limitation, (a) any and all Accounts, Chattel
Paper, Instruments, Cash, proceeds of letters of credit, Letter of Credit
Rights, Supporting Obligations, or other proceeds payable to any Grantor from
time to time in respect of the Collateral, (b) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to any Grantor from time to
time with respect to any of the Collateral, (c) any and all payments (in any
form whatsoever) made or due and payable to any Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any Person acting under color of governmental authority), (d) the proceeds,
damages, or recovery based on any claim of any Grantor against third parties (i)
for past, present or future infringement of any Copyright, Copyright License,
Patent or Patent License or (ii) for past, present or future infringement or
dilution of any Trademark or Trademark License or for injury to the goodwill
associated with any Trademark, Trademark registration or Trademark licensed
under any Trademark License, and (e) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Receivables" " means (i) all of any Grantor's Accounts, Instruments, Documents,
Chattel Paper, Supporting Obligations, letters of credit, proceeds of any letter
of credit, and Letter of Credit Rights, and (ii) all customer lists, software,
and business records related thereto.
"Lender" shall have the meaning assigned thereto in the preamble to the
Agreement.
"Supporting Obligations" means any "supporting obligations," as such term is
defined in the UCC, now owned or hereafter acquired by any Grantor or in which
any Grantor now holds or hereafter acquires any interest.
"Trademark License" means any written agreement granting any right to use any
Trademark or Trademark registration, now owned or hereafter acquired by any
Grantor or in which any Grantor now holds or hereafter acquires any interest.
"Trademarks" means all of the following property, now owned or hereafter
acquired by any Grantor or in which any Grantor now holds or hereafter acquires
any interest: (a) all trademarks, trade names, corporate names, business names,
trade styles, service marks, logos, other source or business identifiers (and
all goodwill associated therewith), prints and labels on which any of the
foregoing have appeared or appear, and designs of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and any
applications in connection therewith, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, and (b)
all reissues, extensions or renewals thereof.
"UCC" means the Uniform Commercial Code as the same is, from time to time, in
effect in the State of Illinois; 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, Secured Party's Lien on any Collateral
is governed by the Uniform Commercial Code as the same is, from time to time, in
effect in a jurisdiction other than the State of Illinois, then the term "UCC"
shall mean the Uniform Commercial Code as in effect, from time to time, 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.
A-5
EXHIBIT B
TO
SECURITY AGREEMENT
GRANTOR'S DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS
--------------------------------------------------
DEPOSIT ACCOUNTS:
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Institution Description Name of Account Number Bank Contact
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INVESTMENT ACCOUNTS:
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Institution Description Name of Account Number Bank Contact
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B-1
EXHIBIT C
TO
SECURITY AGREEMENT
NAME, LOCATIONS, AND OTHER INFORMATION FOR GRANTOR
--------------------------------------------------
1. Grantor's current name and organizational status:
Name:
Type of organization:
State of organization:
Organization file number:
2. For five (5) years prior hereto, Grantor did not do business under any
other name or organization or form except the following:
Name and Dates:
3. Grantor's fiscal year ends on:
4. Grantor's federal employer tax identification number is:
5. The street addresses, cities, states and postal codes of Grantor's current
locations as of the date hereof are:
Chief Executive Office:
Principal Place of Business:
Locations of Collateral:
C-1
EXHIBIT D
TO
SECURITY AGREEMENT
GRANTOR'S PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
------------------------------------------------------
I. PATENTS
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PATENTS
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PATENT NAME STATUS AND DATE ISSUED PATENT NUMBER
--------------------------------------------------------------------------------
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PATENT APPLICATIONS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NAME STATUS AND DATE FILED APPLICATION NUMBER
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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PATENT LICENSES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NAME LICENSOR LICENSEE PATENT NUMBER
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II. TRADEMARKS
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TRADEMARKS
--------------------------------------------------------------------------------
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NAME DATE FILED OR SERIAL NUMBER STATUS
ISSUED
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TRADEMARK APPLICATIONS
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NAME DATE FILED SERIAL NUMBER STATUS
--------------------------------------------------------------------------------
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TRADEMARK LICENSES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NAME LICENSOR LICENSEE NUMBER
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
D-1
III. COPYRIGHTS
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COPYRIGHT REGISTRATIONS
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REGISTRATION NO. TITLE REGISTRATION DATE V & A NO.
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APPLICATIONS FOR COPYRIGHT REGISTRATION
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TITLE DATE FILED V & A NO.
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COPYRIGHT LICENSES
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LICENSOR LICENSEE TITLE V & A NO.
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D-2
EXHIBIT E
TO
SECURITY AGREEMENT
GRANTOR'S SUBSIDIARIES, PARENTS AND AFFILIATES
----------------------------------------------
I. Subsidiaries
II. Parents
III. AFFILIATES
E-1
