EXHIBIT 5.36
This SECURITY AGREEMENT, dated as of January ___, 2000, is entered
into between Borrower and Lender, with reference to the following facts:
R E C I T A L S
A. Borrower and Lender are contemporaneously herewith entering into
the Revolving Credit Agreement; and
B. In order to induce Lender to enter into the Revolving Credit
Agreement, Borrower has agreed to enter into this Security Agreement in order to
grant to Lender a first priority security interest in the Collateral to secure
prompt payment and performance of the Secured Obligations.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties hereinafter set forth, and for other
good and valuable consideration, the parties hereto agree as follows:
1. Definitions. All initially capitalized terms used but not defined
herein shall have the meanings ascribed thereto in the Revolving Credit
Agreement. In addition, as used herein, the following terms shall have the
following meanings:
"Account Debtor" means any Person who is or who may become
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obligated with respect to, or on account of, an Account.
"Accounts" means any and all of Borrower's presently existing and
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hereafter arising accounts and rights to payment, except those evidenced by
Negotiable Collateral, arising out of the sale or lease of goods or the
rendition of services by Borrower, irrespective of whether earned by
performance.
"Borrower" means PC Xxxxxxx.xxx, Inc., a Nevada corporation.
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"Borrower's Books" means any and all presently existing and
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hereafter acquired or created books and records of Borrower, including all
records (including maintenance and warranty records), ledgers, computer
programs, disc or tape files, printouts, runs, and other computer prepared
information indicating, summarizing, or evidencing the Accounts, Deposit
Accounts, Equipment, Inventory, Investment Property, General Intangibles and
Negotiable Collateral.
"Chattel Paper" means all writings of whatever sort which evidence
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a monetary obligation and a security interest in or lease of specific goods,
whether now existing or hereafter arising.
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"Code" means the New York Uniform Commercial Code except, to the
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extent applicable, the Uniform Commercial Code as adopted by the jurisdiction in
which any of the Collateral is located. Any and all terms used in this Security
Agreement which are defined in the Code shall be construed and defined in
accordance with the meaning and definition ascribed to such terms under the
Code, unless otherwise defined herein.
"Collateral" means all present and after acquired personal
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property and Intellectual Property Collateral, including the following,
collectively: any and all of the Accounts, Deposit Accounts, Equipment,
Inventory, Investment Property, General Intangibles, Negotiable Collateral, and
Borrower's Books, in each case whether now existing or hereafter acquired or
created, and any Proceeds or products of any of the foregoing, or any portion
thereof, and any and all Accounts, Deposit Accounts, Equipment, Inventory,
Investment Property, General Intangibles, Negotiable Collateral, money, or other
tangible or intangible property, resulting from the sale or other disposition of
the Accounts, Deposit Accounts, Equipment, Inventory, Investment Property,
General Intangibles, or Negotiable Collateral, or any portion thereof or
interest therein, and the substitutions, replacements, additions, accessions,
products and Proceeds thereof.
"Deposit Account" means any demand, time, savings, passbook or
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like account now or hereafter maintained by or for the benefit of Borrower with
a Lender, savings and loan association, credit union or like organization, and
all funds and amounts therein, whether or not restricted or designated for a
particular purpose.
"Documents" means any and all documents of title, bills of lading,
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dock warrants, dock receipts, warehouse receipts and other documents of
Borrower, whether or not negotiable, and includes all other documents which
purport to be issued by a bailee or agent and purport to cover goods in any
bailee's or agent's possession which are either identified or are fungible
portions of an identified mass, including such documents of title made available
to Borrower for the purpose of ultimate sale or exchange of goods or for the
purpose of loading, unloading, storing, shipping, transshipping, manufacturing,
processing or otherwise dealing with goods in a manner preliminary to their sale
or exchange, in each case whether now existing or hereafter acquired.
"Equipment" means any and all of Borrower's presently existing and
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hereafter acquired machinery, equipment, furniture, furnishings, fixtures,
computer and other electronic data processing equipment and other office
equipment and supplies, computer programs and related data processing software,
spare parts, tools, motors, automobiles, trucks, tractors and other motor
vehicles, rolling stock, jigs, and other goods (other than Inventory, farm
products, and consumer goods), of every kind and description, wherever located,
together with any and all parts, improvements, additions, attachments,
replacements, accessories, and substitutions thereto or therefor, and all other
rights of Borrower relating thereto, whether in the possession and control of
Borrower, or in the possession and control of a third party for the account of
Borrower.
"FEIN" means Federal Employer Identification Number.
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"General Intangibles" means any and all of Borrower's presently
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existing and hereafter acquired or arising general intangibles and other
intangible personal property of every kind and description, including:
(a) contracts and contract rights, noncompetition
covenants, licensing and distribution agreements, indemnity agreements,
guaranties, insurance policies, franchise agreements and lease agreements;
(b) deposit accounts, uncertificated certificates of
deposit, uncertificated securities, and interests in any joint ventures,
partnerships or limited liability companies;
(c) choses in action and causes of action (whether legal or
equitable, whether in contract or tort or otherwise, and however arising);
(d) licenses, approvals, permits or any other
authorizations issued by any Government Authority;
(e) Intellectual Property Collateral;
(f) computer software, magnetic media, electronic data
processing files, systems and programs;
(g) rights of stoppage in transit, replevin and
reclamation, rebates or credits of every kind and nature to which Borrower may
be entitled;
(h) purchase orders, customer lists, subscriber lists and
goodwill;
(i) monies due or recoverable from pension funds, refunds
and claims for tax or other refunds against any Governmental Authority; and
(j) other contractual, equitable and legal rights of
whatever kind and nature.
"Instruments" means any and all negotiable instruments,
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certificated securities and every other writing which evidences a right to the
payment of money, in each case whether now existing or hereafter acquired.
"Intellectual Property Collateral" means the following Assets
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owned or held by Borrower or in which Borrower otherwise has any interest, now
existing or hereafter acquired or arising:
(a) all patents and patent applications, domestic or
foreign, all licenses relating to any of the foregoing and all income and
royalties with respect to any licenses, all rights to xxx for past, present or
future infringement thereof, all rights arising therefrom and pertaining thereto
and all reissues, divisions, continuations, renewals, extensions and
continuations in-part thereof;
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(b) all copyrights and applications for copyright, domestic
or foreign, together with the underlying works of authorship (including titles),
whether or not the underlying works of authorship have been published and
whether said copyrights are statutory or arise under the common law, and all
other rights and works of authorship, all rights, claims and demands in any way
relating to any such copyrights or works, including royalties and rights to xxx
for past, present or future infringement, and all rights of renewal and
extension of copyright;
(c) all state (including common law), federal and foreign
trademarks, service marks and trade names, and applications for registration of
such trademarks, service marks and trade names, all licenses relating to any of
the foregoing and all income and royalties with respect to any licenses, whether
registered or unregistered and wherever registered, all rights to xxx for past,
present or future infringement or unconsented use thereof, all rights arising
therefrom and pertaining thereto and all reissues, extensions and renewals
thereof;
(d) all trade secrets, confidential information, customer
lists, license rights, advertising materials, operating manuals, methods,
processes, know-how, sales literature, sales and operating plans, drawings,
specifications, blue prints, descriptions, inventions, name plates and catalogs;
and
(e) the entire goodwill of or associated with the businesses
now or hereafter conducted by Borrower connected with and symbolized by any of
the aforementioned properties and assets.
"Inventory" means any and all of Borrower's presently existing and
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hereafter acquired goods of every kind and description (including goods in
transit) which are held for sale or lease, or to be furnished under a contract
of service or which have been so leased or furnished, or other disposition,
wherever located, including those held for display or demonstration or out on
lease or consignment or are raw materials, work in process, finished materials,
or materials used or consumed, or to be used or consumed, in Borrower's
business, and the resulting product or mass, and all repossessed, returned,
rejected, reclaimed and replevied goods, together with all materials, parts,
supplies, packing and shipping materials used or usable in connection with the
manufacture, packing, shipping, advertising, selling or furnishing of such
goods; and all other items hereafter acquired by Borrower by way of
substitution, replacement, return, repossession or otherwise, and all additions
and accessions thereto, and any Document representing or relating to any of the
foregoing at any time.
"Investment Property" has the meaning given to such term in the
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Code.
"Lender" means ICE Holdings North America, LLC, a Delaware
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Limited Liability Company.
"Lender Expenses" shall have the meaning assigned to such term in
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the Revolving Credit Agreement and shall also mean: any and all costs or
expenses required to be paid by Borrower under this Security Agreement which are
paid or advanced by Lender; all costs and expenses of Lender, including its
attorneys' fees and expenses (including attorneys' fees incurred pursuant to
proceedings arising under the Bankruptcy Code), incurred or expended to correct
any default or enforce any provision of this Security Agreement, or in gaining
possession
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of, maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, irrespective of whether a sale is
consummated; and all costs and expenses of suit incurred or expended by Lender,
including its attorneys' fees and expenses (including attorneys' fees incurred
pursuant to proceedings arising under the Bankruptcy Code) in enforcing or
defending this Security Agreement, irrespective of whether suit is brought.
"Revolving Credit Agreement" means that certain Agreement, dated
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as of even date herewith, between Borrower and Lender, as may be at any time
hereafter supplemented, modified, amended or restated.
"Negotiable Collateral" means any and all of Borrower's presently
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existing and hereafter acquired or arising letters of credit, advises of credit,
certificates of deposit, notes, drafts, Instruments, Documents and Chattel
Paper.
"Proceeds" means whatever is receivable or received from or upon
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the sale, lease, license, collection, use, exchange or other disposition,
whether voluntary or involuntary, of any Collateral, including "proceeds" as
defined in Section 9-306 of the Code, any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to or for the account of Borrower from
time to time with respect to any of the Collateral, any and all payments (in any
form whatsoever) made or due and payable to Borrower 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), any and all other
amounts from time to time paid or payable under or in connection with any of the
Collateral or for or on account of any damage or injury to or conversion of any
Collateral by any Person, any and all other tangible or intangible property
received upon the sale or disposition of Collateral, and all proceeds of
proceeds.
"Rights to Payment" means all Accounts and any and all rights and
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claims to the payment or receipt of money or other forms of consideration of any
kind in, to and under all General Intangibles, Negotiable Collateral and
Proceeds thereof.
"Secured Obligations" shall have the meaning of "Obligations"
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under the Revolving Credit Agreement and shall also mean any and all debts,
liabilities, obligations, or undertakings owing by Borrower to Lender arising
under, advanced pursuant to, or evidenced by this Security Agreement, whether
direct or indirect, absolute or contingent, matured or unmatured, due or to
become due, voluntary or involuntary, whether now existing or hereafter arising,
and including all interest not paid when due and all Lender Expenses which
Borrower is required to pay or reimburse pursuant to this Security Agreement,
the Revolving Credit Agreement, the other Loan Documents or by law.
"Security Agreement" shall mean this Security Agreement, any
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concurrent or subsequent riders, exhibits or schedules to this Security
Agreement, and any extensions, supplements, amendments, or modifications to or
in connection with this Security Agreement, or to any such riders, exhibits or
schedules.
2. Construction. Unless the context of this Security Agreement
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clearly requires otherwise, references to the plural include the singular,
references to the singular include
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the plural, the part includes the whole, "including" is not limiting, and "or"
has the inclusive meaning represented by the phrase "and/or." References in this
Security Agreement to "determination" by Lender include reasonable estimates
(absent manifest error) by Lender, as applicable (in the case of quantitative
determinations) and reasonable beliefs (absent manifest error) by Lender, as
applicable (in the case of qualitative determinations). The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Security Agreement
refer to this Security Agreement as a whole and not to any particular provision
of this Security Agreement. Article, section, subsection, exhibit, and schedule
references are to this Security Agreement unless otherwise specified.
3. Creation of Security Interest. Borrower hereby grants to Lender a
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continuing security interest in all presently existing and hereafter acquired or
arising Collateral in order to secure the prompt payment and performance of all
of the Secured Obligations. Borrower acknowledges and affirms that such security
interest in the Collateral has attached to all Collateral without further act on
the part of Lender or Borrower.
4. Further Assurances.
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4.1 Borrower shall execute and deliver to Lender concurrently
with Borrower's execution of this Security Agreement, and from time to time at
the request of Lender, all financing statements, continuation financing
statements, fixture filings, security agreements, chattel mortgages,
assignments, and all other documents that Lender may request, in form
satisfactory to Lender, to perfect and maintain perfected Lender's security
interests in the Collateral and in order to consummate fully all of the
transactions contemplated by this Security Agreement and the Revolving Credit
Agreement. Borrower hereby irrevocably makes, constitutes, and appoints Lender
(and Lender's officers, employees, or agents) as Borrower's true and lawful
attorney with power to sign the name of Borrower on any of the above-described
documents or on any other similar documents which need to be executed, recorded,
or filed, and to do any and all things necessary in the name and on behalf of
Borrower in order to perfect, or continue the perfection of, Lender's security
interests in the Collateral. Borrower agrees that neither Lender, nor any of its
designees or attorneys-in-fact, will be liable for any act of commission or
omission, or for any error of judgment or mistake of fact or law with respect to
the exercise of the power of attorney granted under this Section 4.1, other than
as a result of its or their gross negligence or willful misconduct. THE POWER OF
ATTORNEY GRANTED UNDER THIS SECTION 4.1 IS COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE UNTIL ALL OF THE SECURED OBLIGATIONS HAVE BEEN INDEFEASIBLY PAID IN
FULL, THE REVOLVING CREDIT AGREEMENT TERMINATED, AND ALL BORROWER'S DUTIES
HEREUNDER AND THEREUNDER HAVE BEEN DISCHARGED IN FULL.
4.2 Without limiting the generality of the foregoing Section 4.1
or any of the provisions of the Revolving Credit Agreement, Borrower will: (i)
at the request of Lender, xxxx conspicuously all of its records pertaining to
the Collateral with a legend, in form and substance satisfactory to Lender,
indicating that the Collateral is subject to the security interest granted
hereby; (ii) at the request of Lender, appear in and defend any action or
proceeding which may affect Borrower's title to, or the security interest of
Lender in, any of the Collateral;
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and (iii) upon demand of Lender, allow inspection of Collateral by Lender or
Persons designated by Lender at any time during normal business hours.
4.3 With respect to the Negotiable Collateral (other than drafts
received in the ordinary course of business so long as no Event of Default is
continuing), Borrower shall, immediately upon request by Lender, endorse (where
appropriate) and assign the Negotiable Collateral over to Lender, and deliver to
Lender actual physical possession of the Negotiable Collateral to Lender
together with any instruments of transfer or assignment, all in form and
substance satisfactory to Lender, in order to fully perfect the security
interest therein of Lender.
4.4 Borrower shall cooperate with Lender in obtaining a control
agreement in form and substance satisfactory to Lender with respect to all
Deposit Accounts and Investment Property.
5. Representations and Warranties. In order to induce Lender to
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enter into the Revolving Credit Agreement and to make Loans to Borrower, in
addition to the representations and warranties of Borrower set forth in the
Revolving Credit Agreement which are incorporated herein by this reference,
Borrower represents and warrants to Lender that on the Closing Date and
thereafter on the date of each and every Borrowing:
5.1 Location of Chief Executive Office and Collateral; FEIN.
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Borrower's chief executive office is located at the address set forth in
Schedule 1, and all other locations where Borrower conducts business or
Collateral is kept are set forth in Schedule 1. Borrower's FEIN is 00-0000000.
5.2 Locations of Borrower's Books. All locations where
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Borrower's Books are kept, including all equipment necessary for accessing
Borrower's Books and the names and addresses of all service bureaus, computer or
data processing companies and other Persons keeping Borrower's Books or
collecting Rights to Payment for Borrower, are set forth in Schedule 1.
5.3 Trade Names and Trade Styles. All trade names and trade
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styles under which Borrower presently conducts its business operations are set
forth in Schedule 1, and, except as set forth in Schedule 1, Borrower has not,
at any time during the preceding five years: (i) been known as or used any other
corporate, trade or fictitious name; (ii) changed its name; (iii) been the
surviving or resulting corporation in a merger or consolidation; or (iv)
acquired through asset purchase or otherwise any business of any Person.
5.4 Ownership of Collateral. Borrower is and shall continue to
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be the sole and complete owner of the Collateral, free from any Lien other than
Permitted Liens.
5.5 Enforceability; Priority of Security Interest. (i) This
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Security Agreement creates a security interest which is enforceable against the
Collateral in which Borrower now has rights and will create a security interest
which is enforceable against the Collateral in which Borrower hereafter acquires
rights at the time Borrower acquires any such rights, and (ii) Lender has a
perfected security interest (to the fullest extent perfection can be obtained by
filing, notification to third parties, possession or control) and a first
priority security interest in the Collateral in which Borrower now has rights
(subject only to Permitted Liens), and will have a perfected and first priority
security
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interest in the Collateral in which Borrower hereafter acquires rights at the
time Borrower acquires any such rights (subject only to Permitted Liens), in
each case securing the payment and performance of the Secured Obligations.
5.6 Other Financing Statements. Other than financing statements
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in favor of Lender and financing statements filed in connection with Permitted
Liens, no effective financing statement naming Borrower as debtor, assignor,
grantor, mortgagor, pledgor or the like and covering all or any part of the
Collateral is on file in any filing or recording office in any jurisdiction.
5.7 Rights to Payment.
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(a) the Rights to Payment represent valid, binding and
enforceable obligations of the Account Debtors or other Persons obligated
thereon, representing undisputed, bona fide transactions completed in accordance
with the terms and provisions contained in any documents related thereto, and
are and will be genuine, free from Liens, adverse claims, counterclaims,
setoffs, defaults, disputes, defenses, retainages, holdbacks and conditions
precedent of any kind of character, except to the extent reflected by Borrower's
reserves for uncollectible Rights to Payment;
(b) all Account Debtors and other obligors on the Rights to
Payment are Solvent and generally paying their debts as they come due;
(c) all Rights to Payment comply with all applicable laws
concerning form, content and manner of preparation and execution, including
where applicable any federal and state consumer credit laws;
(d) Borrower has not assigned any of its rights under the
Rights to Payment other than to Lender pursuant to this Security Agreement;
(e) all statements made, all unpaid balances and all other
information in Borrower's Books and other documentation relating to the Rights
to Payment are true and correct and in all respects what they purport to be; and
(f) Borrower has no knowledge of any fact or circumstance
which would impair the validity or collectibility of any of the Rights to
Payment.
5.8 Inventory. No Inventory is stored with any bailee,
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warehouseman or similar Person or on any premises leased to Borrower, nor has
any Inventory been consigned to Borrower or consigned by Borrower to any Person
or is held by Borrower for any Person under any "xxxx and hold" or other
arrangement.
5.9 Intellectual Property.
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(a) except as set forth in Schedule 1, Borrower (directly or
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through any Subsidiary) does not own, possess or use under any licensing
arrangement any patents, copyrights, trademarks, service marks or trade names,
nor is there currently pending
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before any Governmental Authority any application for registration of any
patent, copyright, trademark, service xxxx or trade name;
(b) all patents, copyrights, trademarks, service marks and
trade names are subsisting and have not been adjudged invalid or unenforceable
in whole or in part;
(c) all maintenance fees required to be paid on account of
any patents have been timely paid for maintaining such patents in force, and, to
the best of Borrower's knowledge, each of the patents is valid and enforceable
and Borrower has notified Lender in writing of all prior art (including public
uses and sales) of which it is aware;
(d) to the best of Borrower's knowledge after due inquiry,
no infringement or unauthorized use presently is being made of any Intellectual
Property Collateral by any Person ;
(e) Borrower is the sole and exclusive owner of the
Intellectual Property Collateral and the past, present and contemplated future
use of such Intellectual Property Collateral by Borrower has not, does not and
will not infringe or violate any right, privilege or license agreement of or
with any other Person; and
(f) Borrower owns, has material rights under, is a party to,
or an assignee of a party to all material licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications,
trade names and all other intellectual property Collateral necessary to continue
to conduct its business as heretofore conducted.
5.10 Equipment.
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(a) none of the Equipment or other Collateral is affixed to
real property, except Collateral with respect to which Borrower has supplied
Lender with all information and documentation necessary to make all fixture
filings required to perfect and protect the priority of Lender's security
interest in all such Collateral which may be fixtures as against all Persons
having an interest in the premises to which such property may be affixed; and
(b) none of the Equipment is leased from or to any Person,
except as set forth in Schedule 1.
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5.11 Deposit Accounts. The names and addresses of all financial
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institutions at which Borrower maintains its Deposit Accounts, and the account
numbers and account names of such Deposit Accounts, are set forth in Schedule 1.
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5.12 Investment Property. All Investment Property is set forth
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and described in Schedule 1, and all financial institutions or financial
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intermediaries holding or in possession of such Investment Property are set
forth in Schedule 1.
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6. Covenants. In addition to the covenants of Borrower set forth in
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the Revolving Credit Agreement which are incorporated herein by this reference,
Borrower agrees that from the Closing Date and thereafter until the indefeasible
payment, performance and
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satisfaction in full of the Secured Obligations, and all of Lender's obligations
under the Revolving Credit Agreement to Borrower have been terminated:
6.1 Defense of Collateral. Borrower shall appear in and defend
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any action, suit or proceeding which may affect its title to or right or
interest in, or Lender's right or interest in, the Collateral.
6.2 Preservation of Collateral. Borrower shall do and perform
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all acts that may be necessary and appropriate to maintain, preserve and protect
the Collateral.
6.3 Compliance with Laws, Etc. Borrower shall comply with all
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laws, regulations and ordinances, and all policies of insurance, relating to the
possession, operation, maintenance and control of the Collateral.
6.4 Location of Borrower's Books and Chief Executive Office.
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Borrower shall: (i) keep all Borrower's Books at the locations set forth in
Schedule 1; and (ii) maintain the location of Borrower's chief executive office
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or principal place of business at the location set forth in Schedule 1;
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provided, however, that Borrower may amend Schedule 1 so long as (i) such
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amendment occurs by written notice to Lender not less than 30 days prior to the
date on which the location of Borrower's Books or Borrower's chief executive
office or principal place of business is changed, and (ii) at the time of such
written notification, Borrower executes and delivers any financing statement
amendments or fixture filing amendments necessary to perfect or continue
perfected Lender's security interests in the Collateral and also obtains for
Lender such duly executed Collateral Access Agreement as Lender shall require
with respect to such new location.
6.5 Location of Collateral. Borrower shall keep the Inventory
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and Equipment only at the locations identified on Schedule 1; provided, however,
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that Borrower may amend Schedule 1 so long as (i) such amendment occurs by
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written notice to Lender not less than 30 days prior to the date on which the
Inventory or Equipment is moved to such new location, (ii) such new location is
within the continental United States, and (iii) at the time of such written
notification, Borrower executes and delivers any financing statements or fixture
filings necessary to perfect and continue perfected Lender's security interests
in such Assets and also obtains for Lender such duly executed Collateral Access
Agreement as Lender shall require with respect to such new location.
6.6 Change in Name, Trade Name, Trade Style or FEIN. Borrower
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shall not change its name, trade names, trade styles or FEIN, or add any new
trade names or trade styles from those listed on Schedule 1; provided, however,
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that Borrower may amend Schedule 1 so long as (i) such amendment occurs by
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written notice to Lender not less than 30 days prior to the date on which such
new name, trade name, trade style or FEIN becomes effective, and (ii) at the
time of such written notification, Borrower executes and delivers any financing
statement amendments or fixture filing amendments necessary to continue
perfected Lender's security interests in the Collateral.
6.7 Maintenance of Records. Borrower shall keep separate,
accurate and complete Borrower's Books, disclosing Lender's security interest
hereunder.
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6.8 Disposition of Collateral. Borrower shall not surrender or
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lose possession of (other than to Lender), sell, lease, rent, or otherwise
dispose of or transfer any of the Collateral or any right or interest therein,
except to the extent permitted by the Revolving Credit Agreement.
6.9 Liens. Borrower shall keep the Collateral free of all Liens
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except Permitted Liens.
6.10 Leased Premises. At Lender's request, Borrower shall obtain
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from each Person from whom Borrower leases any premises at which any Collateral
is at any time present, such Collateral Access Agreements as Lender may require.
6.11 Rights to Payment. Borrower shall:
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(a) perform and observe all terms and provisions of the
Rights to Payment and all obligations to be performed or observed by it in
connection therewith and maintain the Rights to Payment in full force and
effect;
(b) enforce all Rights to Payment strictly in accordance
with their terms, and take all such action to such end as may be from time to
time reasonably requested by Lender;
(c) if, to the knowledge of Borrower, any dispute, setoff,
claim, counterclaim or defense shall exist or shall be asserted or threatened
with respect to a Right to Payment (whether with or against Borrower or
otherwise), disclose such fact fully to Lender in Borrower's Books relating to
such Account or other Right to Payment and in connection with any report
furnished by Borrower to Lender relating to such Right to Payment;
(d) furnish to Lender such information and reports
regarding the Rights to Payment as Lender may request, and upon request of
Lender make such demands and requests for information and reports as Borrower is
entitled to make in respect of the Rights to Payment; and
(e) upon the occurrence of any Event of Default, establish
such lockbox or similar arrangements for the payment of the Rights to Payment as
Lender shall require.
6.12 Inventory. Borrower shall:
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(a) at such times as Lender shall request, prepare and
deliver to Lender periodic reports pertaining to the Inventory, in form and
substance satisfactory to Lender;
(b) upon the request of Lender, take a physical listing of
the Inventory and promptly deliver a copy of such physical listing to Lender;
(c) not store any Inventory with a bailee, warehouseman or
similar Person or on premises leased to Borrower without obtaining for Lender
such Collateral Access Agreements as Lender shall require; and
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(d) not dispose of any Inventory on a xxxx-and-hold,
guaranteed sale, sale and return, sale on approval, consignment or similar
basis, nor acquire any Inventory from any Person on any such basis, without in
each case giving Lender prior written notice thereof.
6.13 Equipment. Borrower shall, upon Lender's request, deliver
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to Lender a report of each item of Equipment, in form and substance satisfactory
to Lender.
6.14 Intellectual Property Collateral. Borrower shall:
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(a) not enter into any agreement (including any license or
royalty agreement) pertaining to any Intellectual Property Collateral without in
each case giving Lender prior notice thereof;
(b) not allow or suffer any Intellectual Property
Collateral to become abandoned, nor any registration thereof to be terminated,
forfeited, expired or dedicated to the public;
(c) promptly give Lender notice of any rights Borrower may
obtain to any new patentable inventions, trademarks, servicemarks, copyrightable
works or other new Intellectual Property Collateral, prior to the filing of any
application for registration thereof; and
(d) diligently prosecute all applications for patents,
copyrights and trademarks, and file and prosecute any and all continuations,
continuations-in-part, applications for reissue, applications for certificate of
correction and like matters as shall be reasonable and appropriate in accordance
with prudent business practice, and promptly and timely pay any and all
maintenance, license, registration and other fees, taxes and expenses incurred
in connection with any Intellectual Property Collateral.
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7. Collection of Rights to Payment. Borrower or its agents shall
-------------------------------
endeavor in the first instance to collect all amounts due or to become due on or
with respect to the Rights to Payment. At the request of Lender after the
occurrence of an Event of Default, all remittances received by Borrower shall be
held in trust for Lender, and, in accordance with Lender's instructions,
remitted to Lender or deposited to an account with Lender in the form received
(with any necessary endorsements or instruments of assignment or transfer).
8. Events of Default. The occurrence of any Event of Default under
-----------------
the Revolving Credit Agreement shall constitute an event of default ("Event of
--------
Default") under this Security Agreement.
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9. Rights and Remedies.
-------------------
9.1 During the continuance of an Event of Default, Lender,
without notice or demand, may do any one or more of the following, all of which
are authorized by Borrower:
(a) Settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which Lender considers advisable, and
in such cases, Lender will credit the Secured Obligations with only the net
amounts received by Lender in payment of such disputed Accounts after deducting
all Lender Expenses incurred or expended in connection therewith;
(b) Cause Borrower to hold all returned Inventory in trust
for Lender, segregate all returned Inventory from all other property of Borrower
or in Borrower's possession and conspicuously label said returned Inventory as
the property of Lender;
(c) Without notice to or demand upon Borrower or any
guarantor, make such payments and do such acts as Lender considers necessary or
reasonable to protect its security interests in the Collateral. Borrower agrees
to assemble the Collateral if Lender so requires, and to make the Collateral
available to Lender as Lender may designate. Borrower authorizes Lender to enter
the premises where the Collateral is located, to take and maintain possession of
the Collateral, or any part of it, and to pay, purchase, contest, or compromise
any encumbrance, charge, or Lien that in Lender's determination appears to
conflict with its security interests and to pay all expenses incurred in
connection therewith. With respect to any of Borrower's owned or leased
premises, Borrower hereby grants Lender a license to enter into possession of
such premises and to occupy the same, without charge, for up to 120 days in
order to exercise any of Lender's rights or remedies provided herein, at law, in
equity, or otherwise;
(d) Without notice to Borrower (such notice being expressly
waived), and without constituting a retention of any collateral in satisfaction
of an obligation (within the meaning of Section 9505 of the Code), set off and
apply to the Secured Obligations any and all (i) balances and Deposit Accounts
of Borrower held by Lender, or (ii) indebtedness at any time owing to or for the
credit or the account of Borrower held by Lender;
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(e) Hold, as cash collateral, any and all balances and
Deposit Accounts of Borrower held by Lender, to secure the full and final
repayment of all of the Secured Obligations;
(f) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Collateral. Lender is hereby granted a license or other right to
use, without charge, Borrower's labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks, service marks, and advertising
matter, or any property of a similar nature, as it pertains to the Collateral,
in completing production of, advertising for sale, and selling any Collateral
and Borrower's rights under all licenses and all franchise agreements shall
inure to Lender's benefit;
(g) Sell the Collateral at either a public or private sale,
or both, by way of one or more contracts or transactions, for cash or on terms,
in such manner and at such places (including Borrower's premises) as Lender
determines is commercially reasonable. It is not necessary that the Collateral
be present at any such sale;
(h) Lender shall give notice of the disposition of the
Collateral as follows:
(i) Lender shall give Borrower and each holder of a
security interest in the Collateral who has filed with Lender a written request
for notice, a notice in writing of the time and place of public sale, or, if the
sale is a private sale or some other disposition other than a public sale is to
be made of the Collateral, then the time on or after which the private sale or
other disposition is to be made;
(ii) The notice shall be personally delivered or
mailed, postage prepaid, to Borrower as provided in Section 9.1 of the Revolving
-----------
Credit Agreement, at least 5 days before the date fixed for the sale, or at
least 5 days before the date on or after which the private sale or other
disposition is to be made; no notice needs to be given prior to the disposition
of any portion of the Collateral that is perishable or threatens to decline
speedily in value or that is of a type customarily sold on a recognized market.
Notice to Persons other than Borrower claiming an interest in the Collateral
shall be sent to such addresses as they have furnished to Lender;
(iii) If the sale is to be a public sale, Lender also
shall give notice of the time and place by publishing a notice one time at least
5 days before the date of the sale in a newspaper of general circulation in the
county in which the sale is to be held;
(i) Lender may credit bid and purchase at any public sale;
and
(j) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower. Any excess
will be returned, without interest and subject to the rights of third Persons,
by Lender to Borrower.
9.2 Upon the exercise by Lender of any power, right, privilege,
or remedy pursuant to this Security Agreement which requires any consent,
approval, registration, qualification, or authorization of any Governmental
Authority, Borrower agrees to execute and
14
deliver, or will cause the execution and delivery of, all applications,
certificates, instruments, assignments, and other documents and papers that
Lender or any purchaser of the Collateral may be required to obtain for such
governmental consent, approval, registration, qualification, or authorization.
9.3 Borrower hereby irrevocably stipulates and agrees that Lender
has the right under this Security Agreement, upon the occurrence of an Event of
Default, to seek the appointment of a receiver, trustee, or similar official
over Borrower to effect the transactions contemplated by this Security
Agreement, including without limitation, to seek from the appropriate licensing
authority an involuntary transfer of the Licenses in connection with Lender's
foreclosure or enforcement proceedings, and that Lender is entitled to seek such
relief. Borrower hereby irrevocably agrees not to object to such appointment on
any grounds.
9.4 The rights and remedies of Lender under this Security
Agreement, the Revolving Credit Agreement, the other Loan Documents, and all
other agreements contemplated hereby and thereby shall be cumulative. Lender
shall have all other rights and remedies not inconsistent herewith as provided
under the Code, by law, or in equity. No exercise by Lender of any one right or
remedy shall be deemed an election of remedies, and no waiver by Lender of any
default on Borrower's part shall be deemed a continuing waiver of any further
defaults. No delay by Lender shall constitute a waiver, election or acquiescence
with respect to any right or remedy.
9.5 Notwithstanding any other provision of this Agreement to the
contrary, Lender will not be entitled in the Event of Default to take possession
of, foreclose upon, transfer, dispose of or otherwise assert any rights with
respect to any of the following types of the Collateral unless Borrower is also
at that time insolvent, as that term is defined under the U.S. Bankruptcy Code:
(a) Equipment
(b) Inventory
(c) Investment Property
(d) Intellectual Property - Collateral
(e) General Intangibles (excluding contracts and contract
rights, deposit accounts, uncertificated certificates of deposit, purchase
orders, and other contractual rights relating to these excluded items)
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10. Lender Not Liable. So long as Lender complies with the
-----------------
obligations, if any, imposed by Section 9207 of the Code, Lender shall not
otherwise be liable or responsible in any way or manner for: (a) the safekeeping
of the Collateral; (b) any loss or damage thereto occurring or arising in any
manner or fashion or from any cause; (c) any diminution in the value thereof; or
(d) any act or default of any carrier, warehouseman, bailee, forwarding agency,
or other person whomsoever.
11. Indefeasible Payment. The Secured Obligations shall not be
--------------------
considered indefeasibly paid for purposes of this Security Agreement unless and
until all payments to Lender are no longer subject to any right on the part of
any Person, including Borrower, Borrower as a debtor in possession, or any
trustee (whether appointed under the Bankruptcy Code or otherwise) of Borrower
or Borrower's Assets to invalidate or set aside such payments or to seek to
recoup the amount of such payments or any portion thereof, or to declare same to
be fraudulent or preferential. In the event that, for any reason, any portion of
such payments to Lender is set aside or restored, whether voluntarily or
involuntarily, after the making thereof, then the obligation intended to be
satisfied thereby shall be revived and continued in full force and effect as if
said payment or payments had not been made.
12. Notices. All notices or demands by any party hereto to the
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other party and relating to this Security Agreement shall be made in the manner
and to the addresses set forth in Section 9.1 of the Revolving Credit Agreement.
13. General Provisions.
------------------
13.1 Successors and Assigns. This Security Agreement shall
----------------------
bind and inure to the benefit of the respective successors and assigns of
Borrower and Lender; provided, however, that Borrower may not assign this
-------- -------
Security Agreement nor delegate any of its duties hereunder without Lender's
prior written consent and any prohibited assignment or delegation shall be
absolutely void. No consent by Lender to an assignment by Borrower shall release
Borrower from the Secured Obligations. Lender reserves its right to sell,
assign, transfer, negotiate, or grant participations in all or any part of, or
any interest in, the rights and benefits hereunder pursuant to and in accordance
with the provisions of the Revolving Credit Agreement. In connection therewith,
Lender may disclose all documents and information which Lender now or hereafter
may have relating to Borrower, Borrower's business, or the Collateral to any
such prospective or actual Transferee.
13.2 Exhibits and Schedules. All of the exhibits and
----------------------
schedules attached hereto shall be deemed incorporated by reference.
13.3 No Presumption Against Any Party. Neither this
--------------------------------
Security Agreement nor any uncertainty or ambiguity herein shall be construed or
resolved against Lender or Borrower, whether under any rule of construction or
otherwise. On the contrary, this Security Agreement has been reviewed by each of
the parties and their counsel and shall be construed and interpreted according
to the ordinary meaning of the words used so as to accomplish fairly the
purposes and intentions of all parties hereto.
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13.4 Amendments and Waivers. Any provision of this Security
----------------------
Agreement or any of the Loan Documents to which Borrower is a party may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the party asserted to be bound thereby, and then such amendment or
waiver shall be effective only in the specific instance and specific purpose for
which given.
13.5 Counterparts; Integration; Effectiveness. This
----------------------------------------
Security Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Security Agreement constitutes the
entire agreement and understanding among the parties hereto and supersedes any
and all prior agreements and understandings, oral or written, relating to the
subject matter hereof. This Security Agreement shall become effective when
executed by each of the parties hereto and delivered to Lender.
13.6 Severability. The provisions of this Security
------------
Agreement are severable. The invalidity, in whole or in part, of any provision
of this Security Agreement shall not affect the validity or enforceability of
any other of its provisions. If one or more provisions hereof shall be declared
invalid or unenforceable, the remaining provisions shall remain in full force
and effect and shall be construed in the broadest possible manner to effectuate
the purposes hereof.
14. Governing Law. This Security Agreement shall be deemed to
-------------
have been made in the State of New York and the validity, construction,
interpretation, and enforcement hereof, and the rights of the parties hereto,
shall be determined under, governed by, and construed in accordance with the
internal laws of the State of New York, without regard to principles of
conflicts of law.
15. Judicial Reference.
------------------
(a) Other than (i) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (ii) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Agreement, which controversy, dispute or claim is not settled
in writing within thirty (30) days after the "Claim Date" (defined as the date
----------
on which a party subject to this Agreement gives written notice to all other
parties that a controversy, dispute or claim exists), shall be governed by and
construed in accordance with the internal laws of the State of New York,
including, without limitation, Sections 5-1401 and 5-1402 of the New York
General Obligations Law and Rule 327(b) of the New York Civil Practice Law and
Rules. Lender and Borrower hereby irrevocably submit the to non-exclusive
jurisdiction of the federal and New York State courts located in the City, the
Borough of Manhattan in connection with any suit, action or proceeding related
to this Agreement or any of the matters contemplated hereby, irrevocably waive
any defense of lack of personal jurisdiction and irrevocably agree that all
claims in respect of any suit, action or proceeding any be heard and determined
in any such court. Lender and Borrower irrevocably waive, to the fullest extent
they may effectively do so under applicable law, any objections which they may
now or hereafter have to the laying of venue of any such suit, action
17
or proceeding brought in any such court and any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have executed this Security
Agreement as of the date first set forth above.
PC Xxxxxxx.xxx
By
---------------------
Title:
-----------------
ICE Holdings North America, LLC.
By:
---------------------
Title:
-----------------
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SCHEDULE 1
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Section 5.1 Location of Chief Executive Office and Collateral
Section 5.2 Locations of Borrower's Books
Section 5.3 Trade Names or Trade Styles
Section 5.9 Intellectual Property - Licenses to use software
Section 5.10 Equipment Leases
Section 5.11 Deposit Accounts
Section 5.12 Investment Property
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