Attached files
| file | filename |
|---|---|
| 8-K - Cyalume Technologies Holdings, Inc. | v192170_8k.htm |
| EX-10.3 - Cyalume Technologies Holdings, Inc. | v192170_ex10-3.htm |
| EX-10.5 - Cyalume Technologies Holdings, Inc. | v192170_ex10-5.htm |
| EX-10.1 - Cyalume Technologies Holdings, Inc. | v192170_ex10-1.htm |
| EX-10.8 - Cyalume Technologies Holdings, Inc. | v192170_ex10-8.htm |
| EX-10.9 - Cyalume Technologies Holdings, Inc. | v192170_ex10-9.htm |
| EX-10.7 - Cyalume Technologies Holdings, Inc. | v192170_ex10-7.htm |
| EX-10.6 - Cyalume Technologies Holdings, Inc. | v192170_ex10-6.htm |
| EX-10.4 - Cyalume Technologies Holdings, Inc. | v192170_ex10-4.htm |
| EX-99.1 - Cyalume Technologies Holdings, Inc. | v192170_ex99-1.htm |
| EX-10.10 - Cyalume Technologies Holdings, Inc. | v192170_ex10-10.htm |
This
Subordinated Security and Pledge Agreement is subject to the terms and
provisions of the Intercreditor and Subordination Agreement by and between
GRANITE CREEK PARTNERS AGENT, LLC, as Junior Agent
on behalf of itself and the Junior Lenders, and TD BANK, N.A. dated as of
July 29, 2010 (as amended, restated, supplemented or otherwise modified
from time to time, the "Subordination Agreement") and each holder of the Loans,
by its acceptance hereof, shall be bound by the provisions of the Subordination
Agreement.
SUBORDINATED
SECURITY AND PLEDGE AGREEMENT
This
Subordinated Security and Pledge Agreement (this "Agreement"), dated
the 29th day of July, 2010, is made by CYALUME TECHNOLOGIES, INC., a Delaware
corporation having its principal place of business and chief executive office at
96 Windsor Street, West Springfield, Massachusetts (the "Debtor"), for the
benefit of GRANITE CREEK PARTNERS AGENT, LLC, a Delaware limited liability
company, as Agent (the "Agent") and for the
financial institutions or other entities (hereinafter, collectively, the "Lenders") which are
or may become parties to the Loan Agreement (as defined below) (in such capacity
the "Secured
Party").
WITNESSETH
WHEREAS,
pursuant to that certain Subordinated Loan Agreement dated as of July 29,
2010, by and among the Debtor, Cyalume Technologies Holdings, Inc., a Delaware
corporation (the "Holding Company"),
the Lenders, and the Secured Party, as Agent (as amended, restated, modified,
supplemented and in effect from time to time, the "Loan Agreement"; capitalized
terms used herein without definition having the respective meanings ascribed to
them in the Loan Agreement), the Lenders have agreed to make Loans to the
Debtor; and
WHEREAS,
the obligation of the Lenders to make such Loans is subject to the condition,
among others, that the Debtor execute and deliver this Agreement and grant the
liens in favor of the Secured Party as hereinafter described.
NOW,
THEREFORE, for good and valuable consideration, receipt and sufficiency of which
is hereby acknowledged, it is hereby agreed as follows:
1. Security
Interest. As security for the due and punctual payment and
performance of the Secured Obligations described in Section 2 hereof, the Debtor
hereby grants to the Secured Party for the benefit of the Lenders and itself, a
continuing security interest in and to all of its right, title and interest in
the Collateral, whether now owned or existing or hereafter acquired or
arising.
As used
herein, "Collateral" shall
mean all of Debtor's tangible and intangible personal property and fixtures (but
none of its obligations with respect thereto), including, without limitation,
all of Debtor's right, title and interest in the property described below, as
each such term is used in the Uniform Commercial Code as in effect from time to
time in the State of Illinois (the "UCC"):
(i) all
investment property;
(ii) goods;
(iii) equipment;
(iv) inventory;
(v)
instruments (including, without limitation, promissory
notes);
(vi) accounts;
(vii) documents;
(viii) chattel
paper (whether tangible or electronic);
(ix) deposit
accounts;
(x) fixtures;
(xi) letter-of-credit
rights and support obligations;
(xii) the
commercial tort claims (i.e., any claims arising in
tort that the Debtor may have) set forth on Exhibit 1(xii)
hereto;
(xiii) general
intangibles (including, without limitation, payment intangibles and Intellectual
Property Collateral (as defined below)); and
(xiv) any
and all additions, accessions and attachments to and of the foregoing and any
substitutions, replacements, proceeds (including, without limitation, insurance
proceeds), products and supporting obligations of the foregoing.
Notwithstanding
anything to the contrary contained herein, the security interests granted under
this Agreement shall not extend to (and such property shall not constitute
Collateral) the equity interests of the Debtor in CTSA or any other Foreign
Subsidiary now owned or hereafter formed or acquired pursuant to the terms and
conditions of the Loan Agreement, other than a 65% pledge of the equity
interests in CTSA and any other such Foreign Subsidiary in favor of the Agent
for the benefit of the Lenders .
It is
understood and agreed that the security interests and liens created hereby and
under the Loan Agreement and the other Loan Documents shall not prevent, as long
as no Event of Default has occurred and continuing and after written notice from
the Agent, Debtor from using the Collateral in the ordinary course of its
business.
2. Secured
Obligations. The lien hereby granted shall secure equally and
ratably the due and punctual payment and performance of the following
liabilities and obligations (collectively, the "Secured
Obligations"):
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(a) principal
of and premium, if any, and interest on and fees (including, without limitation,
the Closing Fee and all other fees from time to time due from Debtor pursuant to
the Loan Agreement) and other amounts payable with respect to the Term Loan Note
or the Delayed Draw Note (or any of them) and any guarantees thereof;
and
(b) any
and all other indebtedness and obligations of the Debtor and/or any of its
Subsidiaries under the Loan Agreement or under any other agreement, document or
instrument relating thereto, all as amended, modified or supplemented from time
to time, related in any way to the Term Loan Notes or the Delayed Draw Notes (or
any of them).
3. Special Warranties and Covenants of
the Debtor. Debtor hereby represents and warrants to and
covenants and agrees with the Secured Party and the Lenders that:
(a) Debtor
is the owner of and has good and marketable title to the Collateral free from
any liens, other than liens created hereby and Permitted Liens, and Debtor will
defend the Collateral against all claims and demands of all Persons at any time
claiming the same or any interest therein.
(b) The
address shown at the beginning of this Agreement is the chief executive office
and principal place of business of Debtor and the location of all records
concerning that portion of Collateral consisting of accounts receivable and
other general intangibles. Debtor's only additional places of business and the
only additional locations of any Collateral (including Collateral located at
warehouses and the like) are listed on Exhibit 3(b) attached hereto (which
includes legal descriptions of all real property sufficient for fixture
filings). Except as set forth on Exhibit 3(b) attached hereto, during the five
(5) years ended on the date hereof, neither Debtor nor any of its
predecessors-in-interest has conducted any business or sold any goods under any
name (including any fictitious business or trade name) other than its legal
name. Debtor's legal name and jurisdiction of organization is correctly set
forth at the beginning of this Agreement. Debtor will not change its corporate
form or jurisdiction of organization, or change its chief executive office or
principal place of business or any other place of business, or the location of
any Collateral (other than inventory in transit) (including, without limitation,
the records relating thereto), or make any change in its legal name or conduct
business operations under any fictitious business or trade name (other than any
names specified on Exhibit 3(b) attached hereto), (i) in contravention of the
Loan Agreement or (ii) without, in each such case, (A) giving at least twenty
(20) days' prior written notice thereof to the Secured Party and (B) executing,
delivering, filing and recording all necessary financing statements (or
amendments thereto) or other instruments and documents in order to maintain the
validity, enforceability, priority and perfection of the lien arising hereunder
and under the other Loan Documents.
(c) Except
as explicitly permitted by the Loan Agreement, (i) Debtor will not sell or
otherwise dispose of any of the Collateral or any interest therein and (ii)
Debtor will not create, assume, incur or suffer to exist any lien of any kind
(whether senior, pari passu
or subordinate) on the Collateral, other than Permitted
Liens.
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(d) Subject
to the terms of the Loan Agreement, Debtor will keep the Collateral, including,
without limitation, all inventory and equipment, used or useful in the conduct
of its business, in good repair, working order and condition, ordinary wear and
tear excepted, and adequately insured at all times in accordance with the
provisions of the Loan Agreement and the other Loan Documents. Each insurance
policy pertaining to any of the Collateral shall be in form and substance and
shall have such limits and deductibles as shall be reasonably satisfactory to
the Secured Party and, without limiting the generality of the foregoing,
shall:
(i) name
the Secured Party as loss payee (in the case of property insurance) and as an
additional insured (in the case of liability insurance) pursuant to a so-called
standard mortgagee clause and shall contain the so-called agreed upon
replacement cost endorsement and waiver of subrogation;
(ii) provide
that no action of Debtor or any of its Subsidiaries or any tenant or subtenant
shall void such policy as to the Secured Party;
(iii) provide
that the Secured Party shall be notified (and Debtor hereby covenants to notify
the Secured Party) of any expiration, cancellation or material amendment of such
policy at least thirty (30) days in advance of the effective date thereof and
provide that the Secured Party shall have the right to cure any deficiency
resulting in the same;
(iv) provide
that the Secured Party shall receive (and Debtor shall cause the Secured Party
to receive) annually, certificates of insurance (or other appropriate
documentation) demonstrating compliance by Debtor with all provisions of the
Loan Agreement relating to insurance matters; and
(v) be
issued by an insurance company or insurance companies licensed to do business in
the jurisdiction in which the Collateral is located and having the highest or
second highest rating available from A.M. Best Company or an equivalent
Person.
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Certified
copies of all such insurance policies relating to the Collateral shall be
delivered to the Secured Party upon written request. In the event of any
material damage or destruction to the Collateral, Debtor shall give prompt
written notice to the Secured Party. Debtor shall not adjust, compromise or
settle any claim for insurance proceeds in excess of $100,000 without the prior
written consent of the Secured Party. Subject to the terms of the Loan Agreement
and so long as no Default or Event of Default shall have occurred and be
continuing, and so long as each of the following conditions are satisfied,
Debtor may apply the proceeds of any insurance to the repair and restoration or
replacement of any of the Collateral which was the subject of the loss, provided
that (i) the cost of repair and restoration or replacement shall not exceed
$100,000, (ii) Debtor continues to be the sole owner of the Collateral subject
to the lien arising hereunder and under the other Loan Documents and, if
applicable, said Permitted Liens, (iii) the contemplated repair and restoration
or replacement shall reconstruct or restore the Collateral to substantially its
previous condition within ninety (90) days from the date of the damage or
destruction to the Collateral, (iv) all sums necessary to effect the repair and
restoration or replacement over and above any available insurance proceeds shall
be at the sole cost and expense of the Debtor, (v) Debtor shall deposit all
available proceeds together with the additional sums referred to in subsection
(iv) with the Secured Party prior to commencing any repair and restoration or
replacement and (vi) at all times during any repair and restoration or
replacement Debtor shall, at its sole cost and expense, maintain workers'
compensation and public liability insurance in amounts satisfactory to the
Secured Party and in accordance with the provisions of this Section 3(d). If at
any time the Secured Party determines, in good faith, that the foregoing
conditions have not been or cannot be satisfied, then the Secured Party may
apply the proceeds of insurance to the prepayment, without premium, of the
Senior Debt or the Term Loans in accordance with Section 5.3 of the Loan
Agreement. Any insurance proceeds that are received at a time when a Default or
Event of Default shall have occurred and be continuing may be applied by the
Secured Party to the repayment of the Secured Obligations (or, prior the payment
in full of the Senior Debt, the Senior Debt) in accordance with the terms of the
Loan Agreement. If Debtor fails to provide insurance as required by this
Agreement, the Loan Agreement or any of the other Loan Documents, the Secured
Party may, at its option, provide such insurance, and the Debtor will on demand
pay to the Secured Party the amount of any disbursement made by the Secured
Party for such purpose and any such unreimbursed amounts shall constitute
Secured Obligations for all purposes of this Agreement.
Notwithstanding
anything to the contrary herein, the Mortgage shall control with respect to the
insurance policies required on the Premises and property covered
therein.
(e) To
the extent required by the Loan Agreement, Debtor will pay and discharge
promptly as they become due and payable all taxes, assessments and other
governmental charges or levies imposed upon it or its income or upon any of its
properties, real, personal or mixed, or upon any part thereof, including,
without limitation, the Collateral or any part of the Collateral, as well as all
claims of any kind (including claims for labor, materials and supplies) which if
unpaid might by law become a lien or charge upon its property.
(f) Debtor
will, upon the reasonable request of the Secured Party, promptly make, execute
(as applicable), acknowledge and deliver and file and record in all proper
offices and places, including, without limitation, the U.S. Patent and Trademark
Office and the U.S. Copyright Office, such financing statements, continuation
statements, certificates, collateral agreements and other agreements, documents
or instruments as may be necessary to perfect or from time to time renew the
lien arising hereunder and under the other Loan Documents, including, without
limitation, those that may be necessary to perfect such lien in any additional
Collateral hereafter acquired by Debtor or in any replacements or proceeds
thereof, and Debtor will take all such action as may be deemed reasonably
necessary by the Secured Party to carry out the intent and purposes of the Loan
Documents or for assuring and confirming to the Secured Party the grant and
perfection of the lien in the Collateral, including, without limitation, the
Intellectual Property Collateral. To the extent permitted by law, Debtor
authorizes and appoints (such appointment being coupled with an interest and
irrevocable) the Secured Party to execute (as applicable) and to file and record
such financing statements, continuation statements, certificates, collateral
agreements and other agreements, documents and instruments in its stead, with
full power of substitution, as Debtor's attorney-in-fact to be exercised only
(i) if Debtor fails or refuses to do so promptly following a written request
therefor or (ii) following an Event of Default and during the continuance
thereof.
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(g) Debtor
hereby authorizes the Secured Party to file and record in all proper offices and
places, including, without limitation, the U.S. Patent and Trademark Office and
the U.S. Copyright Office, such financing statements, continuation statements,
certificates, collateral agreements and other agreements, documents and
instruments as may be necessary to perfect from time to time renew the lien
arising hereunder and under the other Loan Documents, including, without
limitation, those that may be necessary to perfect such lien in any additional
Collateral hereafter acquired by Debtor or in any replacements or proceeds
thereof.
(h) Debtor
agrees that if any warehouse receipt or receipt in the nature of a warehouse
receipt is issued with respect to any of the inventory (or any other
Collateral), such receipt shall not be "negotiable" (as such term is used in the
Uniform Commercial Code as in effect in any relevant jurisdiction or under other
relevant law). If, notwithstanding the foregoing, any negotiable warehouse
receipts or other negotiable documents are issued with respect to any of the
inventory (or other Collateral), all such instruments shall be held in trust for
the Secured Party and shall be immediately endorsed to the order of the Secured
Party and delivered to the Secured Party to be held by the Secured Party as
Collateral hereunder. In addition, Debtor will notify all warehousemen, bailees,
agents, processors and other similar Persons of the lien created pursuant to the
Loan Documents and will cause each to hold all Collateral for the account of,
and subject to the instructions of, the Secured Party.
(i) Except
in the ordinary course of business or as otherwise explicitly permitted by the
Loan Agreement, without the prior written consent of the Secured Party, Debtor
shall not amend or modify, or waive any of its rights under or with respect to,
any of the accounts receivable, if the effect thereof would be to materially and
adversely impair any remedies of the Debtor or the Secured Party under or with
respect thereto. Upon the occurrence and during the continuance of any Event of
Default, the Secured Party may notify or may require the Debtor to notify (and
after any such notification Debtor shall cause) all Persons obligated on the
accounts receivable to make payment directly to (or in accordance with the
instructions of) the Secured Party. From and after the occurrence of any Event
of Default and during the continuance thereof, the Secured Party may require:
(i) all sums collected or received and all property recovered or possessed by
Debtor in connection with any of the Collateral, including, without limitation,
all sums received in respect of any of the accounts receivable, to be received
and held by Debtor in trust for the Secured Party and to be segregated from the
assets and funds of Debtor and to be immediately delivered to the Secured Party
for application to the payment of the Secured Obligations in accordance with the
terms hereof and (ii) the Debtor, upon the written request of the Secured Party,
to institute depositary, lockbox and other similar credit procedures providing
for the direct receipt of such sums.
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(j) Debtor
will, to the extent permitted by applicable law, specifically assign to the
Secured Party all federal government contracts and will cooperate with the
Secured Party in giving notice of such assignment pursuant to the Federal
Assignment of Claims Act. Debtor will cooperate with the Secured Party in
providing such further information with respect to contracts with any
governmental authority as the Secured Party may reasonably request and will
provide such instruments of further assurance with respect to such contracts as
the Secured Party may reasonably request.
(k) Debtor
hereby constitutes and appoints the Secured Party its true and lawful attorney,
irrevocably, with full power, upon the occurrence and during the continuance of
any Event of Default, in the name of Debtor or otherwise, at the expense of
Debtor and without notice to or demand upon Debtor, to act, require, demand,
receive, compound and give acquittance for any and all monies and claims for
monies due or to become due to Debtor, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take any
action or institute any proceedings which the Secured Party may deem to be
reasonably necessary or advisable to protect the interests of the Secured Party,
which appointment as attorney is coupled with an interest and is irrevocable.
Without limiting the generality of the foregoing, upon the occurrence and during
the continuance of any Event of Default, the Secured Party shall have full
power: (i) to demand, collect, receive payment of, receipt for, settle,
compromise or adjust, and give discharges and releases in respect of any of the
Collateral including, without limitation, any accounts receivable; (ii) to
commence and prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect and/or to enforce any other
rights in respect of any of the Collateral including, without limitation, any
accounts receivable; (iii) to defend any suit, action or proceeding brought
against Debtor with respect to any of the Collateral including, without
limitation, any account receivable; (iv) to settle, compromise or adjust any
suit, action or proceeding described in clause (ii) or (iii) above, and, in
connection therewith, to give such discharges or releases as the Secured Party
may deem appropriate; (v) to endorse checks, notes, drafts, acceptances, money
orders, bills of lading, warehouse receipts or other instruments or documents
including, without limitation, those evidencing or securing the accounts
receivable or any of them; (vi) to receive, open and dispose of all mail
addressed to Debtor and to notify the post office authorities to change the
address of delivery of mail addressed to Debtor to such address, care of the
Secured Party, as the Secured Party may designate; (vii) to act as attorney for
Debtor in obtaining, adjusting, settling and canceling any insurance and
endorsing any drafts and retaining any amounts collected or received under any
policies of insurance; (viii) to discharge any taxes, assessments or other
governmental charges or levies or any other liens to which any Collateral is at
any time subject; and (ix) generally to sell, assign, transfer, pledge, make any
agreement in respect of or otherwise deal with the Collateral as fully and
completely as though the Secured Party was the absolute owner thereof for all
purposes. Debtor agrees to reimburse the Secured Party upon written demand for
any payments made or reasonable expenses incurred by the Secured Party pursuant
to the foregoing authorization and any unreimbursed amounts shall constitute
Secured Obligations for all purposes hereof.
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(l) The
powers conferred on the Secured Party by this Agreement, the Loan Agreement and
the other Loan Documents are solely to protect the interests of the Secured
Party and the Lenders and shall not impose any duty upon the Secured Party to
exercise any such power, and if the Secured Party shall exercise any such power,
such exercise by the Secured Party shall not relieve Debtor of any Default or
Event of Default, and the Secured Party shall be accountable only for amounts
actually received as a result thereof. Except as otherwise required by
applicable law, rule or regulation, the Secured Party shall be under no
obligation to take steps necessary to preserve the rights in or value of or to
collect any sums due in respect of any Collateral against any other Person but
may do so at its option. Without limiting the generality of the foregoing,
except as otherwise required by applicable law, rule or regulation, the Secured
Party shall have no duty or liability with respect to any claim or claims
regarding Debtor's ownership or purported ownership, or rights or purported
rights arising from, the Intellectual Property Collateral (or any portion
thereof) or any use, license, or sublicense thereof, whether arising out of any
past, current or future event, circumstance, act or omission or otherwise. All
of such duties and liabilities shall be exclusively the obligation of the
Debtor. All expenses incurred in connection with the application, protection,
maintenance, renewal or preservation of any of the Collateral including, without
limitation, the Intellectual Property Collateral, shall be borne by the
Debtor.
(m) Debtor
shall defend, indemnify and hold harmless the Secured Party from any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements (including reasonable attorneys' fees) of any
kind whatsoever which may be imposed on, incurred by or asserted against the
Secured Party in connection with or in any way arising out of or relating to the
Collateral or this Agreement, other than those which result from a breach of
this Agreement by the Secured Party or its gross negligence or willful
misconduct.
(n) It
is the intention of the parties hereto that none of the Collateral shall become
fixtures and Debtor shall take all reasonable action or actions as may be
necessary to prevent any of the Collateral from becoming fixtures. Debtor will,
if requested by the Secured Party, use its best efforts to obtain waivers of
lien, in form and substance satisfactory to the Secured Party, from each Person
(including lessors) having any interest in the real property on which any of the
Collateral is or is to be located.
(o) To
the best of Debtor's knowledge, all of Debtor's inventory manufactured or
produced by Debtor has been (and from and after the date hereof will be)
produced in compliance with all material applicable laws, including, without
limitation, the Fair Labor Standards Act, as amended.
(p) Debtor
will promptly notify the Secured Party and the Lenders, as provided in the Loan
Agreement, of any loss or damage to any Collateral in excess of $250,000 or any
request by any other Person for any material credit or adjustment with respect
to any accounts receivable.
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(q) Debtor
confirms that value has been given to it by the Secured Party, that it has
rights in the Collateral and that it has not agreed with the Secured Party to
postpone the time for attachment of any of the security interests in any of the
Collateral. The security interests created by this Agreement will have effect
and be deemed to be effective whether or not the Secured Obligations are owing
or in existence before, after or upon the date of this Agreement.
(r) Debtor
will promptly notify the Secured Party (which notification shall be deemed to
automatically amend Exhibit 1(xii)
hereto) of any commercial tort claim of Debtor not specifically identified
herein and grant to the extent permitted under applicable law, to Secured Party
a security interest in any such commercial tort claim and the proceeds
thereof.
(s) Debtor
shall and shall cause each of its Subsidiaries to place a conspicuous legend on
each of its contracts which constitutes chattel paper which legend will
state: "THIS IS CHATTEL PAPER IN WHICH A LIEN HAS BEEN GRANTED TO
GRANITE CREEK PARTNERS AGENT, LLC" and shall, upon demand, deliver to the
Secured Party or to such other Person as the Secured Party shall designate, to
act on its behalf, all Collateral in its original form consisting of negotiable
instruments or documents, certificated securities, chattel paper and instruments
(in each case, accompanied by stock powers, allonges or other instruments of
transfer executed in blank).
(t) Debtor
shall take all steps necessary to grant the Secured Party or to such other
Person as the Secured Party shall designate, to act on its behalf, control of
all electronic chattel paper in accordance with the UCC and all "transferable
records" as defined in each of the Uniform Electronic Transactions Act and any
other applicable law.
(u) The
Debtor has no knowledge of any fact that would impair the validity or make
uncollectible any Collateral that is accounts receivable, chattel paper, general
intangibles, contract rights, documents or instruments, and, to the best of the
Debtor's knowledge, each obligor liable upon such Collateral has and will have
the capacity to contract.
(v) None
of the Equipment and Inventory has, within the four months preceding the date of
this Security Agreement, been located at any place other than the places
specified on Exhibit
3(b) attached hereto. Other than as set forth on Exhibit 3(v) attached
hereto the Debtor has no trade names. During the four months preceding the date
hereof, other than as set forth on Exhibit 3(v) the
Debtor has not been known by any legal name different from the one set forth on
the signature page hereto, nor has the Debtor been the subject of any merger or
other corporate reorganization, except as set forth on Exhibit 3(v)(1)
attached hereto. The Debtor's federal taxpayer identification number
is (and, during the four months preceding the date hereof, the Debtor has not
had a federal taxpayer identification number different from)
13-3353274. The Debtor is not a party to any federal, state or local
government contract except as set forth in Exhibit 3(v)(2)
attached hereto.
-9-
(w) The
items making up the Inventory at any time are and will be genuine and saleable
(or, in the case of non-finished goods Inventory, in good condition and
available to be incorporated into finished goods Inventory) in the ordinary
course of the Debtor's business.
(x) The
Debtor agrees that it will maintain exclusive possession of its goods,
instruments and inventory, other than Inventory in transit in the ordinary
course of business and Inventory which is in the possession or control of a
warehouseman, bailee agent or other Person (other than a Person controlled by or
under common control with the Debtor) that has been notified of the security
interest created in favor of the Debtor pursuant to this Security Agreement, and
has agreed to hold such Inventory subject to the Agent's lien and waive any Lien
held by it against such Inventory.
(y) Each
Account Receivable is and will be a true and correct statement of the actual
Indebtedness incurred by each account debtor with respect thereto, and arises
and will arise out of or in connection with the sale or lease of goods or for
the rendering of services by the Debtor to each such account
debtor.
4. Special Provisions Concerning
Intellectual Property Collateral. Without limiting the
generality of the other provisions of this Agreement:
(a) Debtor
hereby represents and warrants to and covenants and agrees with the Secured
Party that:
(i) a
true and complete list of all trademarks, patents and copyrights currently
owned, held (whether pursuant to a license or otherwise) or used by the Debtor,
in whole or in part, in conducting its business is set forth on Exhibit 4(a)(i)
attached hereto, and such exhibit correctly sets forth the information specified
therein;
(ii) each
and every trademark in use is subsisting; to the extent owned by the Debtor,
each and every trademark, patent and copyright is valid and enforceable; and, to
the best of Debtor's knowledge, there is no infringement or unauthorized use of
any of the trademarks, patents or copyrights, in whole or in part;
(iii) no
claim has been made in writing that the use of any of the trademarks or
copyrights or the practice of any of the patents does or may violate the rights
of any other Person, and Debtor is not aware of any basis for any such claim to
be asserted;
(iv) the
Debtor is the sole and exclusive owner of the entire and unencumbered right,
title and interest in and to each of the trademarks, patents and copyrights
purported to be owned by it, free and clear of any lien, express or implied,
other than Permitted Liens, and except as set forth on Exhibit 4(a)(i) attached
hereto, no other Person has any license or other right with respect to any of
the trademarks, patents, copyrights or any other Intellectual Property
Collateral; and
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(v) Debtor
and, to Debtor's knowledge, its predecessors in interest has used the proper
statutory notice in connection with its use of the trademarks in all material
respects, and the Debtor has marked its products with all applicable patent
numbers.
(b) If
Debtor shall create or obtain rights to any trademarks, patents or copyrights
(or any other Intellectual Property Collateral) in addition to those set forth
on Exhibit 4(a)(i) attached hereto, the provisions of this Agreement shall
automatically apply thereto and Debtor shall take such action as the Secured
Party may reasonably request to more fully evidence the same. Debtor shall
promptly notify the Secured Party in writing of any new patent application or
grant or trademark or copyright application or registration in which Debtor has
an ownership interest.
(c) Debtor:
(i) authorizes the Secured Party, without any further action by Debtor, to amend
Exhibit 4(a)(i)
to reference any trademark, patent or copyright (or any other Intellectual
Property Collateral) acquired by Debtor after the date hereof or to delete any
reference to any right, title or interest in any trademark or patent or
copyright (or any other Intellectual Property Collateral) in which Debtor no
longer has or claims any right, title or interest; (ii) will promptly (but in
any event within ten (10) days after becoming aware thereof) notify the Secured
Party and the Lenders, as provided in the Loan Agreement, of the institution of,
or any adverse determination in, any proceeding in the U.S. Patent and Trademark
Office, the U.S. Copyright Office or in any federal, state or foreign court or
agency regarding Debtor's claim of ownership, or the enforceability or validity
of any of the Intellectual Property Collateral, in each case which could
reasonably be expected to materially adversely affect the value of any of the
Intellectual Property Collateral, the ability of Debtor or the Secured Party to
dispose of any of the same or the rights and remedies of the Secured Party in
relation thereto; (iii) will promptly notify the Secured Party of any suspected
infringement of any of the Intellectual Property Collateral by any third party
or any claim by any third party that Debtor is infringing upon the intellectual
property rights of such third party that does or could reasonably be expected to
materially adversely affect the value of any of the Intellectual Property
Collateral; (iv) concurrently with the filing of any patent application or
application for registration of any trademark or copyright, will execute,
deliver and record in all appropriate registers and offices, an appropriate form
of a collateral security agreement evidencing the Secured Party's security
interest therein; and (v) will keep accurate and complete records respecting the
Intellectual Property Collateral.
(d) Debtor
shall: (i) to the extent commercially reasonable, make and diligently prosecute
federal application on any existing or future registrable but unregistered
trademarks or copyrights or unpatented but patentable inventions, (ii) to the
extent still utilized in the operation of the business, preserve, maintain and
renew all of the Intellectual Property Collateral and rights and interests
related thereto, including, without limitation, by payment of all taxes,
annuities, issue and maintenance fees and by the use of all proper statutory
notices, designations and patent numbers, and (iii) initiate and diligently
prosecute in its own name, for its own benefit and at its own expense, such
suits, proceedings or other actions for infringement, or other damage or
opposition, cancellation, concurrent use or interference proceedings as are
reasonably necessary to protect any of the trademarks, patents or copyrights or
other Intellectual Property Collateral which Debtor reasonably determines is
material to its business; provided, that no such suit, proceeding or other
action shall be settled or voluntarily dismissed, nor shall any party be
released or excused from any claims or liability for infringement, unless, in
the reasonable judgment of Debtor, to do so is in the best interests of the
Debtor and is not disadvantageous in any material respect to the Secured
Party.
-11-
(e) Without
limiting the generality of the other provisions of this Agreement, the Loan
Agreement and the other Loan Documents, and in addition to all other rights and
remedies of the Secured Party hereunder and thereunder and referred to herein
and therein, Debtor hereby collectively assigns to the Secured Party all of its
right, title and interest in and to all and any of the Intellectual Property
Collateral including, without limitation, each patent, trademark and copyright,
now owned or hereafter acquired by Debtor, and all of the goodwill of the
business of Debtor symbolized by the same and all interest of Debtor in and to
any cause of action related thereto, and Debtor hereby grants to the Secured
Party an absolute power of attorney (which grant is coupled with an interest and
is irrevocable) to sign, upon the occurrence and during the continuance of any
Event of Default, any document which may be necessary or required by the U.S.
Patent and Trademark Office, the U.S. Copyright Office or by any other office or
authority in order to further evidence (and to effect and to record) the
foregoing assignment. Debtor further agrees that, upon the occurrence and during
the continuance of any Event of Default, the Secured Party may take any or all
of the following actions: (i) declare the entire right, title and interest of
Debtor in and to the Intellectual Property Collateral vested in the Secured
Party, in which event such right, title and interest shall immediately vest in
the Secured Party; (ii) take and use and/or, subject to the terms of Section 7
and applicable law, sell the Intellectual Property Collateral (or any portion
thereof) and carry on the business and use the assets of Debtor in connection
with which the Intellectual Property Collateral (or any portion thereof) has
been used; (iii) bring suit to enforce the Trademarks, Patents and/or Copyrights
or any of the other Intellectual Property Collateral and/or any licenses
thereunder or other rights with respect thereto; (iv) direct Debtor to refrain,
in which event Debtor shall refrain, from using the Intellectual Property
Collateral (or any portion thereof) in any manner whatsoever, directly or
indirectly; and (v) direct Debtor to execute, in which event Debtor shall
execute, other and further documents that the Secured Party may reasonably
request to further confirm the provisions hereof and to further evidence the
foregoing assignment. Upon request of the Secured Party, Debtor also shall make
available to the Secured Party, to the extent within Debtor's power and
authority, such individuals then in Debtor's employ to assist in the production,
advertisement and sale of the products and services sold under the Trademarks,
Copyrights and Patents or any of the other Intellectual Property Collateral,
such individuals to be available to perform their prior functions on the Secured
Party's behalf and to be compensated at the expense of the Debtor.
(f) For
the purposes of this Agreement, "Intellectual Property Collateral"
means:
(i) all
trademarks, trademark applications and registrations and trade names, together
with the goodwill appurtenant thereto, owned, held (whether pursuant to a
license or otherwise), used or to be used, in whole or in part, in conducting
the Debtor's business, (the "Trademarks");
-12-
(ii) all
patents and patent applications of the Debtor, including, without limitation,
the inventions and improvements described and claimed therein (the
"Patents");
(iii) all
copyrights and applications for registration of copyrights of the Debtor and all
rights in literary property (the "Copyrights");
(iv) all
reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any Trademarks, Patents and/or Copyrights; all income,
royalties, damages and payments now or hereafter due and/or payable with respect
to any Trademarks, Patents and/or Copyrights, including, without limitation,
damages and payments for past or future infringements thereof; all rights (but
no obligation) to sue for past, present and future infringements of any
Trademarks, Patents and/or Copyrights or bring interference proceedings with
respect thereto; and all rights corresponding to any Trademarks, Patents and/or
Copyrights throughout the world;
(v) all
rights and interests of the Debtor pertaining to common law and statutory
trademark, service marks, trade names, slogans, labels, trade secrets, patents,
copyrights, corporate names, company names, business names, fictitious business
names, trademark or service mark registrations, designs, logos, trade styles,
applications for trademark registration and any other indicia of origin;
and
(vi) all
operating methods, formulae, processes, know-how and the like of the
Debtor.
5. Events of
Default. The Debtor shall be in default under this Agreement
if any one or more of the following events (each an "Event of Default") shall
occur and continue (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or Governmental Authority):
(a) if
default shall be made in the performance or observance of any covenant,
agreement or condition contained in Sections 3(a), 3(b), 3(c), 3(d), or 3(r) of
this Agreement;
(b) if
default shall be made in the performance or observance of any other of the
covenants, agreements or conditions contained in this Agreement and such default
shall have continued for a period of thirty (30) days after the earlier of (i)
the Debtor's obtaining actual knowledge of such default or (ii) the Debtor's
receipt of written notice of such default;
(c) if
any representation or warranty made by or on behalf of Debtor in this Agreement
or in any agreement, document or instrument delivered under or pursuant to any
provision hereof shall prove to have been materially false or incorrect on the
date as of which made; or
-13-
(d) if
any other Event of Default as defined in the Loan Agreement or any other Loan
Document shall occur.
6. Rights and
Remedies.
(a) Upon
the occurrence and during the continuance of any Event of Default, the Secured
Party shall have the following rights and remedies:
(i) all
rights and remedies provided by law or in equity, including, without limitation,
those provided by the UCC;
(ii) all
rights and remedies provided in this Agreement; and
(iii) all
rights and remedies provided in the Loan Agreement, the other Loan Documents or
in any other agreement, document or instrument pertaining to any of the Secured
Obligations.
(b) Notwithstanding
anything to the contrary set forth herein, the Secured Party shall have the
right to exercise (after the occurrence of any Event of Default) all of the
rights and remedies of the Secured Party relating to the Collateral which arise
under or are referred to in this Agreement (including the exercise of any power
of attorney granted herein and the right to enforce this Agreement, by judicial
proceedings or otherwise, to foreclose the lien created hereby, to take
possession of and, subject to the terms of Section 7 and applicable law, to sell
the Collateral (or any part thereof), and/or to direct the time, method and
place of conducting any proceeding for any such remedy or exercising any such
right), and all such rights and remedies may be exercised by the Secured Party
or by a duly authorized representative (or representatives) appointed by the
Secured Party.
-14-
7. Right to Dispose of Collateral,
Etc.
(a) Without
limiting the scope of Section 6 hereof, upon the occurrence and during the
continuance of any Event of Default, the Secured Party shall have the right and
power to take possession of all or any part of the Collateral and, in addition
thereto, the right to enter upon any premises on which all or any part of the
Collateral may be situated and remove the same therefrom and the Secured Party
may sell, resell, assign and deliver, or otherwise dispose of any or all of the
Collateral, for cash and/or credit, in one or more parcels, at any exchange or
broker's board, or at public or private sale and upon such terms and at such
place or places and at such time or times and to such Persons (including,
without limitation, the Secured Party), to the extent permitted by applicable
law, as the Secured Party deems expedient, all without demand for performance by
the Debtor or any notice or advertisement whatsoever except as may be required
by this Agreement or by law. The Secured Party may require the Debtor to make
all or any part of the Collateral (to the extent the same is moveable) available
to the Secured Party at a place to be designated by the Secured Party which is
reasonably convenient to the Secured Party and the Debtor. Unless the Collateral
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, the Secured Party will give the Debtor at least ten (10)
days' prior written notice of the time and place of any public sale thereof or
of the time after which any private sale or any other intended disposition
thereof is to be made. Any such notice shall be deemed to meet any requirement
hereunder or under any applicable law (including the UCC) that reasonable
notification be given of the time and place of such sale or other disposition.
After deducting all costs and expenses of collection, storage, custody, sale or
other disposition and delivery (including legal costs and reasonable attorneys'
fees) and all other charges against the Collateral, the residue of the proceeds
of any such sale or disposition shall be applied to the payment of the Secured
Obligations in the manner set forth in Section 15.4 of the Loan Agreement. In
the event the proceeds of any sale, lease or other disposition of the Collateral
hereunder are insufficient to pay all of the Secured Obligations in full, the
Debtor will be liable for the deficiency, including, if the Secured Party so
elects, interest thereon at a rate per annum equal to the Default Rate
applicable thereto until paid or a late fee as provided in Section 6.8 of the
Loan Agreement, and the cost and expenses of collection of such deficiency,
including, without limitation, reasonable attorneys' fees, expenses and
disbursements. Without limiting the generality of the foregoing or the scope of
Section 6 hereof, upon the occurrence and during the continuance of any Event of
Default, any amount owing by the Secured Party to any Debtor may, without regard
to the value of the Collateral, be offset and applied toward the payment of the
Secured Obligations as aforesaid, whether or not the Secured Obligations, or any
part thereof, shall be then due.
(b) Debtor
acknowledges that portions of the Collateral could be difficult to preserve and
dispose of and be further subject to complex maintenance and management.
Accordingly, the Secured Party, in exercising its rights hereunder, or
otherwise, shall have the widest possible latitude to preserve and protect the
Collateral and the Secured Party's lien therein. Moreover, Debtor acknowledges
and agrees that the Secured Party shall have no obligation to, and Debtor hereby
waives to the fullest extent permitted by law any right that it may have to
require the Secured Party to: (i) clean up or otherwise prepare any of the
Collateral for sale, (ii) pursue any Person to collect any of the Obligations,
or (iii) exercise collection remedies against any Persons obligated on the
Collateral. The Secured Party's compliance with applicable local, state or
federal law requirements, in addition to those imposed by the UCC, in connection
with a disposition of any or all of the Collateral will not be considered to
adversely affect the commercial reasonableness of any disposition of any or all
of the Collateral under the UCC.
(c) Certain
Affiliates of Debtor have executed and delivered or may hereafter execute and
deliver to the Secured Party additional Security Documents securing the Secured
Obligations. Debtor acknowledges and agrees with Secured Party that Secured
Party's rights and remedies, and recourse to the Collateral, hereunder, are not
in any way affected by and shall not in any manner be delayed or impaired by
Secured Party's rights under such other Security Documents, or any defenses
available to or asserted by such Affiliates thereunder, or any exercise or delay
or failure to exercise any of Secured Party's rights and remedies
thereunder.
-15-
8. Right to Use the Collateral,
Etc. Without limiting the scope of Section 6 hereof, upon the
occurrence and during the continuance of any Event of Default, but subject to
the provisions of the UCC or other mandatory provisions of applicable law, the
Secured Party shall have the right and power to take possession of all or any
part of the Collateral, and to exclude the Debtor and all Persons claiming under
Debtor wholly or partly therefrom, and thereafter to hold, store, and/or use,
operate, manage and control the same. Upon any such taking of possession, the
Secured Party, from time to time, at the Debtor's expense, may (but shall not be
obligated to) make all such repairs, replacements, alterations and improvements
to any of the Collateral and may manage and control the Collateral and carry on
the business and exercise all rights and powers of the Debtor in respect thereto
as the Secured Party shall deem reasonably appropriate, including, without
limitation, the right to enter into any and all such agreements with respect to
the use of the Collateral or any part thereof as the Secured Party may see fit
(including, without limitation, licensing agreements related to the Intellectual
Property Collateral); and the Secured Party shall be entitled to collect and
receive all rents, issues, profits, fees, revenues and other income of the same
and every part thereof. Such rents, issues, profits, fees, revenues and other
income shall be applied to pay the expenses of so holding, storing, using,
operating, managing and controlling the Collateral, and of conducting any
business related thereto, and of all maintenance, repairs, replacements,
alterations, additions and improvements, and to make all payments which the
Secured Party may be required or may elect to make, if any, for taxes,
assessments, insurance and other charges upon the Collateral or any part
thereof, and all other payments which the Secured Party may be required or
authorized to make under any provision of this Agreement, the Loan Agreement or
any of the other Loan Documents (including legal costs and reasonable attorneys'
fees). The remainder of such rents, issues, profits, fees, revenues and other
income shall be applied to the payment of the Secured Obligations in the manner
set forth in Section 15.4 of the Loan Agreement.
-16-
9. Waivers, Remedies Cumulative,
Etc.
(a) Debtor
hereby waives presentment, demand, notice, protest and, except as is otherwise
explicitly provided herein or in the Loan Agreement, all other demands and
notices in connection with this Agreement or the enforcement of any of the
rights and remedies of the Secured Party hereunder or in connection with any
Secured Obligations or any Collateral; consents to and waives notice of the
granting of renewals, extensions of time for payment or other indulgences to
Debtor or any other Person, or substitution, release or surrender of any
Collateral, the addition or release of Persons primarily or secondarily liable
on any Secured Obligation, the acceptance of partial payments on any Secured
Obligation and/or the settlement or compromise thereof. To the extent permitted
by law, Debtor also hereby waives any rights and/or defenses Debtor may have
under any anti-deficiency laws or other laws limiting, qualifying or discharging
the Secured Obligations and/or any of the remedies of the Secured Party against
Debtor. Debtor further waives, to the extent permitted by law: (i) any right it
may have under any applicable law (including the constitution of any
jurisdiction in which any of the Collateral may be located and the Constitution
of the United States of America) to notice (other than any requirement of notice
explicitly provided herein or in the Loan Agreement) or to a judicial hearing
prior to the exercise of any right or remedy provided by this Agreement, the
Loan Agreement or any of the other Loan Documents and any right to set aside or
invalidate any sale duly consummated in accordance with the foregoing provisions
hereof on the grounds (if such be the case) that the sale was consummated
without a prior judicial hearing; (ii) any right to damages occasioned by any
lawful exercise by the Secured Party of any right or remedy hereunder or
referred to herein, including any damages arising as a result of any taking of
possession of the Collateral; (iii) all other requirements as to the time,
place and terms of sale or other requirements with respect to the enforcement of
the Secured Party's rights hereunder; (iv) all rights of redemption,
appraisement, valuation, stay, extension or moratorium now or hereafter in force
under any applicable law; and (v) the appointment of a receiver as provided
herein or in the Loan Agreement. The Secured Party shall not be required to
marshall any Collateral (or any part thereof) in any particular order. To the
extent permitted by law, Debtor hereby agrees it will not invoke any right it
may have under any law to require the marshalling of Collateral or any other
right under any law which might cause delay in or impede the enforcement of the
rights of the Secured Party under this Agreement, the Loan Agreement or any of
the other Loan Documents, and Debtor hereby irrevocably waives the benefits of
all such laws. Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of Debtor therein and
thereto, and shall be a perpetual bar both at law and in equity against the
Debtor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under Debtor.
(b) To
the extent permitted by law, the obligations of the Debtor under this Agreement
shall remain in full force and effect without regard to, and shall not be
impaired by: (i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Debtor or of any other
Person (including the Holding Company); (ii) any exercise or nonexercise, or any
waiver, by the Secured Party, of any right, remedy, power or privilege under or
in respect of any of the Secured Obligations or any of the Collateral or any
other security therefor (including under any Loan Document executed by the
Holding Company); (iii) any amendment to or modification of or waiver granted
under this Agreement, the Loan Agreement or any of the other Loan Documents; or
(iv) the taking of additional security for or any guarantee of any of the
Secured Obligations or the release or discharge or termination of any security
or guarantee for any of the Secured Obligations including any waiver granted
under a termination of any Loan Document executed by the Holding Company; and
whether or not Debtor shall have notice or knowledge of any of the
foregoing.
(c) No
remedy conferred herein or in the Loan Agreement or any of the other Loan
Documents upon the Secured Party is intended to be exclusive of any other
remedy, and each and every such remedy (whether granted by Debtor or the Holding
Company) shall be cumulative and shall be in addition to every other remedy
given hereunder or under the Loan Agreement or any of the other Loan Documents
or now or hereafter existing at law or in equity or by statute or otherwise. No
course of dealing between the Debtor or any Affiliate of the Debtor (including
the Holding Company) and the Secured Party, and no delay in exercising any
rights hereunder or under the Loan Agreement or any of the other Loan Documents,
shall operate as a waiver of any right of the Secured Party. No waiver by the
Secured Party of any default shall be effective unless made in writing and
otherwise in accordance with the terms of Article 28 of the Loan Agreement and
no such waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon.
-17-
(d) Debtor's
waivers set forth in this Agreement (including, without limitation, those set
forth in this Section 9) have been made voluntarily, intelligently and knowingly
and after Debtor has been apprised and counseled by its attorneys as to the
nature thereof and its possible alternative rights.
10. Termination. This
Agreement and the lien on the Collateral created hereby shall automatically
terminate, with no further actions required by any party hereto, when all of the
Secured Obligations have been indefeasibly paid and finally discharged in full
in cash (and all commitments of the Secured Party to lend any additional amounts
to the Debtor under the Loan Agreement shall have been terminated) (other than
contingent indemnification obligations which by their terms survive termination
of the Loan Documents). Upon termination as aforesaid, the Secured
Party shall execute and deliver such releases and discharges as the Debtor may
reasonably request at Debtor's expense.
11. Reinstatement. Notwithstanding
the provisions of Section 10 to the contrary, and notwithstanding anything else
to the contrary contained herein, this Agreement shall continue to be effective
or be reinstated, as the case may be, if at any time any amount received by the
Secured Party in respect of the Collateral or the Secured Obligations is
rescinded, or must otherwise be restored or returned by the Secured Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of Debtor
or any Affiliates of Debtor or any guarantor of all or any part of the Secured
Obligations, or upon the appointment of any intervenor, receiver or conservator
of, or trustee or similar official for Debtor, any such Affiliate or guarantor,
or any substantial part of their respective properties or assets, or otherwise,
all as though such payment had not been made.
12. Consents, Approvals,
Etc. Upon the exercise by the Secured Party of any power,
right, privilege or remedy pursuant to this Agreement, the Loan Agreement or any
of the other Loan Documents which requires any consent, approval, registration,
qualification or authorization of, or declaration or filing with, or other
action by, any other Person, including, without limitation, any governmental
authority or instrumentality, Debtor will execute and deliver, or will cause the
execution and delivery of, all such agreements, documents, applications,
certificates, instruments and other documents and papers and will take, or will
cause to be taken, such other action that may be required to obtain such
consent, approval, registration, qualification or authorization of or other
action by such other Person and/or that may be reasonably requested by the
Secured Party in connection therewith.
13. Certain
Definitions. In addition to the descriptions contained in
Section 1 hereof, the items of Collateral referred to therein shall have all of
the meanings ascribed to them in the UCC.
-18-
14. Amendments. All
amendments of this Agreement and all waivers of compliance herewith shall be in
writing and shall be effected in compliance with the provisions of Article 28 of
the Loan Agreement.
15. Communications. All
communications provided for herein shall be made as specified in Article 22 of
the Loan Agreement.
16. Successors and
Assigns. This Agreement shall bind and inure to the benefit of
and be enforceable by the Secured Party and the Debtor, successors to the Debtor
and the successors and assigns of the Secured Party.
17. Governing Law; Jurisdiction; Waiver
of Jury Trial. This Agreement, including the validity hereof
and the rights and obligations of the parties hereunder, and all amendments and
supplements hereof and all waivers and consents hereunder, shall be construed in
accordance with and governed by the domestic substantive laws of the State of
Illinois without giving effect to any choice of law or conflicts of law
provision or rule that would cause the application of the domestic substantive
laws of any other jurisdiction. Each party hereto, to the extent that it may
lawfully do so, hereby consents to service of process, and to be sued, in the
State of Illinois and consents to the jurisdiction of the courts of the State of
Illinois and the United States District Court for the Northern District of
Illinois, as well as to the jurisdiction of all courts to which an appeal may be
taken from such courts, for the purpose of any suit, action or other proceeding
arising out of any of its obligations hereunder and under the Loan Agreement and
the other Loan Documents or with respect to the transactions contemplated hereby
or thereby, and expressly waives any and all objections it may have as to venue
in any such courts. Each party hereto further agrees that a summons and
complaint commencing an action or proceeding in any of such courts shall be
properly served and shall confer personal jurisdiction if served personally or
by certified mail to it in accordance with Section 15 or as otherwise provided
under the laws of the State of Illinois. Notwithstanding the foregoing, each
party hereto agrees that nothing contained in this Section 17 shall preclude the
institution of any such suit, action or other proceeding by the Secured Party in
any jurisdiction other than the State of Illinois. EACH PARTY HERETO IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING
INSTITUTED BY OR AGAINST IT IN RESPECT OF ITS OBLIGATIONS HEREUNDER AND UNDER
THE LOAN AGREEMENT AND ANY OF THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND BY THE LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
-19-
18. Miscellaneous. The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof. This Agreement (together with the
Loan Agreement and the other Loan Documents) embodies the entire agreement and
understanding between the Secured Party and the Debtor and supersedes all prior
agreements and understandings relating to the subject matter hereof. Each
covenant contained herein and in the Loan Agreement and in each of the other
Loan Documents shall be construed (absent an express provision to the contrary)
as being independent of each other covenant contained herein and therein, so
that compliance with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with any other covenant. If any
provision in this Agreement, the Loan Agreement or any of the other Loan
Documents refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable, whether
such action is taken directly or indirectly by such Person, whether or not
expressly specified in such provision. In case any provision in this Agreement,
the Loan Agreement or any of the other Loan Documents shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions hereof and thereof shall not in any way be affected or impaired
thereby. This Agreement may be executed in any number of counterparts and by the
parties hereto on separate counterparts all such counterparts shall together
constitute but one and the same instrument.
19. Subordination
Agreement. Notwithstanding any provision to the contrary in
this Agreement, this Agreement, the Liens and security interests granted to the
Agent and Lenders, at law or equity, pursuant to this Agreement and the other
Loan Documents, and the exercise of any right or remedy by the Agent or any
Lender hereunder are subject to the provisions of the Subordination
Agreement. Agent and Lenders acknowledge and agree to be bound by the
Subordination Agreement. In the event of any conflict
between the terms of the Subordination Agreement and this Agreement or the other
Loan Documents, the terms of the Subordination Agreement shall
govern. Without limiting the generality of the foregoing, and
notwithstanding anything herein to the contrary, all right and remedies of the
Agent and Lenders shall be subject to the terms of the Subordination Agreement,
and until the Senior Debt is paid in full, any obligation of the Debtor
hereunder with respect to the delivery or control of any Collateral, the
notation of any lien on any certificate of title, bill of lading or other
document, the giving of any notice to any bailee or other Person, the provision
of voting rights or the obtaining of any consent of any Person shall be deemed
to be satisfied if the Debtor complies with the requirements of the similar
provision of the Senior Loan Agreement or the applicable Senior Debt
Document.
The
Debtor acknowledges that the Subordination Agreement and the rights and benefits
thereof (as specific references thereto herein) inure only to the benefit of the
holders of the Senior Debt and that no other Person, including the Debtor and
Guarantors, shall have or be entitled to assert any rights or benefits hereunder
arising under the Subordination Agreement or by virtue of the existence of the
specific references thereto herein.
-20-
IN
WITNESS WHEREOF, the Debtor has executed this Agreement as of the date first
above written with the intent to be legally bound.
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CYALUME
TECHNOLOGIES, INC.
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By:
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/s/ Michael Bielonko
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Name:
Michael Bielonko
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Title: Chief
Financial Officer
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Signature
Page to Subordinated Security and Pledge Agreement
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GRANITE
CREEK PARTNERS AGENT, LLC, as Agent
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By:
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/s/ Brian B. Boorstein
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Name: Brian
B. Boorstein
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Title: Managing
Member
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Signature
Page to Subordinated Security and Pledge Agreement