Attached files
| file | filename |
|---|---|
| 8-K - FLORHAM CONSULTING CORP | v204773_8k.htm |
| EX-10.5 - FLORHAM CONSULTING CORP | v204773_ex10-5.htm |
| EX-99.1 - FLORHAM CONSULTING CORP | v204773_ex99-1.htm |
| EX-10.8 - FLORHAM CONSULTING CORP | v204773_ex10-8.htm |
| EX-10.1 - FLORHAM CONSULTING CORP | v204773_ex10-1.htm |
| EX-10.4 - FLORHAM CONSULTING CORP | v204773_ex10-4.htm |
| EX-10.6 - FLORHAM CONSULTING CORP | v204773_ex10-6.htm |
| EX-10.2 - FLORHAM CONSULTING CORP | v204773_ex10-2.htm |
| EX-10.9 - FLORHAM CONSULTING CORP | v204773_ex10-9.htm |
| EX-10.3 - FLORHAM CONSULTING CORP | v204773_ex10-3.htm |
| EX-10.10 - FLORHAM CONSULTING CORP | v204773_ex10-10.htm |
SECURITY
AGREEMENT
THIS
SECURITY AGREEMENT (as amended, restated, modified or supplemented and in effect
from time to time, this “Agreement”)
is entered into as of November 30, 2010, by and among Oak Tree Educational
Partners, Inc., a Delaware corporation formerly known as Florham Consulting
Corp. (the “Company”),
and each of its Subsidiaries, current and future (all of the foregoing current
and future Subsidiaries, collectively with the Company, the “Debtor”),
and Deerpath Funding, LP, a Delaware limited partnership, as Agent (as defined
in the Loan Agreement) for the ratable benefit of the Lenders (as defined in the
Loan Agreement) (together with any successor Agent under the Loan Agreement, the
“Secured
Party”).
WITNESSETH:
WHEREAS,
Debtor and Secured Party have entered into that certain Loan Agreement of even
date herewith (as from time to time amended, restated, supplemented or otherwise
modified, the “Loan
Agreement”); and
WHEREAS,
the execution and delivery of this Agreement is a condition precedent to the
obligation of Secured Party to extend credit to Debtor pursuant to the Loan
Agreement.
NOW,
THEREFORE, in consideration of the foregoing and as an inducement to Secured
Party to enter into the Loan Agreement and extend credit to Debtor, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section
1. Definitions.
(a) When
used herein, the terms Account, Account Debtor, Certificated Security, Chattel
Paper, Commercial Tort Claim, Deposit Account, Document of Title, Electronic
Chattel Paper, Equipment, Financial Asset, Fixtures, Goods,
Health-Care-Insurance Receivable, Inventory, Instrument, Investment Property,
Letter of Credit Rights, Payment Intangibles, Proceeds, Security, Security
Entitlement, Supporting Obligations and Uncertificated Security have the
respective meanings assigned thereto in the UCC (as defined below).
(b) Capitalized
terms used herein and not otherwise defined shall have the meanings assigned
thereto in the Loan Agreement.
(c) The
following terms have the following meanings (such definitions to be applicable
to both the singular and plural forms of such terms):
Culinary Group
Acquisition is defined in the Loan Agreement.
Collateral
means all property and rights of Debtor in which a security interest is granted
hereunder. Notwithstanding anything herein to the contrary, in no
event shall “Collateral” include, and Debtor shall not be deemed to have granted
a security interest in, any contract, lease, license or other agreement which by
its terms prohibits the granting of a security interest therein (except to the
extent such prohibition is unenforceable pursuant to the provisions of Article 9
of the UCC); provided,
however, that Debtor will use commercially reasonable efforts to promptly
obtain consent to the collateral assignment thereof and the granting of a
security interest therein to Secured Party and, at such time such consent is
obtained, the contract, lease, license or other agreement shall constitute
“Collateral” hereunder, and provided, further, that notwithstanding the
foregoing, the term “Collateral” shall include any and all proceeds arising from
such excluded property to the extent that the assignment or encumbering of such
proceeds is not subject to the same or similar prohibitions or
restrictions.
Computer Hardware
and Software means all of Debtor’s rights (including rights as licensee
and lessee) with respect to: (i) computer and other electronic data processing
hardware, including all integrated computer systems, central processing units,
memory units, display terminals, printers, computer elements, card readers, tape
drives, hard and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories, peripheral devices and other related
computer hardware; (ii) all software programs designed for use on the computers
and electronic data processing hardware described in clause (i) above, including
all operating system software, utilities and application programs in whatsoever
form (source code and object code in magnetic tape, disk or hard copy format or
any other listings whatsoever); (iii) any firmware associated with any of the
foregoing; and (iv) any documentation for hardware, software and firmware
described in clauses (i), (ii) and (iii) above, including flow charts, logic
diagrams, manuals, specifications, training materials, charts and pseudo
codes.
Default
means the occurrence of an event of Default under Section 11
of the Loan Agreement.
Foreign Filing
Offices is defined in Section
3(s).
General
Intangibles means all of Debtor’s “general intangibles” as defined in the
UCC and, in any event, includes, without limitation, all of Debtor’s trademarks,
trade names, patents, copyrights, trade secrets, customer lists, inventions,
designs, software, software programs, mask works, goodwill, registrations,
licenses, franchises, tax refund claims, guarantee claims, Payment Intangibles,
security interests and rights to indemnification.
Intellectual
Property means all past, present and future: trade secrets and
other proprietary information; trademarks, service marks, business names,
Internet domain names, designs, logos, trade dress, slogans, indicia and other
source and/or business identifiers, and the goodwill of the business relating
thereto and all registrations or applications for registrations which have
heretofore been or may hereafter be issued thereon throughout the world;
copyrights (including copyrights for computer programs and software) and
copyright registrations or applications for registrations which have heretofore
been or may hereafter be issued throughout the world and all tangible property
embodying the copyrights; unpatented inventions (whether or not patentable);
patent applications and patents; industrial designs, industrial design
applications and registered industrial designs; license agreements related to
any of the foregoing and income therefrom; books, records, writings, computer
tapes or disks, flow diagrams, specification sheets, source codes, object codes
and other physical manifestations, embodiments or incorporations of any of the
foregoing; the right to sue for all past, present and future infringements of
any of the foregoing; and all common law and other rights throughout the world
in and to all of the foregoing.
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Joinder Agreement
is defined in the Loan Agreement.
Non-Tangible
Collateral means, collectively, Debtor’s Accounts and General
Intangibles.
Obligations
means all obligations (monetary or otherwise) of Debtor under the Loan
Agreement, any other Loan Document or any instrument executed in connection
therewith, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due.
Obligor
means a Person that, with respect to an obligation secured by a security
interest in the Collateral, (a) owes payment or other performance on the
obligation, (b) has provided property or other security or credit support other
than the Collateral to secure payment or other performance of the obligation, or
(c) is otherwise accountable in whole or in part for payment or other
performance of the obligation. The term does not include issuers or
nominated persons under a letter of credit.
Organizational
I.D. Number means the organizational identification number assigned to
Debtor by the applicable governmental unit or agency of the jurisdiction of
organization for Debtor.
Patents means all of the
following now owned or hereafter acquired by Debtor; (a) all letters patent of
the United States or any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or any
other country, including registrations, recordings and pending applications in
the United States Patent and Trademark Office or any similar offices in any
other country, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
Permitted
Liens is defined in the Loan Agreement.
Receivable(s) means all Accounts and
all right, title and interest in any returned goods, together with all right,
title, securities and guarantees with respect thereto, including any rights to
stoppage in transit, replevin, reclamation and re-sales, and all related
security interests, liens, charges, encumbrances and pledges, whether voluntary
or involuntary, in each ease whether now existing or owned or hereafter arising
or acquired.
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Security
Interest is defined in Section
2.
Trademarks
means all of the following now owned or hereafter acquired by Debtor:
(a) all trademarks, service marks, trade names, corporate names, company
names, business names, Internet domain names, fictitious business names, trade
styles, trade dress, logos, indicia and other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any similar offices in any
other country or any political subdivision thereof, and all extensions or
renewals thereof; (b) all goodwill associated therewith or symbolized
thereby; and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
Type of
Organization means the kind or type of entity of Debtor, such as a
corporation, limited partnership or limited liability company.
UCC means
the Uniform Commercial Code as in effect in the State of New York on the date of
this Agreement, as it may be amended or modified from time to time hereafter;
provided, however, that, as used in Section 5
hereof, UCC shall mean the Uniform Commercial Code as in effect from time to
time in any applicable jurisdiction.
Section
2. Grant of Security
Interest. As security for the payment and performance of all
Obligations, each Debtor hereby assigns to Secured Party, and grants to Secured
Party a continuing security interest (the “Security
Interest”) in, all of the property of Debtor whether now or hereafter
existing or acquired, including all of the property acquired by Debtor pursuant
to the Culinary Group Acquisition, regardless of where located including,
without limitation, all of Debtor’s:
(a) Accounts;
(b) Certificated
Securities;
(c) Chattel
Paper, including Electronic Chattel Paper;
(d) Computer
Hardware and Software and all rights with respect thereto, including, any and
all licenses, options, warranties, service contracts, program services, test
rights, maintenance rights, support rights, improvement rights, renewal rights
and indemnifications, and any substitutions, replacements, additions or model
conversions of any of the foregoing;
(e) Commercial
Tort Claims;
(f)
Deposit Accounts;
(g) Documents
of Title;
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(h) Financial
Assets;
(i) General
Intangibles;
(j) Goods
(including all of its Equipment, Fixtures and Inventory), and all embedded
software, accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor;
(k) Instruments;
(l)
Intellectual Property;
(m) Investment
Property;
(n) Letter
of Credit Rights;
(o) money
(of every jurisdiction whatsoever);
(p) Security
Entitlements;
(q) Supporting
Obligations;
(r) Uncertificated
Securities; and
(s) to
the extent not included in the foregoing, all other personal property of any
kind or description;
together
with all books, records, writings, databases, information and other property
relating to, used or useful in connection with, or evidencing, embodying,
incorporating or referring to any of the foregoing, and all Proceeds, products,
offspring, rents, issues, profits and returns of and from any of the foregoing;
provided, however, that
to the extent that the provisions of any lease or license of Computer Hardware
and Software or Intellectual Property expressly prohibit (which prohibition is
enforceable under applicable law) the assignment thereof, and the grant of a
security interest therein, Secured Party will not enforce its security interest
(other than in respect of the Proceeds thereof) for so long as such prohibition
continues, it being understood that upon request of Secured Party, Debtor will
in good faith use reasonable efforts to obtain consent for the creation of a
security interest in favor of Secured Party (and to Secured Party’s enforcement
of such security interest) in Debtor’s rights under such lease or
license.
Section
3. Representations and
Warranties. Debtor represents and warrants to Secured Party,
as of the Closing Date but after giving effect to the Culinary Group
Acquisition, that:
(a) No
financing statement (other than any which may have been filed on behalf of
Secured Party) with respect to Debtor or the Collateral is on file in any public
office.
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(b) Debtor
is and will be the lawful owner of all Collateral, free of all liens, claims,
security interests and encumbrances whatsoever, other than the security interest
hereunder and Permitted Liens, with full power and authority to execute this
Agreement and perform its obligations hereunder, and to subject the Collateral
to the security interest hereunder.
(c) All
information with respect to Collateral and Account Debtors set forth in any
schedule, certificate or other writing at any time heretofore or hereafter
furnished by Debtor to Secured Party is and will be true and correct in all
material respects as of the date furnished.
(d) The
execution and delivery of this Agreement and the performance by Debtor of its
obligations hereunder are within Debtor’s powers, have been duly authorized by
all necessary action, have received all necessary governmental approval (if any
shall be required), and do not and will not contravene or conflict with any
provision of law or of the articles of incorporation, certificate of formation,
by-laws, limited liability company agreement, limited partnership agreement or
any similar governing documents of Debtor or of any material agreement,
indenture, instrument or other document, or any material judgment, order or
decree, which is binding upon Debtor.
(e) This
Agreement is a legal, valid and binding obligation of Debtor, enforceable in
accordance with its terms, except that the enforceability of this Agreement may
be limited by bankruptcy, insolvency, fraudulent conveyance, fraudulent
transfer, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors’ rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
(f) The
Security Interest in the Collateral created by this Agreement will be duly
perfected once the action required for perfection under applicable Law has been
taken. The creation, attachment and perfection of the Security
Interest do not require the consent of any third party. Once
perfected, the Security Interest will constitute a first and prior lien on the
Collateral.
(g) Debtor’s
chief executive office and principal place of business are as set forth on Schedule I
hereto; Schedule I
also sets forth each location where Debtor maintains a place of business,
maintains any Inventory, or owns or leases any real property. The
failure of the description of locations of Collateral on Schedule I
to be accurate or complete will not impair the Security Interest in such
Collateral.
(h) Debtor
is duly organized, validly existing and in good standing under the laws of the
state set forth on Schedule II
hereto; Schedule II
sets forth the Type of Organization, Organizational I.D. Number and
federal taxpayer identification number of Debtor.
(i) Debtor’s
exact legal name is as set forth on the signature pages of this Agreement and on
Schedule
II; Schedule
III sets forth all of Debtor’s prior legal names and prior Types of
Organizations, and lists all mergers or other reorganizations to which Debtor
has been subject, within the five (5) year period immediately preceding the date
hereof.
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(j) Schedule
IV hereto contains a complete listing of all of Debtor’s Intellectual
Property that is subject to registration statutes.
(k) Schedule V
hereto contains a complete listing of all of Debtor’s Instruments, Investment
Property, Letter-of-Credit Rights, Chattel Paper, Documents of Title and
Commercial Tort Claims.
(l)
Except as set forth on Schedule
VI hereto, Debtor has no tangible Collateral located outside of the
United States.
(m) Schedule
VII hereto contains a complete listing of Debtor’s tangible Collateral
located with any bailee, warehousemen or other third parties.
(n) Schedule
VIII hereto contains a complete listing of all of Debtor’s Collateral
that is subject to certificate of title statutes.
(o) Schedule
IX hereto contains a complete listing of all of Debtor’s Deposit Accounts
and other bank accounts, including locations and applicable account
numbers.
(p) Debtor
is in compliance with the requirements of all applicable laws (including the
provisions of the Fair Labor Standards Act), rules, regulations and orders of
every Governmental Authority, the non-compliance with which would reasonably be
expected to result in a Material Adverse Event.
(q) Except
for Permitted Liens, Debtor has good and indefeasible and merchantable title to
and ownership of all of its Equipment. None of Debtor’s Equipment is
(i) a Fixture to real estate unless such real estate is owned by Debtor and is
subject to a mortgage in favor of Secured Party, or if such real estate is
leased, is subject to a landlord's agreement in favor of Secured Party on terms
acceptable to Secured Party, or (ii) an accession to other personal property
unless such personal property is subject to a first priority lien in favor of
Secured Party.
(r) The
amounts due Debtor under the Collateral are not subject to any material setoff,
counterclaim, defense, allowance or adjustment (other than discounts for prompt
payment shown on the invoice) or to any material dispute, objection or complaint
by any Account Debtor or other Obligor.
(s) Debtor
has full right to use the Patents and Trademarks and all Patents and Trademarks
owned, controlled, or acquired by Debtor, or which Debtor has a right to use:
(i) are subsisting and have not been adjudged or claimed to be invalid or
unenforceable (either in whole or in part) and Debtor is not aware of any basis
for such a claim, (ii) are valid and enforceable, (iii) are in the
name of Debtor, (iv) are properly recorded and/or filed in the United
States Patent and Trademark Offices, and (v) Debtor has taken all necessary
steps to properly record or file ownership in the name of Debtor in the proper
foreign filing offices (the “Foreign Filing
Offices”) with respect to foreign Patents and Trademarks, as
appropriate. Debtor’s right, title and interest in the Patents and
Trademarks is free and clear of any Liens, registered user agreements, or
covenants by Debtor not to sue third Persons or licenses.
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(t) Debtor
has properly completed all required filings, payments, renewals and obligations
in the United States Patent and Trademark Offices or the appropriate Foreign
Filing Offices, as the case may be, to maintain its Patents and Trademarks as
fully valid and enforceable.
(u) No
claim has been made that the ownership or use of any of the Patents and
Trademarks, or the manufacture, use or sale of any product made in accordance
therewith or service rendered thereunder, does or may violate the rights of any
third Person, and Debtor has no knowledge of any third party rights which may be
infringed or otherwise violated by the use of any of the Patents and
Trademarks.
(v) The
delivery at any time by Debtor to Secured Party of Collateral or of additional
specific descriptions of certain Collateral will constitute a representation and
warranty by Debtor to Secured Party under this Agreement that the
representations and warranties of this Section 3
are true and correct with respect to each item of such Collateral.
Section
4. Certificates, Schedules and
Reports. Debtor will from time to time, as Secured Party may
request, deliver to Secured Party such schedules, certificates and reports
respecting all or any of the Collateral at the time subject to the security
interest hereunder, and the items or amounts received by Debtor in full or
partial payment of any of the Collateral, as Secured Party may reasonably
request. Any such schedule, certificate or report shall be executed
by a duly authorized officer of Debtor and shall be in such form and detail as
Secured Party may specify. Debtor shall immediately notify Secured
Party of the occurrence of any event causing any loss or depreciation in the
value of its Inventory or other Goods that are material to Debtor and its
Subsidiaries taken as a whole, and such notice shall specify the amount of such
loss or depreciation.
Section
5.
Agreements of
Debtor.
(a) Debtor,
at Secured Party’s request, at any time and from time to time, shall execute and
deliver to Secured Party such financing statements, amendments and any other
documents, including Instruments, and do such acts as Secured Party deems
necessary in order to establish and maintain valid, attached and perfected
security interests in the Collateral in favor of Secured Party, free and clear
of all Liens and claims and rights of third parties whatsoever except Permitted
Liens. Debtor hereby irrevocably authorizes Secured Party at any
time, and from time to time, to file in any jurisdiction any initial financing
statements and amendments thereto that (i) indicate the Collateral (A) as “all
assets of Debtor,” “the Collateral described in the Security Agreement” or words
of similar effect, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the UCC of the jurisdiction
wherein such financing statement or amendment is filed, or (B) as being of an
equal or lesser scope or with greater detail, and (ii) contain any other
information required by Article 9 of the UCC of the jurisdiction wherein such
financing statement or amendment is filed regarding the sufficiency or filing
office acceptance of any financing statement or amendment, including, without
limitation, (A) whether Debtor is an organization, the Type of Organization and
the Organization ID Number issued to Debtor and (B) in the case of a financing
statement filed as a fixture filing or indicating Collateral to be extracted or
timber to be cut, a sufficient description of the real property to which the
Collateral relates. Debtor further ratifies and affirms its
authorization for any financing statements and/or amendments thereto that
Secured Party has filed in any jurisdiction prior to the date of this
Agreement.
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(b) During
the term of this Agreement, Debtor agrees to:
(i) keep
all of the Collateral (other than with respect to Goods in transit between
facilities, temporary warehousing for up to thirty (30) days, or sales or leases
of Inventory in the ordinary course of business or the sale or lease of other
Collateral to the extent permitted by the Loan Agreement) at, and will not
maintain any place of business at any location other than, its address(es) shown
on Schedule
I hereto or at such other addresses of which Debtor shall have given
Secured Party not less than thirty (30) days’ prior written notice; provided, however, that
Debtor at any time may keep its Inventory at the addresses of its third-party
vendors;
(ii) keep
its records concerning the Non-Tangible Collateral in such a manner as will
enable Secured Party or its designees to determine at any time the status of the
Non-Tangible Collateral;
(iii) maintain
a current record of the location of all Collateral and furnish Secured Party
such information concerning Debtor, the Collateral and the Account Debtor as
Secured Party may from time to time reasonably request;
(iv) permit
Secured Party and its designees, from time to time, on reasonable notice and at
reasonable times and intervals during normal business hours (or at any time
without notice during the existence of a Default) to inspect Debtor’s Inventory
and other Goods, and to inspect, audit and make copies of and extracts from all
records and other papers in the possession of Debtor pertaining to the
Collateral and the Account Debtors, and will, upon request of Secured Party
during the existence of a Default, deliver to Secured Party all of such records
and papers;
(v) upon
request of Secured Party, stamp on its records concerning the Collateral, and
add on all Chattel Paper and Instruments constituting a portion of the
Collateral, a notation, in form satisfactory to Secured Party, of the security
interest of Secured Party hereunder;
(vi) promptly
notify Secured Party in writing of any change in any material fact or
circumstance represented or warranted by Debtor with respect to any of the
Collateral, and promptly notify Secured Party in writing of any claim, action or
proceeding challenging the Security Interest or affecting title to all or any
material portion of the Collateral or the Security Interest and, at Secured
Party’s request, appear in and defend any such action or proceeding at Debtor’s
expense;
(vii) not
sell, lease, assign or create or permit to exist any Lien on any Collateral
other than Permitted Liens except for the sale or lease of Inventory in the
ordinary course of its business and sales of Equipment which is no longer useful
in its business or which is being replaced by similar
Equipment;
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(viii) keep
all of its Inventory and other Goods insured under policies maintained with
reputable, financially sound insurance companies against loss, damage, theft and
other risks to such extent as is customarily maintained by companies similarly
situated, and copies of such policies or certificates thereof shall, if Secured
Party so requests, be deposited with or furnished to Secured Party;
(ix) take
such actions as are reasonably necessary to keep its Goods in good repair and
condition;
(x) take
such actions as are reasonably necessary to keep its Equipment in good repair
and condition and in good working order, ordinary wear and tear
excepted;
(xi) promptly
pay when due all license fees, registration fees, taxes, assessments and other
charges which may be levied upon or assessed against the ownership, operation,
possession, maintenance or use of its Equipment and other Goods except to the
extent the validity thereof is being contested in good faith and adequate
reserves are being maintained in connection therewith;
(xii) not
(A) permit any of its Equipment to become a Fixture to real property unless such
real property is owned by Debtor and is subject to a mortgage in favor of
Secured Party, or if such real property is leased, is subject to a landlord's
agreement in favor of Secured Party on terms reasonably acceptable to Secured
Party, or (B) permit any of its Equipment to become an accession to any other
personal property unless such personal property is subject to a first priority
lien in favor of Secured Party.
(xiii) upon
request of Secured Party, (A) cause to be noted on the applicable certificate,
in the event any of its Equipment is covered by a certificate of title, the
security interest of Secured Party in the Equipment covered thereby, and (B)
deliver all such certificates to Secured Party or its designees;
(xiv) take
all steps reasonably necessary to protect, preserve and maintain all of its
rights in the Collateral;
(xv) except
as listed on Schedule
VI, keep all of the tangible Collateral in the United
States;
(xvi) promptly
notify Secured Party in writing upon acquiring or otherwise obtaining any
Collateral after the date hereof consisting of Deposit Accounts, Investment
Property, Letter-of-Credit Rights or Electronic Chattel Paper and, upon the
request of Secured Party, promptly execute such other documents, and do such
other acts or things deemed appropriate by Secured Party to deliver to Secured
Party control with respect to such Collateral;
10
(xvii) promptly
notify Secured Party in writing upon acquiring or otherwise obtaining any
Collateral after the date hereof consisting of Documents of Title or Instruments
and, upon the request of Secured Party, promptly execute such other documents,
and do such other acts or things deemed appropriate by Secured Party to deliver
to Secured Party possession of such Documents of Title which are negotiable and
Instruments, and, with respect to nonnegotiable Documents of Title, to have such
nonnegotiable Documents of Title issued in the name of Secured
Party;
(xviii) with
respect to Collateral in the possession of a third party, other than
Certificated Securities and Goods covered by a Document of Title, obtain an
acknowledgment from the third party that it is holding the Collateral for
benefit of Secured Party;
(xix) promptly
notify Secured Party in writing upon incurring or otherwise obtaining a
Commercial Tort Claim after the date hereof against any third party, and, upon
the request of Secured Party, promptly enter into an amendment to this
Agreement, and do such other acts or things deemed appropriate by Secured Party
to give Secured Party a security interest in such Commercial Tort
Claim;
(xx) take
any and all actions necessary to transfer control to Secured Party over any
depositary accounts maintained for any Borrower by any depositary bank,
including but not limited to changing the signature cards to reflect Secured
Party as the sole signatory with power and authority over such depositary
accounts within five (5) Business Days of receipt of Secured Party’s written
request therefore;
(xxi) take
other action reasonably requested by Secured Party to ensure the attachment,
perfection and, first priority of, and the ability of Secured Party to enforce,
the security interests in any and all of the Collateral including, without
limitation:
1) executing,
delivering and, where appropriate, filing financing statements and amendments
relating thereto under the UCC, to the extent, if any, that Debtor’s signature
thereon is required therefor;
2) complying
with any provision of any statute, regulation or treaty of the United States as
to any Collateral if compliance with such provision is a condition to
attachment, perfection or priority of, or ability of Secured Party to enforce,
the security interests in such Collateral;
3) obtaining
governmental and other third party consents and approvals, including without
limitation any consent of any licensor, lessor or other Person obligated on
Collateral;
4) obtaining
waivers from mortgagees and landlords in form and substance satisfactory to
Secured Party; and
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5) taking
all actions required by the UCC in effect from time to time or by other law, as
applicable in any relevant UCC jurisdiction, or by other law as applicable in
any foreign jurisdiction;
(xxii) not
change its state of formation or organization or Type of Organization without
providing Secured Party with at least thirty (30) days’ prior written notice;
and
(xxiii) not
change its legal name without providing Secured Party with at least thirty (30)
days’ prior written notice; provided that, the Company
has advised Secured Party that it intends to change is corporate name to Oak Tree
Educational Partners, Inc., as soon as practicable following the date of
this Agreement.
(c) Any
expenses incurred in protecting, preserving or maintaining any Collateral shall
be borne by Debtor. Except as otherwise expressly set forth in Section 2,
whenever a Default shall be existing, Secured Party shall have the right to
bring suit to enforce any or all of the Intellectual Property or licenses
thereunder, in which event Debtor shall at the request of Secured Party do any
and all lawful acts and execute any and all proper documents required by Secured
Party in aid of such enforcement and Debtor shall promptly, upon demand,
reimburse and indemnify Secured Party for all costs and expenses incurred by
Secured Party in the exercise of its rights under this Section
5. Notwithstanding the foregoing, Secured Party shall have no
obligation or liability regarding the Collateral or any part thereof by reason
of, or arising out of, this Agreement.
Section
6. Default; Rights and Remedies
of Secured Party upon a Default. If a Default shall have
occurred and be continuing, Secured Party shall have the following rights and
remedies:
(a) Secured
Party may exercise any or all of the remedies available to it under this
Agreement, the other Loan Documents, at law, in equity or
otherwise;
(b) Secured
Party may request that Debtor direct that all Receivables be paid directly to a
lock box account established with, or for the benefit of, Secured
Party;
(c) Debtor
shall hold in trust (and not commingle with its other assets) for Secured Party
all Collateral that is Chattel Paper, Instruments or Documents of Title at any
time received by it and promptly deliver same to Secured Party, unless Secured
Party at its option gives Debtor written permission to retain such Collateral;
at Secured Party’s request, each contract, Chattel Paper, Instrument or Document
of Title so retained shall be marked to state that it is assigned to Secured
Party and each instrument shall be endorsed to the order of Secured Party (but
failure to so mark or endorse shall not impair the Security
Interest);
(d) Debtor
irrevocably appoints Secured Party its true and lawful attorney with full power
of substitution, in the name of Debtor, for the sole use and benefit of Secured
Party, but at Debtor’s expense, to the extent permitted by law, to file claims
under any insurance policies of Debtor, to receive, receipt and give acquittance
for any payments that may be payable thereunder, and to execute any and all
endorsements, receipts, releases, assignments, reassignments or other documents
that may be necessary to effect the collection, compromise or settlement of any
claims under any such insurance policies;
12
(e) Debtor
irrevocably appoints Secured Party its true and lawful attorney with full power
of substitution, in the name of Debtor, for the sole use and benefit of Secured
Party, but at Debtor’s expense, to the extent permitted by law, to exercise, all
or any of the following powers with respect to all or any of Debtor’s Collateral
(to the extent necessary to pay the Obligations in full):
(i) to
demand, sue for, collect, receive and give acquittance for any and all monies
due or to become due upon or by virtue thereof;
(ii) to
settle, compromise, compound, prosecute or defend any action or proceeding with
respect thereto;
(iii) to
take control of, sell, lease, license or otherwise dispose of the same or the
Proceeds thereof, as fully and effectually as if Secured Party were the absolute
owner thereof;
(iv) to
extend the time of payment of any or all thereof and to make any allowance or
other adjustment with reference thereto;
(v) to
endorse Debtor’s name on any notes, acceptances, checks, drafts, money orders or
other evidences of payment on Collateral that may come into Secured Party’s
possession;
(vi) to
sign Debtor’s name on any invoice or bill of lading relating thereto, on any
drafts against Obligors or other Persons making payment with respect thereto, on
assignments and verifications of accounts or other Collateral and on notices to
Obligors making payment with respect thereto;
(vii) to
send requests for verification of obligations to any Obligor; and
(viii) to
do all other acts and things reasonably necessary to carry out the intent of
this Agreement;
provided, however, that,
except in the case of Collateral that is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Secured Party will give Debtor at least ten (10) days’ prior written notice of
the time and place of any public sale thereof or the time after which any
private sale or other intended disposition thereof will be made. If,
following the occurrence of a Default, any Obligor or Account Debtor fails to
make payment on any Collateral when due, Secured Party is authorized, in its
sole discretion, either in its own name or in Debtor’s name, to take such action
as Secured Party reasonably shall deem appropriate for the collection of any
amounts owed with respect to Collateral or upon which a delinquency
exists. Regardless of any other provision of this Agreement, however,
Secured Party shall not be liable for its failure to collect, or for its failure
to exercise diligence in the collection of, any amounts owed with respect to
Collateral except for its own fraud, gross negligence, or willful misconduct,
nor shall it be under any duty to anyone except Debtor to account for funds that
it shall actually receive under this Agreement. A receipt given by
Secured Party to any Obligor or Account Debtor shall be a full and complete
release, discharge, and acquittance to such Obligor or Account Debtor, to the
extent of any amount so paid to Secured Party. Secured Party may
apply or set off amounts paid and the deposits against any liability of Debtor
to Secured Party.
13
(f) Secured
Party’s sale of less than all the Collateral shall not exhaust Secured Party’s
rights under this Agreement and Secured Party is specifically empowered to make
successive sales until all the Collateral is sold. If the proceeds of
a sale of less than all the Collateral shall be less than the Obligations, this
Agreement and the Security Interest shall remain in full force and effect as to
the unsold portion of the Collateral just as though no sale had been
made. In the event any sale under this Agreement is not completed or
is, in Secured Party’s opinion, defective, such sale shall not exhaust Secured
Party’s rights under this Agreement and Secured Party shall have the right to
cause a subsequent sale or sales to be made. Any and all statements
of fact or other recitals made in any bill of sale or assignment or other
instrument evidencing any foreclosure sale under this Agreement as to nonpayment
of the Obligations, or as to the occurrence of any Default, or as to Secured
Party’s having declared all of such Obligations to be due and payable, or as to
notice of time, place and terms of sale and the properties to be sold having
been duly given, or as to any other act or thing having been duly done by
Secured Party, shall be taken as prima facie evidence of the
truth of the facts so stated and recited. Secured Party may appoint
or delegate any one or more Persons as agent to perform any act or acts
necessary or incident to any sale held by Secured Party, including the sending
of notices and the conduct of sale, but such acts must be done in the name and
on behalf of Secured Party. In connection with the sale of Collateral
that constitutes Securities, Secured Party is authorized, but not obligated, to
limit prospective purchasers to the extent deemed necessary or desirable by
Secured Party to render such sale exempt from registration requirements of the
Securities Act of 1933, as amended, and any applicable state securities laws,
and no sale so made in good faith by Secured Party shall be deemed not be
“commercially reasonable” because so made.
(g) In
addition to any and all other rights afforded to Secured Party in this Section 6,
Secured Party may exercise all the rights of a secured party under the UCC
(whether or not in effect in the jurisdiction where such rights are exercised)
with respect to any Collateral and, if cash shall be insufficient to pay all the
Obligations in full, sell, lease, license or otherwise dispose of the Collateral
or any part thereof in accordance with the provisions of the
UCC. Notice of any such sale or other disposition shall be given to
Debtor as required under this Section
6.
|
|
Section
7.
|
Application of
Proceeds.
|
(a) If
a Default shall have occurred and be continuing, Secured Party may apply the
proceeds of any sale or other disposition of all or any part of the Collateral,
in the following order of priorities:
14
(i) first, to pay the expenses of
such sale or other disposition, including reasonable compensation to Secured
Party and counsel for Secured Party, and all expenses, liabilities and advances
incurred or made by Secured Party in connection with this Agreement, and any
other amounts then due and payable in connection with this
Agreement;
(ii) second, to pay all interest
(including post-petition interest) and other fees payable under the Loan
Agreement, until payment in full of all such interest and fees shall have been
made;
(iii) third, to pay the unpaid
principal of the Obligations, until payment in full of the principal of all
Obligations shall have been made (or so provided for);
(iv) fourth, to pay all other
Obligations, until payment in full of all such other Obligations shall have been
made (or so provided for); and
(v) finally, to pay to Debtor, or
as a court of competent jurisdiction may direct, any surplus then remaining from
the proceeds of the Collateral owned by it.
Secured
Party may make such distributions hereunder in cash or in kind or, on a ratable
basis, in any combination thereof.
(b) All
distributions made by Secured Party pursuant to this section shall be final
(except in the event of manifest error).
Section
8. Existence of
Default. Regarding the existence of any Default for purposes
of this Agreement, Debtor agrees that the Obligors or Account Debtors on any
Collateral may rely upon written certification from Secured Party that such a
Default exists and Debtor expressly agrees that Secured Party shall not be
liable to Debtor for any claims, damages, costs, expenses or causes of action of
any nature whatsoever in connection with, arising out of, or related to Secured
Party’s exercise of any rights, powers or remedies under any Loan Document
except for its own fraud, negligence, or willful misconduct.
Section
9.
Limitation on Duty in
Respect of Collateral.
(a) Beyond
the exercise of reasonable care in the custody and preservation thereof, Secured
Party will have no duty as to any Collateral in its possession or control or in
the possession or control of any bailee or any income therefrom or as to the
preservation of rights against prior parties or any other rights pertaining
thereto. Secured Party will be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession or
control if such Collateral is accorded treatment substantially equal to that
which it accords its own property, and will not be liable or responsible for any
loss or damage to any Collateral, or for any diminution in the value thereof, by
reason of any act or omission of any bailee selected by Secured Party in good
faith or by reason of any act or omission by Secured Party pursuant to
instructions from Debtor, except to the extent that such liability arises from
Secured Party’s gross negligence or willful misconduct.
15
(b) To
the extent that applicable law imposes duties on Secured Party to exercise
remedies in a commercially reasonable manner, Debtor acknowledges and agrees
that it is not commercially unreasonable for Secured Party (i) to fail to incur
expenses reasonably deemed significant by Secured Party to prepare Collateral
for disposition or otherwise to complete raw material or work-in-process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or third
party consents for the collection or disposition of Collateral to be collected
or disposed of, (iii) to fail to exercise collection remedies against Account
Debtors or other Persons obligated on Collateral or to remove liens or
encumbrances on or any adverse claims against Collateral, (iv) to exercise
collection remedies against Account Debtors and other Persons obligated on
Collateral directly or through the use of collection agencies and other
collection specialists, (v) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (vi) to contact other Persons, whether or not in the
same business as Debtor, for expressions of interest in acquiring all or any
portion of the Collateral, (vii) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the collateral is of a
specialized nature, (viii) to dispose of Collateral by utilizing Internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers and
sellers of assets, (ix) to dispose of assets in wholesale rather than retail
markets, (x) to disclaim disposition warranties, including, without limitation,
any warranties of title, (xi) to purchase insurance of credit enhancements to
insure Secured Party against risks of loss, collection or disposition of
Collateral, or to provide to Secured Party a guaranteed return from the
collection or disposition of Collateral, or (xii) to the extent deemed
appropriate by Secured Party, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist Secured Party
in the collection or disposition of any of the Collateral. Debtor
acknowledges that the purpose of this section is to provide non-exhaustive
indications of what actions or omissions by Secured Party would not be
commercially unreasonable in Secured Party’s exercise of remedies against the
Collateral and that other actions or omissions by Secured Party shall not be
deemed commercially unreasonable solely on account of not being indicated in
this section. Without limitation upon the foregoing, nothing
contained in this section shall be construed to grant any right to Debtor or to
impose any duties on Secured Party that would not have been granted or imposed
by this Agreement or by applicable law in the absence of this
section.
(c) The
Security Interest is given to secure the prompt, unconditional and complete
payment and performance of the Obligations when due, and is given as security
only. Secured Party does not assume, and shall not be liable for, any
of the Debtor’s liabilities, duties or obligations under, or in connection with,
the Collateral. Secured Party’s acceptance of this Agreement, or its
taking any action in carrying out this Agreement, does not constitute Secured
Party’s approval of the Collateral or Secured Party’s assumption of any
obligation under or in connection with the Collateral. This Agreement
does not affect or modify Debtor’s obligations with respect to the
Collateral.
16
Section
10. Fraudulent
Conveyance. Notwithstanding anything contained in this
Agreement to the contrary, Debtor agrees that if, but for the application of
this Section 10,
the Obligations or any Security Interest would constitute a preferential
transfer under 11 U.S.C. § 547, a fraudulent conveyance under 11 U.S.C. §
548 (or any successor section of that statute) or a fraudulent conveyance or
transfer under any state fraudulent conveyance or fraudulent transfer law or
similar Law in effect from time to time (each a “Fraudulent
Conveyance”), then the Obligations and each affected Security Interest
will be enforceable to the maximum extent possible without causing the
Obligations or any Security Interest to be a Fraudulent Conveyance, and shall be
deemed to have been automatically amended to carry out the intent of this Section 10.
Section
11. Actions by Secured
Party. Section 13
of the Loan Agreement shall govern the taking of any actions or exercise of any
right or remedy by Agent in its capacity as (a) Agent for the ratable benefit of
the Lenders under the Loan Agreement and (b) the “Secured Party” under this
Agreement.
|
Section
12.
|
General.
|
(a) Debtor
agrees that it will cause each of its Subsidiaries that is created or acquired
after the Closing Date, within five (5) Business days of such Subsidiary’s
creation or acquisition by Debtor, to execute and deliver a Joinder Agreement,
agreeing to become a Debtor under this Agreement, together with supplements to
the Schedules hereto setting forth all relevant information with respect to such
party as of the date of such delivery. Upon execution of such Joinder
Agreement by each such Subsidiary, such Subsidiary shall become a Debtor for all
purposes of this Agreement.
(b) Any
notice from Secured Party to Debtor, if mailed, shall be deemed given three (3)
Business days after the date mailed, postage prepaid, addressed to Debtor either
at Debtor’s address shown on Schedule I
hereto or at such other address as Debtor shall have specified in writing to
Secured Party as its address for notices hereunder.
(c) Debtor
agrees to pay all expenses, including reasonable attorney’s fees and charges
(including time charges of attorneys who are employees of Secured Party) paid or
incurred by Secured Party in endeavoring to collect the Obligations of Debtor,
or any part thereof, and in enforcing this Agreement against Debtor, and such
obligations will themselves be Obligations.
(d) No
delay on the part of Secured Party in the exercise of any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by Secured Party
of any right or remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy.
(e) This
Agreement shall remain in full force and effect until all Obligations have been
paid in full. If at any time all or any part of any payment
theretofore applied by Secured Party to any of the Obligations is or must be
rescinded or returned by Secured Party for any reason whatsoever (including the
insolvency, bankruptcy or reorganization of Debtor), such Obligations shall, for
the purposes of this Agreement, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such application by Secured Party, and this Agreement shall continue to be
effective or be reinstated, as the case may be, as to such Obligations, all as
though such application by Secured Party had not been made.
17
(f) THIS AGREEMENT, THE LOAN AGREEMENT
AND THE OTHER LOAN DOCUMENTS (AS DEFINED IN THE LOAN AGREEMENT), INCLUDING BUT
NOT LIMITED TO, THE PROVISIONS RELATING TO GOVERNING LAW, JURY WAIVER, VENUE,
SERVICE OF PROCESS AND ARBITRATION, CONSTITUTE THE ENTIRE UNDERSTANDINGS OF
DEBTOR AND SECURED PARTY AND SUPERSEDE ALL PRIOR WRITTEN OR ORAL AGREEMENTS AND
ANY CONTEMPORANEOUS ORAL AGREEMENTS WITH RESPECT TO THE SUBJECT MATTER
HEREOF.
(g) The
rights and privileges of Secured Party hereunder shall inure to the benefit of
its successors and assigns. Debtor may not assign or transfer its
rights hereunder or any interest herein or delegate its duties hereunder without
the prior written consent of Secured Party.
(h) This
Agreement may be executed and delivered (including by facsimile or Portable
Document Format (pdf) transmission) in any number of counterparts with the same
effect as if all signatories had signed the same document. Facsimile
and other electronic copies of manually-signed originals shall have the same
effect as manually-signed originals and shall be binding on Debtor and Secured
Party. All counterparts must be construed together to constitute one
and the same instrument.
(i) At
any time after the date of this Agreement, one or more additional Persons may
become parties hereto by executing and delivering to Secured Party a Joinder
Agreement (as provided in clause (a) above) or a
counterpart of this Agreement, together with supplements to the Schedules hereto
setting forth all relevant information with respect to such party as of the date
of such delivery. Immediately upon such execution and delivery (and
without any further action), each such additional Person will become a party to,
and will be bound by all the terms of, this Agreement.
[Signatures
Appear on Following Page]
18
IN
WITNESS WHEREOF, this Security Agreement has been duly executed as of the day
and year first above written.
|
SECURED
PARTY:
|
|||
|
Deerpath
Funding, LP
|
|||
|
a
Delaware limited partnership,
|
|||
|
as
Agent
|
|||
|
By:
|
Deerpath
Funding General Partner, Inc.
|
||
|
its
general partner
|
|||
|
By:
|
/s/
James H. Kirby
|
||
| Name: James H. Kirby | |||
| Title: President | |||
[Signature
Page 1 of 2 to Security Agreement]
DEBTOR:
|
Oak
Tree Educational Partners, Inc.
|
Educational
Investors, Inc.
|
|||
|
a
Delaware corporation
|
a
Delaware corporation
|
|||
|
By:
|
/s/ Joseph J. Bianco
|
By:
|
/s/ Joseph J. Bianco
|
|
|
Name:
Joseph J. Bianco
|
Name:
Joseph J. Bianco
|
|||
|
Title:
Chief Executive Officer
|
Title:
Chief Executive Officer
|
|||
|
Valley
Anesthesia, Inc.
|
Training
Direct, LLC
|
|||
|
a
Delaware corporation
|
a
Connecticut limited liability company
|
|||
|
By:
|
/s/ Joseph J. Bianco
|
By:
|
/s/ Joseph Monaco
|
|
|
Name:
Joseph J. Bianco
|
Name:
Joseph Monaco
|
|||
|
Title:
Chief Executive Officer
|
Title:
Manager
|
|||
|
Educational
Training Institute, Inc.
|
Culinary
Tech Center LLC
|
|||
|
a
New York corporation
|
a
New York limited liability company
|
|||
|
By:
|
/s/ Joseph Monaco
|
By:
|
/s/ Joseph Monaco
|
|
|
Name:
Joseph Monaco
|
Name:
Joseph Monaco
|
|||
|
Title:
President
|
Title:
Manager
|
|||
|
Professional
Culinary Institute LLC
|
||||
|
a
New York limited liability company
|
||||
|
By:
|
/s/ Joseph Monaco
|
|||
|
Name:
Joseph Monaco
|
||||
|
Title:
Manager
|
|
|||
[Schedule
IX]