Exhibit 10.4 to 2010 10-Q

 

 

AMENDED AND RESTATED SECURITY AGREEMENT

Dated as of June 30, 2010

between

WACHOVIA DEVELOPMENT CORPORATION,

as the Borrower

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as the Agent for the Secured Parties

and accepted and agreed to by

CONVERGYS CORPORATION

 

 

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TABLE OF CONTENTS

 

1A.1

  Amendment and Restatement.    2

1.

  Definitions.    2

2.

  Grant of Security Interest.    3

3.

  Representations and Warranties.    5

4.

  Payment of Obligations.    5

5.

  Other Covenants.    5

6.

  Default; Remedies.    6

7.

  Remedies Not Exclusive.    6

8.

  Performance by the Agent of the Borrower’s Obligations.    7

9.

  Duty of the Agent.    7

10.

  Powers Coupled with an Interest.    7

11.

  Financing Statements.    7

12.

  Security Agreement Under Uniform Commercial Code.    8

13.

  Authority of the Agent.    9

14.

  Notices.    9

15.

  Severability.    9

16.

  Amendment in Writing; No Waivers; Cumulative Remedies.    9

17.

  Section Headings.    10

18.

  Successors and Assigns.    10

19.

  The Borrower’s Waiver of Rights.    10

20.

  GOVERNING LAW.    10

21.

  Obligations Are Without Recourse.    11

22.

  Partial Release; Full Release.    11

23.

  Miscellaneous.    11

24.

  Conflicts with Participation Agreement.    11

25.

  LESSEE AS A PARTY.    12

26.

  Counterparts.    13

 

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AMENDED AND RESTATED SECURITY AGREEMENT

This AMENDED AND RESTATED SECURITY AGREEMENT, dated as of June 30, 2010 (as
amended, modified, extended, supplemented, restated and/or replaced from time to
time, this “Security Agreement”), is made between WACHOVIA DEVELOPMENT
CORPORATION, a North Carolina corporation, as the borrower (the “Borrower”), and
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Bank”),
as agent for (a) the Credit Lenders (hereinafter defined) under the Amended and
Restated Credit Note Loan Agreement dated as of June 30, 2010 (as amended,
modified, extended, supplemented and/or restated from time to time, the “Credit
Note Loan Agreement”) by and among the Borrower, the several banks and other
financial institutions from time to time parties thereto (the foregoing banks
and financial institutions are collectively referenced as the “Credit Lenders”)
and Bank, as the agent for the Credit Lenders, (b) the Mortgage Lenders
(hereinafter defined) under the Amended and Restated Mortgage Note Loan
Agreement dated as of June 30, 2010 (as amended, modified, extended,
supplemented and/or restated from time to time, the “Mortgage Note Loan
Agreement”) by and among the Borrower, the several banks and other financial
institutions from time to time parties thereto (the foregoing banks and
financial institutions are collectively referenced as the “Mortgage Lenders”)
and Bank, as the agent for the Mortgage Lenders, (c) the Lessor, and (d) itself.
The Agent, the Lessor, the Credit Lenders, and the Mortgage Lenders, together
with their successors and permitted assigns, are collectively referred to
hereinafter as the “Secured Parties.” The Bank, in its capacity as agent for the
Secured Parties is referred to hereinafter as the “Agent,” and this Security
Agreement is accepted and agreed to by Convergys Corporation, an Ohio
corporation.

PRELIMINARY STATEMENT

The parties to that certain Existing Security Agreement entered into the
Existing Security Agreement to provide a Lien granted in favor of the Agent to
secure the financing provided by the Financing Parties with regard to the
Property.

The parties to this Security Agreement have entered into this Security Agreement
to amend and restate the Existing Security Agreement.

Various of the parties to the Participation Agreement (hereinafter defined) are
parties to the Existing Participation Agreement, certain other Existing
Operative Agreements or certain other Operative Agreements.

The Existing Debt Providers have funded the Existing Loans and the Existing
Lessor has funded the Existing Lessor Advance, each in accordance with the
Existing Operative Agreements.

Subject to the terms of the Assignment and Recharacterization Agreement, the
Existing Debt Providers have been requested to assign their entire right, title
and interest in the Existing Loans and the Existing Operative Agreements to the
Lenders, and the Lenders desire to accept such assignments.

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Subject to the terms of the Assignment and Recharacterization Agreement, the
Existing Lessor has been requested to assign its entire right, title and
interest in the Existing Operative Agreements to the Lessor, and the Lessor
desires to accept such assignment.

It is a condition, among others, to the obligation of the Lenders and the Lessor
to purchase their respective assignment interests pursuant to the Assignment and
Recharacterization Agreement that the Borrower shall have executed and delivered
this Security Agreement to the Agent, for the benefit of the Secured Parties.

The Borrower is the legal and beneficial owner of the Property (except the
Borrower may have a ground leasehold interest in certain Property pursuant to
one (1) or more Ground Leases).

Pursuant to the various Operative Agreements, the Bank has agreed to act in the
capacity as Agent.

NOW, THEREFORE, in consideration of the premises and to induce the Credit
Lenders to make Credit Loans under the Credit Note Loan Agreement, the Mortgage
Lenders to make Mortgage Loans under the Mortgage Note Loan Agreement and the
Lessor to make its Lessor Advance under the Participation Agreement, the
Borrower hereby agrees with the Agent, for the benefit of the Secured Parties,
as follows:

 

  1A.1 Amendment and Restatement.

This Security Agreement amends and restates in its entirety the Existing
Security Agreement. This Security Agreement is not intended to constitute a
novation of the Existing Security Agreement.

 

  1. Definitions.

(a) The following terms are used herein as defined in the Uniform Commercial
Code as in effect from time to time in the State of New York (the “UCC”):
Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents,
Equipment, Fixtures, General Intangibles, Instruments, Investment Property,
Letter-of-Credit Rights and Proceeds. Each such term as used in relationship
with the Borrower and/or the Lessee shall mean each such collateral category
only to the extent arising from or relating to the transactions contemplated by
the Operative Agreements or arising directly or indirectly from or otherwise
relating to (i) the ownership by the Borrower and/or the Lessee of, (ii) the
right, title or interest of the Borrower and/or the Lessee in, (iii) the
planning, design, engineering, construction, development, completion, insuring,
operation, maintenance, modification, alteration, lease, sublease or use of, or
(iv) the sale, casualty, condemnation, assignment, transfer, pledge, encumbrance
or other disposition of, the Property or any part thereof. For the avoidance of
doubt, (i) the term “Accounts” as used herein shall exclude all accounts
receivable of the business and operations of the Borrower and/or the Lessee and
(ii) the term “General Intangibles” as used herein shall exclude all trademarks,
trade names and symbols of the Borrower and/or the Lessee.

 

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(b) As used herein, the following terms shall have the following respective
meanings:

“Lessee” shall mean Convergys Corporation, an Ohio corporation, its successors,
permitted assigns and permitted transferees.

(c) Capitalized terms used but not otherwise defined in this Security Agreement
shall have the respective meanings specified in Appendix A to the Amended and
Restated Participation Agreement dated as of June 30, 2010 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time in
accordance with the applicable provisions thereof, the “Participation
Agreement”) among the Lessee, the various entities which are parties thereto
from time to time as guarantors thereunder, the Borrower, the Credit Lenders,
the Mortgage Lenders and the Bank, as the agent for the Primary Financing
Parties and respecting the Security Documents, as the agent for the Secured
Parties.

(d) The rules of usage set forth in Appendix A to the Participation Agreement
shall apply to this Agreement.

 

  2. Grant of Security Interest.

To secure the payment and performance of all the Obligations and any other
amounts advanced under the Credit Note Loan Agreement in connection with the
Credit Notes, under the Mortgage Note Loan Agreement in connection with the
Mortgage Notes or under the Participation Agreement as a Lessor Advance, all the
amounts now or hereafter owing to the Credit Lenders, the Mortgage Lenders, the
Lessor or the Agent thereunder or under any other Operative Agreement, THE
BORROWER HEREBY CONVEYS, GRANTS, ASSIGNS, TRANSFERS, HYPOTHECATES, MORTGAGES AND
SETS OVER TO THE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, A FIRST PRIORITY
SECURITY INTEREST IN AND LIEN ON ALL OF ITS RIGHT, TITLE AND INTEREST IN AND TO
THE BORROWER’S INTEREST (AS THE TERM “BORROWER’S INTEREST” IS DEFINED IN
APPENDIX A TO THE PARTICIPATION AGREEMENT), whether now existing or hereafter
acquired, IN EACH OF THE FOLLOWING, BUT SOLELY TO THE EXTENT SUCH RIGHT, TITLE
OR INTEREST IS ACQUIRED by the borrower WITH RESPECT TO or in connection with
THE PROPERTY, ANY OPERATIVE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY:

(a) all Accounts;

(b) all Chattel Paper (including without limitation all rights under the Lease
and each Lease Supplement);

(c) all Commercial Tort Claims;

(d) all Documents;

 

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(e) all Equipment;

(f) all Fixtures (including without limitation any Fixtures constituting the
Property, as defined in Appendix A to the Participation Agreement);

(g) all General Intangibles, including without limitation (i) all rights to
payment and all indemnity rights under the Operative Agreements, (ii) all
computer software, books and records relating to or used in connection with the
operation of the Property or any part thereof, (iii) all unearned premiums under
insurance policies now held or subsequently obtained by the Lessee relating to
the Property or any part thereof, (iv) all consents, licenses, certificates and
other governmental approvals relating to use or operation of the Property or any
part thereof, and (v) all plans and specifications relating to the Property or
any part thereof; specifically excluding however, trademarks, trade names and
symbols;

(h) all Instruments;

(i) all Investment Property;

(j) all Letter-of-Credit Rights;

(k) all Property or any part thereof;

(l) all money, cash or cash equivalent and Deposit Accounts;

(m) all Proceeds, including without limitation (i) all Rent and all other rents,
payments, purchase prices, receipts, revenues, issues and profits payable under
the Lease or pursuant to any other lease with respect to the Property,
(ii) subject to application thereof in accordance with the terms of the Lease,
all proceeds of any insurance policies maintained by or for the benefit of the
Borrower, including without limitation any right to collect and receive such
proceeds and (iii) all awards and other compensation, including without
limitation the interest payable thereon and any right to collect and receive the
same, made to the present or any subsequent owner of the Property for the taking
by eminent domain, condemnation or otherwise, of all or any part of the Property
or any easement or other right therein; and

(n) all right, title and interest of the Borrower in and to all substitutes,
modifications and replacements of, and all additions, accessions and
improvements to, the Fixtures and Equipment, subsequently acquired or leased by
the Borrower or constructed, assembled or placed by the Borrower on the
Property, immediately upon such acquisition, lease, construction, assembling or
placement, and in each such case, without any further conveyance, assignment or
other act by the Borrower.

 

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(All of the foregoing property and rights and interests now owned or held or
subsequently acquired by the Borrower and described in the foregoing clauses
(a) through (n) are collectively referred to as the “Security Assets”).

TO HAVE AND TO HOLD the Security Assets and the rights and privileges hereby
granted unto the Agent (for the benefit of the Secured Parties) its successors
and assigns for the uses and purposes set forth, until all of the Obligations
owing to the Credit Lenders, the Mortgage Lenders, the Lessor and the Agent
under the Operative Agreements are paid in full; provided, that EXCLUDED from
the Security Assets at all times and in all respects shall be all Excepted
Payments.

 

  3. Representations and Warranties.

(a) [Reserved].

(b) The Borrower is the legal owner of the Security Assets and has the right to
pledge, sell, assign and transfer the Security Assets.

 

  4. Payment of Obligations.

The Borrower shall pay all Obligations in accordance with the terms of the
Credit Note Loan Agreement, the Credit Notes, the Mortgage Note Loan Agreement,
the Mortgage Notes, the Participation Agreement and the other Operative
Agreements and perform each term to be performed by it under the Credit Note
Loan Agreement, the Credit Notes, the Mortgage Note Loan Agreement, the Mortgage
Notes, the Participation Agreement and the other Operative Agreements.

 

  5. Other Covenants.

(a) At any time and from time to time, upon the written request of the Agent,
and at the expense of the Borrower (with funds provided by the Lessee for such
purpose in accordance with the terms of the Operative Agreements), the Borrower
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Agent reasonably may request for
the purposes of obtaining or preserving the full benefits of this Security
Agreement and of the rights and powers granted by this Security Agreement.

(b) The Borrower will not, and none of the Financing Parties authorizes the
Borrower to, sell, exchange transfer, assign, lease or otherwise dispose of the
Security Assets or any interest therein except as permitted under the Operative
Agreements.

(c) The Borrower shall execute and deliver all agreements, assignments,
instruments or other documents as reasonably requested by the Agent for the
purpose of obtaining and maintaining control within the meaning of the UCC with
respect to any Security Assets consisting of Deposit Accounts and
Letter-of-Credit Rights.

 

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(d) Each of the Borrower and the Lessee will promptly forward to the Agent
written notification of any and all Commercial Tort Claims of which such Person
is aware and execute and deliver such statements, documents and notices and do
and cause to be done all such things as may be required by the Agent or required
by law, including the UCC, to fully create, perfect and maintain the priority of
the Agent’s security interest in any Commercial Tort Claims.

6. Default; Remedies.

(a) If an Event of Default has occurred and is continuing:

(i) subject to such notice as may be required by applicable law, the Agent, in
addition to all other remedies available at law or in equity, shall have the
right forthwith to enter upon the Property (or any other place where any
component of any Security Assets are located at such time) without charge, and
take possession of all or any portion of the Security Assets, and to sell,
re-let or otherwise dispossess itself of the Security Assets and receive the
rents, issues and profits thereof, to make repairs and to apply said rentals and
profits, after payment of all necessary or proper charges and expenses, on
account of the amounts hereby secured (subject to the Excepted Payments); and

(ii) the Agent, shall, as a matter of right, be entitled to the appointment of a
receiver for the Security Assets, and the Borrower hereby consents to such
appointment and waives notice of any application therefor.

(b) If an Event of Default has occurred and is continuing, the Agent may proceed
by an action at law, suit in equity or other appropriate proceeding, to protect
and enforce its rights, whether for the foreclosure of the Lien of this Security
Agreement, or for the specific performance of any agreement contained herein or
for an injunction against the violation of any of the terms hereof. The proceeds
of any sale of any of the Security Assets shall be applied pursuant to
Section 8.7 of the Participation Agreement and the Intercreditor Agreement. In
addition, the Agent may proceed under Section 12 hereof.

7. Remedies Not Exclusive.

The Agent shall be entitled to enforce payment of the indebtedness and
performance of the Obligations and to exercise all rights and powers under this
Security Agreement or under any of the other Operative Agreements or any laws
now or hereafter in force, notwithstanding some or all of the Obligations may
now or hereafter be otherwise secured, whether by deed of trust, mortgage,
security agreement, pledge, Lien, assignment or otherwise. Neither the
acceptance of this Security Agreement nor its enforcement, shall prejudice or in
any manner affect the Agent’s right to realize upon or enforce any other
security now or hereafter held by the Agent as security for the Obligations, it
being agreed that the Agent shall be entitled to enforce this Security Agreement
and any other security now or hereafter held by the Agent in such order and
manner as the Agent may determine in its absolute discretion. Every power or
remedy given by any of

 

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the Operative Agreements to the Agent or to which it may otherwise be entitled,
may be exercised, concurrently or independently, from time to time and as often
as may be deemed expedient by the Agent. In no event shall the Agent, in the
exercise of the remedies provided in this Security Agreement (including without
limitation in connection with the assignment of rents to the Agent, or the
appointment of a receiver and the entry of such receiver onto all or any part of
the Property), be deemed a “mortgagee in possession” or a “pledgee in
possession”, and the Agent shall not in any way be made liable for any act,
either of commission or omission, in connection with the exercise of such
remedies.

8. Performance by the Agent of the Borrower’s Obligations.

If the Borrower fails to perform or comply with any of its agreements contained
herein the Agent, at its option, but without any obligation so to do, may
perform or comply, or otherwise cause performance or compliance, with such
agreement. The reasonable expenses of the Agent incurred in connection with
actions undertaken as provided in this Section 8, together with interest thereon
at a rate per annum equal to the Overdue Rate from the date of payment by the
Agent to the date reimbursed by the Borrower, shall be payable by the Borrower
(with funds provided by the Lessee for such purpose in accordance with the terms
of the Operative Agreements) to the Agent on demand and constitutes part of the
Obligations secured hereby.

9. Duty of the Agent.

The Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of any Security Assets in its possession, if any, shall be to deal
with it in the same manner as the Agent deals with similar property for its own
account. Neither the Agent nor the Lessor nor any Credit Lender nor any Mortgage
Lender nor any of their respective directors, officers, employees, shareholders,
partners or agents shall be liable for failure to demand, collect or realize
upon any of the Security Assets or for any delay in doing so or shall be under
any obligation to sell or otherwise dispose of any Security Assets upon the
request of the Borrower or any other Person or to take any other action
whatsoever with regard to the Security Assets or any part thereof.

10. Powers Coupled with an Interest.

All powers, authorizations and agencies contained in this Security Agreement are
coupled with an interest and are irrevocable until this Security Agreement is
terminated and the Liens created hereby are released.

11. Financing Statements.

Each of the Borrower and the Lessee authorizes the Agent at the expense of the
Borrower or the Lessee, as applicable (such amounts to be paid with funds
provided by the Lessee for such purpose), to file financing statements with
respect to the Security Assets under this Security Agreement in such form and in
such filing offices as the Agent reasonably determines appropriate to perfect
the security interests of the Agent under this Security Agreement. A carbon,
photographic or other reproduction of this Security Agreement shall be
sufficient as a

 

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financing statement for filing in any jurisdiction. For purposes of such
financing statement, the Borrower or the Lessee, as applicable, shall be deemed
to be the debtor, and the Agent shall be deemed to be the secured party. The
address of the Borrower is Wachovia Development Corporation, c/o Wells Fargo
Securities, LLC, MAC D1053-082, 301 South College Street, Charlotte, North
Carolina 28288, Attention: Jack Altmeyer, with a copy to Wells Fargo Bank,
National Association, 230 West Monroe Street, Suite 2900, Chicago, Illinois
60606, Attention: Steven Buehler. The address of the Lessee is 201 East Fourth
Street, Cincinnati, Hamilton County, Ohio, 45202, Attention: David R. Wiedwald,
Treasurer. The address of the Agent is Wells Fargo Bank, National Association,
c/o Wells Fargo Securities, LLC, MAC D1053-082, 301 South College Street,
Charlotte, North Carolina 28288, Attention: Jack Altmeyer, with a copy to Wells
Fargo Bank, National Association, 230 West Monroe Street, Suite 2900, Chicago,
Illinois 60606, Attention: Steven Buehler.

12. Security Agreement Under Uniform Commercial Code.

(a) It is the intention of the parties hereto that this Security Agreement as it
relates to matters of the grant, perfection and priority of security interests
the subject hereof, shall constitute a security agreement within the meaning of
the Uniform Commercial Code of the states in which the Security Assets are
located. If an Event of Default shall occur and be continuing, then in addition
to having any other right or remedy available at law or in equity, the Agent may
proceed under the applicable Uniform Commercial Code and exercise such rights
and remedies as may be provided to a secured party by such Uniform Commercial
Code with respect to all or any portion of the Security Assets which is personal
property (including without limitation taking possession of and selling the
Property). If the Agent shall elect to proceed under the Uniform Commercial
Code, then ten (10) days’ notice of sale of the personal property shall be
deemed reasonable notice and the reasonable expenses of retaking, holding,
preparing for sale, selling and the like incurred by the Agent shall include,
but not be limited to, reasonable attorneys’ fees and legal expenses. At the
Agent’s request, the Borrower shall assemble such personal property and make it
available to the Agent at a place designated by the Agent which is reasonably
convenient to both parties.

(b) The Borrower, upon reasonable request by the Agent from time to time as may
be necessary to protect Agent’s interest in the Security Assets, shall execute,
acknowledge and deliver to the Agent one (1) or more separate security
agreements, in form satisfactory to the Agent, covering all or any part of the
Security Assets and will further execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, any financing statement, affidavit,
continuation statement or certificate or other document as the Agent may request
in order to perfect, preserve, maintain, continue or extend the security
interest under, and the priority of the Liens granted by, this Security
Agreement and such security instrument. The Borrower further agrees to pay to
the Agent (with funds provided by the Lessee for such purpose in accordance with
the terms of the Operative Agreements) on demand all costs and expenses incurred
by the Agent in connection with the preparation, execution, recording, filing
and re-filing of any such document and all reasonable costs and expenses of any
record searches for financing statements the Agent shall reasonably require. The
filing of any financing or

 

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continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of the Agent to proceed
against the Property encumbered by this Security Agreement.

13. Authority of the Agent.

The Borrower acknowledges that the rights and responsibilities of the Agent
under this Security Agreement with respect to any action taken by the Agent or
the exercise or non-exercise by the Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Security Agreement shall be governed by Section 8.6 of the
Participation Agreement, the Intercreditor Agreement and by such other
agreements with respect thereto as may exist from time to time (until such time
as all amounts due and owing to the Secured Parties and the Agent under the
Operative Agreements have been paid in full), but the Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and the Borrower shall be
under no obligation, or entitlement, to make any inquiry respecting such
authority.

14. Notices.

All notices required or permitted to be given under this Security Agreement
shall be in writing and delivered as provided in Section 12.2 of the
Participation Agreement.

15. Severability.

Any provision of this Security Agreement which is prohibited or unenforceable
shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof.

16. Amendment in Writing; No Waivers; Cumulative Remedies.

Subject to the terms of the Intercreditor Agreement:

(a) None of the terms or provisions of this Security Agreement may be waived,
amended, supplemented or otherwise modified except in accordance with the terms
of Section 12.4 of the Participation Agreement.

(b) No failure to exercise, nor any delay in exercising, on the part of the
Agent, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Agent of any right or
remedy hereunder on any one (1) occasion shall not be construed as a bar to any
right or remedy which the Agent would otherwise have on any future occasion.

 

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(c) The rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any other rights or remedies
provided by law.

17. Section Headings.

The section headings used in this Security Agreement are for convenience of
reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.

18. Successors and Assigns.

This Security Agreement shall be binding upon the successors of the Borrower,
and the Borrower shall not assign any of its rights or obligations hereunder or
with respect to any of the Security Assets without the prior written consent of
the Agent (at the direction of the Majority Secured Parties). This Security
Agreement shall inure to the benefit of the Agent, the Lessor, the Credit
Lenders and the Mortgage Lenders and their respective successors and assigns, in
accordance with their respective interests herein.

19. The Borrower’s Waiver of Rights.

Except as otherwise set forth herein, to the fullest extent permitted by law,
the Borrower waives the benefit of all laws now existing or that may
subsequently be enacted providing for (a) any appraisement or valuation before
sale of any portion of the Security Assets or interest therein, (b) any stay or
extension of the time for the enforcement of the collection of the indebtedness
or the creation or extension of a period of redemption from any sale made in
collecting such debt, (c) exemption of any portion of the Security Assets from
attachment, levy or sale under execution or exemption from civil process and
(d) marshalling of any portion of the Security Assets or interest therein.
Except as otherwise set forth herein, to the fullest extent the Borrower may do
so, the Borrower agrees that the Borrower will not at any time insist upon,
plead, claim or take the benefit or advantage of any law now or hereafter in
force providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Security Agreement before
exercising any other remedy granted hereunder and the Borrower, for the Borrower
and its successors and assigns, and for any and all Persons ever claiming any
interest in the Security Assets, to the extent permitted by law, hereby waives
and releases all rights of redemption, valuation, appraisement, stay of
execution, notice of election to mature or declare due the whole of the
Obligations and marshalling in the event of foreclosure of the Liens hereby
created.

20. GOVERNING LAW.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 12(a) HEREOF, THIS SECURITY
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO THE
EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS LOCATED ARE REQUIRED
TO APPLY.

 

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21. Obligations Are Without Recourse.

The provisions of the Participation Agreement relating to limitations on
liability of the Borrower are hereby incorporated by reference herein, Mutatis
Mutandis.

22. Partial Release; Full Release.

The Agent may release for such consideration as it may require any portion of
the Security Assets without (as to the remainder of the Security Assets) in any
way impairing or affecting the Lien, security interest and priority herein
provided for the Agent compared to any other Lien holder or secured party.
Further, the Agent shall execute and deliver to the Borrower such documents and
instruments as may be required to release the Lien and security interest created
by this Security Agreement with respect to the Property as provided in
Section 8.8 of the Participation Agreement or to grant the easements and permit
the other matters provided for in Section 8.5 of the Participation Agreement.

23. Miscellaneous.

(a) This Security Agreement is one (1) of the documents which create Liens and
security interests that secure payment and performance of the Obligations. The
Agent, at its election, may commence or consolidate in a single action all
proceedings to realize upon all such Liens and security interests. The Borrower
hereby waives (i) any objections to the commencement or continuation of an
action to foreclose the Lien of this Security Agreement or exercise of any other
remedies hereunder based on any action being prosecuted or any judgment entered
with respect to the Obligations or any Liens or security interests that secure
payment and performance of the Obligations and (ii) any objections to the
commencement of, continuation of, or entry of a judgment in any such other
action based on any action or judgment connected to this Security Agreement. In
case of a foreclosure sale, the Security Assets may be sold, at the Agent’s
election, in one (1) parcel or in more than one (1) parcel and the Agent is
specifically empowered (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the Security
Assets to be held.

(b) THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO
JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY REFERENCE HEREIN, MUTATIS
MUTANDIS.

24. Conflicts with Participation Agreement.

Notwithstanding any other provision hereof, in the event of any conflict between
the terms of this Security Agreement and the Participation Agreement, the terms
of the Participation Agreement shall govern.

 

11

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  25. LESSEE AS A PARTY.

(a) LESSEE has executed this Security Agreement TO EVIDENCE THE AGREEMENT OF THE
LESSEE TO THE TERMS OF THE SECURITY AGREEMENT (INCLUDING SECTIONS 5(d) AND 11)
AND FOR THE purpose of subjecting to the security interest AND lIEN granted
hereunder all of its right, title and interest, if any, in and to the SECURITY
ASSETS TO SECURE THE PROMPT PAYMENT IN FULL OF ALL AMOUNTS OWING BY THE LESSEE
FROM TIME TO TIME AND THE PERFORMANCE OF all OBLIGATIONS of THE LESSEE TO THE
SECURED PARTIES UNDER THE OPERATIVE AGREEMENTS IN THE EVENT THAT A COURT, WHEN
ENFORCING THIS SECURITY AGREEMENT FOLLOWING THE OCCURRENCE AND CONTINUANCE OF A
LEASE EVENT OF DEFAULT, DETERMINES THAT THE LESSEE’S INTEREST IN THE PROPERTY IS
NOT A LEASEHOLD INTEREST, BUT THAT THE TRANSACTIONS CONTEMPLATED BY THE LEASE
SHALL BE TREATED AS A SECURED BORROWING. TO EFFECT THE FOREGOING, LESSEE hereby
grants to the Agent (for the benefit of the SECURED PARTIES) a security interest
in and to all of its right, title and interest, if any, in and to the security
assets (TO THE EXTENT LESSEE, RATHER THAN THE BORROWER, IS DETERMINED TO HAVE
ANY RIGHT, TITLE OR INTEREST THEREIN AND WITHOUT REGARD TO ANY LANGUAGE IN
SECTION 2 OR THE DEFINITION OF “SECURITY ASSETS” OR ANY DEFINITION OF ANY ITEM
CONSTITUTING THE SECURITY ASSETS WHICH OTHERWISE WOULD LIMIT THE SECURITY ASSETS
TO THE RIGHT, TITLE AND INTEREST OF THE BORROWER THEREIN), TO SECURE THE PROMPT
PAYMENT IN FULL OF ALL AMOUNTS OWING BY THE LESSEE FROM TIME TO TIME AND THE
PERFORMANCE OF all OBLIGATIONS of THE LESSEE TO THE SECURED PARTIES UNDER THE
OPERATIVE AGREEMENTS. LESSEE acknowledges and agrees that, upon the occurrence
AND CONTINUANCE of a LEASE Event of Default, the Agent shall have the right to
exercise any or all of its remedies hereunder as against any such right, title
or interest of LESSEE in or to the SECURITY ASSETS. THE SECURITY ASSETS SHALL
NOT INCLUDE EQUIPMENT ACQUIRED OR FINANCED WITH FUNDS (I) OTHER THAN THE cREDIT
PROCEEDS, THE MORTGAGE LOANS AND THE LESSOR ADVANCE AND ALL PROCEEDS THEREOF AND
(II) OTHER THAN PROCEEDS PROVIDED DIRECTLY OR INDIRECTLY BY THE LESSEE OR ONE OF
ITS AFFILIATES WHERE THE LESSEE IS EXPRESSLY REQUIRED BY ANY OPERATIVE AGREEMENT
TO ACQUIRE ANY ASSET BY OR ON BEHALF OF THE LESSOR, IN EACH CASE INCLUDING ANY
REPLACEMENT OF SUCH ASSETS WHETHER SUCH REPLACEMENT IS MADE WITH THE PROCEEDS OF
INSURANCE OR OTHERWISE.

(b) In furtherance of Section 5.1 of the Lease, the Agent hereby acknowledges
and agrees that so long as no Lease Event of Default shall exist and be
continuing, the Agent will not disturb the possession of Lessee, will not
terminate the Lease or join Lessee in summary ejectment or foreclosure
proceedings (unless such joinder is required to effect such ejectment or
foreclosure proceedings against the Borrower, but subject to

 

12

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the non-disturbance rights of Lessee hereunder), and shall recognize the
leasehold estate and contractual rights of the Lessee under the Lease, including
without limitation the Purchase Option granted thereunder to the Lessee, it
being understood that such leasehold estate and rights of the Lessee shall be
unaffected by any foreclosure action or enforcement of remedies by the Agent
hereunder so long as no Lease Event of Default shall exist and be continuing.

 

  26. Counterparts.

This Security Agreement may be executed in counterparts, each of which shall
constitute an original but all of which, when taken together, shall constitute
one instrument.

[signature page follows]

 

13

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IN WITNESS WHEREOF, each of the undersigned has caused the Security Agreement to
be duly executed and delivered as of the date first above written.

 

WACHOVIA DEVELOPMENT CORPORATION,

as the Borrower

By:____________________________________

Name:__________________________________

Title:___________________________________

 

(signature pages continue)

Amended and Restated Security Agreement

Convergys Corporation

--------------------------------------------------------------------------------

WELLS FARGO BANK, NATIONAL

ASSOCIATION, as the Agent

By: ______________________________ Name: ____________________________
Title:_____________________________

 

(signature pages continue)

Amended and Restated Security Agreement

Convergys Corporation

--------------------------------------------------------------------------------

Accepted and Agreed to:

 

CONVERGYS CORPORATION By:______________________________
Name:____________________________ Title:_____________________________

 

(signature pages end)

Amended and Restated Security Agreement

Convergys Corporation