Exhibit 10.14


 


COLLATERAL ASSIGNMENT OF CONTRACTS


 


THIS
COLLATERAL ASSIGNMENT OF CONTRACTS (the
“Assignment”) is made and entered into as of the 20th day of October, 2010, by
CASTLEROCK SECURITY HOLDINGS, INC., a Delaware corporation (“Assignor”),
in favor of SIEMENS FIRST CAPITAL COMMERCIAL FINANCE, LLC, a Delaware limited
liability company, as Agent (“Assignee”).


 


WITNESSETH:


 


WHEREAS,
pursuant to that certain Credit Agreement dated as of May 25, 2007, as
amended, by and among Assignor, Alarm Funding, LLC, a Delaware limited
liability company (“Alarm Funding” and together with Assignor, the “Borrower”),
CastleRock Security, Inc., a Delaware corporation, the lenders now or
hereafter party thereto (“Lenders”) and Assignee (as it may hereafter from time
to time be restated, amended, modified or supplemented, the “Credit Agreement”),
Lenders have agreed to provide certain Loans and credit accommodations to
Borrower;


 


WHEREAS,
Assignor will directly benefit from the making of the Loans and other financial
accommodations to be made by Lender to Borrower;


 


WHEREAS,
in consideration of Lender’s willingness to provide the Loan and grant other
financial accommodations to Borrower, Assignor is entering into this Agreement;
and


 


WHEREAS,
in order to provide additional security for the repayment of such Loans, the
parties hereto desire that Assignee for the benefit of Lenders be granted an
assignment and security interest in all rights of Assignor under those certain
contracts listed on Schedule I (each an “Assigned Contract” and
collectively the “Assigned Contracts”).


 


NOW,
THEREFORE, in consideration of the premises and covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged by Assignor, and intending to be legally bound, Assignor assigns
to Assignee for the benefit of Lenders all of its right, title and interest in
and to each Assigned Contract to the extent assignable and to the fullest
extent permitted by Law.


 


1.             Except
as otherwise expressly provided herein, capitalized terms used in this
Assignment shall have the respective meanings given to them in the Credit
Agreement and the rules of construction set forth in Section 1.2
[Construction] of the Credit Agreement shall apply to this Assignment.


 


2.             Assignor
has granted, bargained, sold, assigned, transferred and set over and by these
presents does hereby grant, bargain, sell, assign, transfer and set over unto
Assignee on behalf of Lenders, its respective successors and assigns, all the
rights, interests and privileges 


 

















 


which
Assignor has or may have in or under any Assigned Contract, including the
present and continuing right with full power and authority, in its own name, or
in the name of Assignor, or otherwise, but subject to the provisions and limitations
of Section 3, (i) to make claim for, enforce, perform, collect and
receive any and all rights under any Assigned Contract, (ii) to do any and
all things which Assignor is or may become entitled to do under any Assigned
Contract, and (iii) to make all waivers and agreements, give all notices,
consents and releases and other instruments and to do any and all other things
whatsoever which Assignor is or may become entitled to do under any Assigned
Contract.


 


3.             The
acceptance of this Assignment and the payment or performance under the Assigned
Contracts shall not constitute a waiver of any rights of Assignee or Lenders
under the terms of the Credit Agreement or any other Credit Documents; it being
understood that, until the occurrence of an Event of Default, and the exercise
of Assignee’s rights, on behalf of Lenders, under Section 4, Assignor
shall have all rights to the Assigned Contracts and to retain, use and enjoy
the same.


 


4.             Assignor,
upon the occurrence and during the continuance of an Event of Default, hereby
authorizes Assignee, at Assignee’s option, to do all acts required or permitted
under any Assigned Contract as Assignee, acting as Agent to Lenders, in its
sole discretion may deem proper. 
Assignor does hereby irrevocably constitute and appoint Assignee, while
this Assignment remains in force and effect and, in each instance, to the full
extent permitted by applicable Law, its true and lawful attorney in fact,
coupled with an interest and with full power of substitution and revocation, for
Assignor and in its name, place and stead, to demand and enforce compliance
with all the terms and conditions of each Assigned Contract and all benefits
accrued thereunder, whether at Law, in equity or otherwise; provided, however,
that Assignee shall not exercise any such power unless and until an Event of
Default shall have occurred.


 


5.             Assignee
on behalf of Lenders shall not be obligated to perform or discharge any
obligation or duty to be performed or discharged by Assignor under any Assigned
Contract.   Assignor hereby agrees to
indemnify Assignee and Lenders for, and to save Assignee and Lenders harmless
from, any and all liability arising under the Assigned Contracts, other than
arising or resulting from Assignee’s (or its agents, employees or contractors)
gross negligence or willful misconduct. 
Notwithstanding the foregoing, in the event Assignee assigns any
Assigned Contract to a third party, Assignor shall have no obligation to
indemnify Assignee for any actions taken by such third party with respect to
such Assigned Contract after the date of such assignment. The indemnity
agreement contained in this Section shall survive the termination of this
Assignment, indefeasible payment of the Loans, and assignment of any rights
hereunder.


 


6.             Assignor
agrees that this Assignment and the designation and directions herein set forth
are irrevocable.


 


7.             Neither
this Assignment nor any action or inaction on the part of Assignee shall
constitute an assumption on the part of Assignee of any obligations or duties
under any Assigned Contract.


 


8.             Assignor
covenants and warrants that:


 


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(a)           it
has the power and authority to assign each Assigned Contract, no third party
consent, approval or notice is required for Assignor to assign each Assigned
Contract and there have been no prior assignments of any Assigned Contract
which are currently in effect;


 


(b)           each
Assigned Contract is and shall be a valid contract, and to the best knowledge
of Assignor after reasonable inquiry there are and shall be, no material
defaults with respect to the Security Alarm Contracts on the part of any of the
parties thereto or any defaults or series of related defaults under the
Security Alarm Contracts that are material to Assignor’s business;


 


(c)           it
will not assign, pledge or otherwise encumber any Assigned Contract without the
prior written consent of Assignee other than as may be permitted under the
terms of the Credit Agreement;


 


(d)           other
than in the ordinary course of business with respect to the Security Alarm
Contracts or as may be permitted by the Credit Agreement, it will not cancel,
terminate or accept any surrender of any Assigned Contract, or (except as may
otherwise be permitted by the Credit Agreement) amend or modify the same
directly or indirectly in any material respect whatsoever, without having
obtained the prior written consent of Assignee thereto;


 


(e)           other
than in the ordinary course of business with respect to the Security Alarm
Contracts or as may be permitted by the Credit Agreement, it will not waive or
give any consent with respect to any material default or material variation in
the performance under any Assigned Contract; it will at all times take proper
steps to enforce all of the provisions and conditions thereof, unless in the
reasonable judgment of Assignor such enforcement would not be prudent or
economic; it will forthwith notify Assignee of any material default under any
Assigned Contract, other than the Security Alarm Contracts; and it will forthwith
notify Assignee of any default or series of related defaults under the Security
Alarm Contracts that are material to Assignor’s business;


 


(f)            it
will use commercially reasonable efforts to perform and observe, or cause to be
performed and observed, all of the terms, covenants and conditions on its part
to be performed and observed with respect to each Assigned Contract, in all
material respects; and


 


(g)           it
will execute from time to time any and all additional assignments or
instruments of further assurance to Assignee, as Assignee may at any time
reasonably request.


 


9.             At
such time as the Loans are paid in full in good and immediately available funds
and the Credit Agreement is terminated, this Assignment and all of Assignee’s
and Lenders’ right, title and interest hereunder with respect to the Assigned
Contracts shall terminate; provided, however, that this Assignment shall
continue to be effective or be reinstated, as the case may be, any time any
payment of any of the Obligations is rescinded, recouped, avoided, or must
otherwise be returned or released by any Lender or Agent upon or during the
insolvency, bankruptcy, or reorganization of, or any similar proceeding
affecting, the Borrower or for any other reason whatsoever, all as though such
payment had not been made and was due and owing.


 


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10.           This
Assignment shall inure to the benefit of Assignee, its respective successors
and assigns, and shall be binding upon Assignor, its successors, successors in title
and permitted assigns.  Assignor shall
not assign this Assignment or delegate its duties hereunder without the prior
written consent of Assignee.


 


11.           This
Agreement shall be deemed to be a contract under the Laws of the State of New
York and shall, pursuant to New York General Obligations Law Section 5-1401,
for all purposes be governed by, and construed and enforced in accordance with,
the laws of the State of New York.


 


[SIGNATURE PAGE FOLLOWS]


 


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[SIGNATURE PAGE 1 OF 1 TO


COLLATERAL ASSIGNMENT OF CONTRACTS]


 


IN
WITNESS WHEREOF, Assignor has caused this instrument to be executed under seal
as of the day and year first above written.


 


	
   

  	
  CASTLEROCK
  SECURITY HOLDINGS, INC.,

  
	
   

  	
  a
  Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Brian E. Johnson

  	
  (SEAL)

  
	
   

  	
   

  	
  Brian
  E. Johnson, President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accepted:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIEMENS
  FIRST CAPITAL COMMERCIAL

  	
   

  	
   

  	
   

  
	
  FINANCE,
  LLC, as Agent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Anthony Casciano

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Anthony
  Casciano

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Senior
  Vice President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Matthew R. Begley

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Matthew
  R. Begley

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
   

  	
   

  



 

















 


SCHEDULE I


 


ASSIGNED CONTRACTS


 


1.                                       All Security
Alarm Contracts


 


2.                                       Servicing
Agreement dated as of November 26, 2008, by and between CastleRock Security, Inc.
and Alarm Funding, LLC


 


3.                                       Confidential
Settlement Agreement and Release dated January 6, 2010, by and between
Security Associates International , Inc., CastleRock Security, Inc.
and Alarm Funding, LLC on the one hand, and APX Alarm Security Solutions, Inc.
and Apex Alarm, LLC, on the other hand.


 


4.                                       Agreement for
Central Station Services dated May 3, 2010, by and between CastleRock
Security, Inc. and Lydia Security Monitoring, Inc. d/b/a Central
Office Processing Services.