exv10w32






Exhibit 10.32




Execution Copy




SECURITY AGREEMENT




     THIS SECURITY AGREEMENT (“Agreement”), is dated as of August 1, 2008 (this “Agreement”), is
between RealPage, Inc., a Delaware corporation, located at 4000 International Parkway, Carrollton,
TX 75007 (the “Company”), and HV Capital Investors, L.L.C., a Michigan limited liability company,
located at 7 West Square Lake Road, Suite 122, Bloomfield Hills, Michigan 48302 (the “Investor”).



     1. Purpose. This Agreement is granted by the Company in favor of Investor under the Note
Purchase Agreement, dated August 1, 2008, entered into between the Company and Investor (the “Note
Agreement”), and the Note(s) issued to Investor by the Company under the Secured Promissory Note(s)
(as may be amended, restated, modified or replaced from time to time, collectively, the “Notes” or
individually, a “Note”). Under the Note Agreement and the Notes, Investor may loan the Company up
to the sum of $10,000,000. The Company has agreed to secure all debt of the Company to Investor in
accordance with the terms and conditions of this Agreement. Capitalized terms not defined in this
Agreement have the meaning set forth under the Note Agreement. This Agreement is subject to the
senior rights of the Senior Lender under the Subordination Agreement.



     2. Grant of Security Interest. The Company hereby grants to Investor a continuing security
interest in the “Collateral” described in Section 3 below to secure the payment of the Notes and
all other loans and advances from Investor to the Company of any nature whatsoever arising under
the Notes or the Note Agreement (including all renewals, modifications and extensions thereof),
including, without limitation all interest, costs, expenses, and reasonable attorneys’ fees, which
may be made or incurred by Investor in the disbursement, administration, and collection of such
amounts, and in the protection, maintenance, and liquidation of the Collateral (collectively,
"Liabilities”). This Agreement shall be and become effective when, and continue in effect, as long
as any Liabilities of the Company to Investor are outstanding and unpaid. Other than the Senior
Debt or otherwise permitted under the terms of the Senior Debt ,the Company will not, unless in the
ordinary course of business or as approved by its Board of Directors, subject to the provisions and
covenants set forth in the Note Agreement, sell, assign, transfer, pledge or otherwise dispose of
or encumber any Collateral to any third party while this Agreement is in effect without the prior
written consent of Investor.



     3. Collateral. The “Collateral” covered by this Agreement is all of personal property of the
Company, tangible and intangible, which it now owns or shall hereafter acquire or create,
immediately upon the acquisition or creation thereof, and includes, but is not limited to, the
following:




3.1 All accounts (including health-care-insurance receivables), chattel paper
(including tangible and electronic chattel paper), deposit accounts, documents
(including negotiable documents), equipment (including all accessions and additions
thereto), general intangibles (including payment intangibles and software), goods



 









 





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(including fixtures), instruments (including promissory notes), inventory (including
all goods held for sale or lease or to be furnished under a contract of service, and
including returns and repossessions), investment property (including securities and
securities entitlements), letter of credit rights, money, and all of Company’s books
and records with respect to any of the foregoing, and the computers and equipment
containing said books and records; and




3.2 any and all cash proceeds and/or noncash proceeds of any of the foregoing,
including, without limitation, insurance proceeds, and all supporting obligations and
the security therefor or for any right to payment. All terms above have the meanings
given to them in the California Uniform Commercial Code, as amended or supplemented
from time to time, including revised Division 9 of the Uniform Commercial
Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section 35,
operative July 1, 2001.




Notwithstanding the foregoing, the Collateral shall not include any copyrights, patents,
trademarks, servicemarks and applications therefor, now owned or hereafter acquired, or any
claims for damages by way of any past, present and future infringement of any of the
foregoing (collectively, the “Intellectual Property”); provided, however, that the
Collateral shall include all accounts and general intangibles that consist of rights to
payment and proceeds from the sale, licensing or disposition of all or any part, or rights
in, the foregoing (the “Rights to Payment”). Notwithstanding the foregoing, if a judicial
authority (including a U.S. Bankruptcy Court) holds that a security interest in the
underlying Intellectual Property is necessary to have a security interest in the Rights to
Payment, then the Collateral shall automatically, and effective as of the Closing, include
the Intellectual Property to the extent necessary to permit perfection of Investor’s
security interest in the Rights to Payment.



     4. Perfection of Security Interest. The Company shall execute and deliver to Investor,
concurrently with the Company’s execution of this Agreement and at any time or times hereafter at
the request of Investor (and pay the cost of filing or recording same in all public offices deemed
necessary by Investor), all financing statements, assignments, certificates of title, applications
for vehicle titles, affidavits, reports, notices, schedules of accounts, designations of inventory,
letters of authority and all other documents that Investor may reasonably request, in form
satisfactory to Investor, to perfect and maintain perfected Investor’s security interests in the
Collateral. In addition, the Company irrevocably authorizes Investor, its agents, attorneys, and
representatives, to file financing statements, and amendments thereto, at the Company’s expense,
necessary to establish and maintain Investor’s perfected security interest in the Collateral. In
order to fully consummate all of the transactions contemplated hereunder, the Company shall make
appropriate entries on its books and records disclosing Investor’s security interests in the
Collateral. Upon payment of the Notes, Investor authorizes the Company to file any and all
termination statements necessary in the Company’s discretion to terminate Investor’s security
interests in the Collateral.



     5. Warranties. The Company warrants and agrees that while any of the Liabilities remain
unperformed and unpaid and except as may occur in the ordinary course of business or be



 









 





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approved by the Company’s Board of Directors, subject to the provisions and covenants set
forth in the Note Agreement, (i) other than as a part of the Senior Debt, the Company is the owner
of the Collateral free and clear of all liens or security interests and all Chattel Paper
constituting Collateral evidences a perfected security interest in the goods covered by it, free
from all other liens and security interests other than Permitted Liens, as such Term is defined in
the Note Agreement, no financing statement other than that of Investor and for Permitted Liens is
on file covering the Collateral or any of it and if Inventory is represented or covered by
documents of title, the Company is the owner of the documents, free of all liens and security
interest other than Investor’s security interest; (ii) the Company’s exact legal name is as set
forth above; (iii) the Company is an organization of the type and organized in the jurisdiction set
forth above, (iv) the address of the Company’s principal office is as set forth above, while the
addresses of the Company’s other places of business where Collateral is now or may in the future be
located, and the Company’s business locations shall not be changed without the prior written
consent of Investor, and the Company further warrants that the Collateral, wherever located, is
covered by this Agreement; (v) the Collateral will not be used, nor will the Company permit the
Collateral to be used, for any unlawful purpose, whatever; (vi) the Company will neither change its
name, form of business entity nor address of its principal office without giving written notice
thereof to Investor at least thirty (30) days prior to the effective date of such change; and the
Company agrees that all documents, instruments and agreements demanded by Investor in response to
such change shall be prepared, filed and recorded at the Company’s expense prior to the effective
date of such change; (vii) the Company shall at all times maintain the Collateral in first class
condition and repair; (viii) the Company will indemnify and hold Investor harmless against claims
of any persons or entities not party to this Agreement concerning disputes arising over the
Collateral; and (ix) the Collateral is or will be located at the addresses set forth in Exhibit A.




     6. Covenants Concerning the Company’s Legal Status. The Company covenants with Investor as
follows: (i) without providing at least thirty (30) days prior written notice to Investor, the
Company will not change its name, its place of business or, if more than one, chief executive
office, or its mailing address or organizational identification number if it has one, (ii) if the
Company does not have an organizational identification number and later obtains one, the Company
shall forthwith notify Investor of such organizational identification number, and (iii) the Company
will not change its type of organization, jurisdiction of organization or other legal structure.



     7. Insurance, Taxes, Etc. The Company shall, subject to the terms of the Note Agreement, (i)
pay all taxes, levies, assessments, judgments and charges of any kind upon or relating to the
Collateral, to the Company’s business, and to the Company’s ownership or use of any of its assets,
income or gross receipts; (ii) at its own expense, keep and maintain all of the Collateral fully
insured against loss or damage by fire, theft, explosion and other risks in such amounts, with such
companies, under such policies and in such form as shall be recommended by the Company’s Board of
Directors which policies shall expressly provide that loss thereunder shall be payable to Investor
as its interest may appear (and Investor shall have a security interest in the proceeds of such
insurance and may apply any such proceeds which may be received by it toward payment of the
Liabilities, whether or not due, in such order of application as Investor may reasonably
determine); (iii) maintain at its own expense public liability and property damage insurance in
such amounts



 









 





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with such companies, under such policies and in such form as shall be recommended by the
Company’s Board of Directors; and, upon Investor’s request, shall furnish Investor with such
policies and evidence of payment of premiums thereon. If the Company at any time hereafter should
fail to obtain or maintain any of the policies required above or pay any premium in whole or in
part relating thereto, or shall fail to pay any such tax, assessment, levy, or charge or to
discharge any such lien or encumbrance, then Investor, without waiving or releasing any obligation
or default of the Company hereunder, may at any time hereafter (but shall be under no obligation to
do so) make such payment or obtain such discharge or obtain and maintain such policies of insurance
and pay such premiums, and take such action with respect thereto as Investor reasonably deems
advisable. All sums so disbursed by Investor, including reasonable attorneys’ fees, court costs,
expenses, and other charges relating thereto, shall be part of the Company’s Liabilities, secured
hereby, and payable on demand.




     8. Sale, Collections, Etc.



          8.1 Until the occurrence of an Event of Default (as that term is defined below), Investor
authorizes and permits the Company to collect Accounts from Account debtors. Subject to the
Subordination Agreement, this privilege may be terminated by Investor at any time upon the
occurrence of a Default as set forth in this Agreement, and Investor thereupon shall be entitled to
and have all of the ownership, title, rights, securities and guarantees of the Company in respect
thereto, and in respect to the property evidenced thereby, including the right of stoppage in
transit, and Investor may notify any Account debtor of the assignment of Accounts and collect the
same; thereafter the Company will receive all payments on Account as agent of and for Investor and
will transmit to Investor, on the day of receipt thereof, all original checks, drafts, acceptances,
notes and other evidence of payment received in payment of or on account of Accounts, including all
cash monies, similarly received by the Company. Subject to the Subordination Agreement, until such
delivery, the Company shall keep all such remittances separate and apart from the Company’s own
funds, capable of identification as the property of Investor, and shall hold the same in trust for
Investor.




          8.2 Until the occurrence of an Event of Default and until such time as Investor shall notify
the Company of the revocation of such power and authority the Company may (i) only in the ordinary
course of its business, at its own expense, sell, lease or furnish under contracts of service any
of the Inventory normally held by the Company for such purpose; (ii) use and consume any raw
materials, work in process or materials, the use and consumption of which is necessary in order to
carry on the Company’s business; and the Company shall, at its own expense, endeavor to collect, as
and when due all amounts due with respect to any of the Collateral, including the taking of such
action with respect to such collection as Investor may reasonably request or, in the absence of
such request, as the Company may deem advisable. A sale in the ordinary course of business does
not include a transfer in partial or total satisfaction of a debt.




     9. Waiver. The Company waives all defenses and setoffs which could hinder or reduce the
obligations of the Company under this Agreement. In addition, except as expressly prohibited by
law, the Company waives any right it has to require Investor to give notice of the details of any



 









 





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public or private sale of personal property security held from the Company or pursue any
remedy available to Investor.




     10. Information. Subject to the terms of the Note Agreement, the Company shall permit
Investor or its agents upon reasonable prior written notice, during business hours to have access
to and to inspect all the Collateral and may from time to time verify Accounts and Chattel Paper,
inspect, check, make copies of or extracts from the books, records and files of the Company, and
the Company will make same available at any time for such purposes. In addition, subject to the
terms of the Note Agreement, the Company shall promptly supply Investor with financial and such
other information concerning its affairs and assets as Investor may reasonably request from time to
time.



     11. Event of Default.



          11.1 An Event of Default shall exist as and when provided under a Note.




          11.2 An Event of Default shall exist if Company permits the inclusion in any contract to which
it or a subsidiary becomes a party of any provisions that could restrict or invalidate the creation
of a security interest in any of the Collateral.




          11.3 An Event of Default shall exist if Company permits Liens, other than Permitted Liens, as
such terms are defined in the Note Agreement, on any of its Collateral, including without limit the
Intellectual Property.




          11.4 Upon the occurrence of an Event of Default, the Notes and all other Liabilities may
(notwithstanding any provisions thereof) at the option of Investor and without demand or notice of
any kind, be declared, and thereupon immediately shall become due and payable, and subject to the
Subordination Agreement Investor may exercise from time to time any rights and remedies, including
the right to immediate possession of the Collateral, available to it under applicable law. Subject
to the Subordination Agreement, the Company agrees, in case of an Event of Default, to assemble, at
its expense, all the Collateral at a convenient place acceptable to Investor and to pay all costs
of Investor of collection of the Notes and all other Liabilities, and enforcement of rights
hereunder, including reasonable attorneys’ fees and legal expenses, including participation in
bankruptcy proceedings, and expense of locating the Collateral and expenses of any repairs to any
realty or other property to which any of the Collateral may be affixed or be a part. If any
notification of intended disposition of any of the Collateral is required by law, such
notification, if mailed, shall be deemed reasonably and properly given if sent at least seven days
before such disposition, postage prepaid, addressed to the undersigned either at the address shown
below, or at any other address of the undersigned appearing on the records of Investor.




          11.5 SUBJECT TO THE SUBORDINATION AGREEMENT, THE COMPANY AGREES THAT INVESTOR SHALL, IN THE
EVENT OF ANY DEFAULT, HAVE THE RIGHT TO PEACEFULLY TAKE POSSESSION ANY OF THE COLLATERAL. THE
COMPANY WAIVES ANY RIGHT IT MAY HAVE, IN SUCH INSTANCE, TO A JUDICIAL HEARING PRIOR TO SUCH
RETAKING.







 









 








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     12. General. Time shall be deemed of the very essence of this Agreement. Except as otherwise
defined in this Agreement, all terms in this Agreement shall have the meanings provided by Delaware
Code Title 6, Articles 1-11, as amended, revised or replaced by any successor laws hereafter
enacted (the “Delaware Uniform Commercial Code”). Investor shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its possession if it takes
such action for that purpose as the Company requests in writing, but failure of Investor to comply
with any such request shall not of itself be deemed a failure to exercise reasonable care, and
failure of Investor to preserve or protect any rights with respect to such Collateral against any
prior parties or to do any act with respect to the preservation of such Collateral not so requested
by the Company shall not be deemed a failure to exercise reasonable care in the custody and
preservation of such Collateral. Any delay on the part of Investor in exercising any power,
privilege or right hereunder, or under any other instrument executed by the Company to Investor in
connection herewith shall not operate as a waiver thereof, and no single or partial exercise
thereof, or the exercise of any other power, privilege or right shall preclude other or further
exercise thereof, or the exercise of any other power, privilege or right. The waiver by Investor
of any Event of Default by the Company shall not constitute a waiver of any subsequent Events of
Default, but shall be restricted to the Event of Default so waived. All rights, remedies and
powers of Investor hereunder are irrevocable and cumulative, and not alternative or exclusive, and
shall be in addition to all rights, remedies and powers given hereunder or in or by any other
instruments or by the Delaware Uniform Commercial Code, or any laws now existing or hereafter
enacted.



     This Agreement shall be construed in accordance with the laws of the State of Delaware without
giving effect to any applicable principles of conflicts of laws. Whenever possible each provision
of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Agreement. The
rights and privileges of Investor hereunder shall inure to the benefit of its successors and
assigns and this Agreement shall be binding on all heirs, executors, administrators, assigns and
successors of the Company.



     All notices and other communications required or permitted hereunder shall be in writing and
shall be hand delivered or sent via receipted facsimile, overnight courier service or mailed by
certified or registered mail, postage prepaid, return receipt requested, addressed or sent (i) if
to Investor, at the address furnished by Investor to the Company in writing, or (ii) if to the
Company, at the address first shown above or facsimile number (972) 820 3932, or at such other
address as the Company shall have furnished to Investor in writing.



     This Agreement constitutes the entire understanding of the parties with respect to the subject
matter hereof and supersedes all prior written and oral communications or understandings. This
Agreement may be amended or supplemented only by a writing signed on behalf of both parties. The
Company acknowledges receipt of a true and complete copy of this Agreement. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.



 









 





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     INVESTOR AND THE COMPANY ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
RIGHT, BUT ONE THAT MAY BE WAIVED. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT)
WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, INVESTOR AND
THE COMPANY WAIVE ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE
OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT.



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     The parties have executed this Security Agreement between RealPage, Inc. and HV Capital
Investors, L.L.C. as of the date first written above.



	 	 	 	 	 	 	 	 
	COMPANY:	 	INVESTOR:
	 
	 	 	 	 	 	 
	RealPage, Inc., a Delaware corporation	 	HV Capital Investors. L.L.C., a Michigan

limited liability company
	 
	 	 	 	 	 	 
	By:

	/s/ Timothy J. Barker
	 	By:
	GWH Management, LLC
	 

	 

Timothy J. Barker
	 	 Its:
	Manager
	 

	Its: Executive Vice President	 	 	 	 
	 

	Chief Financial Officer and Treasurer	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	/s/ Glennon Healey
	 

	 	 	 	 	 	 
	 

	 	 	 	 	Glennon W. Healey
	 

	 	 	 	 	Its: Manager






 









 






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Exhibit A




Collateral Locations



	 	 	 
	1.

	 	600 Blair Park Road, Suite #270
	 

	 	Williston, VT 05495
	 
	 	 
	2.

	 	4000 International Parkway
	 

	 	Carrollton, TX 75007
	 
	 	 
	3.

	 	4120 International Parkway, Suite 1000
	 

	 	Carrollton, Texas 75007
	 
	 	 
	4.

	 	36 Discovery, Irvine, CA
	 

	 	Irvine, CA 92618
	 
	 	 
	5.

	 	Laxmi Cyber City, 2nd Floor
	 

	 	Hi-tech City, Kondapur
	 

	 	Hyderabad, India
	 
	 	 
	6.

	 	Two Live Oak Center
	 

	 	3445 Peachtree Rd NE, Suite 1400
	 

	 	Atlanta, GA 30326
	 
	 	 
	7.

	 	In addition, certain computers and telecommunications equipment will be in the
possession of certain employees at sites in states other than those listed above.






 









 











 









 








EXHIBIT A



The “Collateral” covered by this Financing Statement is all of personal property of the Debtor,
tangible and intangible, which it now owns or shall hereafter acquire or create, immediately upon
the acquisition or creation thereof, and includes, but is not limited to, the following:




     1.1 All accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general Intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), Inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records; and



     1.2 any and all cash proceeds and/or noncash proceeds of any of the foregoing, Including,
without limitation, Insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section
35, operative July 1, 2001.



     Notwithstanding the foregoing, the Collateral shall not include any copyrights, patents,
trademarks, servicemarks and applications therefor, now owned or hereafter acquired, or any claims
for damages by way of any past, present and future Infringement of any of the foregoing
(collectively, the “Intellectual Property”); provided, however, that the Collateral shall include
all accounts and general intangibles that consist of rights to payment and proceeds from the sale,
licensing or disposition of all or any part, or rights in, the foregoing (the “Rights to Payment”).
Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds
that a security interest in the underlying Intellectual Property is necessary to have a security
interest in the Rights to Payment, then the Collateral shall automatically, and effective as of the
Closing, include the Intellectual Property to the extent necessary to permit perfection of Secured
Party’s security interest in the Rights to Payment.