Exhibit 10.3
Security Agreement
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THIS SECURITY AGREEMENT (this "Agreement"), dated as of October 1, 2008, is made
by the Companies identified as such on the signature pages hereof (each
individually a "Grantor" and collectively, the "Grantors") in favor of PNC BANK,
NATIONAL ASSOCIATION (the "Bank"), with an address at 1600 Market Street, 22nd
Floor, Philadelphia, PA 19103.
Under the terms hereof, the Bank desires to obtain and each Grantor desires to
grant the Bank security for all of the Obligations (as hereinafter defined).
NOW, THEREFORE, each Grantor and the Bank, intending to be legally bound, hereby
agree as follows:
1.
DEFINITIONS.
(A)
"COLLATERAL" SHALL INCLUDE ALL PERSONAL PROPERTY OF EACH GRANTOR,
INCLUDING THE FOLLOWING, ALL WHETHER NOW OWNED OR HEREAFTER ACQUIRED OR ARISING
AND WHEREVER LOCATED:
(I) ACCOUNTS (INCLUDING HEALTH-CARE-INSURANCE RECEIVABLES
AND CREDIT CARD RECEIVABLES); (II) SECURITIES ENTITLEMENTS, SECURITIES ACCOUNTS,
COMMODITY ACCOUNTS, COMMODITY CONTRACTS AND INVESTMENT PROPERTY; (III) DEPOSIT
ACCOUNTS; (IV) INSTRUMENTS (INCLUDING PROMISSORY NOTES); (V) DOCUMENTS
(INCLUDING WAREHOUSE RECEIPTS); (VI) CHATTEL PAPER (INCLUDING ELECTRONIC CHATTEL
PAPER AND TANGIBLE CHATTEL PAPER); (VII) INVENTORY, INCLUDING RAW MATERIALS,
WORK IN PROCESS, OR MATERIALS USED OR CONSUMED IN A GRANTOR'S BUSINESS, ITEMS
HELD FOR SALE OR LEASE OR FURNISHED OR TO BE FURNISHED UNDER CONTRACTS OF
SERVICE, SALE OR LEASE, GOODS THAT ARE RETURNED, RECLAIMED OR REPOSSESSED;
(VIII) GOODS OF EVERY NATURE, INCLUDING STOCK-IN-TRADE, GOODS ON CONSIGNMENT,
STANDING TIMBER THAT IS TO BE CUT AND REMOVED UNDER A CONVEYANCE OR CONTRACT FOR
SALE, THE UNBORN YOUNG OF ANIMALS, CROPS GROWN, GROWING, OR TO BE GROWN,
MANUFACTURED HOMES, COMPUTER PROGRAMS EMBEDDED IN SUCH GOODS AND FARM PRODUCTS;
(IX) EQUIPMENT, INCLUDING MACHINERY, VEHICLES AND FURNITURE; (X) FIXTURES; (XI)
AGRICULTURAL LIENS; (XII) AS-EXTRACTED COLLATERAL; (XIII) COMMERCIAL TORT
CLAIMS, IF ANY, DESCRIBED ON EXHIBIT "A" HERETO; (XIV) LETTER OF CREDIT RIGHTS;
(XV) GENERAL INTANGIBLES, OF EVERY KIND AND DESCRIPTION, INCLUDING PAYMENT
INTANGIBLES, SOFTWARE, COMPUTER INFORMATION, SOURCE CODES, OBJECT CODES, RECORDS
AND DATA, ALL EXISTING AND FUTURE CUSTOMER LISTS, CHOSES IN ACTION, CLAIMS
(INCLUDING CLAIMS FOR INDEMNIFICATION OR BREACH OF WARRANTY), BOOKS, RECORDS,
PATENTS AND PATENT APPLICATIONS, COPYRIGHTS, TRADEMARKS, TRADENAMES,
TRADESTYLES, TRADEMARK APPLICATIONS, GOODWILL, BLUEPRINTS, DRAWINGS, DESIGNS AND
PLANS, TRADE SECRETS, CONTRACTS, LICENSES, LICENSE AGREEMENTS, FORMULAE, TAX AND
ANY OTHER TYPES OF REFUNDS, RETURNED AND UNEARNED INSURANCE PREMIUMS, RIGHTS AND
CLAIMS UNDER INSURANCE POLICIES; (XVI) ALL SUPPORTING OBLIGATIONS OF ALL OF THE
FOREGOING PROPERTY; (XVII) ALL PROPERTY OF EACH GRANTOR NOW OR HEREAFTER IN THE
BANK'S POSSESSION OR IN TRANSIT TO OR FROM, OR UNDER THE CUSTODY OR CONTROL OF,
THE BANK OR ANY AFFILIATE THEREOF; (XVIII) ALL CASH AND CASH EQUIVALENTS
THEREOF; AND (XIX) ALL CASH AND NONCASH PROCEEDS (INCLUDING INSURANCE PROCEEDS)
OF ALL OF THE FOREGOING PROPERTY, ALL PRODUCTS THEREOF AND ALL ADDITIONS AND
ACCESSIONS THERETO, SUBSTITUTIONS THEREFOR AND REPLACEMENTS THEREOF.
(B)
"OBLIGATIONS" SHALL INCLUDE ALL LOANS, ADVANCES, DEBTS,
LIABILITIES, OBLIGATIONS, COVENANTS AND DUTIES OWING BY EACH GRANTOR TO THE BANK
UNDER THE LOAN AGREEMENT, DATED AS OF OCTOBER 1, 2008, BY AND BETWEEN NEW
HORIZONS WORLDWIDE, INC. (THE "BORROWER") AND THE BANK (THE "LOAN