Document:

Exhibit 10.22

 

		
	
  
	
Commercial Note

Florida

 

	
Borrower:   Health Plan Intermediaries Holdings, LLC
	
Date:  December 15, 2014

	
Borrower’s Address:  15438 N. Florida Avenue, Suite 201, Tampa, Florida 33613-1223

	
Loan Amount:  Fifteen Million and No/100 Dollars ($15,000,000.00)

	
Account Number:
	
 
	
Note Number:
	
 
	
Officer: Jordan K. Young

For value received, the borrower(s) named above, whether one or more (the “Borrower”), jointly and severally promise to pay to the order of SunTrust Bank, a Georgia banking corporation (“SunTrust”) at any of its offices, or at such place as SunTrust may in writing designate, without offset in U.S. Dollars in immediately available funds, the Loan Amount shown above, or the total of all amounts advanced under this commercial note and any modifications, renewals, extensions or replacements thereof (this “Note”)  if less than the full Loan Amount is advanced, plus interest and any other amounts due, upon the terms specified below.

Note TypeRepayment Terms

 

		
	
Revolving

Master
	
This is an open end revolving line of credit.  Borrower  may borrow, repay, and re-borrower an aggregate principal amount up to the Loan Amount outstanding at any one time.

	
 
	
 

	
Borrowing

Note With Maturity Date
	
Principal is due and payable in full on the Maturity Date, but the Borrower shall be liable for only so much of the Loan Amount as shall be equal to the total amount advanced to the Borrower by SunTrust from time to time, less all payments made by or for the Borrower and applied by SunTrust to principal.  Advances under this Note shall be recorded and maintained by SunTrust in its internal records and such records shall be conclusive of the principal and interest owed by Borrower unless there is an error in such records.  Accrued interest will be payable on the 15th day of each month beginning on January 15, 2015, with all unpaid accrued interest due and payable on the Maturity Date. 

	
 
	
 

	
 
	
“Maturity Date” means December 15, 2017 or such date to which this Note may be extended or renewed in the sole discretion of SunTrust by written notice from SunTrust to Borrower.

Additional Terms And Conditions

This Note is governed by additional terms and conditions contained in an Agreement to Commercial Note between the Borrower and SunTrust dated December 15, 2014 and any modifications, renewals, extensions or replacements thereof (the “Agreement”).  In the event of a conflict between any term or condition contained in this Note and in the Agreement, such term or condition of the Agreement shall control.

Interest

Interest will accrue on an actual/360 basis (calculated on the actual number of days elapsed over a year of 360 days). Interest shall accrue from the date of disbursement on the unpaid balance and shall continue to accrue until this Note is paid in full. 

Subject to the above, interest per annum payable on this Note (the “Rate”) shall be

The LIBOR Rate as defined on the attached Addendum A plus 1.95%.

Adjustments to the Rate shall be effective as of the Interest Rate Determination Date. 

The Rate shall not exceed 18% if the loan amount is $500,000.00 or less, or 24% if the loan amount is over $500,000.00.

Collateral

To the extent permitted by law, the Borrower grants to SunTrust a security interest in and a lien upon all deposits or investments maintained by the Borrower with SunTrust and any affiliates thereof.

 

			
	
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*106F*

 

 

The collateral for this Note includes, but is not limited to, the following:

First lien position Uniform Commercial Code filing on all of Borrower's business assets (No Landlord Lien Waiver is required). 

All assets of Owner, American Service Insurance Agency, LLC, Health Insurance Innovations, Inc., HealthPocket, Inc., Insurance Center for Excellence, LLC, Secured Software Solutions LLC, Sunrise Group Marketing LLC and Sunrise Health Plans LLC as more particularly described herein, and including but not limited to, all Accounts,  Inventory, furniture, fixtures and Equipment, goods, deposit accounts, instruments, documents, commercial tort claims, letter of credit rights, investment property, chattel paper and General Intangibles (as all such terms are used herein and in the Uniform Commercial Code). Without limiting the foregoing the term “Collateral” shall include all of Owner’s rights, title and interest in, to and under (i) any interest rate hedge agreement or other derivative transaction agreement and (ii) any schedule or confirmation relating to such interest rate hedge agreement or derivative transaction agreement.  The term “Collateral” specifically excludes (i) all equity interests in a joint venture known as Simple Insurance Leads, LLC; (ii) cash held on behalf of others for third party insurance carriers, producers and discount benefit providers; and (iii) rights under contracts or other agreements which are not assignable or for which the counter-party will not give consent.

The proceeds of any Collateral may be applied against the liabilities of the Borrower to SunTrust in such order as SunTrust deems proper.

Loan Purpose And Updated Financial Information Required

The Borrower warrants and represents that the loan evidenced by this Note is being made solely for the purpose of acquiring or carrying on a business, professional or commercial activity or acquiring real or personal property as an investment (other than a personal investment) or for carrying on an investment activity (other than a personal investment activity). The Borrower agrees to provide to SunTrust updated financial information, including, but not limited to, tax returns, current financial statements in form satisfactory to SunTrust, as well as additional information, reports or schedules (financial or otherwise), all as SunTrust may from time to time request.

Representations and Warranties

This Note has been duly executed and delivered by Borrower, constitutes Borrower’s valid and legally binding obligations and is enforceable in accordance with its terms against Borrower.  The execution, delivery and performance of this Note and the consummation of the transaction contemplated will not, with or without the giving of notice or the lapse of time, (a) violate any material law applicable to Borrower, (b) violate any judgment, writ, injunction or order of any court or governmental body or officer applicable to Borrower, (c) violate or result in the breach of any material agreement to which Borrower is a party nor (d) violate Borrower’s charter or bylaws as applicable. No consent, approval, license, permit or other authorization of any third party or any governmental body or officer is required for the valid and lawful execution and delivery of this Note.

Default, Acceleration And Setoff

An “event of default” shall occur hereunder upon the occurrence of any one or more of the following events or conditions:

	
a.
	
the failure by any Obligor (as defined below) to pay when due, whether by acceleration or otherwise, any amount owed under this Note;

	
b.
	
the occurrence of any non-monetary event of default under any agreement or loan document executed in conjunction with this Note or the failure of any Obligor to perform any non-monetary covenant, promise or obligation contained in this Note or any other agreement to which any Obligor and SunTrust are parties (the “Loan Documents” other than those specifically described as an “Event of Default” in this Note), and with respect to such breach that by its nature can be cured, such breach shall continue for a period of fifteen (15) days after receipt by Borrower of notice from SunTrust, provided that the foregoing cure period shall only be available once during each twelve (12) month period for each such covenant, promise, or obligation;

	
c.
	
the  breach of any of any Obligor’s material representation or warranties contained in this Note or any other agreement with SunTrust;

	
d.
	
the failure of any Obligor to pay when due a sum in excess of $50,000.00 owed to any creditor other than SunTrust under a written agreement calling for the payment of money;

	
e.
	
dissolution, liquidation, merger, consolidation, termination or suspension of usual business of any Obligor other than a merger or consolidation between any Obligor and any of its affiliates or subsidiaries provided that 30 days prior written notice identifying the parties to the dissolution, merger, or consolidation and the proposed date and survivor of the transaction is delivered to SunTrust;

 

			
	
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f.
	
the insolvency or inability to pay debts as they mature of any Obligor, the application for the appointment of a receiver for any Obligor, the filing of a petition or the commencement of a proceeding by or against any Obligor under any provision of any applicable Bankruptcy Code or other insolvency law or statute, or any assignment for the benefit of creditors by or against any Obligor;

	
g.
	
the filing of any petition or the commencement of any proceeding against an Obligor by a third party for relief under any bankruptcy or insolvency law, or any law relating to the relief of debtors, readjustment of indebtedness, debtor reorganization, composition or extension of debt which is not dismissed within 60 days of filing or commencement;

	
h.
	
the entry of a judgment or the issuance or service of any attachment, levy or garnishment against any Obligor or the property of any Obligor or the repossession or seizure of property of any Obligor for a sum in excess of $50,000.00 which is not satisfied, dismissed, dissolved, terminated, or replaced with a bond within 60 days of such entry, issuance, service levy, repossession, or seizure;

	
i.
	
a determination by SunTrust that a material adverse change in the financial condition, operations, business or prospects of all Obligors, taken as a whole, has occurred since the date of this Note which adverse change impairs the ability of all Obligors, taken as a whole, to continue normal business operations or to perform their obligations under the Loan Documents;

	
j.
	
any Obligor commits fraud or makes a material misrepresentation at any time in connection with this Note or any Collateral;

	
k.
	
the sale or transfer by any Obligor of all or substantially all of such Obligor’s assets other than in the ordinary course of business; or

	
l.
	
the termination of any guaranty of this Note by a guarantor; or

	
m.
	
Michael Kosloske ceases to be the Chief Executive Officer of Borrower.

SunTrust shall not be obligated to fund this Note or make any advance under this Note if an event of default exists or would exist if such funding occurred or such advance made.  Upon the occurrence of an event of default, SunTrust shall, at its option, have the remedies provided herein and by any other agreement between SunTrust and any Obligor or under applicable law, including without limitation, declaring the entire outstanding principal balance, together with all interest thereon and any other amounts due under this Note, to be due and payable immediately without presentment, demand, protest, or notice of any kind, except notice required by law.  Upon the occurrence of an event of default under section g above, the entire outstanding principal balance, together with all interest thereon and any other amounts due under this Note, shall automatically become due and payable without presentment, demand, protest, or notice of any kind except notice required by law, and SunTrust’s obligation to make advances under this Note shall automatically terminate without notice or further action by SunTrust. Upon the occurrence of an event of default, as of the date of such event of default, SunTrust shall be entitled to interest on the unpaid balance of this Note at the lesser of (a) the Rate plus 4.00% per annum or (b) the maximum rate allowed by law (the “Default Rate”) until paid in full. To the extent permitted by law, upon default SunTrust will have the right, in addition to all other remedies provided herein, to set off the amount due under this Note or due under any other obligation to SunTrust against any and all accounts, whether checking or savings or otherwise, credits, money, stocks, bonds or other security or property of any nature whatsoever on deposit with, held by, owed by, or in the possession of, SunTrust to the credit of or for the account of any Obligor, without notice to or consent by any Obligor. The remedies provided in this Note and any other agreement between SunTrust and any Obligor and by applicable law are cumulative and not exclusive of any other remedies provided by law.

Late Charges And Other Authorized Fees And Charges

As used herein the term “Obligor” shall individually and collectively refer to the Borrower and any person or entity that is primarily or secondarily liable on this Note and any person or entity that has conveyed or may hereafter convey any security interest or lien to SunTrust in any real or personal property to secure payment of this Note.  If any portion of a payment is at least ten (10) days past due, the Borrower agrees to pay a late charge of 5% of the amount which is past due.  Unless prohibited by applicable law, the Borrower agrees to pay the fee established by SunTrust from time to time for returned checks if a payment is made on this Note with a check and the check is dishonored for any reason after the second presentment.  In addition to any other amounts owed under the terms of this Note, the Borrower agrees to pay those fees and charges disclosed in  the attached Disbursements and Charges Summary which is incorporated in this Note by reference and, as permitted by applicable law, the Borrower agrees to pay the following: (a) all reasonable expenses, including, without limitation, any and all reasonable costs incurred by SunTrust related to default, all court costs and reasonable out-of-pocket collection expenses, whether suit be brought or not, incurred in collecting this Note; (b) all reasonable costs incurred in evaluating, preserving or disposing of any Collateral granted as security for the payment of this Note, including the cost of any audits, appraisals, appraisal updates, reappraisals or environmental inspections which SunTrust from time to time in its sole discretion may deem necessary; (c) any premiums for property insurance purchased on behalf of the Borrower or on behalf of the owner(s) of any Collateral pursuant to any security instrument relating to any Collateral; (d) any reasonable expenses or reasonable 

 

			
	
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costs incurred in defending any claim arising out of the execution of this Note or the obligation which it evidences, or otherwise involving the employment by SunTrust of attorneys with respect to this Note and the obligations it evidences; and (e) any other charges permitted by applicable law. The Borrower agrees to pay such amounts on demand or, at SunTrust’s option, such amounts may be added to the unpaid balance of the Note and shall accrue interest at the stated Rate. Upon the occurrence of an event of default, or after demand and failure to pay if this Note is payable on demand, interest shall accrue at the Default Rate.

Waivers

The Borrower and each other Obligor waive presentment, demand, protest, notice of protest and notice of dishonor and waive all exemptions, whether homestead or otherwise, as to the obligations evidenced by this Note and waive any discharge or defenses based on suretyship or impairment of Collateral or of recourse. The Borrower specifically waives his/her homestead rights under the laws and Constitution of the State of Florida. The Borrower and each other Obligor waive any rights to require SunTrust to proceed against any other Obligor or any Collateral before proceeding against the Borrower or any of them, or any other Obligor, and agree that without notice to any Obligor and without affecting any Obligor’s liability, SunTrust, at any time or times, may grant extensions of the time for payment or other indulgences to any Obligor or permit the renewal or modification of this Note, or permit the substitution, exchange or release of any Collateral for this Note and may add or release any Obligor primarily or secondarily liable. The Borrower and each other Obligor agree that SunTrust may apply all monies made available to it from any part of the proceeds of the disposition of any Collateral or by exercise of the right of setoff either to the obligations under this Note or to any other obligations of any Obligor to SunTrust, as SunTrust may elect from time to time. 

Waiver of Jury Trial 

THE BORROWER AND SUNTRUST HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND ANY OTHER DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR SUNTRUST ENTERING INTO OR ACCEPTING THIS NOTE.  FURTHER, THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF SUNTRUST, NOR SUNTRUST’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUNTRUST WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.

Patriot Act Notice

SunTrust hereby notifies Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 signed into law October 26, 2001), SunTrust may be required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow SunTrust to identify the Borrower in accordance with the Act.

Hold Harmless and Indemnification

Borrower hereby indemnifies and agrees to hold SunTrust and its officers, directors, employees, agents and affiliates harmless from and against all claims, damages, liabilities (including attorneys’ fees and legal expenses), causes of action, actions, suits and other legal proceedings (collectively, “Claims”) in any matter relating to or arising out of this Note or any loan document executed in connection with this Note, or any act, event or transaction related thereto or to the Collateral, except in the instance where such Claims are the result of SunTrust's willful misconduct.  Borrower shall promptly provide SunTrust with written notice of any such Claim.  Upon request of SunTrust, Borrower shall defend SunTrust from such Claims, and pay the attorneys’ fees, legal expenses and other costs incurred in connection therewith, or in the alternative, SunTrust shall be entitled to employ its own legal counsel to defend such Claims at Borrower’s sole expense.  

 

			
	
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Miscellaneous

All amounts received by SunTrust shall be applied to expenses, late fees and interest before principal or in any other order as determined by SunTrust, in it sole discretion, as permitted by law.  Any provision of this Note which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Note. No amendment, modification, termination or waiver of any provision of this Note, nor consent to any departure by the Borrower from any term of this Note, shall in any event be effective unless it is in writing and signed by an authorized officer of SunTrust, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  If the interest Rate is tied to an external index and the index becomes unavailable during the term of this loan, SunTrust may, in its sole and absolute discretion, designate a substitute index with notice to the Borrower. No failure or delay on the part of SunTrust to exercise any right, power or remedy under this Note shall be construed as a waiver of the right to exercise the same or any other right at any time.  The captions of the paragraphs of this Note are for convenience only and shall not be deeded to constitute a part hereof or used in construing the intent of the parties.  All representations, warranties, covenants and agreements contained herein or made in writing by Borrower in connection herewith shall survive the execution and delivery of this Note and any other agreement, document or writing relating to or arising out of any of the foregoing.  All notices or communications given to Borrower pursuant to the terms of this Note shall be in writing and may be given to Borrower at Borrower’s address as stated below or at the top of this Note unless Borrower notifies SunTrust in writing of a different address.  Unless otherwise specifically provided herein to the contrary, such written notices and communications shall be delivered by hand or overnight courier service, or mailed by first class mail, postage prepaid, addressed to the Borrower at the address referred to herein. Any written notice delivered by hand or by overnight courier service shall be deemed given or received upon receipt. Any written notice delivered by U.S. Mail shall be deemed given or received on the third (3rd) business day after being deposited in the U.S. Mail. Notwithstanding any provision of this Note or any loan document executed in connection with this Note to the contrary, the Borrower and SunTrust intend that no provision of this Note or any loan document executed in connection with this Note be interpreted, construed, applied, or enforced in a way that will permit or require the payment or collection of interest in excess of the highest rate of interest permitted to be paid or collected by the laws of the jurisdiction indicated below, or federal law if federal law preempts the law of such jurisdiction with respect to this transaction (the “Maximum Permitted Rate”).  If, however, any such provision is so interpreted, construed, applied, or enforced, Borrower and SunTrust intend (a) that such provision automatically shall be deemed revised so as to require payment only of interest at the Maximum Permitted Rate; and (b) if interest payments in excess of the Maximum Permitted Rate have been received, that the amount of such excess shall be deemed credited retroactively in reduction of the then-outstanding principal amount of this obligation, together with interest at the Maximum Permitted Rate. In connection with all calculations to determine the Maximum Permitted Rate, the Borrower and SunTrust intend  a that all charges be excluded to the extent they are properly excludable under the usury laws of such jurisdiction or the United States, as they from time to time are determined to apply to this obligation; and  (b) that all charges that may be spread in the manner  provided by statute of the jurisdiction indicated or any similar law, be so spread. 

Liability, Successors And Assigns And Choice Of Law

Each Borrower shall be jointly and severally obligated and liable on this Note. This Note shall apply to and bind each of the Borrower’s heirs, personal representatives, successors and permitted assigns and shall inure to the benefit of SunTrust, its successors and assigns. Notwithstanding the foregoing, Borrower shall not assign Borrower’s rights or obligations under this Note without SunTrust’s prior written consent. This Note shall be governed by applicable federal law and the internal laws of the state of Florida. The Borrower agrees that certain material events and occurrences relating to this Note bear a reasonable relationship to the laws of Florida and the validity, terms, performance and enforcement of this Note shall be governed by the internal laws of Florida which are applicable to agreements which are negotiated, executed, delivered and performed solely in Florida.  Unless applicable law provides otherwise, in the event of any legal proceeding arising out of or related to this Note, Borrower consents to the jurisdiction and venue of any court located in the state of Florida.

Documentary and Intangible Taxes 

In the event that any intangible tax or documentary stamp tax is due from SunTrust to any state or other governmental agency or authority because of the execution or holding of this Note, the Borrower shall, upon demand, reimburse SunTrust for any such tax paid.

Documentary Stamp Tax Statement: This Commercial Note is not secured by real property situated in the State of Florida.  Pursuant to Section 201.08(D)(a), the Florida documentary stamp tax on this Commercial Note is limited to $2,450.00, which sum is being paid directly to the Florida Department of Revenue.

Transfer of Loan

SunTrust may, at any time, sell, transfer or assign the Note, the related security instrument and any related loan documents, and any or all servicing rights with respect thereto, or grant participations therein or issue mortgage pass-through certificates or other securities evidencing a beneficial interest in a rated or unrated public offering or private placement (the “Securities”).  SunTrust may forward to each purchaser, transferee, assignee, servicer, participant, or investor in such Securities or any Rating Agency (as hereinafter defined) 

 

			
	
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rating such Securities (collectively, the “Investor”) and each prospective Investor, all documents and information which SunTrust now has or may hereafter acquire relating to the Borrower, any loan to Borrower, any guarantor or the property, whether furnished by Borrower, any guarantor or otherwise, as SunTrust determines necessary or desirable.  The term “Rating Agency” shall mean each statistical rating agency that has assigned a rating to the Securities.

Confidentiality

SunTrust agrees not to disclose or use any Confidential Information (as hereinafter defined) provided to SunTrust except in connection with the indebtedness owed by Borrower as evidenced, inter alia, by that certain: (i) Commercial Note from Borrower and payable to Bank in the principal amount of $15,000,000.00; and (ii) Agreement to Commercial Note between SunTrust and Borrower (collectively, the “Transaction”).  SunTrust agrees to take normal and commercially reasonable precautions to maintain the confidentiality and prevent the unauthorized use of the Confidential Information.  Confidential Information may be disclosed to (i) SunTrust's legal counsel and other third party advisors (collectively, “Advisors”), (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority, (iv) to enforce any remedy hereunder or under any of the documents executed and delivered by any Obligor to SunTrust (collectively, the “Loan Documents”) or in connection with any suit, action or proceeding relating to the this Agreement, any other Loan Document or the Transaction or the enforcement of its rights hereunder or thereunder, or (vi) with the written consent of the Borrower.  Any individual or entity obligated to abide by the confidentiality and non-use provisions of this section shall be considered to have complied with such obligations to do so if such individual or entity has exercised normal and commercially reasonable precautions, but in no event less than those precautions that it uses to protect its own confidential and proprietary information of similar importance.  In any event, SunTrust shall be responsible for any breach of this Section by it or any of its Advisors.

If SunTrust is compelled or desires to disclose any of the Confidential Information pursuant to clause (ii), above (“Disclosure Action”), SunTrust will provide Borrower with prompt written notice (to the extent legally permitted) of each such Disclosure Action so that Borrower may (at its expense) seek an appropriate protective order or other appropriate remedy and/or waive SunTrust’s compliance with the provisions of this section.  In addition, if requested by Borrower, SunTrust shall assist Borrower at Borrower's expense in obtaining a protective order and taking other legally available steps to resist or narrow any Disclosure Action falling within clause (ii) above.  In the event that a protective order or other remedy is not obtained promptly, SunTrust may furnish that portion (and only that portion) of the Confidential Information which, in the opinion of the SunTrust’s counsel, SunTrust is legally required to disclose and will otherwise exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded any such Confidential Information so disclosed.

For purposes of this Section, “Confidential Information” means all non-public, confidential or proprietary information of any Obligor and their respective affiliates, which is identified in writing as such, in any form; and shall include any notes, analyses, compilations, reports, forecasts, studies, samples, data, statistics, summaries, interpretations and other materials prepared by or for SunTrust that contain, are based on, or otherwise reflect or are derived, in whole or in part, from any of the foregoing.  Notwithstanding the foregoing, “Confidential Information” shall not include any information that (x) is or becomes publicly available other than as a result of a breach of this Section, (y) was within SunTrust’s or its Advisors’ possession on a non-confidential basis from a source other than an Obligor that is not known by SunTrust or its Advisors to be subject to any obligation of confidentiality to any Obligor, or (z) was developed independently by SunTrust or its Advisors without any reference to or use of the Confidential Information.  

By signing below under seal, the Borrower agrees to the terms of this Note and the disbursement of proceeds as described in the Disbursements and Charges Summary form provided in connection with this transaction.

 

	
 
	
 
	
 
	
Health Plan Intermediaries Holdings, LLC
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
By:
	
 Health Insurance Innovations, Inc.,
	
 

	
     
	
 
	
 
	
 
	
A Delaware corporation,
	
 

	
 
	
 
	
 
	
 
	
Managing Member
	
 

 

	
 
	
 
	
 
	
By:
	
 \s\ Dirk A. Montgomery

	
 
	
 
	
 
	
 
	
Dirk A. Montgomery, 

	
 
	
 
	
 
	
 
	
Executive Vice President and Chief Financial Officer

 

			
	
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Addendum A To Note 

LIBOR Index Rate (104)

SECTION 1

Definitions. As used in this Addendum, the following terms shall have the meanings set forth below:

“Bank” shall mean SunTrust Bank and its successors and assigns.

“Borrower” shall collectively and individually refer to the maker of the attached note dated December 15, 2014 (“Note”).  The terms of this Addendum are hereby incorporated into the Note and in the event of any conflict between the terms of the Note and the terms of this Addendum, the terms of this Addendum shall control.

“Business Day” shall mean, with respect to Interest Periods applicable to the LIBOR Rate, a day on which the Bank is open for business and on which dealings in U.S. dollar deposits are carried on in the London Inter-Bank Market.

“Interest Period” shall mean a period of one (1) month, provided that (i) the initial Interest Period may be less than one month, depending on the initial funding date and (ii) no Interest Period shall extend beyond the maturity date of the Note.

“Interest Rate Determination Date” shall mean the date the Note is initially funded and the first Business Day of each calendar month thereafter.

“LIBOR Rate” shall mean that rate per annum effective on any Interest Rate Determination Date which is equal to the quotient of:

(i) the rate per annum equal to the offered rate for deposits in U.S. dollars for a one (1) month period, which rate appears on that page of Reuters reporting service, or such similar service as determined by the Bank, that displays ICE Benchmark Administration (“ICE”) (or any successor thereto if ICE is no longer making a London Interbank Offered Rate available) interest settlement rates for deposits in U.S. Dollars, as of 11:00 A.M. (London, England time) two (2) Business Days prior to the Interest Rate Determination Date; provided, that if no such offered rate appears on such page, the rate used for such Interest Period will be the per annum rate of interest determined by the Bank to be the rate at which U.S. dollar deposits for the Interest Period, are offered to the Bank in the London Inter-Bank Market as of 11:00 A.M. (London, England time), on the day which is two (2) Business Days prior to the Interest Rate Determination Date, divided by

(ii) a percentage equal to 1.00 minus the maximum reserve percentages (including any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upward to the next 1/100th of 1%) in effect on any day to which the Bank is subject with respect to any LIBOR loan pursuant to regulations issued by the Board of Governors of the Federal Reserve System with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities” under Regulation D).  This percentage will be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Prime Rate” shall mean the publicly announced prime lending rate of the Bank from time to time in effect, which rate may not be the lowest or best lending rate made available by the Bank or, if the Note is governed by Subtitle 10 of Title 12 of the Commercial Law Article of the Annotated Code of Maryland, “Prime Rate” shall mean the Wall Street Journal Prime Rate, which is the Prime Rate published in the “Money Rates” section of the Wall Street Journal from time to time.

SECTION 2

Interest. The Borrower shall pay interest upon the unpaid principal balance of the Note at the LIBOR Rate plus the margin provided in the Note.  Interest shall be due and payable as provided in the Note and shall be calculated as described in the Note.  The interest rate shall remain fixed during each month based upon the interest rate established pursuant to this Addendum on the applicable Interest Rate Determination Date.

 

			
	
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SECTION 3

Additional Costs. In the event that any applicable law or regulation or the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof (whether or not having the force of law) (i) shall change the basis of taxation of payments to the Bank of any amounts payable by the Borrower hereunder (other than taxes imposed on the overall net income of the Bank) or (ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by the Bank, or (iii) shall impose any other condition with respect to the Note, and the result of any of the foregoing is to increase the cost to the Bank of making or maintaining the Note or to reduce any amount receivable by the Bank hereunder, and the Bank determines that such increased costs or reduction in amount receivable was attributable to the LIBOR Rate basis used to establish the interest rate hereunder, then the Borrower shall from time to time, upon demand by the Bank, pay to the Bank additional amounts sufficient to compensate the Bank for such increased costs (the “Additional Costs”).  A detailed statement as to the amount of such Additional Costs, prepared in good faith and submitted to the Borrower by the Bank, shall be conclusive and binding in the absence of manifest error.

SECTION 4

Unavailability Of Dollar Deposits. If the Bank determines in its sole discretion at any time (the “Determination Date”) that it can no longer make, fund or maintain LIBOR based loans for any reason, including without limitation illegality, or the LIBOR Rate cannot be ascertained or does not accurately reflect the Bank's cost of funds, or the Bank would be subject to Additional Costs that cannot be recovered from the Borrower, then the Bank will notify the Borrower and thereafter will have no obligation to make, fund or maintain LIBOR based loans.  Upon such Determination Date the Note will be converted to a variable rate loan based upon the Prime Rate.  Thereafter the interest rate on the Note shall adjust simultaneously with any fluctuation in the Prime Rate. 

 

	
 
	
Health Plan Intermediaries Holdings, LLC
	
 

	
 
	
 
	
 
	
 

	
 
	
By:
	
Health Insurance Innovations, Inc.,
	
 

	
 
	
 
	
A Delaware corporation,
	
 

	
 
	
 
	
Managing Member
	
 

	
 
	
 
	
 
	
 

 

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 \s\ Dirk A. Montgomery

	
 
	
 
	
 
	
Dirk A. Montgomery,

	
 
	
 
	
 
	
Executive Vice President and

	
 
	
 
	
 
	
Chief Financial Officer

 

 

			
	
{30048034;1}630106 (03/14) (FL)
	
Page 8 of 8Exhibit 10.23

 

	

	
Form of Security Agreement (Commercial)

Blanket Lien; Accounts and General Intangibles

Inventory, Accounts and General Intangibles 

Furniture, Fixtures and Equipment

This Security Agreement dated as of December 15, 2014 by _________________ (“Owner”) in favor of SunTrust Bank, its present and future affiliates and their successors and assigns (collectively, “SunTrust”) provides:

In order to induce SunTrust from time to time to enter into agreements with and to extend or continue to extend credit to ____________________ (and any one or more and any combination if more than one, the “Borrower”) and in consideration of any credit so extended, Owner (which may include the Borrower) hereby grants, sells, assigns, transfers and conveys to SunTrust, a security interest in the Collateral and all proceeds, products, rents and profits thereof and all substitutions and replacements therefore and all revenues from the right to use the Collateral to secure the prompt payment and performance of any and all liabilities, obligations, agreements and undertakings of Borrower to SunTrust (and, in addition, all liabilities, obligations, agreements and undertakings of Owner, or any one or more of them, to SunTrust if Owner and Borrower are not the same person or entity) in any amount, whether now existing or hereafter arising, including those owed by Borrower or Owner to others and acquired by SunTrust through purchase, assignment or otherwise, however created, evidenced or arising, whether individually or jointly with others, and whether absolute or contingent, direct or indirect, as maker, endorser, guarantor, surety or otherwise, liquidated or unliquidated, matured or unmatured, whether or not secured by other collateral, and including, without limitation, (a) all obligations to perform or forbear from performing any acts, (b) all overdrafts on deposits or accounts maintained by Borrower or Owner with SunTrust, (c) all liabilities, obligations, agreements and undertakings of Borrower or Owner to SunTrust pursuant to any interest rate hedge agreement or other derivative transaction agreement or any foreign exchange contract or any application or other agreement requesting SunTrust to issue any letter of credit including, without limitation, the obligation of Borrower or Owner to reimburse SunTrust for all amounts funded by SunTrust pursuant to any such letter of credit, (d) all obligations and other liabilities of Borrower or Owner to SunTrust  in respect of any of the following services (i) any treasury or other cash management services, including, without limitation, automated clearing house (ACH) origination and other funds transfer, depository (including, without limitation,  cash vault and check deposit),  zero balance account and sweep,  returned items processing,  controlled disbursement,  positive pay,  lockbox,  account reconciliation and information reporting,  payables outsourcing,  payroll processing, and  trade finance services, and (ii) card services, including, without limitation,  credit card (including, without limitation,  purchasing card and commercial card), prepaid card (including, without limitation,  payroll, stored value and gift cards),  merchant services processing, and debit card services and (e) all reasonable costs of collection and protection of SunTrust’s rights, including attorneys’ fees allowed by law, whether such collection or protection occurs prior to, during, or after any bankruptcy proceedings filed by or against any Obligor (as such term is defined below) (all the foregoing being hereinafter collectively referred to as the “Obligations”); provided, however, that “Obligations” will not include any Excluded Swap Obligation (as hereinafter defined).  “Excluded Swap Obligation” means any Swap Obligation (as hereinafter defined), if and to the extent that all or any portion of the grant of  a security interest hereunder to secure such Swap Obligation is or becomes illegal under the Commodity Exchange Act (7 U.S.C. §1 et seq.) (as amended and, together with any successor statute, the “Commodity Exchange Act”), or any rule, regulation or order of the Commodities Futures Trading Commission (or the application or official interpretation of any thereof), by virtue of Owner’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time that this grant of a security interest becomes effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, the exclusion of such Swap Obligation under the grant of a security interest hereunder shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such security interest is or becomes illegal. For purposes hereof, the term “Swap Obligation” means any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.   

 

			
	
{30039887;1}Copies: 0

Distribution: Original - Collateral File

630127U (07/2013) Attorney Prepared 

Security Agreement (Commercial)
	
Page 1 of 11
	
*127U*

 

 

Collateral.  As used in this Security Agreement, the term “Collateral” shall mean the following, whether now existing or hereafter acquired: 

Check all that are applicable (IF THE COLLATERAL IS NOT SPECIFICALLY DESIGNATED BY A CHECK MARK, OWNER GRANTS SUNTRUST A BLANKET SECURITY INTEREST):

 

	
X
	
Blanket Security Interest Covering All Assets
	
 
	
All assets of Owner, as more particularly described herein, and including but not limited to, all Accounts,  Inventory, furniture, fixtures and Equipment, goods, deposit accounts, instruments, documents, commercial tort claims, letter of credit rights, investment property, chattel paper and General Intangibles (as all such terms are used herein and in the Uniform Commercial Code). Without limiting the foregoing the term “Collateral” shall include all of Owner’s rights, title and interest in, to and under (i) any interest rate hedge agreement or other derivative transaction agreement and (ii) any schedule or confirmation relating to such interest rate hedge agreement or derivative transaction agreement.  The term “Collateral” specifically excludes (i) Owner's equity interests in a joint venture known as Simple Insurance Leads, LLC; (ii) cash held on behalf of others for third party insurance carriers, producers and discount benefit providers; and (iii) rights under contracts or other agreements which are not assignable or for which the counter-party will not give consent.

Representations and Warranties. Owner represents and warrants to SunTrust as follows:

	
a.
	
This Security Agreement has been duly executed and delivered by Owner, constitutes Owner’s valid and legally binding obligation and is enforceable in accordance with its terms against Owner. Owner represents and warrants to SunTrust that it has rights in all of the Collateral and has the power to transfer rights in all of the Collateral.  The execution, delivery and performance of this Security Agreement, the grant of the security interest in the Collateral and the consummation of the transactions contemplated will not, to the best of Owner's knowledge and belief, with or without the giving or notice of the lapse of time, (a) violate any material law applicable to Owner, (b) violate any judgment, writ, injunction or order of any court or governmental body or officer applicable to Owner, (c) violate or result in the breach of any material agreement to which Owner is a party or by which any of Owner’s property, including the Collateral, is bound, or (d) violate any restriction on the transfer of any of the Collateral.  Owner represents and warrants that as of the date of this Security Agreement it is an “eligible contract participant” as defined in the Commodity Exchange Act. Owner is and will continue to be the absolute owner of the Collateral and there are no other liens or security interests affecting the Collateral other than the security interest granted in this Security Agreement except those previously disclosed to SunTrust in writing by Owner;

	
b.
	
Owner is a (entity type) organized under the laws of the State of ________________ and Owner's Organizational Identification Number is _________________________.  Owner is duly qualified and in good standing to do business in every jurisdiction where qualification is necessary; the execution and performance of this Security Agreement have been duly authorized by its members and no further action of any party is necessary; the execution and performance of this Security Agreement will not, to the best of Owner's knowledge and belief, violate or contravene any provisions of law or regulation or any articles of organization, operating agreement or other agreement to which it is a party or by which it is bound; and no consent or approval of any governmental agency or authority is required in making or performing the obligations under this Security Agreement;

	
c.
	
Primary Collateral locations are as delineated in Schedule “A” attached hereto and by this reference incorporated herein.  Owner will maintain the Collateral at the locations delineated in Schedule “A”. The Collateral shall not be moved from the locations delineated in Schedule “A” without 30 days prior written notification to SunTrust;

	
d.
	
Owner maintains its books and records at 15438 N. Florida Avenue, Suite 201, Tampa, Florida 33613-1223.

	
e.
	
All information supplied and statements made to SunTrust in any financial statement are true, correct, complete, valid and genuine in all material respects;

	
f.
	
No part of the Collateral has been, and never will be so long as this Security Agreement remains a lien on the Collateral, used for the generation, collection, manufacture, storage, treatment, disposal, release or threatened release of any hazardous substance, as those terms are defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C., Section 9601, et seq. (“CERCLA”), Superfund Amendments and Reauthorization Act (“SARA”), applicable state laws, or regulations adopted pursuant to either of the foregoing. Owner agrees to comply with any federal, state or local law, statute, ordinance or regulation, court or administrative order or decree or private agreement regarding materials which require special handling in collection, storage, treatment or disposal because of their impact on the environment (“Environmental Requirements”). Owner agrees to indemnify and hold SunTrust harmless against any and all claims, losses and expenses resulting from a breach of this provision of this Security Agreement and Owner will pay or reimburse SunTrust for all reasonable costs and reasonable expenses for expert opinions or investigations required or requested by SunTrust which, in SunTrust’s sole discretion, are necessary to ensure compliance with this provision of this Security Agreement. The obligation to indemnify shall survive the payment of the Obligations and the satisfaction of this Security Agreement; and 

Page 2 of 11

 

	
g.
	
If applicable, all Collateral has been produced in compliance with the Fair Labor Standards Act or other applicable wage and employee law, rule, regulation or order, and that no existing or future liability shall occur as a result thereof. Owner may contest, in good faith, the applicability of any such law, rule, regulation or order, including prosecuting any appeals, so long as SunTrust’s interest in the Collateral, in the opinion of SunTrust, is not jeopardized as a result.

Choice of Law. Owner agrees that certain material events and occurrences relating to this Security Agreement bear a reasonable relationship to the laws of Florida.  This Security Agreement shall be governed by the laws of such jurisdiction and, unless applicable law provides otherwise, in the event of any legal proceeding arising out of or related to this Security Agreement, Owner consents to the jurisdiction and venue of any court located in such jurisdiction. Unless otherwise specified, “Uniform Commercial Code” as used herein shall refer to the Uniform Commercial Code of such jurisdiction, both current and as it may be amended or revised from time to time in the future.

Covenants. 

	
a. 
	
Owner shall furnish to SunTrust such financial and business information and reports in form and content satisfactory to SunTrust as and when SunTrust may from time to time reasonably require. 

	
b. 
	
Owner shall give 30 days prior written notice to SunTrust of its intent to consolidate or merge with or acquire the stock or other ownership interest of any of its affiliates or subsidiaries; Owner shall qualify as a foreign entity and obtain all requisite licenses and permits in each jurisdiction where Owner is required to do so in order to do business in such jurisdiction.

	
c. 
	
Owner shall notify SunTrust in writing at least 30 days prior to any change of its name or structure or change in its state of jurisdiction of registration or organization, principal place of business or chief executive office. 

	
d. 
	
The following shall apply if the Collateral consists of tangible personal property: Owner shall maintain all of the Collateral in good condition and repair. SunTrust shall have the right to inspect the Collateral at any reasonable time and shall have the right to obtain such appraisals, reappraisals, appraisal updates or environmental inspections as SunTrust, in its sole discretion, may deem necessary from time to time. Owner will not use or permit any person or entity to use the Collateral (i) in any manner inconsistent with the provisions of this Security Agreement; or (ii) in violation of any policy of insurance issued with respect to the Collateral; or (iii) in violation of any local, state or federal law or regulation, including but not limited to any such law or regulation pertaining to the protection of the environment or the protection of the health or safety of persons or animals, and any such law or regulation pertaining to the control of drugs, narcotics or other controlled substances. If the Collateral has been used or is hereafter used in violation of the covenants and agreements contained herein, Owner shall indemnify SunTrust and hold SunTrust harmless against all claims, actions, causes of action, reasonable costs, reasonable expenses, reasonable fees and penalties in connection with such use. Without the express prior written consent of SunTrust, Owner shall not cause or permit all or any part of the Collateral to be affixed to real property so as to become a fixture as that term is defined or interpreted in the state in which the Collateral is at any time located. 

	
e. 
	
Owner will not pledge or grant any security interest in any of the Collateral to any person or entity except SunTrust, or permit any lien or encumbrance to attach to any of the Collateral, or any levy to be made on the Collateral, or any financing statement (except financing statements in favor of SunTrust) to be on file against the Collateral.

	
f. 
	
Owner hereby constitutes and appoints any officer or employee of SunTrust as its true and lawful attorney-in-fact upon the occurrence of an Event of Default which is not cured within any applicable cure or grace period (i) to transfer the Collateral into SunTrust's name or the name of its nominee, but SunTrust's failure to do so shall not be interpreted to be a waiver of any interest, and (ii) to do and perform all other acts and things necessary, proper and requisite to carry out the intent of this Security Agreement. The power herein granted shall be deemed to be coupled with an interest and may not be revoked until the Obligations have been paid in full, including all expenses payable by Owner and no amounts may be re-borrowed.

	
g. 
	
Owner agrees to pay on demand all reasonable legal expenses and reasonable attorneys’ fees, as permitted by applicable law, any appraisal fees and all reasonable expenses incurred or paid by SunTrust in protecting and enforcing the rights of SunTrust under this Security Agreement, including SunTrust’s right to take possession of the Collateral and its proceeds, and to hold, prepare for sale, sell and dispose of the Collateral.

Page 3 of 11

 

	
h. 
	
This Security Agreement shall be a continuing agreement and shall remain in full force and effect irrespective of any interruptions in the business relations of the Borrower with SunTrust and shall apply to any ultimate balance which shall remain due by the Borrower to SunTrust; provided, however, that Owner may by written notice terminate this Security Agreement with respect to all Obligations of the Borrower incurred or contracted by the Borrower or acquired by SunTrust after the date on which such notice is personally delivered to or mailed via registered mail to the SunTrust address set forth below and accepted by SunTrust.

	
i. 
	
Owner will defend the Collateral against the claims and demands of all parties. Owner will not, without prior written consent of SunTrust, grant any security interest in the Collateral and will keep it free from any lien, encumbrance or security interest.

Blanket Security Interest. If the Collateral is identified a Blanket Security Interest, Owner acknowledges and agrees that this Security Agreement and any financing statement filed in connection with this Security Agreement is intended to cover and does cover all assets of Owner, wherever located, whether now owned or subsequently acquired or arising and all proceeds and products thereof and includes, but is not limited to all of Owner’s: 

	
a.
	
Accounts, insurance refund claims and all other insurance claims and proceeds, tax refund claims, license fees, rents, contract rights, instruments, certificates of deposit, documents, tangible chattel paper, electronic chattel paper, promissory notes, drafts, acceptances and other forms of obligations and receivables, whether or not earned by performance; 

	
b.
	
Inventory;

	
c.
	
Equipment;  

	
d.
	
General Intangibles; 

	
e.
	
Commercial tort claims, letter of credit rights, awards and other payments in respect of any taking and all insurance proceeds in respect of any of the foregoing, and all monies and claims for money due and to become due to Owner under all its Accounts, contract rights, leases and General Intangibles, all investment property and financial assets, all as said terms are defined in the Uniform Commercial Code.

Accounts. If the Collateral includes Accounts, the following shall apply.

	
a.
	
Owner warrants that to the best of its knowledge and belief: (i) each and every Account, now owned or hereafter acquired, is a bona fide existing obligation, valid and enforceable against the account debtor, for goods sold or leased and delivered or services rendered in the ordinary course of business; and (ii) it is subject to no dispute, defense or offset; Owner has good title to the Account and has full right and power to grant SunTrust a security interest in the Accounts and Owner shall promptly notify SunTrust of any Account to which these warranties are or become untrue; Owner agrees that it will not permit any return of merchandise, the sale of which gave rise to any of the Accounts, except in the usual and regular course of business;

	
b.
	
Owner shall maintain complete and accurate books and records, and its principal books and records, including all records concerning Accounts, shall be kept and maintained at the locations delineated in Schedule “A”. Owner shall not move such books and records without giving SunTrust at least 30 days prior written notice. It is specifically agreed that SunTrust shall have and Owner hereby grants to SunTrust a security interest in all books  and records of Owner and shall have access to them at any time for inspection, verification, examination and audit;

	
c.
	
Owner will prepare and deliver to SunTrust, at SunTrust’s request from time to time, a listing and aging of all Accounts and any further schedules or information with respect to Accounts that SunTrust may require;

	
d.
	
Upon the occurrence of an Event of Default which is not cured within any applicable cure or grace period, SunTrust shall have the right to notify account debtors of its security interest in the Accounts and supporting obligations and require payments to be made directly to SunTrust. Owner hereby appoints SunTrust and any officer or employee of SunTrust, as SunTrust may from time to time designate, as its attorneys-in-fact for Owner, upon the occurrence of an Event of Default which is not cured within any applicable cure or grace period, to sign and endorse in the name of Owner, to give notice in the name of Owner, and to perform all other actions necessary or desirable in the reasonable discretion of SunTrust to effect these provisions and carry out the intent hereof, all at the cost and expense of Owner. Owner hereby ratifies and approves all acts of such attorneys-in-fact and neither SunTrust nor any other such attorneys-in-fact will be liable for any acts of commission or omission nor for any error of judgment. This power being coupled with an interest is irrevocable so long as any Account or General Intangible pledged to SunTrust remains unpaid and the Borrower has any unpaid Obligations to SunTrust. The reasonable costs of such collection and enforcement, including reasonable attorneys’ fees and reasonable out-of-pocket expenses, shall be borne solely by Owner whether the same are incurred by SunTrust or Owner;

Page 4 of 11

 

	
e.
	
Upon the occurrence of an Event of a Default which is not cured within any applicable grace or cure period, at the option of SunTrust, all payments on the Accounts received by Owner shall be remitted to SunTrust in their original form on the day of receipt; all notes, checks, drafts and other instruments so received shall be duly endorsed to the order of SunTrust. At SunTrust’s election, the payments shall be deposited into a special deposit account (“Special Account”) maintained with SunTrust. SunTrust may designate with each such deposit the particular Account upon which payment was made. The Special Account shall be held by SunTrust as additional security for the Obligations. Prior to depositing payments on the Accounts into the Special Account, Owner agrees that it will not commingle such payments with any of Owner’s funds or property, but will hold them separate and apart and in trust for SunTrust. SunTrust will have the power to withdraw funds from the Special Account. SunTrust may at any time and from time to time, in its sole discretion, apply any part of the funds in the Special Account to the Obligations whether or not the same is due. Upon full and final satisfaction of the Obligations (including without limitation all fees and expenses owing to SunTrust or its attorneys), plus termination of any commitment to extend additional funds, SunTrust will pay to Owner any excess funds, whether received by SunTrust as a deposit in the Special Account or as a direct payment on any of the Accounts;

	
f.
	
If any of Owner’s Accounts arise out of contracts with the United States or any department, agency, or instrumentality thereof, Owner will promptly notify SunTrust in writing and execute any instruments and take any steps required by SunTrust in order that all moneys due and to become due under such contracts shall be assigned to SunTrust and in order that proper notice be given under the Federal Assignment of Claims Act;

	
g.
	
SunTrust shall not be liable and shall suffer no loss on account of loss or depreciation of any Account due to acts or omissions of SunTrust unless SunTrust’s conduct is willful and malicious, and SunTrust shall have no duty to take any action to preserve the Collateral or collect Accounts; 

	
h.
	
Upon request by SunTrust, Owner will note on its records concerning the Accounts, a notation of the security interest under this Security Agreement, which notation must be satisfactory to SunTrust in both form and content; 

	
i.
	
Upon the occurrence of an Event of a Default which is not cured within any applicable grace or cure period,SunTrust may enforce collection of any Account and supporting obligation by suit or otherwise and may surrender, release or exchange all or any part thereof, or compromise, extend or renew the same for any period. All monies so received by SunTrust may in SunTrust’s sole discretion, be either (i) applied by SunTrust directly toward payment of all or any part of the Obligations, whether or not then due, in such order of application as SunTrust may determine; or (ii) deposited to the credit of Borrower or in an account with SunTrust as security for payment of the Obligations and SunTrust may, from time to time, in its sole discretion, permit Borrower to use all or any part of the funds on deposit in said account in the normal course of business. Owner will promptly reimburse SunTrust for all expenses, including  reasonable attorneys’ fees and legal expenses, incurred by SunTrust in seeking to collect on or enforce collection of such amounts; and

	
j.
	
Upon the occurrence of an Event of a Default which is not cured within any applicable grace or cure period, after notice from SunTrust, Owner will forthwith, upon receipt, transmit and deliver to SunTrust, in the form received, all cash, checks, drafts, items, chattel paper and other instruments or writing for the payment of money (properly endorsed, where required, so that such items may be collected by SunTrust) which may be received by Owner at any time in full or partial payment or otherwise as proceeds of any of the Accounts. After such notice from SunTrust, Owner will not commingle any such proceeds with any other of its funds or property, but will hold them separate and apart from Owner’s own funds or property and in express trust for SunTrust until delivery is made to SunTrust, and

	
k.
	
To protect SunTrust’s rights hereunder, Owner hereby constitutes any officer or employee of SunTrust its true and lawful attorney-in-fact with full power of substitution to endorse or sign the name of Owner upon any invoice, freight or express bill, or bill of lading relating to any Account covered hereby and to notify the post office authorities to change the address for delivery of Owner’s mail relating to the Accounts to an address designated by SunTrust and to receive, open, and dispose of all mail relating to the Accounts addressed to Owner and to do and perform all other acts and things necessary, proper and requisite to carry out the intent of this Security Agreement. This power shall be deemed to be coupled with an interest and may not be revoked by Owner until the Obligations have been paid in full.

Inventory. If the Collateral includes Inventory, the following shall apply:

	
a.
	
Owner agrees to maintain books and records pertaining to the Inventory in such detail, form and scope as SunTrust shall require. Owner shall promptly advise SunTrust of any substantial changes relating to the type, or quantity of the Inventory or any event which would have a material effect on the value of the Inventory or on the security interest granted to SunTrust. 

	
b.
	
If the Inventory remains in the possession or control of any of Owner’s agents or processors, Owner shall notify such agents or processors of SunTrust’s security interest, and upon request, instruct them to hold such Inventory for SunTrust’s account and subject to SunTrust’s instruction.

	
c.
	
Owner will prepare and deliver to SunTrust, at SunTrust’s request from time to time, a listing of all Inventory and such information regarding the Inventory as SunTrust may require.

Page 5 of 11

 

	
d.
	
SunTrust may require Owner to assemble the Inventory and make it available to SunTrust at a place to be designated by SunTrust which is reasonably convenient. SunTrust may take possession of the Inventory without a court order. 

	
e.
	
Until default hereunder, Owner may, unless otherwise provided in this Security Agreement, in the ordinary course of business, at its own expense, sell, lease or furnish under contract of service any of the Inventory normally held by Owner for such purpose.

Insurance, Taxes and Assessments. Owner shall at all times keep insurable Collateral insured against any and all risks, including, without limitation, fire, and such other insurance, including but not limited to flood insurance, as may be required by SunTrust from time to time, and in such amounts as may be satisfactory to SunTrust. Insurance may be purchased from an insurer of Owner’s choice, except as otherwise required by law. All such insurance policies are to be made payable to SunTrust, in the event of loss, under a standard non-contributory “mortgagees”, “lenders”, or “secured party” clause and shall contain a breach of warranty provision acceptable to SunTrust which shall establish SunTrust’s right to be paid the insurance proceeds irrespective of any action, inaction, breach of warranty or conditions, or negligence of Owner or any other person or entity with respect to such policies. All such insurance policies shall provide for a minimum of thirty days written notice to SunTrust prior to cancellation. Owner appoints SunTrust attorney-in-fact to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be payable to Owner hereunder, 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, which power of attorney shall be deemed coupled with an interest and irrevocable so long as SunTrust has a security interest in any of the Collateral. Owner shall provide proof of such insurance as requested by SunTrust. Owner shall pay and discharge all taxes, assessments and charges of every kind prior to the date when such taxes, assessments or charges shall become delinquent and provide proof of such payments to SunTrust, upon request. However, nothing contained in this Security Agreement shall require Owner to pay any such taxes, assessments and charges so long as it shall contest its validity in good faith and shall post any bond or security required by SunTrust against the payment. Upon the failure of Owner to purchase required insurance or to pay such required amounts, SunTrust, at its option, and at Owner’s expense, may obtain such insurance or pay such taxes, assessments, and charges. In addition, SunTrust may from time to time, in its sole discretion, perform any undertakings of Owner which Owner shall fail to perform and take any other action which SunTrust deems necessary for the maintenance or preservation of any of the Collateral. Any amounts so paid shall be included in the Obligations secured by the Collateral. At SunTrust’s request, Owner agrees to promptly reimburse SunTrust on demand for all such reasonable expenses incurred by SunTrust, together with interest thereon from the date paid by SunTrust at the highest rate payable on the Obligations. Any insurance obtained by SunTrust, at its option, may be single or dual interest, protecting its rights, rights of Owner or joint rights. Any insurance obtained by SunTrust may provide, at its option, that such insurance will pay the lesser of the unpaid balance of the Obligations or the repair or replacement value of the Collateral. SunTrust may use the proceeds of any insurance obtained by Owner or by SunTrust to repair or replace the Collateral or, if SunTrust elects to do so, to repay part or all of the Obligations, whether or not then due, and in such order as SunTrust may determine, and the Borrower will still be responsible to repay any remaining unpaid balance of the Obligations. The whole or partial loss or destruction of all or any part of the Collateral shall not affect or impair the obligation of any person or entity liable under the Obligations.

Deposit Accounts. If the Collateral includes deposit accounts, the Collateral shall include all demand, time, savings, passbook and other deposit accounts of Owner with all banks, credit unions, savings and loan associations and other financial institutions which are now owned or hereafter acquired by Owner or in which Owner now has or hereafter acquires any right, title or interest, together with all proceeds of the deposit accounts.

Additional Covenants and Agreements if Borrower is Different than Owner.   If Borrower is different than Owner, then so long as any of the Obligations remain outstanding or so long as this Security Agreement shall remain in effect Owner covenants and agrees as follows: (a) Owner hereby expressly consents to and adopts any agreements which Borrower has entered into or will enter into with SunTrust regarding any of the Obligations or the Collateral; (b) Owner hereby agrees that the Collateral shall be subject to disposition in accordance with the terms and conditions of this Security Agreement and any agreements executed by Borrower in connection with any of the Obligations or the Collateral; (c) Owner will not be subrogated to SunTrust's rights to any other collateral and any proceeds thereof in which SunTrust holds a security interest to secure payment of any of the Obligations; (d) Owner agrees that SunTrust may at any time and from time to time, without notice to, or the consent of, Owner: (i) retain any of the Collateral in satisfaction of any of the Obligations to the extent permitted by applicable law, (ii) retain or obtain a security interest or lien in any property in addition to the Collateral to secure payment or performance of any of the Obligations, (iii) allow or cause any Obligations to be incurred, (iv) retain or obtain persons or entities that are primarily or secondarily obligated upon any of the Obligations other than the Borrower, (v) extend or renew any of the Obligations for any period (whether or not longer than the original term), (vi) release, compromise or modify any of the Obligations, (vii) release, in whole or in part, any person or entity primarily or secondarily obligated upon any of the Obligations or enter into any compromise with respect to the obligation of any such person or entity relative to any of the Obligations, (viii) release, with or without consideration, SunTrust's security interest or lien in any property other than the Collateral which may at any time secure payment or performance of any of the Obligations, (ix) accept substitutions or exchanges for any property other than the Collateral which may at any time secure payment or performance of any of the Obligations, (x) exercise its rights as a secured party and dispose of the Collateral without having first resorted to any property securing any of the Obligations other than the Collateral and without having first proceeded against or demanded payment from any person or entity primarily or secondarily obligated upon any of the Obligations; and (e) Owner specifically waives any and all rights pursuant to O.C.G.A. Sec. 10-7-24 or T.C.A. Sec. 47-12-101 et seq. if this Security Agreement is governed by the laws of Georgia or Tennessee and the same or similar provision contained in the Uniform Commercial Code of any other state or states which may govern this Security Agreement.

Page 6 of 11

 

Events of Default. As used herein the term “Obligor” shall individually, collectively, jointly and severally refer to Borrower, Owner and any other person or entity that is primarily or secondarily liable upon all or any part of the Obligations secured hereby and any person or entity that has conveyed or may hereafter convey any security interest or lien to SunTrust in any real or personal property to secure payment of all or any part of the Obligations. Unless prohibited by applicable law, an “Event of Default” shall occur hereunder upon the occurrence of any one or more of the following events or conditions: 

	
a. 
	
the failure by any Obligor to pay when due, whether by acceleration or otherwise, any sum constituting all or any part of the Obligations; 

	
b. 
	
the failure of any Obligor to perform any non-monetary covenant, promise or obligation contained in this Security Agreement, any document evidencing any of the Obligations, or any other non-monetary agreement to which any Obligor and SunTrust are parties (the “Loan Documents”), other than those specifically described as an “Event of Default” in this Security Agreement and with respect to such breach that by its nature can be cured, such breach shall continue for a period of fifteen (15) days after receipt by Borrower of notice from SunTrust, provided that the foregoing cure period shall only be available once during each twelve (12) month period for each such covenant, promise, or obligation;

	
c. 
	
the breach of any of any Obligor’s material representations or warranties in this Security Agreement or any other agreement with SunTrust;

	
d. 
	
the failure of any Obligor to pay when due a sum in excess of $50,000,00 owed to any creditor other than SunTrust under a written agreement calling for the payment of money; 

	
e. 
	
dissolution, liquidation, merger, consolidation, termination or suspension of usual business of any Obligor, other than a merger or consolidation between any Obligor and any of its affiliates or subsidiaries provided that 30 days prior written notice identifying the partes to the dissolution, merger or consolidation and the proposed dated and survivor of the transaction is delivered to SunTrust; 

	
f. 
	
the insolvency or inability to pay debts as they mature of any Obligor, the filing of any petition or the commencement of any proceeding by an Obligor for relief under any bankruptcy or insolvency law, or any law relating to the relief of debtors, readjustment of indebtedness, debtor reorganization, or composition or extension of debt;

	
g. 
	
the filing of any petition or the commencement of any preceeding against an Obligor by a third party for relief under any bankruptcy or insolvency law, or any law relating to the relief of debtors, readjustment of indebtedness, debtor reorganization, composition or extension of debt which is not dismissed within 60 days of filing or commencement;

	
h. 
	
the entry of a judgment or the issuance or service of any attachment, levy or garnishment against any Obligor or the property of any Obligor or the repossession or seizure of property of any Obligor for a sum in excess of $50,000.00 which is not satisfied, dismissed, dissolved, terminated, or replaced with a bond within 60 days of such entry, issuance, service levey, repossession, or seizure;

	
i. 
	
a determination by SunTrust that a material adverse change in the financial condition of all Obligors, taken as a whole, has occurred since the date of this Security Agreement, which material adverse change impairs the ability of all Obligors, taken as whole, to continue normal business operations or to perform their obligations under the Loan Documents; or

	
j. 
	
any Obligor commits fraud or makes a material misrepresentation at any time in connection with this Security Agreement, the Obligations or the Collateral; or

	
k. 
	
the sale or transfer by any Obligor of all or substantially all of such Obligor's assets other than in the ordinary course of business; or

	
l. 
	
Michael Kosloske ceases to be the Chief Executive Officer of Borrower.

Remedies Upon Default; Acceleration of Obligations. Unless prohibited by applicable law, the Obligations secured hereby shall automatically and simultaneously mature and become due and payable, without notice or demand, upon the filing of any petition or the commencement of any proceeding by or against an Obligor for relief under any bankruptcy or insolvency law, or any law relating to the relief of debtors, readjustment of indebtedness, debtor reorganization, or composition or extension of debt.  Unless prohibited by applicable law, upon the occurrence of any one or more of the other Events of Default described above, the Obligations secured hereby shall, at the option of SunTrust, immediately mature and become due and payable, without notice or demand. If all or any part of the Obligations secured hereby are not paid as and when due and payable, whether by acceleration or otherwise, then SunTrust may, at its option, without notice or demand of any kind: (a) transfer all or any part of the Collateral into the name of SunTrust or its nominee, at Owner's expense, with or without disclosing that such Collateral is subject to SunTrust's security interest; (b) enter upon premises upon which the Collateral is located and, to the extent permitted by law without legal process, take exclusive possession of the Collateral, and redeem the Collateral, or any part thereof (irrespective of redemption penalty); (c) appropriate and apply toward payment of such of the Obligations, and in such order of application, as SunTrust may from time to time elect, all or any part of any balances, credits, items or monies in any bank deposit or deposit account constituting a part of the Collateral; (d) sell the Collateral at public or private sale, either in whole or in part, and SunTrust may purchase the Collateral at any such public sale and at any private sale as permitted by law. Such sale shall result in the sale, conveyance and disposition of all right, title and interest of Owner in all or any part of the Collateral which is the subject of such a disposition and SunTrust is authorized as attorney-in-fact for Owner to sign 

Page 7 of 11

 

and execute any transfer, conveyance or instrument in writing that may be necessary or desirable to effectuate any such disposition of the Collateral, which power shall be coupled with an interest; and (e) exercise all other rights of a secured party under the Uniform Commercial Code and all other rights under law or pursuant to this Security Agreement, all of which shall be cumulative. If any notification of intended disposition of any Collateral is required by law, reasonable notification shall be deemed given if written notice is deposited in the U.S. Mail, first class or certified postage prepaid, addressed to Owner and such other persons or entities as SunTrust deems to be appropriate, stating all items required by applicable statutes, including the time and place of any public sale or the time after which any private sale or disposition is to be made, at least ten (10) days prior thereto. The proceeds of any disposition of the Collateral shall be applied in the following order (i) First, to pay all reasonable costs and reasonable expenses associated with the retaking, holding, preparation and disposition of the Collateral; (ii) Then to pay attorneys' fees; (iii) Next, to pay all accrued but unpaid interest upon the Obligations in such order as SunTrust may determine in its discretion; and (iv) Finally, to all unpaid principal outstanding upon the Obligations, whether or not due and payable, in such order as SunTrust may determine in its discretion. Any remaining surplus shall be paid to Owner or otherwise in accordance with law. If the proceeds of such disposition are insufficient to pay the Obligations in full, Borrower and all other persons or entities liable thereon shall remain fully obligated to SunTrust for the unpaid balance thereof. 

Execution by More than One Party.  The term “Owner” as used in this Security Agreement shall, if this instrument is signed by more than one party, mean the “Owner and each of them” and each shall be jointly and severally obligated and liable. If any party is a partnership or limited liability company, the agreements and obligations on the part of Owner shall remain in force and applicable regardless of any changes in the parties comprising the partnership or limited liability company and the term “Owner” shall include any altered or successor partnership, limited liability company or other legal entity, and the predecessor partnership or limited liability company and its partners or members/managers shall not be released from any obligation or liability.

Waivers by Owner. To the extent permitted by applicable law, Owner hereby waives (a) notice of acceptance of this Security Agreement and of any extensions or renewals of credit by SunTrust to the Borrower; (b) presentment and demand for payment of the Obligations; (c) protest and notice of dishonor or default to Owner or to any other party with respect to the Obligations; (d) all other notices to which Owner might otherwise be entitled; and (e) if for business purposes, the benefit of any homestead exemption. To the extent permitted by applicable law, Owner further waives any right to require that any action be brought against the Borrower or any other party, the right to require that resort be had to any security or to any balance of any deposit account or credit on the books of SunTrust in favor of the Borrower or any other party, the right to redeem the Collateral and to object to SunTrust's proposal to retain the Collateral in satisfaction of any of Obligations and any right to obtain injunctive or other relief relative to SunTrust's sale or other disposition of the Collateral and to recover losses caused by SunTrust's failure to approve or correct any list of Collateral provided to SunTrust for any purpose by any person or entity. Owner waives all rights, claims and defenses based on principles of suretyship.

No Obligation to Extend Credit. This Security Agreement shall not be construed to impose any obligation on SunTrust to extend or continue to extend any credit at any time.

Indemnity. Owner agrees to indemnify and hold harmless SunTrust, its subsidiaries, affiliates, successors, and assigns and their respective agents, directors, employees, and officers from and against any and all complaints, claims, defenses, demands, actions, bills, causes of action (including, without limitation, reasonable costs and reasonable attorneys’ fees), and losses of every nature and kind whatsoever, which may be raised or sustained by any directors, officers, employees, shareholders, creditors, regulators, successors in interest, or receivers of the Borrower or any third party as a result of or arising out of, directly or indirectly, SunTrust extending credit as evidenced by the Obligations to the Borrower, and taking the Collateral as security for the Obligations, and Owner agrees to be liable for any and all judgments which may be recovered in any such action, claim, proceeding, suit, or bill, including any compromise or settlement thereof, and defray any and all reasonable expenses, including, without limitation, reasonable costs and reasonable attorneys’ fees, that may be incurred in or by reason of such actions, claims, proceedings, suits, or bills. This obligation to indemnify shall survive the payment of the Obligations and the satisfaction of this Security Agreement.

Financing Statements and Additional Documentation. SunTrust is authorized to file such financing statements and amendments as SunTrust deems necessary to perfect, continue or assure its security interest in the Collateral and Owner hereby ratifies any financing statement filed previously by SunTrust. Owner will deliver such instruments of future assignment or assurance, and such other agreements, as SunTrust may from time to time request to carry out the intent of this Security Agreement, and will join with SunTrust in executing any documents in form satisfactory to SunTrust, and hereby authorizes SunTrust to sign for Owner, or to file without signature, any financing statements, amendments and other documents and instruments from time to time as SunTrust may deem advisable, and pay any cost of filing the same, including all recordation, transfer, indebtedness and other taxes and fees, deemed advisable by SunTrust.

Successor in Interest: SunTrust as Collateral Agent. This Security Agreement shall be binding upon Owner, its successors and assigns, and the benefits hereof shall inure to SunTrust, its successors and assigns. Notwithstanding the foregoing, Owner shall not assign Owner’s rights or obligations under this Security Agreement without SunTrust’s prior written consent. SunTrust Bank shall serve as collateral agent on behalf of itself and present and future affiliates.

Page 8 of 11

 

Miscellaneous. (a) Each and every power given herein is coupled with an interest and is irrevocable by death or otherwise. (b) The captions of the paragraphs of this Security Agreement are for convenience only and shall not be deemed to constitute a part hereof or used in construing the intent of the parties. (c) If any part of any provision of this Security Agreement shall be invalid or unenforceable under applicable law, such part shall be ineffective to the extent of such invalidity only, without in any way affecting the remaining parts of such provision or the remaining provisions of this Security Agreement. (d) This Security Agreement shall not be modified or amended except in a writing signed by Owner and SunTrust. (e) All representations, warranties, covenants and agreements contained herein or made in writing by Owner in connection herewith shall survive the execution and delivery of this Security Agreement and any and all notes, other agreements, documents and writings relating to or arising out of any of the foregoing or any of the Obligations. (f) All rights and remedies of SunTrust expressed herein are in addition to all other rights and remedies possessed by SunTrust under applicable law or other agreements, including rights and remedies under any other agreement or instrument relating to any of the Obligations or any security therefor. (g) No waiver by SunTrust of any of its rights or remedies or of any default shall operate as a waiver of any other right or remedy or of any other default or of the same right or remedy or of the same default on a future occasion. No delay or omission on the part of SunTrust in exercising any right or remedy shall operate as a waiver thereof, and no single or partial exercise by SunTrust of any right or remedy shall preclude any other or further exercise thereof or the exercise of any other right or remedy. No action of SunTrust permitted hereunder or under any agreement or instrument relating to any of the Obligations or any security therefor shall impair or affect the rights of SunTrust in and to the Collateral. (h) All terms as defined herein shall include both the plural and singular, where applicable. (i) All notices or communications given to Owner or SunTrust pursuant to the terms of this Security Agreement shall be in writing and given to Owner and SunTrust at the address set forth below. Unless otherwise specifically provided herein to the contrary, such written notices and communications shall be delivered by hand or overnight courier service, or mailed by first class mail, postage prepaid, addressed to the parties hereto at the addresses referred to herein or to such other addresses as either party may designate to the other party by a written notice given in accordance with the provisions of this Security Agreement. Any written notice delivered by hand or by overnight courier service shall be deemed given or received upon receipt. Any written notice delivered by U.S. Mail shall be deemed given or received on the third (3rd) business day after being deposited in the U.S. Mail. (j) SunTrust shall not be responsible or liable for its failure to give notice to Owner of any default in the payment of any amounts that might become due and owing with respect to the Collateral nor shall SunTrust be responsible or liable for SunTrust's failure to collect any amounts payable with respect to the Collateral. (k) SunTrust shall be under no obligation to monitor the market value of any Collateral, to advise Owner of such market value, or to take any action whatsoever to preserve the value of any Collateral by selling, exchanging or otherwise disposing of such Collateral in order to avoid any loss to Owner resulting from a decline in the market value of such Collateral. (l) SunTrust shall be under no obligation to pay any amounts owing with respect to any Collateral. (m) This Security Agreement is in addition to and not in replacement of any other agreement between Owner and SunTrust, and in the event any previous or subsequent security agreement by Owner does not exclude an Excluded Swap Obligation from the grant of a security interest thereunder, the terms of this Security Agreement as it relates to any Excluded Swap Obligation will control. (n) The term Owner shall include all persons signing below as Owner and the obligation of such Owners hereunder shall be their joint and several obligations.

Notice: This Section Does Not Apply To Transactions Governed by the Laws of North Carolina or West Virginia.

WAIVER OF JURY TRIAL. OWNER AND SUNTRUST HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURITY AGREEMENT AND ANY OTHER DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS SECURITY AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR SUNTRUST ENTERING INTO OR ACCEPTING THIS SECURITY AGREEMENT. FURTHER, OWNER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF SUNTRUST, NOR SUNTRUST’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUNTRUST WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. 

Confidentiality

SunTrust agrees not to disclose or use any Confidential Information (as hereinafter defined) provided to SunTrust except in connection with the indebtedness owed by Owner as evidenced, inter alia, by that certain: (i) Commercial Note from Borrower and payable to Bank in the principal amount of $15,000,000.00; and (ii) Agreement to Commercial Note between SunTrust and Borrower (collectively, the “Transaction”).  SunTrust agrees to take normal and commercially reasonable precautions to maintain the confidentiality and prevent the unauthorized use of the Confidential Information.  Confidential Information may be disclosed to (i) SunTrust's legal counsel and other third party advisors (collectively, “Advisors”), (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority, (iv) to enforce any remedy hereunder or under any of the documents executed and delivered by any Obligor to SunTrust (collectively, the “Loan Documents”) or in connection with any suit, action or proceeding relating to the this Agreement, any other Loan Document or the Transaction or the enforcement of its rights hereunder or thereunder, or (vi) with the written consent of the Borrower.  Any 

Page 9 of 11

 

individual or entity obligated to abide by the confidentiality and non-use provisions of this section shall be considered to have complied with such obligations to do so if such individual or entity has exercised normal and commercially reasonable precautions, but in no event less than those precautions that it uses to protect its own confidential and proprietary information of similar importance.  In any event, SunTrust shall be responsible for any breach of this Section by it or any of its Advisors.

If SunTrust is compelled or desires to disclose any of the Confidential Information pursuant to clause (ii), above (“Disclosure Action”), SunTrust will provide Borrower with prompt written notice (to the extent legally permitted) of each such Disclosure Action so that Borrower may (at its expense) seek an appropriate protective order or other appropriate remedy and/or waive SunTrust’s compliance with the provisions of this section.  In addition, if requested by Borrower, SunTrust shall assist Borrower at Borrower's expense in obtaining a protective order and taking other legally available steps to resist or narrow any Disclosure Action falling within clause (ii) above.  In the event that a protective order or other remedy is not obtained promptly, SunTrust may furnish that portion (and only that portion) of the Confidential Information which, in the opinion of the SunTrust’s counsel, SunTrust is legally required to disclose and will otherwise exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded any such Confidential Information so disclosed.

For purposes of this Section, “Confidential Information” means all non-public, confidential or proprietary information of any Obligor and their respective affiliates, which is identified in writing as such, in any form; and shall include any notes, analyses, compilations, reports, forecasts, studies, samples, data, statistics, summaries, interpretations and other materials prepared by or for SunTrust that contain, are based on, or otherwise reflect or are derived, in whole or in part, from any of the foregoing.  Notwithstanding the foregoing, “Confidential Information” shall not include any information that (x) is or becomes publicly available other than as a result of a breach of this Section, (y) was within SunTrust’s or its Advisors’ possession on a non-confidential basis from a source other than an Obligor that is not known by SunTrust or its Advisors to be subject to any obligation of confidentiality to any Obligor, or (z) was developed independently by SunTrust or its Advisors without any reference to or use of the Confidential Information.  

The undersigned have executed this Security Agreement as of the date first written above.

 

	
 
	
By: 
	
(Entity Name)

	
 
	
 
	
(State of Incorporation),

 

	
 
	
 
	
By:
	
\s\ Dirk A. Montgomery

	
 
	
 
	
 
	
Dirk A. Montgomery,

	
 
	
 
	
 
	
Executive Vice President and Chief Financial Officer

Addresses

 

	
Owner Address for Purpose of Notice
	
15438 N. Florida Avenue, Suite 201

	
 

 
	
Tampa, Florida 33613-1223

 

	
SunTrust Address for Purpose of Notice
	
SunTrust Bank

	
 

 
	
Attn: Legal Notice Specialist

	
 

 
	
211 Perimeter Center Parkway, Suite 100

	
 

 
	
Atlanta, Georgia 30346

Page 10 of 11

 

SCHEDULE “A” TO SECURITY AGREEMENT

PRIMARY COLLATERAL LOCATIONS

	
1.
	
15438 North Florida Avenue, Suite 201

	
 
	
Tampa, Florida 33613

	
2.
	
440 North Wolfe Road

	
 
	
Sunnyvale, California 94024

	
3.
	
3216 Friendly Lane, Suite B

	
 
	
Haltom City, Texas 76117

	
4.
	
123 NW 13th Street, Suite 101

	
 
	
Boca Raton, Florida 33432

	
5.
	
6600 NW 16th Street, Suite 1

	
 
	
Plantation, Florida 33313

Page 11 of 11

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