Document:

Edgewater/Epic - Security Agreement (8/01)

EXHIBIT 4.29

 

SECURITY AGREEMENT

 

THIS SECURITY

AGREEMENT (this “Agreement”) dated as of April       , 2002, is between EPICEDGE, INC., a

Texas corporation (the “Company” or the “Debtor”), and Edgewater

Private Equity Fund III, L.P., a Delaware limited partnership, as agent (“Agent”)

on behalf of the lenders (together with their successors and assigns, the “Lenders”)

party to the Purchase Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, the

Lenders, Agent, the Company and certain other parties have entered into that

certain Note and Preferred Stock Purchase Agreement of even date herewith (as

the same may hereafter be amended, supplemented or otherwise modified from time

to time, the “Purchase Agreement”); and

 

WHEREAS,

pursuant to the terms of the Purchase Agreement, the Company is required to

execute this Agreement in order to secure the obligations and liabilities of

the Company under the Notes and the Transaction Documents.

 

NOW,

THEREFORE, for and in consideration of the premises set forth herein, any loan,

advance or other financial accommodation heretofore or hereafter made to the

Company under or in connection with the Purchase Agreement, and for other good

and valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, the parties hereto agree as follows:

 

1.             Definitions.  When used herein, (a) the terms

Account, Account Debtor, Certificated Security, Chattel Paper, Commercial Tort

Claim, Deposit Account, Document, Electronic Chattel Paper, Equipment,

Financial Asset, Fixtures, Goods, Health-Care-Insurance Receivable, Inventory,

Instrument, Investment Property, Letter-of-Credit Rights, Payment Intangibles,

Proceeds, Security, Security Entitlement, Supporting Obligations and

Uncertificated Security have the respective meanings assigned thereto in the

UCC (as defined below); (b) capitalized terms which are not otherwise

defined have the respective meanings assigned thereto in the Purchase

Agreement; and (c) the following terms have the following meanings (such

definitions to be applicable to both the singular and plural forms of such

terms):

 

Assignee Deposit Account - see Section 4.

 

Collateral means all property and rights of

Debtor in which a security interest is granted hereunder.

 

Computer Hardware and Software means all of

Debtor’s rights (including rights as licensee and lessee) with respect to

(i) computer and other electronic data processing hardware, including all

integrated computer systems, central processing units, memory units, display

terminals, printers, computer elements, card readers, tape drives, hard and

soft disk drives, cables, electrical supply hardware, generators, power

equalizers, accessories, peripheral devices and other related computer

hardware; (ii) all Software and all software programs designed for use on

the computers and electronic data processing hardware described in clause (i)

above, 

 

 

including all operating system

software, utilities and application programs in whatsoever form (source code

and object code in magnetic tape, disk or hard copy format or any other

listings whatsoever); (iii) any firmware associated with any of the

foregoing; and (iv) any documentation for hardware, software and firmware

described in clauses (i), (ii) and (iii) above,

including flow charts, logic diagrams, manuals, specifications, training

materials, charts and pseudo codes.

 

Contract Right means any right of the Debtor

to payment under a contract for the sale or lease of goods or the rendering of

services, which right is at the time not yet earned by performance.

 

Default means the occurrence of any Event of

Default under the Purchase Agreement which occurs prior to the full payment of

all amounts due under the Notes or the conversion of the Notes in accordance

with the terms thereof.

 

General Intangibles means, with respect to

Debtor, all of Debtor’s “general intangibles” as defined in the UCC and, in any

event, includes (without limitation) all of Debtor’s trademarks, trade names,

patents, copyrights, trade secrets, customer lists, inventions, designs,

Software, software programs, mask works, goodwill, registrations, licenses,

franchises, tax refund claims, guarantee claims, Payment Intangibles, security

interests and rights to indemnification.

 

Intellectual Property means all past, present

and future: trade secrets, know-how and other proprietary information;

trademarks, Internet domain names, service marks, trade dress, trade names,

business names, designs, logos, slogans (and all translations, adaptations,

derivations and combinations of the foregoing) indicia and other source and/or

business identifiers, and the goodwill of the business relating thereto and all

registrations or applications for registrations which have heretofore been or

may hereafter be issued thereon throughout the world; copyrights (including

copyrights for computer programs and software) and copyright registrations or

applications for registrations which have heretofore been or may hereafter be

issued throughout the world and all tangible property embodying the copyrights;

unpatented inventions (whether or not patentable); patent applications and

patents; industrial designs, industrial design applications and registered

industrial designs; license agreements related to any of the foregoing and

income therefrom; books, records, writings, computer tapes or disks, flow

diagrams, specification sheets, computer software, source codes, object codes,

executable code, data, databases and other physical manifestations, embodiments

or incorporations of any of the foregoing; the right to sue for all past,

present and future infringements of any of the foregoing; all other

intellectual property; and all common law and other rights throughout the world

in and to all of the foregoing.

 

Lender Party means each Lender under and as

defined in the Purchase Agreement.

 

Material Adverse Effect means a material

adverse effect on the financial condition, business or operating results of the

Company or on the transactions contemplated in the Purchase Agreement or any

other Transaction Document.

 

Non-Tangible Collateral means, with respect to

Debtor, collectively, Debtor’s Accounts, Contract Rights and General

Intangibles.

 

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Obligations mean all monetary obligations of

Debtor to the Lender Parties under the Notes.

 

Organization I.D. Number means, with respect

to Debtor, the number assigned to Debtor by the agency with which the articles

of incorporation, certificate of formation or other organizational document in

respect of Debtor was filed.

 

Type of Organization means, with respect to

Debtor, the kind or type of entity of Debtor, such as a corporation or limited

liability company.

 

UCC means the Uniform Commercial Code as in

effect in the State of Illinois on the date of this Agreement, as may be

amended or modified from time to time after July 1, 2001; provided that,

as used in Section 8 hereof, “UCC” shall mean the Uniform

Commercial Code as in effect from time to time in any applicable jurisdiction.

 

Unless

otherwise expressly provided herein, references to agreements (including this

Agreement) and other contractual instruments shall be deemed to include all

subsequent amendments and other modifications thereto, but only to the extent

such amendments and other modifications are not prohibited by the terms of any

Transaction Document.  The term

“including” is not limiting and means “including, without limitation”.

 

2.             Grant of Security Interest.  As security for the payment of all

Obligations, Debtor hereby assigns to the Agent for the benefit of the Lender Parties,

and grants to the Agent for the benefit of the Lender Parties a continuing

security interest in all of the property of Debtor, whether now or hereafter

existing or acquired, regardless of where located, including, without

limitation:

 

                All of Debtor’s:

 

a.                                       Accounts,

including Health-Care-Insurance Receivables;

 

b.                                      Certificated

Securities;

 

c.                                       Chattel

Paper, including Electronic Chattel Paper;

 

d.                                      Computer

Hardware and Software and all rights with respect thereto, including, any and

all licenses, options, warranties, service contracts, program services, test

rights, maintenance rights, support rights, improvement rights, renewal rights

and indemnifications, and any substitutions, replacements, additions or model

conversions of any of the foregoing;

 

e.                                       Commercial

Tort Claims;

 

f.                                         Deposit

Accounts;

 

g.                                      Documents;

 

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h.                                      Financial

Assets;

 

i.                                          General

Intangibles, including Payment Intangibles and Software;

 

j.                                          Goods

(including all of its Equipment, Fixtures and Inventory), and all embedded

software, accessions, additions, attachments, improvements, substitutions and

replacements thereto and therefor;

 

k.                                       Instruments;

 

l.                                          Intellectual

Property;

 

m.                                    Investment

Property;

 

n.                                      Letter

of Credit Rights;

 

o.                                      money

(of every jurisdiction whatsoever);

 

p.                                      Security

Entitlements;

 

q.                                      Supporting

Obligations;

 

r.                                         Contract

Rights;

 

s.                                       Uncertificated

Securities; and

 

t.                                         to

the extent not included in the foregoing, other personal property of any kind

or description;

 

together with all books,

records, writings, data bases, information and other property relating to, used

or useful in connection with, or evidencing, embodying, incorporating or

referring to any of the foregoing, and all Proceeds, products, offspring,

rents, issues, profits and returns of and from any of the foregoing; provided

that to the extent that the provisions of any lease or license of Computer

Hardware and Software or Intellectual Property expressly prohibit (which

prohibition is enforceable under applicable law) the assignment thereof, and

the grant of a security interest therein, Agent will not enforce its security

interest in Debtor’s rights under such lease or license (other than in respect

of the Proceeds thereof) for so long as such prohibition continues, it being

understood that upon request of the Agent, Debtor will in good faith use

reasonable efforts to obtain consent for the creation of a security interest in

favor of the Agent (and to Agent’s enforcement of such security interest) in

Debtor’s rights under such lease or license.

 

3.             Warranties.  Except as set forth on Schedule 3

hereto, Debtor warrants that: 

(a) no financing statement (other than any which may have been

filed on behalf of the Agent or the parties listed on Schedule 3

attached hereto (“Permitted Liens”)) covering any of the Collateral is

on file in any public office; (b) Debtor is and will be the lawful owner

of all Collateral, free of all liens, claims, security interests and

encumbrances whatsoever, other than the security interest hereunder and

Permitted Liens, with full power and authority to execute this Agreement and

perform Debtor’s obligations hereunder, and to subject the Collateral to the 

 

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security interest hereunder (subject

to licenses and leases which expressly prohibit the granting of a security

interest therein, which prohibition is enforceable under applicable law);

(c) all information with respect to Collateral and Account Debtors set

forth in any schedule, certificate or other writing at any time heretofore or

hereafter furnished by Debtor to the Agent or any Lender Party is and will be

true and correct in all material respects as of the date furnished;

(d) Debtor’s state of incorporation or organization, Type of Organization,

Organization I.D. Number, chief executive office and principal place of

business are as set forth on Schedule I hereto (and Debtor has not

changed its state of incorporation or organization, nor maintained its chief

executive office and principal place of business at any other location at any

time after January 1, 1999 except as set forth on Schedule I;

(e) each other location where Debtor maintains a place of business is set

forth on Schedule II hereto; (f) except as set forth on Schedule III

hereto, Debtor is not now known and during the three years preceding the date

hereof has not previously been known by any trade name; (g) Debtor’s exact

legal name is as set forth on the signature pages of this Agreement, and except

as set forth on Schedule III hereto, during the three years

preceding the date hereof Debtor has not been known by any legal name different

from the one set forth on the signature pages of this Agreement nor has Debtor

been the subject of any merger or other corporate or organizational

reorganization; (h) Schedule IV hereto contains a complete

listing of all of Debtor’s patented and registered Intellectual Property

(including all pending patent applications and applications for the

registration of other Intellectual Property owned or filed by the Debtor);

(i) Debtor is a corporation duly organized, validly existing and in good

standing under the laws of the state of its incorporation; (j) the

execution and delivery of this Agreement and the performance by Debtor of its

obligations hereunder are within Debtor’s corporate powers, have been duly

authorized by all necessary corporate action, have received all material

governmental approval (if any shall be required), and do not and will not

contravene or conflict with any provision of law or of the charter or by-laws

of Debtor or of any material agreement, indenture, instrument or other

document, or any material judgment, order or decree, which is binding upon

Debtor; (k) this Agreement is a legal, valid and binding obligation of

Debtor, enforceable in accordance with its terms, except that the

enforceability of this Agreement may be limited by bankruptcy, insolvency,

fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other

similar laws now or hereafter in effect relating to creditors’ rights generally

and by general principles of equity (regardless of whether enforcement is

sought in a proceeding in equity or at law); (l) Debtor is in compliance

with the requirements of all applicable laws (including the provisions of the

Fair Labor Standards Act), rules, regulations and orders of every governmental

authority, the noncompliance with which would reasonably be expected to result

in a Material Adverse Effect; (m) Schedule V hereto contains a

complete listing of all of Debtor’s Instruments, Deposit Accounts, Investment

Property, Letter-of-Credit Rights, Chattel Paper and Commercial Tort Claims;

(n) except as set forth on Schedule VI hereto, Debtor has no

tangible Collateral located outside of the United States; (o) Schedule VII

hereto contains a complete listing of Debtor’s tangible Collateral located with

any bailee, warehousemen or other third parties; and (p) Schedule VIII

hereto contains a complete listing of all of Debtor’s Collateral which is

subject to certificate of title statutes.

 

4.             Collections, etc.  Until such time during the existence of a

Default as the Agent shall notify Debtor of the revocation of such power and

authority, Debtor (a) may, in the ordinary course of its business, at its

own expense, sell, lease or furnish under contracts of service any of the

Inventory normally held by Debtor for such purpose, use and consume, in the

 

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ordinary course of its

business, any raw materials, work in process or materials normally held by

Debtor for such purpose, and use, in the ordinary course of its business, the

cash Proceeds of Collateral and other money which constitutes Collateral,

(b) will, at its own expense, endeavor to collect, as and when due, all amounts

due under any of the Non-Tangible Collateral, including the taking of such

action with respect to such collection as the Agent may reasonably request or,

in the absence of such request, as Debtor may deem advisable, and (c) may

grant, in the ordinary course of business, to any party obligated on any of the

Non-Tangible Collateral, any rebate, refund or allowance to which such party

may be lawfully entitled, and may accept, in connection therewith, the return

of Goods, the sale or lease of which shall have given rise to such NonTangible

Collateral.  The Agent, however, may, at

any time that a Default exists, whether before or after any revocation of such

power and authority or the maturity of any of the Obligations, notify an

Account Debtor or other Person obligated on Collateral to make payment or

otherwise render performance to or for the benefit of the Agent, and enforce,

by suit or otherwise, the obligations of an Account Debtor or other Person

obligated on Collateral and exercise the rights of Debtor with respect to the

obligation of the Account Debtor or other Person obligated on Collateral to

make payment or otherwise render performance to the Debtor, and with respect to

any property that secures the obligations of the Account Debtor or other Person

obligated on the Collateral.  In

connection with the exercise of such rights and remedies, Agent may surrender,

release or exchange all or any part of such Collateral, or compromise or extend

or renew for any period (whether or not longer than the original period) any

indebtedness thereunder or evidenced thereby. 

Upon the request of the Agent during the existence of a Default, Debtor

will, at its own expense, notify any or all parties obligated on any of the

Non-Tangible Collateral to make payment to the Agent of any amounts due or to

become due thereunder.

 

Upon request

by the Agent during the existence of a Default, Debtor will forthwith, upon

receipt, transmit and deliver to the Agent, in the form received, all cash,

checks, drafts and other instruments or writings for the payment of money

(properly endorsed, where required, so that such items may be collected by the

Agent) which may be received by Debtor at any time in full or partial payment

or otherwise as Proceeds of any of the Collateral.  Except as the Agent may otherwise consent in writing, any such

items which may be so received by Debtor will not be commingled with any other

of its funds or property, but will be held separate and apart from its own

funds or property and upon express trust for the Agent until delivery is made

to the Agent.  Debtor will comply with

the terms and conditions of any consent given by the Agent pursuant to the

foregoing sentence.

 

During the

existence of a Default, all items or amounts which are delivered by Debtor to

the Agent on account of partial or full payment or otherwise as Proceeds of any

of the Collateral shall be deposited to the credit of a deposit account (each

an “Assignee Deposit Account”) of Debtor with a financial institution

selected by the Agent over which the Agent has sole dominion and control, as

security for payment of the Obligations. 

Debtor shall not have any right to withdraw any funds deposited in the

applicable Assignee Deposit Account. 

The Agent may, from time to time, in its discretion, and shall upon

request of the Debtor made not more than once in any week, apply all or any of

the then balance, representing collected funds, in the Assignee Deposit Account

toward payment of the Obligations, whether or not then due, in such order of

application as the Agent may determine, and the Agent may, from time to time,

in its discretion, release all or any of such balance to the Debtor.

 

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The Agent (or

any designee of the Agent) is authorized to endorse, in the name of the Debtor,

any item, howsoever received by the Agent, representing any payment on or other

Proceeds of any of the Collateral.

 

5.             Certificates, Schedules and

Reports.  Debtor will from time to

time, as the Agent may request, deliver to the Agent such schedules,

certificates and reports respecting all or any of the Collateral at the time

subject to the security interest hereunder, and the items or amounts received

by Debtor in full or partial payment of any of the Collateral, as the Agent may

reasonably request.  Any such schedule,

certificate or report shall be executed by a duly authorized officer of Debtor

and shall be in such form and detail as the Agent may specify.  Debtor shall immediately notify the Agent of

the occurrence of any event causing any loss or depreciation in the value of

its Inventory or other Goods which is material to the Company and its

Subsidiaries taken as a whole, and such notice shall specify the amount of such

loss or depreciation.

 

6.             Agreements of the Debtor.  Debtor (a) shall, at the Agent’s

request, at any time and from time to time, execute and deliver to the Agent

such financing statements, amendments 

and other documents and do such acts as the Agent deems necessary in

order to establish and maintain valid, attached and perfected security

interests in the Collateral in favor of the Lender Parties, free and clear of

all Liens and claims and rights of third parties whatsoever except Permitted

Liens.  Debtor hereby irrevocably authorizes

the Agent at any time, and from time to time, to file in any jurisdiction ay

initial financing statements and amendments thereto that (i) indicate the

Collateral (x) as all assets of Debtor or words of similar effect, regardless

of whether any particular asset comprised in the Collateral falls within the

scope of Article 9 of the UCC of the jurisdiction wherein such financing

statement or amendment is filed, or (y) as being of an equal or lesser scope or

within greater detail, and (ii) contain any other information required by

Section 5 of Article 9 of the UCC of the jurisdiction wherein such financing

statement or amendment is filed regarding the sufficiency or filing office

acceptance of any financing statement or amendment, including (x) whether

Debtor is an organization, the Type of Organization the Organization ID Number

issued to Debtor and (y) in the case of a financing statement filed as a

fixture filing or indicating Collateral to be extracted collateral or timber to

be cut, a sufficient description of real property to which the Collateral

relates, Debtor further ratifies and affirms its authorization for any

financing statements and/or amendments thereto, filed by the Agent in any

jurisdiction prior to the date of this Agreement, (b) will keep all its

Inventory and other tangible Collateral at, and will not maintain any place of

business at any location other than, its address(es) shown on Schedules I

and II hereto or at such other addresses of which Debtor shall have

given the Agent not less than 30 days’ prior written notice, (c) will keep

its records concerning the Non-Tangible Collateral in such a manner as will

enable the Agent or its designees to determine at any time the status of the

Non-Tangible Collateral; (d) will furnish the Agent such information

concerning Debtor, the Collateral and the Account Debtors as the Agent may from

time to time reasonably request; (e) will permit the Agent and its

designees, from time to time, on reasonable notice and at reasonable times and

intervals during normal business hours (or at any time without notice during

the existence of a Default) to inspect Debtor’s Inventory and other Goods, and

to inspect, audit and make copies of and extracts from all records and other

papers in the possession of Debtor pertaining to the Collateral and the Account

Debtors, and will, upon request of the Agent during the existence of a Default,

deliver to the Agent all of such records and papers; (f) will, upon

request of the Agent, stamp on its records concerning the

 

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Collateral, and add on all

Chattel Paper and Instruments constituting a portion of the Collateral, a

notation, in form satisfactory to the Agent, of the security interest of the

Agent hereunder; (g) except for the sale or lease of Inventory in the ordinary

course of its business and sales of Equipment which is no longer useful in its

business or which is being replaced by similar Equipment, and except for the

licensing of Debtor’s Intellectual Property in the ordinary course of Debtor’s

business upon fair and reasonable terms which are fully disclosed to Agent, and

the abandonment of Intellectual Property which in Debtor’s reasonable

discretion is no longer useful in the business or not otherwise economically

desirable, will not sell, lease, license or assign any Collateral or create or

permit to exist any lien on any Collateral other than Permitted Liens;

(h) will at all times keep all of its Inventory and other Goods insured

under policies maintained with reputable, financially sound insurance companies

against loss, damage, theft and other risks to such extent as is customarily

maintained by companies similarly situated, and cause all such policies to

provide that loss thereunder shall be payable to the Agent as its interest may

appear (it being understood that (A) so long as no Default shall be

existing, the Agent shall deliver any proceeds of such insurance which may be

received by it to Debtor and (B) whenever a Default shall be existing, the

Agent may apply any proceeds of such insurance which may be received by it

toward payment of the Obligations, whether or not due, in such order of

application as the Agent may determine), and such policies or certificates

thereof shall, if the Agent so requests, be deposited with or furnished to the

Agent; (i) will take such actions as are reasonably necessary to keep its

Inventory in good repair and condition; (j) will take such actions as are

reasonably necessary to keep its Equipment in good repair and condition and in

good working order, ordinary wear and tear excepted; (k) will promptly pay

when due all license fees, registration fees, taxes, assessments and other

charges which may be levied upon or assessed against the ownership, operation,

possession, maintenance or use of its Equipment and other Goods; (1) will,

upon request of the Agent, (i) cause to be noted on the applicable

certificate, in the event any of its Equipment is covered by a certificate of

title, the security interest of the Agent in the Equipment covered thereby, and

(ii) deliver all such certificates to the Agent or its designees;

(m) will take all steps reasonably necessary to protect, preserve and

maintain all of its rights in the Collateral; (n) except as listed on Schedule VI,

will keep all of the tangible Collateral in the United States; (o) will

promptly notify Agent in writing upon acquiring or otherwise obtaining any

Collateral after the date hereof consisting of Deposit Accounts, Investment

Property, Letter-of-Credit Rights or Electronic Chattel Paper and, upon the

request of Agent, will promptly execute such other documents, and do such other

acts or things deemed appropriate by Agent to deliver to Agent control with

respect to such Collateral; (p) will promptly notify Agent in writing upon

acquiring or otherwise obtaining any Collateral after the date hereof

consisting of Documents or Instruments and, upon the request of Agent, will

promptly execute such other documents, and do such other acts or things deemed

appropriate by Agent to deliver to Agent possession of such Documents which are

negotiable and Instruments, and, with respect to nonnegotiable Documents, to

have such nonnegotiable Documents issued in the name of the Agent;

(q) with respect to Collateral in the possession of a third party, other

than Certificated Securities and Goods covered by a Document, will obtain an

acknowledgment from the third party that it is holding the Collateral for

benefit of the Agent, if requested by the Agent; (r) will promptly notify

Agent in writing upon incurring or otherwise obtaining a Commercial Tort Claim

in excess of $25,000 individually or Commercial Tort Claims in excess of

$50,000 in the aggregate after the date hereof against any third party, and,

upon the request of Agent, will promptly enter into an amendment to this

Agreement, and do such other acts or things deemed

 

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appropriate by the Agent to

give Agent a security interest in such Commercial Tort Claim or Commercial Tort

Claims, as applicable; (s) further agrees to take other action reasonably

requested by the Agent to insure the attachment, and the ability of the Agent

to enforce, the security interests in any and all of the Collateral including,

without limitation, (i) executing, delivering and, where appropriate,

filing financing statements and amendments relating thereto under the UCC, to

the extent, if any, that the Debtor’s signature thereon is required therefore,

(ii) complying with any provision of any statute, regulation or treaty of

the United States as to any Collateral if compliance with such provision is a

condition to attachment, perfection or priority of, or ability of the Agent to

enforce, the security interests in such Collateral, (iii) obtaining

governmental and other third party consents and approvals, including without

limitation any consent of any licensor, lessor or other person or entity

obligated on Collateral, (iv) obtaining waivers from mortgages and

landlords in form and substance satisfactory to the Agent, and (v) taking

all actions required by the UCC in effect from time to time or by other law, as

applicable in any relevant UCC jurisdiction, or by other law as applicable in

any foreign jurisdiction and as requested by Agent, (t) will not change

its state of incorporation or organization or Type of Organization without

providing Agent with at least thirty (30) days’ prior written notice;

(u) will not change its legal name without providing Agent with at least

30 days’ prior written notice; and (v) will reimburse the Agent for all

expenses, including reasonable attorney’s fees and charges (including time

charges of attorneys who are employees of the Agent), incurred by the Agent in

seeking to collect or enforce any rights in respect of Debtor’s Collateral.

 

Any expenses

incurred in protecting, preserving or maintaining any Collateral shall be borne

by the Debtor. Except as otherwise expressly set forth in Section 2,

whenever a Default shall be existing, the Agent shall have the right to bring

suit to enforce any or all of the Intellectual Property or licenses thereunder,

in which event the Debtor shall at the request of the Agent do any and all

lawful acts and execute any and all proper documents required by the Agent in

aid of such enforcement and Debtor shall promptly, upon demand, reimburse and

indemnify the Agent for all costs and expenses incurred by the Agent in the

exercise of its rights under this Section 6.  Notwithstanding the foregoing, the Agent

shall have no obligation or liability regarding the Collateral or any Proceeds

thereof by reason of, or arising out of, this Agreement.

 

To the extent

Debtor uses any of the proceeds from the Loans to purchase Collateral, Debtor’s

repayment of the Loans shall apply on a “first- in-first-out” basis so that the

portion of the Loans used to purchase a particular item of Collateral shall be

paid in the chronological order the Debtor purchased the Collateral.

 

7.             Default.  Whenever a Default shall be existing, the

Agent may exercise from time to time any right or remedy available to it under

applicable law, including without limitation, Agent may exercise on behalf of

the Lender Parties all the rights of a secured party under the UCC (whether or

not in effect in the jurisdiction where such rights are exercised) with respect

to any Collateral.  Debtor agrees, in

case of Default, (i) at the Agent’s request, to assemble, at its expense,

all its Inventory and other Goods (other than Fixtures) at a convenient place

or places acceptable to the Agent, and (ii) at the Agent’s request, to

execute all such documents and do all such other things which may be necessary

or desirable, subject to Section 2 above which prohibits Agent from

enforcing the liens granted hereunder in certain Intellectual Property, in

 

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order to enable the Agent or

its nominee to be registered as owner of the Intellectual Property with any

competent registration authority.  Any

notification of intended disposition of any of the Collateral required by law

shall be deemed reasonably and properly given if given at least ten days before

such disposition.  Upon the occurrence

of a Default, Agent may sell the Collateral without giving any warranties as to

the Collateral, including any warranties of title, possession, quiet enjoyment

and the like.  Any cash Proceeds of any

enforcement, collection or disposition by the Agent of any of the Collateral

may be applied by the Agent to payment of expenses in connection with the

Collateral, including reasonable attorney’s fees and charges, and any balance

of such cash Proceeds may be applied by the Agent toward the payment of such of

the Obligations, and in such order of application, as the Agent may from time

to time elect.  If Agent disposes of any

of the Collateral upon credit, the Debtor will be credited with only those payments

actually made by the purchaser and received by Agent.  In the event the purchaser of such Collateral fails to pay for

such Collateral, Agent may resell such Collateral and the Debtor shall be

credited with any cash Proceeds of the sale.

 

8.             General.  The Agent shall be deemed to have exercised

reasonable care in the custody and preservation of any of the Collateral in its

possession if it takes such action for that purpose as any Debtor requests in

writing, but failure of the Agent to comply with any such request shall not of

itself be deemed a failure to exercise reasonable care, and no failure of the

Agent to preserve or protect any right with respect to such Collateral against

prior parties, or to do any act with respect to the preservation of such

Collateral not so requested by Debtor, shall be deemed of itself a failure to

exercise reasonable care in the custody or preservation of such Collateral.

 

All notices

required hereunder shall be given in accordance with the Purchase Agreement.

 

Debtor agrees

to pay all reasonable expenses, including reasonable attorney’s fees and

charges paid or incurred by the Agent or any Lender in endeavoring to collect

the Obligations of Debtor, or any part thereof, and in enforcing this

Agreement, and such obligations will themselves be Obligations.

 

No delay on

the part of the Agent in the exercise of any right or remedy shall operate as a

waiver thereof, and no single or partial exercise by the Agent of any right or

remedy shall preclude other or further exercise thereof or the exercise of any

other right or remedy.

 

This Agreement

shall remain in full force and effect until all Obligations have been fully

paid and satisfied and all commitments of any kind of Lenders have

terminated.  If at any time all or any

part of any payment theretofore applied by the Agent or any Lender Party to any

of the Obligations is or must be rescinded or returned by the Agent or such

Lender Party for any reason whatsoever (including the insolvency, bankruptcy or

reorganization of Debtor), such Obligations shall, for the purposes of this

Agreement, to the extent that such payment is or must be rescinded or returned,

be deemed to have continued in existence, notwithstanding such application by

the Agent or such Lender Party, and this Agreement shall continue to be

effective or be reinstated, as the case may be, as to such Obligations, all as

though such application by the Agent or such Lender Party had not been made.

 

10

 

This Agreement

shall be construed in accordance with and governed by the laws of the State of

Illinois applicable to contracts made and to be performed entirely within such

State.  Whenever possible, each

provision of this Agreement shall be interpreted in such manner as to be effective

and valid under applicable law, but if any provision of this Agreement shall be

prohibited by or invalid under applicable law, such provision shall be

ineffective to the extent of such prohibition or invalidity, without

invalidating the remainder of such provision or the remaining provisions of

this Agreement.

 

This Agreement

shall be binding upon Company and its successors and assigns, and shall inure

to the benefit of Agent and its nominees, successors and assigns. Company’s

successors and assigns shall include, without limitation, a receiver, trustee

or debtor-in-possession of or for Company; provided, however,

that Company shall not voluntarily assign its obligations hereunder without the

prior written consent of Agent.

 

This Agreement

may be executed in any number of counterparts and by the different parties

hereto on separate counterparts, and each such counterpart shall be deemed to

be an original, but all such counterparts shall together constitute one and the

same Agreement. Delivery of an executed counterpart of this Agreement by

telefacsimile shall be equally as effective as delivery of a manually executed

counterpart of this Agreement.  Any

party delivering an executed counterpart of this Agreement by telefacsimile

shall also deliver a manually executed counterpart of this Agreement, but the

failure to deliver a manually executed counterpart shall not affect the

validity, enforceability, and binding effect of this Agreement.

 

At any time

after the date of this Agreement, one or more additional Persons may become

parties hereto by executing and delivering to the Agent a counterpart of this

Agreement together with supplements to the Schedules hereto setting forth all

relevant information with respect to such party as of the date of such delivery.

Immediately upon such execution and delivery (and without any further action),

each such additional Person will become a party to, and will be bound by all

the terms of, this Agreement.

 

ANY LITIGATION BASED HEREON, OR ARISING OUT

OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION

DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE

STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN

DISTRICT OF ILLINOIS; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY

COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT’S OPTION, IN THE

COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE

FOUND. DEBTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF

THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR

THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET

FORTH ABOVE. DEBTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY

REGISTERED MAIL, POSTAGE PREPAID, TO THE ADDRESS SET FORTH ON SCHEDULE I

HERETO (OR SUCH OTHER ADDRESS AS IT SHALL HAVE SPECIFIED IN WRITING TO THE

AGENT AS ITS ADDRESS FOR NOTICES HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR

WITHOUT THE STATE

 

11

 

OF

ILLINOIS. DEBTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT

PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE

LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO

ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN

INCONVENIENT FORUM.

 

EACH OF DEBTOR, THE AGENT AND (BY ACCEPTING

THE BENEFITS HEREOF) EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN

ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT,

ANY NOTE, ANY OTHER TRANSACTION DOCUMENT AND ANY AMENDMENT, INSTRUMENT,

DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN

CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY FINANCING RELATIONSHIP

EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH

ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

[SIGNATURE

PAGE FOLLOWS]

 

12

 

Signature Page to Security Agreement

 

IN WITNESS

WHEREOF, this Agreement has been duly executed as of the day and year first

above written.

 

	

   

  	

  DEBTOR:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  EPICEDGE,

  INC., a Texas corporation

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  AGENT:

  
	

   

  	

   

  
	

   

  	

  EDGEWATER

  PRIVATE EQUITY FUND

  
	

   

  	

  III, L.P.,

  as Agent

  
	

   

  	

   

  
	

   

  	

  By:  Edgewater III Management, L.P.

  
	

   

  	

  Its:  General Partner

  
	

   

  	

   

  
	

   

  	

  By:  Gordon Management, Inc.

  
	

   

  	

  Its:  General Partner

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  
	

   

  	

  Its:

  	

   

  	

   

  
									

 

 

 

SCHEDULE I TO

SECURITY AGREEMENT

 

	

  Information

  Required

  	

   

  	

  Company

  
	

  Exact Legal

  Name

  	

   

  	

   

  
	

  State of

  Organization

  	

   

  	

   

  
	

  Type of

  Organization

  	

   

  	

   

  
	

  Organization

  I.D. Number

  	

   

  	

   

  
	

  Chief

  Executive Officer and 

  Principal Place of Business

  	

   

  	

   

  

 

[COMPANY

TO COMPLETE]

 

 

SCHEDULE II

TO SECURITY AGREEMENT

 

ADDRESSES

 

[COMPANY TO COMPLETE]

 

 

 

SCHEDULE III

TO SECURITY AGREEMENT

 

TRADE NAMES, PRIOR LEGAL NAMES, ETC.

 

[COMPANY TO COMPLETE]

 

 

 

SCHEDULE IV

TO SECURITY AGREEMENT

 

 

	

  PATENTS

  
	

   

  
	

  [COMPANY

  TO COMPLETE]

  
	

   

  
	

  PATENT/SERIAL NO.

  	

   

  	

  COUNTRY

  	

   

  	

  CO. NAME HELD IN

  	

   

  	

  ISSUE DATE

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  TRADEMARKS

  
	

   

  
	

   

  
	

  TRADEMARK NAME

  	

   

  	

  REGISTRATION/SERIAL NO.

  	

   

  	

  COUNTRY

  	

   

  	

  CO. NAME HELD IN

  	

   

  	

  ISSUE DATE

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  COPYRIGHTS

  
	

   

  
	

  COPYRIGHT NAME

  	

   

  	

  COUNTRY

  	

   

  	

  CO. NAME HELD IN

  	

   

  	

  ISSUE DATE

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
																				

 

 

 

SCHEDULE V

TO SECURITY AGREEMENT

 

[COMPANY

TO COMPLETE]

 

Instruments:

 

 

 

Deposit Accounts:

 

 

 

Investment Property:

 

 

 

Letter-of-Credit Rights:

 

 

 

Chattel Paper:

 

 

 

Commercial Tort Claims:

 

 

SCHEDULE VI

TO SECURITY AGREEMENT

 

COLLATERAL NOT LOCATED IN THE UNITED STATES

 

[COMPANY TO COMPLETE]

 

 

 

SCHEDULE VII

TO SECURITY AGREEMENT

COLLATERAL LOCATED WITH THIRD PARTIES

[COMPANY TO COMPLETE]

 

 

 

SCHEDULE VIII

TO SECURITY AGREEMENT

 

COLLATERAL SUBJECT TO CERTIFICATE OF TITLE STATUTE

 

[COMPANY TO COMPLETE]Subordination Agreement

EXHIBIT 4.30

 

SUBORDINATION AGREEMENT

 

THIS

SUBORDINATION AGREEMENT (this “Agreement”), dated as of April       , 2002, is between EDGEWATER PRIVATE

EQUITY FUND III, L.P., a Delaware limited partnership, as agent (“Agent”)

on behalf of certain Lenders party to the Purchase Agreement (as defined below)

(“Lenders”), and MRA SYSTEMS, INC., a Colorado corporation d/b/a GE ACCESS

(“Creditor”).

 

WHEREAS,

EpicEdge, Inc., a Texas corporation (“Borrower”), is currently indebted to

Creditor under certain agreements, instruments and documents, (together with

any amendments thereto or replacements or substitutions thereof, now or

hereafter evidencing or securing the Creditor Indebtedness (as defined below)

the “Creditor Documents”) which indebtedness is secured by a security interest

in and a lien on all of Borrower’s assets;

 

WHEREAS,

Lenders have agreed to make loans and other credit accommodations (“Lenders’

Indebtedness”) to and for the account of Borrower pursuant to a Note and

Preferred Stock Purchase Agreement of even date herewith, among Lenders,

Borrower and certain other parties (the “Purchase Agreement”; and together with

such other agreements, instruments and documents, including any amendments

thereto or replacements or substitutions thereof, evidencing or securing all or

any part of Lenders’ Indebtedness, the “Lenders’ Documents”), a copy of which

has been furnished to Creditor;

 

WHEREAS, the

Lenders’ Indebtedness is and will be secured in its entirety by a security

interest in and lien on all of Borrower’s assets; and

 

WHEREAS,

Lenders have agreed that any security interest hereafter acquired by Lenders in

or on Borrower’s assets shall be and remain, in all respects, subordinate to

any security interest in or lien on Borrower’s assets in favor of Creditor.

 

NOW,

THEREFORE, in consideration of the premises and covenants contained herein and

for other good and valuable consideration, the receipt and sufficiency of which

is hereby acknowledged, the undersigned do hereby agree as follows:

 

1.             Lenders hereby subordinate the

Lenders’ Indebtedness to any and all sums, debts, demands, claims, liabilities

or causes of action for which Borrower may be liable to Creditor pursuant to

the Creditor Documents and/or pursuant to any note, security agreement,

guaranty or other instrument or document executed pursuant thereto or in

connection therewith (the “Creditor Indebtedness”).

 

2.             Lenders hereby subordinate all

security interests, liens on, and encumbrances which in any way secure the

Lenders’ Indebtedness (the “Lenders’ Collateral”) to all security interests,

liens on, and encumbrances which in any way secure the payment of the Creditor

Indebtedness (the “Creditor Collateral”).

 

3.             Creditor hereby consents to the

Borrower incurring the Lenders’ Indebtedness and the granting of a security

interest in the Lenders’ Collateral.

 

 

4.             Creditor hereby represents and

warrants that the Borrower is not in breach of any term of the Creditor

Documents and that no default or event of default has occurred or is continuing

under the Creditor Documents.

 

5.             Creditor hereby agrees to (a)

forbear from accelerating the Creditor Indebtedness, (b) not declare a default

or event of default under the Creditor Documents, and (c) not exercise any

remedies against the Borrower, as long as, (i) there are no payment defaults

under the Creditor Documents or (ii) no bankruptcy or other case or proceeding

under any bankruptcy or insolvency law, is commenced in respect of the

Borrower.

 

6.             This Agreement shall continue in

full force and effect until the full payment of the entire Creditor

Indebtedness.

 

7.             All notices, payments, requests,

reports, information and demands which any party may desire or may be required

to give or make to any other party shall be given or made upon such party by

and hand delivery or by the deposit in the United States Mail, postage prepaid,

Certified or Registered addressed as follows:

 

	

  TO CREDITOR:

  	

  MRA SYSTEMS,

  INC., d/b/a GE ACCESS

  
	

   

  	

  1426 Pearl

  Street

  
	

   

  	

  Boulder,

  Colorado 80302

  
	

   

  	

  Attn:

  	

   

  	

   

  
	

   

  	

   

  
	

  TO LENDERS:

  	

  EDGEWATER

  PRIVATE EQUITY FUND III, L.P.

  
	

   

  	

  900 North

  Michigan Avenue

  
	

   

  	

  Chicago,

  Illinois 60611

  
	

   

  	

  Attn: Ryan

  Satterfield

  

 

Said notice shall be deemed

given when delivered or mailed as aforesaid.

 

8.             This Agreement shall be binding

upon the successors and assigns of the Lenders, Borrower and Creditor.

 

[Signature Page Follows]

 

2

 

IN WITNESS

WHEREOF, the undersigned have caused this Agreement to be duly executed as of

the day and year first above written.

 

	

   

  	

  CREDITOR:

  
	

   

  	

   

  
	

   

  	

  MRA SYSTEMS,

  INC., d/b/a GE Access

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Its:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  LENDERS:

  
	

   

  	

   

  
	

   

  	

  EDGEWATER

  PRIVATE EQUITY FUND III,

  L.P., as Agent for Lenders

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Its:

  	

   

  
								

 

3

 

ACCEPTANCE OF BORROWER

 

EpicEdge, Inc.,

a Texas corporation, hereby accepts and consents to the foregoing Agreement and

agrees to be bound by all of the provisions thereof and to recognize all

priorities and rights granted thereby to MRA SYSTEMS, INC., d/b/a GE ACCESS,

and its successors and assigns and to perform in accordance therewith.

 

	

   

  	

  Borrower:

  
	

   

  	

   

  
	

   

  	

  EPICEDGE,

  INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Its:

  	

   

  
					

 

Dated: April        , 2002

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