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EXHIBIT 4.19

 

SECURITY AGREEMENT

 

THIS SECURITY

AGREEMENT (this “Agreement”) dated as of February         , 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 (the “Lender”).

 

W  I  T  N  E  S

S  E  T  H:

 

WHEREAS, the

Lender has agreed to loan the Company an aggregate principal amount of Six

Hundred Ten Thousand Dollars ($610,000) pursuant to that certain Secured

Promissory Note of even date herewith (the “Note”), made by the Company in

favor of the Lender; and

 

WHEREAS,

pursuant to the terms of the Note, the Company is required to execute this

Agreement in order to secure the obligations and liabilities of the Company

under the Note.

 

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 Note, 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 Note; 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 Default

under the Note which occurs prior to the full payment of all amounts due under

the Note.

 

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.

 

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 Loan Documents.

 

Non-Tangible Collateral means, with respect to

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

Intangibles.

 

Obligations mean all monetary obligations of

Debtor to the Lender under the Note.

 

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.

 

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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

of the Loan Documents.  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 Lender, and grants to the Lender 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;

 

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;

 

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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, Lender 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 Lender, Debtor will in good faith use

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

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

Debtor’s rights under such lease or license.

 

3.             Warranties.  Debtor warrants that:  (a) no financing statement (other than any

which may have been filed on behalf of the Lender or the parties listed on Schedule

3 attached hereto (“Permitted Liens”)) covering any of or has other rights

in 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 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 Lender 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

 

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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 Lender 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

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

Lender 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

 

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NonTangible Collateral.  The Lender, 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 Lender, 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, Lender 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 Lender 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 Lender of any amounts due or to become due

thereunder.

 

Upon request

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

receipt, transmit and deliver to the Lender, 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

Lender) 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 Lender 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 Lender until delivery is made

to the Lender.  Debtor will comply with

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

foregoing sentence.

 

During the

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

the Lender 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 at

a financial institution selected by Lender (each an “Assignee Deposit

Account”) of Debtor over which the Lender 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 Lender 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 Lender may determine, and the Lender may, from time to time,

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

 

The Lender (or

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

Debtor, any item, howsoever received by the Lender, 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 Lender may request, deliver to the Lender 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 Lender

may

 

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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 Lender may specify.  Debtor shall immediately notify the Lender

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 Lender’s request,

at any time and from time to time, execute and deliver to the Lender such

financing statements, amendments  and

other documents and do such acts as the Lender deems necessary in order to

establish and maintain valid, attached and perfected security interests in the

Collateral in favor of the Lender, free and clear of all Liens and claims and

rights of third parties whatsoever except Permitted Liens.  Debtor hereby irrevocably authorizes the

Lender 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 Lender 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 Lender 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 Lender or its designees to determine at any time the status of

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

concerning Debtor, the Collateral and the Account Debtors as the Lender may

from time to time reasonably request; (e) will permit the Lender 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 Lender during the existence of a

Default, deliver to the Lender all of such records and papers; (f) will,

upon request of the Lender, stamp on its records concerning the Collateral, and

add on all Chattel Paper and Instruments constituting a portion of the

Collateral, a notation, in form satisfactory to the Lender, of the security

interest of the Lender 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 Lender, 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

 

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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 Lender as

its interest may appear (it being understood that (A) so long as no

Default shall be existing, the Lender shall deliver any proceeds of such

insurance which may be received by it to Debtor and (B) whenever a Default

shall be existing, the Lender 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 Lender may determine), and such policies or

certificates thereof shall, if the Lender so requests, be deposited with or

furnished to the Lender; (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 Lender, (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 Lender in the Equipment

covered thereby, and (ii) deliver all such certificates to the Lender 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 Lender 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 Lender, will promptly execute

such other documents, and do such other acts or things deemed appropriate by

Lender to deliver to Lender control with respect to such Collateral;

(p) will promptly notify Lender in writing upon acquiring or otherwise

obtaining any Collateral after the date hereof consisting of Documents or

Instruments and, upon the request of Lender, will promptly execute such other

documents, and do such other acts or things deemed appropriate by Lender to

deliver to Lender 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 Lender; (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 Lender, if

requested by Lender; (r) will promptly notify Lender 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 Lender,

will promptly enter into an amendment to this Agreement, and do such other acts

or things deemed appropriate by the Lender to give Lender 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 Lender

to insure the attachment, and the ability of the Lender 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

 

8

 

attachment, perfection or

priority of, or ability of the Lender 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 Lender, 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 Lender, (t) will not change its state of incorporation or

organization or Type of Organization without providing Lender with at least

thirty (30) days’ prior written notice; (u) will not change its legal name

without providing Lender with at least 30 days’ prior written notice; and

(v) will reimburse the Lender for all expenses, including reasonable

attorney’s fees and charges (including time charges of attorneys who are

employees of the Lender), incurred by the Lender 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 Lender 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 Lender do any and all

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

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

the Lender for all costs and expenses incurred by the Lender in the exercise of

its rights under this Section 6. 

Notwithstanding the foregoing, the Lender 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

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

applicable law, including without limitation, Lender may exercise 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 Lender’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 Lender, and (ii) at the Lender’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 Lender from

enforcing the liens granted hereunder in certain Intellectual Property, in

order to enable the Lender 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, Lender 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 Lender of any of the Collateral

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

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

of such cash

 

9

 

Proceeds may be applied by the

Lender toward the payment of such of the Obligations, and in such order of

application, as the Lender may from time to time elect.  If Lender 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 Lender. 

In the event the purchaser of such Collateral fails to pay for such

Collateral, Lender may resell such Collateral and the Debtor shall be credited

with any cash Proceeds of the sale.

 

8.             General.  The Lender 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 Lender to comply with any such request shall not of

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

Lender 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 Note.

 

Debtor agrees

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

charges paid or incurred by the Lender 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 Lender in the exercise of any right or remedy shall operate as

a waiver thereof, and no single or partial exercise by the Lender 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 Lender have

terminated.  If at any time all or any

part of any payment theretofore applied by the Lender to any of the Obligations

is or must be rescinded or returned by the Lender 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 Lender, 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 Lender had not been made.

 

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 Lender and its nominees, successors and assigns. Company’s

successors

 

10

 

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 Lender.

 

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 Lender 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 THE OTHER LOAN DOCUMENTS,

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 LENDER’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 LENDER AS ITS ADDRESS FOR NOTICES HEREUNDER) OR BY

PERSONAL SERVICE WITHIN OR WITHOUT THE STATE 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 AND THE LENDER HEREBY WAIVES

ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND

ANY RIGHTS UNDER THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND

 

11

 

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:

  	

   

  
	

   

  	

   

  
	

   

  	

  LENDER:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  EDGEWATER

  PRIVATE EQUITY FUND 

  	

   

  
	

   

  	

  III, L.P.,

  as Lender

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  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]Edgewater/Epic - Feb 2002 Bridge Loan Trademark License and Security

Agreement

EXHIBIT 4.20

 

TRADEMARK AND LICENSE SECURITY AGREEMENT

 

TRADEMARK AND

LICENSE SECURITY AGREEMENT (“Agreement”) dated as of February        , 2002, is between EPICEDGE, INC., a

Texas corporation (the “Company”), and Edgewater Private Equity Fund

III, L.P., a Delaware limited partnership(the “Lender”).

 

W I T N E S S E T H:

 

WHEREAS, the

Lender has agreed to loan the Company an aggregate principal amount of Six

Hundred Ten Thousand Dollars ($610,000) pursuant to that certain Secured

Promissory Note of even date herewith (the “Note”), made by the Company in

favor of the Lender; and

 

WHEREAS,

pursuant to the terms of the Note, the Company is required to execute this

Agreement in order to secure the obligations and liabilities of the Company

under the Note.

 

NOW,

THEREFORE, in consideration of the premises set forth herein and for other good

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

acknowledged, Company agrees as follows:

 

1.             Defined Terms.

 

(a)           Unless otherwise defined herein, the

capitalized terms used herein which are defined in the Note shall have the

meanings specified in the Note.

 

(b)           The words “hereof,” “herein” and

“hereunder” and words of like import when used in this Agreement shall refer to

this Agreement as a whole and not to any particular provision of this

Agreement, and section and schedule references are to this Agreement unless

otherwise specified.

 

(c)           All terms defined in this Agreement

in the singular shall have comparable meanings when used in the plural, and vice

versa, unless otherwise specified.

 

(d)           For purposes of this Agreement, the

term “Event of Default” shall mean a Default under the Note occurring prior to

the full payment of all amounts due under the Note.

 

2.             Security Interest in Trademarks.  To secure the complete and timely payment,

performance and satisfaction of all of the Obligations, the Company hereby

grants to Lender a continuing security interest, with power of sale (upon the

occurrence of and during the continuance of an Event of Default and to the

extent permitted by applicable law) in all of Company’s interest in now owned

or existing and hereafter acquired or arising (collectively, the “Collateral”):

 

(a)           trademarks, registered trademarks and

trademark registrations, trade names, service marks, registered service marks

and service mark registrations, including, without limitation, the registered

trademarks and registered service marks listed on Schedule A, and

(i) the reissues, continuations, all renewals and extensions thereof,

(ii) all income, royalties,

 

 

 damages and payments now and hereafter due and/or payable under

and with respect thereto, including, without limitation, payments under all

licenses entered into in connection therewith and damages and payments for past

or future infringements or dilutions thereof, (iii) the right to sue for

past, present and future infringements and dilutions thereof, and (iv) all

of such Company’s rights corresponding thereto throughout the world (all of the

foregoing registered trademarks and registered service marks together with the

items described in clauses (i)-(iv) in this paragraph 2(a), being sometimes

hereinafter individually and/or collectively referred to as the “Trademarks”);

 

(b)           the goodwill of such Company’s

business connected with and symbolized by the Trademarks; and

 

(c)           license agreements with any other

party in connection with any Trademarks or such other party’s trademarks,

registered trademarks, trademark registrations, trade names, service marks,

registered service marks and service mark registrations, whether such Company

is a licensor or licensee under any such license agreement, including, but not

limited to, the license agreements listed on Schedule B, and the

right upon the occurrence of and during the continuance of an Event of Default

to use the foregoing in connection with the enforcement of Lender’s rights

under the Note (all of the foregoing being hereinafter referred to collectively

as the “Licenses”). 

Notwithstanding the foregoing provisions of this Section 2,

the Licenses shall not include any license agreement with respect to which the

grant of the security interest contemplated by this Agreement would be a breach

or default thereunder; it being understood that upon request of the

Lender, Company will in good faith use commercially reasonable efforts to

obtain consent for the creation of a security interest in favor of the Lender

in Company’s rights under such license agreement.

 

3.             Restrictions on Future

Agreements.  The Company will not,

without Lender’s prior written consent, enter into any agreement, including,

without limitation, any license agreement, which is inconsistent with this

Agreement, and Company further agrees that it will not take any action, and

will use its best efforts not to permit any action to be taken by others

subject to its control, including licensees, or fail to take any action, which

would in any material respect affect the validity or enforcement of the rights

transferred to Lender under this Agreement or the rights associated with those

Trademarks which are necessary or desirable in the operation of Company’s

business.

 

4.             New Trademarks and Licenses.  The Company represents and warrants that the

Trademarks and Licenses listed on Schedule A and Schedule B,

respectively, include all of the Trademarks and Licenses now owned or held by

such Company.  If, prior to the

termination of this Agreement, Company shall (i) obtain rights to any new

Trademark or Licenses or (ii) become entitled to the benefit of any new or

existing Trademark or License, the provisions of Section 2 shall

automatically apply thereto and Company shall notify Lender in writing (with

reasonable detail) upon request of Lender of such changes.  Provided that Company shall, within

ten (10) days of approval, notify Lender and provide Lender with copies of

all relevant documents relating to the approval of an application for a

domestic Trademark by the United States Patent and Trademark Office.  The Company hereby authorizes Lender to

unilaterally modify this Agreement by (a) amending Schedule A

or Schedule B, as the case may be, to include any Trademarks or

Licenses which are described under Section 2, or under this 

 

2

 

Section 4,

and (b) filing with the United States Patent and Trademark Office, in

addition to and not in substitution for, this Agreement, a duplicate original

of this Agreement containing on Schedule A or Schedule B

thereto, as the case may be, the revised list of Trademarks and/or Licenses

under Section 2 or this Section 4.  Notwithstanding the foregoing, the Company

hereby agrees that Lender’s security interest shall extend to all of the

collateral listed in Section 2 and this Section 4,

regardless of whether Lender actually amends Schedule A and Schedule B.

 

5.             Royalties.  Company hereby agrees that the use by Lender

of the Trademarks and Licenses and as authorized hereunder for collateral

security purposes (upon the occurrence of and during the continuance of an

Event of Default) shall be co-extensive with such Company’s rights thereunder

and with respect thereto and without any liability for royalties or other

related charges from Lender to Company.

 

6.             Nature and Continuation of

Lender’s Security Interest.  This

Agreement is made for collateral security purposes only.  This Agreement shall create a continuing

security interest in the Trademarks and Licenses and shall remain in full force

and effect until the Obligations have been paid in full and the Note

terminated.  At such time, the rights

granted to Lender hereunder shall also terminate, and Lender agrees to execute

a release and termination as necessary to effectuate the release of the

security interest granted to it.  If at

any time all or any part of any payment theretofore applied by the Lender to

any of the Obligations is or must be rescinded or returned by the Lender for

any reason whatsoever (including the insolvency, bankruptcy or reorganization

of the Company), 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 Lender,

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 Lender

had not been made.

 

7.             Right to Inspect; Further

Assignments and Security Interests. 

Lender shall have the right, at any reasonable time and from time to

time, to inspect the premises and to examine the books, records, and operations

of Company relating to the Trademarks and the Licenses including, without

limitation, Company’s quality control processes.  From and after the occurrence of, and during the continuance of,

an Event of Default, and subject to the terms of the Note, the Company agrees

that Lender or a conservator appointed by Lender, shall have the right to

establish such reasonable additional product quality controls as Lender or such

conservator, in its sole judgment, may deem necessary to assure maintenance of

the quality of products sold by Company under the Trademarks or the

Licenses.  The Company agrees

(i) not to sell or assign its respective interests in, or grant any

license under, the Trademarks or the Licenses outside the ordinary course of

business in accordance with past practices without the prior written consent of

Lender, (ii) to maintain the quality of any and all products in connection

with which the Trademarks are used, consistent with the quality of said

products as of the date hereof, and (iii) not to reduce the quality of

such products in any material respect without the prior written consent of

Lender.

 

8.             Duties of Company.

 

(a)           The Company shall have the duty:  (i) to prosecute diligently any

trademark applications or registrations or service mark applications or

registrations that are part 

 

3

 

of the Trademarks pending as of

the date hereof or thereafter until the termination of this Agreement;

(ii) to make applications for trademarks and service marks as Company

deems appropriate, and (iii) to take commercially reasonable steps to

preserve and maintain all of Company’s rights in the trademark and service mark

applications and trademark and service mark registrations that are part of the

Trademarks.  Any expenses incurred in

connection with the foregoing shall be borne by Company.  The Company shall not abandon any material

trademark or service mark which is the subject of a registered trademark,

service mark or application therefor and which is or shall be, in such

Company’s commercially reasonable business judgment, necessary or economically

desirable in the operation of such Company’s business.  Company agrees to retain an experienced

trademark attorney reasonably acceptable to Lender for filing and prosecution

of all applications and other proceedings.

 

(b)           Lender shall not have any duty with

respect to the Trademarks or Licenses. 

Without limiting the generality of the foregoing, Lender shall not be

under any obligation to take any steps necessary to preserve rights in the

Trademarks and Licenses against any other parties, but may do so at Lender’s

option upon the occurrence of and during the continuance of an Event of

Default, and all reasonable expenses incurred in connection therewith shall be

for the sole account of Company and added to the Obligations secured hereby.

 

9.             Lender’s Right to Sue.  Upon the occurrence of and during the

continuance of an Event of Default, and subject to the terms of the Note,

Lender shall have the right, but shall not be obligated, to bring suit to

enforce the Trademarks and the Licenses and, if Lender shall commence any such

suit, Company shall, at the request of Lender, do any and all lawful acts and

execute any and all proper documents reasonably required by Lender in aid of

such enforcement.  The Company shall,

upon demand, promptly reimburse and indemnify Lender for all reasonable costs

and expenses incurred by Lender in the exercise of its rights under this Section 9

(including, without limitation, all attorneys’ and paralegals’ fees).  If, for any reason whatsoever, Lender is not

reimbursed with respect to the costs and expenses referred to in the preceding

sentence, such reasonable costs and expenses shall be added to the Obligations

secured hereby.

 

10.           Waivers.  No course of dealing between Company and

Lender, and no failure to exercise or delay in exercising on the part of Lender

any right, power or privilege hereunder or under the other Loan Documents shall

operate as a waiver of any of Lender’s rights, powers or privileges.  No single or partial exercise of any right,

power or privilege hereunder or under Note shall preclude any other or further

exercise thereof or the exercise of any other right, power or privilege.

 

11.           Lender’s Exercise of Rights and

Remedies Upon Default. 

Notwithstanding anything set forth herein to the contrary, it is hereby

expressly agreed that upon the occurrence of and during the continuance of an

Event of  Default, Lender may exercise

any of the rights and remedies provided in this Agreement and any of the other

Loan Documents.  Without limiting the

foregoing, Company acknowledges and agrees that upon the occurrence of and

during the continuance of an Event of 

Default, Lender or its nominee may use the Trademarks and Licenses to complete

the manufacture of, assemble, package, distribute, prepare for sale and sell

the inventory, or for any other purpose in connection with the conduct of

Company’s business.

 

4

 

12.           Intent-to-Use Applications.  Notwithstanding any provision of this

Agreement, the applicable Uniform Commercial Code or any other agreement or

law, in no event shall any party be required or permitted under this Agreement

to assign, convey or transfer any trademark or service mark that is the subject

of an application for registration under Section 1(b) of the Lanham

Act (15 U.S.C. § 1051(b)), as amended, prior to the filing of the verified

statement of use under Section 1(d) of the Lanham Act

(15 U.S.C. § 1051(d)), as amended except in connection with the ongoing

business to which such trademark or service mark pertains.

 

13.           Severability.  The provisions of this Agreement are

severable, and if any clause or provision shall be held invalid or

unenforceable in whole or in part in any jurisdiction, then such invalidity or

unenforceability shall affect only such clause or provision, or part thereof,

in such jurisdiction, and shall not in any manner affect such clause or

provision in any other jurisdiction, or any other clause or provision of this

Agreement in any jurisdiction.

 

14.           Modification.  This Agreement cannot be altered, amended or

modified in any way, except as specifically provided in Section 2

and Section 4 hereof or by a writing signed by the parties hereto.

 

15.           Cumulative Remedies; Power of

Attorney.  All of Lender’s rights

and remedies with respect to the Trademarks and the Licenses, whether

established hereby, by any other agreements or by law, shall be cumulative and

may be exercised singularly or concurrently. 

The Company hereby irrevocably appoints Lender as Company’s  attorney-in-fact, with full authority in the

place and stead of Company and in the name of Company or otherwise to carry out

the acts described below.  Subject to

the terms of the Note, upon the occurrence of and during the continuance of an

Event of Default, the Company hereby authorizes Lender to, in its sole

discretion, (i) endorse Company’s name on all applications, documents,

papers and instruments necessary or desirable for Lender to exercise its rights

and remedies regarding the Trademarks and the Licenses, (ii) take any

other actions to exercise its rights and remedies regarding the Trademarks and

the Licenses as Lender deems are in its best interest, (iii) grant or

issue any exclusive or nonexclusive license under the Trademarks to anyone on

commercially reasonable terms, and (iv) assign, pledge, convey or

otherwise transfer title in or dispose of the Trademarks to anyone on

commercially reasonable terms.  Lender

shall take no action pursuant to subsection (i), (ii), (iii) or (iv) of this Section 15

without taking like action with respect to the entire goodwill of Company’s

business connected with the use of, and symbolized by, such Trademarks.  The Company hereby ratifies all such actions

that such attorney-in-fact shall lawfully do or cause to be done by virtue

hereof.  This power of attorney is

coupled with an interest and shall be irrevocable until this Agreement shall

have been terminated pursuant to Section 6 hereof.  The Company acknowledges and agrees that

this Agreement is not intended to limit or restrict in any way the rights and

remedies of Lender under the Loan Documents, but rather is intended to

facilitate the exercise of such rights and remedies.  Lender shall have, in addition to all other rights and remedies

given it by the terms of this Agreement, all rights and remedies allowed by law

and the rights and remedies of a secured party under the Uniform Commercial

Code as enacted in any jurisdiction in which, respectively, either (y) the

Trademarks may be located or deemed located, or (z) the Licenses were

granted (the “UCC”).

 

16.           Binding Effect; Benefits.  This Agreement shall be binding upon Company

and its successors and assigns, and shall inure to the benefit of Lender and

its nominees, successors and

 

5

 

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 Lender.

 

17.           Governing Law.  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, subject,

however, to the applicability of the UCC of any jurisdiction in which any

Collateral may be located or deemed located at any given time.

 

18.           Forum

Selection.  ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER

OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, 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 LENDER’S OPTION, IN THE COURTS OF ANY JURISDICTION

WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE LOCATED OR DEEMED LOCATED.  COMPANY 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. 

COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY

REGISTERED MAIL, POSTAGE PREPAID, TO THE ADDRESS OF THE COMPANY SPECIFIED IN,

OR PURSUANT TO, THE NOTE OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF

ILLINOIS.  COMPANY 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.

 

19.           Jury

Trial.  EACH OF COMPANY AND LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN

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

THE OTHER LOAN DOCUMENTS 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.

 

20.           Notices.  All notices or other communications

hereunder shall be given in the manner and to the addresses set forth in the

Note.

 

21.           Section Headings.  The section headings herein are for

convenience of reference only and shall not affect in any way the interpretation

of any of the provisions hereof.

 

6

 

22.           Execution in Counterparts.  This Agreement may be executed in any number

of counterparts and by different parties hereto in separate counterparts, each of

which when so executed shall be deemed to be an original and all of which taken

together shall 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.

 

23.           Right of Recordal of Security

Interest.  Lender shall have the

right, but not the obligation, at the expense of Company, to record this

Agreement in the United States Patent and Trademark Office and with such other

recording authorities deemed reasonable and proper by Lender.  Upon satisfaction in full of the Obligations

and termination of the Note, Company shall have the right to effect recordal of

such satisfaction or termination at the expense of Company in the United States

Patent and Trademark Office and with such other recording authorities deemed

reasonable and proper by Company. 

Lender and Company shall cooperate to effect all such recordals

hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

7

Trademark and

License Security Agreement Signature Page

 

IN WITNESS

WHEREOF, the parties hereto have duly executed this Agreement on the day and

year first above written.

 

 

	

   

  	

  Company:

  
	

   

  	

   

  
	

   

  	

  EPICEDGE,

  INC., a Texas corporation

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

  ACCEPTED AND

  AGREED BY:

  	

   

  
	

   

  	

   

  
	

  EDGEWATER

  PRIVATE EQUITY FUND

  	

   

  
	

   III, L.P., as Lender

  	

   

  
	

   

  	

   

  
	

  By:  Edgewater III Management, L.P.

  	

   

  
	

  Its:  General Partner

  	

   

  
	

   

  	

   

  
	

  By:  Gordon Management, Inc.

  	

   

  
	

  Its:  General Partner

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  	 

	

  Title:

  	

   

  	

   

  	

   

  	 

										

 

 

	

  STATE OF

  	

   

  	

  )

  	

   

  	

   

  	 

	

   

  	

   

  	

  ) SS

  	

   

  	

   

  
	

  COUNTY OF

  	

   

  	

  )

  	

   

  	

   

  	 

												

 

The foregoing

Trademark and License Security Agreement was executed and acknowledged before

me this         day of                                    , 2002, by                                         , personally known to me to be the                                            

of EpicEdge, Inc., a Texas corporation, on behalf of such entity.

 

(SEAL)

 

	

   

  	

  Notary

  Public

  	

   

  
	

   

  	

  My

  commission expires

  	

   

  
				

 

 

 

	

  STATE OF

  	

   

  	

  )

  	

   

  	

   

  	 

	

   

  	

   

  	

  ) SS

  	

   

  	

   

  
	

  COUNTY OF

  	

   

  	

  )

  	

   

  	

   

  	 

												

 

The foregoing

Trademark and License Security Agreement was executed and acknowledged before

me this          day of                                            ,

2002, by                                                , personally known

to me to be the                                              of Edgewater Private

Equity Fund III, L.P., as Lender.

 

(SEAL)

 

	

   

  	

  Notary

  Public

  	

   

  
	

   

  	

  My

  commission expires

  	

   

  
				

 

SCHEDULE A

to Trademark and License Security Agreement

 

TRADEMARKS

 

[COMPANY TO COMPLETE]

 

SCHEDULE B

to Trademark and License Security Agreement

 

LICENSES

 

[COMPANY TO COMPLETE]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00038-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00038-of-00352.parquet"}]]