CoActive Marketing Group Inc. Contracts
Sample Business Contracts
Security Agreement - CoActive Marketing Group Inc., Inmark Services Inc., U.S. Concepts Inc., Grupo Hacerlo LLC, Optimum Group Inc. and Signature Bank
Security Agreement
SECURITY AGREEMENT, dated as of October 31 2002, between [CoActive
Marketing Group, Inc., a Delaware corporation, Inmark Services, Inc., a Delaware
corporation, U.S. Concepts, Inc., a Delaware corporation, Grupo Hacerlo LLC, a
New York limited liability company, Optimum Group, Inc., an Ohio corporation]
(the "Debtor"), and Signature Bank (the "Secured Party").
WHEREAS, the Debtor has entered into a Credit Agreement dated as of the
date hereof (as amended and in effect from time to time, the "Credit
Agreement"), with the Secured Party, pursuant to which the Secured Party,
subject to the terms and conditions contained therein, is to make loans or
otherwise to extend credit to the Debtor; and
WHEREAS, it is a condition precedent to the Secured Party's making any
loans or otherwise extending credit to the Debtor under the Credit Agreement
that the Debtor execute and deliver to the Secured Party a security agreement in
substantially the form hereof; and
WHEREAS, the Debtor wishes to grant a security interest in favor of the
Secured Party as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. All capitalized terms used herein without
definitions shall have the respective meanings provided therefor in the Credit
Agreement. The term "State," as used herein, means the State of New York. All
terms defined in the Uniform Commercial Code of the State and used herein shall
have the same definitions herein as specified therein. However, if a term is
defined in Article 9 of the Uniform Commercial Code of the State differently
than in another Article of the Uniform Commercial Code of the State, the term
has the meaning specified in Article 9. The term "Obligations," as used herein,
means all of the indebtedness, obligations and liabilities of the Debtor to the
Secured Party, individually or collectively, whether direct or indirect, joint
or several, absolute or contingent, due or to become due, now existing or
hereafter arising under or in respect of the Credit Agreement, any promissory
notes or other instruments or agreements executed and delivered pursuant thereto
or in connection therewith or this Agreement; and the terms "Event of Default,"
and "Loan Documents," as used herein, shall have the respective meanings given
to such terms in the Credit Agreement.
2. Grant of Security Interest. The Debtor hereby grants to the
Secured Party, to secure the payment and performance in full of all of the
Obligations, a security interest in and so pledges and assigns to the Secured
Party the following properties, assets and rights of the Debtor, wherever
located, whether now owned or hereafter acquired or arising, and all proceeds
and products thereof (all of the same being hereinafter called the
"Collateral"): all personal and fixture property of every kind and nature
including without limitation all goods (including inventory, equipment and any
accessions thereto), instruments (including promissory notes), documents,
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accounts (including health-care-insurance receivables), chattel paper (whether
tangible or electronic), deposit accounts, letter-of-credit rights (whether or
not the letter of credit is evidenced by a writing), commercial tort claims
(with respect to which the Debtor represents and warrants to the Secured Party
that, to the extent any of the same exist on the date hereof, they are fully
described on the "Perfection Certificate," as such term is defined in Section 6
hereof), securities and all other investment property, supporting obligations,
any other contract rights or rights to the payment of money, insurance claims
and proceeds, all general intangibles (including all payment intangibles), and
all patents and patent rights, trademarks, service marks and trademark and
service mark rights (together with the goodwill appurtenant thereto), copyrights
and copyright registrations. The Secured Party acknowledges that the attachment
of its security interest in any additional commercial tort claim as original
collateral is subject to the Debtor's compliance with Section 4.7.
3. Authorization to File Financing Statements. The Debtor hereby
irrevocably authorizes the Secured Party at any time and from time to time to
file in any filing office in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that (a) indicate the
Collateral (i) as all assets of the 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 Uniform Commercial Code of the State or
such jurisdiction, or (ii) as being of an equal or lesser scope or with greater
detail, and (b) provide any other information required by part 5 of Article 9 of
the Uniform Commercial Code of the State, or such other jurisdiction, for the
sufficiency or filing office acceptance of any financing statement or amendment,
including whether the Debtor is an organization, the type of organization and
any organizational identification number issued to the Debtor. The Debtor agrees
to furnish any such information to the Secured Party promptly upon the Secured
Party's request. The Debtor also ratifies its authorization for the Secured
Party to have filed in any Uniform Commercial Code jurisdiction any like initial
financing statements or amendments thereto if filed prior to the date hereof.
4. Other Actions. To further the attachment, perfection and first
priority of, and the ability of the Secured Party to enforce, the Secured
Party's security interest in the Collateral, and without limitation on the
Debtor's other obligations in this Agreement, the Debtor agrees, in each case at
the Debtor's expense, to take the following actions with respect to the
following Collateral:
4.1 Promissory Note and Tangible Chattel Paper. If the
Debtor shall at any time hold or acquire any promissory notes or tangible
chattel paper, the Debtor shall promptly notify the Secured Party thereof and,
at Secured Party's request and option, the Debtor shall forthwith endorse,
assign and deliver the same to the Secured Party, accompanied by such
instruments of transfer or assignment duly executed in blank as the Secured
Party may from time to time specify.
4.2 Deposit Accounts. For each deposit account that the
Debtor at any time opens or maintains, the Debtor shall promptly notify the
Secured Party thereof and, at the Secured Party's request and option, pursuant
to an agreement in form and substance reasonably satisfactory to the Secured
Party, either (a) cause the depositary bank to comply at any time with
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instructions from the Secured Party to such depositary bank directing the
disposition of funds from time to time credited to such deposit account, without
further consent of the Debtor, or (b) arrange for the Secured Party to become
the customer of the depositary bank with respect to the deposit account, with
the Debtor being permitted, only with the consent of the Secured Party, to
exercise rights to withdraw funds from such deposit account. The Secured Party
agrees with the Debtor that the Secured Party shall not give any such
instructions or withhold any withdrawal rights from the Debtor, unless an Event
of Default has occurred and is continuing, or would occur, if effect were given
to any withdrawal not otherwise permitted by the Loan Documents. The provisions
of this paragraph shall not apply to (i) any deposit account for which the
Debtor, the depositary bank and the Secured Party have entered into a cash
collateral agreement specially negotiated among the Debtor, the depositary bank
and the Secured Party for the specific purpose set forth therein, (ii) a deposit
account for which the Secured Party is the depositary bank and is in automatic
control, and (iii) deposit accounts specially and exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the benefit
of the Debtor's salaried employees.
4.3 Investment Property. If the Debtor shall at any time
hold or acquire any certificated securities, the Debtor shall promptly notify
the Secured Party thereof and, at Secured party's request and option, the Debtor
shall forthwith endorse, assign and deliver the same to the Secured Party,
accompanied by such instruments of transfer or assignment duly executed in blank
as the Secured Party may from time to time specify. If any securities now or
hereafter acquired by the Debtor are uncertificated and are issued to the Debtor
or its nominee directly by the issuer thereof, the Debtor shall immediately
notify the Secured Party thereof and, at the Secured Party's reasonable request
and option, pursuant to an agreement in form and substance reasonably
satisfactory to the Secured Party, either (a) cause the issuer to agree to
comply with instructions from the Secured Party as to such securities, without
further consent of the Debtor or such nominee, or (b) arrange for the Secured
Party to become the registered owner of the securities. If any securities,
whether certificated or uncertificated, or other investment property now or
hereafter acquired by the Debtor are held by the Debtor or its nominee through a
securities intermediary or commodity intermediary, the Debtor shall immediately
notify the Secured Party thereof and, at the Secured Party's reasonable request
and option, pursuant to an agreement in form and substance reasonably
satisfactory to the Secured Party, either (i) cause such securities intermediary
or (as the case may be) commodity intermediary to agree to comply with
entitlement orders or other instructions from the Secured Party to such
securities intermediary as to such securities or other investment property, or
(as the case may be) to apply any value distributed on account of any commodity
contract as directed by the Secured Party to such commodity intermediary, in
each case without further consent of the Debtor or such nominee, or (ii) in the
case of financial assets or other investment property held through a securities
intermediary, arrange for the Secured Party to become the entitlement holder
with respect to such investment property, with the Debtor being permitted, only
with the consent of the Secured Party, to exercise rights to withdraw or
otherwise deal with such investment property. The Secured Party agrees with the
Debtor that the Secured Party shall not give any such entitlement orders or
instructions or directions to any such issuer, securities intermediary or
commodity intermediary, and shall not withhold its consent to the exercise of
any withdrawal or dealing rights by the Debtor, unless an Event of Default has
occurred and is continuing, or, after giving effect to any such investment and
withdrawal rights not otherwise permitted by the Loan Documents, would occur.
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The provisions of this paragraph shall not apply to any financial assets
credited to a securities account for which the Secured Party is the securities
intermediary.
4.4 Collateral in the Possession of a Bailee. If any
Collateral is at any time in the possession of a bailee, the Debtor shall
promptly notify the Secured Party thereof and, at the Secured Party's reasonable
request and option, shall promptly obtain an acknowledgment from the bailee, in
form and substance reasonably satisfactory to the Secured Party, that the bailee
holds such Collateral for the benefit of the Secured Party, and that such bailee
agrees to comply, without further consent of the Debtor, with instructions from
the Secured Party as to such Collateral. The Secured Party agrees with the
Debtor that the Secured Party shall not give any such instructions unless an
Event of Default has occurred and is continuing or would occur after taking into
account any action by the Debtor with respect to the bailee.
4.5 Electronic Chattel Paper and Transferable Records. If
the Debtor at any time holds or acquires an interest in any electronic chattel
paper or any "transferable record," as that term is defined in Section 201 of
the federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, the Debtor shall promptly notify the Secured Party
thereof and, at the reasonable request and option of the Secured Party, shall
take such action as the Secured Party may reasonably request to vest in the
Secured Party control, under Section 9-105 of the Uniform Commercial Code, of
such electronic chattel paper or control under Section 201 of the federal
Electronic Signatures in Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in
such jurisdiction, of such transferable record. The Secured Party agrees with
the Debtor that the Secured Party will arrange, pursuant to procedures
reasonably satisfactory to the Secured Party and so long as such procedures will
not result in the Secured Party's loss of control, for the Debtor to make
alterations to the electronic chattel paper or transferable record permitted
under UCC Section 9-105 or, as the case may be, Section 201 of the federal
Electronic Signatures in Global and National Commerce Act or Section 16 of the
Uniform Electronic Transactions Act for a party in control to make without loss
of control, unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by the Debtor with respect to such
electronic chattel paper or transferable record.
4.6 Letter-of-Credit Rights. If the Debtor is at any time
a beneficiary under a letter of credit, the Debtor shall promptly notify the
Secured Party thereof and, at the reasonable request and option of the Secured
Party, the Debtor shall, pursuant to an agreement in form and substance
reasonably satisfactory to the Secured Party, either (i) arrange for the issuer
and any confirmer or other nominated person of such letter of credit to consent
to an assignment to the Secured Party of the proceeds of the letter of credit,
or (ii) arrange for the Secured Party to become the transferee beneficiary of
the letter of credit, with the Secured Party agreeing, in each case, that the
proceeds of the letter to credit are to be applied as provided in the Credit
Agreement.
4.7 Commercial Tort Claims. If the Debtor shall at any
time hold or acquire a commercial tort claim (in addition to those, if any,
listed in Section 2), the Debtor shall immediately notify the Secured Party in a
writing signed by the Debtor of the particulars thereof and grant to the Secured
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Party in such writing a security interest therein and in the proceeds thereof,
all upon the terms of this Agreement, with such writing to be in form and
substance satisfactory to the Secured Party.
4.8 Other Actions as to Any and All Collateral. The
Debtor further agrees, at the request and option of the Secured Party, to take
any and all other actions the Secured Party may reasonably determine to be
necessary or useful for the attachment, perfection and first priority of, and
the ability of the Secured Party to enforce, the Secured Party's security
interest in any and all of the Collateral, including, without limitation, (a)
executing, delivering and, where appropriate, filing financing statements and
amendments relating thereto under the Uniform Commercial Code, to the extent, if
any, that the Debtor's signature thereon is required therefor, (b) causing the
Secured Party's name to be noted as secured party on any certificate of title
for a titled good if such notation is a condition to attachment, perfection or
priority of, or ability of the Secured Party to enforce, the Secured Party's
security interest in such Collateral, (c) 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 Secured Party to enforce, the Secured Party's
security interest in such Collateral, (d) obtaining governmental and other third
party waivers, consents and approvals in form and substance reasonably
satisfactory to Secured Party, including, without limitation, any consent of any
licensor, lessor or other person obligated on Collateral, (e) obtaining waivers
from mortgagees and landlords in form and substance reasonably satisfactory to
the Secured Party and (f) taking all actions under any earlier versions of the
Uniform Commercial Code or under any other law, as reasonably determined by the
Secured Party to be applicable in any relevant Uniform Commercial Code or other
jurisdiction, including any foreign jurisdiction.
5. Relation to Other Security Documents. [When the Debtor is
CoActive, include the following: "Concurrently herewith, the Debtor is executing
and delivering to the Secured Party a pledge agreement pursuant to which the
Debtor is pledging to the Secured Party shares of the capital stock of Garcia
Baldwin, Inc. Such pledge shall be governed by the terms of such pledge
agreement and not by the terms of this Agreement."]
6. Representations and Warranties Concerning Debtor's Legal
Status. The Debtor has previously delivered to the Secured Party a certificate
signed by the Debtor and entitled "Perfection Certificate" (the "Perfection
Certificate"). The Debtor represents and warrants to the Secured Party as
follows: (a) the Debtor's exact legal name is that indicated on the Perfection
Certificate and on the signature page hereof, (b) the Debtor is an organization
of the type, and is organized in the jurisdiction set forth in the Perfection
Certificate, (c) the Perfection Certificate accurately sets forth the Debtor's
organizational identification number or accurately states that the Debtor has
none, (d) the Perfection Certificate accurately sets forth the Debtor's place of
business or, if more than one, its chief executive office, as well as the
Debtor's mailing address, if different, (e) all other information set forth on
the Perfection Certificate pertaining to the Debtor is accurate and complete,
and (f) that there has been no change in any information provided in the
Perfection Certificate since the date on which it was executed by the Debtor.
7. Covenants Concerning Debtor's Legal Status. The Debtor
covenants with the Secured Party as follows: (a) without providing at least 30
days prior written notice to the Secured Party, the Debtor will not change its
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name, its place of business or, if more than one, chief executive office, or its
mailing address or organizational identification number if it has one, (b) if
the Debtor does not have an organizational identification number and later
obtains one, the Debtor shall forthwith notify the Secured Party of such
organizational identification number, and (c) without providing at least 30 days
prior written notice to the Secured Party, the Debtor will not change its type
of organization, jurisdiction of organization or other legal structure.
8. Representations and Warranties Concerning Collateral, etc. The
Debtor further represents and warrants to the Secured Party as follows: (a) the
Debtor is the owner of the Collateral, free from any right or claim or any
person or any adverse lien, security interest or other encumbrance, except for
Permitted Liens, (b) none of the Collateral constitutes, or is the proceeds of,
"farm products" as defined in Section 9-102(a)(34) of the Uniform Commercial
Code of the State, (c) none of the account debtors or other persons obligated on
any of the Collateral is a governmental authority covered by the Federal
Assignment of Claims Act or like federal, state or local statute or rule in
respect of such Collateral, (d) the Debtor holds no commercial tort claim except
as indicated in Section 2 hereof or on the Perfection Certificate, and (e) the
Debtor has at all times operated its business in compliance with all applicable
provisions of the federal Fair Labor Standards Act, as amended, and with all
applicable provisions of federal, state and local statutes and ordinances
dealing with the control, shipment, storage or disposal of hazardous materials
or substances, (f) all other information set forth on the Perfection Certificate
pertaining to the Collateral is accurate and complete, and (g) that there has
been no change in any information provided in the Perfection Certificate since
the date on which it was executed by the Debtor.
9. Covenants Concerning Collateral, etc. The Debtor further
covenants with the Secured Party as follows: (a) the Collateral, to the extent
not delivered to the Secured Party pursuant to Section 4 or disposed of as
permitted by the Loan Documents, will be kept at those locations listed on the
Perfection Certificate and the Debtor will not remove the Collateral from such
locations, without providing at least thirty days prior written notice to the
Secured Party, (b) except for Permitted Liens, the Debtor shall be the owner of
the Collateral free from any right or claim of any other person, lien, security
interest or other encumbrance, and the Debtor shall defend the same against all
claims and demands of all persons at any time claiming the same or any interests
therein adverse to the Secured Party, (c) the Debtor shall not pledge, mortgage
or create, or suffer to exist any right of any person in or claim by any person
to the Collateral, or any security interest, lien or encumbrance in the
Collateral in favor of any person, other than the Secured Party except for
Permitted Liens, (d) the Debtor will keep the Collateral in good order and
repair in accordance with the applicable provisions of the Credit Agreement and
will not use the same in violation of law or any policy of insurance thereon,
(e) the Debtor will permit the Secured Party, or its designee, to inspect the
Collateral at any reasonable time, wherever located, in accordance with the
applicable provisions of the Credit Agreement, (f) the Debtor will pay promptly
when due all taxes, assessments, governmental charges and levies upon the
Collateral or incurred in connection with the use or operation of such
Collateral or incurred in connection with this Agreement, in accordance with the
applicable provisions of the Credit Agreement, (g) the Debtor will continue to
operate, its business in compliance with all applicable provisions of the
federal Fair Labor Standards Act, as amended, and with all applicable provisions
of federal, state and local statutes and ordinances dealing with the control,
shipment, storage or disposal of hazardous materials or substances, in
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accordance with the applicable provisions of the Credit Agreement and (h) the
Debtor will not sell or otherwise dispose, or offer to sell or otherwise
dispose, of the Collateral or any interest therein except for (i) sales of
inventory and licenses of general intangibles in the ordinary course of
business, (ii) so long as no Event of Default has occurred and is continuing,
sales or other dispositions of obsolescent items of equipment consistent with
past practices dispositions and (iii) as otherwise permitted by the Credit
Agreement.
10. Insurance.
10.1 Maintenance of Insurance. The Debtor will maintain
with financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall be in
accordance with general practices of businesses engaged in similar activities in
similar geographic areas. Such insurance shall be in such minimum amounts that
the Debtor will not be deemed a co-insurer under applicable insurance laws,
regulations and policies and otherwise shall be in such amounts, contain such
terms, be in such forms and be for such periods as may be reasonably
satisfactory to the Secured Party. In addition, all such insurance shall be
payable to the Secured Party as loss payee under a "standard" or "New York" loss
payee clause. Without limiting the foregoing, the Debtor will (i) keep all of
its physical property insured against such risks (including, without limitation,
hazard, business interruption, public liability and product liability), and in
such amounts, as are usually carried/covered by companies engaged in the same or
similar business, (ii) maintain all such workers' compensation or similar
insurance as may be required by law, and (iii) maintain, in amounts and with
deductibles equal to those generally maintained by businesses engaged in similar
activities in similar geographic areas, general public liability insurance
against claims of bodily injury, death or property damage occurring, on, in or
about the properties of the Debtor; business interruption insurance; and product
liability insurance.
10.2 Insurance Proceeds. The proceeds of any casualty
insurance in respect of any casualty loss of any of the Collateral shall,
subject to the rights, if any, of other parties with an interest having priority
in the property covered thereby, (i) so long as no Default or Event of Default
has occurred and is continuing and to the extent that the amount of such
proceeds is less than $100,000, be disbursed to the Debtor for direct
application by the Debtor solely to the repair or replacement of the Debtor's
property so damaged or destroyed, and (ii) in all other circumstances, be held
by the Secured Party as Cash Collateral for the Obligations. The Secured Party
may, at its sole option, disburse from time to time all or any part of such
proceeds so held as Cash Collateral, upon such terms and conditions as the
Secured Party may reasonably prescribe, for direct application by the Debtor
solely to the repair or replacement of the Debtor's property so damaged or
destroyed, or the Secured Party may apply all or any part of such proceeds to
the Obligations.
10.3 Continuation of Insurance. All policies of insurance
shall provide for at least 30 days prior written cancellation notice to the
Secured Party. In the event of failure by the Debtor to provide and maintain
insurance as herein provided, the Secured Party may, at its option, provide such
insurance and charge the amount thereof to the Debtor. The Debtor agrees to
reimburse the Secured Party on demand for all expenditures so made. The Secured
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Party shall have no obligation to the Debtor to make any such expenditures, nor
shall the making thereof be construed as the waiver or cure of any Default or
Event of Default. The Debtor shall furnish the Secured Party with certificates
of insurance and policies evidencing compliance with the foregoing insurance
provision.
11. Collateral Protection Expenses; Preservation of Collateral.
11.1 Expenses Incurred by Secured Party. In the Secured
Party's reasonable discretion, if the Debtor fails to do so, the Secured Party
may discharge taxes and other encumbrances at any time levied or placed on any
of the Collateral, maintain any of the Collateral, make repairs thereto and pay
any necessary filing fees or insurance premiums. The Debtor agrees to reimburse
the Secured Party on demand for all expenditures so made. The Secured Party
shall have no obligation to the Debtor to make any such expenditures, nor shall
the making thereof be construed as the waiver or cure of any Default or Event of
Default.
11.2 Secured Party's Obligations and Duties. Anything
herein to the contrary notwithstanding, the Debtor shall remain obligated and
liable under each contract or agreement comprised in the Collateral to be
observed or performed by the Debtor thereunder. The Secured Party shall not have
any obligation or liability under any such contract or agreement by reason of or
arising out of this Agreement or the receipt by the Secured Party of any payment
relating to any of the Collateral, nor shall the Secured Party be obligated in
any manner to perform any of the obligations of the Debtor under or pursuant to
any such contract or agreement, to make inquiry as to the nature or sufficiency
of any payment received by the Secured Party in respect of the Collateral or as
to the sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Secured Party or to which the Secured Party may be entitled at
any time or times. The Secured Party's sole duty with respect to the custody,
safe keeping and physical preservation of the Collateral in its possession,
under Section 9-207 of the Uniform Commercial Code of the State or otherwise,
shall be to deal with such Collateral in the same manner as the Secured Party
deals with similar property for its own account.
12. Securities and Deposits. The Secured Party may at any time
following and during the continuance of an Event of Default, at its option,
transfer to itself or any nominee any securities constituting Collateral,
receive any income thereon and hold such income as additional Collateral or
apply it to the Obligations. Whether or not any Obligations are due, the Secured
Party may, following and during the continuance of an Event of Default, demand,
sue for, collect, or make any settlement or compromise which it deems desirable
with respect to the Collateral. Regardless of the adequacy of Collateral or any
other security for the Obligations, any deposits or other sums at any time
credited by or due from the Secured Party to the Debtor may at any time be
applied to or set off against any of the Obligations.
13. Notification to Account Debtors and Other Persons Obligated on
Collateral. If an Event of Default shall have occurred and be continuing, the
Debtor shall, at the request and option of the Secured Party, notify account
debtors and other persons obligated on any of the Collateral of the security
interest of the Secured Party in any account, chattel paper, general intangible,
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instrument or other Collateral and that payment thereof is to be made directly
to the Secured Party or to any financial institution designated by the Secured
Party as the Secured Party's agent therefor, and the Secured Party may itself,
if an Event of Default shall have occurred and be continuing, without notice to
or demand upon the Debtor, so notify account debtors and other persons obligated
on Collateral. After the making of such a request or the giving of any such
notification, the Debtor shall hold any proceeds of collection of accounts,
chattel paper, general intangibles, instruments and other Collateral received by
the Debtor as trustee for the Secured Party without commingling the same with
other funds of the Debtor and shall turn the same over to the Secured Party in
the identical form received, together with any necessary endorsements or
assignments. The Secured Party shall apply the proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Collateral
received by the Secured Party to the Obligations, such proceeds to be
immediately credited after final payment in cash or other immediately available
funds of the items giving rise to them.
14. Power of Attorney.
14.1 Appointment and Powers of Secured Party. The Debtor
hereby irrevocably constitutes and appoints the Secured Party and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place and
stead of the Debtor or in the Secured Party's own name, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments that may be necessary or
useful to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives said attorneys the power and right, on
behalf of the Debtor, without notice to or assent by the Debtor, to do the
following:
(a) upon the occurrence and during the continuance of an
Event of Default, generally to sell, transfer,
pledge, make any agreement with respect to or
otherwise dispose of or deal with any of the
Collateral in such manner as is consistent with the
Uniform Commercial Code of the State and as fully and
completely as though the Secured Party were the
absolute owner thereof for all purposes, and to do,
at the Debtor's expense, at any time, or from time to
time, all acts and things which the Secured Party
deems necessary or useful to protect, preserve or
realize upon the Collateral and the Secured Party's
security interest therein, in order to effect the
intent of this Agreement, all at least as fully and
effectively as the Debtor might do, including,
without limitation, (i) the filing and prosecuting of
registration and transfer applications with the
appropriate federal, state, local or other agencies
or authorities with respect to trademarks, copyrights
and patentable inventions and processes, (ii) upon
written notice to the Debtor, the exercise of voting
rights with respect to voting securities, which
rights may be exercised, if the Secured Party so
elects, with a view to causing the liquidation of
assets of the issuer of any such securities, and
(iii) the execution, delivery and recording, in
connection with any sale or other disposition of any
Collateral, of the endorsements, assignments or other
instruments of conveyance or transfer with respect to
such Collateral; and
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(b) to the extent that the Debtor's authorization given
in Section 3 is not sufficient, to file such
financing statements with respect hereto, with or
without the Debtor's signature, or a photocopy of
this Agreement in substitution for a financing
statement, as the Secured Party may deem appropriate
and to execute in the Debtor's name such financing
statements and amendments thereto and continuation
statements which may require the Debtor's signature.
14.2 Ratification by Debtor. To the extent permitted by
law, the Debtor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and is irrevocable.
14.3 No Duty on Secured Party. The powers conferred on the
Secured Party hereunder are solely to protect its interests in the Collateral
and shall not impose any duty upon it to exercise any such powers. The Secured
Party shall be accountable only for the amounts that it actually receives as a
result of the exercise of such powers, and neither it nor any of its officers,
directors, employees or agents shall be responsible to the Debtor for any act or
failure to act, except for the Secured Party's own gross negligence or willful
misconduct.
15. Rights and Remedies. If an Event of Default shall have
occurred and be continuing, the Secured Party, without any other notice to or
demand upon the Debtor, shall have in any jurisdiction in which enforcement
hereof is sought, in addition to all other rights and remedies, the rights and
remedies of a secured party under the Uniform Commercial Code of the State and
any additional rights and remedies which may be provided to a secured party in
any jurisdiction in which Collateral is located, including, without limitation,
the right to take possession of the Collateral, and for that purpose the Secured
Party may, so far as the Debtor can give authority therefor, enter upon any
premises on which the Collateral may be situated and remove the same therefrom.
The Secured Party may in its discretion require the Debtor to assemble all or
any part of the Collateral at such location or locations within the
jurisdiction(s) of the Debtor's principal office(s) or at such other locations
as the Secured Party may reasonably designate. Unless the Collateral is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, the Secured Party shall give to the Debtor at least
five Business Days prior written notice of the time and place of any public sale
of Collateral or of the time after which any private sale or any other intended
disposition is to be made. The Debtor hereby acknowledges that five Business
Days prior written notice of such sale or sales shall be reasonable notice. In
addition, the Debtor waives any and all rights that it may have to a judicial
hearing in advance of the enforcement of any of the Secured Party's rights and
remedies hereunder, including, without limitation, its right following an Event
of Default to take immediate possession of the Collateral and to exercise its
rights and remedies with respect thereto.
16. Standards for Exercising Rights and Remedies. To the extent
that applicable law imposes duties on the Secured Party to exercise remedies in
a commercially reasonable manner, the Debtor acknowledges and agrees that it is
not commercially unreasonable for the Secured Party (a) to fail to incur
expenses reasonably deemed significant by the Secured Party to prepare
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Collateral for disposition or otherwise to fail to complete raw material or work
in process into finished goods or other finished products for disposition, (b)
to fail to obtain third party consents for access to Collateral to be disposed
of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to
fail to remove liens or encumbrances on or any adverse claims against
Collateral, (d) to exercise collection remedies against account debtors and
other persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (e) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not
the Collateral is of a specialized nature, (f) to contact other persons, whether
or not in the same business as the Debtor, for expressions of interest in
acquiring all or any portion of the Collateral, (g) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the collateral is of a specialized nature, (h) to dispose of Collateral by
utilizing Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets, (i) to dispose of assets in
wholesale rather than retail markets, (j) to disclaim disposition warranties,
(k) to purchase insurance or credit enhancements to insure the Secured Party
against risks of loss, collection or disposition of Collateral or to provide to
the Secured Party a guaranteed return from the collection or disposition of
Collateral, or (l) to the extent deemed appropriate by the Secured Party, to
obtain the services of other brokers, investment bankers, consultants and other
professionals to assist the Secured Party in the collection or disposition of
any of the Collateral. The Debtor acknowledges that the purpose of this Section
16 is to provide non-exhaustive indications of what actions or omissions by the
Secured Party would fulfill the Secured Party's duties under the Uniform
Commercial Code or other law of the State or any other relevant jurisdiction in
the Secured Party's exercise of remedies against the Collateral and that other
actions or omissions by the Secured Party shall not be deemed to fail to fulfill
such duties solely on account of not being indicated in this Section 16. Without
limitation upon the foregoing, nothing contained in this Section 16 shall be
construed to grant any rights to the Debtor or to impose any duties on the
Secured Party that would not have been granted or imposed by this Agreement or
by applicable law in the absence of this Section 16.
17. No Waiver by Secured Party, etc. The Secured Party shall not
be deemed to have waived any of its rights or remedies in respect of the
Obligations or the Collateral unless such waiver shall be in writing and signed
by the Secured Party. No delay or omission on the part of the Secured Party in
exercising any right or remedy shall operate as a waiver of such right or remedy
or any other right or remedy. A waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future occasion.
All rights and remedies of the Secured Party with respect to the Obligations or
the Collateral, whether evidenced hereby or by any other instrument or papers,
shall be cumulative and may be exercised singularly, alternatively, successively
or concurrently at such time or at such times as the Secured Party deems
expedient.
18. Suretyship Waivers by Debtor. The Debtor waives demand,
notice, protest, notice of acceptance of this Agreement, notice of loans made,
credit extended, Collateral received or delivered or other action taken in
reliance hereon and all other demands and notices of any description. With
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respect to both the Obligations and the Collateral, the Debtor assents to any
extension or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Secured Party may deem advisable. The Secured Party
shall have no duty as to the collection or protection of the Collateral or any
income therefrom, the preservation of rights against prior parties, or the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in Section 11.2. The Debtor further waives any and all other
suretyship defenses.
19. Marshalling. The Secured Party shall not be required to
marshal any present or future collateral security (including but not limited to
the Collateral) for, or other assurances of payment of, the Obligations or any
of them or to resort to such collateral security or other assurances of payment
in any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights and remedies, however existing or
arising. To the extent that it lawfully may, the Debtor hereby agrees that it
will not invoke any law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Secured Party's rights and
remedies under this Agreement or under any other instrument creating or
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Debtor hereby
irrevocably waives the benefits of all such laws.
20. Proceeds of Dispositions; Expenses. The Debtor shall pay to
the Secured Party on demand any and all expenses, including reasonable
attorneys' fees and disbursements, incurred or paid by the Secured Party in
protecting, preserving or enforcing the Secured Party's rights and remedies
under or in respect of any of the Obligations or any of the Collateral. After
deducting all of said expenses, the residue of any proceeds of collection or
sale or other disposition of the Collateral shall, to the extent actually
received in cash, shall be applied to the payment of the Obligations in such
order or preference as is provided in the Credit Agreement, proper allowance and
provision being made for any Obligations not then due. Upon the final payment
and satisfaction in full of all of the Obligations and after making any payments
required by Sections 9-608(a)(1)(C) or 9-615(a)(3) of the Uniform Commercial
Code of the State, any excess shall be returned to the Debtor. In the absence of
final payment and satisfaction in full of all of the Obligations, the Debtor
shall remain liable for any deficiency.
21. Overdue Amounts. Until paid, all amounts due and payable by
the Debtor hereunder shall be a debt secured by the Collateral and shall bear,
whether before or after judgment, interest at the rate of interest for overdue
principal set forth in the Credit Agreement.
22. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS
INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Debtor
agrees that any action or claim arising out of, or any dispute in connection
with, this Agreement, any rights, remedies, obligations, or duties hereunder, or
the performance or enforcement hereof or thereof, may be brought in the courts
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of the State or any federal court sitting therein and consents to the
non-exclusive jurisdiction of such court and to service of process in any such
suit being made upon the Debtor by mail at the address specified in Section 9.01
of the Credit Agreement. The Debtor hereby waives any objection that it may now
or hereafter have to the venue of any such suit or any such court or that such
suit is brought in an inconvenient court.
23. Waiver of Jury Trial. THE DEBTOR WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS, REMEDIES, OBLIGATIONS, OR DUTIES
HEREUNDER, OR THE PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF. Except as
prohibited by law, the Debtor waives any right which it may have to claim or
recover in any litigation referred to in the preceding sentence any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. The Debtor (i) certifies that neither the Secured
Party nor any representative, agent or attorney of the Secured Party has
represented, expressly or otherwise, that the Secured Party would not, in the
event of litigation, seek to enforce the foregoing waivers or other waivers
contained in this Agreement, and (ii) acknowledges that, in entering into the
Credit Agreement and the other Loan Documents to which the Secured Party is a
party, the Secured Party is relying upon, among other things, the waivers and
certifications contained in this Section 23.
24. Miscellaneous. The headings of each section of this Agreement
are for convenience only and shall not define or limit the provisions thereof.
This Agreement and all rights and obligations hereunder shall be binding upon
the Debtor and its respective successors and assigns, and shall inure to the
benefit of the Secured Party and its successors and assigns. If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity of
all other terms hereof shall in no way be affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein. The Debtor acknowledges receipt
of a copy of this Agreement.
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IN WITNESS WHEREOF, intending to be legally bound, the Debtor has
caused this Agreement to be duly executed as of the date first above written.
[COACTIVE MARKETING GROUP, INC.,
INMARK SERVICES, INC., U.S. CONCEPTS,
INC., GRUPO HACERLO LLC, OPTIMUM
GROUP, INC.]
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Accepted:
Signature Bank
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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