AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT, dated as of June 26, 2001 (the
"Effective Date"), by and between ISPSOFT INC., a New Jersey corporation (the
"Debtor"), and DSET CORPORATION, a New Jersey corporation (the "Secured Party").
WHEREAS, the Debtor and the Secured Party have entered into a Security
Agreement, dated as of May 7, 2001 (the "Prior Security Agreement"), pursuant to
which the Debtor has granted to the Secured party a lien on the Collateral; and
WHEREAS, the Secured Party has agreed to make additional loans to the
Debtor and the parties desire to amend and restate the Prior Security Agreement;
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the Debtor and the
Secured Party hereby agree as follows:
Section 1. Definitions. (a) Unless the context otherwise requires, all
terms used but not expressly defined herein shall have the meanings, if any,
given to them in the Uniform Commercial Code as in effect from time to time in
the State of New Jersey (the "UCC").
(b) Additionally the following terms shall have the following meanings:
"Collateral" means all the items described in Section 2 hereof.
"Events of Default" means the occurrence and continuation of any of the
Events of Default described in Note (as defined in Section 3(a) below).
"Intercreditor Agreement" means the Amended and Restated Intercreditor
Agreement, by and among the Debtor, certain the secured parties and certain
other lenders dated as of April 12, 2001.
"Liabilities" means the obligations of the Debtor to the Secured Party
set forth in Sections 3(a) and (b) hereof.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, limited liability partnerships,
general partnerships, joint-stock companies, joint ventures, associations,
companies, trusts, banks, trust companies and other organizations, whether or
not legal entities, and governments and agencies and political subdivisions
thereof.
Section 2. Pledge and Grant of Security Interest. As collateral
security for the payment in full of the Liabilities, the Debtor hereby grants
the Secured Party a security interest in, and lien on, all right, title and
interest of the Debtor presently existing or which may hereafter arise, in, to
and under all of its property of all kinds and descriptions, wherever the same
may now or hereafter be located, now existing and/or owned and hereafter arising
and/or acquired or in which the Debtor as of the date hereof has or hereafter
may acquire an interest (to the extent of such interest), including, without
limitation, (i) all "accounts" of the Debtor, whether now existing or hereafter
arising, and all other claims for moneys due or to become due to the Debtor,
including (A) tax refunds and rights to receive tax refunds, insurance proceeds,
condemnation awards, rights to refunds (including, without limitation, all
amounts refunded or paid to the Debtor as a result of such amounts being deemed
voidable transfers in any insolvency or bankruptcy proceeding), contribution,
subrogation and/or indemnification, and (B) reserves, "deposit accounts" and
other monies now or at any time or times hereafter in the possession or under
the control of the Secured Party, (ii) all instruments, files, records, ledger
sheets and other documents, covering or relating to any of the Collateral as
described herein, (iii) all "goods", including inventory of the Debtor, whether
now owned or hereafter acquired, and all "documents", (iv) all "equipment",
including all machinery, fixtures, furniture and improvements, whether now owned
or hereafter acquired, including any items substituted therefor as replacements,
and any additions and accessions thereto, (v) all of Debtor's contract rights
and "general intangibles", including interests in affiliates, partnerships and
joint ventures, and all "instruments", (vi) all trademarks now or hereafter
owned, adopted, used or which are being used by the Debtor, and the applications
and registrations thereof, together with the goodwill of the business connected
with the use of and symbolized by the trademarks, and all proceeds thereof
including but not limited to any and all causes of action for infringement
thereof and any and all royalties for any licenses thereof, (vii) all patents,
together with any application, issue, reexamination, reissue, continuation,
continuation-in-part, division, improvement, or extension thereof, and all
proceeds thereof, including but not limited to any and all causes of action for
infringement for the full term of the patents and any and all royalties for any
licenses thereof, (viii) all work in progress, including but not limited to all
reproduction and allied rights necessary for production, distribution, and
exploitation of said work throughout the world in perpetuity and all copyrights
therein and all renewals and extensions thereof, and all translations,
adaptations and other versions of the work now made or hereafter created, (ix)
all computer and other electronic data processing hardware, integrated computer
systems, central processing units, memory units, display terminals, printers,
features, computer elements, card readers, tape drives, hard and soft disk
drives, cables, electrical supply hardware, generators, power equalizers,
accessories and all peripheral devices and other related computer hardware, (x)
all software programs (including both source code, object code and all related
applications and data files) designed for use on the computers and electronic
data processing hardware described in the preceding clause (ix), (xi) all
documentation (including flow charts, logic diagrams, manuals, guides and
specifications) with respect to such hardware and software described in the
preceding clauses (ix) and (x), (xii) all other personal property of the Debtor
whether now owned or hereafter acquired, and
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(xiii) all products and "proceeds" and accessions, additions and substitutions
of the items described in (i) through (xii) above.
TO HAVE AND TO HOLD all the Collateral, unto the Secured Party forever, upon the
terms and subject to the conditions hereinafter set forth.
Section 3. Obligations Secured. This Agreement is made, and the
security interest created hereby is granted:
(a) to secure the due and punctual payment of the Debtor's obligations,
including but not limited to principal and interest and costs and expenses of
collection, to the Secured Party under that certain Secured Promissory Note,
dated June 26, 2001 in the aggregate principal amount of up to $2,000,000 (the
"Note") and all obligations of Debtor arising hereunder (including, without
limitation, any amounts owing under Section 6 hereof); and
(b) to secure the due and punctual payment of any costs and expenses
incurred in connection with the realization of the security for which this
Agreement provides and any reasonable out-of-pocket costs and expenses
(including, but not limited to, all reasonable legal expenses) incurred in
connection with any proceedings to which this Agreement may give rise.
Section 3A. Representations and Warranties.
(a) The Debtor hereby represents and warrants that (i) it is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and duly qualified to do business and in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on its current business and operations or the ownership
of its properties; (ii) it has all necessary rights, franchises and privileges
and full power and authority to execute, deliver and perform this Agreement and
to conduct its business as currently conducted; and (iii) it has taken all
necessary action to execute, deliver and perform this Agreement and this
Agreement has been duly executed and delivered by the Debtor and constitutes the
legally valid and binding obligations of the Debtor, enforceable in accordance
its terms except as such enforceability may be limited by bankruptcy, insolvency
and other similar laws affecting creditors' rights generally.
(b) The Debtor hereby represents and warrants that it is the legal,
record and beneficial owner of, and has good, valid and marketable title to, the
Collateral.
(c) The Debtor hereby represents and warrants that, except as has been
obtained as of the date hereof, no consent of any party and no consent, license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any government instrumentality is
required to be obtained by the Debtor in connection with the execution, delivery
or performance of this Agreement, the validity or enforceability of this
Agreement, the perfection or enforceability of the Secured Party' security
interest in the
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Collateral or, except for compliance with or as may be required by applicable
securities laws, the exercise by the Secured Party of any of its rights or
remedies provided herein.
(d) The Debtor hereby represents and warrants that the execution,
delivery and performance of this Agreement by it will not violate any provision
of any applicable law or regulation or of any order, judgment, writ, award or
decree of any court, arbitrator or other government instrumentality, domestic or
foreign, applicable to it, or of its certificate of incorporation or by-laws, or
of any securities issued by it, or of any mortgage, indenture, lease, deed of
trust, loan agreement or other material contract, agreement or instrument or
undertaking to which it is a party or which purports to be binding upon it or
upon any of its assets and will not result in the creation or imposition of (or
the obligation to create or impose) any lien or encumbrance on any of its
assets, except as contemplated by this Agreement.
(e) The Debtor hereby represents and warrants that upon filing any
financing statements in the relevant state filing offices, the security interest
granted pursuant to this Agreement in the Collateral will constitute a valid,
first-priority, perfected security interest in and lien on such Collateral,
enforceable as such against all creditors of the Debtor and any Persons
purporting to purchase any Collateral from the Debtor.
Section 4. Collateral Owned Free and Clear; Rights With Respect to the
Collateral. (a) Except for the security interest hereby granted to the Secured
Party and the security interest granted the Debtor's bridge lenders in 2001, the
Debtor will not pledge, assign, grant a security interest in or otherwise
encumber any of the Collateral, or permit or suffer any lien, security interest,
claim or encumbrance of any nature whatsoever in, on or upon the Collateral,
without the prior written consent of Secured Party, at the time such action is
taken, and the Debtor hereby represents that the Debtor has not done so
heretofore and the Collateral is owned by the Debtor free and clear of all
encumbrances.
(b) The Secured Party shall have the right, at any time after the
occurrence of any Event of Default, to cause the Collateral to be registered in
the name of the Secured Party. Unless and until an Event of Default shall have
occurred and be continuing, the Debtor may exercise all other rights with
respect to the Collateral, and the Debtor will remain in possession of the
Collateral.
(c) The Secured Party shall not have any obligation with respect to any
other property held or received by it hereunder, except to use reasonable care
in the custody and preservation thereof to the extent required by applicable
law.
Section 5. Maintenance of the Collateral. The Debtor shall at all times
from and after the date of this Agreement until the Liabilities have been paid
in full take all steps necessary and prudent to protect the Collateral and the
first-priority, perfected security interest of the Secured Party in the
Collateral, including but not limited to, the following:
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(a) keep and maintain the tangible Collateral at the principal place of
business of the Debtor located at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
or its office located in San Jose, California and not remove (other than in the
ordinary course of business) the same without 30 days prior notice to the
Secured Party, and will take all necessary steps to maintain the priority of the
Secured Party's security interest in any Collateral, whether or not requested to
do so by the Secured Party;
(b) keep and maintain books and records relating to the Collateral at
its principal place of business in a form reasonably satisfactory to the Secured
Party and not remove the same without the written consent of the Secured Party
and allow the Secured Party and its representatives access to such books and
records and to the Collateral, at all reasonable times after the giving of
reasonable notice, for the purpose of examination, verification, copying,
extracting and such other purposes as the Secured Party may require;
(c) when necessary or desirable for the perfection or maintenance of
the Secured Party's security interest in the Collateral as requested to do so by
the Secured Party make, stamp or record such entries or legends on any of the
Debtor's books and records relating to the Collateral as the Secured Party shall
reasonably request from time to time;
(d) at the expense of the Debtor, defend the Collateral and defend and
indemnify each of the Secured Party against all claims, liens, security
interests, demands and other encumbrances of third parties, at any time claiming
an interest, of any nature whatsoever, in the Collateral, which is adverse to
any security interest granted to the Secured Party;
(e) keep the Collateral free of all encumbrances, and (except as
permitted by this Agreement) not sell, lease, transfer or otherwise dispose of
the Collateral or any interest therein, in bulk or otherwise;
(f) promptly notify each of the Secured Party in the event of material
loss or damage to the Collateral;
(g) pay all taxes which are or may become a lien on the Collateral,
promptly when due so as to avoid imposition of any lien;
(h) observe and comply with all laws, regulations, ordinances, rules
and orders of any federal, state, municipal or other governmental authority
relating to the Collateral and the use thereof, except during any period in
which the Debtor, at the Debtor's expense and in the Debtor's name, shall be in
good faith contesting the Debtor's obligations to comply therewith; and
(i) execute and deliver to the Secured Party such other and further
documents, instruments or writings and do, or omit or refrain from doing, such
other acts and things which
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the Secured Party may reasonably request in order to evidence, effectuate,
perfect or maintain its perfected security interest in the Collateral, such
instruments to be in form and substance reasonably satisfactory to the Secured
Party.
Section 6. Remedies. (a) If any amount shall be due to the Secured
Party pursuant to this Agreement or the Note, and shall not have been paid when
and as the same shall have become due, whether at maturity, by acceleration,
after notice of non-payment or otherwise, or if any other Event of Default shall
have occurred, the Secured Party, subject to the terms of the Intercreditor
Agreement, may take any or all of the following actions, after the expiration of
any applicable grace period:
(i) apply any funds held by any of the Secured Party as a result
of any action on the Collateral to the payment of the Liabilities
in the priorities set forth herein;
(ii) sell the Collateral, or any interest therein, and negotiate,
endorse, assign, transfer and deliver unto the purchaser or
purchasers thereof the Collateral, at public or private sale, for
cash, upon credit, or for other property for immediate or future
delivery and for such price or prices and on such terms as the
Secured Party in its sole discretion shall deem appropriate;
(iii) take any action at law or in equity to enforce performance
and observance of the obligations, agreements or covenants of the
Debtor under this Agreement;
(iv) exercise any and all rights and remedies conferred upon the
Secured Party by the UCC and other applicable laws; and
(v) upon notice to the Debtor, enter upon and into the Debtor's
principal place of business, or such other premises owned, leased
or otherwise controlled by the Debtor as may be necessary, without
liability for trespass and remove all of the Collateral and all
books, records, invoices and other documentation relating thereto.
The Secured Party may require the Debtor to assemble the Collateral and make it
available to the Secured Party at a place to be designated by the Secured Party
reasonably convenient to the Party.
(b) The Debtor agrees that, subsequent to an Event of Default
hereunder, the Secured Party may notify "account debtors" that the Collateral
has been assigned to the Secured Party and the Secured Party may collect such
"accounts" directly and charge the reasonable collection costs and expenses to
the account of the Debtor. The reasonable costs of collection,
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notification and enforcement, including but not limited to, reasonable counsel
fees and out-of-pocket expenses, shall be borne solely by the Debtor.
(c) All proceeds from the sale of the Collateral by the Secured Party
hereunder and all other moneys received by the Secured Party pursuant to the
terms of this Agreement shall be applied as follows:
FIRST: provided that such expenses were incurred in accordance
with the terms hereof or of the Note or the Intercreditor
Agreement, the payment of all reasonable expenses incurred by any
Secured Party in connection with such sale, including, but not
limited to, the expenses of taking, advertising, processing,
preparing and storing the Collateral to be sold, all court costs
and the Secured Party's reasonable legal fees in connection
therewith, and to the payment of all reasonable costs and expenses
paid or incurred by the Secured Party in connection with this
Agreement or the exercise of any right or remedy hereunder, to the
extent that such advances, costs and expenses shall not have been
paid to the Secured Party upon the Secured Party's demand to the
Debtor therefor; provided, however, that in the event there are
insufficient funds available to repay all of these expenses, the
available funds shall be allocated to the relevant Secured Party
in proportion to their relative expenditures; and
SECOND: to the payment of accrued but unpaid interest due and
owing on the Note and then to unpaid principal on the Note;
THIRD: to the payment of any other outstanding amounts under the
Note and this Agreement; and
any surplus, if any remaining, to be paid over to the Debtor, or as a court of
competent jurisdiction may direct. Any requirement of reasonable notice imposed
by law shall be deemed met if such notice is in writing and is sent to the
Debtor in accordance with Section 17 hereof at least ten (10) days prior to the
sale, disposition or other event giving rise to such notice requirement.
Section 7. Waivers. (a) The Debtor acknowledges that the transactions
of which this Agreement is a part are commercial transactions.
(b) Except as provided herein, the Debtor waives presentment, demand,
notice, protest, notice of acceptance of this Agreement and the Note, notice of
credit extended, collateral received or delivered or other action taken in
reliance hereon and all other demands and notices of any description. The
Secured Party shall not have any duty as to the collection or protection of
rights against prior parties, nor as to the preservation of any rights
pertaining thereto beyond the safe custody thereof.
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Section 8. Remedies Cumulative. (a) No remedy conferred upon or
reserved to the Secured Party hereunder is or shall be deemed to be exclusive of
any other available remedy or remedies. Without limiting the generality of the
foregoing and subject to the terms of the Intercreditor Agreement, the Secured
Party and each of them shall have the right to exercise any available remedy to
recover any amount due and payable hereunder without regard to whether any other
amount is due and payable, and without prejudice to the Secured Party to
exercise any available remedy hereunder or otherwise, for other Events of
Defaults existing at the time the earlier action was commenced.
(b) Any delay, omission or failure by the Secured Party to insist upon
the strict performance by the Debtor of any of the covenants, conditions and
agreements herein set forth or to exercise any right or remedy available to it
upon the occurrence of any Event of Default hereunder or otherwise, shall not
impair any such right or remedy or be considered or taken as a waiver or
relinquishment for the future the right to insist upon and to enforce, by
injunction or other appropriate legal or equitable remedy, strict compliance by
the Debtor with all of the covenants, conditions and agreements herein or
otherwise, or of the right to exercise any such rights or remedies if such
default by the Debtor be continued or repeated.
Section 9. No Waiver. Failure by the Secured Party to exercise any
right or remedy under this Agreement, under any other agreement between the
Secured Party and the Debtor, including the Note and the Intercreditor
Agreement, or delay by the Secured Party in exercising the same, will not
operate as a waiver thereof. No waiver of any such right or remedy by the
Secured Party will be effective unless it is in writing and signed by the
Secured Party.
Section 10. Successors and Assigns. This Agreement shall bind and inure
to the benefit of the successors and assigns of the Secured Party and to any
subsequent holders of any of the Liabilities. The term "Debtor" shall be deemed
to include the successors and assigns of the Debtor.
Section 11. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New Jersey applicable
to contracts made and to be performed entirely within such state and applicable
federal law.
Section 12. Financing Statements. The Debtor will, at the request of
the Secured Party, execute any financing statement submitted to it by such party
with respect to its interest in the Collateral. The Debtor hereby authorizes, to
the extent permitted by applicable law, the Secured Party to prepare and file
UCC-1, UCC-3 and other financing statements as may be deemed by the Secured
Party to be reasonably necessary to perfect and maintain the perfection of its
interest in the Collateral and any amendments thereto or continuations thereof
without the signature of the Debtor.
Section 13. Termination. This Agreement shall terminate at such time as
the Liabilities have been paid in full and all Debtors obligations hereunder
have been performed;
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provided, however, that if, at any time, all or part of any payment of the
Liabilities theretofore made by the Debtor or any other Person is rescinded or
otherwise must be returned by the Secured Party for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization of
the Debtor or any other Person), this Agreement shall continue to be effective
or shall be reinstated, as the case may be, as to the Liabilities which were
satisfied by the payment to be rescinded or returned, all as though such payment
had not been made. Upon the termination of this Agreement, the Secured Party
shall deliver any appropriate UCC-3 termination statements to the Debtor.
Section 14. Further Assurances. The Debtor will promptly and duly
execute and deliver to the Secured Party such further documents, instruments,
writings and assurances and take such further action as the Secured Party may
from time to time reasonably request, in order to evidence, effectuate, perfect
or maintain the perfected security interest of the Secured Party in the
Collateral and to otherwise carry out more effectively the intent and purpose of
this Agreement and to establish and protect the rights and remedies created or
intended to be created in favor of the Secured Party hereunder.
Section 15. Interpretation. If any provision of this Agreement shall be
ruled invalid by any court of competent jurisdiction, the invalidity of such
provision shall not affect the remaining provisions hereof.
Section 16. Consents and Approvals to be in Writing. No consent or
approval of the Secured Party hereunder shall be effective unless in writing and
signed by the Secured Party.
Section 17. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be given to the parties
at their respective addresses and shall be sent by (a) hand delivery, (b)
certified mail, return receipt requested, postage prepaid, (c) a recognized
overnight delivery service, or (d) telecopy or other means of facsimile. Notices
sent by hand delivery shall be deemed received when delivered to the address
and/or person set forth below; notices sent by certified mail shall be deemed
received when accepted; notices sent by overnight delivery service shall be
deemed received when delivered and notices sent by telecopy shall be deemed
received upon receipt of confirmation of dispatch. Any party from time to time
may change its address, facsimile number or other information for the purpose of
notices to that party by giving notice specifying such change to the other party
hereto at least ten days prior to the effective date of such change.
Section 18. Waiver of Jury Trial. THE DEBTOR AND THE SECURED PARTY
WAIVE ANY RIGHTS THEY MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED ON OR ARISING FROM THIS AGREEMENT OR THE NOTE, ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY OR EFFECTED PURSUANT HERETO OR THERETO, ANY
DEALINGS OR COURSE OF DEALING BETWEEN OR AMONG THEM RELATING IN ANY WAY TO THE
SUBJECT MATTER OF THIS AGREEMENT OR ANY STATEMENTS OR ACTIONS OF
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ANY OF THEM OR THEIR AFFILIATES. Each of the parties acknowledges and agrees
that this waiver is a material inducement to enter into the business
relationship contemplated by this Agreement and the Note and that each has
relied on this waiver in entering into these documents to which it is a party
and will continue to rely on this waiver in its future dealings with the other
party. The scope of this waiver is intended to be all-encompassing, and this
waiver shall apply to all claims, of any nature whatsoever, whether deriving
from contract, arising by law, based on tort or otherwise. THE DEBTOR AND THE
SECURED PARTY HAVE MADE THIS WAIVER KNOWINGLY AND VOLUNTARILY, AND THIS WAIVER
SHALL BE IRREVOCABLE. THIS WAIVER SHALL ALSO APPLY TO ALL AMENDMENTS,
SUPPLEMENTS, RESTATEMENTS, EXTENSIONS AND MODIFICATIONS OF THIS AGREEMENT AND
THE NOTE. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
Section 19. Secured Party Appointed Attorney-in-Fact and Proxy. The
Debtor hereby appoints each of the Secured Party with full power of
substitution, as the Debtor's true lawful attorney-in-fact, and in the name and
on behalf of the Debtor and at the Debtor's expense, from time to time in the
Secured Party's discretion from and after the occurrence and during the
continuance of an Event of Default to take any action and to execute any
instrument which any of the Secured Party may deem necessary or advisable to
perfect, protect or enforce any right or security interest hereunder or
otherwise accomplish the purposes of this Agreement, including, without
limitation, to execute and file alone any financing statement and any document
or instrument under any other applicable laws, and to receive, endorse and
collect all instruments made payable to the Debtor representing any dividend or
other distribution in respect of any of the Collateral and to give full
discharge for the same. The Debtor ratifies and approves all such acts of such
attorney and proxy. The Secured Party will not be liable for any acts or
omissions, nor for any error of judgment or mistake of fact or law, other than
such Secured Party's own gross negligence or willful misconduct as determined by
a final non-appealable judgment of a court of competent jurisdiction. This
power, being coupled with an interest, is irrevocable until all Liabilities have
been paid in full.
Section 20. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
Section 21. Indemnification by the Debtor. The Debtor shall indemnify
the Secured Party and each director, officer and agent of the Secured Party
(each such Person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee (subject to (Y) below), incurred by or asserted against any
Indemnitee arising out any third party claims of, in connection with, or as a
result of (i) the execution or delivery of this Agreement, the Intercreditor
Agreement or the Note, or any agreement or instrument contemplated hereby or
thereby, the performance by
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the parties hereto or thereto of their respective obligations hereunder or
thereunder or the consummation of the transactions or any other transactions
contemplated hereby or thereby, (ii) any loan made pursuant to the Note or the
use of the proceeds therefrom, or (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnitee is a party thereto;
provided, however, (X) that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee and (Y) the Debtor shall have the right to defend
any such claim with counsel of its choosing (reasonably acceptable to the
Indemnitee) and otherwise control the defense thereof; provided, however, that
with respect to this subsection (Y), Debtor must first acknowledge to Indemnitee
in writing that the claim is subject to the Indemnification provided by this
Section 21 and must satisfy Indemnitee that Debtor has the financial ability to
satisfy the claim in full.
Section 22. Intercreditor Agreement and Escrow Agreement. By execution
of this Agreement by the Secured Party, the Debtor and the Secured Party confirm
and agree that this Agreement shall act as a counterpart signature to the
Intercreditor Agreement in accordance with Section 5.5 of the Intercreditor
Agreement. The Debtor and the Secured Party further agree that for all purposes
of the Intercreditor Agreement, (i) the Note shall be considered one of the
Secured Notes under the Intercreditor Agreement; (ii) the Secured Party shall be
considered one of the Lenders under the Intercreditor Agreement; (iii) this
Agreement shall be considered the Security Agreement under the Intercreditor
Agreement, and (iv) the Secured Party shall be considered a Primary Lender under
the Intercreditor Agreement. Notwithstanding the terms of Section 3.2(a) of the
Intercreditor Agreement, the Secured Party agrees not to take any Enforcement
Action (as defined in the Intercreditor Agreement) against the Debtor unless
either (a) the Secured Party has obtained the prior written consent to such
Enforcement Action of at least one other Primary Lender or (b) at least one
other Primary Lender has commenced an Enforcement Action against the Debtor. The
Debtor shall obtain all consents and agreements necessary for the Secured Party
to be a party to the Intercreditor Agreement within five (5) business days from
the date hereof or the Debtor shall be in material breach of this Agreement. In
addition, the Debtor shall obtain all consents and agreements necessary for the
Secured Party to be a party to the Comprehensive Preferred Escrow Agreement
dated January 29, 2001 among the Debtor, Lucent Technologies, Inc., Signal Lake
Venture Fund and SGM Capital Limited within five (5) business days from the date
hereof or the Debtor shall be in material breach of this Agreement.
Section 23. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties with respect to the subject matter of
this Agreement and supersedes all prior agreements or understandings, written or
oral, between the parties with respect to the subject matter hereof, including
without limitation the Prior Security Agreement which is amended and restated in
its entirety by this Agreement.
******
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IN WITNESS WHEREOF, the Debtor and the Secured Party have duly executed
this Agreement, all as of the day and year first above written.
Debtor:
ISPSOFT INC.
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: President and
Chief Executive Officer
Secured Party:
DSET CORPORATION
By: /s/ Xxxxxxx X. XxXxxx, Xx.
--------------------------
Name: Xxxxxxx X. XxXxxx, Xx.
Title: President and
Chief Executive Officer
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