Exhibit 10.2
AMENDED AND RESTATED SECURITY
AGREEMENT
THIS AMENDED AND RESTATED SECURITY
AGREEMENT (this “ Security Agreement ”) dated as
of September 29, 2006 is by and among the parties identified
as “Grantors” on the signature pages hereto and such
other parties as may become Grantors hereunder after the date
hereof (individually a “ Grantor ”, and
collectively the “ Grantors ”) and BANK OF
AMERICA, N.A., as administrative agent (in such capacity, the
“ Administrative Agent ”) for the holders of the
Secured Obligations referenced below.
W I T N E S S E T H
WHEREAS, a $150 million credit
facility has been established in favor of FTI Consulting, Inc., a
Maryland corporation (the “ Borrower ”),
pursuant to the terms of that Credit Agreement (as amended,
modified, supplemented and extended from time to time, the “
Credit Agreement ”) dated as of the date hereof among
the Borrower, the Guarantors identified therein, the Lenders
identified therein and Bank of America, N.A., as Administrative
Agent;
WHEREAS, this Security Agreement is
required under the terms of the Credit Agreement; and
WHEREAS, this Security Agreement is
given in amendment to, restatement of and substitution for the
Security Agreement dated as of November 28, 2003 among the
Grantors and Bank of America, N.A., as administrative
agent.
NOW, THEREFORE, in consideration of
these premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions .
(a) Capitalized terms used and not
otherwise defined herein shall have the meanings provided in the
Credit Agreement.
(b) The following terms shall have
the meanings assigned thereto in the Uniform Commercial Code in
effect in the State of North Carolina on the date hereof:
Accession, Account, As-Extracted Collateral, Chattel Paper,
Commercial Tort Claim, Commingled Goods, Consumer Goods, Deposit
Account, Document, Equipment, Farm Products, Fixtures, General
Intangible, Goods, Instrument, Inventory, Investment Property,
Letter-of-Credit Right, Manufactured Home, Proceeds, Software,
Standing Timber, Supporting Obligation and Tangible Chattel
Paper.
(c) As used herein, the following
terms shall have the meanings set forth below:
“ Collateral ”
has the meaning provided in Section 2 hereof.
“ Copyright License
” means any written agreement, naming any Grantor as
licensor, granting any right under any Copyright including, without
limitation, any thereof referred to in Schedule 6.17 to the
Credit Agreement.
“ Copyrights ”
means (a) all registered United States copyrights in all
Works, now existing or hereafter created or acquired, all
registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, registrations,
recordings and applications in the United States Copyright Office
including, without limitation, any thereof referred to in
Schedule 6.17 to the Credit Agreement, and (b) all
renewals thereof including, without limitation, any thereof
referred to in Schedule 6.17 to the Credit
Agreement.
“ Patent License
” means any agreement, whether written or oral, providing for
the grant by or to a Grantor of any right to manufacture, use or
sell any invention covered by a Patent, including, without
limitation, any thereof referred to in Schedule 6.17 to the
Credit Agreement.
“ Patents ” means
(a) all letters patent of the United States or any other
country and all reissues and extensions thereof, including, without
limitation, any letters patent referred to in Schedule 6.17
to the Credit Agreement, and (b) all applications for letters
patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without
limitation, any thereof referred to in Schedule 6.17 to the
Credit Agreement.
“ Secured Obligations
” means, without duplication, (a) all of the Obligations
and (b) all costs and expenses incurred in connection with
enforcement and collection of the Obligations, including Attorney
Costs.
“ Trademark License
” means any agreement, written or oral, providing for the
grant by or to a Grantor of any right to use any Trademark,
including, without limitation, any thereof referred to in
Schedule 6.17 to the Credit Agreement.
“ Trademarks ”
means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business
identifiers, and the goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in
the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state thereof or any
other country or any political subdivision thereof, or otherwise,
including, without limitation, any thereof referred to in
Schedule 6.17 to the Credit Agreement, and (b) all
renewals thereof.
“ UCC ” means the
Uniform Commercial Code.
“ Work ” means
any work that is subject to copyright protection pursuant to Title
17 of the United States Code.
2. Grant of Security Interest in
the Collateral . To secure the prompt payment and performance
in full when due, whether by lapse of time, acceleration, mandatory
prepayment or otherwise, of the Secured Obligations, each Grantor
hereby grants to the Administrative Agent, for the benefit of the
holders of the Secured Obligations, a continuing security interest
in, and a right to set off against, any and all right, title and
interest of such Grantor in and to all of the following, whether
now owned or existing or owned, acquired, or arising hereafter
(collectively, the “ Collateral ”):
(a) all Accounts;
(b) all cash and
currency;
(c) all Chattel Paper;
(d) those Commercial Tort Claims
identified on Schedule 2(d) attached hereto;
(e) all Copyrights;
(f) all Copyright
Licenses;
(g) all Deposit Accounts;
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(h) all Documents;
(i) all Equipment;
(j) all Fixtures;
(k) all General
Intangibles;
(l) all Instruments;
(m) all Inventory;
(n) all Investment
Property;
(o) all Letter-of-Credit
Rights;
(p) all Patents;
(q) all Patent Licenses;
(r) all Software;
(s) all Supporting
Obligations;
(t) all Trademarks;
(u) all Trademark
Licenses;
(v) all other personal property of
such Grantor of whatever type or description; and
(w) to the extent not otherwise
included, all Accessions and all Proceeds of any and all of the
foregoing.
Notwithstanding anything to the
contrary contained herein, the security interests granted under
this Security Agreement shall not extend to (i) any Property
that is subject to a Lien securing Indebtedness permitted under
Section 8.01(b) , (i) or (p)
of the Credit Agreement pursuant to documents that prohibit
such Grantor from granting any other Liens in such Property or
(ii) any lease, license or other contract if the grant of a
security interest in such lease, license or contract in the manner
contemplated by this Security Agreement is prohibited by the terms
of such lease, license or contract and would result in the
termination thereof, but only to the extent that (A) after
reasonable efforts, consent from the relevant party or parties has
not been obtained and (B) any such prohibition could not be
rendered ineffective pursuant to the UCC or any other applicable
law (including Debtor Relief Laws) or principles of
equity.
The Grantors and the Administrative
Agent, on behalf of the holders of the Secured Obligations, hereby
acknowledge and agree that the security interest created hereby in
the Collateral (i) constitutes continuing collateral security
for all of the Secured Obligations, whether now existing or
hereafter arising and (ii) is not to be construed as an
assignment of any Copyrights, Copyright Licenses, Patents, Patent
Licenses, Trademarks or Trademark Licenses.
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3. Provisions Relating to
Accounts .
(a) Anything herein to the contrary
notwithstanding, each of the Grantors shall remain liable under
each of the Accounts to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to each such
Account. Neither the Administrative Agent nor any holder of the
Secured Obligations shall have any obligation or liability under
any Account (or any agreement giving rise thereto) by reason of or
arising out of this Security Agreement or the receipt by the
Administrative Agent or any holder of the Secured Obligations of
any payment relating to such Account pursuant hereto, nor shall the
Administrative Agent or any holder of the Secured Obligations be
obligated in any manner to perform any of the obligations of a
Grantor under or pursuant to any Account (or any agreement giving
rise thereto), to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to
the sufficiency of any performance by any party under any Account
(or any agreement giving rise thereto), to present or file any
claim, to take any action to enforce any performance or to collect
the payment of any amounts that may have been assigned to it or to
which it may be entitled at any time or times.
(b) At any time after the occurrence
and during the continuation of an Event of Default, the
Administrative Agent shall have the right, but not the obligation,
to make test verifications of the Accounts in any manner and
through any medium that it reasonably considers advisable, and the
Grantors shall furnish all such assistance and information as the
Administrative Agent may require in connection with such test
verifications, (ii) upon the Administrative Agent’s
request and at the expense of the Grantors, the Grantors shall
cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports
showing reconciliations, aging and test verifications of, and trial
balances for, the Accounts and (iii) the Administrative Agent
in its own name or in the name of others may communicate with
account debtors on the Accounts to verify with them to the
Administrative Agent’s satisfaction the existence, amount and
terms of any Accounts.
4. Representations and
Warranties . Each Grantor hereby represents and warrants to the
Administrative Agent, for the benefit of the holders of the Secured
Obligations, that so long as any of the Secured Obligations remains
outstanding and until all of the commitments relating thereto have
been terminated:
(a) Ownership . Each Grantor
is the legal and beneficial owner of its Collateral and has the
right to pledge, sell, assign or transfer the same.
(b) Security
Interest/Priority . This Security Agreement creates a valid
security interest in favor of the Administrative Agent, for the
benefit of the holders of the Secured Obligations, in the
Collateral of such Grantor and, when properly perfected by filing,
shall constitute a valid perfected security interest in such
Collateral, to the extent such security interest can be perfected
by filing under the UCC, free and clear of all Liens except for
Permitted Liens.
(c) Types of Collateral .
None of the Collateral consists of, or is the Accessions or the
Proceeds of, As-Extracted Collateral, Consumer Goods, Farm
Products, Manufactured Homes, or Standing Timber.
(d) Accounts . (i) Each
Account of the Grantors and the papers and documents relating
thereto are genuine and in all material respects what they purport
to be, (ii) each Account arises out of (A) a bona fide
sale of goods sold and delivered by such Grantor (or is in the
process of being delivered) or (B) services theretofore
actually rendered by such Grantor to, the account debtor named
therein, and (iii) no surety bond was required or given in
connection with any Account of a Grantor or the contracts or
purchase orders out of which they arose.
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(e) Inventory . No Inventory
is held by any Person other than a Grantor pursuant to consignment,
sale or return, sale on approval or similar arrangement.
5. Covenants . Each Grantor
covenants that, so long as any of the Secured Obligations remains
outstanding and until all of the commitments relating thereto have
been terminated, such Grantor shall:
(a) Other Liens . Defend the
Collateral against the claims and demands of all other parties
claiming an interest therein other than Permitted Liens.
(b) Instruments/Tangible Chattel
Paper/Documents . If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any
Instrument or Tangible Chattel Paper, or if any property
constituting Collateral shall be stored or shipped subject to a
Document, (i) ensure that such Instrument, Tangible Chattel
Paper or Document is either in the possession of such Grantor at
all times or, if requested by the Administrative Agent, is
immediately delivered to the Administrative Agent, duly endorsed in
a manner satisfactory to the Administrative Agent and
(ii) ensure that any Collateral consisting of Tangible Chattel
Paper is marked with a legend acceptable to the Administrative
Agent indicating the Administrative Agent’s security interest
in such Tangible Chattel Paper.
(c) Perfection of Security
Interest . Execute and deliver to the Administrative Agent such
agreements, assignments or instruments (including affidavits,
notices, reaffirmations and amendments and restatements of existing
documents, as the Administrative Agent may reasonably request) and
do all such other things as the Administrative Agent may reasonably
deem necessary, appropriate or convenient (i) to assure to the
Administrative Agent the effectiveness and priority of its security
interests hereunder, including (A) such instruments as the
Administrative Agent may from time to time reasonably request in
order to perfect and maintain the security interests granted
hereunder in accordance with the UCC, (B) with regard to
Copyrights, a Notice of Grant of Security Interest in Copyrights
for filing with the United States Copyright Office in the form of
Schedule 5(f)(i) attached hereto, (C) with regard to
Patents, a Notice of Grant of Security Interest in Patents for
filing with the United States Patent and Trademark Office in the
form of Schedule 5(f)(ii) attached hereto and (D) with
regard to Trademarks, a Notice of Grant of Security Interest in
Trademarks for filing with the United States Patent and Trademark
Office in the form of Schedule 5(f)(iii) attached hereto,
(ii) to consummate the transactions contemplated hereby and
(iii) to otherwise protect and assure the Administrative Agent
of its rights and interests hereunder. To that end, each Grantor
authorizes the Administrative Agent to file one or more financing
statements (with collateral descriptions broader and/or less
specific than the description of the Collateral contained herein)
disclosing the Administrative Agent’s security interest in
any or all of the Collateral of such Grantor without such
Grantor’s signature thereon, and further each Grantor also
hereby irrevocably makes, constitutes and appoints the
Administrative Agent, its nominee or any other Person whom the
Administrative Agent may designate, as such Grantor’s
attorney-in-fact with full power and for the limited purpose to
sign in the name of such Grantor any such financing statements
(including renewal statements), amendments and supplements, notices
or any similar documents that in the Administrative Agent’s
reasonable discretion would be necessary, appropriate or convenient
in order to perfect and maintain perfection of the security
interests granted hereunder, such power, being coupled with an
interest, being and remaining irrevocable so long as the Secured
Obligations remain unpaid and until the commitments relating
thereto shall have been terminated. Each Grantor hereby agrees that
a carbon, photographic or other reproduction of this Security
Agreement or any such financing statement is sufficient for filing
as a financing statement by the Administrative Agent without notice
thereof to such Grantor wherever the Administrative Agent may in
its sole discretion desire to file the same. In the event for any
reason the law of any jurisdiction other than North Carolina
becomes or is applicable to the Collateral of any Grantor or any
part thereof, or to any of the Secured Obligations, such Grantor
agrees to execute and deliver all such instruments and to do
all
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such other things as the
Administrative Agent in its sole discretion reasonably deems
necessary, appropriate or convenient to preserve, protect and
enforce the security interests of the Administrative Agent under
the law of such other jurisdiction (and, if a Grantor shall fail to
do so promptly upon the request of the Administrative Agent, then
the Administrative Agent may execute any and all such requested
documents on behalf of such Grantor pursuant to the power of
attorney granted hereinabove). If any Collateral is in the
possession or control of a Grantor’s agents and the
Administrative Agent so requests, such Grantor agrees to notify
such agents in writing of the Administrative Agent’s security
interest therein and, upon the Administrative Agent’s
request, instruct them to hold all such Collateral for the account
of the holders of the Secured Obligations and subject to the
Administrative Agent’s instructions. Each Grantor agrees to
mark its books and records to reflect the security interest of the
Administrative Agent in the Collateral.
(d) Control . After the
occurrence and during the continuation of an Event of Default,
execute and deliver all agreements, assignments, instruments or
other documents as the Administrative Agent shall reasonably
request for the purpose of obtaining and maintaining control within
the meaning of the UCC with respect to any Collateral consisting of
Deposit Accounts, Investment Property, Letter-of-Credit Rights and
Electronic Chattel Paper.
(e) Collateral held by
Warehouseman, Bailee, etc . If any Collateral is at any time in
the possession or control of a warehouseman, bailee, agent or
processor of such Grantor, (i) notify the Administrative Agent
of such possession or control, (ii) notify such Person of the
Administrative Agent’s security interest in such Collateral,
(iii) instruct such Person to hold all such Collateral for the
Administrative Agent’s account and subject to the
Administrative Agent’s instructions and (iv) use its
best efforts to obtain an acknowledgment from such Person that it
is holding such Collateral for the benefit of the Administrative
Agent.
(f) Treatment of Accounts .
Not grant or extend the time for payment of any Account, or
compromise or settle any Account for less than the full amount
thereof, or release any Person or property, in whole or in part,
from payment thereof, or allow any credit or discount thereon,
other than as normal and customary in the ordinary course of a
Grantor’s business or as required by law.
(g) Covenants Relating to
Copyrights .
(i) Not do any act or knowingly omit
to do any act whereby any material Copyright may become invalidated
and (A) not do any act, or knowingly omit to do any act,
whereby any material Copyright may become injected into the public
domain; (B) notify the Administrative Agent immediately if it
knows that any material Copyright may become injected into the
public domain or of any adverse determination or development
(including, without limitation, the institution of, or any such
determination or development in, any court or tribunal in the
United States or any other country) regarding a Grantor’s
ownership of any such Copyright or its validity; (C) take all
necessary steps as it shall deem appropriate under the
circumstances, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each registration
of each material Copyright owned by a Grantor including, without
limitation, filing of applications for renewal where necessary; and
(D) promptly notify the Administrative Agent of any material
infringement of any material Copyright of a Grantor of which it
becomes aware and take such actions as it shall reasonably deem
appropriate under the circumstances to protect such Copyright,
including, where appropriate, the bringing of suit for
infringement, seeking injunctive relief and seeking to recover any
and all damages for such infringement.
(ii) Not make any assignment or
agreement in conflict with the security interest in the Copyrights
of each Grantor hereunder.
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(h) Covenants Relating to Patents
and Trademarks .
(i) (A) Continue to use each
Trademark on each and every trademark class of goods applicable to
its current line as reflected in its current catalogs, brochures
and price lists in order to maintain such Trademark in full force
free from any claim of abandonment for non-use, (B) maintain
as in the past the quality of products and services offered under
such Trademark, (C) employ such Trademark with the appropriate
notice of registration, (D) not adopt or use any mark that is
confusingly similar or a colorable imitation of such Trademark
unless the Administrative Agent, for the ratable benefit of the
holders of the Secured Obligations, shall obtain a perfected
security interest in such mark pursuant to this Security Agreement,
and (E) not (and not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby any
Trademark may become invalidated.
(ii) Not do any act, or omit to do
any act, whereby any Patent may become abandoned or
dedicated.
(iii) Notify the Administrative
Agent and the holders of the Secured Obligations immediately if it
knows that any application or registration relating to any Patent
or Trademark may become abandoned or dedicated, or of any adverse
determination or development (including, without limitation, the
institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office or any
court or tribunal in any country) regarding a Grantor’s
ownership of any Patent or Trademark or its right to register the
same or to keep and maintain the same.
(iv) Whenever a Grantor, either by
itself or through an agent, employee, licensee or designee, shall
file an application for the registration of any Patent or Trademark
with the United States Patent and Trademark Office or any similar
office or agency in any ot
