Exhibit
10.6
SECURITY
AGREEMENT
This SECURITY AGREEMENT (as the same may from time to time be
amended, restated or otherwise modified, this
“Agreement”) is made as of the 30 th day of July, 2007 by
MEDIABISTRO.COM INC., a Delaware corporation
(“Pledgor”), in favor of KEYBANK NATIONAL ASSOCIATION,
as the administrative agent under the Credit Agreement, as
hereinafter defined (“Agent”), for the benefit of Agent
and the Lenders, as hereinafter defined.
1. Recitals
.
JUPITERMEDIA CORPORATION, a Delaware corporation (together with its
successors and assigns, “Borrower”), entered into that
certain Credit and Security Agreement, dated as of July 12,
2007, with the lenders from time to time listed on Schedule
1 thereto (together with their respective successors and
assigns and any other additional lenders that become party to the
Credit Agreement, collectively, the “Lenders” and,
individually, each a “Lender”), Agent, and Citizens
Bank, N.A., as the syndication agent (as the same may from time to
time be amended, restated or otherwise modified, the “Credit
Agreement”). Pledgor desires that the Lenders grant the
financial accommodations to Borrower as described in the Credit
Agreement.
Pledgor, a subsidiary of Borrower whose financing is provided by
the Loans and Letters of Credit, as each term is defined in the
Credit Agreement, deems it to be in the direct pecuniary and
business interests of Pledgor that Borrower obtain from the Lenders
the Commitment, as defined in the Credit Agreement, and the Loans
and Letters of Credit, provided for in the Credit Agreement.
Pledgor understands that the Lenders are willing to grant such
financial accommodations only upon certain terms and conditions,
one of which is that Pledgor grant to Agent, for the benefit of the
Lenders, a security interest in and a collateral assignment of the
Collateral, as hereinafter defined, and this Agreement is being
executed and delivered in consideration of the Lenders entering
into the Credit Agreement and each financial accommodation granted
to Borrower by the Lenders and for other valuable
consideration.
2.
Definitions . Except as specifically defined
herein, (a) capitalized terms used herein that are defined in
the Credit Agreement shall have their respective meanings ascribed
to them in the Credit Agreement, and (b) unless otherwise
defined in the Credit Agreement, terms that are defined in the
U.C.C. are used herein as so defined. As used in this Agreement,
the following terms shall have the following meanings:
“Account” means all of Pledgor’s accounts, as
defined in the U.C.C.
“Account Debtor” means any Person obligated to pay all
or any part of any Account in any manner and includes (without
limitation) any guarantor thereof or other accommodation party
therefor.
“Cash Collateral Account” means a commercial Deposit
Account designated “cash collateral account” and
maintained by Pledgor with Agent, and any interest earned thereon,
from which account Agent shall have the exclusive right to withdraw
funds until all of the Obligations are paid in full.
“Cash Security” means all cash, instruments, Deposit
Accounts, and other cash equivalents, whether matured or unmatured,
whether collected or in the process of collection, upon which
Pledgor presently has or may hereafter have any claim, wherever
located, including but not limited to any of the foregoing that are
presently or may hereafter be existing or maintained with, issued
by, drawn upon, or in the possession of Agent or any Lender.
“Collateral” means all of Pledgor’s existing and
future (a) personal property; (b) Accounts, Investment
Property, instruments, contract rights, chattel paper, documents,
supporting obligations, letter-of-credit rights, Pledged Notes,
commercial tort claims, General Intangibles, Inventory and
Equipment; (c) funds now or hereafter on deposit in the Cash
Collateral Account, if any; (d) Cash Security; and
(e) Proceeds of any of the foregoing; provided that Collateral
shall exclude (i) any fixed asset that is subject to a
purchase money security interest or capital lease permitted under
the Credit Agreement to the extent that and only so long as the
agreements with respect to such purchase money security interest or
capital lease, as the case may be, specifically prohibit additional
Liens, (ii) licenses and contracts which by the terms of such
licenses and contracts prohibit the assignment of such agreements
(to the extent such prohibition is enforceable at law),
(iii) equity interests in (A) any direct Foreign
Subsidiary in excess of (1) sixty-five percent (65%) of
the total combined voting power of all classes of equity interests
or stock of such Foreign Subsidiary’s stock or other equity
interests, and (2) one hundred percent (100%) of the
non-voting equity interests or stock of such Foreign
Subsidiary’s stock or other equity interests, and
(B) any indirect Foreign Subsidiary, and (iv) any
letter-of-credit right for a specified purpose, to the extent
Pledgor is required by applicable law to apply the proceeds of such
letter-of-credit right for such specified purpose.
“Deposit Account” means (a) a deposit account, as
defined in the U.C.C., (b) any other deposit account, and
(c) any demand, time, savings, checking, passbook or similar
account maintained with a bank, savings and loan association,
credit union, or similar organization; provided that Deposit
Account shall exclude any Deposit Account that is a trust or
special account exclusively comprised of funds for (i) payroll
(and related payroll taxes), (ii) 401(k) and other retirement
plans and employee benefits, including rabbi trusts for deferred
compensation, (iii) health care benefits, and (iv) escrow
arrangements (e.g., environmental indemnity accounts).
“Equipment” means all of Pledgor’s equipment, as
defined in the U.C.C.
“Event of Default” means an event or condition that
constitutes an Event of Default, as defined in Section 15.1
hereof.
“General Intangibles” means all of Pledgor’s
(a) general intangibles, as defined in the U.C.C.; and
(b) choses in action, causes of action, intellectual property,
customer lists, corporate or other business records, inventions,
designs, patents, patent applications, service marks,
- 2 -
registrations, trade
names, trademarks, copyrights, licenses, goodwill, computer
software, rights to indemnification and tax refunds.
“Immaterial Deposit Account” means a Deposit Account
maintained by Pledgor that at all times, has a balance of less than
One Hundred Thousand Dollars ($100,000); provided that the
Immaterial Deposit Accounts of all Credit Parties shall not, at any
time, aggregate in excess of One Hundred Thousand Dollars
($100,000).
“Inventory” means all of Pledgor’s inventory, as
defined in the U.C.C.
“Investment Property” means all of Pledgor’s
investment property, as defined in the U.C.C., unless the Uniform
Commercial Code as in effect in another jurisdiction would govern
the perfection and/or priority of a security interest in investment
property, and, in such case, investment property shall be defined
in accordance with the law of that jurisdiction as in effect from
time to time.
“ITU Application” shall mean a trademark application
filed with the USPTO pursuant to 15 U.S.C. § 1051(b).
“Obligations” means, collectively, (a) all
Indebtedness and other obligations now owing or hereafter incurred
by Borrower to Agent, the Fronting Lender, the Swing Line Lender or
any Lender pursuant to the Credit Agreement, and includes the
principal of and interest on all Loans and all obligations pursuant
to Letters of Credit; (b) each renewal, extension,
consolidation or refinancing of any of the foregoing, in whole or
in part; (c) all interest from time to time accruing on any of
the foregoing, and all fees and other amounts payable to Agent or
any Lender pursuant to the Credit Agreement or any other Loan
Document; (d) all obligations and liabilities of the Companies
owing to Lenders under Hedge Agreements; (e) the Bank Product
Obligations owing to Lenders under Bank Product Agreements;
(f) every other liability, now or hereafter owing to Agent or
any Lender by any Company or Pledgor pursuant to the Credit
Agreement or any other Loan Document; and (g) all Related
Expenses.
“Pledged Notes” means the promissory notes payable to
Pledgor, as described on Schedule 1 hereto, and any
additional or future note with an unpaid principal amount exceeding
One Hundred Thousand Dollars ($100,000) that may hereafter from
time to time be payable to Pledgor.
“Proceeds” means (a) proceeds, as defined in the
U.C.C. and any other proceeds, and (b) whatever is received
upon the sale, exchange, collection or other disposition of
Collateral or proceeds, whether cash or non-cash. Cash proceeds
include, without limitation, moneys, checks, and Deposit Accounts.
Proceeds include, without limitation, any Account arising when the
right to payment is earned under a contract right, any insurance
payable by reason of loss or damage to the Collateral, and any
return or unearned premium upon any cancellation of insurance.
Except as expressly authorized in this Agreement, the right of
Agent and the Lenders to Proceeds specifically set forth herein, or
indicated in any financing statement, shall never constitute an
express or implied authorization on the part of Agent or any Lender
to Pledgor’s sale, exchange, collection, or other disposition
of any or all of the Collateral.
- 3 -
“Trademark Act” shall mean the U.S Trademark Act of
1946, as amended.
“U.C.C.” means the Uniform Commercial Code, as in
effect from time to time in Ohio.
“U.C.C. Financing Statement” means a financing
statement filed or to be filed in accordance with the Uniform
Commercial Code, as in effect from time to time in the relevant
state or states.
3. Security
Interest . In consideration of and as security for
the full and complete payment of all of the Obligations, Pledgor
hereby grants to Agent, for the benefit of the Lenders, a security
interest in and a collateral assignment of the Collateral. Pledgor,
Agent and the Lenders hereby acknowledge and agree that, with
respect to any ITU Application included within the Collateral, to
the extent such an ITU Application would, under the Trademark Act,
be deemed to be transferred in violation of 15 U.S.C. §
1060(a) as a result of the security interest granted herein, or
otherwise invalidated or made unenforceable as a result of the
execution or performance of this Agreement, no security interest
shall be deemed to have been granted in such ITU Application
(notwithstanding the provisions of this Agreement or any other Loan
Document) until such time as the circumstances that would give rise
to such violation, invalidation or unenforceability no longer
exist.
4.
Representations and Warranties . Pledgor hereby
represents and warrants to Agent and each Lender as follows:
4.1. Pledgor is a corporation duly
organized, validly existing and in good standing under the laws of
its state of incorporation and is duly qualified to do business in
each state in which a failure to so qualify would have a material
adverse effect on Pledgor.
4.2. Pledgor has full power, authority and
legal right to pledge the Collateral, to execute and deliver this
Agreement, and to perform and observe the provisions hereof. The
officers acting on Pledgor’s behalf have been duly authorized
to execute and deliver this Agreement. This Agreement is valid and
binding upon Pledgor in accordance with the terms hereof.
4.3. Neither the execution and delivery of
this Agreement, nor the performance and observance of the
provisions hereof, by Pledgor will materially conflict with, or
constitute a material violation or default under, any provision of
any applicable law or of any contract (including, without
limitation, Pledgor’s certificate (or articles) of
incorporation and bylaws (or regulations) or of any other writing
binding upon Pledgor in any manner.
4.4. Pledgor is organized solely under the
laws of the State of Delaware and has not continued existence from
any other jurisdiction. Pledgor’s chief executive office is
set forth on Schedule 4 hereto. Pledgor has places of
business or maintains Collateral at the locations set forth on
Schedule 4 hereto.
- 4 -
4.5.
At the execution and delivery hereof,
except as permitted pursuant to the Credit Agreement,
(a) there is no effective U.C.C. Financing Statement
outstanding covering the Collateral, or any part thereof;
(b) none of the Collateral is subject to any security interest
or Lien of any kind; (c) the Internal Revenue Service has not
alleged the nonpayment or underpayment of any tax by Pledgor or
threatened to make any assessment in respect thereof; and
(d) upon execution of this Agreement and the filing of the
U.C.C. Financing Statements in connection herewith, Agent will
have, for the benefit of the Lenders, a valid and enforceable first
security interest in the Collateral (to the extent perfection can
be accomplished by such filing or action) that is the type in which
a security interest may be created under the U.C.C. by the
execution of a security agreement and perfected by the filing of a
U.C.C. Financing Statement (other than commercial tort claims).
Pledgor does not own any Subsidiaries.
4.6. Pledgor has received consideration
that is the reasonably equivalent value of the obligations and
liabilities that Pledgor has incurred to the Lenders. Pledgor is
not insolvent, as defined in any applicable state or federal
statute, nor will Pledgor be rendered insolvent by the execution
and delivery of this Agreement to Agent or any other documents
executed and delivered to Agent or the Lenders in connection
herewith. Pledgor has not engaged, nor is Pledgor about to engage,
in any business or transaction for which the assets retained by it
are or will be an unreasonably small amount of capital, taking into
consideration the obligations to the Lenders incurred hereunder.
Pledgor does not intend to, nor does it believe that it will, incur
debts beyond its ability to pay such debts as they mature.
4.7. At the execution and delivery hereof,
no Event of Default will exist.
5. Insurance
. Pledgor shall at all times maintain insurance upon
the Inventory, Equipment and other personal and real property in
accordance with Section 5.1 of the Credit Agreement.
6. Taxes and
Other Pledgor Obligations . Pledgor shall pay in
full (a) all taxes, assessments and governmental charges and
levies in accordance with Section 5.2 of the Credit Agreement;
(b) all of its wage obligations to its employees in accordance
with Section 5.2 of the Credit Agreement; (c) all
obligations under the Employees Retirement Income Security Act of
1974, as amended from time to time, in accordance with
Section 5.6 of the Credit Agreement; and (d) all of
Pledgor’s other obligations calling for the payment of money
in accordance with Section 5.2 of the Credit Agreement.
7. Corporate
Names and Location of Collateral . Pledgor shall
not (a) change its name, or (b) change its jurisdiction
or form of organization or extend or continue its existence in or
to any other jurisdiction (other than its jurisdiction of
organization at the date of this Agreement) except in accordance
with Section 5.19 of the Credit Agreement. Agent is hereby
authorized to file new U.C.C. Financing Statements describing the
Collateral and otherwise in form and substance sufficient for
recordation wherever necessary or appropriate, as determined in
Agent’s sole discretion, to perfect or continue perfected the
security interest of Agent, for the benefit of the Lenders, in the
Collateral. Pledgor shall pay all filing and recording fees and
taxes in connection with the filing or recordation of such U.C.C.
Financing Statements and shall
- 5 -
immediately reimburse
Agent therefor if Agent pays the same. Such amounts not so paid or
reimbursed shall be Related Expenses.
8. Financial
Records . Pledgor shall forward to Agent, upon
request of Agent or any Lender, whenever made, (a) invoices,
sales journals or other documents satisfactory to Agent or such
Lender, as the case may be, that summarize the Accounts, certified
by an officer of Pledgor, (b) within the time specified by
Agent, an aging report of the Accounts then outstanding setting
forth, in such form and detail and with such representations and
warrantie
