THIS SECURITY AGREEMENT (“ Security Agreement ”) is made as of March 29, 2005, by and between EPICOR SOFTWARE CORPORATION , a Delaware corporation (“ Debtor ”), and KEYBANK NATIONAL ASSOCIATION , as Administrative Agent (“ KeyBank ” or “ Agent ”) for the parties identified as Lenders (together with KeyBank in its capacity as a Lender, the “Lenders”) under that certain Credit Agreement of even date herewith between Debtor, Agent and the Lenders (the “ Credit Agreement ”).
1. Concurrently herewith Debtor is entering into the Credit Agreement, pursuant to which the Lenders shall provide Debtor with a senior secured revolving credit facility (the “ Revolving Credit Facility ”).
2. Pursuant to the Credit Agreement Lenders shall make various advances and will provide Debtor with certain letters of credit (the “ Letters of Credit ”).
3. It is a prerequisite to the Lenders’ entering into the Credit Agreement that Debtor enter into this Security Agreement and grant to the Agent for itself and the ratable benefit of the Lenders, the security interest hereafter provided to secure the Obligations.
4. Debtor as owner of the assets encumbered hereby, desires to enter into this Security Agreement to secure payment and performance of the Obligations.
NOW, THEREFORE, for good and valuable consideration, receipt and adequacy of which is hereby acknowledged, the parties agree as follows:
1. GENERAL .
1.1 Definitions . For purposes of this Security Agreement, the following terms shall have the meanings specified below. In addition terms not defined below which are defined in Article 8 or Article 9 of the UCC or in the Credit Agreement shall have the meaning specified therein.
(a) Account Debtors . “Account Debtors” means all persons who now are or hereafter become in any way obligated, liable, or responsible for any payment of any kind in connection with any or all of the Accounts.
(b) Accounts . The term “Accounts” shall have the meaning provided in the UCC and shall include, without limitation, all presently existing and hereafter arising accounts (as defined in the UCC), contract rights, royalties, and other forms of obligations owing to Debtor arising out of (i) the sale or lease of goods, (ii) the sale or licensing of software, patents, trademarks, copyrights and other intellectual property or technology, (iii) the rendering of services (whether or not earned by performance), or (iv) any credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Debtor.
(c) Agent . The term “Agent” shall have the meaning given to such term in the preamble to this Security Agreement.
(d) Bankruptcy Code . The term “Bankruptcy Code” shall mean the Bankruptcy Reform Act of 1978 (11 U.S.C. § 101-1330) as now enacted or hereafter modified.
(e) Certificates of Ownership . The term “Certificates of Ownership” shall mean all of Debtor’s certificates of title.
(f) Collateral . The term “Collateral” shall mean the personal property assets identified as “Collateral” in Exhibit A to this Security Agreement.
(g) Copyrights . The term “Copyrights” shall have the meaning provided in the UCC and shall include, without limitation, all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held.
(h) Debtor’s Books . The term “Debtor’s Books” shall mean all of Debtor’s books and records including, but not limited to: minute books; ledgers, records indicating, summarizing or evidencing Debtor’s assets, liabilities, the Collateral, the Obligations, and all information relating thereto; records indicating, summarizing or evidencing Debtor’s business operations or financial condition; and all computer programs, disc or tape files, printouts, runs, and other computer prepared information and the equipment containing such information.
(i) Deposit Account . The term “Deposit Accounts” shall have the meaning provided in the UCC.
(j) Dispose or Disposition . The term Dispose or Disposition shall mean any sale, lease, transfer or other disposition of the Inventory (including any sale leaseback transaction).
(k) Equipment . The term “Equipment” shall have the meaning provided in the UCC, wherever located, and shall include, without limitation, machinery, machine tools, motors, controls, attachments, parts, tools, and accessories incidental thereto, computer and office equipment, furniture, furnishings, fixtures, motor vehicles, trailers and rolling stock; and all substitutions, replacements, accessories, additions, attachments, improvements, accessions, Proceeds and products of the foregoing.
(l) Event of Default . The term “Event of Default” shall have the meaning given to such term in Section 5 of this Security Agreement.
(m) General Intangibles . The term “General Intangibles” shall have the meaning provided in the UCC, and shall include without limitation, all interests or claims on insurance policies; all interests in any partnership; all Intellectual Property; trade names, trade name rights; trademarks, trademark rights, copyrights, patents, and all applications therefor; licenses, permits, franchises, and like privileges or rights issued by any governmental or regulatory authority; income tax refunds; customer lists; route lists, purchase orders, computer programs, computer disks, computer tapes; design rights, payments of insurance, claims and causes of action; and all guaranty claims which are not classified as supporting obligations, co-op memberships, leasehold interests in personal property, security interests or other security held by or granted to the Debtor to secure payment by an account debtor of any of the Accounts.
(n) Governmental Authority . The term “Governmental Authority” shall mean (a) any international, foreign, federal, state, county or municipal government, or political subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality, central bank or public body, or (c) any court, administrative tribunal or public utility.
(o) Intellectual Property Collateral . The term “Intellectual Property Collateral” shall mean all of the following assets now owned or hereafter acquired:
(i) Copyrights, Trademarks, Patents, and Mask Works;
(ii) Licenses or other rights to use any of the Copyrights, Patents, Trademarks, or Mask Works, and all license fees and royalties arising from such use to the extent permitted by such license or rights;
(iii) Any and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired or held;
(iv) Any and all design rights which may be available to Debtor now or hereafter existing, created, acquired or held;
(v) Any and all claims for damages by way of past, present and future infringement of any of the rights included above, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified above;
(vi) All “domain names” of Debtor;
(vii) All amendments, renewals and extensions of any of the Copyrights, Trademarks, Patents, or Mask Works;
(viii) All contracts and contract rights relating to any of the foregoing; and
(ix) All Proceeds of the foregoing.
(p) Inventory . The term “Inventory” shall have the meaning provided in the UCC, and shall include, without limitation, merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned by or in the custody or possession, actual or constructive, of Debtor, including such inventory as is temporarily out of its custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above.
(q) Lenders . The term “Lenders” shall have the meaning given to such term in the preamble to this Security Agreement.
(r) Lender Expenses . The term “Lender Expenses” means: all costs and expenses incurred by Agent and/or the Lenders in connection with this Security Agreement or the transactions contemplated hereby, including, without limitation, (i) all costs or expenses required to be paid by Debtor under this Security Agreement which are paid or advanced by Agent and/or the Lenders; (ii) all costs or expenses required to be paid by Debtor under the Credit Agreement which are paid or advanced by Agent and/or the Lenders; (iii) taxes and insurance premiums of every nature and kind of Debtor paid by Agent and/or the Lenders; (iv) filing, recording, publication, search fees, appraiser fees, auditor fees paid or incurred by Lenders in connection with Agent’s and/or Lenders’ transactions with Debtor; (v) costs and expenses incurred by Agent and/or the Lenders in collecting or realizing upon the Collateral (with or without suit), to correct any default or enforce any provision of this Security Agreement, costs and expenses of suit incurred by Agent and/or the Lenders in enforcing or defending this Security Agreement or any portion hereof; and (vi) reasonable attorneys’ fees and expenses incurred by Agent and/or the Lenders in advising, structuring, drafting, reviewing, amending, terminating, enforcing, defending or concerning this Security Agreement, any portion hereof, any agreement related hereto, or any of the transactions contemplated hereby, whether or not suit is brought, and including, but not limited to, any expenses incurred in any proceedings or case in the U.S. Bankruptcy Courts in enforcing or defending its rights in its collateral, under this Security Agreement or under any note or other document executed in connection with this Security Agreement.
(s) Licenses . The term “Licenses” shall mean all licenses or other rights to use any of the Copyrights, Patents, Trademarks, or Mask Works and all license fees and royalties arising from such use to the extent permitted by such license or right.
(t) Lien . The term “Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement (including in the nature of, cash collateral accounts or security interests), encumbrance, lien (statutory or other), fixed or floating charge, or other security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the UCC or comparable laws of any jurisdiction), including the interest of a purchaser of accounts receivable.
(u) Loan Documents . The term “Loan Documents” shall have the meaning given to such term in the Credit Agreement, including all extensions, modifications, renewals or amendments to such Loan Documents, and shall include all other documents executed in connection therewith.
(v) Mask Works . The term “Mask Works” shall have the meaning provided in the UCC and shall include without limitation all mask work or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired.
(w) Material Adverse Effect . The term “Material Adverse Effect” shall mean any set of circumstances or events which (a) has any material adverse effect upon the validity or enforceability of any Loan Document, (b) is material and adverse to the financial condition, business, assets or operations of Debtor, or (c) materially impairs the ability of Debtor to perform the Obligations.
(x) Negotiable Collateral . The term “Negotiable Collateral” shall mean all of Debtor’s present and future letters of credit (of which it is a beneficiary), notes, drafts, instruments, securities, documents of title, and chattel paper.
(y) Obligations . The term “Obligations” shall have the meaning given to such term in the Credit Agreement, including whether Debtor may be liable individually or jointly, or whether recovery upon such debt may be or become barred by any statute of limitations or otherwise unenforceable, including all attorneys’ fees and costs now or hereafter payable by Debtor to the Agent and/or the Lenders under the Loan Documents or in connection with the collection and enforcement of such debts, obligations and liabilities. Notwithstanding anything to the contrary contained in this Security Agreement, this Security Agreement shall not secure and the term “Obligations” shall not include any debts that are or may hereafter constitute “consumer credit” which is subject to the disclosure requirements of the federal Truth-In Lending Act (15 U.S.C. Section 1601, et seq.) or any similar state law in effect from time to time, unless Agent and Debtor shall otherwise agree in a separate written agreement.
(z) Patents . The term “Patents” shall have the meaning provided in the UCC and shall include without limitation all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.
(aa) Priority Liens . The term “Priority Liens” shall mean and refer to (i) Liens on any of Debtor’s personal property the purchase price and related acquisition costs of which are financed by third-party lender as permitted by the Credit Agreement; (ii) Liens in existence on the date any asset becomes Collateral, to the extent such asset is taken, with the express written consent of Agent, subject to such Lien; (iii) Liens that are Permitted Liens that must be perfected by possession and the third-party to whom such Lien is granted has possession of the Collateral relating thereto and such third-party has not entered into any agreement altering such priority; (iv) Liens (including tax Liens) in favor of any Governmental Authority which pursuant to statute or law creating such Lien and other applicable law, have priority over the Liens granted under this Security Agreement and (v) Liens set forth on Exhibit C hereto.
(bb) Proceeds . The term “Proceeds” shall have the meaning provided in the UCC and shall include without limitation whatever is received upon the sale, lease, exchange, collection or
other disposition of Collateral or proceeds, including, without limitation, proceeds of insurance covering Collateral, tax refunds, and any and all accounts, notes, instruments, chattel paper, equipment, money, deposit accounts, securities accounts, goods, or other tangible and intangible property of Debtor resulting from the sale or other disposition of the Collateral, and the proceeds thereof.
(cc) Security Agreement . The term “Security Agreement” shall mean this Security Agreement, any concurrent or subsequent rider to this Security Agreement and any extensions, supplements, amendments or modifications to this Security Agreement and/or to any such rider.
(dd) Trademarks . The term “Trademarks” shall have the meaning provided in the UCC and shall include without limitation any trademarks and service marks, whether registered or not, application to register and registrations of the same and like protections, and the entire goodwill of the business of Debtor connected with and symbolized by such trademarks.
(ee) UCC . The term “UCC” shall mean the Uniform Commercial Code of the State of California, as presently in force and effect and any replacements therefore as and when such replacements become effective.
1.2 Accounting Terms . All accounting terms and computations shall be based upon generally accepted accounting principles consistently applied.
2. SECURITY INTEREST .
2.1 Security Interest .
(a) As security for the prompt and complete payment and performance of all the Obligations, Debtor hereby grants to Agent (as Administrative Agent for itself and for the ratable benefit of the Lenders) a first priority security interest (subject to Priority Liens) in all of Debtor’s right, title and interest in, to and under the Collateral described in Exhibit A . Notwithstanding the foregoing, the security interest granted herein shall not extend to and the term “Collateral” shall not include (i) any General Intangibles of the Debtor (whether owned or held as licensee or lessee or otherwise) to the extent that the granting of a security interest therein would be contrary to applicable law or create a default under any agreement governing such property, right or license (but only if such restrictions are enforceable as a matter of law); or (ii) any equipment financed by another lender or lessor under documentation that prohibits the granting of a second lien thereon executed prior to the date of this Agreement or which is a Permitted Lien.
(b) Agent’s security interest in the Collateral shall attach to the Collateral without further act on the part of the Agent, Lenders or Debtor.
(c) Except for Priority Liens, in which case Agent’s security interest shall be junior to third parties holding such Priority Liens, such security interest constitutes a valid, first priority security interest in the presently existing Collateral, and will constitute a valid, security interest in Collateral acquired after the date hereof.
2.2 Security Documents; Attorney-In-Fact .
(a) Agent may file all financing statements and continuation statements as it may deem necessary to perfect and maintain perfected Agent’s security interest. Debtor shall execute and deliver, or cause to be executed and delivered, to Agent, concurrently with Debtor’s execution of this Security Agreement, and at any time or times hereafter at the request of Agent, all documents which Agent may reasonably request, in form satisfactory to Agent, to perfect and maintain perfected Agent’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated under this Security Agreement.
(b) Debtor hereby irrevocably makes, constitutes and appoints Agent to act on Debtor’s behalf as Debtor’s true and lawful attorney with power to sign the name of Debtor on any of the above-described documents or on any other similar documents which need to be executed, recorded, and/or filed in order to perfect or continue perfected Agent’s security interest in the Collateral.
(c) The appointment of Agent as Debtor’s attorney, and each and every one of Agent’s rights and powers, being coupled with an interest, are irrevocable so long as any Obligations remain unpaid or unperformed.
3. REPRESENTATIONS AND WARRANTIES . In addition to the representations and warranties of Debtor set forth in the Credit Agreement, which are incorporated herein by reference, Debtor represents and warrants that as of the date hereof and as of the date of each Request for Extension of Credit under the Credit Agreement:
3.1 State of Incorporation; Place of Business . Debtor is a corporation validly existing and in good standing under the laws of the State of Delaware; as of the date hereof, Debtor’s chief executive office and principal place of business is located at 195 Technology Drive, Irvine, California 92618-2402.
3.2 Tangible Collateral . Tangible Collateral is in good operating condition and repair, normal wear and tear excepted.
3.3 No Offsets . To the best of Debtor’s knowledge, each account, account receivable and right to payment and each instrument, document, chattel paper and other agreement constituting or evidencing Collateral is (or will be when arising or issued) the valid, genuine and legally enforceable obligation, subject to no defense, set off or counterclaim (other than those arising in the ordinary course of business) of the account debtor or other obligor named therein or in Debtor’s records pertaining thereto as being obligated to pay such obligation.
3.4 Warranties and Representations Cumulative . The warranties, representations and agreements set forth herein shall be cumulative and in addition to any and all other warranties, representations and agreements which Debtor shall give, or cause to be given, to Agent, either now or hereafter.
4. COVENANTS . Debtor hereby covenants and agrees that during the term hereof and until all Obligations (other than inchoate indemnity obligations) are fully paid and performed:
4.1 Accounts .
(a) Debtor will not discount any accounts owed by customers (including, without limitation, rights to payment evidenced by chattel paper or an instrument, commercial tort claims, investment property, and letter of credit rights) or evidence of indebtedness except (i) to Agent or (ii) for such discounts as are customarily provided for prompt payment or settlement of delinquent accounts.
(b) Debtor will not sell any account (including, without limitation, Accounts, rights to payment evidenced by chattel paper or an instrument, commercial tort claims, investment property, and letter of credit rights) or evidence of indebtedness except in the ordinary course of business.
4.2 Notifications . Debtor shall promptly notify Agent of any material loss of or material damage to any material item of Collateral.
4.3 Good Repair . Debtor shall (i) maintain, preserve and protect the Collateral necessary in the operation of its business in good order and condition, subject to wear and tear in the ordinary course of business, (ii) not permit any waste of the Collateral, except where failure to do so would not reasonably be expected to have a Material Adverse Effect and (iii) keep and maintain the Collateral in material compliance with all environmental laws.
4.4 Inspection . At any time during regular business hours and as often as reasonably requested upon reasonable notice, permit Agent or any Lender, or any employee, agent or representative thereof, to examine, audit and make copies and abstracts from Debtor’s records and books of account related to the Collateral and to visit and inspect its properties and to discuss its affairs, finances and accounts with any of its officers and key employees, and, upon request, furnish promptly to Agent or any Lender true copies of all financial information and internal management reports made available to their senior management. Notwithstanding any provision of this Security Agreement to the contrary, so long as no Event of Default shall have occurred and be continuing, Debtor shall not be required to disclose, permit the inspection, examination, photocopying or making extracts of, or discuss, any document, information or other matter that (i) constitutes non-financial trade secrets or non-financial proprietary information, or (ii) the disclosure of which to Agent or any Lender, or their designated representative, is then prohibited by law or any agreement binding on Debtor that was not entered into by Debtor for the purpose of concealing information from Agent or Lenders. Debtor shall, however, furnish to Agent such information concerning Debtor’s intellectual property (including, without limitation, application and registration numbers for any filings in connection with such intellectual property) as is reasonably necessary to permit Agent (on behalf of itself and the other Lenders) to perfect a security interest in such intellectual property.
4.5 Reports . Upon the Agent’s request but in no event more than once in any twelve (12) consecutive months unless an Event of Default exists, Debtor shall deliver to Agent such reports and information available to Debtor’s management concerning the Collateral as Agent may reasonably request. All reports and information provided to Agent by Debtor shall be complete and accurate in all material respects at the time provided.
4.6 Delivery . Debtor shall, if Agent at any time so request (whether the request is made before or after the occurrence of an Event of Default), promptly deliver to Agent any instrument, document, chattel paper or Certificate of Ownership constituting Collateral, duly endorsed or assigned by Debtor.
4.7 Use . Debtor shall not use or keep any Collateral, or permit it to be used or kept, negligently or for any unlawful purpose or in violation of any Laws or orders of any Governmental Authority applicable to Debtor, its assets, its business and the Collateral, the noncompliance with which would reasonably be expected to have a Material Adverse Effect.
4.8 Fixtures . Debtor shall not permit any material item of tangible Collateral to become part of or to be affixed to any real property without first assuring to the reasonable satisfaction of Agent that: (i) Agent’s Lien will be prior and senior to any interest or lien then held or thereafter acquired by any mortgagee or encumbrancer of such real property or the owner or purchaser of any interest therein; and (ii) that Agent shall have the right to remove any Collateral from such real property at any time and without any unreasonable restraint or impediment.
4.9 Statutes . To the extent that the UCC is superceded by another statute, Debtor shall take such action as is reasonably requested by Agent to enforce, perfect, protect, implement, continue, maintain and preserve Agent ‘s right hereunder and under the other Loan Documents and the priority of the Agent’s lien.
4.10 Deposit Accounts . For all Deposit Accounts that Debtor now or hereafter maintains with any financial institutions other than Agent (“ Third Party Bank ”), Debtor shall promptly execute a Deposit Account Control Agreement in substantially the form set forth in Exhibit B or other form reasonably acceptable to Agent and shall promptly execute, and obtain the execution of, such Deposit Account Control Agreement by the respective Third Party Bank.
4.11 Securities Accounts . For all Securities Accounts that Debtor now or hereafter maintains with any institutions other than Agent (“ Third Party Institution ”), Debtor shall promptly execute a Securities Account Control Agreement in a form reasonably acceptable to Agent and shall promptly obtain the execution of such Securities Account Control Agreement by the respective Third Party
Institution. Debtor shall not hold any assets in any Securities Account maintained by Debtor that would not be subject to Agent’s perfected security interest, unless (i) Debtor executes and causes the execution of an account control agreement such that Agent ‘s security interest in such assets are perfected by such agreement, or (ii) Debtor has executed such other agreements or documents as are necessary to provide and perfect a lien on such assets.
4.12 Equipment . Without limiting the generality of this Section 4, upon Agent’s request, Debtor shall provide the Agent with complete and accurate schedules containing (i) a description of each material item of Equipment; and (ii) such other information regarding the Equipment as the Agent may reasonably require.
4.13 Letters of Credit . To the extent that Debtor holds as beneficiary any Letters of Credit, at the request of Agent, whether or not an Event of Default has occurred, Debtor will use its reasonable efforts to obtain the issuing bank’s consent to the Agent’s lien on such Letter of Credit and recognition of Agent’s right to draw on such Letter of Credit, in the place of Debtor and in accordance with the terms of such Letter of Credit, during the continuance of the Event of Default, in connection with Agent’s exercise of available remedies.
4.14 Lawsuits . To the extent the Debtor hereafter holds or acquires a cause of action for any claim in any material amount, at the request of Agent, whether or not an Event of Default has occurred, Debtor will execute such documents as Agent may request to grant and reflect Agent’s lien on such cause of action.
4.15 Inventory .
(a) Debtor shall not make any Disposition except in the ordinary course of business or as set forth in the Credit Agreement.
(b) Without limiting the generality of Section 4.4 above, Debtor shall maintain records containing entries of all material reportable transactions relating to the Inventory, including accurate records showing (a) the current Inventory stock held by Debtor; (b) the cost and sales records of the Inventory; and (c) the kinds, types, qualities and quantities of the Inventory.
(c) Neither Agent nor Lender shall be directly or indirectly liable or responsible in any way or under any circumstances to Debtor or any other party (a) for the safe keeping of the Inventory; (b) any loss of, damage to or destruction of the Inventory occurring or arising in any manner from any cause (other than loss or damage arising from Agent’s or any Lender’s gross negligence or willful misconduct); (c) any decrease in the value of the Inventory; or (d) any act or omission by any carrier, warehouse operator, bailee, forwarding agent, or other party dealing with all or part of the Inventory.
4.16 Accounts .
(a) Upon Agent’s request exercised no more often than three times during any period of twelve (12) consecutive months, Debtor shall furnish Agent access to copies of all contracts, orders, invoices, shipping instructions, delivery receipts, bills of lading, and other similar documents for any goods, the sale or disposition of which gives rise to an Account (collectively the “Accounts Receivable Documentation”). Upon Agent’s request, Debtor shall also furnish Agent with an aged accounts receivable report. Agent shall have the right from time to time to verify the validity, amount and any other matters relating to any or all of the Accounts directly with the respective Account Debtors in any manner, in Debtor’s name.
(b) Prior to the occurrence of an Event of Default, Debtor shall collect the Accounts, at Debtor’s sole cost and expense. Upon the occurrence and during the continuation of an Event of Default, upon the request of Agent (i) Agent shall have the exclusive right to make all collections on the Accounts and (ii) Debtor shall deliver any amounts collected on such Accounts to Agent, as directed by Agent.
(c) All checks, drafts, money orders, notes, instruments, documents, and other non-cash proceeds of the Accounts delivered to Agent in payment or on account of the Obligations shall not constitute payment except as provided in the UCC.
(d) Debtor shall at all times in all material respects perform and discharge all obligations of Debtor to each Account Debtor in accordance with the terms of all documents, contracts, invoices, and other agreements between Debtor and such Account Debtor.
(e) Without Agent’s prior written consent, Debtor shall not compromise, adjust, or grant any discount, credit, allowance, or extension of time for payment to any Account Debtors except in the ordinary course of Debtor’s business.
4.17 Further Assurances . At any time and from time to time Debtor shall execute and deliver such further instruments and take such further action as may reasonably be requested by Agent to effect the purposes of this Security Agreement and to maintain, preserve and protect the Collateral and Agent’s and Lenders’ security interest therein.
5. EVENTS OF DEFAULT . The occurrence of any one or more of the following events shall constitute an Event of Default under this Security Agreement at the option of Agent:
5.1 Breach of Security Agreement . (i) Any representation or warranty hereunder or in any Loan Document proves to have been incorrect in any material respect when made or deemed made, (ii) Debtor breaches any provision of this Security Agreement which cannot be cured or (iii) the breach by Debtor of any other provision of this Security Agreement that remains uncured for a period of thirty (30) days.
5.2 Breach of Other Agreements . The occurrence and continuance of an Event of Default under the Credit Agreement.
5.3 Lien Priority . Agent shall cease to have a valid and perfected first priority security interest upon any material item of the Collateral subject only to Priority Liens.
5.4 Seizure of Assets . If all or any material item of the Collateral is attached, seized, subjected to a writ or distress warran