Pledge and Security Agreement (2008)Full Document 

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PLEDGE AND SECURITY AGREEMENT

 

This PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of February 11, 2008, is entered into by and among CIBER, INC., a Delaware corporation (the “Borrower”), CIBER INTERNATIONAL, INC., a Delaware corporation and CIBER (INDIA) LTD., a Delaware corporation (each, a “Debtor” and, collectively, the “Debtors”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent (together with its successor(s) thereto in such capacity, the “Administrative Agent”) for the ratable benefit of the Lenders (as defined in the Credit Agreement referenced below), the Swing Line Lender and L/C Issuer (each, a “Secured Party” and, collectively, the “Secured Parties”).

 

Recitals

 

A.            Each Debtor is (or will be with respect to after-acquired property) the legal and beneficial owner and holder of the Collateral of such Debtor (as defined in Section 1 hereof).

 

B.            Debtors, the Lenders (as defined in the Credit Agreement referenced below) and the Administrative Agent have entered into that certain Credit Agreement, dated as of the date hereof (together with any amendments, modifications, replacements or substitutions thereof, the “Credit Agreement”), providing for a revolving line of credit in the initial maximum principal amount, in the aggregate, of $200,000,000.

 

C.            As a condition precedent to the effectiveness of the Credit Agreement and the making of the credit extensions to the Borrower under the Credit Agreement, each Debtor is required to secure the Secured Obligations (as defined below) in the manner set forth herein.

 

D.            Each Debtor has determined that it is in its best interests to execute this Agreement inasmuch as each Debtor will derive substantial direct and indirect benefits from the credit extensions made to the Borrower from time to time pursuant to the Credit Agreement, and each Debtor understands and agrees that Administrative Agent, the Lenders and any additional Secured Parties are relying on this representation in agreeing to make credit extensions to the Borrower under the Credit Agreement.

 

Agreement

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

 

1.             Definitions.  Any term used or defined in the Code (as defined below) that is not defined in this Agreement has the meaning given to that term in the Code, as in effect from time to time, when used in this Agreement. Other capitalized terms used but not defined herein have the respective meanings assigned to them in the Credit Agreement.  The following words and terms shall have the following meanings, respectively, unless the context hereof otherwise clearly requires:

 



 

(a)           Code” means the Uniform Commercial Code as in effect in the State of New York from time to time, or in any jurisdiction the laws of which may be applicable to or in connection with the creation, perfection or priority of any security interest purported to be created under the Loan Documents.

 

(b)           Collateral” means all of each Debtor’s right, title and interest in, to and under the following described property of such Debtor (except as otherwise indicated, each term used in this Section 1(b) that is defined in the Code shall have in this Agreement the meaning given to it in the Code):

 

(i)            all now owned or existing and hereafter acquired or arising and wherever located:  A) accounts; (B) goods; (C) health-care-insurance receivables; (D) general intangibles; (E) payment intangibles; (F) deposit accounts as listed on Schedule A hereto (as such Schedule is amended or supplemented from time to time); (G) chattel paper (including, without limitation, electronic chattel paper and tangible chattel paper); (H) documents; (I) instruments; (J) software; (K) letters of credit; (L) letter-of-credit rights; (M) money; (N) Receivables; (O) commercial tort claims (other than any against the Administrative Agent or any of its affiliates) as listed on Schedule B hereto (as such Schedule is amended or supplemented from time to time); (Q) equipment; (R) inventory; and (S) fixtures;

 

(ii)           all now existing and hereafter acquired or arising and wherever located: (A) capital stock, equity securities or interests and other investment property owned by each Debtor, including, without limitation, the Equity Interests of each Subsidiary owned by each Debtor described in Schedule C hereto (collectively, the “Investment Property”); (B) all cash dividends and cash distributions with respect to the foregoing (“Dividends”); (C) all non-cash dividends paid on capital securities, liquidating dividends paid on capital securities, shares of capital securities resulting from (or in connection with the exercise of) stock splits, reclassifications, warrants, options, non-cash dividends, mergers, consolidations, and all other distributions (whether similar or dissimilar to the foregoing) on or with respect to any capital securities constituting Collateral (all of the foregoing, excluding Dividends, “Distributions”); and (D) all certificates, agreements (including stockholders agreements, partnership agreements, operating agreements and limited liability company agreements), books, records, writings, data bases, information and other property relating to, used or useful in connection with, evidencing, embodying, incorporating or referring to, any of the foregoing;

 

(iii)          to the extent not otherwise included above, each and every other item of personal property and fixtures, whether now existing or hereafter arising or acquired, including, without limitation, all licenses, contracts and agreements, and all Collateral Support;

 

(iv)          to the extent, if any, not otherwise included above, all present and future business records and information, including, without limitation, books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer printouts, tapes and other storage media containing the same and computer programs and software (including without limitation, source code, object code and related manuals and documentation and all licenses to use such software) for accessing and manipulating such information, in each case that relate to any of the foregoing described Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon; and

 

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(v)           to the extent, if any, not otherwise included above, all supporting obligations, proceeds, products, accessions, rents and profits of or in respect of any of the foregoing (including without limitation all insurance policies and proceeds thereof).

 

Notwithstanding the foregoing, “Collateral” shall not include investment property consisting of Equity Interests of an issuer that is a Foreign Subsidiary (other than an Exempt Foreign Subsidiary) of any Debtor, in excess of 65% of the total combined voting power of all Equity Interests of such Foreign Subsidiary.

 

(c)           Collateral Support” means property (real or personal) assigned, hypothecated or otherwise securing any of the Collateral, including, without limitation, any security agreement or other agreement granting a Lien or security interest in such real or personal property.

 

(d)           Intellectual Property Rights” means all now or hereafter acquired rights of a Person (whether owned or subject to a valid right to use) arising in connection with any intellectual property or other proprietary rights, including without limitation all rights arising in connection with any patents, registered and common law trademarks, service marks, trade names, copyrights, licenses and other similar rights (including, without limitation, know-how, trade secrets and other confidential information) and applications for each of the foregoing, if any, provided that, the term Intellectual Property Rights shall not include any U.S. trademark or service mark application, to the extent the security interest granted hereunder would cause the invalidation of such trademark or service mark application, until such time as a statement to allege use (or the equivalent) in respect thereof has been filed with, and accepted by, the United States Patent and Trademark Office.

 

(e)           Permitted Liens” means Liens permitted under Section 7.01 of the Credit Agreement.

 

(f)            Receivables” means rights to payment, whether or not earned by performance, for goods including, without limitation, property sold, leased, licensed, assigned or otherwise disposed of, or services rendered or to be rendered, including, without limitation, any account and all such rights constituting or evidenced by any account, chattel paper, instrument, general intangible, payment intangible or investment property, together with all of the relevant Debtor’s rights, if any, in any goods or other property giving rise to such payment and all Collateral Support and supporting obligations related thereto and all Receivables Records.

 

(g)           Receivables Records” means (i) all documents, instruments or other writings or electronic records or other records evidencing the Receivables, (ii) all books, correspondence, credit or other files, records, ledger sheets or cards, invoices and other papers relating to Receivables, including, without limitation, all tapes, cards, computer tapes, computer discs, computer runs, record keeping systems and other papers and documents relating to the Receivables, whether in the possession or under the control of a Debtor or any computer bureau or agent from time to time acting for such a Debtor or otherwise, (iii) all evidences of the filing of financing statements and the registration of other instruments in connection therewith, and amendments, supplements or other modifications thereto, notices to other creditors or secured parties, and certificates, acknowledgments, or other writings, including, without limitation, lien

 

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search reports, from filing or other registration officers, (iv) all credit information, reports and memoranda relating thereto and (v) all other written or non-written forms of information related in any way to the foregoing or any Receivable.

 

(h)           Secured Obligations” means (i) collectively, all “Obligations” and all “Guaranteed Obligations” (in each case under and as defined in the Credit Agreement), (ii) to the extent not otherwise included in clause (i), all principal, interest (including, without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any Debtor, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), and all other charges, fees, premiums, indemnities and expenses relating to any of the foregoing, and (iii) to the extent not otherwise included in clauses (i) or (ii), all costs, expenses and reasonable out-of-pocket attorneys’ fees paid or incurred by the Administrative Agent at any time before or after judgment in attempting to collect any of the foregoing, to realize on any Collateral, and to enforce this Agreement.

 

(i)            Securities Act” means the Securities Act of 1933, as amended.

 

2.             Grant of Security Interest.  As security for the due and punctual payment and performance of the Secured Obligations in full, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code (or any successor provision)), each Debtor hereby agrees that the Administrative Agent shall have, and each Debtor hereby grants to and creates in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, a continuing first priority Lien on and security interest in and to the Collateral of such Debtor, subject only to (i) the superior priority of certain Permitted Liens and (ii) the further assurance obligations set forth in Section 6.13 of the Credit Agreement.  The intent of the parties hereto is that the Collateral secures all Secured Obligations of the Debtors, whether or not such Secured Obligations exist under this Agreement or any of the other Loan Documents.

 

Notwithstanding anything herein to the contrary, in no event shall the security interest granted hereunder attach to (a) any lease, license, contract right or agreement to which any Debtor is a party or any of its rights or interests thereunder if and for so long as the grant of such security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of such Debtor therein or (ii) in a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law or principles of equity); provided, however, that such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation, unenforceability, other restriction or assignment shall be remedied and, to the extent severable, shall attach immediately to any portion of such lease, license, contract or agreement that does not result in any of the consequences specified in (i) or (ii) including, without limitation, any proceeds of such lease, license, contract, property rights or agreement, (b) equipment or other property of a debtor subject to a Permitted Lien of the type described in clauses (k)(x), (m), (p) or (s) of Section 7.01 of the Credit Agreement if the contract or other agreement under which

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