SECOND LIEN SECURITY AGREEMENT
By
RISKMETRICS GROUP HOLDINGS, LLC,
as Borrower
and
THE GUARANTORS PARTY HERETO
and
BANK OF AMERICA, N.A.,
as Collateral Agent
Dated as of January 11, 2007
TABLE OF CONTENTS
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Page
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PREAMBLE
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1
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RECITALS
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1
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AGREEMENT
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2
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ARTICLE I
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DEFINITIONS AND INTERPRETATION
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SECTION 1.1.
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Definitions
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2
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SECTION 1.2.
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Interpretation
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7
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SECTION 1.3.
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Resolution of Drafting Ambiguities
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8
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SECTION 1.4.
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Perfection Certificate
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8
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ARTICLE II
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GRANT OF SECURITY AND SECURED OBLIGATIONS
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SECTION 2.1.
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Grant of Security Interest
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8
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SECTION 2.2.
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Filings
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9
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SECTION 2.3.
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Second Priority Nature of Liens
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10
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ARTICLE III
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PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
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USE OF PLEDGED COLLATERAL
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SECTION 3.1.
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Delivery of Certificated Securities Collateral
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10
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SECTION 3.2.
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Perfection of Uncertificated Securities Collateral
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10
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SECTION 3.3.
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[Reserved]
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11
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SECTION 3.4.
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Other Actions
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11
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SECTION 3.5.
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Joinder of Additional Guarantors
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13
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SECTION 3.6.
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Supplements; Further Assurances
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13
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ARTICLE IV
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REPRESENTATIONS, WARRANTIES AND COVENANTS
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SECTION 4.1.
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Defense of Claims; Transferability of Pledged Collateral
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14
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SECTION 4.2.
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Other Financing Statements
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14
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i
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SECTION 4.3.
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Location of Inventory and Equipment
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15
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SECTION 4.4.
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[Reserved]
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15
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SECTION 4.5.
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Consents, etc
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15
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SECTION 4.6.
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Pledged Collateral
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15
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SECTION 4.7.
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Insurance
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15
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SECTION 4.8.
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Chief Executive Office; Change of Name; Jurisdiction of Organization
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15
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ARTICLE V
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CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
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SECTION 5.1.
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Pledge of Additional Securities Collateral
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16
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SECTION 5.2.
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Voting Rights; Distributions; etc
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16
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SECTION 5.3.
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[Reserved]
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17
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SECTION 5.4.
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Certain Agreements of Pledgors As Issuers and Holders of Equity Interests
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18
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ARTICLE VI
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CERTAIN PROVISIONS CONCERNING INTELLECTUAL
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PROPERTY COLLATERAL
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SECTION 6.1.
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Grant of Intellectual Property License
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18
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SECTION 6.2.
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Protection of Collateral Agent’s Security
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18
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SECTION 6.3.
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After-Acquired Property
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19
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SECTION 6.4.
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Litigation
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19
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ARTICLE VII
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CERTAIN PROVISIONS CONCERNING RECEIVABLES
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SECTION 7.1.
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Maintenance of Records
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20
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SECTION 7.2.
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[Reserved]
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20
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SECTION 7.3.
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[Reserved]
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20
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SECTION 7.4.
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Collection
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20
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ARTICLE VIII
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TRANSFERS
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SECTION 8.1.
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[Reserved]
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21
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ii
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ARTICLE IX
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REMEDIES
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SECTION 9.1.
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Remedies
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21
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SECTION 9.2.
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Notice of Sale
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23
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SECTION 9.3.
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Waiver of Notice and Claims
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23
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SECTION 9.4.
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Certain Sales of Pledged Collateral
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23
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SECTION 9.5.
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No Waiver; Cumulative Remedies
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24
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SECTION 9.6.
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Certain Additional Actions Regarding Intellectual Property
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25
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ARTICLE X
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APPLICATION OF PROCEEDS
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SECTION 10.1.
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Application of Proceeds
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25
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ARTICLE XI
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MISCELLANEOUS
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SECTION 11.1.
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Concerning Collateral Agent
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25
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SECTION 11.2.
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Collateral Agent May Perform; Collateral Agent Appointed
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Attorney-in-Fact
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27
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SECTION 11.3.
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Continuing Security Interest; Assignment
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27
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SECTION 11.4.
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Termination; Release
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28
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SECTION 11.5.
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Modification in Writing
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28
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SECTION 11.6.
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Notices
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29
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SECTION 11.7.
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Governing Law, Consent to Jurisdiction and Service of Process;
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Waiver of Jury Trial
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29
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SECTION 11.8.
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Severability of Provisions
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29
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SECTION 11.9.
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Execution in Counterparts
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29
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SECTION 11.10.
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Business Days
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29
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SECTION 11.11.
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No Credit for Payment of Taxes or Imposition
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29
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SECTION 11.12.
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No Claims Against Collateral Agent
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29
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SECTION 11.13.
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No Release
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30
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SECTION 11.14.
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Obligations Absolute
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30
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SIGNATURES
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S-1
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EXHIBIT 1
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Form of Issuer’s Acknowledgment
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EXHIBIT 2
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Form of Securities Pledge Amendment
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EXHIBIT 3
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Form of Joinder Agreement
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EXHIBIT 4
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[Reserved]
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iii
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EXHIBIT 5
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[Reserved]
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EXHIBIT 6
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Form of Second Lien Copyright Security Agreement
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EXHIBIT 7
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Form of Second Lien Patent Security Agreement
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EXHIBIT 8
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Form of Second Lien Trademark Security Agreement
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iv
SECOND LIEN SECURITY AGREEMENT
This SECOND LIEN SECURITY AGREEMENT dated as of January 11,2007 (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the provisions hereof, this “Agreement”) made by RISKMETRICS GROUP HOLDINGS, LLC, a Delaware limited liability company (the “Borrower”), and the Guarantors from to time to time party hereto (the “Guarantors”), as pledgors, assignors and debtors (the Borrower, together with the Guarantors, in such capacities and together with any successors in such capacities, the “Pledgors,” and each, a “Pledgor”), in favor of BANK OF AMERICA, N.A., in its capacity as collateral agent pursuant to the Credit Agreement (as hereinafter defined), as pledgee, assignee and secured party (in such capacities and together with any successors in such capacities, the “Collateral Agent”).
R E C I T A L S:
A. The Borrower, RiskMetrics Group, Inc., a Delaware corporation (“Holding”), Bank of America, N.A., as Administrative Agent and the lenders from time to time party thereto have, in connection with the execution and delivery of this Agreement, entered into that certain Second Lien Credit Agreement, dated as of the date hereof (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; which term shall also include and refer to any increase in the amount of indebtedness under the Credit Agreement and any refinancing or replacement of the Credit Agreement (whether under a bank facility, securities offering or otherwise) or one or more successor or replacement facilities whether or not with a different group of agents or lenders (whether under a bank facility, securities offering or otherwise) and whether or not with different obligors upon the Administrative Agent’s acknowledgment of the termination of the predecessor Credit Agreement).
B. Each Guarantor has, pursuant to the Guaranty, unconditionally guaranteed the Secured Obligations (as hereinafter defined).
C. The Borrower and each Guarantor will receive substantial benefits from the execution, delivery and performance of the obligations under the Credit Agreement, the Guaranty and the other Loan Documents and each is, therefore, willing to enter into this Agreement.
D. This Agreement is given by each Pledgor in favor of the Collateral Agent for the benefit of the Secured Parties (as hereinafter defined) to secure the payment and performance of all of the Secured Obligations.
F. It is a condition to the obligations of the Lenders to make the Loans under the Credit Agreement that each Pledgor execute and deliver the applicable Loan Documents, including this Agreement.
G. &n
