EXH10-10
SECURITY AGREEMENT
This Agreement, made as of the 5th day of December, 1990, by and
between AUTOMATED LIGHT TECHNOLOGIES, INC., having its principal office in the
Town of ▇▇▇▇▇▇, County of Tolland and State of Connecticut (the "DEBTOR"), and
the CONNECTICUT DEVELOPMENT AUTHORITY having its principal office at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, in the City of Hartford, County of Hartford and State of
Connecticut, (the "AUTHORITY").
W I T N E S S E T H:
In consideration of the mutual promises and covenants herein contained,
the parties agree as follows:
1. Definitions. In this Agreement:
a. "Collateral" means all property of DEBTOR listed and described
in Schedule A hereto, whether any of such property shall be
owned, acquired or crested by DEBTOR at any time hereafter,
wherever located, and the products, accessions, or
substitutions therefor, and the accounts or proceeds arising
from the sale or disposition of any Inventory of the DEBTOR
including any returns thereof, including, where applicable,
the proceeds of insurance covering the above.
b. "Indebtedness" means all debts, liabilities and obligations of
any kind, whenever and however incurred including future
obligations of the DEBTOR to, whether or not evidenced by any
notes, instruments, documents or other writing, excluding the
obligations of DEBTOR pursuant to the Warrant executed and
delivered in connection with this transaction.
c. "Inventory" means all merchandise, raw materials,
work-in-process, parts, supplies, and finished products
intended for sale or lease or to be furnished under contracts
of service of every kind and description, now or at any time
hereafter owned by and in the custody or possession, actual or
constructive, of the DEBTOR, including goods as are
temporarily out of the DEBTOR's custody or possession and
including any returns upon any accounts, or proceeds including
insurance proceeds resulting from the sale or disposition of
any of the foregoing.
d. "State" means any state in which the DEBTOR carries on
business or in which the collateral is at any time located.
e. Any term not defined herein that is defined in the Uniform
Commercial Code, as enacted in the State, shall have the
meaning as defined therein.
To secure the payment of a loan in the amount of THREE HUNDRED THOUSAND
AND NO/100 ($300,000.00) DOLLARS plus interest, payable in accordance with the
terms of a note of even date herewith, which may be attached hereto and made a
part hereof (the "Note"), and to secure the performance or payment of all
Indebtedness of any kind, whenever and however incurred of the DEBTOR to
AUTHORITY whether or not evidenced by notes or any other instrument, DEBTOR
hereby grants and conveys to a security interest in the Collateral.
2. DEBTOR's Covenants. The DEBTOR warrants, covenants and agrees as
follows:
a. To pay and perform all of the obligations secured by this
Agreement according to their terms.
b. To defend the title to the Collateral against all persons and
against all claims, except claims which are permitted herein.
c. On demand of the AUTHORITY to do the following: furnish
further assurance of title, execute any written agreement or
do any other acts necessary to effectuate the purposes and
provisions of this Agreement, execute any instrument or
statement required by law or otherwise in order to perfect,
continue or terminate the security interest of the AUTHORITY
in the Collateral and pay all costs of filing in connection
therewith.
d. To retain possession of the Collateral during the existence of
this Agreement and not to sell, exchange, assign, loan,
deliver, lease, mortgage or otherwise dispose of same without
the written consent of the AUTHORITY, which consent will not
unreasonably be withheld (except for inventory which may be
sold in the ordinary course of business).
e. To keep the Collateral at its present locations and not to
remove same (except for sales in the usual course of business)
without the prior written consent of the AUTHORITY, which
consent will not be unreasonably withheld.
f. To keep the Collateral free and clear of all liens, charges,
encumbrances, taxes and assessments, except for the security
interest of a prior secured party, and except for any
subsequent encumbrances consented to in writing by the
AUTHORITY.
g. To pay, when due, all taxes, assessments and license fees
relating to the Collateral.
h. To keep the Collateral, at the DEBTOR's own cost and expense,
in good repair and condition and to use it for the purposes
intended and not to misuse, abuse, waste or allow it to
deteriorate except for normal wear and tear and to make the
same available for inspection by the AUTHORITY during normal
business hours.
i. To keep the Collateral insured against loss by fire, including
extended coverage, theft and other hazards as the AUTHORITY
may require in an amount no less than eighty percent (is0%) of
the full value of the insurable Collateral. Policies covering
the Collateral shall be obtained from responsible insurers
authorized to do business in Connecticut, Certificates of
insurance or policies shall have attached thereto a loss
payable clause making loss payable to the AUTHORITY as its
interest may appear, and all such policies and renewal
policies shall be deposited with the AUTHORITY. Each policy or
endorsement shall contain a clause requiring the insurer to
give not less than ten (10) days' written notice to the
AUTHORITY in the event of cancellation of the policy for any
reason whatsoever, and is clause that the interest of the
AUTHORITY shall not be impaired or invalidated by any act or
neglect of the DEBTOR or owner of the Collateral nor by the
occupation of the Premises where the Collateral is located for
purposes more hazardous than are permitted by said policy. The
DEBTOR shall give immediate written notice to the AUTHORITY
and to insurers of loss or damage to the Collateral and shall
promptly file proofs of loss with insurers. Subject to the
rights of prior secured parties, the DEBTOR hereby appoints
the AUTHORITY the attorney of the DEBTOR in obtaining and
adjusting any such insurance and endorsing settlement drafts
and hereby assigns to the AUTHORITY all sums which may become
payable under such insurance, including return premiums and
dividends, as additional security for the indebtedness. In the
event of termination is threatened termination of insurance,
the AUTHORITY has the right to obtain its own insurance
covering the Collateral and to add the costs of obtaining and
maintaining such insurance as an additional obligation of the
DEBTOR to the AUTHORITY. Nothing herein shall relieve the
DEBTOR of his duty or obligation to do any ace for which the
AUTHORITY may be hereby appointed attorney for the DEBTOR.
j. In the conduct of its business, the DEBTOR will comply with
all applicable laws , ordinances, rules and
regulations of all governmental authorities having
Jurisdiction over the DEBTOR and/or its business.
k. The DEBTOR authorizes the AUTHORITY, if the DEBTOR fails to do
so, to do all things required of the DEBTOR herein and charge
all expenses incurred to the DEBTOR and charge interest on the
same until repayment to it at the interest rate provided in
the Note; and that failure to repay any said advance with
interest within fifteen (15) days from the date of demand by
the AUTHORITY shall constitute a default hereunder.
l. To provide the AUTHORITY with a balance sheet within
forty-five (45) days of the end of each fiscal quarter of the
DEBTOR, and to provide annual financial statements prepared by
the DEBTOR's independent accountant within ninety (90) days of
the end of the DEBTOR's fiscal year, and to make all its books
and records available for inspection by the AUTHORITY during
reasonable business hours.
3. Non-Waiver. Waiver of or acquiescence in any default by the
DEBTOR or failure of the AUTHORITY to insist upon strict performance by the
DEBTOR of any warranties or agreements in this Security Agreement shall not
constitute a waiver of any subsequent or other default or failure
4. Default. The following shall constitute a default by the
DEBTOR:
a. The occurrence of a default under the Note.
b. Failure by the DEBTOR to comply with or perform within fifteen
(15) days from the date of performance any provision of this
Agreement.
c. Materially false or misleading representations or warranties
made or given by the DEBTOR in connection with this Agreement.
d. Commencement of any bankruptcy or other insolvency proceeding
by or against the DEBTOR which is not withdrawn, dismissed,
discharged or removed within sixty (60) days of commencement.
e. Any act of the DEBTOR which the AUTHORITY, in its sole
discretion, deems will imperil the prospect of full
performance or satisfaction of the DEBTOR's obligations to the
AUTHORITY.
f. Depreciation (except depreciation as reflected for tax or
accounting purposes) or impairment of the Collateral, or
material and substantial change in the financial status of the
DEBTOR which Jeopardizes the
prospect of performance of any of the warranties or covenants herein.
g. Default under any other loan agreement, promissory note, or
security agreement executed by the DEBTOR in respect of any
debt owed to the AUTHORITY or to any other person.
5. Remedies on Default. Upon any default and without demand, the DEBTOR
agrees immediately to assemble the Collateral and make it available to the
AUTHORITY at the place and time designated in the said demand. The AUTHORITY
shall be entitled to immediate possession of the Collateral and the AUTHORITY
may: (i) enter any premises where any Collateral may be located for the purpose
of taking possession of and removing same, and (ii) sell, assign, lease or
otherwise dispose of the Collateral or any part thereof, either at public or
private sale acceptable to the AUTHORITY, all at the AUTHORITY's sole option and
as it, in its sole discretion, may deem advisable, and the AUTHORITY may bid or
become purchaser at any such sale if public, free from any right of redemption
which is hereby expressly waived by the DEBTOR. Until sale, the AUTHORITY may
store the Collateral on the premises where it is located when seized, and if
said premises are the property of the DEBTOR, the DEBTOR agrees not to charge
the AUTHORITY for storage thereof for a period of ninety (90) days before or
after sale or disposition of said Collateral. Unless the Collateral is
perishable or threatens to decline speedily in value or is of a type customarily
sold in a recognized market, the AUTHORITY will give the DEBTOR reasonable
notice of the time and place of any public sale or the time after which any
private sale or other intended disposition will be made. The requirement of
reasonable notice shall be met if such notice is mailed to the DEBTOR at least
five (5) days before the time of the sale or disposition.
The net cash proceeds resulting from the collection, liquidation, sale,
or other disposition of the Collateral shall be applied first to the expenses
(including a11 attorneys' fees) of preparing for said, storing, processing,
selling, collecting, liquidating the Collateral and the like, and then t-o the
satisfaction of all liabilities of the DEBTOR to the AUTHORITY, application as
to particular obligations or against principal or interest under the Note to be
in the AUTHORITY's sole discretion. The DEBTOR shall be liable to the AUTHORITY
and shall pay to the AUTHORITY on demand, any deficiency which may remain after
such sale, disposition, collection or liquidation of collateral, and the
AUTHORITY in turn agrees to remit to the DEBTOR, or other persons as their
interests appear, any surplus remaining after all such liabilities have been
paid in full.
To facilitate the exercise by the AUTHORITY of the rights and remedies
set forth in this section, the DEBTOR hereby constitutes the AUTHORITY or any
other person whom the AUTHORITY may designate, as attorney-in-fact for the
DEBTOR, at the
DEBTOR's expense, to exercise all or any of the foregoing powers, and other
powers incidental to the foregoing, all of which, being coupled with an
interest, shall be irrevocable, shall continue until all obligations have been
paid in full and shall be in addition to any other rights and remedies that the
AUTHORITY may have.
6. Attorneys' Fees etc. Upon any default, the AUTHORITY's attorneys'
reasonable fees and the legal and other expenses for pursuing, searching for,
receiving, taking, keeping, storing, advertising, and selling the Collateral
shall be chargeable to the DEBTOR.
7. Cross-Default. Any default under the terms of this Agreement shall
constitute a default under the Note and any other document or instruments
evidencing or securing any other loan now existing or hereafter made by the
Authority to the Borrower, and a default under the Note or such other documents
or instruments shall constitute a default under this Agreement.
8. Other Rights. In addition to all rights and remedies herein, upon
default, the AUTHORITY shall have such other rights and remedies as are set
forth in the Uniform Commercial Code and the Connecticut General Statutes. as
amended.
9. Prejudgment Remedies Waiver. The DEBTOR hereby acknowledges that the
transaction of which this Security Agreement forms a part is a commercial
transaction as defined under Chapter 903^ of the Connecticut General Statutes,
as amended, and hereby waives right to notice and hearing said Statutes and
authorizes the AUTHORITY attorney to issue a writ for a preJudgment remedy
without court order.
10. Binding Effect. The terms, warranties and agreements herein
contained shall bind and inure to the benefit of the respective parties hereto,
and their respective legal representatives, successors and assigns .
11. Assignment. The AUTHORITY may assign without limitation its
security interest in the Collateral. Prior to assigning such security interest
to a bona fide, unrelated third party for value, the AUTHORITY shall give notice
of such proposed assignment to the DEBTOR . The DEBTOR shall have the right to
have the security interest assigned to it on the same terms and conditions as
are set forth in the proposed assignment. If the DEBTOR elects to exercise its
rights to have the security interest assigned to it, it shall give notice of the
same to the AUTHORITY within thirty (30) days of the date of the AUTHORITY's
notice to the DEBTOR. Failure of the DEBTOR to provide such notice within said
thirty (30) days shall terminate the DEBTOR's right of first refusal with
respect thereto.
12. Choice of Law. The law of the State of Connecticut shall govern the
rights and duties of the parties herein contained.
IN WITNESS WHEREOF, the parties have respectively signed and sealed
these presents at Hartford, Connecticut the day and year first above written.
WITNESSED BY: AUTOMATED LIGHT TECHNOLOGIES, INC.
By: /s/
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▇▇▇▇ ▇. ▇▇▇▇▇▇
Its President
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CONNECTICUT DEVELOPMENT AUTHORITY
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Loan Officer
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STATE OF CONNECTICUT )
) ss. at Hartford
COUNTY OF HARTFORD )
On this 5th day of December, 1990, before me, the undersigned officer,
personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇, who acknowledged himself to be the President
of Automated Light Technologies, Inc., a corporation, and that he as such
President, being authorized so to do, execute the foregoing instrument for the
purposes therein contained, by signing the name of the corporation by himself as
President.
In Witness Whereof I hereunto set my hand.
------------------------------------
Commissioner of the Superior Court
STATE OF CONNECTICUT)
) ss. at Hartford
COUNTY OF HARTFORD )
On this 5th day of December, 1990, before me, the undersigned officer,
personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, who acknowledge himself to be a loan
officer of the Connecticut Development Authority, and that he as such officer,
being authorized so to do, executed the foregoing instrument for the purposes
therein contained, by signing the name of the Connecticut Development Authority
by himself as such officer.
In Witness Whereof I hereunto set my hand.
------------------------------------
Commissioner of the Superior Court
SCHEDULE A
(a) All goods of the DEBTOR, including without limitation: machinery,
equipment, furniture, furnishings, fixtures, tools, supplies and motor
vehicles of every kind and description now or hereafter owned by the
DEBTOR or in which the DEBTOR may have or may hereafter acquire any
interest, together with all customer lists and records of the business
and all improvements thereto.
(b) All inventory of the DEBTOR, including, but not limited to: all
merchandise, raw material, parts, supplies, work in process, finished
products intended for sale, of every kind and description now or
hereafter owned by and in the custody of or possession, actual or
constructive, of the DEBTOR including such inventory as is temporarily
out of the DEBTOR's custody or possession and including any returns
upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing,
including, among other things, but not limited to, raw materials and
finished products and including all other classes of merchandise,
materials, parts, supplies, work in process, inventories and finished
products intended for sale by the DEBTOR including inventory
temporarily removed from its customary location.
(c) All contract rights and general intangibles of the DEBTOR, including
without limitation: goodwill, trademarks, trade styles, trade names,
patents, patent applications and deposit accounts.
(d) All present and future accounts, accounts receivable and other
receivables and all books and records relating thereto.
(e) All documents, instruments and chattel paper; and whether any of the
foregoing types or items of property referred to in (a) through (e)
above (the "Collateral") shall be acquired or created by the DEBTOR at
any time hereafter, wherever located, and the products and proceeds of
the Collateral and any replacements, additions, accessions, or
substitutions of the Collateral, after acquired property, and the
accounts or proceeds arising from the sale of disposition of any
inventory of the DEBTOR including any returns thereof; including,
where applicable, the proceeds of insurance covering the Collateral.