SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed as of the 15th day of
March, 2000, by ▇▇▇▇▇▇ TECHNOLOGIES, INC., a Delaware corporation (the
"Obligor"), in favor of DVI FINANCIAL SERVICES INC. (the "Lender"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory",
"investment property" and "proceeds" shall have the meanings given such
terms in the Code.
1.2 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current
Chief Executive Office is ▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
1.3 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.4 "Collateral" shall mean all existing and after-acquired accounts,
chattel papers, documents, general intangibles, equipment, goods,
instruments, inventory and investment property of Obligor and all income,
proceeds and products thereof, including without limitation:
(a) All of Obligor's present and future accounts, contract
rights, chattel paper, instruments and documents and all other rights
to the payment of money whether or not yet earned, for services
rendered or goods sold, consigned, leased or furnished by Obligor or
otherwise, together with (i) all goods (including any returned,
rejected, repossessed or consigned goods), the sale, consignment,
lease or other furnishings of which shall be given or may give rise to
any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lien or in connection therewith,
including stoppage in transit, set-off, detinue, replevin and
reclamation, (iii) all general intangibles related thereto, (iv) all
guaranties, mortgages, security interests, assignments, and other
encumbrances on real or personal property, leases and other agreements
or property securing or relating to any accounts, (v)
choses-in-action, claims and judgments, (vi) any return or unearned
premiums, which may be due upon cancellation of any insurance
policies, and (vii) all products and proceeds of any of the foregoing.
(b) All of Obligor's present and future inventory (including but
not limited to goods held for sale or lease or furnished or to be
furnished under contracts for service, raw materials, work-in-process,
finished goods and goods used or consumed in Obligor's business)
whether owned, consigned or held on consignment, together with all
merchandise, component materials, supplies, packing, packaging and
shipping materials, and all returned, rejected or repossessed goods
sold, consigned, leased or otherwise furnished by Obligor and all
products and proceeds of any of the foregoing.
(c) All of Obligor's present and future general intangibles
(including but
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not limited to tax refunds and rebates, manufacturing and processing
rights, designs, patent rights and applications therefor, trademarks
and registration or applications therefor, tradenames, brand names,
logos, inventions, copyrights and all applications and registrations
therefor), licenses, permits, approvals, software and computer
programs, license rights, royalties, trade secrets, methods,
processes, know-how, formulas, drawings, specifications, descriptions,
label designs, plans, blueprints, patterns and all memoranda, notes
and records with respect to any research and development, and all
income, products and proceeds of any of the foregoing, including
without limitation the intellectual property described in Schedule
1.4.
(d) All of Obligor's present and future machinery, equipment,
furniture, fixtures, motor vehicles, tools, dies, jigs, molds and
other articles of tangible personal property of every type together
with all parts, substitutions, accretions, accessions, attachments,
accessories, additions, components and replacements thereof, and all
manuals of operation, maintenance or repair, and all products and
proceeds of any of the foregoing.
(e) All of Obligor's present and future general ledger sheets,
files, records, customer lists, books of account, invoices, bills,
certificates or documents of ownership, bills of sale, business
papers, correspondence, credit files, tapes, cards, computer runs and
all other data and data storage systems whether in the possession of
Obligor or any service bureau.
(f) All deposits, funds, instruments, documents, policies and
evidence and certificates of insurance, securities, chattel paper and
other assets of Obligor or in which Obligor has an interest and all
proceeds thereof, now or at any time hereafter on deposit with or in
the possession or control of Lender or owing by Lender to Obligor or
in transit by mail or carrier to Lender or in the possession of any
other Person acting on Lender's behalf, without regard to whether
Lender received the same in pledge, for safekeeping, as agent for
collection or otherwise, or whether Lender has conditionally released
the same, and in all assets of Obligor in which Lender now has or may
at any time hereafter obtain a lien, mortgage, or security interest
for any reason.
1.5 "DVI Indebtedness" shall mean all obligations and indebtedness of
Obligor to Lender, whether now or hereafter owing or existing, including,
without limitation, (a) the obligations and indebtedness of Obligor arising
under the Loan Documents and those credit facilities specifically described
on Schedule 1.5 attached hereto and (b) any of the foregoing that arises
after the filing of a petition by or against Obligor under the U.S.
Bankruptcy Code even if the obligations do not accrue because of the
automatic stay under U.S. Bankruptcy Code ss. 362 or otherwise.
1.6 "Event of Default" shall include any and all events described in
Section 7.
1.7 "Loan Documents" shall mean (a) that certain Second Amended and
Restated Secured Promissory Note of even date herewith given by Obligor and
▇▇▇▇▇▇ Technologies, Inc., a New York corporation ("STNY") to Lender in the
original principal amount of Five Million Dollars ($5,000,000.00), (b) that
certain Second Amended and Restated Promissory Note of even date herewith
given by Obligor and STNY to Lender in the original principal amount of One
Million Five Hundred Ninety-Six Thousand One Hundred Eighty-Nine Dollars
($1,596,189.00), (c) all documents, instruments and agreements evidencing
any indebtedness of
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Obligor (whether arising as a loan, lease or otherwise) owed to DVI
Strategic Partner Group, a division of Lender and (d) all agreements,
documents and instruments collateral to any of the foregoing, together with
all amendments, replacements, increases, renewals and modifications thereof
or thereto, including, without limitation, this Agreement.
1.8 Permitted Liens" shall mean the security interest and lien granted
by Obligor to Greystone Funding Corporation pursuant to that certain
Security Agreement dated December 27, 1999, which shall be expressly
subordinate to the security interests and liens granted to Lender
hereunder.
1.9 "Person" means an individual, a corporation or a government or any
agency or subdivision thereof, or any other entity.
2. SECURITY INTEREST. Obligor grants to Lender a security interest in, and
lien on, the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Lender by Obligor hereunder shall not be rendered void by the fact
that no DVI Indebtedness exists as of a particular date, but shall continue in
full force and effect until all DVI Indebtedness has been paid in full, Lender
has no agreement or commitment outstanding pursuant to which Lender may extend
credit to or on behalf of Obligor and Lender has executed and delivered
termination statements and/or releases with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the DVI Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
DVI INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof, at the time of the creation of any DVI Indebtedness and until all DVI
Indebtedness has been paid in full:
5.1 Valid Organization, Good Standing and Qualification. Obligor is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of New York, has full power and authority to execute,
deliver and comply with the Loan Documents, and to carry on its business as
it is now being conducted and is duly licensed or qualified as a foreign
corporation in good standing under the laws of each other jurisdiction in
which the character or location of the properties owned by it or the
business transacted by it requires such licensing or qualification, except
where the failure to be so licensed or qualified would not have a material
adverse effect on the Collateral, assets, business, operations or financial
condition of Obligor or the ability of Obligor to perform its obligations
under the Loan Document.
5.2 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
devices), excepting only liens in favor of the Lender and the Permitted
Liens. Obligor will defend
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the Collateral against any claims of all persons or entities other than the
Lender.
5.3 Due Authorization; No Legal Restrictions. The execution and
delivery by Obligor of the Loan Documents, the consummation of the
transactions contemplated by the Loan Documents and the fulfillment and
compliance with the respective terms, conditions and provisions of the Loan
Documents: (a) have been duly authorized by all requisite corporate action
of Obligor, (b) will not conflict with or result in a breach of, or
constitute a default (or might, upon the passage of time or the giving of
notice or both, constitute a default) under, any of the terms, conditions
or provisions of any applicable statute, law, rule, regulation or ordinance
or Obligor's Certificates or Articles of Incorporation or By-Laws or any
indenture, mortgage, loan or credit agreement or instrument to which
Obligor is a party or by which it may be bound or affected, or any judgment
or order of any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, and (c) will not
result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the property or assets of Obligor under
the terms or provisions of any such agreement or instrument, except liens
in favor of Lender.
5.4 Governmental Consents. No consent, approval or authorization of or
designation, declaration or filing with any governmental authority on the
part of Obligor is required in connection with the execution, delivery or
performance by Obligor of this Agreement or the consummation of the
transactions contemplated hereby.
5.5 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto
will at all times be located at the addresses set forth on Schedule 5.5
attached hereto; or such other location determined by Obligor after prior
notice to Lender and delivery to Lender of any items requested by Lender to
maintain perfection and priority of Lender's security interests and liens
and access to Obligor's books and records.
5.6 Pending Litigation or Proceedings. Except as set forth on Schedule
5.6 attached hereto, there are no judgments outstanding or actions, suits
or proceedings pending or, to the best of Obligor's knowledge, threatened
against or affecting Obligor or the Collateral, at law or in equity or
before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign.
5.7 Enforceability. The Loan Documents have been duly executed by
Obligor and constitute valid and binding obligations of Obligor,
enforceable in accordance with their terms except as enforceability may be
limited by any bankruptcy, insolvency, reorganization, moratorium or other
laws or equitable principles affecting creditors' rights generally.
5.8 Taxes. Obligor has filed all tax returns which it is required to
file and has paid, or made provision for the payment of, all taxes which
have or may have become due pursuant to such returns or pursuant to any
assessment received by it, except such taxes (other than real estate taxes
which must be paid regardless of challenge), if any, as are being contested
in good faith and as to which adequate reserves have been provided. Such
tax returns are complete and accurate in all respects. Obligor knows of no
proposed additional assessment or basis for any assessment of additional
taxes.
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5.9 Regulations. Obligor is not in violation of its Certificate or
Articles of Incorporation or in default in the performance or observance of
any of its obligations, covenants or conditions contained in any indenture
or other agreement creating, evidencing or securing any indebtedness or
pursuant to which any such indebtedness is issued and Obligor is not in
violation of or in default under any other agreement or instrument or any
judgment, decree, order, statute, rule or governmental regulation,
applicable to it or by which its properties may be bound or affected.
5.10 Intellectual Property. Obligor owns or possesses the irrevocable
right to use all of the patents, trademarks, service marks, trade names,
copyrights, licenses, franchises and permits and rights with respect to the
foregoing necessary to own and operate that Obligor's properties (including
the Collateral) and to carry on its business as presently conducted and
presently planned to be conducted without conflict with the rights of
others.
5.11 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other
document furnished by Obligor pursuant hereto or in connection herewith
fails to contain any statement of material fact necessary to make such
representation or warranty not misleading in light of the circumstances
under which it was made. There is no fact which Obligor knows or should
know and has not disclosed to Lender, which does or may materially and
adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the DVI Indebtedness
have been paid in full, Obligor shall:
6.1 Payment of Obligations. Pay when due all DVI Indebtedness and all
other amounts payable by Obligor to Lender.
6.2 Existence; Approvals; Qualification; Business Operations;
Compliance with Laws.
(a) obtain, preserve and keep in full force and effect its
separate corporate existence and all rights, licenses, registrations
and franchises necessary to the proper conduct of its business or
affairs;
(b) qualify and remain qualified as a foreign corporation in each
jurisdiction in which the character or location of the properties
owned by it or the business transacted by it requires such
qualification except where the failure to obtain or maintain such
qualification would not have a material adverse effect on the
Collateral, assets, business, operations or financial condition of
Obligor or the ability of Obligor to perform its obligations under the
Loan Documents;
(c) continue to operate its business as presently operated and
will not engage in any new businesses without the prior written
consent of Lender, which consent will not be unreasonably withheld;
and
(d) comply with the requirements of all applicable laws and all
rules,
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regulations (including environmental regulations) and orders of
regulatory agencies and authorities having jurisdiction over it.
6.3 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the
Collateral, except for sales of inventory or obsolete equipment in the
ordinary course for fair consideration.
6.4 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens
or charges upon properties acquired or to be acquired under conditional
sales agreements or other title retention devices) on its property or
assets, whether now owned or hereafter acquired, or upon any income or
profits therefrom, except as permitted hereunder or under the Loan
Documents.
6.5 Maintenance of Properties. Maintain, preserve, protect and keep or
cause to be maintained, preserved, protected and kept its real and personal
property used or useful in the conduct of its business in good working
order and condition, reasonable wear and tear excepted, and will pay and
discharge when due the cost of repairs to and maintenance of the same.
6.6 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Lender, in amounts acceptable to
Lender (at least adequate to comply with any co-insurance provisions) and
against all such liability and hazards as are usually carried by entities
engaged in the same or a similar business similarly situated or as may be
required by Lender. Obligor will carry business interruption insurance in
such amounts as may be required by Lender. In the case of insurance on any
of the Collateral, Obligor shall carry insurance in the full insurable
value thereof and cause Lender to be named as insured mortgagee with
respect to all real property, loss payee (with a lender's loss payable
endorsement) with respect to all personal property, and additional insured
with respect to all liability insurance, as its interests may appear with
thirty (30) days' notice to be given Lender by the insurance carrier prior
to cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Lender the insurance policies
therefor or in the alternative, evidence of insurance and at least thirty (30)
business days prior to the expiration of any such insurance, additional policies
or duplicates thereof or in the alternative, evidence of insurance evidencing
the renewal of such insurance and payment of the premiums therefor. Obligor
shall direct all insurers that in the event of any loss thereunder or the
cancellation of any insurance policy, the insurers shall make payments for such
loss and pay all returned or unearned premiums directly to Lender and not to
Obligor and Lender jointly.
In the event of any loss, Obligor will give Lender immediate notice thereof
and Lender may make proof of loss whether the same is done by Obligor. Lender is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Lender's name, to endorse Obligor's name on
any check, draft or other instrument evidencing insurance proceeds, and to take
any action or sign any document to pursue any insurance loss claim. Such power
being coupled with an interest is irrevocable.
In the event of any loss, Lender, at its option, may (i) retain and apply
all or any part of the
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insurance proceeds to reduce, in such order and amounts as Lender may elect the
DVI Indebtedness, or (ii) disburse all or any part of such insurance proceeds to
or for the benefit of Obligor for the purpose of repairing or replacing
Collateral after receiving proof satisfactory to Lender of such repair or
replacement, in either case without waiving or impairing the DVI Indebtedness or
any provision of this Agreement. Any deficiency thereon shall be paid by Obligor
to Lender upon demand. Obligor shall not take out any insurance without having
Lender named as loss payee or additional insured thereon. Obligor shall bear the
full risk of loss from any loss of any nature whatsoever with respect to the
Collateral.
6.7 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Lender from time to time with such agreements,
financing statements and additional instruments, documents or information
as the Lender may in its discretion deem necessary or advisable to perfect,
protect and maintain the security interests in the Collateral, to permit
Lender to protect its interest in the Collateral, or to carry out the terms
of the Loan Documents. Obligor hereby authorizes and appoints Lender as its
attorney-in-fact, with full power of substitution, to take such actions as
Lender may deem advisable to protect the Collateral and its interests
thereon and its rights hereunder, to execute on Obligor's behalf and file
at Obligor's expense financing statements, and amendments thereto, in those
public offices deemed necessary or appropriate by Lender to establish,
maintain and protect a continuously perfected security interest in the
Collateral, and to execute on Obligor's behalf such other documents and
notices as Lender may deem advisable to protect the Collateral and its
interests therein and its rights hereunder. Such power being coupled with
an interest is irrevocable. Obligor irrevocably authorizes the filing of a
carbon, photographic or other copy of this Agreement, or of a financing
statement, as a financing statement and agrees that such filing is
sufficient as a financing statement.
6.8 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Lender and delivery to Lender of
any items requested by Lender to maintain perfection and priority of
Lender's security interests and access to Obligor's books and records.
6.9 Inspections. Permit officers of Lender, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Lender's employees or by independent accountants) any of
the Collateral or other assets of Obligor, including the books of account
of Obligor, and discuss the affairs, finances and accounts of Obligor with
its officers and with its independent accountants, at such times as Lender
may desire; provided, however, that prior to the occurrence of an Event of
Default such access shall be limited to all reasonable times during regular
business hours.
6.10 Taxes; Claims for Labor and Materials. Pay or cause to be paid
when due all taxes, assessments, governmental charges or levies imposed
upon it or its income, profits, payroll or any property belonging to it,
including without limitation all withholding taxes, and all claims for
labor, materials and supplies which, if unpaid, might become a lien or
charge upon any of its properties or assets; provided that it shall not be
required to pay any such tax, assessment, charge, levy or claim so long as
the validity thereof shall be contested in good faith by appropriate
proceedings promptly initiated and diligently conducted by it, and neither
execution nor foreclosure sale or similar proceedings shall have been
commenced in respect thereof (or such proceedings
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shall have been stayed pending the disposition of such contest of
validity), and it shall have set aside on its books, or at the request of
Lender deposited with Lender, adequate reserves with respect thereto.
6.11 Indebtedness. Except for existing indebtedness acceptable to
Lender or to the extent permitted hereunder, Obligor will not incur, permit
or suffer to exist directly or indirectly, including through guaranty
obligations, any liabilities or obligations for borrowed money or capital
lease obligations (except operating leases complying with FASB13) to any
other person or entity other than Lender or Greystone Funding Corporation
without the prior written consent of Lender.
6.12 Requested Information. With reasonable promptness, deliver to
Lender all financial information in respect of the condition, operation and
affairs of Obligor and the Collateral as Lender may reasonably request from
time to time.
7. EVENTS OF DEFAULT. The occurrence of any event of default or default
under any of the Loan Documents after expiration of any applicable notice and/or
grace period permitted in such documents shall constitute an "Event of Default"
hereunder.;
8. REMEDIES OF LENDER.
8.1 Remedies. At the option of the Lender, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the DVI Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and
all other obligations of Obligor to Lender hereunder or under any
other agreement, note or otherwise arising will become immediately due
and payable without any further demand or notice;
(b) Lender may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Lender may exercise each and every right and remedy granted
to it under the Loan Documents, under the Code and under any other
applicable law or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Lender after an
Event of Default may be for cash, credit or any combination thereof, and
Lender may purchase all or any part of the Collateral at public or, if
permitted by law, private sale, and in lieu of actual payment of such
purchase price, may set-off the amount of such purchase price against the
DVI Indebtedness then owing. Any sales of the Collateral may be adjourned
from time to time with or without notice. The Lender may cause the
Collateral to remain on Obligor's premises or otherwise or to be removed
and stored at premises owned by other persons, at Obligor's expense,
pending sale or other disposition of the Collateral. Obligor, at Lender's
request, shall assemble the Collateral consisting of inventory and tangible
assets and make such assets available to Lender at a place to be designated
by Lender. Lender shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or
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elsewhere, on such occasion or occasions as Lender may see fit. Any notice
required to be given by Lender of a sale, lease or other disposition or
other intended action by Lender with respect to any of the Collateral which
is deposited in the United States mail, postage prepaid and duly addressed
to Obligor at the address specified in Section 11 below, at least five (5)
business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized
by Lender upon any such sale or other disposition, after deduction for the
expenses of retaking, holding, storing, transporting, preparing for sale,
selling or otherwise disposing of the Collateral incurred by Lender in
connection therewith and all other costs and expenses related thereto
including attorney fees, shall be applied in such order as Lender, in its
sole discretion, elects, toward satisfaction of the DVI Indebtedness.
Lender shall account to Obligor for any surplus realized upon such sale or
other disposition, and Obligor shall remain liable for any deficiency. The
commencement of any action, legal or equitable, or the rendering of any
judgment or decree for any deficiency shall not affect Lender's security
interest in the Collateral. Obligor agrees that Lender has no obligation to
preserve rights to the Collateral against any other parties. Lender is
hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual
property, equipment, real estate, patents, copyrights, rights of use of any
name, trade secrets, trade names, trademarks, service marks and advertising
matter, or any property of a similar nature, as it pertains to the
Collateral, in completing production of, advertising for sale and selling
any inventory or other Collateral and Obligor's rights under all contracts,
licenses, leases and franchise agreements shall inure to Lender's benefit.
Lender shall be under no obligation to ▇▇▇▇▇▇▇▇ any assets in favor of
Obligor or any other party or against or in payment of any or all of the
DVI Indebtedness.
8.3 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Lender to exercise any right, remedy, power or privilege under
the Loan Documents upon the occurrence of any Event of Default or otherwise
shall operate as a waiver thereof or impair any such right, remedy, power
or privilege. No waiver of any Event of Default shall affect any later
Event of Default or shall impair any rights of Lender. No single, partial
or full exercise of any rights, remedies, powers and privileges by the
Lender shall preclude further or other exercise thereof. No course of
dealing between Lender and Obligor shall operate as or be deemed to
constitute a waiver of Lender's rights under the Loan Documents or affect
the duties or obligations of Obligor.
8.4 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers
and privileges in Lender's favor at law or in equity. Whenever the Lender's
consent or approval is required or permitted, such consent or approval
shall be at the sole and absolute discretion of Lender.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay
within thirty (30) days of demand all costs and expenses of Lender, including
without limitation:
9.1 All costs and expenses in connection with any amendments,
extensions and increases to the Loan Documents (including, without
limitation, attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
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clearance certificates, as Lender deems advisable;
9.2 All Lender's, costs and expenses in connection with the
enforcement, protection and preservation of the Lender's rights or remedies
under the Loan Documents, or any other agreement relating to any
Obligations, or in connection with legal advice relating to the rights or
responsibilities of Lender (including without limitation court costs,
reasonable attorney's fees and expenses of accountants and appraisers); and
9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan
Documents, and all liabilities to which Lender may become subject as the
result of delay in paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Lender in its
discretion, may make expenditures for such purposes and the amount so expended
(including reasonable attorney's fees and expenses, filing fees and other
charges) shall be payable by Obligor on demand and shall constitute part of the
DVI Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the DVI Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all reasonable attorneys' fees and legal
costs incurred by Lender in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Lender interest thereon at the Default Rate (as defined in the Loan
Documents). Obligor's obligations under this Section shall survive termination
of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's performance
of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual, division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual,
division or department for attention) shall have been designated by notice given
by one party to the other:
10
To Obligor:
▇▇▇▇▇▇ Technologies, Inc.
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telecopier No.: 718-937-5962
To Lender:
DVI Strategic Partner Group
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Operating Officer
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
DVI, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
or after August 1, 2000
DVI, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Lender is
hereby released from any claim or liability in connection with: (a) safekeeping
any Collateral; (b) any loss or damage to any Collateral; (c) any diminution in
value of the Collateral; or (d) any act or default of another person or entity.
Lender shall only be liable for any act or omission on its part
constituting willful misconduct. In the event that Lender breaches its required
standard of conduct, Obligor agrees that its liability shall be only for direct
damages suffered and shall not extend to consequential or incidental damages. In
the event Obligor brings suit against Lender in connection with the transactions
contemplated hereunder and Lender is found not to be liable, Obligor will
indemnify and hold Lender harmless from all costs and expenses, including
attorney's fees, incurred by Lender in connection with such suit.
11
13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the DVI Indebtedness, including without limitation any action by
Lender in replevin, foreclosure or other court process or in connection with any
other action related to the DVI Indebtedness or the transactions contemplated
hereunder, each Obligor waives:
13.1 all procedural errors, defects and imperfections in such
proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from
attachment, levy or sale under execution, or providing for any stay of
execution to be issued on any judgment recovered in connection with the DVI
Indebtedness or in any replevin or foreclosure proceeding, or otherwise
providing for any valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any
of the DVI Indebtedness and sold upon any writ of execution issued thereon
in whole or in part, in any order desired by Lender;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the DVI Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise; and
13.6 any demand for possession of Collateral prior to commencement of
any suit.
14. JURISDICTION. Obligor hereby consents to the jurisdiction of any state
or federal court located within the Commonwealth of Pennsylvania, and
irrevocably agrees that, subject to the Lender's election, all actions or
proceedings relating to the Loan Documents or the transactions contemplated
hereunder may be litigated in such courts, and Obligor waives any objection
which it may have based on improper venue or forum non conveniens to the conduct
of any proceeding in any such court and waives personal service of any and all
process upon it, and consents that all such service of process be made by mail
or messenger directed to it at the address set forth in Section 11. Nothing
contained in this Section 14 shall affect the right of Lender to serve legal
process in any other manner permitted by law or affect the right of Lender to
bring any action or proceeding against Obligor or its property in the courts of
any other jurisdiction.
15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or
unenforceability of any provision shall not affect or impair the remaining
provisions which shall continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not
be deemed to constitute a part of this
12
Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by
or on behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth (without
giving effect to any principles of conflicts of law).
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any
third party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Lender, nor shall
this Agreement be construed as creating a partnership, joint venture or
making Lender an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
Agreement or of any financing statement may be filed as a financing
statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND LENDER WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED
TO HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR
DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR
THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
OBLIGOR AND LENDER AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT
ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF OBLIGOR
AND LENDER TO THE WAIVER OF THEIR RIGHT TO
13
TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security Agreement on
the date first above written.
▇▇▇▇▇▇ TECHNOLOGIES, INC., a Delaware corporation
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
Lender hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 15.11 above.
DVI FINANCIAL SERVICES INC.
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
14
INTELLECTUAL PROPERTY
Patent No. Title
5,434,418 INTRA-ORAL SENSOR FOR COMPUTER AIDED RADIOGRAPHY
5,834,782 LARGE AREA IMAGE DIRECTOR
5,852,647 MATERIAL SUPPLYING APPARATUS
5,898,753 APPARATUS FOR MEASURING BONE DENSITY USING ACTIVE
PIXEL SENSORS
5,908,294 DENTAL IMAGING SYSTEM WITH LAMPS AND METHOD
5,912,942 X-RAY DETECTION SYSTEM USING PIXEL SENSORS
4,160,997 INTRAORAL FLUOROSCOPE
▇▇▇▇ Reg/App. No. Owner/Assignee
---- ------------ --------------
SPACEMAKER 836,018 ▇▇▇▇▇▇ X-Ray Corporation
MARKSMAN 1,002,697 ▇▇▇▇▇▇ X-▇▇▇ Corporation
INTREX 1,275,980 ▇▇▇▇▇▇ X-Ray Corporation
CDRCAM 2,173,892 ▇▇▇▇▇▇ Technologies, Inc.
CDR 2,175,448 ▇▇▇▇▇▇ Technologies, Inc.
CDRCAM (Stylized) 2,194,223 ▇▇▇▇▇▇ Technologies, Inc.
QUICKZOOM 2,243,409 ▇▇▇▇▇▇ Technologies, Inc.
QUICKZOOM (Stylized) 2,243,412 ▇▇▇▇▇▇ Technologies, Inc.
ACCUDEXA 2,229,546 ▇▇▇▇▇▇ Technologies, Inc.
CDRPAN 75-55-8,970 ▇▇▇▇▇▇ Technologies, Inc.
CDR DISCOVERY 75-589,544 ▇▇▇▇▇▇ X-Ray Corporation
SCHEDULE 1.4
TO
SECURITY AGREEMENT
15
NAMES AND ADDRESSES OF OBLIGOR
Names of Obligor
----------------
▇▇▇▇▇▇ Technologies, Inc., a Delaware corporation
Addresses of Obligor
--------------------
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE 5.5
TO
SECURITY AGREEMENT
16
PENDING AND THREATENED LITIGATION
SCHEDULE 5.6
TO
SECURITY AGREEMENT
17