EXHIBIT 10.8
SECURITY AGREEMENT
BOGEN COMMUNICATIONS INTERNATIONAL, INC.
Date: April 21, 1998
The undersigned, BOGEN COMMUNICATIONS INTERNATIONAL, INC., a Delaware
corporation with an office for the transaction of business at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (herein referred to as "Borrower"), hereby agrees in
favor of KEYBANK NATIONAL ASSOCIATION, a national banking association with an
office for the transaction of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (in its individual capacity, "Key"), as agent for the Banks, as
follows:
1. DEFINITIONS. All capitalized terms used herein which are defined in
the Credit Agreement of even date herewith (hereinafter, together with all
exhibits thereto, as it may from time to time be amended, modified or
supplemented, referred to as the "Credit Agreement") by and between the
Borrower, Bogen Communications, Inc., various financial institutions and Key as
agent, shall have the respective meanings provided therefor in the Credit
Agreement, unless otherwise defined herein or unless the context otherwise
requires.
2. THE INDEBTEDNESS. In consideration of one or more loans, advances,
or other financial accommodations at any time before, at or after the date
hereof made or extended by the Banks to or for the account of Borrower, directly
or indirectly, as principal, guarantor or otherwise (the "Indebtedness")
Borrower hereby grants to the Banks a continuing security interest in and a
right of set-off against, and Borrower hereby assigns to the Banks, the
Collateral described in Paragraph 3, to secure the payment, performance and
observance of (i) all indebtedness, obligations, liabilities and agreements of
any kind of Borrower to the Banks, now existing or hereafter arising, direct or
indirect, absolute or contingent, secured or unsecured, due or not, arising out
of or relating to the Indebtedness and (ii) all agreements, documents and
instruments evidencing any of the foregoing or under which any of the foregoing
may have been issued, created, assumed or guaranteed (all of the foregoing being
herein referred to as the "Obligations").
3. THE COLLATERAL. The Collateral is described on Schedule "A" annexed
hereto as part hereof and also includes all attachments, accessions and
equipment now or hereafter affixed to the Collateral or used in connection
therewith, substitutions and replacements therefor (unless the description of
Collateral expressly excludes after-acquired Collateral), all items of
Collateral now owned or existing and hereafter acquired, created or arising, and
all proceeds thereof (including, without limitation, claims of Borrower against
third parties for loss or damage to or destruction of any Collateral).
4. WARRANTIES, REPRESENTATIONS AND COVENANTS. Borrower warrants,
represents and covenants that:
(a) The chief executive office and other places of business of
Borrower, the Collateral and the books and records relating to the
Collateral and the Collateral are, and have been during the four month
period prior to the date hereof (or in the case of a new business, from
the date of commencement of said business), located at the address(es)
set
forth below and Borrower will not change the same, or merge or
consolidate with any person or change its name, without prior written
notice to and consent of the Agent:
Addresses: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇;
(b) Borrower will use the Collateral for lawful and business
purposes only, with all reasonable care and caution and in conformity
with all applicable laws, ordinances and regulations;
(c) Borrower will keep the Collateral in first-class order,
repair, running and marketable condition, at Borrower's sole cost and
expense;
(d) The Banks shall at all times have free access to and right
of inspection of the Collateral and any records pertaining thereto, and
the right to make extracts from and to receive from Borrower originals
or true copies of such records and any papers and instruments relating
to any Collateral upon request therefor (which rights shall, except
after the occurrence of an Event of Default, be exercised only upon
reasonable notice during regular business hours), and Borrower hereby
grants to the Banks a security interest in all such records, papers and
instruments to secure the payment, performance and observance of the
Obligations;
(e) The Collateral is now and shall remain personal property,
is not now a fixture and Borrower will not permit any Collateral which
is not now a fixture to become a fixture without prior written notice
to and consent of the Banks and without first making all arrangements,
and delivering, or causing to be delivered, to the Agent all
instruments and documents, including, without limitation, waivers and
subordination agreements by any landlords or mortgagees, requested by
and satisfactory to the Banks to preserve and protect the primary
security interest granted herein against all persons;
(f) Borrower, at its sole cost and expense, will insure the
Collateral in the name of and with loss or damage payable solely to the
Agent, as its interest may appear, against such risks, with such
companies and in such amounts, as may be required by the Banks from
time to time (all such policies providing ten (10) days minimum written
notice of cancellation to the Agent) and Borrower will deliver to the
Agent the original or duplicate policies, or certificates or other
evidence satisfactory to the Agent attesting thereto, and Borrower will
promptly notify the Agent of any loss or damage to any Collateral or
arising from its use;
(g) Borrower will, at its sole cost and expense, and at all
times, pay and discharge all taxes and assessments and keep the
Collateral free and clear of any and all liens, security interests or
encumbrances (other than in favor of the Banks), perform all acts and
execute all documents requested by the Banks from time to time to
evidence, perfect, maintain or enforce the Banks' primary security
interest granted herein or otherwise in
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furtherance of the provisions of this Security Agreement;
(h) At any time and from time to time, Borrower shall, at its
sole cost and expense, execute and deliver to the Banks such financing
statements pursuant to the Uniform Commercial Code ("UCC"),
applications for certificate of title and other papers, documents or
instruments as may be requested by the Banks in connection with this
Security Agreement, and Borrower hereby authorizes the Banks to execute
and file at any time and from time to time one or more financing
statements or copies thereof or of this Security Agreement with respect
to the Collateral signed only by the Banks;
(i) In its discretion, the Agent may, at any time and from
time to time, after a Default (as hereinafter defined) has occurred and
is continuing, in its name or Borrower's or otherwise, notify any
account debtor or obligor of any account, contract, document,
instrument, chattel paper or general intangible included in the
Collateral to make payment to the Banks;
(j) In their discretion, the Banks may, at any time and from
time to time, after a Default has occurred and is continuing, demand,
▇▇▇ for, collect or receive any money or property at any time payable
or receivable on account of or in exchange for, or make any compromise
or settlement deemed desirable by the Banks with respect to, any
Collateral, and/or extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, or release, any
Collateral or Obligations, all without notice to or consent by Borrower
and without otherwise discharging or affecting the Obligations, the
Collateral or the security interest granted herein;
(k) In their discretion, the Banks may, at any time and from
time to time, for the account of Borrower, pay any amount or do any act
required of Borrower hereunder and which Borrower fails to do or pay,
and any such payment shall be deemed an advance by the Banks to
Borrower payable on demand together with interest at the highest rate
then payable on any of the Obligations;
(l) Borrower will pay the Banks for any sums, costs, and
expenses which the Banks may pay or incur pursuant to the provisions of
this Security Agreement or in negotiating, executing, perfecting,
defending, or protecting the security interest granted herein or in
enforcing payment of the Obligations or otherwise in connection with
the provisions hereof, including but not limited to court costs,
collection charges, travel expenses, and reasonable attorneys' fees,
all of which, together with interest at the highest rate then payable
on any of the Obligations, shall be part of the Obligations and be
payable on demand;
(m) All proceeds of any other Collateral received by Borrower
after the occurrence of a Default shall not be commingled with other
property of Borrower, but shall be segregated, held by Borrower in
trust for the Banks, and immediately delivered to the
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Agent in the form received, duly endorsed in blank where appropriate to
effectuate the provisions hereof, the same to be held by the Agent as
additional Collateral hereunder or, at the Banks' option, to be applied
to payment of the Obligations, whether or not due and in any order; and
(n) In their sole discretion, the Banks may, subject to the
terms of the Credit Agreement, at any time and from time to time,
assign, transfer or deliver to any transferee of any Obligations, any
Collateral, whereupon the Banks shall be fully discharged from all
responsibility and the transferee shall be vested with all powers and
rights of the Banks hereunder with respect thereto, but the Banks shall
retain all rights and powers with respect to any Collateral not
assigned, transferred or delivered.
5. DEFAULT. It shall constitute an event of default ("Default") under
this Security Agreement if an Event of Default shall have occurred under any of
the Loan Documents or if any one or more of the following shall occur:
(a) Borrower shall fail to perform any covenant, agreement or
obligation contained in this Security Agreement; or
(b) the Collateral shall be subjected to waste, sale, transfer
or other disposition or any lien, encumbrance or other imposition is
placed upon said Collateral; or
(c) any levy, seizure, attachment, condemnation, forfeiture or
other proceeding shall be brought against or with respect to the
Collateral; or
(d) the occurrence of a material and adverse change in the
condition or affairs (financial or otherwise) of the Borrower which the
Banks reasonably believe substantially impairs their security or
substantially increases the risk of failure of payment or performance
under any of the Loan Documents.
6. REMEDIES. Upon the occurrence and continuation of any Default and at
any time thereafter, the Banks shall have the following rights and remedies (to
the extent permitted by applicable law) in addition to all rights and remedies
of a secured party under the UCC or of the Banks under the Obligations, all such
rights and remedies being cumulative, not exclusive and enforceable
alternatively, successively or concurrently:
(a) the Banks may at any time and from time to time, with or
without judicial process or the aid and assistance of others, enter
upon any premises in which any Collateral may be located and, without
resistance or interference by Borrower, take possession of the
Collateral; and/or dispose of any Collateral on any such premises;
and/or require Borrower to assemble and make available to the Banks at
the expense of Borrower any Collateral at any place and time designated
by the Banks which is reasonably convenient to both parties; and/or
remove any Collateral from any such premises for the purpose of
effecting sale or
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other disposition thereof (and if any of the Collateral consists of
motor vehicles, the Banks may use Borrower's license plates); and/or
sell, resell, lease, assign and deliver, grant options for or otherwise
dispose of any Collateral in its then condition or following any
commercially reasonable preparation or processing, at public or private
sale or proceedings or otherwise, by one or more contracts, in one or
more parcels, at the same or different times, with or without having
the Collateral at the place of sale or other disposition, for cash
and/or credit, and upon any terms, at such place(s) and time(s) and to
such person(s) as the Banks deem best, all without demand, notice or
advertisement whatsoever except that where an applicable statute
requires reasonable notice of sale or other disposition Borrower hereby
agrees that the sending of five days' notice by registered or certified
mail, return receipt requested, to any address of Borrower set forth in
this Security Agreement shall be deemed reasonable notice thereof. If
any Collateral is sold by the Banks upon credit or for future delivery,
the Banks shall not be liable for the failure of the purchaser to pay
for same and in such event the Banks may resell such Collateral. The
Banks may buy any Collateral at any public sale and, if any Collateral
is of a type customarily sold in a recognized market or is of the type
which is the subject of widely distributed standard price quotations,
the Banks may buy such Collateral at private sale and in each case may
make payment therefor by any means. The Banks may apply the sale
proceeds actually received from any sale or other disposition to the
reasonable expenses of retaking, holding, preparing for sale, selling,
leasing and the like, to reasonable attorneys' fees and all legal,
travel and other expenses which may be incurred by the Banks in
attempting to collect the Obligations or enforce this Security
Agreement or in the prosecution or defense of any action or proceeding
related to the subject matter of this Security Agreement; and then to
the Obligations in such order and as to principal or interest as the
Banks may desire; and Borrower shall remain liable and will pay the
Banks on demand any deficiency remaining, together with interest
thereon at the highest rate then payable on the Obligations and the
balance of any expenses unpaid, with any surplus to be paid to
Borrower, subject to any duty of the Banks imposed by law to the holder
of any subordinate security interest in the Collateral known to the
Banks;
(b) The Banks may appropriate, set off and apply to the
payment of the Obligations, any Collateral in or coming into the
possession of the Banks or their agents, without notice to Borrower and
in such manner as the Banks may in their discretion determine.
7. DESIGNATION AND AUTHORIZATION. To effectuate the terms and
provisions hereof, Borrower hereby designates and appoints the Agent and each of
its designees or agents as attorney-in-fact of Borrower, irrevocably and with
power of substitution, with authority, after the occurrence of a Default, to:
receive, open and dispose of all mail addressed to Borrower and notify the Post
Office authorities to change the address for delivery of mail addressed to
Borrower to such address as the Agent may designate; endorse the name of
Borrower on any notes, acceptances, checks, drafts, money orders, instruments or
other evidences of Collateral that may come into the Agent's possession; sign
the name of Borrower on any invoices, documents, drafts against and notices to
account debtors or obligors of Borrower, assignments and requests for
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verification of accounts; execute proofs of claim and loss; execute
endorsements, assignments of other instruments of conveyance or transfer; adjust
and compromise any claims under insurance policies or otherwise; execute
releases; and do all other acts and things necessary or advisable in the sole
discretion of the Agent to carry out and enforce this Security Agreement or the
Obligations. All acts done under the foregoing authorization are hereby ratified
and approved and neither the Agent nor any designee or agent thereof shall be
liable for any acts of commission or omission, for any error of judgment or for
any mistake of fact or law. This power of attorney being coupled with an
interest is irrevocable while any Obligations shall remain unpaid.
8. PRESERVATION AND DISPOSITION OF COLLATERAL; MISCELLANEOUS. The Agent
shall have the duty to exercise reasonable care in the custody and preservation
of any Collateral in its possession, which duty shall be fully satisfied if the
Agent maintains safe custody of such Collateral. Except as hereinabove
specifically set forth, the Agent shall not be deemed to assume any other
responsibility for, or obligation or duty with respect to, any Collateral, or
its use, of any nature or kind, or any matter or proceedings arising out of or
relating thereto, including, without limitation, any obligation or duty to take
any action to collect, preserve or protect its or Borrower's rights in the
Collateral or against any prior parties thereto, but the same shall be at
Borrower's sole risk and responsibility at all times. Borrower hereby releases
the Banks from any claims, causes of action and demands at any time arising out
of or with respect to this Security Agreement, the Obligations, the Collateral
and its use and/or any actions taken or omitted to be taken by the Banks with
respect thereto, and Borrower hereby agrees to hold the Banks harmless from and
with respect to any and all such claims, causes of action and demands. The
Banks' prior recourse to any Collateral shall not constitute a condition of any
demand, suit or proceeding for payment or collection of the Obligations. No act,
omission or delay by any Bank shall constitute a waiver of its rights and
remedies hereunder or otherwise. No single or partial waiver by any Bank of any
Default or right or remedy which it may have shall operate as a waiver of any
other Default, right or remedy or of the same Default, right or remedy on a
future occasion. Borrower hereby waives presentment, notice of dishonor and
protest of all instruments included in or evidencing any Obligations or
Collateral, and all other notices and demands whatsoever (except as expressly
provided herein). In the event of any litigation with respect to any matter
connected with this Security Agreement, the Obligations or the Collateral,
Borrower hereby waives the right to a trial by jury. Borrower hereby irrevocably
consents to the jurisdiction of the Courts of the State of New York and of any
Federal Court located in such State in connection with any action or proceeding
arising out of or relating to the Obligations, this Security Agreement or the
Collateral, or any document or instrument delivered with respect to any of the
Obligations. Borrower hereby waives personal service of any process in
connection with any such action or proceeding and agrees that the service
thereof may be made by certified or registered mail directed to Borrower at any
address of Borrower set forth in this Security Agreement. Borrower so served
shall appear or answer to such process within thirty (30) days after the mailing
thereof. Should Borrower so served fail to appear or answer within said thirty
(30) day period, Borrower shall be deemed in default and judgment may be entered
by any Bank against Borrower for the amount or such other relief as may be
demanded in any process so served. In the alternative, in its discretion, any
Bank may effect service upon Borrower in any other form or manner permitted by
law. All capitalized terms used
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and not otherwise defined shall have the meanings set forth in the Credit
Agreement and other terms herein shall have the meanings as defined in the UCC,
unless the context otherwise requires. No provision hereof shall be modified,
altered or limited except by a written instrument expressly referring to this
Security Agreement and to such provision, and executed by the party to be
charged. This Security Agreement and all Obligations shall be binding upon the
successors, or assigns of Borrower and shall, together with the rights and
remedies of the Banks hereunder, inure to the benefit of the Banks and their
successors, endorsees and assigns. This Security Agreement and the Obligations
shall be governed in all respects by the laws of the State of New York
applicable to contracts executed and to be performed in such State. If any term
of this Security Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby. The Banks are authorized to annex hereto any schedules
referred to herein. Borrower acknowledges receipt of a copy of this Security
Agreement.
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IN WITNESS WHEREOF, the undersigned has executed or caused this
Security Agreement to be executed in the State of New York as of the date first
above set forth.
BOGEN COMMUNICATIONS
INTERNATIONAL, INC.
By:___________________________________
Name:
Title:
STATE OF NEW JERSEY )
) ss.:
COUNTY OF )
On this ___ day of April, 1998, before me the subscriber personally
appeared ______________, who being by me duly sworn, did depose and say; that he
resides at ___________________, that he is _______________________________ of
Bogen Communications International, Inc., the corporation described in and which
executed the foregoing instrument; and that he signed his name thereto by order
of the Board of Directors of said corporation.
______________________________________
NOTARY PUBLIC
Schedule "A"
All personal property and fixtures of the Borrower, whether now or
hereafter existing or now owned or hereafter acquired and wherever located, of
every kind and description, tangible or intangible, and all goods, equipment,
inventory, accounts, chattel paper, general intangibles, credits, claims,
demands and any other property, rights and interests of the Borrower, and any
and all additions and accessions thereto, all substitutions and replacements
therefor and all products and proceeds thereof and proceeds of insurance
thereon.