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EXHIBIT 4.3
Date: May 14, 2001
SECURITY AGREEMENT
LENDER/SECURED PARTY: DEBTOR(S)/PLEDGOR(S):
MUSI INVESTMENTS ▇.▇. ▇▇▇▇▇▇ TECHNOLOGIES, INC.
231 VAL DES BONS MALADES ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Debtor/Pledgor is: [ ] Individual [X] Corporation [ ] Partnership
[ ] Other __________________
Address is Debtor's/Pledgor's: [ ] Residence [X] Place of Business
[ ] Chief Executive Office if more than one place
of business
Collateral (hereinafter defined) is located at: [X] Debtor's/Pledgor's address
shown above
[ ] the following address:____
_______________________________________________________________________________
_______________________________________________________________________________
Reference is made to that certain Loan Agreement dated May 14, 2001 (the "Loan
Agreement") between Lender and Debtor. Capitalized terms used herein and not
otherwise defined herein shall have the meaning ascribed to them in the Loan
Agreement.
1. SECURITY INTEREST. For good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Debtor/Pledgor (hereinafter
referred to as "Debtor") assigns and grants to Lender (also known as
"Secured Party"), a security interest and lien in the Collateral
(hereinafter defined) to secure the payment and the performance of the
Obligation (hereinafter defined).
2. COLLATERAL. A security interest is granted in the following collateral
described in this Item 2 (the "Collateral'):
A. TYPES OF COLLATERAL (check as applicable)
[X] ACCOUNTS: Any and all accounts and other rights of Debtor to the payment for
goods sold or leased or for services rendered whether or not earned by
performance, contract rights, book debts, checks, notes, drafts, instruments,
chattel, paper acceptances, and any and all amounts due to Debtor from a factor
or other forms of obligations and receivables now existing or hereafter arising
out of the business of Debtor.
[X] INVENTORY: Any and all of Debtor's goods held as inventory
whether now owned or hereafter acquired, including without limitation, any and
all such goods held for sale or lease or being processed for sale or lease in
Debtor's business, as now or hereafter conducted including all materials goods
and work in process, finished goods and other tangible property held for sale or
lease or furnished or to be furnished under contracts of service or used or
consumed in Debtor's business, along with all documents (including documents of
title) covering such inventory.
[X] EQUIPMENT: Any and all of Debtor's goods held as equipment
including, without limitation, all machinery, tools, dies, furnishings, or
fixtures wherever located whether now owned or hereafter acquired, together with
all increases, parts, fittings, accessories, equipment, and special tools now or
hereafter affixed to any part thereof or used in connection therewith.
[X] FIXTURES:
[X] Specific Fixtures: Limited to any and all of Debtor's goods held as
fixtures which are specifically described in the space below to the
extent that granting a security interest shall not constitute a
violation of law or default under any agreement or contract applicable
to Debtor.
whether now existing or hereafter acquired. These goods are or will become
fixtures on the following described real estate in Forsyth County, North
Carolina, owned by: Debtor more particularly described as follows: as described
in Exhibit A attached hereto.
[X] GENERAL INTANGIBLES:
Any and all of Debtor's general intangible property, including, without
limitation, all patents, trademarks, service marks and exclusive licenses
(whether issued or pending), and all processes and systems related thereto.
B. SUBSTITUTIONS, PROCEEDS AND RELATED ITEMS. Any and all substitutes and
replacements for, accessions, attachments and other additions to,
tools, parts and equipment now or hereafter added to or used in
connection with, and all cash or non-cash proceeds and products of,
the Collateral (including, without limitation all income benefits and
property receivable, received or distributed which results from any of
the Collateral, such as dividends payable or distributable in cash
property or stock; insurance distributions of any kind related to the
Collateral, including, without limitation, returned premiums interest
premium and principal payments; redemption proceeds and subscription
rights; and shares or other proceeds of conversions or splits of any
securities in the Collateral) any and all choses in action and causes
of action of Debtor, whether now existing or hereafter arising,
relating directly or indirectly to the Collateral (whether arising in
contract, tort or otherwise and whether or not currently in
litigation); all certificates of title, manufacturer's statements of
origin, other documents, accounts and chattel paper, whether now
existing or hereafter arising directly or indirectly from or related
to the Collateral; all warranties, wrapping, packaging, advertising
and shipping materials used or to be used in connection with or
related to the Collateral; all of Debtors books, records, data, plans,
manuals, computer software, computer tapes, computer systems, computer
disks, computer programs, source codes and object codes containing any
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information, pertaining directly or indirectly to the Collateral and
all rights of Debtor to retrieve data and other information pertaining
directly or indirectly to the Collateral from third parties, whether
now existing or hereafter arising; and all returned refused, stopped
in transit, or repossessed Collateral, any of which, received by
Debtor, upon request shall be delivered immediately to Lender.
3. DESCRIPTION OF OBLIGATION(S). The following obligations ("Obligation" or
"Obligations") are secured by this Agreement: (a) A debts, obligations
liabilities and agreements of Debtor to Lender, now or hereafter existing,
arising under the Loan Agreement, and all renewals, extensions or
rearrangement of any of the above; (b) All costs incurred by Lender to
obtain, preserve, perfect and enforce this Agreement and maintain,
preserve, collect and realize upon the Collateral; (c) All other reasonable
costs and reasonable attorney's fees incurred by Lender for which Debtor is
obligated to reimburse Lender in accordance with the terms of the Loan
Documents, together with interest at the maximum rate allowed by law or if
none, Prime Rate plus 4% per annum. If Debtor is not the obligor of the
Obligation, and in the event any amount paid to Lender on any Obligation is
subsequently recovered from Lender in or as a result of any bankruptcy,
insolvency or fraudulent conveyance proceeding, Debtor shall be liable to
Lender for the amounts so recovered up to the fair market value of the
Collateral whether or not the Collateral has been released or the security
interest terminated. In the event the Collateral has been released or the
security interest terminated the fair market value of the Collateral shall
be determined, at Lender's option, as of the date the Collateral was
released, the security interest terminated, or said amounts were recovered.
4. DEBTOR'S WARRANTIES. Debtor hereby represents and warrants to Lender as
follows:
A. FINANCING STATEMENTS. Except as may be noted by schedule attached
hereto and incorporated herein by reference, no financing statement
covering the Collateral is or will be on file in any public office,
except the financing statements relating to this security interest,
and no security interest, other than the one herein created, has
attached or been perfected in the Collateral or any part thereof.
B. OWNERSHIP. Debtor owns, or will use the proceeds of any loans by
Lender to become the owner of, the Collateral free from any setoff,
claim, restriction, lien, security interest or encumbrance, except
Permitted Liens and the security interest hereunder.
C. FIXTURES AND ACCESSIONS. No material part of the Collateral is affixed
to real estate or is an accession to any goods, or will become a
fixture or accession, except as expressly set out herein.
D. CLAIMS OF DEBTORS ON THE COLLATERAL. As of the date of this Agreement,
all account debtors and other obligors whose debts or obligations are
part of the Collateral have no right to setoffs, counterclaims or
adjustments, and no defenses in connection therewith, except defenses,
adjustments, setoffs and counterclaims that arise in the ordinary
course of business.
E. ENVIRONMENTAL COMPLIANCE. To the best of Debtor's knowledge, the
conduct of Debtor's business operations and the condition of Debtor's
property does not and will not violate any federal laws, rules or
ordinances for environmental protection, regulations of the
Environmental Protection Agency and any applicable local or state law
rule, regulation or rule of common law and any judicial interpretation
thereof relating primarily to the environment or any materials defined
as hazardous materials or substances under any local, state or federal
environmental laws, rules or regulations, and petroleum, petroleum
products, oil and asbestos ("Hazardous Materials"), except violations
which are not likely to have a Material Adverse Effect.
F. POWER AND AUTHORITY. Debtor has full power and authority to make this
Agreement, and all necessary consents and approvals of any persons,
entities, governmental or regulatory authorities and securities
exchanges have been obtained to effectuate the validity of this
Agreement.
5. DEBTOR'S COVENANTS. Until full payment and performance of all of the
Obligations and termination or expiration of any obligation or commitment
of Lender to make advances or loans to Debtor, unless Lender otherwise
consents in writing:
A. OBLIGATION AND THIS AGREEMENT. Debtor shall perform all of its
agreements herein and in any other material agreements between it and
Lender.
B. OWNERSHIP AND MAINTENANCE OF THE COLLATERAL. Debtor shall keep all
tangible Collateral (except Collateral that is obsolete or no longer
used in the ordinary course of business) in good condition. Debtor
shall defend the Collateral against all claims and demands of all
persons at any time claiming any interest therein adverse to Lender.
Debtor shall keep the Collateral free from all liens and security
interests except Permitted Liens and the security interest hereby
created.
C. INSURANCE. Debtor shall insure the Collateral with companies
reasonably acceptable to Lender. Such insurance shall be in an amount
not less than the fair market value of the Collateral and shall be
against such casualties with such deductible amounts as Lender shall
approve. All insurance policies shall be written for the benefit of
Debtor and Lender as their interests may appear, payable to Lender as
loss payee, or in other form satisfactory to Lender, and such policies
or certificates evidencing the same shall be furnished to Lender. All
policies of insurance shall provide for written notice to Lender at
least thirty (30) days prior to cancellation. Risk of loss or damage
is Debtor's to the extent of any deficiency in any effective insurance
coverage.
D. LENDER'S COSTS. Debtor shall pay all reasonable costs necessary to
obtain, preserve, perfect, defend and enforce the security interest
created by this Agreement, collect the Obligation, and preserve,
defend, enforce and collect the Collateral, including but not limited
to taxes, assessments, insurance premiums, repairs, rent, storage
costs and expenses of sales legal expenses, reasonable attorney's fees
and other fees or expenses for which Debtor is obligated to reimburse
Lender in accordance with the terms of the Loan Documents. Whether the
Collateral is or is not in Lender's possession, and without any
obligation to do so and without waiving Debtor's default for failure
to make any such payment, Lender at its option may pay any such costs
and expenses, discharge encumbrances on the Collateral, and pay for
insurance of the Collateral, and such payments shall be a part of the
Obligation and bear interest at the rate set out in the Obligation.
Debtor agrees to reimburse Lender on demand for any costs so incurred.
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E. INFORMATION AND INSPECTION. Debtor shall (i) promptly furnish Lender
any information with respect to the Collateral reasonably requested by
Lender; (ii) allow Lender or its representatives to inspect the
Collateral, during business hours and wherever located, and to inspect
and copy, or furnish Lender or its representatives with copies of, all
records relating to the Collateral and the Obligation; (iii) promptly
furnish Lender or its representatives such information as Lender may
request to identify the Collateral, at the time and in the form
requested by Lender; and (iv) deliver upon request to Lender shipping
and delivery receipts evidencing the shipment of goods and invoices
evidencing the receipt of, and the payment for, the Collateral.
F. ADDITIONAL DOCUMENTS. Debtor shall sign and deliver any papers deemed
reasonably necessary or desirable in the judgment of Lender to obtain,
maintain, and perfect the security interest hereunder and to enable
Lender to comply with any federal or state law in order to obtain or
perfect Lender's interest in the Collateral or to obtain proceeds of
the Collateral.
G. PARTIES LIABLE ON THE COLLATERAL. Debtor shall preserve the liability
of all obligors on any Collateral, shall preserve the priority of all
security therefor. Lender shall have no duty to preserve such
liability or security, but may do so at the expense of Debtor, without
waiving Debtor's default.
H. RECORDS OF THE COLLATERAL. Debtor at all times shall maintain accurate
books and records covering the Collateral. Debtor immediately will
▇▇▇▇ all books and records with an entry showing the absolute
assignment of all Collateral to Lender, and Lender is hereby given the
right to audit the books and records of Debtor relating to the
Collateral at any time and from time to time. The amounts shown as
owed to Debtor on Debtor's books and on any assignment schedule will
be the undisputed amounts owing and unpaid.
I. DISPOSITION OF THE COLLATERAL. If disposition of any Collateral gives
rise to an account, chattel paper or instrument, Debtor immediately
shall notify Lender, and upon request of Lender shall assign or
indorse the same to Lender. No Collateral may be sold, leased,
manufactured, processed or otherwise disposed of by Debtor in any
manner without the prior written consent of Lender, except: (1) the
Collateral sold, leased, manufactured, processed or consumed in the
ordinary course of business, and (2) dispositions of Collateral that
is obsolete or no longer used in Debtor's business.
J. ACCOUNTS. Each account held as Collateral will represent the valid and
legally enforceable obligation of third parties and shall not be
evidenced by any instrument or chattel paper.
K. NOTICE/LOCATION OF THE COLLATERAL. Debtor shall give Lender written
notice of each office of Debtor in which records of Debtor pertaining
to accounts held as Collateral are kept and each location at which the
Collateral is or will be kept, and of any change of any such location.
If no such notice is given, all records of Debtor pertaining to the
Collateral and all Collateral of Debtor are and shall be kept at the
address marked by Debtor above.
L. CHANGE OF NAME/STATUS AND NOTICE OF CHANGES. Without the written
consent of Lender, Debtor shall not change its name, change its
corporate status, use any trade name or engage in any business not
reasonably related to its business as presently conducted. Debtor
shall notify Lender immediately of (i) any material change in the
Collateral, (ii) a change in Debtor's residence or location, (iii) a
change in any matter warranted or represented by Debtor in this
Agreement, or in any of the Loan Documents or furnished to Lender
pursuant to this Agreement, and (iv) the occurrence of an Event of
Default (hereinafter defined).
M. USE AND REMOVAL OF THE COLLATERAL. Debtor shall not use the Collateral
illegally. Debtor shall not, unless previously indicated as a fixture,
permit the Collateral to be affixed to real or personal property
without the prior written consent of Lender. Debtor shall not permit
any of the Collateral to be removed from the locations specified
herein without the prior written consent of Lender, except for the
sale of inventory in the ordinary course of business.
N. POSSESSION OF THE COLLATERAL. Debtor shall deliver all investment
securities and other instruments, documents and chattel paper which
are part of the Collateral and in Debtor's possession to Lender
immediately upon request, or if hereafter acquired, immediately
following acquisition and such request, appropriately endorsed to
Lender s order, or with appropriate , duly executed powers. Debtor
waives presentment, notice of acceleration, demand, notice of
dishonor, protest, and all other notices with respect thereto.
O. CONSUMER CREDIT. If any Collateral or proceeds includes obligations of
third parties to Debtor, the transactions giving rise to the
Collateral shall conform in all material respects to the applicable
state or federal law including but not limited to consumer credit law.
Debtor shall hold harmless and indemnify Lender against any cost, loss
or expense arising from Debtor's breach of this covenant.
P. POWER OF ATTORNEY. Debtor appoints Lender and any officer thereof
effective upon the occurrence and during the continuance of an Event
of Default as Debtor's attorney-in-fact with full power in Debtor's
name and behalf to do every act which Debtor is obligated to do or may
be required to do hereunder; however, nothing in this paragraph shall
be construed to obligate Lender to take any action hereunder nor shall
Lender be liable to Debtor for failure to take any act on hereunder.
This appointment shall be deemed a power coupled with an interest and
shall not be terminable as long as the Obligation is outstanding and
shall not terminate on the disability or incompetence of Debtor.
Q. WAIVERS BY DEBTOR. Debtor waives notice of the creation, advance,
increase, existence, extension or renewal of and of any indulgence
with respect to, the Obligation; waives presentment, demand, notice of
dishonor, and protest; waives notice of the amount of the Obligation
outstanding at any time, notice of any change in financial condition
of any person liable for the Obligation or any part thereof, and all
other notices respecting the Obligation except for notices to be
provided under the Loan Agreement. Debtor waives any right to require
that any action be brought against any other person or to require that
resort be had to any other security or to any balance of any deposit
account. Debtor further waives any right of subrogation or to enforce
any right of action against any other Debtor until the Obligation is
paid in full.
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R. OTHER PARTIES AND OTHER COLLATERAL. No renewal or extension of or any
other indulgence with respect to the Obligation or any part thereof,
no release of any security, no release of any person (including any
maker, indorser, guarantor or surety) liable on the Obligation, no
delay in enforcement of payment, and no delay or omission or lack of
diligence or care in exercising any right or power with respect to the
Obligation or any security therefor or guaranty thereof or under this
Agreement shall in any manner impair or affect the rights of Lender
under the law, hereunder, or under any other agreement pertaining to
the Collateral. Lender need not file suit or assert a claim for
personal judgment against any person for any part of the Obligation or
seek to realize upon any other security for the Obligation, before
foreclosing or otherwise realizing upon the Collateral Debtor waives
any, right to the benefit of or to require or control application of
any other security or proceeds thereof, and agrees that Lender shall
have no duty or obligation to Debtor to apply to the Obligation any
such other security or proceeds thereof.
S. COLLECTION AND SEGREGATION OF ACCOUNTS AND RIGHT TO NOTIFY. Lender
hereby authorizes Debtor to collect the Collateral, subject to the
direction and control of Lender, but following the occurrence and
during the continuance of an Event of Default, Lender may without
cause or notice, curtail or terminate said authority at any time. Upon
notice by Lender, whether oral or in writing to Debtor, Debtor shall
forthwith upon receipt of all checks, drafts, cash, and other
remittances in payment of or on account following the occurrence and
during the continuance of an Event of Default of the Collateral,
deposit the same in one or more special accounts maintained with
Lender over which Lender alone shall have power of withdrawal. The
remittance of the proceeds of such Collateral shall not, however,
constitute payment or liquidation of such Collateral until Lender
shall receive good funds for such proceeds. Funds placed in such
special accounts shall be held by Lender as security for all
Obligations secured hereunder. These proceeds shall be deposited in
precisely the form received except for the endorsement of Debtor where
necessary to permit collection of items, which indorsement Debtor
agrees to make and which indorsement Lender is also hereby authorized,
as attorney-in-fact, to make on behalf of Debtor. In the event Lender
has notified Debtor to make deposits to a special account, pending
such deposit, Debtor agrees that it will not commingle any such
checks, drafts, cash or other remittances with any funds or other
property of Debtor, but will hold them separate and apart therefrom,
and upon an express trust for Lender until deposit thereof is made in
the special account. Lender will, from time to time, apply the whole
or any part of the Collateral funds on deposit in this special account
against such Obligations as are secured hereby as Lender may in its
sole discretion elect. At the sole election of Lender, any portion of
said funds on deposit in the special account which Lender shall elect
not to apply to the Obligations, may be paid over by Lender to Debtor.
At any time, following the occurrence and during the continuance of an
Event of Default, Lender may notify persons obligated on any
Collateral to make payments directly to Lender and Lender may take
control of all proceeds of any Collateral. Until Lender elects to
exercise such rights, Debtor as agent of Lender, shall collect and
enforce all payments owed on the Collateral.
T. COMPLIANCE WITH STATE AND FEDERAL LAWS. Debtor will maintain its
existence, good standing and qualification to do business, where the
failure to do so would result in a Material Adverse Effect, and comply
in all material respects with all laws, regulations and governmental
requirements, including without limitation, environmental laws
applicable to it or any of its property, business operations and
transactions.
U. ENVIRONMENTAL COVENANTS. Debtor shall immediately advise Lender in
writing of (i) any and all material enforcement, cleanup, remedial,
removal, or other governmental or regulatory actions instituted,
completed or threatened pursuant to any applicable federal, state, or
local laws, ordinances or regulations relating to any Hazardous
Materials affecting Debtor's business operations; and (ii) all
material claims made or threatened by any third party against Debtor
relating to damages, contribution, cost recovery, compensation, loss
or injury resulting from any Hazardous Materials. Debtor shall
immediately notify Lender of any material remedial action taken by
Debtor with respect to Debtor's business operations. Debtor will not
use or permit any other party to use any Hazardous Materials at any of
Debtor's places of business or at any other property owned by Debtor
except such materials as are incidental to Debtor's normal course of
business, maintenance and repairs and which are handled in material
compliance with all applicable environmental laws. Debtor agrees to
permit Lender, its agents, contractors and employees to enter and
inspect any of Debtor's places of business or any other property of
Debtor at any reasonable times upon three (3) days prior notice for
the purposes of conducting, at Lender's expense, an environmental
investigation and audit (including taking physical samples) to insure
that Debtor is complying with this covenant.
6. RIGHTS AND POWERS OF LENDER.
A. GENERAL. Lender, following the occurrence and during the continuance
of an Event of Default may obtain from any person information
regarding Debtor or Debtor's business, which information any such
person also may furnish without liability to Debtor; require Debtor to
give possession or control of any Collateral to Lender; indorse as
Debtor's agent any instruments, documents or chattel paper in the
Collateral or representing proceeds of the Collateral; contact account
debtors directly to verify information furnished by Debtor; take
control of proceeds, Including stock received as dividends or by
reason of stock splits; release the Collateral in its possession to
any Debtor, temporarily or otherwise; require additional Collateral;
reject as unsatisfactory any property hereafter offered by Debtor as
Collateral; set standards from time to time to govern what may be used
as after acquired Collateral; designate, from time to time, a certain
percent of the Collateral as the loan value and require Debtor to
maintain the Obligation at or below such figure; take control of funds
generated by the Collateral, such as cash dividends, interest and
proceeds or refunds from insurance, and use same to reduce any part of
the Obligation and exercise all other rights which an owner of such
Collateral may exercise, except the right to vote or dispose of the
Collateral before an Event of Default; at any time transfer any of the
Collateral or evidence thereof into its own name or that of its
nominee; and demand, collect, convert, redeem receipt for, settle,
compromise, adjust, ▇▇▇ for, foreclose or realize upon the Collateral,
in its own name or in the name of Debtor, as Lender may determine.
Lender shall not be liable for failure to collect any account or
instruments, or for any act or omission on the part of Lender, its
officers, agents or employees, except for its or their own willful
misconduct or gross negligence. The foregoing rights and powers of
Lender will be in addition to, and not a limitation upon, any rights
and powers of Lender given by law, elsewhere in this Agreement, or
otherwise. If Debtor fails to maintain any required insurance to the
extent permitted by applicable law Lender may (but is not obligated
to) following 10 days prior written notice to Debtor purchase single
interest insurance coverage for the Collateral which insurance may at
Lender's option (i) protect only Lender and not provide any
remuneration or protection for Debtor directly and (ii) provide
coverage only after the Obligation has been declared due as herein
provided. The premiums for any such insurance purchased by Lender
shall be a part of the Obligation and shall bear interest as provided
in 3(d) hereof.
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7. DEFAULT.
A. EVENT OF DEFAULT. An event of default ("Event of Default") shall occur
if: (i) there is a loss, theft, damage or destruction of any material
portion of the Collateral for which there is no insurance coverage or
for which, in the opinion of Lender, there is insufficient insurance
coverage; or (ii) the occurrence of a "Default" under the Loan
Agreement.
B. RIGHTS AND REMEDIES. If any Event of Default shall occur then in each
and every such case, Lender may without presentment, demand, or
protest; notice of default, dishonor, demand, non-payment, or protest;
notice of intent to accelerate all or any part of the Obligation;
notice of acceleration of all or any part of the Obligation; or notice
of any other kind, all of which Debtor hereby expressly waives,
(except for any notice required under this Agreement, any other Loan
Document or applicable law); at any time thereafter exercise and/or
enforce any of the following rights and remedies of Lender's option:
i. ACCELERATION. The Obligation shall at Lender's option, become
immediately due and payable, and the obligation, If any, of
Lender to permit further borrowings under the Obligation shall at
Lender's option immediately cease and terminate.
ii. POSSESSION AND COLLECTION OF THE COLLATERAL. At its option: (a)
take possession or control of, store, lease, operate, manage,
sell, or instruct any Agent or Broker to sell or otherwise
dispose of, all or any part of the Collateral; (b) notify all
parties under any account or contract right forming all or any
part of the Collateral to make any payments otherwise due to
Debtor directly to Lender; (c) in Lender's own name, or in the
name of Debtor, demand, collect, receive, ▇▇▇ for, and give
receipts and releases for, any and all amounts due under such
accounts and contract rights; (d) indorse as the agent of Debtor
any check, note, chattel paper, documents or instruments forming
all or any part of the Collateral; (e) make formal application
for transfer to Lender (or to any assignee of Lender or to any
purchaser of any of the Collateral) of all of Debtor's permits,
licenses, approvals, agreements and the like relating to the
Collateral or to Debtor's business; (f) take any other action
which Lender deems necessary or desirable to protect and realize
upon its security interest in the Collateral; and (g) in addition
to the foregoing, and not in substitution therefor, exercise any
one or more of the rights and remedies exercisable by Lender
under any other provision of this Agreement, under any of the
other Loan Documents, or as provided by applicable law
(including, without limitation, the Uniform Commercial Code as in
effect in NEW YORK (hereinafter referred to as the "UCC")). In
taking possession of the Collateral Lender may enter Debtor's
premises and otherwise proceed without legal process, if this can
be done without breach of the peace. Debtor shall, upon Lender's
demand, promptly make the Collateral or other security available
to Lender at a place designated by Lender, which place shall be
reasonably convenient to both parties.
Lender shall not be liable for nor be prejudiced by, any loss, depreciation or
other damages to the Collateral, unless caused by Lender's willful and malicious
act. Lender shall have no duty to take any action to preserve or collect the
Collateral.
iii. RECEIVER. Obtain the appointment of a receiver for all or any of
the Collateral, Debtor hereby consenting to the appointment of
such a receiver and agreeing not to oppose any such appointment.
iv. RIGHT OF SET OFF. Without notice or demand to Debtor, set off and
apply against any and all of the Obligation any and all deposits
(general or special, time or demand provisional or final) and any
other indebtedness, at any time held or owing by Lender or any of
Lender's agents or affiliates to or for the credit of the account
of Debtor or any guarantor or indorser of Debtor's Obligation.
Lender shall be entitled to immediate possession of all books and records
evidencing any Collateral or pertaining to chattel paper covered by this
Agreement and it or its representatives shall have the authority to enter upon
any premises upon which any of the same, or any Collateral, may be situated and
remove the same therefrom without liability. Lender may surrender any insurance
policies in the Collateral and receive the unearned premium thereon. Debtor
shall be entitled to any surplus and shall be liable to Lender for any
deficiency. The proceeds of any disposition after default available to satisfy
the Obligation shall be applied to the Obligation in such order and in such
manner as Lender in its discretion shall decide.
Debtor specifically understands and agrees that any sale by Lender of all or
part of the Collateral pursuant to the terms of this Agreement may be effected
by the Lender at times and in manners which could result in the proceeds of such
sale as being significantly and materially less than might have been received if
such sale had occurred at different times or in different manners, and Debtor
hereby releases Lender and its officers and representatives from and against any
and all obligations and liabilities arising out of or related to the timing or
manner of any such date; provided that any such sale is in accordance with
applicable law and conducted in a commercially reasonable manner.
8. GENERAL.
A. PARTIES BOUND. Lender's rights hereunder shall inure to the
benefit of its successors and assigns. In the event of any
assignment or transfer by Lender of any of the Obligation or the
Collateral, Lender thereafter shall be fully discharged from any
responsibility with respect to the Collateral so assigned or
transferred, but Lender shall retain all rights and powers hereby
given with respect to any of the Obligation or the Collateral not
so assigned or transferred. All representations, warranties and
agreements of Debtor if more than one are joint and several and
all shall be binding upon the personal representatives, heirs,
successors and assigns of Debtor.
B. WAIVER. No delay of Lender in exercising any power or right shall
operate as a waiver thereof; nor shall any single or partial
exercise of any power or right preclude other or further exercise
thereof or the exercise of any other power or right. No waiver by
Lender of any right hereunder or of any default by Debtor shall
be binding upon Lender unless in writing, and no failure by
Lender to exercise any power or right hereunder or waiver of any
default by Debtor shall operate as a waiver of any other or
further exercise of such right or power or of any further
default. Each right, power and remedy of Lender as provided for
herein or in any of the Loan Documents, or which shall now or
thereafter exist at law or in equity or by statue of otherwise,
shall be cumulative and concurrent and shall be in addition to
every other such right, power or remedy. The exercise or
beginning of the exercise by Lender of any one
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or more of such rights, powers or remedies shall not preclude the
simultaneous or later exercise by Lender or any or all other such
rights, powers or remedies.
C. AGREEMENT CONTINUING. This Agreement shall constitute a
continuing agreement, applying to all future as well as existing
transactions, whether or not of the character contemplated at the
date of this Agreement, and if all transactions between Lender
and Debtor shall be closed at any time, shall be equally
applicable to any new transactions thereafter. Provisions of this
Agreement, unless by their terms exclusive, shall be in addition
to other agreements between the parties. Time is of the essence
of this Agreement.
D. DEFINITIONS. Unless the context indicates otherwise, definitions
in the UCC apply to words and phrases in this Agreement; if UCC
definitions conflict, Article 9 definitions apply.
E. NOTICES. Notice shall be deemed reasonable if mailed postage
prepaid at least five (5) days before the related action (or if
the UCC elsewhere specifies a longer period, such longer period)
to the address of Debtor given above, or to such other address as
any party may designate by written notice to the other party.
Each notice request and demand shall be deemed given or made, if
sent by mail, upon the earlier of the date of receipt of five (5)
days after deposit in the U.S. Mail, first class postage prepaid,
or if sent by any other means, upon delivery.
F. MODIFICATIONS. No provision hereof shall be modified or limited
except by written agreement expressly referring hereto and to the
provisions so modified or limited and signed by Debtor and
Lender. The provisions of this Agreement shall not be modified or
limited by course of conduct or usage of trade.
G. APPLICABLE LAW AND PARTIAL INVALIDITY. This Agreement has been
delivered in the State of NEW YORK and shall be construed in
accordance with the laws of that State. Wherever possible each
provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating
the remainder of such provisions or the remaining provisions of
this Agreement. The invalidity or unenforceability of any
provision of any Loan Document to any person or circumstances
shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.
H. FINANCING STATEMENT. To the extent permitted by applicable law, a
carbon, photographic or other reproduction of this Agreement or
any financing statement covering the Collateral shall be
sufficient as a financing statement.
I. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF
OR RELATING TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY
RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY CLAIM
BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY
BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES
OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL
DISPUTES OF AMERICAN ARBITRATION ASSOCIATION OR ANY SUCCESSOR
THEREOF ("A.A.A."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL.
JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION. ANY PARTY TO THIS INSTRUMENT, AGREEMENT OR
DOCUMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY INCONSISTENCY OR CLAIM
TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
I. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN NEW YORK COUNTY,
NEW YORK AND ADMINISTERED BY A.A.A. WHO WILL APPOINT AN ARBITRATOR. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS.
II. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL BE
DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT; OR (II) LIMIT THE RIGHT OF LENDER HERETO (A) TO EXERCISE SELF HELP
REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY
REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL
OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. LENDER MAY EXERCISE SUCH SELF HELP
RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY
REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING
BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS
EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION
FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER
OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
J. CONTROLLING DOCUMENT. To the extent that this Security Agreement
conflicts with or is in any way incompatible with any other Loan
Document concerning the Obligation, any promissory note shall
control over any other document, and if such note does not
address an issue, then each other document shall control to the
extent that it deals most specifically with an issue.
K. EXECUTION UNDER SEAL. This Agreement is being executed under seal
by Debtor(s).
L. NOTICE OF FINAL AGREEMENT. THIS WRITTEN SECURITY AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
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PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be
duly executed under seal by their duly authorized representatives as of the date
first above written.
MUSI INVESTMENTS ▇.▇. ▇▇▇▇▇▇ TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ Antivari By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇ Antivari Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title:___________________________ Title: Chairman and CEO
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Attest (If Applicable)
[Corporate Seal]
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