Exhibit 10.2
GENERAL SECURITY AGREEMENT
GENERAL SECURITY AGREEMENT dated as of June 30, 2004 by Ultralife
Batteries, Inc., a Delaware corporation ("Debtor") in favor of JPMorgan Chase
Bank, in its capacity as Collateral Agent for the Lenders party to the Credit
Agreement described below.
W I T N E S S E T H :
WHEREAS, Debtor, Collateral Agent and Lenders are parties to a Credit
Agreement dated as of June 30, 2004 (as the same may be amended and in effect
from time to time, the "Credit Agreement"), pursuant to which Lenders have
agreed to make loans available to Debtor; and
WHEREAS, it is a condition precedent to the availability of such loans
under the Credit Agreement that Debtor shall have granted the security interests
contemplated by this Agreement in order to secure the payment and performance of
Debtor's indebtedness and obligations under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make the loans available to Debtor under the Credit Agreement, Debtor
hereby agrees with Collateral Agent for its benefit and the benefit of Lenders
as follows:
SECTION 1. Definitions
1.1 Certain Defined Terms. Terms defined in the UCC and not otherwise
defined herein shall have the respective meanings provided for in the UCC. Terms
defined in the Credit Agreement and not otherwise defined herein or in the UCC
shall have the respective meanings provided for in the Credit Agreement. The
following terms, as used herein, have the meanings set forth below:
"Collateral" has the meaning assigned to that term in Section 2.
"Control" means "control" as defined in the UCC.
"Copyright License" means any oral or written agreement now or hereafter
in existence granting to Debtor any right to use any copyright, as the same may
be amended and in effect from time to time.
"Copyrights" means collectively all of the following now owned or
hereafter created or acquired by Debtor: (a) all copyrights, rights and
interests in copyrights, works protectable by copyright, copyright registrations
and copyright applications, including, without limitation, those listed in the
schedules to the Copyright Security Agreement; (b) all renewals of any of the
foregoing; (c) all income, royalties, damages and payments now or hereafter due
and/or payable under any of the foregoing or with respect to any of the
foregoing, including, without limitation, damages or payments for past, present
or future infringements of any of the foregoing; (d) the right to ▇▇▇ for past,
present and future infringements of any of the foregoing; (e) all rights
corresponding to any of the foregoing throughout the world; and (f) all goodwill
associated with and symbolized by any of the foregoing.
"Copyright Security Agreement" means the copyright security agreement to
be executed and delivered by Debtor to Lender, substantially in the form of
Exhibit A, as the same may be amended and in effect from time to time.
"Depository Account" has the meaning assigned to that term in Section 7.
"Intellectual Property" means collectively all of the following:
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks and
Trademark Licenses.
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"Patent License" means any oral or written agreement now or hereafter in
existence granting to Debtor any right to use any invention on which a patent is
in existence, as the same may be amended and in effect from time to time.
"Patents" means collectively all of the following now owned or hereafter
created or acquired by any Debtor: (a) all patents and patent applications
including, without limitation, those listed in the schedules to the Patent
Security Agreement and the inventions and improvements described and claimed
therein, and patentable inventions; (b) the reissues, divisions, continuations,
renewals, extensions and continuations-in-part of any of the foregoing; (c) all
income, royalties, damages and payments now or hereafter due and/or payable
under any of the foregoing or with respect to any of the foregoing, including,
without limitation, damages and payments for past, present and future
infringements of any of the foregoing; (d) the right to ▇▇▇ for past, present
and future infringements of any of the foregoing; (e) all rights corresponding
to any of the foregoing throughout the world; and (f) all goodwill associated
with any of the foregoing.
"Patent Security Agreement" means the patent security agreement executed
and delivered by Debtor to Lender, substantially in the form of Exhibit B, as
the same may be amended and in effect from time to time.
"Secured Obligations" has the meaning assigned to that term in Section 3.
"Security Interests" means the security interests granted pursuant to
Section 2 hereof and pursuant to the Copyright Security Agreement, the Patent
Security Agreement and the Trademark Security Agreement, as well as all other
security interests created or assigned as additional security for the Secured
Obligations pursuant to the provisions of this Agreement and the other Loan
Documents.
"Trademark License" means any oral or written agreement now or hereafter
in existence granting to Debtor any right to use any trademark, as the same may
be amended and in effect from time to time.
"Trademarks" means collectively all of the following now owned or
hereafter created or acquired by Debtor: (a) all trademarks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, service marks, logos, other business identifiers, prints and labels on
which any of the foregoing have appeared or appear, all registrations and
recordings thereof, and all applications in connection therewith including,
without limitation, those listed in the schedules to the Trademark Security
Agreement; (b) all renewals thereof; (c) all income, royalties, damages and
payments now or hereafter due and/or payable under any of the foregoing or with
respect to any of the foregoing including, without limitation, damages and
payments for past, present and future infringements of any of the foregoing; (d)
the right to ▇▇▇ for past, present and future infringements of any of the
foregoing; (e) all rights corresponding to any of the foregoing throughout the
world; and (f) all goodwill associated with and symbolized by any of the
foregoing.
"Trademark Security Agreement" means the trademark security agreement
executed and delivered by Debtor to Lender substantially in the form of Exhibit
C, as the same may be amended and in effect from time to time.
"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of New York, provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of the
Security Interest in any Collateral or the availability of any remedy hereunder
is governed by the Uniform Commercial Code as in effect on or after the date
hereof in any other jurisdiction, "UCC" means the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such perfection or effect of perfection or non-perfection or availability of
such remedy.
1.2 Other Definition Provisions. References to "Sections, " "subsections,"
"Exhibits" and "Schedules" shall be to Sections, subsections, Exhibits and
Schedules, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the
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context otherwise requires, be used in the singular or the plural depending on
the reference. All references to statutes and related regulations shall include
(unless otherwise specifically provided herein) any amendments of same and any
successor statutes and regulations.
SECTION 2. Grant of Security Interests
To secure the payment, performance and observance of the Secured
Obligations, Debtor hereby grants to Collateral Agent, for the benefit of
Collateral Agent and Lenders, a continuing security interest in, right of setoff
against, and (except as to Trademarks as to which Debtor grants only a security
interest) a collateral assignment to Collateral Agent of, all right, title and
interest of Debtor in all personal property (the "Collateral"), whether now
owned or existing or hereafter acquired or arising and regardless of where
located including, without limitation, all of the types of Collateral described
in Schedule A, attached hereto and made a part hereof.
Notwithstanding the foregoing, so long as no Event of Default has occurred
and is continuing, Debtor shall have the exclusive, non-transferable right and
license to use the Intellectual Property.
SECTION 3. Security for Obligations
This Agreement secures the payment and performance of all indebtedness,
liabilities and obligations of Debtor now existing or hereafter created or
arising under this Agreement or any other agreement with Collateral Agent, any
Lender and/or any of the affiliates of Collateral Agent or any affiliates of any
Lender (including, without limitation, any and all indebtedness, liabilities and
obligations arising under or in respect to any Swap Agreement) and all renewals,
extensions, restructurings and refinancings of any of the above including,
without limitation, any additional indebtedness which may be extended to Debtor
pursuant to any restructuring or refinancing of Debtor's indebtedness under the
Credit Agreement, and including any post-petition interest accruing during any
bankruptcy, reorganization or other similar proceeding (all such indebtedness,
liabilities and obligations of Debtor being collectively referred to herein as
the "Secured Obligations").
SECTION 4. Debtor Remains Liable
Anything herein to the contrary notwithstanding: (a) Debtor shall remain
liable under the contracts and agreements included in its Collateral to the
extent set forth therein to perform all of its duties and obligations thereunder
to the same extent as if this Agreement had not been executed; (b) the exercise
by Collateral Agent of any of the rights hereunder shall not release Debtor from
any of its duties or obligations under the contracts and agreements included in
the Collateral; and (c) neither Collateral Agent nor any Lender shall have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Collateral Agent nor any
Lender be obligated to perform any of the obligations or duties of Debtor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 5. Representations and Warranties
In order to induce Collateral Agent to enter into this Agreement for its
benefit and the benefit of the Lenders, Debtor represents and warrants to
Collateral Agent and to each Lender as follows:
5.1 Binding Obligation. This Agreement is the legally valid and binding
obligation of Debtor, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws or equitable principles relating to or limiting
creditor's rights generally.
5.2 Location of Equipment and Inventory. All of the Equipment, Inventory
and Fixtures of Debtor are located at the places specified on Schedule I. All
hereafter acquired Equipment, Inventory or Fixtures of Debtor will be located at
the places specified on Schedule I hereto, except as otherwise
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permitted hereunder. None of said locations are leased by Debtor as lessee
except those designated as such on Schedule I.
5.3 Ownership of Collateral; Bailees. Except for matters disclosed on
Schedule II, other Permitted Encumbrances and the Security Interests, Debtor
owns its Collateral, and will own all after-acquired Collateral, free and clear
of any Lien. No effective financing statement or other form of lien notice
covering all or any part of its Collateral is on file in any recording office,
except for those in favor of Collateral Agent and as disclosed on Schedule II.
Except as disclosed on Schedule II, none of the Collateral is in the possession
of any consignee, bailee, warehouseman, agent or processor. Debtor does not sell
any Inventory to any customer on approval or on any other basis which entitles
the customer to return, or which may obligate Debtor to repurchase, such
Inventory.
5.4 Office Locations; Fictitious Names. The jurisdiction of organization,
mailing address, principal place of business, chief executive office and office
where Debtor keeps its books and records relating to its Accounts, Documents,
General Intangibles, Instruments and Investment Property is located at the place
specified on Schedule I. Debtor has no other places of business except those
separately specified on Schedule I. Debtor does not do business and has not done
business during the past five years under any trade-name or fictitious business
name except as disclosed on Schedule III.
5.5 Perfection. Collateral Agent has a valid, attached security interest,
and upon completion of all necessary steps for perfection, will have a perfected
and except for the Permitted Encumbrances and as set forth on Schedule 6.02 to
the Credit Agreement, first priority security interest in the Collateral,
securing the payment of the Secured Obligations, and such Security Interests are
entitled to all of the rights, priorities and benefits afforded by the UCC or
other applicable law as enacted in any relevant jurisdiction which relates to
perfected security interests.
5.6 Governmental Authorizations; Consents. No authorization, approval or
other action by, and no notice to or filing with, any domestic or foreign
governmental authority or regulatory body or consent of any other Person is
required either (a) for the grant by Debtor of the Security Interests granted
hereby or for the execution, delivery or performance of this Agreement by Debtor
or (b) for the perfection of or the exercise by Collateral Agent of its rights
and remedies hereunder.
5.7 Accounts. Each existing and each hereafter arising Account, Payment
Intangible and other General Intangibles representing an obligation of payment
owed to the Debtor ("Payment Obligations") constitutes, or will constitute, the
legally valid and binding obligation of the customer obligated to pay the same.
The amount represented by Debtor to Collateral Agent as owing by each customer
is, or will be, the correct amount actually and unconditionally owing, except
for normal cash discounts and allowances where applicable. No customer has any
defense, set-off, claim or counterclaim against Debtor that can be asserted
against Collateral Agent, whether in any proceeding to enforce Collateral
Agent's rights in the Collateral or otherwise except defenses, setoffs, claims
or counterclaims that are not, in the aggregate, material to the value of the
Accounts. None of the Payment Obligations are, nor will any hereafter arising
Payment Obligations be, evidenced by a promissory note or other Instrument other
than a check.
5.8 Intellectual Property. Debtor's Copyrights, Patents and Trademarks
listed on the respective schedules to each of the Copyright Security Agreement,
the Patent Security Agreement and the Trademark Security Agreement constitute
all of the federally registered Copyrights, Patents and Trademarks owned by
Debtor. To the best of Borrower's knowledge, all federally registered
Copyrights, Patents and Trademarks owned by Debtors are valid, subsisting and
enforceable and all filings necessary to maintain the effectiveness of such
registrations have been made.
5.9 Inventory. All Debtor's Inventory is of good and merchantable quality,
free from any defects, such Inventory is not subject to any licensing, patent,
trademark, trade name or copyright agreement with any Person that restricts
Debtor's ability to manufacture and/or sell its Inventory and the completion and
manufacture of such Inventory by a Person other than Debtor would be permitted
under any contract to which Debtor is a party or to which such Inventory is
subject.
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5.10 Accurate Information. All information heretofore, herein or hereafter
supplied to the Collateral Agent or any Lender by or on behalf of Debtor with
respect to its Collateral is and will be accurate and complete in all material
respects.
SECTION 6. Further Assurances; Covenants
6.1 Other Documents and Actions. Debtor will, from time to time, at its
expense, promptly execute and deliver all further instruments and documents and
take all further action that may be necessary or desirable, or that Collateral
Agent may request, in order to create, perfect and protect any security
interests granted or purported to be granted hereby or pursuant to any other
Loan Document or to enable Collateral Agent to exercise and enforce its rights
and remedies hereunder, or under any other Loan Document with respect to the
Collateral. Without limiting the generality of the foregoing, Debtor will: (a)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments, documents or notices, as may be necessary
or desirable, or as Collateral Agent may request, in order to create, perfect
and preserve the security interests granted or purported to be granted hereby or
pursuant to any other Loan Document with respect to the Collateral; (b) at any
reasonable time, upon demand by Collateral Agent after and during the
continuance of an Event of Default, exhibit its Collateral to allow inspection
of such Collateral by Collateral Agent or Persons designated by Collateral Agent
and to examine and make copies of the records of Debtor related thereto, and to
discuss such Collateral and the records of Debtor with respect thereto with, and
to be advised as to the same by, Debtor's officers and employees and, after the
occurrence and during the continuance of an Event of Default, in the case of
Debtor's Accounts, Documents, General Intangibles, Instruments and Investment
Property with any Person which is or may be obligated thereon; and (c) upon
Collateral Agent's request, appear in and defend any action or proceeding that
may affect Debtor's title to or Collateral Agent's security interest in with
respect to the Collateral. Without limiting the generality of the foregoing,
Debtor shall use its reasonable best efforts to obtain a Landlord Waiver
Agreement (as defined herein) from each of its existing landlords with respect
to any premises of Debtor located in the United States of America. For purposes
herein, the term "Landlord Waiver Agreement" shall mean a written agreement from
the landlord of such premises in favor of the Collateral Agent, in form and
substance reasonably satisfactory to the Collateral Agent, pursuant to which
such landlord will acknowledge Collateral Agent's security interest in the
Collateral, waive any security interest, lien or other claim by such landlord to
the Collateral and agree to permit Collateral Agent access to the premises in
order to exercise its rights and remedies and otherwise deal with the
Collateral.
6.2 Collateral Agent Authorized. The Debtor irrevocably appoints the
Collateral Agent as its lawful attorney and agent and grants the Collateral
Agent the power to execute, authenticate and to file, with or without any
signature and by electronic means, any Financing Statement, Addendum, Amendment,
Continuation Statement or other Record, in the Debtor's name and on the Debtor's
behalf including any filing which further describes for identification any
Commercial Tort Claim which may come into existence in the future.
6.3 Corporate or Name Change. Debtor will give Collateral Agent at least
thirty (30) days prior written notice of any such change in Debtor's name,
identity, jurisdiction of organization, mailing address or corporate structure.
With respect to any change, Debtor will promptly execute and deliver such
documents and take such actions as Collateral Agent deems necessary or desirable
to create, perfect and preserve the security interests of Collateral Agent in
the Collateral.
6.4 Business Locations. Subject to the next sentence, Debtor will keep its
Collateral (other than Collateral in the possession of Collateral Agent and cash
on deposit in Depository Accounts and other permitted deposit accounts) at the
locations specified on Schedule I. Debtor will give Collateral Agent at least
thirty (30) days prior written notice of any change in Debtor's chief executive
office and principal place of business or of any new location of business or any
new location for any of Debtor's Collateral. With respect to any new location
(which in any event shall be within the continental United States), Debtor will
execute such documents and take such actions as Collateral Agent deems necessary
to perfect and preserve Collateral Agent's security interest in Debtor's
Collateral.
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6.5 Bailees. No Collateral in excess of $200,000 shall at any time be in
the possession or control of any warehouseman, bailee or any of Debtor's agents
or processors without Collateral Agent's prior written consent and unless
Collateral Agent, if Collateral Agent has so requested, has received warehouse
receipts or bailee lien waivers satisfactory to Collateral Agent prior to the
commencement of such storage. Debtor shall, upon the request of Collateral
Agent, notify any such warehouseman, bailee, agent or processor of the Security
Interests created hereby and shall instruct such Person to hold all such
Collateral for Collateral Agent's account subject to Collateral Agent's
instructions.
6.6 Instruments. After and during the continuance of an Event of Default,
Debtor will deliver and pledge to Collateral Agent all Instruments duly endorsed
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to Collateral Agent. Debtor will also deliver to
Collateral Agent all security agreements securing any Instruments and execute
UCC-3 financing statements assigning to Collateral Agent any UCC financing
statements filed by Debtor in connection with such security agreements. Debtor
will ▇▇▇▇ conspicuously all chattel paper with a legend, in form and substance
satisfactory to Collateral Agent, indicating that such chattel paper is subject
to the Security Interests.
6.7 Filing Requirements. None of the Equipment (other than motor vehicles)
is covered by any certificate of title. Upon request of Collateral Agent, Debtor
shall promptly deliver to Collateral Agent any and all certificates of title,
applications for title or similar evidence of ownership of all Equipment and
shall cause Collateral Agent to be named as lienholder on any such certificate
of title or other evidence of ownership. None of the Collateral is of a type in
which security interests or liens may be registered, recorded or filed under, or
notice thereof given under, any federal statute or regulation except for
Collateral described on the schedules to the Copyright Security Agreement, the
Patent Security Agreement and the Trademark Security Agreement. Debtor shall
promptly notify Collateral Agent in writing upon acquiring any interest
hereafter in Collateral that is of a type where a security interest or lien may
be registered, recorded or filed under, or notice thereof given under, any
federal statute or regulation. Debtor shall promptly inform Collateral Agent of
any deletions from (other than in the ordinary course of Debtor's business) its
Equipment and shall not permit any such items to become Fixtures to real estate
other than real estate subject to mortgages or deeds of trust in favor of
Collateral Agent and except if the aggregate value of the Equipment which
becomes a Fixture after the date hereof does not exceed $100,000 in each of
Debtor's premises. The legal description and street address of the property on
which any Fixtures are located is set forth on Schedule I, together with the
name and common address of the record owner of each such property.
6.8 Investment Property Covenants. Debtor will take any and all actions
required or requested by Collateral Agent, from time to time, to (a) cause
Collateral Agent to obtain exclusive Control of any Investment Property owned by
Debtor in a manner acceptable to Collateral Agent and (b) obtain from any
issuers of Investment Property and such other Persons, for the benefit of
Collateral Agent, written confirmation of Collateral Agent's Control over such
Investment Property. For purposes of this subsection 6.8, Lender shall have
exclusive Control of Investment Property if (I) such Investment Property
consists of certificated securities and Debtor delivers such certificated
securities to Collateral Agent (with appropriate endorsements if such
certificated securities are in registered form); (ii) such Investment Property
consists of uncertificated securities and either (x) Debtor delivers such
uncertificated securities to Lender or (y) the issuer thereof agrees, pursuant
to documentation in form and substance satisfactory to Lender, that it will
comply with instructions originated by Lender without further consent by Debtor;
and (iii) such Investment Property consists of security entitlements and either
(x) Lender becomes the entitlement holder thereof or (y) the appropriate
securities intermediary agrees, pursuant to documentation in form and substance
satisfactory to Collateral Agent, that it will comply with entitlement orders
originated by Lender without further consent by Debtor.
6.9 Account Covenants. Except as otherwise provided in this subsection
6.9, Debtor shall continue to collect, at its own expense, all amounts due or to
become due Debtor under the Accounts and other Payment Obligations and apply
such amounts as are so collected to the outstanding balances thereof. In
connection with such collections, Debtor may take (and, at Collateral Agent's
direction while
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an Event of Default is continuing, shall take) such action as Debtor or
Collateral Agent may deem necessary or advisable to enforce collection of the
Accounts and other Payment Obligations; provided, that Collateral Agent shall
have the right at any time after the occurrence and during the continuance of a
Default or an Event of Default to: (a) notify the customers or obligors under
any Accounts and other Payment Obligations of the assignment of such Accounts
and other Payment Obligations to Collateral Agent and to direct such customers
or obligors to make payment of all amounts due or to become due directly to
Collateral Agent; (b) enforce collection of any such Accounts and other Payment
Obligations; and (c) adjust, settle or compromise the amount or payment of such
Accounts and other Payment Obligations. After the occurrence and during the
continuance of a Default or an Event of Default (I) all amounts and Proceeds
received by Debtor with respect to its Accounts and other Payment Obligations
shall be received in trust for the benefit of Collateral Agent, shall be
segregated from other funds of Debtor and shall be forthwith paid over to
Collateral Agent in the same form as so received (with any necessary
endorsement) to be held in the Depository Account pursuant to Section 7 or
applied pursuant to Section 14. Each Debtor shall not adjust, settle or
compromise the amount or payment of any Account or other Payment Obligations, or
release wholly or partly any customer or obligor thereof, or allow any credit or
discount thereon (other than credits and discounts in the ordinary course of
business and in amounts which are not material to Debtor) without the prior
consent of Collateral Agent.
6.10 Intellectual Property Covenants. Debtor shall concurrently herewith
deliver to Collateral Agent the Copyright Security Agreement, the Patent
Security Agreement and the Trademark Security Agreement and all other documents,
instruments and other items as may be necessary for Collateral Agent to file
such agreements with the United States Copyright Office and the United States
Patent and Trademark Office. If, before the Secured Obligations are paid in
full, Debtor acquires any new federally registered Copyrights, Patents or
Trademarks or rights thereto, Debtor shall give to Collateral Agent prompt
written notice thereof, and shall amend the respective security agreements to
include any such new federally registered Copyrights, Patents or Trademarks.
Debtor shall: (a) prosecute diligently any copyright, patent or trademark
application at any time pending; (b) make application for registration or
issuance of all new copyrights, patents and trademarks as reasonably deemed
appropriate by Debtor; (c) preserve and maintain all rights in its Intellectual
Property; and (d) use its best efforts to obtain any consents, waivers or
agreements necessary to enable Collateral Agent to exercise its remedies with
respect to Debtor's Intellectual Property. Debtor shall not abandon any material
right to file a copyright, patent or trademark application nor shall Debtor
abandon any material pending copyright, patent or trademark application, or
Copyright, Patent, or Trademark without the prior written consent of Collateral
Agent. Debtor represents and warrants to Collateral Agent that the execution,
delivery and performance of this Agreement by Debtor will not violate or cause a
default under any of its Intellectual Property or any agreement in connection
therewith.
6.11 Equipment Covenants. Debtor shall cause its Equipment to be
maintained and preserved in the same condition, repair and working order as when
new, ordinary wear and tear excepted, and in accordance with any manufacturer's
manual, and shall promptly make or cause to be made all repairs, replacements,
and other improvements in connection therewith that are necessary or desirable
to such end.
6.12 Protection of Collateral; Insurance. Debtor will do nothing to impair
the rights of Collateral Agent in the Collateral. Debtor assumes all liability
and responsibility in connection with the Collateral acquired by it, and the
liability of Debtor to pay the Secured Obligations shall in no way be affected
or diminished by reason of the fact that such Collateral may be lost, stolen,
damaged, or for any reason whatsoever unavailable to Debtor. The Debtor will
have and maintain Insurance at its expense at all times in such amounts, in such
form, containing such terms and written by such companies as may be reasonably
satisfactory to Collateral Agent. All policies of Insurance shall be payable to
the Collateral Agent and the Debtor, as their interests may appear, shall
identify the Collateral Agent as Lenders Loss Payee, and shall provide for
thirty (30) days' written notice of cancellation or modification to Collateral
Agent. Collateral Agent is authorized by the Debtor to act as its attorney in
collecting, adjusting, settling or cancelling such Insurance and endorsing any
drafts drawn by insurers. Collateral Agent may apply any proceeds of Insurance
received by it to the Secured Obligations, whether due or not; provided,
however, that Collateral Agent will hold such proceeds as a special deposit for
use by the Debtor in
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replacing any damaged Collateral which gave rise to such proceeds, so long as
the Debtor is taking steps to replace such Collateral with due diligence and in
good faith and so long as no Event of Default shall have occurred. The Debtor
will immediately notify Collateral Agent of any damage to or loss of the
Collateral in excess of $500,000. Not later than the expiration date of each
policy of Insurance then in effect, the Debtor shall deliver to Collateral Agent
a certificate of Insurance certifying as to (i) the extension of such policy or
the issuance of a renewal policy therefor, describing the same in reasonable
detail satisfactory to Collateral Agent, and (ii) the payment in full of the
portion of the premium therefor then due and payable (or accompanied by other
proof of such payment satisfactory to Secured Party). The Debtor shall be
required forthwith to notify Collateral Agent (by telephone, confirmed in
writing) if the Debtor shall determine at any time not to, or at any time be
unable to, extend or renew any such policy then in effect.
6.13 Taxes and Claims. Debtor will pay when due all property and other
taxes, assessments and governmental charges imposed upon, and all claims
against, Debtor's Collateral (including claims for labor, materials and
supplies); provided that no such tax, assessment or charge need be paid if
Debtor is contesting the same in good faith by appropriate proceedings promptly
instituted and diligently conducted and if Debtor has established such reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP; and provided further that the same can be contested without risk of loss
or forfeiture or material impairment of the Collateral or the use thereof.
6.14 Collateral Description. Debtor will furnish to Collateral Agent, from
time to time upon request, statements and schedules further identifying and
describing its Collateral and such other information, reports and evidence
concerning its Collateral (and in particular its Accounts) as Collateral Agent
may reasonably request, all in reasonable detail. The Debtor will at all times
keep accurate and complete records of the Accounts, Instruments and other
Collateral and will deliver such reconciliation reports and other financial
information to Collateral Agent as Collateral Agent may at any time reasonably
request. Collateral Agent, or any of its agents, shall have the right to call at
the Debtor's place or places of business at reasonable intervals and upon
reasonable notice to inspect, audit, make test verifications and otherwise
examine and make extracts from the books, records, journals, orders, receipts,
correspondence and other data relating to any of the Collateral.
6.15 Use of Collateral. Debtor will not use or permit its Collateral to be
used unlawfully or in violation of any provision of applicable law, or any
policy of insurance covering any of the Collateral.
6.16 Records of Collateral. Debtor shall keep full and accurate books and
records relating to its Collateral and shall stamp or otherwise ▇▇▇▇ such books
and records in such manner as Collateral Agent may reasonably request indicating
that the Collateral is subject to the Security Interests.
6.17 Federal Claims. Debtor shall notify Collateral Agent of any
Collateral which constitutes a claim against the United States government or any
instrumentality or agency thereof, the assignment of which claim is restricted
by federal law and will execute and deliver to the Collateral Agent an
Assignment of Claims Under United States Government Contract in the form
prescribed by the Collateral Agent. Upon the request of Collateral Agent, Debtor
shall take such steps as may be necessary to comply with any applicable federal
assignment of claims laws.
6.18 Hot Goods. Debtor represents and covenants that none of its Inventory
has been or will be produced in violation of any provision of the Fair Labor
Standards Act of 1938, as amended, or in violation of any other law.
SECTION 7. Bank Accounts; Collection of Accounts and Payments
Upon request by Collateral Agent at any time after an Event of Default,
Debtor shall enter into a blocked account agreement ("Blocked Account
Agreement"), in a form specified by Collateral Agent, with each financial
institution with which Debtor maintains from time to time any deposit accounts
(general or special). Pursuant to the Blocked Account Agreements and pursuant
hereto, Debtor grants and shall grant to Collateral Agent, a continuing lien
upon, and security interest in, all such accounts and all funds
9
at any time paid, deposited, credited or held in such accounts (whether for
collection, provisionally or otherwise) or otherwise in the possession of such
financial institutions, and each such financial institution shall act as
Collateral Agent's agent in connection therewith. At any time after an Event of
Default, Debtor shall not establish any deposit account with any financial
institution unless prior thereto Collateral Agent and Debtor shall have entered
into a Blocked Account Agreement with such financial institution.
Upon Collateral Agent's request at any time after an Event of Default,
Debtor shall establish lock-box or blocked accounts (collectively, "Lockbox
Accounts") in Debtor's name with such banks as are acceptable to Collateral
Agent ("Collecting Banks"), subject to irrevocable instructions in a form
specified by Collateral Agent, to which the obligors of all Accounts and other
Payment Obligations shall directly remit all payments on Accounts and other
Payment Obligations and in which Debtor will immediately deposit all cash
payments for Inventory or other cash payments constituting proceeds of
Collateral in the identical form in which such payment was made, whether by cash
or check. In addition, Collateral Agent may establish one or more depository
accounts at each Collecting Bank or at a centrally located bank (collectively,
the "Depository Account"). From and after receipt by any Collecting Bank of
written notice from Collateral Agent to such Collecting Bank that an Event of
Default has occurred and is continuing, all amounts held or deposited in the
Lockbox Accounts held by such Collecting Bank shall be transferred to the
Depository Account. Subject to the foregoing, Debtor hereby agrees that all
payments received by Collateral Agent whether by cash, check, wire transfer or
any other instrument, made to such Lockbox Accounts or otherwise received by
Collateral Agent and whether on the Accounts or as proceeds of other Collateral
or otherwise will be the sole and exclusive property of Collateral Agent. Debtor
shall, acting as trustee for Collateral Agent, receive, as the sole and
exclusive property of Collateral Agent, any moneys, checks, notes, drafts or
other payments relating to and/or constituting proceeds of Accounts or other
Collateral which come into the possession or under the control of Debtor and
immediately upon receipt thereof, Debtor or such Persons shall deposit the same
or cause the same to be deposited in kind, in a Lockbox Account.
SECTION 8. Collateral Agent Appointed Attorney-in-Fact
Each Debtor hereby irrevocable appoints Collateral Agent as Debtor's
attorney-in-fact, with full authority in the place and stead of Debtor and in
the name of Debtor, Collateral Agent or otherwise, from time to time in
Collateral Agent's discretion to take any action and to execute any instrument
that Collateral Agent may deem necessary or advisable after an Event of Default
to accomplish the purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to Collateral
Agent;
(b) to ask, demand, collect, ▇▇▇ for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due, extend the time of
payment of, make any allowances and other adjustments under or in respect of any
of the Collateral;
(c) to receive, endorse, and collect any drafts or other Instruments,
Documents and chattel paper, in connection with clauses (a) and (b) above;
(d) to file any claims or take any action or institute any proceedings
that Collateral Agent may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of Collateral Agent with
respect to any of the Collateral;
(e) to pay or discharge taxes or Liens levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by Collateral Agent in its sole
discretion, and such payments made by Collateral Agent to become obligations of
Debtor to Collateral Agent, due and payable immediately without demand;
(f) to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, assignments, verifications and notices in
connection with Accounts and other documents relating to the Collateral;
10
(g) generally to sell, transfer, pledge, make any reasonable allowances
and other reasonable adjustments or make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
Collateral Agent were the absolute owner thereof for all purposes, and to do, at
Collateral Agent's option and Debtor's expense, at any time or from time to
time, all acts and things that Collateral Agent deems necessary to protect,
preserve or realize upon the Collateral.
(h) to sign the Debtor's name on any Document, on invoices relating to any
Account, on drafts against customers, on schedules of assignments of Accounts,
on notices of assignment, Financing Statements under the UCC and other public
records, on verifications of Accounts, and on notices to customers;
(i) to file or record in any public office notices of assignment or any
other public notice required to effect this Security Agreement;
(j) to notify the post office authorities to change the address for
delivery of the Debtor's mail to an address designated by Collateral Agent;
(k) to receive, open and dispose of all mail addressed to the Debtor;
(l) to discharge Taxes, liens or other encumbrances at any time levied
against or placed thereon;
(m) to send requests for verification of Accounts to the Debtor's
customers; and
(n) to do all other things Collateral Agent deems reasonably necessary or
desirable to carry out the purposes of this Agreement.
Debtor hereby ratifies and approves all acts of Collateral Agent made or taken
pursuant to this Section 8. Neither Collateral Agent nor any Person designated
by Collateral Agent shall be liable for any acts or omissions (except as caused
by their own gross negligence or willful misconduct) or for any error of
judgment or mistake of fact or law. This power, being coupled with an interest,
is irrevocable so long as this Agreement shall remain in force.
SECTION 9. Transfers and Other Liens
Except as otherwise permitted herein or by the Credit Agreement, Debtor
shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise dispose
of, or grant any option with respect to, any of its Collateral, except that
Debtor may (i) sell Inventory in the ordinary course of business, (ii) dispose
of up to $250,000 in book value of Equipment in any fiscal year without the
prior consent of the Collateral Agent; or
(b) create or suffer to exist any lien, security interest or other charge
or encumbrance upon or with respect to any of its Collateral to secure
indebtedness of any Person except for the security interest created by this
Agreement or permitted under the Credit Agreement.
SECTION 10. Remedies
(a) If any Event of Default shall have occurred and be continuing,
Collateral Agent may exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the UCC (whether or
not the UCC applies to the affected Collateral) and also may: (i) require Debtor
to, and Debtor hereby agrees that it will, at its expense and upon request of
Collateral Agent forthwith, assemble all or part of its Collateral as directed
by Collateral Agent and make it available to Collateral Agent at any reasonable
place or places designated by Collateral Agent in which event Debtor shall at
its own expense (A)
11
forthwith cause the same to be moved to the place or places so designated by
Collateral Agent and thereby delivered to Collateral Agent, (B) store and keep
any Collateral so delivered to Collateral Agent at such place or places pending
further action by Collateral Agent, and (C) while Collateral shall be so stored
and kept, provide such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain the Collateral in good condition;
(ii) withdraw all cash in its Depository Accounts and apply such monies in
payment of the Secured Obligations; and (iii) without notice except as specified
below, sell, lease or otherwise dispose of its Collateral or any part thereof in
one or more parcels at public or private sale, and without the necessity of
gathering at the place of sale of the property to be sold, at any of the
Collateral Agent's offices or elsewhere, at such time or times, for cash, on
credit or for future delivery, and at such price or prices and upon such other
terms as Collateral Agent may deem commercially reasonable. Debtor agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days
notice to Debtor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
At any sale of the Collateral, if permitted by law, Collateral Agent may bid
(which bid may be, in whole or in part, in the form of cancellation of
indebtedness) for the purchase of the Collateral or any portion thereof for the
account of Collateral Agent. Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. Collateral
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. To the extent
permitted by law, Debtor hereby specifically waives all rights of redemption,
stay or appraisal which it has or may have under any law now existing or
hereafter enacted.
(b) Upon the occurrence and during the continuance of an Event of Default,
Collateral Agent or its agents or attorneys shall have the right without notice
or demand or legal process (unless the same shall be required by applicable
law), personally, or by agents or attorneys, (i) to enter upon, occupy and use
any premises owned or leased by Debtor or where the Collateral is located (or is
believed to be located) until the Secured Obligations are paid in full without
any obligation to pay rent to Debtor, to render the Collateral useable or
saleable and to remove the Collateral or any part thereof therefrom to the
premises of Collateral Agent or any agent of Collateral Agent for such time as
Collateral Agent may desire in order to effectively collect or liquidate the
Collateral and use in connection with such removal any and all services,
supplies and other facilities of Debtor; (ii) to take possession of Debtor's
original books and records, to obtain access to Debtor's data processing
equipment, computer hardware and software relating to the Collateral and to use
all of the foregoing and the information contained therein in any manner
Collateral Agent deems appropriate; and (iii) to notify postal authorities to
change the address for delivery of Debtor's mail to an address designated by
Collateral Agent and to receive, open and dispose of all mail addressed to
Debtor.
(c) Debtor acknowledges and agrees that a breach of any of the covenants
contained in Sections 6, 7 and 9 hereof will cause irreparable injury to
Collateral Agent and that Collateral Agent has no adequate remedy at law in
respect of such breaches and therefore agrees, without limiting the right of
Collateral Agent to seek and obtain specific performance of other obligations of
Debtor contained in this Agreement, that the covenants of Debtor contained in
the Sections referred to in this Section shall be specifically enforceable
against Debtor.
SECTION 11. Assignment of Intellectual Property
Debtor hereby grants a security interest to the Collateral Agent in all
Intellectual Property and collaterally assigns, transfers and conveys to
Collateral Agent all non-Trademark Intellectual Property owned or used by Debtor
to the extent necessary to enable Collateral Agent, to be a fully effective
assignment upon the occurrence of any Event of Default, to realize on the
Collateral and any successor or assign to enjoy the benefits of the Collateral.
This right and assignment shall inure to the benefit of Collateral Agent and its
successors, assigns and transferees, whether by voluntary conveyance, operation
of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or
otherwise. Such right and assignment is granted free of charge, without
requirement that any monetary payment whatsoever including, without limitation,
any royalty or license fee, be made to Debtor or any other Person by Collateral
Agent or any Lender.
12
SECTION 12. Assigned Agreements
If an Event of Default has occurred and is continuing, Debtor hereby
irrevocably authorizes and empowers Collateral Agent, without limiting any other
authorizations or empowerments contained in any of the other Loan Documents, to
assert, either directly or on behalf of Debtor, any claims Debtor may have, from
time to time, against any other party to any of the agreements to which Debtor
is a party or to otherwise exercise any right or remedy of Debtor under any such
agreements (including, without limitation, the right to enforce directly against
any party to any such agreement all of Debtor's rights thereunder, to make all
demands and give all notices and to make all requests required or permitted to
be made by Debtor thereunder).
SECTION 13. Limitation on Duty of Collateral Agent with Respect to
Collateral
Beyond the safe custody thereof, Collateral Agent shall have no duty with
respect to any Collateral in its possession or control (or in the possession or
control of any agent or bailee) or with respect to any income thereon or the
preservation of rights against prior parties or any other rights pertaining
thereto. Collateral Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property. Collateral Agent shall not be liable or responsible for any
loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any warehouseman, carrier,
forwarding agency, consignee or other agent or bailee selected by Collateral
Agent in good faith.
SECTION 14. Application of Proceeds
Upon the occurrence and during the continuance of an Event of Default, the
proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held in the Depository Accounts shall be applied: first,
to all fees, costs and expenses incurred by Collateral Agent or any Lender with
respect to the Credit Agreement, the other Loan Documents or the Collateral;
second, to accrued and unpaid interest on the Secured Obligations (including any
interest which but for the provisions of the Bankruptcy Code, would have accrued
on such amounts); third, to the principal amounts of the Secured Obligations
outstanding; and fourth, to any other indebtedness or obligations of Debtor
owing to Collateral Agent or any Lender under the Loan Documents. Any balance
remaining shall be delivered to Debtor.
SECTION 15. Expenses
Debtor shall pay all costs, fees and expenses of protecting, storing,
warehousing, appraising, insuring, handling, maintaining and shipping its
Collateral, all costs, fees and expenses of creating, perfecting, maintaining
and enforcing the Security Interest, and any and all excise, property, sales and
use taxes imposed by any federal, state, local or foreign authority on any of
the Collateral, or with respect to periodic appraisals and inspections of its
Collateral, or with respect to the sale or other disposition thereof. If Debtor
fails to promptly pay any portion of the above costs, fees and expenses when due
or to perform any other such obligation of Debtor under this Agreement,
Collateral Agent or any other Lender may, at its option, but shall not be
required to, pay or perform the same and charge Debtor's account for all fees,
costs and expenses incurred therefor, and Debtor agrees to reimburse Collateral
Agent or such Lender therefor on demand. All sums so paid or incurred by
Collateral Agent or any other Lender for any of the foregoing, any and all other
sums for which a Debtor may become liable hereunder and all fees, costs and
expenses (including attorneys' fees, legal expenses and court costs) incurred by
Collateral Agent or any other Lender in enforcing or protecting the Security
Interests or any of their rights or remedies under this Agreement shall be
payable on demand, shall constitute Secured Obligations, shall bear interest
until paid at the highest rate provided in the Credit Agreement and shall be
secured by the Collateral.
13
SECTION 16. Notices
Except in the case of notices and other communications expressly permitted
to be given by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to Debtor, to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention of Chief Financial Officer, (Telecopy No. 315-331-3925), with a copy
to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq. at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
(Telecopy No. 315-331-7048), and (b) if to Collateral Agent, to JPMorgan Chase
Bank, Collateral Agent, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇-▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention of Ultralife Batteries, Inc. Account Representative (Telecopy No.
585-258-7604). Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 17. Successors and Assigns
This Agreement is for the benefit of Collateral Agent and Lenders and
their successors and assigns, and in the event of an assignment of all or any of
the Secured Obligations, the rights hereunder, to the extent applicable to the
Secured Obligations so assigned, may be transferred with such Secured
Obligations. This Agreement shall be binding on Debtor and its successors and
assigns; provided that each Debtor may not delegate its obligations under this
Agreement without Collateral Agent's prior written consent.
SECTION 18. Changes in Writing
No amendment, modification, termination or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing signed by
Collateral Agent.
SECTION 19. Applicable Law
Pursuant to Section 5-1401 of the New York General Obligations Law, the
whole of this Security Agreement and the rights and obligations of the Debtor
and the Collateral Agent hereunder shall be governed, construed and interpreted
in accordance with, the laws of the State of New York without regard to any
conflicts-of-laws rules which would require the application of the laws of any
other jurisdiction.
SECTION 20. Failure or Indulgence Not Waiver; Remedies Cumulative
No failure or delay on the part of Collateral Agent or any Lender in the
exercise of any power, right or privilege hereunder shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or any other right, power
or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
SECTION 21. Headings
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
SECTION 22. 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.
14
SECTION 23. Survival
All representations and warranties of Debtor contained in this Agreement
shall survive the execution and delivery of this Agreement.
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
ULTRALIFE BATTERIES, INC., as Debtor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President Finance & CFO
JPMORGAN CHASE BANK., as Collateral Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
SCHEDULE A
to
Security Agreement
granted by
Ultralife Batteries, Inc. (the "Debtor") in favor of
JPMorgan Chase Bank in its capacity as Collateral Agent for the
Lenders party to the Credit Agreement
Collateral Description Continued:
All of the following types of Collateral, now owned or hereafter acquired,
arising or existing, as such types are defined in the Uniform Commercial Code of
the State of New York as in effect from time to time, and intending thereby to
include as Collateral all personal property of the Debtor:
1. Accessions 19. Farm Products 37. Payment Orders
2. Accounts 20. Financial Assets 38. Proceeds
3. As-Extracted 21. Fixtures 39. Proceeds of a Letter
Collateral of Credit
22. General Intangibles
4. Assets 40. Promissory Notes
23. Goods
5. Cash Proceeds 41. Records
24. Health-Care-
6. Certificated Insurance 42. Securities Accounts
Securities Receivables
43. Securities
7. Checks 25. Instructions
44. Securities
8. Chattel Paper 26. Instruments Certificates
9. Commercial Tort 27. Inventory 45. Security Entitlements
Claims
28. Investment Property 46. Software
10. Commodity Accounts
29. Items 47. Supply Contracts
11. Commodity Contracts
30. Leasehold Interests 48. Supporting
12. Contracts for Sale Obligations
31. Letter-of Credit
13. Deposit Accounts Rights 49. Tangible Chattel
Paper
14. Documents 32. Manufactured Homes
50. Uncertificated
15. Drafts 33. Nonnegotiable Securities
Instruments
16. Electronic Chattel
Paper 34. Noncash Proceeds
17. Entitlement Orders 35. Notes
18. Equipment 36. Payment Intangibles
================================================================================
IN FURTHERANCE OF THE FOREGOING TYPES OF COLLATERAL, AND WITHOUT LIMITATION
THEREOF, all of the following property, now owned or hereafter acquired, arising
or existing, together with all proceeds thereof:
================================================================================
51. All certificates of deposit and all uncertificated certificates of deposit.
52. All insurance covering any type of Collateral described in this Schedule A
or any part thereof against risks of fire, flood, theft, loss, nonconformity of,
defects or infringement of rights in, or damage or any other risk of loss
whatsoever.
53. All of Debtor's right, title and interest in all of its books, records,
ledger sheets, files and other data and documents, including records in any form
(digital or other) and recorded in or through any tangible medium (magnetic,
lasergraphic or other) and all is retrievable in perceivable form, together with
all machinery and processes (including computer programming instructions)
required to read and print such records relating to any types of Collateral
described in this Schedule A.
54. All patent rights throughout the world, including all letters patents,
patent applications, patent licenses, patentable inventions, modifications and
improvements thereof, all rights to any and all letters patent and applications
for letters patent, all divisions, renewals, reissues, continuations,
continuations-in-part, extensions and reexaminations of any of the foregoing,
all shop rights, all proceeds of, and rights associated with any of the
foregoing (including license royalties and proceeds of infringement suits), the
right to ▇▇▇ third parties for past, present or future infringements of any of
the foregoing and for breach or enforcement of any of the foregoing, and all
rights corresponding to each of the foregoing throughout the world (the "Patent
Rights").
55. All information concerning the subject matter of the Patent Rights, and all
other confidential or proprietary or useful information and all know-how and
common law or statutory trade secrets obtained by or used in or contemplated at
any time for use in the business of Debtor, and all other research and
development work by Debtor whether or not the same is a patentable invention,
including without limitation all design and engineering data, shop rights,
instructions, procedures, standards, specifications, plans, drawings and
designs.
56. All trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, certification marks,
collective marks, logos, other source of business identifiers, prints and labels
on which any of the foregoing have appeared or appear, designs and general
intangibles of a like nature (each of the foregoing items being called a
"Trademark"), now existing anywhere in the world or hereafter adopted or
acquired, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any office or agency of the
United States of America or any State thereof or any foreign country, all
Trademark licenses, all reissues, extensions or renewals of any of the foregoing
items all of the goodwill of the business connected with the use of, and
symbolized by the foregoing items all proceeds of, and rights associated with,
the foregoing, including any claim by Debtor against third parties for past,
present or future infringement or dilution of any Trademark, Trademark
registration or Trademark license, including any Trademark, Trademark
registration or Trademark license, or for any injury to the goodwill associated
with the use of any such Trademark or for breach or enforcement of any Trademark
license.
57. All copyrights and all semiconductor chip product mask works of Debtor,
whether statutory or common law, registered or unregistered, now or hereafter in
force throughout the world, including, without limitation, all of Debtor's
right, title and interest in and to all copyrights and mask works registered in
the United States Copyright Office or anywhere else in the world and all
applications for registration thereof, whether pending or in preparation, all
copyright and mask work licenses, the right to ▇▇▇ for past, present and future
infringements of any thereof, all rights corresponding thereto throughout the
world, all
extensions and renewals of any thereof and all proceeds of the foregoing,
including, without limitation, licenses, royalties, income, payments, claims,
damages and proceeds of suit.
58. (A) all computer and other electronic data processing hardware, integrated
computer systems, central processing units, memory units, display terminals,
printers, features, computer elements, card readers, tape drives, hard and soft
disk drives, cables, electrical supply hardware, generators, power equalizers,
accessories and all peripheral devices and other related computer hardware,
whether now owned, licensed or leased or hereafter acquired by Debtor; (B) all
software programs including source code and object code and all related
applications and data files), whether now owned, licensed or leased or hereafter
acquired by Debtor, designed for use on the computers and electronic data
processing hardware described in clause (A) above; (C) all firmware associated
therewith, whether now owned, licensed or leased or hereafter acquired by
Debtor; (D) all documentation (including flow charts, logic diagrams, manuals,
guides and specifications) for such hardware, software and firmware described in
the preceding clauses (A), (B) and (C), whether now owned, licensed or leased or
hereafter acquired by Debtor; and (v) all rights with respect to all of the
foregoing, including, without limitation, any and all copyrights, licenses,
options, warranties, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights, renewal rights and
indemnifications and any substitutions, replacements, additions or model
conversions of any of the foregoing.
SCHEDULE I
Jurisdiction of Organization: Chief Executive Office;
Locations of Books and Records, Equipment, Inventory and Fixtures
1. Jurisdiction of Organization: Delaware
2. Mailing Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
3. Principal Place of Business: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
4. Chief Executive Office: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
5. Location of Books and
Records: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
6. Locations of Equipment,
Inventory and Fixtures: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Bailment)
▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Bailment)
▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Bailment)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Bailment)
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
SCHEDULE II
Liens; Financing Statements; Goods in Possession of
Consignees, Bailees, Warehousemen, Agents and Processors
Existing Liens
Creditor Address Collateral Date of Lien
Winthrop Resources Corporation ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Leased Equipment 7/22/02
Suite 800 8/15/02
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Wyssmont Company Inc. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Specific Equipment 4/4/03
▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
Each Lien and the related Collateral are more specifically described in the UCC
Search dated June __, 2004 of the Delaware Secretary of State's records enclosed
in the Loan Transcript
Bailment of Collateral with Material Value
Master Molded Products Corporation, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Monroe FTZ Operators, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Goods owned by Third Parties in the Possession of Ultralife Batteries, Inc.
(Security Interest does not attach)
Badger Technologies, Inc. has equipment on site at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Debtor has no interest in the following equipment of
Badger Technologies, Inc.:
SCHEDULE III
Trade Names and Fictitious Names
(Present and Past Five Years)
2
EXHIBIT A
COPYRIGHT SECURITY AGREEMENT
WHEREAS, Ultralife Batteries, Inc., a Delaware corporation ("Grantor"),
owns the Copyrights and applications for Copyrights listed on Schedule 1 annexed
hereto; and
WHEREAS, Grantor, JPMorgan Chase Bank, as Collateral Agent ("Collateral
Agent") and Lenders are parties to a Credit Agreement dated June 30, 2004 (as
the same may be amended and in effect from time to time, the "Credit
Agreement"), providing for extensions of credit to be made to Grantor by
Lenders; and
WHEREAS, pursuant to the terms of the General Security Agreement dated as
of June 30, 2004 (as the same may be amended and in effect from time to time,
the "Security Agreement") by Grantor in favor of Collateral Agent (in such
capacity, "Grantee), Grantor has granted to Grantee for the benefit of Lenders a
security interest in substantially all the assets of Grantor including all
right, title and interest of Grantor in, to and under all now owned and
hereafter acquired Copyrights (as defined in the Security Agreement), together
with the goodwill of the business symbolized by Grantor's Copyrights and all
proceeds thereof, to secure the payment of all amounts owing by Grantor under
the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee a continuing security interest in all of Grantor's right, title and
interest in, to and under the following (all of the following items or types of
property being herein collectively referred to as the "Copyright Collateral"),
whether presently existing or hereafter created or acquired:
(1) each Copyright and application for Copyright listed on Schedule 1
annexed hereto, together with any reissues, extensions or renewals
thereof, and all of the goodwill of the business connected with the
use of, and symbolized by each Copyright; and
(2) all products and proceeds of the foregoing, including, without
limitation, any claim by Grantor against third parties for past,
present or future (a) infringement or dilution of any Copyright, or
(b) injury to the goodwill associated with any Copyright.
The security interest granted hereby is granted in conjunction with the
security interests granted to Grantee pursuant to the Security Agreement.
Grantor hereby acknowledges and affirms that the rights and remedies of Grantee
with respect to the security interest in the Copyright Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein. Terms defined in the Security Agreement and not otherwise defined herein
shall have the respective meanings provided for in the Security Agreement.
IN WITNESS WHEREOF, Grantor has caused this Copyright Security Agreement
to be duly executed by its duly authorized officer as of the 30th day of June,
2004
ULTRALIFE BATTERIES, INC., as Debtor
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
ACKNOWLEDGED:
JPMORGAN CHASE BANK, as Collateral Agent
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
ACKNOWLEDGMENT
STATE OF NEW YORK )
COUNTY OF _____________ ) ss:
On the 30th day of June, 2004 before me personally appeared
______________, to me known, who being by me duly sworn, did depose and say that
he is ______________ of Ultralife Batteries, Inc., the corporation described in
and which executed the foregoing instrument; that he signed his name thereto by
order of the board of directors of said corporation.
____________________________________
Notary Public
{Seal}
My commission expires:_____________________
STATE OF NEW YORK )
COUNTY OF MONROE ) ss:
On the 30th day of June, 2004 before me personally appeared ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, to me known, who being by me duly sworn, did depose and say that she is a
Vice President of JPMorgan Chase Bank, as Collateral Agent, the corporation
described in and which executed the foregoing instrument; that she signed her
name thereto by order of the board of directors of said corporation.
___________________________________
Notary Public
{Seal}
My commission expires:_____________________
Schedule 1
to
Copyright Security Agreement
COPYRIGHTS
COPYRIGHT APPLICATIONS
2
EXHIBIT B
PATENT SECURITY AGREEMENT
WHEREAS, Ultralife Batteries, Inc., a Delaware corporation ("Grantor"),
owns the Patents and applications for Patents listed on Schedule 1 annexed
hereto; and
WHEREAS, Grantor, JPMorgan Chase Bank, as Collateral Agent ("Collateral
Agent") and Lenders are parties to a Credit Agreement dated June 30, 2004 (as
the same may be amended and in effect from time to time, the "Credit
Agreement"), providing for extensions of credit to be made to Grantor by
Lenders; and
WHEREAS, pursuant to the terms of the General Security Agreement dated as
of June 30, 2004 (as the same may be amended and in effect from time to time,
the "Security Agreement") by Grantor in favor of Collateral Agent (in such
capacity, "Grantee"), Grantor has granted to Grantee for the benefit of Lenders
a security interest in substantially all the assets of Grantor including all
right, title and interest of Grantor in, to and under all now owned and
hereafter acquired Patents (as defined in the Security Agreement), and all
products and proceeds thereof, to secure the payment of all amounts owing by
Grantor under the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee a continuing security interest in all of Grantor's right, title and
interest in, to and under the following (all of the following items or types of
property being herein collectively referred to as the "Patent Collateral"),
whether presently existing or hereafter created or acquired:
(1) each Patent and application for Patent listed on Schedule 1 annexed
hereto, together with any reissues, continuations or extensions
thereof, and all of the goodwill of the business connected with the
use of and symbolized by, each such Patent; and
(2) all products and proceeds of the foregoing, including, without
limitation, any claim by Grantor against third parties for past,
present or future (a) infringement or dilution of any Patent, or (b)
injury to the goodwill associated with any Patent.
The security interest granted hereby is granted in conjunction with the
security interests granted to Grantee pursuant to the Security Agreement.
Grantor hereby acknowledges and affirms that the rights and remedies of Grantee
with respect to the security interest in the Patent Collateral made and granted
hereby are more fully set forth in the Security Agreement, the terms and
provision of which are incorporated by reference herein as if fully set forth
herein. Terms defined in the Security Agreement and not otherwise defined herein
shall have the respective meanings provided for in the Security Agreement.
IN WITNESS WHEREOF, Grantor has caused this Patent Security Agreement to
be duly executed by its duly authorized officer as of the 30th day of June,
2004.
ULTRALIFE BATTERIES, INC., as Debtor
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
2
ACKNOWLEDGED:
JPMORGAN CHASE BANK, as Collateral Agent
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
ACKNOWLEDGMENT
STATE OF NEW YORK )
COUNTY OF _____________ ) ss:
On the 30th day of June, 2004 before me personally appeared
______________, to me known, who being by me duly sworn, did depose and say that
he is ______________ of Ultralife Batteries, Inc., the corporation described in
and which executed the foregoing instrument; that he signed his name thereto by
order of the board of directors of said corporation.
____________________________________
Notary Public
{Seal}
My commission expires:_____________________
STATE OF NEW YORK )
COUNTY OF MONROE ) ss:
On the 30th day of June, 2004 before me personally appeared ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, to me known, who being by me duly sworn, did depose and say that she is a
Vice President of JPMorgan Chase Bank, as Collateral Agent, the corporation
described in and which executed the foregoing instrument; that she signed her
name thereto by order of the board of directors of said corporation.
___________________________________
Notary Public
{Seal}
My commission expires:_____________________
Schedule 1
to
Patent Security Agreement
PATENTS
PATENT APPLICATIONS
2
EXHIBIT C
TRADEMARK SECURITY AGREEMENT
WHEREAS, Ultralife Batteries, Inc., a Delaware corporation ("Grantor"),
owns the Trademarks and applications for Trademarks listed on Schedule 1 annexed
hereto; and
WHEREAS, Grantor, JPMorgan Chase Bank, as Collateral Agent ("Collateral
Agent") and Lenders are parties to a Credit Agreement dated June 30, 2004 (as
same may be amended and in effect from time to time, the "Credit Agreement"),
providing for extensions of credit to be made to Grantor by Lenders; and
WHEREAS, pursuant to the terms of the General Security Agreement dated as
of June 30, 2004 (as the same may be amended and in effect from time to time,
the "Security Agreement") by Grantor in favor of Collateral Agent (in such
capacity, "Grantee"), Grantor has granted to Grantee for the benefit of Lenders
a security interest in substantially all the assets of Grantor including all
right, title and interest of Grantor in, to and under all now owned and
hereafter acquired Trademarks (as defined in the Security Agreement), together
with the goodwill of the business symbolized by Grantor's Trademarks, and all
proceeds thereof, to secure the payment of all amounts owing by Grantor under
the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee a continuing security interest in all of Grantor's right, title and
interest in, to and under the following (all of the following items or types of
property being herein collectively referred to as the "Trademark Collateral"),
whether presently existing or hereafter created or acquired:
(1) each Trademark and application for Trademark listed on Schedule 1
annexed hereto, together with any reissues, continuations or
extensions thereof, and all of the goodwill of the business
connected with the use of, and symbolized by, each Trademark; and
(2) all products and proceeds of the foregoing, including, without
limitation, any claim by Grantor against third parties for past,
present or future (a) infringement or dilution of any Trademark, or
(b) injury to the goodwill associated with any Trademark.
The security interest granted hereby is granted in conjunction with the
security interests granted to Grantee pursuant to the Security Agreement.
Grantor hereby acknowledges and affirms that the rights and remedies of Grantee
with respect to the security interest in the Trademark Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein. Terms defined in the Security Agreement and not otherwise defined herein
shall have the respective meanings provided for in the Security Agreement.
IN WITNESS WHEREOF, Grantor has caused this Trademark Security Agreement
to be duly executed by its duly authorized officer as of the 30th day of June,
2004.
ULTRALIFE BATTERIES, INC., as Debtor
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
2
ACKNOWLEDGED:
JPMORGAN CHASE BANK, as Collateral Agent
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
ACKNOWLEDGMENT
STATE OF NEW YORK )
COUNTY OF _____________ ) ss:
On the 30th day of June, 2004 before me personally appeared
______________, to me known, who being by me duly sworn, did depose and say that
he is ______________ of Ultralife Batteries, Inc., the corporation described in
and which executed the foregoing instrument; that he signed his name thereto by
order of the board of directors of said corporation.
____________________________________
Notary Public
{Seal}
My commission expires:_____________________
STATE OF NEW YORK )
COUNTY OF MONROE ) ss:
On the 30th day of June, 2004 before me personally appeared ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, to me known, who being by me duly sworn, did depose and say that she is a
Vice President of JPMorgan Chase Bank, as Collateral Agent, the corporation
described in and which executed the foregoing instrument; that she signed her
name thereto by order of the board of directors of said corporation.
___________________________________
Notary Public
{Seal}
My commission expires:_____________________
Schedule 1
to
Trademark Security Agreement
TRADEMARKS
TRADEMARK APPLICATIONS