EXHIBIT 10.10
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SECURITY AGREEMENT
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SECURITY AGREEMENT (this "AGREEMENT") made this 15 day of October,
2003, by and between LASERTEL INC, an Arizona corporation having its chief
executive offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"DEBTOR"), in favor of CITIZENS BANK NEW HAMPSHIRE, a guaranty savings bank
chartered under the laws of the State of New Hampshire, with a place of business
at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (together with its successors
and assigns, the "SECURED PARTY"), for itself and acting as agent under the
terms of that certain Credit Agreement dated as of even date herewith (as it may
be amended from time to time, the "CREDIT AGREEMENT") by and among Presstek,
Inc., as "Borrower", the Debtor, as Guarantor, the Secured Party and the banks
that are parties thereto as Lenders from time to time (the "LENDERS").
WHEREAS, the Debtor has requested that the Lenders enter into the
Credit Agreement with the Borrower and the Debtor, and to extend credit to the
Borrower on the terms and subject to the conditions set forth therein;
WHEREAS, it is a condition precedent to the Lenders' agreement to enter
into the Credit Agreement and extend credit to the Borrower thereunder that the
Debtor execute and deliver this Agreement and grant the security interest herein
provided;
NOW, THEREFORE, in order to induce the Lenders to enter into the Credit
Agreement and extend credit to the Borrower thereunder, and in consideration
thereof, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1. DEFINITIONS.
1.01 Generally. All capitalized terms used without definition herein or
in any certificate, report or other document delivered pursuant hereto, but
defined in the Credit Agreement, shall have the meanings ascribed to such terms
in the Credit Agreement. Except as otherwise defined herein, terms defined in
the NH UCC (as defined below) and used herein shall have the meanings ascribed
to such terms in the NH UCC; provided, however, that if a term is defined in
Article 9 of the NH UCC differently than in another Article thereof, the term
shall have the meaning set forth in Article 9.
1.02 Terms Defined in this Agreement. For purposes of this Agreement,
the following terms have the meanings set forth below:
"AGREEMENT" shall have the meaning set forth in the Preamble.
"LENDERS" shall have the meaning set forth in the Preamble.
"BLUE SKY LAWS" shall have the meaning set forth in Section 9.02(c).
"BORROWER" shall mean Presstek, Inc.
"CHANGE" shall have the meaning set forth in Section 8.02.
"COLLATERAL" shall have the meaning set forth in Article 2.
"COPYRIGHT OFFICE" shall have the meaning set forth in Article 6.
"DEBTOR" shall have the meaning set forth in the Preamble.
"INDEMNIFIED PARTY" shall have the meaning set forth in Article 12.
"CREDIT AGREEMENT" shall have the meaning set forth in the Preamble.
"NH UCC" means the Uniform Commercial Code in effect in the State of
New Hampshire, as it may be amended from time to time, provided, that if by
reason of mandatory provisions of law, perfection, or the effect of perfection
or nonperfection, of the Security Interest in any Collateral or the availability
of any remedy hereunder is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than New Hampshire, "NH 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, as the case may be.
"PERFECTION CERTIFICATE" means the certificate, substantially in the
form attached hereto as Exhibit A, signed by an authorized officer of the Debtor
and delivered to the Secured Party.
"PERFECTION DOCUMENTS" shall have the meaning set forth in Section
3.01.
"SECURED PARTY" shall have the meaning set forth in the Preamble.
"SECURITIES ACT" shall have the meaning set forth in Section 9.02(c).
"SECURITY INTEREST" means the security interest and liens granted
pursuant to Article 2 hereof as well as all other security interests created or
assigned as additional security for the Obligations pursuant to this Agreement.
"UNIFORM COMMERCIAL CODE" means, in reference to any jurisdiction, the
Uniform Commercial Code as adopted and in effect in such jurisdiction, as it may
be amended from time to time.
1.03 Terms Defined in NH UCC. For purposes of this Agreement, the terms
for which definitions are supplied by the NH UCC include, without limitation,
those set forth below. Term and section references contained herein are provided
for convenience only, and the omission of any term from following list is not
intended to mean that the applicable NH UCC definition does not apply to such
omitted term.
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"ACCESSION" ss.9-102(a)(1)
"ACCOUNT" ss.9-102(a)(2)
"ACCOUNT DEBTOR" ss.9-102(a)(3)
"CERTIFICATED SECURITY" ss.8-102(a)(4)
"CONFIRMER" ss.5-102(a)(4)
"CHATTEL PAPER" ss.9-102(a)(11)
"COMMERCIAL TORT CLAIM" ss.9-102(a)(13)
"COMMODITY INTERMEDIARY ss.9-102(a)(17)
"DEPOSIT ACCOUNT" ss.9-102(a)(29)
"DOCUMENT" ss.9-102(a)(30)
"ELECTRONIC CHATTEL PAPER" ss.9-102(a)(31)
"ENTITLEMENT HOLDER" ss.8-102(a)(7)
"ENTITLEMENT ORDER" ss.8-102(a)(8)
"EQUIPMENT" ss.9-102(a)(33)
"FILING OFFICE" ss.9-102(a)(37)
"FINANCIAL ASSET" ss.8-102(a)(9)
"FINANCING STATEMENT" ss.9-102(a)(39)
"FIXTURE FILING" ss.9-102(a)(40)
"GENERAL INTANGIBLE" ss.9-102(a)(42)
"GOODS" ss.9-102(a)(44)
"INSTRUMENT(S)" ss.9-102(a)(47)
"INVENTORY" ss.9-102(a)(48)
"INVESTMENT PROPERTY" ss.9-102(a)(49)
"ISSUER" ss.8-201
"LETTER-OF-CREDIT RIGHT" ss.9-102(a)(51)
"PAYMENT INTANGIBLE" ss.9-102(a)(61)
"PROCEEDS" ss.9-102(a)(64)
"SECURITIES INTERMEDIARY" ss.8-102(a)(14)
"SECURITY" ss.8-102(a)(15)
"SUPPORTING OBLIGATION" ss.9-102(a)(77)
"TANGIBLE CHATTEL PAPER" ss.9-102(a)(78)
"UNCERTIFICATED SECURITY" ss.8-102(a)(18)
1.04 Matters of Interpretation and Construction.
(a) The language of this Agreement, having been negotiated by
the parties hereto, shall not be construed against any party hereto by reason of
the extent to which such party or its counsel participated in the drafting
hereof or by reason of the extent to which any such provision is inconsistent
with any prior draft hereof.
(b) Use of the singular shall be deemed to include the plural
and use of the plural shall be deemed to include the singular. Use of any gender
shall be deemed to include all other genders.
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(c) A reference to any law, agreement or other document
includes any amendment or modification to such law, agreement or document.
(d) A reference to any Person includes its successors and
permitted assigns.
(e) Unless the context clearly requires otherwise, reference
to a particular "Article" or "Section" refers to the corresponding article or
section of this Agreement.
(f) Unless the context clearly requires otherwise, use of the
word "including" shall mean "including, without limitation"; use of the words
"and" and "or" shall in each case mean "and/or."
ARTICLE 2. GRANT OF SECURITY INTEREST. The Debtor hereby grants to the Secured
Party for the benefit of the Secured Party and the Lenders, to secure the full,
punctual and unconditional payment and performance of the Obligations, a
security interest in all of the Debtor's right, title and interest in and to the
following properties, assets and rights of the Debtor, wherever located, whether
now owned or hereafter acquired or arising, and all Proceeds and products
thereof (all of the same being hereinafter called the "COLLATERAL"):
all personal and fixture property of every kind and nature including
without limitation all Goods (including Inventory, Equipment and any
Accessions thereto), Instruments (including promissory notes),
Documents, Accounts, Chattel Paper (whether Tangible Chattel Paper or
Electronic Chattel Paper), Deposit Accounts (other than payroll
accounts), Letter-of-Credit Rights (whether or not the letter of credit
is evidenced by a writing), Commercial Tort Claims, Securities and all
other Investment Property, Supporting Obligations, any other contract
rights or rights to the payment of money, all sums payable under any
policy of insurance (including without limitation, any return for
premiums), tort claims, and all General Intangibles (including all
Payment Intangibles).
The Secured Party acknowledges that the attachment of its security interest in
any Commercial Tort Claim is subject to the Debtor's compliance with Section
8.22(g). The Debtor agrees that the security interest herein granted has
attached and shall continue until (i) the Obligations have been paid, performed
and undefeasibly discharged in full and (ii) the Lenders are no longer committed
to extend any credit to the Debtor under the Credit Agreement or any other Loan
Document. The security interest is granted as security only and shall not
subject the Secured Party or the Lenders to, transfer to the Secured Party or
the Lenders, or in any way affect or modify, any obligation or liability of the
Debtor with respect to any of the Collateral or any transaction in connection
therewith. Except during the existence of an Event of Default, the Debtor shall
retain the right to vote any of the Investment Property constituting Collateral
in a manner not inconsistent with the terms of this Agreement and the Credit
Agreement.
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ARTICLE 3. DELIVERY AND FILING OF FINANCING STATEMENTS.
3.01 Delivery of Perfection Documents. Upon the execution of this
Agreement, and from time to time thereafter, the Debtor shall deliver to the
Secured Party such Financing Statements, documentation, notices, and
assignments, including assignments under the Assignment of Claims Act of 1940,
as amended (collectively, the "PERFECTION DOCUMENTS"), as may be deemed
necessary by the Secured Party to perfect the Security Interest in all
Collateral.
3.02 Authorization to File Financing Statements and Take Other Action.
The Debtor hereby irrevocably authorizes the Secured Party at any time and from
time to time to sign (if required) and file in any appropriate Filing Office,
wherever located, any Financing Statement that (a) describes the Collateral (i)
as all assets of the Borrower or words of similar effect, regardless of whether
any particular assets comprised in the Collateral falls within the scope of
Article 9 of the Uniform Commercial Code of such jurisdiction, or (ii) as being
of any equal or lesser scope or with greater detail and (b) contains any other
information required by Part 5 of Article 9 of the Uniform Commercial Code of
the applicable jurisdiction for the sufficiency or Filing Office acceptance of
any Financing Statement, including (i) whether the Debtor is an organization,
the type of organization and any organization identification number issued to
the Debtor and, (ii) in the case of a Financing Statement filed as a Fixture
Filing, a sufficient description of real property to which the Collateral
relates. The Debtor also authorizes the Secured Party to file a copy of this
Agreement in lieu of a Financing Statement, and to take any and all actions
required by any earlier versions of the Uniform Commercial Code or by any other
applicable law. The Debtor shall provide the Secured Party with any information
the Secured Party shall reasonably request in connection with any of the
foregoing.
ARTICLE 4. SECURITIES PLEDGE AGREEMENT. From time to time, at the request of the
Secured Party, the Debtor shall execute and deliver to the Secured Party, for
the benefit of the Secured Party and the Lenders, a Securities Collateral Pledge
Agreement pursuant to which the Debtor shall pledge to the Secured Party all
Securities included in the Collateral. The provisions of any Securities
Collateral Pledge Agreement shall be supplemental to the provisions of this
Agreement, and nothing contained in any Securities Collateral Pledge Agreement
shall derogate from any of the rights or remedies of the Secured Party
hereunder; nor shall anything contained in any Securities Collateral Pledge
Agreement be deemed to prevent or extend the time of attachment or perfection of
any Security Interest in such Collateral created hereby.
ARTICLE 5. PATENT AND TRADEMARK SECURITY AGREEMENT. Concurrently herewith the
Debtor is executing and delivering to the Secured Party, for the benefit of the
Secured Party and the Lenders, a Patent and Trademark Security Agreement
pursuant to which the Debtor is granting to the Secured Party a security
interest in certain Collateral consisting of patents, patent rights, trademarks,
service marks, and trademark and service ▇▇▇▇ rights, together with the goodwill
appurtenant thereto. The provisions of the Patent and Trademark Security
Agreement are supplemental to the provisions of this Agreement, and nothing
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contained in the Patent and Trademark Security Agreement shall derogate from any
of the rights or remedies of the Secured Party hereunder; nor shall anything
contained in the Patent and Trademark Security Agreement be deemed to prevent or
extend the time of attachment or perfection of any Security Interest in such
Collateral created hereby.
ARTICLE 6. COPYRIGHT MEMORANDUM. Concurrently herewith the Debtor is, in
addition, executing and delivering to the Secured Party, for the benefit of the
Secured Party and the Lenders, and for recording in the United States Copyright
Office (the "COPYRIGHT OFFICE"), a Memorandum of Grant of Security Interests in
Copyrights. The Debtor represents and warrants to the Secured Party and the
Lenders that such Memorandum identifies all now existing material copyrights and
other rights in and to all material copyrightable works of the Debtor,
identified, where applicable, by title, author and/or Copyright Office
registration number and date. The Debtor represents and warrants to the Secured
Party and the Lenders that it has registered all material copyrights with the
Copyright Office, as identified in such Memorandum. The Debtor covenants,
promptly following the acquisition thereof, to provide to the Secured Party like
identifications of all material copyrights and other rights in and to all
material copyrightable works hereafter acquired by the Debtor and to execute and
deliver to the Secured Party a supplemental Memorandum of Grant of Security
Interest in Copyrights modified to reflect such subsequent acquisitions.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES. The Debtor hereby represents and
warrants to the Secured Party and the Lenders as follows, each such
representation and warranty to continue in full force so long as this Agreement
remains in effect:
7.01 Accuracy of Perfection Certificate. The Debtor has delivered a
Perfection Certificate to the Secured Party on the date hereof, which is hereby
incorporated by reference as if fully set forth herein. All of the information
set forth in such Perfection Certificate is true and correct in all material
respects. The Debtor has not failed to disclose in the Perfection Certificate
any information necessary for the information contained in the Perfection
Certificate not to be misleading.
7.02 Ownership of Collateral; Absence of Liens and Restrictions. The
Debtor is, and in the case of property acquired after the date hereof, will be,
the sole legal and equitable owner of the Collateral purported to be owned by
it, holding good and marketable title to the same free and clear of all
Encumbrances except for the Security Interest and Encumbrances specifically
permitted under the terms of the Credit Agreement, and has good right and legal
authority to pledge, sell, assign, deliver, and create the Security Interest in
such Collateral in the manner herein contemplated. The Collateral is genuine and
is what it is purported to be. The Collateral is not subject to any restriction
that would prohibit or restrict the assignment, delivery or creation of the
Security Interests.
7.03 First Priority Security Interest. This Agreement creates a valid
and continuing lien on and security interest in the Collateral. Upon the filing
of a Financing Statement in the appropriate Filing Office for the location of
the Debtor listed in the Debtor's Perfection Certificate, the Security Interest
will be perfected (except to the extent a security interest may not be perfected
by filing under the Uniform Commercial Code), prior to all other Encumbrances,
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and will be enforceable as such against creditors of the Debtor, any owner of
the real property where any of the Collateral is located, any purchaser of such
real property and any present or future creditor obtaining a lien on such real
property.
7.04 No Conflicts. Neither the Debtor nor any of its predecessors has
performed any act or is bound by any agreement which might prevent the Secured
Party from enforcing the Security Interest or any of the terms of this
Agreement, or which would limit the Secured Party in any such enforcement.
Except as specifically disclosed in the Perfection Certificate, no Financing
Statement or other document evidencing a lien that names the Debtor as debtor is
on file in any jurisdiction and the Debtor has not signed any document or
agreement authorizing the filing of any such Financing Statement or document.
7.05 Accounts. Each Account constituting Collateral (i) is and will be
a true and correct statement of the actual Indebtedness incurred by each Account
Debtor with respect thereto, (ii) arises and will arise out of or in connection
with the sale or lease of Goods or for the rendering of services by the Debtor
to each Account Debtor, and (iii) is and shall be a valid, legal and binding
obligation of the party purported to be obligated thereon, enforceable in
accordance with its terms and free of material setoffs, defenses or
counterclaims.
7.06 Inventory. All Inventory constituting Collateral at any time are
and will be genuine and salable in the ordinary course of the Debtor's business.
None of the Inventory has been or will be produced in violation of the Fair
Labor Standards Act of 1938, as amended, or any other law.
7.07 Notes and Other Instruments. Pursuant to the terms of this
Agreement, the Debtor has endorsed, assigned and delivered to the Secured Party
all promissory notes and other Instruments pledged hereunder. Regardless of the
form of such endorsement, the Debtor hereby waives presentment, demand, notice
of dishonor, protest, notice of protest and all other notices with respect
thereto.
7.08 No Authorization. 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 for (i) the grant
of the Security Interest, (ii) the execution, delivery or performance of this
Agreement by the Debtor or (iii) the perfection of the Security Interest or the
exercise by the Secured Party of its rights and remedies hereunder, other than
(a) the filing of Financing Statements under the Uniform Commercial Code, (b)
the filing of appropriate documents in the United States Patent and Trademark
Office, (c) the filing of appropriate documents in the U.S. Copyright Office and
(d) such other filings as have already been made.
7.09 Validity of Collateral. The Debtor has no knowledge of any fact
that would impair the validity or make uncollectible any material amount of the
Collateral that is Accounts, Chattel Paper, Payment Intangibles, General
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Intangibles, contract rights, Documents or Instruments, and to the best of the
Debtor's knowledge, each obligor liable on such Collateral has and will have the
capacity to contract.
ARTICLE 8. COVENANTS. The Debtor hereby covenants with the Secured Party and the
Lenders that, so long as this Agreement remains in effect:
8.01 Perfection Certificate. The Debtor will supplement the Perfection
Certificate promptly upon learning of (i) the inaccuracy of any of the
information provided therein or (ii) the existence of any information that is
necessary for the information contained therein not to be misleading or
incomplete.
8.02 Changes Relating to Debtor. The Debtor will not change its name,
identity or organizational structure, nature or jurisdiction of organization, or
chief executive office, or place where its business records and records relating
to the Collateral are kept, or move any tangible Collateral (other than
Investment Property and Inventory which has been sold in the ordinary course of
business) to a location other than those set forth in the Perfection
Certificate, or merge into or consolidate with any other Person, without the
prior written consent of the Secured Party and the Lenders. With respect to any
such proposed event, the Debtor shall provide the Secured Party and the Lenders
at least 30 days' prior written notice thereof and the Debtor shall deliver to
the Secured Party and the Lenders such new Financing Statements or other
documentation as may be necessary or required by the Secured Party and the
Lenders to ensure the continued perfection and priority of the Security
Interest. In connection with the movement of any Collateral to a new location, a
Landlord Waiver with respect to such new location shall be delivered to the
Secured Party, at the Secured Party's request, concurrently with the occupancy
thereof. The Debtor hereby grants to the Secured Party, for a term commencing on
the date hereof and continuing so long as any of the Obligations remain
outstanding, at a rental of $1.00 for such entire term, the receipt and
sufficiency of which are hereby acknowledged, the right upon and after an Event
of Default to the use of all premises or places of business which the Debtor now
or hereafter may have and where any Collateral may be located for the purpose of
exercising its rights against the Collateral, except, in the case of leased
premises, to the extent such a grant is prohibited by the terms of the
applicable lease. With respect to any such leased premises, the Debtor hereby
agrees that the Secured Party shall not owe to the Debtor any rent attributable
to the Secured Party's use of such leased premises while exercising its right
under this Agreement. Promptly after the consummation of any of the foregoing
changes or any merger or consolidation (each, a "CHANGE"), the Debtor shall
deliver to the Secured Party copies of its amended organizational documents, if
any, certified by the Secretary of State (or equivalent) of its state of
organization evidencing the Change.
8.03 Protection and Defense of Security Interest; Sales and
Encumbrances. The Debtor shall take all steps that are necessary and prudent to
protect the Security Interest in the Collateral, and shall defend the Security
Interest of the Secured Party in the Collateral against the competing claims and
demands of all other Persons. The Debtor will not sell, grant, lease, assign or
transfer any interest in, or permit to exist any lien, security interest or
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other Encumbrance on, any of the Collateral, except the Security Interest and as
specifically permitted by the Credit Agreement.
8.04 Fixture Conflicts; Required Waivers. The Debtor intends, to the
extent not inconsistent with applicable law, that the Collateral shall remain
personal property of the Debtor and shall not be deemed to be a fixture
irrespective of the manner of its attachment to any real estate. The Debtor will
deliver to the Secured Party such disclaimers, waivers, or other documents as
the Secured Party reasonably may request to confirm the foregoing, executed by
each Person having an interest in such real estate.
8.05 Books and Records; Notice of Security Interest. The Debtor shall
keep complete and accurate books and records (in form and substance satisfactory
to the Secured Party) relating to the Collateral at its chief executive office
as listed on the Perfection Certificate, and will not remove the same from such
location without the prior written consent of the Secured Party in accordance
with Section 8.02. Upon the request of the Secured Party, the Debtor shall stamp
or otherwise ▇▇▇▇ such books and records in such manner as the Secured Party may
reasonably request in order to reflect the Security Interest including, without
limitation notation of the Security Interest on any certificates of title or
other evidence of ownership outstanding with respect to the Collateral and the
posting of notices thereof upon the Collateral or in and about designated areas
where the Collateral may be used, stored or kept, from time to time. The Debtor
will allow the Secured Party or its designees access at any reasonable time and
from time to time during the Debtor's regular business hours upon reasonable
notice (and at all times during the existence of an Event of Default) to
examine, to inspect and make extracts from or copies of the Debtor's books and
records, inspect the Collateral and, during the existence of an Event of
Default, arrange for verification of Accounts constituting Collateral directly
with any Account Debtors or by other methods or for other purposes as the
Secured Party may require.
8.06 Collection and Delivery of Proceeds. The Debtor will diligently
collect all of its Accounts constituting Collateral until the Secured Party
exercises its right to collect the Accounts pursuant to this Agreement during
the existence of an Event of Default. During the existence of an Event of
Default, all Proceeds of Accounts, Inventory and other Collateral received by
the Debtor, regardless of the form of the Collateral or the manner of receipt,
shall be held in trust for the Secured Party and the Lenders, and the Debtor
shall deliver said Proceeds daily to the Secured Party, without commingling, in
the identical form received (properly endorsed or assigned where required to
enable the Secured Party to collect same), for application to the Obligations.
If any Accounts are at any time evidenced by Tangible Chattel Paper, promissory
notes, trade acceptances or other Instruments, the Debtor will promptly deliver
the same to the Secured Party, accompanied by such instruments of transfer or
assignment duly executed in blank as the Secured Party may from time to time
specify and, regardless of the form of such instrument, the Debtor hereby waives
presentment, demand, notice of dishonor, protest, notice of protest and all
other notices with respect thereto.
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8.07 Lockboxes. Upon request of the Secured Party during the existence
of an Event of Default, the Debtor will (i) enter into a lockbox arrangement
satisfactory to the Secured Party with one or more financial institutions (which
may include the Lenders) deemed acceptable by the Secured Party for the
collection of Proceeds and direct all of its Account Debtors to make all
payments on Accounts to the lockboxes established thereunder, and/or (ii)
maintain all its Deposit Accounts (other than payroll) with the Secured Party or
at another financial institution which has agreed to accept drafts drawn on it
by the Secured Party under a written depository transfer agreement or other
arrangement with the Secured Party and to block such Deposit Accounts and waive
such institution's own rights as against such Deposit Accounts, and deposit all
Proceeds of Collateral (including the Proceeds received in such lockboxes) into
such Deposit Accounts. The Debtor shall pay all fees, costs and expenses
associated with the establishment and maintenance of such lockboxes and Deposit
Accounts.
8.08 Notification of Account Debtors. The Debtor shall at the request
of the Secured Party, and at its option the Secured Party may itself during the
existence of an Event of Default, notify Account Debtors of the Security
Interest in any Account and that payment thereof is to be made directly to the
Secured Party for application to the Obligations.
8.09 Information re Inventory. Whenever reasonably requested by the
Secured Party, the Debtor shall prepare a physical listing of all Inventory,
shall furnish to the Secured Party a report (certified by an authorized officer
of the Debtor to be true, correct and complete) of such physical listing, such
report to be in such form and with such specificity as may be requested by the
Secured Party, and shall take all further steps requested by the Secured Party
to perfect the Security Interest in the Inventory.
8.10 Insurance. The Debtor will maintain insurance on the Collateral as
required by the Credit Agreement or other Loan Documents.
8.11 Maintenance and Use; Payment of Taxes. The Debtor will maintain,
preserve, protect and keep the Collateral in good condition and repair (ordinary
wear and tear excepted) and prevent any waste or unusual or unreasonable
depreciation thereof; will not use the same in violation of law or any policy of
insurance thereon, and will pay promptly when due all taxes and assessments on
such Collateral or on its use or operation, except as otherwise permitted by the
Credit Agreement.
8.12 General Intangibles. The Debtor will apply for, and diligently
pursue applications for, registration of its ownership of the General
Intangibles constituting Collateral for which registration is appropriate, and
will use such other measures as are appropriate to preserve its rights in its
other General Intangibles constituting Collateral. The Debtor will, at the
request of the Secured Party, retain off-site current copies of all materials
created by or furnished to the Debtor on which is recorded then-current
information about any computer programs or data bases that the Debtor has
developed or otherwise has the right to use from time to time. Such materials
shall include, without limitation, magnetic or other computer media on which
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object, source or other code is recorded and documentation of those computer
programs or data bases, in the nature of listing printouts, narrative
descriptions, flow diagrams and similar items. The Debtor will, at the request
of the Secured Party, deliver a set of such copies to the Secured Party for
safekeeping and retention or transfer in the event of foreclosure.
8.13 Investment Property. If the Debtor shall at any time hold or
acquire any Certificated Securities, the Debtor shall forthwith endorse, assign
and deliver the same to the Secured Party, accompanied by such instruments of
transfer or assignment duly executed in blank as the Secured Party may from time
to time specify. If any Securities now held or hereafter acquired by the Debtor
are Uncertificated Securities and are issued to the Debtor or its nominee
directly by the Issuer thereof, the Debtor shall promptly notify the Secured
Party thereof and, at the Secured Party's request and option, pursuant to an
agreement in form and substance satisfactory to the Secured Party, either (i)
cause the Issuer to agree to comply with instructions from the Secured Party as
to such Securities, without further consent of the Debtor or such nominee, or
(ii) arrange for the Secured Party to become the registered owner of the
Securities. If the Debtor, as registered holder of Investment Property, receives
(i) any dividend or other distribution in cash or other property in connection
with the liquidation or dissolution of the Issuer of such Investment Property,
or in connection with the redemption or payment of such Investment Property, or
(ii) any stock certificate, option or right, or other distribution, whether as
an addition to, in substitution of, or in exchange for, such Investment
Property, or otherwise, the Debtor agrees to accept the same in trust for the
Secured Party and the Lenders and to forthwith endorse, assign and deliver the
same to the Secured Party, accompanied by such instruments of transfer or
assignment duly executed in blank as the Secured Party may from time to time
specify, to be held by the Secured Party as Collateral. If any Securities,
whether Certificated Securities or Uncertificated Securities, or other
Investment Property now held or hereafter acquired by the Debtor are held by the
Debtor or its nominee through a Securities Intermediary or Commodity
Intermediary, the Debtor shall promptly notify the Secured Party thereof and, at
the Secured Party's request and option, pursuant to an agreement in form and
substance satisfactory to the Secured Party, either (i) cause such Securities
Intermediary or Commodity Intermediary, as the case may be, to agree to comply
with Entitlement Orders or other instructions from the Secured Party to such
Securities Intermediary as to such Securities or other Investment Property or,
as the case may be, to apply any value distributed on account of any commodity
contract as directed by the Secured Party to such Commodity Intermediary, in
each case without further consent of the Debtor or such nominee, or (ii) in the
case of Financial Assets or other Investment Property held through a Securities
Intermediary, arrange for the Secured Party to become the Entitlement Holder
with respect to such Investment Property, with the Debtor being permitted, only
with the consent of the Secured Party, to exercise rights to withdraw or
otherwise deal with such Investment Property.
8.14 Deposit Accounts. The Debtor shall take all actions necessary or
requested by the Secured Party to maintain, preserve or protect the rights and
interest of the Secured Party with respect to all cash deposits of the Debtor
(other than payroll accounts) and all other Proceeds of Collateral. The Debtor
shall not open or maintain any Deposit Account or other bank account (other than
payroll accounts) unless the Debtor shall either (a) cause the depositary bank
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to agree to comply at any time with instructions from the Secured Party to such
depositary bank directing the disposition of funds from time to time credited to
such Deposit Account or other bank account, without further consent of the
Debtor, or (b) arrange for the Secured Party to become the customer of the
depositary bank with respect to the Depositary Account or other bank account,
with the Debtor being permitted, only with the consent of the Secured Party, to
exercise rights to withdraw funds from such Deposit Account or other bank
account. The provisions of this section shall not apply to (i) any Deposit
Account for which the Debtor, the depositary bank and the Secured Party have
specifically negotiated and entered into a cash collateral agreement, (ii)
Deposit Accounts for which the Secured Party or any of the Lenders is the
depositary bank or (iii) payroll accounts.
8.15 Letters of Credit Rights. For each letter of credit at any time
issued to the Debtor as beneficiary thereunder, the Debtor shall notify the
Secured Party thereof and, at the option and request of the Secured Party, the
Debtor shall deliver the original letter of credit and any ancillary documents
to the Secured Party and shall, pursuant to an agreement in form and substance
satisfactory to the Secured Party, either (i) arrange for the issuer and any
Confirmer of such letter of credit to consent to an assignment to the Secured
Party of the proceeds of any drawing under the letter of credit or (ii) arrange
for the Secured Party to become the transferee beneficiary of the letter of
credit, with the Secured Party agreeing, in each case, that the proceeds of any
drawing under the letter of credit are to be paid to the Secured Party to be
held by the Secured Party as Collateral.
8.16 Electronic Chattel Paper and Transferable Records. If the Debtor
at any time holds or acquires an interest in any Electronic Chattel Paper or any
"transferable record," as that term is defined in Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any jurisdiction
applicable to the Debtor, the Debtor shall promptly notify the Secured Party
thereof and, at the request of the Secured Party, shall take such action as the
Secured Party may reasonably request to vest in the Secured Party control under
Section 9-105 of the Uniform Commercial Code of such Electronic Chattel Paper or
control under Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, of such transferable record.
8.17 Bailments, Etc. If any Collateral is at any time in the possession
or control of any warehouseman, bailee or any of the Debtor's agents, the Debtor
shall promptly notify the Secured Party thereof and, upon request of the Secured
Party, (i) notify such warehouseman, bailee or agent of the Security Interest
and instruct such warehouseman, bailee or agent to hold all such Collateral for
the Secured Party 's account subject to the Secured Party 's instructions, (ii)
obtain from such warehouseman, bailee or agent a written acknowledgment that
such Person holds possession of the Collateral for the Secured Party's benefit
and shall act upon the Secured Party's instructions with respect to such
Collateral without the further consent of the Debtor, (iii) deliver any
negotiable warehouse receipt, ▇▇▇▇ of lading or other document of title issued
with regard to the Collateral to the Secured Party appropriately endorsed to the
Secured Party's order, and/or (iv) arrange for the issuance in the name of the
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Secured Party, in form reasonably satisfactory to the Secured Party, any
nonnegotiable document of title covering such Collateral. Until the occurrence
of an Event of Default, Debtor shall be entitled to issue instructions to each
such warehouseman, bailee, an agent regarding the Collateral.
8.18 Assignment of Claims Act. If at any time any Accounts of the
Debtor arise from contracts with the United States of America or any department,
agency or instrumentality thereof, the Debtor will promptly notify the Secured
Party thereof and shall execute all assignments and take all steps reasonably
requested by the Secured Party in order that all monies due and to become due
thereunder will be assigned and paid to the Secured Party and notice thereof
given to the federal authorities under the Assignment of Claims Act of 1940.
8.19 Tangible Chattel Paper, Notes and Other Instruments. If at any
time any amount payable under or in connection with any of the Collateral is
evidenced by any Tangible Chattel Paper, promissory note, trade acceptances or
other Instrument, the Debtor shall promptly deliver the same to the Secured
Party, accompanied by such instruments of transfer or assignment duly executed
in blank as the Secured Party may from time to time reasonably request.
Regardless of the form of such instrument, the Debtor hereby waives presentment,
demand, notice of dishonor, protest, notice of protest and all other notices
with respect thereto.
8.20 Assembly of Collateral. Following the occurrence and during the
continuance of an Event of Default, the Debtor will, upon demand, assemble the
Collateral and make it available to the Secured Party at a place and time
designated by the Secured Party that is reasonably convenient to both parties.
8.21 Further Assurances. Upon the reasonable request of the Secured
Party, and at the sole expense of the Debtor, the Debtor will promptly execute
and deliver such further instruments and documents and take such further actions
as the Secured Party may deem desirable to obtain the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, filing of any Financing Statement, or notice under the Uniform
Commercial Code or other applicable law, execution of assignments or mortgages
of General Intangibles, delivery of appropriate stock or bond powers, and
transfer of Collateral (other than Inventory, Accounts, General Intangibles and
Equipment) to the Secured Party's possession. The Debtor shall also take all
actions requested by the Secured Party in order to insure the continued
perfection and priority of the Security Interest in any of the Collateral and
the preservation of the rights of the Secured Party therein.
8.22 Notices and Reports Pertaining to Collateral. In addition to any
other notice or reporting requirement imposed on the Debtor under this
Agreement, the Debtor will, with respect to the Collateral:
(a) promptly furnish to the Secured Party, from time to time
upon request, reports in form and detail reasonably satisfactory to the Secured
Party;
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(b) promptly notify the Secured Party of any Encumbrance
(except Encumbrances specifically permitted under the Credit Agreement) asserted
against the Collateral, including any attachment, levy, execution or other legal
process levied against any of the Collateral, and of any information received by
the Debtor relating to the Collateral, including the Accounts, the Account
Debtors, or other Persons obligated in connection therewith, that may in any way
materially adversely affect the value of the Collateral or the rights and
remedies of the Secured Party with respect thereto, and reimburse the Secured
Party and the Lenders for any expenses they may incur in satisfying any of the
foregoing;
(c) promptly notify the Secured Party when it obtains
knowledge of actual or imminent bankruptcy or other insolvency proceeding of any
material Account Debtor or Issuer of Investment Property;
(d) promptly deliver to the Secured Party, as the Secured
Party may from time to time request, originals of all schedules, lists,
invoices, delivery receipts, customers' purchase orders, documents of the
shipping instructions, bills of lading and any other evidence of shipping
arrangements, receipts, writings and other items relating to the Collateral;
(e) promptly notify the Secured Party of any material return
or adjustment, rejection, repossession, or loss or damage of or to merchandise
represented by Accounts or constituting Inventory and of any material credit,
adjustment or dispute arising in connection with the goods or services
represented by Accounts or constituting Inventory;
(f) promptly after the application by the Debtor for
registration of any General Intangibles, as contemplated in Section 8.12, notify
the Secured Party thereof;
(g) promptly upon acquiring any Commercial Tort Claim, notify
the Secured Party in a writing signed by the Debtor, of the details thereof and
grant to the Secured Party, for the benefit of the Secured Party and the
Lenders, in such writing a security interest therein and in all the Proceeds
thereof, such writing to be in form and substance satisfactory to the Secured
Party; and
(h) promptly notify the Secured Party in the event of a
material loss or damage to the Collateral, if such loss or damage is not covered
by insurance, of any reclamation or repossession of or any action by a creditor
to reclaim or repossess any material asset(s) of the Debtor, of any material
adverse change in the Collateral; and of any other occurrence that may
materially adversely affect the Security Interest of the Secured Party in the
Collateral.
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ARTICLE 9. RIGHTS AND REMEDIES OF THE SECURED PARTY.
9.01 Rights and Remedies Generally. Following the occurrence and during
the continuance of an Event of Default, in addition to the rights and remedies
of a secured party under the NH UCC and the Uniform Commercial Code in effect in
any other jurisdiction in which enforcement of the rights of the Secured Party
is sought, the Secured Party may take any or all of the following actions:
(a) The Secured Party may, at its option, without notice or
demand, cause all of the Obligations to become immediately due and payable and,
subject to applicable law, take immediate possession of the Collateral, and for
that purpose the Secured Party may, so far as the Debtor can give authority
therefor, enter upon any premises on which any of the Collateral is situated and
remove the same therefrom or remain on such premises and in possession of such
Collateral for purposes of conducting a sale or enforcing the rights of the
Secured Party.
(b) The Secured Party may collect and receive all income and
Proceeds in respect of any Collateral and exercise all rights of the Debtor with
respect thereto, including without limitation the right to exercise all voting
and corporate rights at any meeting of the shareholders of the Issuer of any
Investment Property and to exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any
Investment Property as if the Secured Party was the absolute owner thereof,
including the right to exchange, at its discretion, any and all of any
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the Issuer thereof, all without
liability except to account for property actually received (but the Secured
Party shall have no duty to exercise any of the aforesaid rights, privileges or
options and shall not be responsible for any failure to do so or delay in so
doing).
(c) The Secured Party may sell, lease or otherwise dispose of
any Collateral at a public or private sale, with or without having such
Collateral at the place of sale, and upon such terms and in such manner as the
Secured Party may determine in accordance with applicable law, and the Secured
Party may purchase any Collateral at any such sale. The Debtor agrees that upon
any such sale the Collateral sold shall be held by the purchaser free from all
claims or rights of every kind and nature, including any equity of redemption or
similar rights, and all such equity of redemption and similar rights are hereby
expressly waived and released by the Debtor. In the event any consent, approval
or authorization of any governmental agency is necessary to effectuate any such
sale, the Debtor agrees to execute all applications or other instruments as may
be required.
(d) With respect to any Collateral consisting of Accounts, the
Secured Party may (i) demand, collect, and receive any amounts relating thereto,
as the Secured Party may determine; (ii) commence and prosecute any actions in
any court for the purposes of collecting any such Accounts and enforcing any
other rights in respect thereof, (iii) defend, settle or compromise any action
brought and, in connection therewith, give such discharges or releases as the
Secured Party may deem appropriate; (iv) receive, open and dispose of mail
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addressed to any of the Debtor and endorse checks, notes, drafts, acceptances,
money orders, bills of lading, warehouse receipts or other instruments or
documents evidencing payment, shipment or storage of the goods giving rise to
such Accounts or securing or relating to such Accounts, on behalf of and in the
name of any of the Debtor; and (v) sell, assign, transfer, make any agreement in
respect of, or otherwise deal with or exercise rights in respect of, any such
Accounts or the goods or services which have given rise thereto, as fully and
completely as though the Secured Party were the absolute owner thereof for all
purposes.
(e) With respect to any Collateral consisting of Equipment or
Inventory, the Secured Party may (i) make, adjust and settle claims under any
insurance policy related thereto and place and pay for appropriate insurance
thereon; (ii) discharge taxes and other Encumbrances at any time levied or
placed thereon; (iii) make repairs or provide maintenance with respect thereto;
and (iv) pay any necessary filing fees and any taxes arising as a consequence of
any such filing. The Secured Party shall have no obligation to make any such
expenditures nor shall the making thereof relieve any Debtor of its obligation
to make such expenditures.
(f) With respect to any Collateral consisting of Investment
Property, the Secured Party may (i) transfer such Collateral at any time to
itself, or to its nominee, and receive the income thereon and hold the same as
Collateral hereunder or apply it to the Obligations; and (ii) demand, ▇▇▇ for,
collect or make any compromise or settlement it deems desirable.
(g) The Secured Party may perform any covenant or agreement of
any of the Debtor contained herein that the Debtor has failed to perform and in
so doing the Secured Party may expend such sums as it may reasonably deem
advisable in the performance thereof, including, without limitation, the payment
of any taxes or insurance premiums, payment to obtain a release of an
Encumbrance or potential Encumbrance, expenditures made in defending against any
adverse claim and all other expenditures which the Secured Party may make for
the protection of any Collateral or which it may be compelled to make by
operation of law. All such sums and amounts so expended shall be repaid by the
Debtor upon demand, shall constitute additional Obligations and shall bear
interest from the date said amounts are expended at the rate per annum provided
in the Credit Agreement to be paid on Prime Rate Loans after the occurrence of
an Event of Default. No such performance of any covenant or agreement by the
Secured Party on behalf of any Debtor, and no such advance or expenditure
therefor, shall relieve the Debtor of any Event of Default.
(h) The Secured Party may retain and apply the Proceeds of any
disposition of Collateral, first, to its reasonable expenses of retaking,
holding, protecting and maintaining, and preparing for disposition and disposing
of, the Collateral, including reasonable attorneys' fees and other legal
expenses incurred by it in connection therewith; and second, to the payment of
the Obligations in such order of priority as the Lenders shall determine. Any
surplus remaining after such application shall be paid to the Debtor or to
whomever may be legally entitled thereto, provided that in no event shall the
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Debtor be credited with any part of the Proceeds of the disposition of the
Collateral until such Proceeds shall have been received in cash by the Lenders.
The Debtor shall remain liable for any deficiency.
9.02 Disposition of Collateral.
(a) Prior to any disposition of Collateral pursuant to this
Agreement, the Secured Party may, at its option, cause any of the Collateral to
be repaired or reconditioned in such manner and to such extent as to make it
saleable. Unless such Collateral threatens to decline rapidly in value or is of
the type customarily sold on a recognized market, the Secured Party shall send
to the Debtor prior written notice of the time and place of any public sale of
such Collateral or of the time after which any private sale or other disposition
thereof is to be made.
(b) The Debtor hereby grants to the Secured Party a license or
other right to use, without charge, the Debtor's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks and
advertising matter, or any property of a similar nature, relating to the
Collateral, in completing production of, advertising for sale and selling any
Collateral; and the Debtor's rights under all licenses and all franchise
agreements shall inure to the Secured Party's benefit.
(c) The Debtor recognizes (i) that the Secured Party may be
unable to effect a public sale of all or a part of the Investment Property by
reason of certain prohibitions contained in the Securities Act of 1933 (as
amended from time to time, the "SECURITIES ACT") or the Securities laws of
various states (the "BLUE SKY LAWS"), but may be compelled to resort to one or
more private sales to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire the Investment Property for their own
account, for investment and not with a view to the distribution or resale
thereof, (ii) that private sales so made may be at prices and upon other terms
less favorable to the seller than if the Investment Property were sold at public
sales, (iii) that neither the Secured Party nor the Lenders has any obligation
to delay sale of any of the Investment Property for the period of time necessary
to permit the Investment Property to be registered for public sale under the
Securities Act or the Blue Sky Laws, and (iv) that private sales made under the
foregoing circumstances shall be deemed to have been made in a commercially
reasonable manner.
9.03 Appointment as Attorney-in-Fact. The Debtor hereby appoints the
Secured Party and the Secured Party's designees or agents as attorney-in-fact of
the Debtor, irrevocably and with power of substitution, with full authority in
the name of the Debtor, for sole use and benefit of the Lenders, but at the
Debtor's expense, so long as an Event of Default is continuing, to take any and
all of the actions specified above in this section and elsewhere in this
Agreement. This power of attorney is coupled with an interest and shall be
irrevocable for so long as any of the Obligations remain outstanding.
9.04 Duties re Collateral. Except as otherwise provided herein, and as
may be mandated by applicable law, the Secured Party shall have no duty as to
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the collection or protection of any Collateral nor as to the preservation of any
rights pertaining thereto, beyond the safe custody of any Collateral in its
possession.
9.05 Destruction of Documents and Records. The Debtor authorizes the
Secured Party and the Lenders to destroy all invoices, delivery receipts,
reports and other types of documents and records delivered to the Secured Party
and/or the Lenders in connection with the transactions contemplated herein at
any time subsequent to the expiration of the applicable statute of limitations.
ARTICLE 10. SET-OFF. Any deposits or other sums at any time credited by or due
from any of the Lenders to any of the Debtor may, without demand or notice (any
such demand or notice being expressly waived hereby) and to the fullest extent
permitted by law and without regard to any source of payment whatsoever,
following the occurrence and during the continuance of an Event of Default, be
applied to or set off against Obligations on which the Debtor is primarily
liable and may at or after the maturity thereof be applied to or set off against
Obligations on which the Debtor is secondarily liable, and advice thereof shall
thereafter be given to the Debtor 's chief financial officer.
ARTICLE 11. WAIVERS. To the extent permitted by applicable law, the Debtor
waives (i) presentment, demand, notice, protest, notice of acceptance of this
Agreement, notice of any loans made, credit or other extensions granted,
Collateral received or delivered and any other action taken in reliance hereon
and all other demands and notices of any description, except for such demands
and notices as are expressly required to be provided to the Debtor under this
Agreement or any other document evidencing the Obligations and (ii) to the full
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension and redemption laws now or hereafter in force and all rights of
marshaling in the event of any sale or disposition of any of the Collateral. To
the extent that it lawfully may do so, the Debtor hereby agrees that it will not
invoke any law relating to the marshaling of collateral which might cause delay
in or impede the enforcement of the rights of the Secured Party or the Lenders
under this Agreement or under any other instrument evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or guaranteed, and to the extent that it lawfully
may do so the Debtor hereby irrevocably waives the benefits of all such laws.
With respect to both the Obligations and any Collateral, the Debtor assents to
any extension or postponement of the time of payment or any other forgiveness or
indulgence, to any substitution, exchange or release of Collateral, to the
addition or release of any party or Person primarily or secondarily liable, to
the acceptance of partial payment thereon and the settlement, compromise or
adjustment of any thereof, all in such manner and at such time or times as the
Secured Party may deem advisable. The Secured Party may exercise its rights with
respect to the Collateral without resorting, or regard, to other collateral or
sources of reimbursement for Obligations. The Secured Party and the Lenders
shall not be deemed to have waived any of their rights with respect to the
Obligations or the Collateral unless such waiver is in writing and signed by the
Secured Party and the Lenders. No delay or omission on the part of the Secured
Party or the Lenders in exercising any right and no course of dealing shall
operate as a waiver of such right or any other right. A waiver on any one
occasion shall not bar or waive the exercise of any right on any future
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occasion. All rights and remedies of the Secured Party and the Lenders with the
respect to the Obligations or the Collateral, whether evidenced hereby or by any
other instrument or papers, are cumulative and not exclusive of any remedies
provided by law or any other agreement, and may be exercised separately or
concurrently.
ARTICLE 12. INDEMNIFICATION AND EXPENSES. The Debtor agrees to indemnify and
hold the Secured Party and the Lenders, and their respective officers,
directors, trustees, agents, servants and employees (each, an "INDEMNIFIED
PARTY") harmless from and against any taxes, liabilities, claims and damages,
including reasonable attorneys' fees and disbursements, and other expenses
incurred or arising by reason of the taking or the failure to take action by the
Indemnified Party under this Agreement and in respect of any transactions
effected in connection with this Agreement, except those arising from the gross
negligence or willful misconduct of the Indemnified Party. The Debtor promises
to reimburse the Secured Party and the Lenders on demand for all reasonable
out-of-pocket fees and disbursements (including all reasonable attorneys' fees
and collateral evaluation costs) incurred or expended in protecting, preserving
or enforcing the rights of the Secured Party and the Lenders under or in respect
of the Obligations or any of the Collateral. The amount of all such costs and
expenses shall, until paid, bear interest at the rate applicable to Prime Rate
Loans and shall be an Obligation secured by the Collateral.
ARTICLE 13. NOTICES. All notices, approvals, requests, demands and other
communications hereunder expressly required by this Agreement to be in writing,
to any party hereto shall be deemed to have been given when delivered to the
Person(s) and in the manner provided in Section 9.1 of the Credit Agreement. Any
notice, unless otherwise specified, may be given orally or in writing.
ARTICLE 14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Debtor and its respective successors and assigns,
and shall be binding upon and inure to the benefit of and be enforceable by the
Secured Party and its successors and assigns permitted under the Credit
Agreement, whether or not an express assignment of rights hereunder is made;
provided that the Debtor may not assign or transfer its rights or obligations
hereunder. Without limiting the generality of the foregoing sentence, the
Lenders may, in the manner and to the extent set forth in the Credit Agreement,
assign or otherwise transfer any agreement or any Note held by it evidencing,
securing or otherwise executed in connection with the Obligations, or sell
participations in any interest therein, to any other Person, and such other
Person shall thereupon become vested, to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to the Lenders under the terms of the Loan Documents.
ARTICLE 15. GOVERNING LAW. This agreement shall be governed by the laws of the
State of New Hampshire without regard to its principles relating to choice and
conflicts of law.
ARTICLE 16. CONSENT TO JURISDICTION. DEBTOR HEREBY CONSENTS TO THE JURISDICTION
OF ANY OF THE COURTS OF THE STATE OF NEW HAMPSHIRE LOCATED IN HILLSBOROUGH
COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
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SITTING IN CONCORD, NEW HAMPSHIRE IN CONNECTION WITH ANY ACTION TO ENFORCE THE
RIGHTS OF THE SECURED PARTY UNDER THIS AGREEMENT. THE DEBTOR IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE EXERCISE OF JURISDICTION
BY SAID COURTS IN CONNECTION WITH ANY SUCH ACTION AND AGREES NOT TO ASSERT IN
ANY SUCH ACTION THAT SUCH ACTION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
ARTICLE 17. WAIVER OF JURY TRIAL. EACH OF THE DEBTOR, THE SECURED PARTY AND THE
LENDERS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS
OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
EXCEPT AS PROHIBITED BY LAW, EACH OF THE DEBTOR, THE SECURED PARTY AND THE
LENDERS HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES. THE
DEBTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE SECURED
PARTY OR THE LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE SECURED
PARTY OR THE LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT EACH OF THE LENDERS HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BECAUSE OF, AMONG OTHER THINGS, THE DEBTOR'S
WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
ARTICLE 18. CONTINUING OBLIGATIONS. The Debtor acknowledges that the Secured
Party and the Lenders, in determining to enter into the Credit Agreement, have
relied upon the fact that the Security Interest granted herein constitutes the
continuing and irrevocable agreement of the Debtor, and the Debtor agrees that
its obligations hereunder may not be revoked in whole or in part. The
obligations of the Debtor hereunder shall terminate when the commitment of the
Lenders to extend credit under the Credit Agreement shall have terminated and
all of the Obligations have been indefeasibly paid in full in cash and
discharged; provided, however, that:
(a) if a claim is made upon the Secured Party or the Lenders
at any time for repayment or recovery of any amounts or any property received by
the Secured Party or the Lenders from any source on account of any of the
Obligations and the Secured Party or the Lenders repay or return any amounts or
property so received (including interest thereon to the extent required to be
paid by the Secured Party or the Lenders) or
(b) if the Secured Party or the Lenders become liable for any
part of such claim by reason of (i) any judgment or order of any court or
administrative authority having competent jurisdiction, or (ii) any settlement
or compromise of any such claim,
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then the Debtor shall remain obligated under this Agreement with respect to the
amounts so repaid or property so returned and the amounts for which the Secured
Party or the Lenders become liable (such amounts being deemed part of the
Obligations), and the Security Interest granted herein shall apply with full
force and effect with to such Obligations, to the same extent as if such amounts
or property had never been received by the Secured Party or the Lenders,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any such Obligations.
ARTICLE 19. GENERAL.
19.01 Amendment, Etc. This Agreement may not be amended, modified
or supplemented except by a writing signed by the parties hereto.
19.02 Multiple Counterparts. This Agreement and any amendment hereof
may be executed in several counterparts by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, but all of
which together shall constitute one and the same instrument.
19.03 Captions and Headings. Captions and section headings are for
convenience of reference only and in no way define, limit or describe the scope
or intent of the provisions hereof.
19.04 Joint Possession. In the event that any Collateral or any deposit
or other sum due from or credited by the Lenders is held or stands in the name
of any of the Debtor and another or others jointly, the Lenders may deal with
the same for all purposes as if it belonged to or stood in the name of the
Debtor alone.
19.05 Survival. All representations, warranties, covenants and
agreements contained in this Agreement, including without limitation the
agreement of the Debtor to indemnify the Secured Party and the Lenders set forth
in Article 12, shall survive the execution and delivery of the Loan Documents.
19.06 Severability. If any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, that holding
shall not invalidate or render unenforceable any other provision hereof.
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IN WITNESS WHEREOF, the Debtor has caused this Agreement to be duly
executed as an instrument under seal as of the date first written above.
DEBTOR:
LASTERTEL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President - Finance
Hereunto Duly Authorized
Accepted in Manchester, New Hampshire as of the date and year first above
written.
SECURED PARTY:
CITIZENS BANK NEW HAMPSHIRE
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Hereunto Duly Authorized
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