EXHIBIT 10.25
DOC GSA DATE 2-2-96
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COM CVC HOLDINGS INC.
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[LOGO] GENERAL SECURITY AGREEMENT
MANUFACTURERS AND TRADERS TRUST COMPANY
Name(s) of Undersigned CVC Holdings, Inc.
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Address(es) of Undersigned ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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In consideration of Manufacturers and Traders Trust Company, a New York
banking corporation having its chief executive office at One M&T Plaza, Buffalo,
New York 14240, (the "Secured Party") heretofore or hereafter (1) granting any
loan, credit or other financial accommodation to, or in reliance upon any
guaranty, endorsement or other assurance of (a) any of the undersigned or (b)
CVC Products, Inc., a Delaware Corporation
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(Name) (Type of entity and, if not an individual, jurisdiction in
having his or her residence or its only place of business or
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which organized)
chief executive office at ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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(Address)
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(the "Borrower"), (2) permitting any extension, renewal, refinancing,
modification or replacement of any indebtedness, liability or obligation arising
as a direct or indirect result of any such loan, credit or other financial
accommodation, (3) surrendering or releasing any guaranty, endorsement or other
assurance, any collateral or other security, or any subordination, directly or
indirectly securing the payment of, or otherwise directly or indirectly
applicable to, any such indebtedness, liability or obligation or (4) granting
any waiver of, or any forbearance or other indulgence relating to, any right or
remedy relating to any such indebtedness, liability or obligation, to any such
guaranty, endorsement or other assurance, to any such collateral or other
security or to any such subordination, and for other valuable consideration, the
receipt of which is acknowledged, each of the undersigned agrees with the
Secured Party as follows:
1. Reference to Definitions.
a. For purposes of this Agreement, each of the following terms has the
meaning given it in Section 16 of this Agreement: (i) Bankruptcy Law, (ii)
Collateral, (iii) Debtor, (iv) Equipment, (v) Event of Default, (vi) General
Intangible, (vii) Goods, (viii) Inventory, (ix) Obligations, (x) Other
Collateral, (xi) Other Obligor, (xii) Permitted Lien, (xiii) Person, (xiv)
Primary Obligor, (xv) Security Interest and (xvi) Successor.
b. For purposes of this Agreement, each of the following terms has the
meaning given it for purposes of Article 9 of the Uniform Commercial Code of the
State of New York as in effect on the date of this Agreement: (i) Account, (ii)
Account Debtor, (iii) Chattel Paper, (iv) Consumer Goods, (v) Deposit Account,
(vi) Document, (vii) Farm Product, (viii) Fixture, (ix) Instrument, (x) Proceeds
and (xi) Products.
c. For purposes of this Agreement, "Uncertificated Security" has the
meaning given it for purposes of Article 8 of the Uniform Commercial Code of the
State of New York as in effect on the date of this Agreement.
2. Security Interest; Nature of Security Interest.
a. To secure the payment of the Obligations, each of the undersigned
grants to the Secured Party a security interest in, and assigns, pledges and
hypothecates to the Secured Party, the Collateral.
b. Each Security Interest (i) is unconditional, (ii) is independent of and
in addition to all Other Collateral, (iii) is a continuing security interest,
assignment, pledge or hypothecation, and (iv) shall continue in full force and
effect except insofar as this Agreement is terminated as provided in Section 12g
of this Agreement.
3. Reinstatement of Obligations. Each portion of the Obligations that is
(a) paid by any money received or applied by the Secured Party (including, but
not limited to, any such money constituting, or received or applied because of
the existence of, any of the Collateral or any Other Collateral) and later
returned by or otherwise recovered from the Secured Party as a direct or
indirect result of any claim, regardless of the basis or outcome thereof,
whether asserted affirmatively, as a counterclaim, setoff or defense or
otherwise and whether now existing or hereafter arising, for the return or for
any other recovery of such money (including, but not limited to, any such claim
based, in whole or in part, upon any allegation that (i) such money constituted
trust funds for purposes of the Lien Law of the State of New York or for
purposes of any similar statute, regulation or other law, (ii) the receipt or
application of such money constituted an impermissible setoff or (iii) the
receipt or application of such money, or the grant or perfection of any security
interest in, or of any other lien or encumbrance upon, any of the Collateral or
any Other Collateral, constituted a preference, fraudulent transfer or
fraudulent conveyance) or (b) satisfied by the Secured Party's retention of any
portion of the Collateral, or by the Secured Party's retention of any Other
Collateral, that is later returned by or otherwise recovered from the Secured
Party as a direct or indirect result of any claim, regardless of the basis or
outcome thereof, whether asserted affirmatively, as a counterclaim, setoff or
defense or otherwise and whether now existing or hereafter arising, for the
return or for any other recovery of such portion of the Collateral or Other
Collateral (including, but not limited to, any such claim based, in whole or in
part, upon any allegation that the grant or perfection of any security interest
in, or of any other lien or encumbrance upon, such portion of the Collateral or
Other Collateral constituted a preference, fraudulent transfer or fraudulent
conveyance) shall be reinstated as part of the Obligations for purposes of this
Agreement (including, but not limited to, Section 12g of this Agreement) as of
the date it originally arose and for purposes of each statute of limitations
with respect to any action or other legal proceeding by the Secured Party
against any Debtor relating to this Agreement as of the date of such return or
other recovery of such money, portion of the Collateral or Other Collateral.
4. Covenants.
a. Simultaneously with the execution and delivery to the Secured Party of
this Agreement, each of the undersigned shall execute and deliver to the Secured
Party each financing statement, notice of lien, instrument of assignment and
other writing, and take each other action, that the Secured Party shall deem
necessary or desirable at the sole option of the Secured Party to perfect or
accomplish any Security Interest.
b. Simultaneously with the execution and delivery to the Secured Party of
this Agreement, each of the undersigned shall deliver each presently existing
instrument included in the Collateral (except for any check or other draft) and
held by him, her or it to the Secured Party with each endorsement, instrument of
assignment and other writing that the Secured Party shall deem necessary or
desirable at the sole option of the Secured Party to accomplish the assignment
or other transfer of such instrument to the Secured Party. Until such delivery,
he, she or it shall hold such instrument in trust for the Secured Party.
c. Immediately upon receiving any instrument included in the Collateral
(except for, until (i) the occurrence or existence of any Event of Default or
(ii) any notice to the contrary shall be delivered, given or sent by the Secured
Party to any Debtor, any check or other draft), each Debtor shall deliver such
instrument to the Secured Party with each endorsement, instrument of assignment
and other writing that the Secured Party shall deem necessary or desirable at
the sole option of the Secured Party to accomplish the assignment or other
transfer of such instrument to the Secured Party. Until such delivery, such
Debtor shall hold such instrument in trust for the Secured Party.
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d. Each Debtor shall provide to the Secured Party, in form satisfactory to
the Secured Party, (i) if such Debtor is an individual, at least once during
each period of twelve consecutive months, a personal financial statement of such
Debtor for a year ending not more than sixty days earlier, in reasonable detail
and certified by such Debtor to be complete and accurate, (ii) if such Debtor is
not an individual, within sixty days after the end of each fiscal quarter of
each fiscal year of such Debtor, statements of income and of changes in
financial position of such Debtor for such fiscal quarter and for the period
from the beginning of such fiscal year to the end of such fiscal quarter and a
balance sheet of such Debtor as of the end of such fiscal quarter each in
reasonable detail and certified by an officer or member of such Debtor to be
complete and accurate, to be in accordance with the records of such Debtor and
to present fairly, subject to normal and nonmaterial year-end adjustments, the
results of the operations, and the changes in financial position, of such Debtor
for such fiscal quarter and for the period from the beginning of such fiscal
year to the end of such fiscal quarter, and the financial position of such
Debtor as of the end of such fiscal quarter, in conformity with generally
accepted accounting principles applied consistently with the application of such
principles with respect to the preceding fiscal quarter of such Debtor, (iii) if
such Debtor is not an individual, within ninety days after the end of each
fiscal year of such Debtor, statements of income and of changes in financial
position of such Debtor for such fiscal year and a balance sheet of such Debtor
as of the end of such fiscal year, each in reasonable detail and certified by an
independent certified public accountant acceptable to the Secured Party to
present fairly the results of the operations, and the changes in financial
position, of such Debtor for such fiscal year and the financial position of such
Debtor as of the end of such fiscal year, in conformity with generally accepted
accounting principles applied consistently with the application of such
principles with respect to the preceding fiscal year of such Debtor and to have
been based upon an audit by such accountant that was made in accordance with
generally accepted auditing standards and accordingly included such tests of
accounting records and such other auditing procedures as such accountant deemed
necessary in the circumstances, and (iv) promptly upon the request of the
Secured Party, all additional information relating to such Debtor or to such
Debtor's business, operations, assets, affairs or condition (financial or other)
that is so requested.
e. Each Debtor shall maintain accurate and complete records relating to
the Collateral (including, but not limited to, upon the request of the Secured
Party, a perpetual inventory record relating to inventory included in the
Collateral) in conformity with generally accepted accounting principles
consistently applied.
f. Before the end of any applicable grace period, each Debtor shall pay
each tax, assessment, fee and charge imposed by any government or political
subdivision upon any of the Collateral, upon the ownership, possession, use,
operation, sale or lease of any of the Collateral, upon this Agreement or upon
any instrument evidencing any of the Obligations.
g. Each Debtor shall obtain and maintain in full force and effect each
authorization, approval, permit, consent, franchise and license from any Person
necessary for the ownership, possession, use, operation, sale or lease of any of
the Collateral.
h. Each Debtor shall defend the Collateral against each demand, claim,
counterclaim, setoff and defense asserted by any Person other than the Secured
Party (including, but not limited to, any Account Debtor).
i. Each Debtor shall indemnify the Secured Party on demand against each
liability, cost and expense (including, but not limited to, if the Secured Party
retains counsel for advice, for litigation or for any other purpose, each
attorney's fee and disbursement) incurred by the Secured Party as a direct or
indirect result of any claim, regardless of the basis or outcome thereof,
whether asserted affirmatively, as a counterclaim, setoff or defense or
otherwise and whether now existing or hereafter arising, arising out of the
ownership, possession, use, operation, sale or lease of any of the Collateral.
j. Each Debtor shall (i) keep all Goods included in the Collateral insured
against each risk to which any of such Goods may at any time be subject
(including, but not limited to, fire, theft and risks covered by extended
coverage) and (ii) maintain insurance against liability on account of damage to
any Person or property arising out of the ownership, possession, use, operation,
sale or lease of any of such Goods. Such insurance shall be provided in such
amounts, for such periods, on such terms, with such special endorsements and by
such companies as shall be satisfactory to the Secured Party. Each Debtor shall
deliver to the Secured Party a copy of each policy pursuant to which any of such
insurance is provided. Without limiting the generality of the first two
sentences of this Section 4j, (i) each policy pursuant to which any of the
insurance described in clause (i) of the first sentence of this Section 4j is
provided shall contain a mortgagee clause, in form and substance satisfactory to
the Secured Party, (A) naming the Secured Party as a mortgagee as the interest
of the Secured Party may appear and (B) providing that (I) all money payable
pursuant to any insurance provided pursuant to such policy shall be payable to
the Secured Party, (II) no insurance provided pursuant to such policy shall be
affected by any act or omission of any Debtor or of any owner of any real
property referred to in such policy and (III) neither such policy nor such
mortgagee clause may be canceled, terminated or adversely amended except upon
thirty days' prior written notice to the Secured Party and (ii) each policy
pursuant to which any of the insurance described in clause (ii) of the first
sentence of this Section 4j is provided shall contain a clause, in form and
substance satisfactory to the Secured Party, (A) naming the Secured Party as an
additional insured as the interest of the Secured Party may appear and (B)
providing that neither such policy nor such clause may be canceled, terminated
or adversely amended except upon thirty days' prior written notice to the
Secured Party.
k. Each Debtor shall immediately (i) cause all Goods included in the
Collateral to be properly titled and registered to the extent required by any
applicable statute, regulation or other law, (ii) cause the interest of the
Secured Party to be properly noted on each certificate of title relating to any
of such Goods and (iii) deliver each such certificate received by such Debtor to
the Secured Party.
l. Each Debtor shall (i) keep each Fixture and piece of Equipment included
in the Collateral in as good condition as when first delivered to any Debtor,
ordinary wear and tear excepted, (ii) perform maintenance on each such Fixture
and piece of Equipment strictly in accordance with each applicable specification
of any manufacturer or seller thereof and (iii) use and operate each such
Fixture and piece of Equipment, and permit each such Fixture and piece of
Equipment to be used and operated, only in the manner in which it was designed
to be used and operated so as to subject it only to ordinary wear and tear.
m. Each Debtor shall use his, her it its best efforts to cause any issuer
of any General Intangible or Instrument included in the Collateral to make
public, whether by filing reports with the Securities and Exchange Commission or
otherwise, all information with respect to such issuer necessary or desirable to
permit the sale or other disposition of such General Intangible or Instrument
without registration pursuant to the Securities Act of 1933.
n. If any Account or General Intangible included in the Collateral
represents money owing pursuant to any contract for the improvement of real
property or for a public improvement for purposes of the Lien Law of the State
of New York, each Debtor shall (i) immediately send or deliver notice of such
fact to the Secured Party, (ii) receive and hold any money advanced by the
Secured Party with respect to such Account or General Intangible as a trust fund
to be first applied to the payment of trust claims as such term is defined in
Section 71 of such Lien Law, (iii) until each such trust claim is paid, not use
or permit the use of any of such money for any purpose other than the payment of
such trust claims and (iv) promptly upon the request of the Secured Party,
execute and deliver each writing, and take each other action, that the Secured
Party shall deem necessary or desirable at the sole option of the Secured Party
to give or file notice of the Secured Party's interest in such Account or
General Intangible pursuant to whichever of Sections 15, 16 and 73 of such Lien
Law is applicable.
o. If any Account or General Intangible included in the Collateral arises
out of a contract with any government or political subdivision (including, but
not limited to, the United States) or with any department, agency or
instrumentality thereof, such Debtor shall (i) immediately send or deliver
notice of such fact to the Secured Party and (ii) promptly upon the request of
the Secured Party, execute and deliver each writing, and take each other action
that the Secured Party shall deem necessary or desirable at the sole option of
the Secured Party properly to perfect under any statute, regulation or other law
(including, but not limited to, the Federal Assignments of Claims Act) the
interest of the Secured Party in such Account or General Intangible.
p. Each Debtor shall promptly deliver or send to the Secured Party notice
of any failure of any Account Debtor or other Person to perform any obligation
relating to any Account, Chattel Paper, General Intangible, Instrument, Document
or Deposit Account included in the Collateral.
q. Immediately upon receiving any proxy statement, notice or other
communication relating to any General Intangible or Instrument included in the
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Collateral, each Debtor shall (i) if such proxy statement, notice or other
communication is in writing, deliver a copy thereof to the Secured Party or (ii)
if such proxy statement, notice or other communication is not in writing,
deliver or send notice thereof to the Secured Party.
r. immediately upon acquiring knowledge or reason to know that any Goods
included in the Collateral have been affixed to, or have been installed in or
on, any real property or any Goods not included in the Collateral, each Debtor
shall deliver or send notice of such fact to the Secured Party.
s. Immediately upon acquiring knowledge or reason to know of any maturity,
call, exchange, conversion, redemption, offer, tender or similar matter relating
to any General Intangible, Instrument or Deposit Account included in the
Collateral, each Debtor shall deliver or send notice thereof to the Secured
Party.
t. Immediately upon acquiring knowledge or reason to know of any loss,
destruction or theft of, or of any damage to, any of the Collateral from any
cause of any kind, each Debtor shall send or deliver notice thereof to the
Secured Party.
u. Immediately upon acquiring knowledge or reason to know of (i) the
threat or commencement by any Person other than the Secured Party of any action
or other legal proceeding relating to any of the Collateral or questioning the
validity of this Agreement or of any action taken or to be taken pursuant to
this Agreement, (ii) any judgment, order or award of any court, agency or other
governmental authority or of any arbitrator relating to any of the Collateral or
rendering invalid this Agreement or any action taken or to be taken pursuant to
this Agreement or (iii) the assertion by any Person other than the Secured Party
of any demand, claim, counterclaim, setoff or defense relating to any of the
Collateral, each Debtor shall deliver or send notice thereof to the Secured
Party.
v. Immediately upon acquiring knowledge or reason to know of the
occurrence or existence of (i) any Event of Default, (ii) any event or condition
that, after notice, after lapse of time or after both notice and lapse of time,
would constitute an Event of Default or (iii ) any event or condition that has
or (so far as can be foreseen) will or might have any material adverse effect on
any of the Collateral, on any Debtor, Primary Obligor or Other Obligor or on the
business, operations, assets, affairs or condition (financial or other) of any
Debtor, Primary Obligor or Other Obligor, each Debtor shall deliver or send
notice thereof to the Secured Party.
w. Immediately upon acquiring knowledge or reason to know of any change in
(i) the location of the residence, only place of business or chief executive
office of any Debtor, (ii) the location of any of the Collateral if not (A) in
the possession or under the control of, or enroute to or from, the Secured Party
or (B) mobile Equipment being removed for not more than thirty days at a time
from any location indicated in any questionnaire submitted to the Secured Party
by any of the undersigned in connection with this Agreement as a location where
such mobile Equipment will be kept or (iii) the name, identity or structure of
any Debtor, each Debtor shall deliver or send notice thereof to the Secured
Party.
x. No Debtor shall (i) execute or permit to be filed or remain on file in
any public office any financing statement relating to any of the Collateral,
naming any Debtor as a debtor and naming any Person other than the Secured Party
as a secured party or (ii) execute any application for any certificate of title
or notice of lien, or permit to exist any certificate of title, relating to any
Goods included in the Collateral and naming any Person other than the Secured
Party as a secured party, except for financing statements, applications, notices
of lien and certificates of title fully and accurately described in Exhibit A
attached to and made a part of this Agreement.
y. No Debtor shall (i) permit to exist any registration of any transfer or
pledge of any Uncertificated Security included in the Collateral, (ii) execute
or permit to exist any order to register any transfer or pledge of, or any
notification of any security interest in, or of any other lien or encumbrance
upon, any such Uncertificated Security or (iii) permit any such Uncertificated
Security to be shown on the records of any clearing corporation other than in
the name of any Debtor, of the Secured Party or of any nominee of the Secured
Party, except for registrations, orders, notifications and Uncertificated
Securities fully and accurately described in Exhibit A attached to and made a
part of this Agreement.
z. No Debtor shall create or permit to exist, or attempt or agree or
otherwise incur any obligation to create or permit to exist, any security
interest in, or any other lien or encumbrance upon, any of the Collateral,
except for Permitted Liens.
aa. No Debtor shall abandon, assign, sell, lease, exchange, convert or
otherwise transfer or dispose of any of the Collateral or any interest in any of
the Collateral, except that, until (i) the occurrence or existence of any Event
of Default or (ii) any notice to the contrary shall be delivered, given or sent
by the Secured Party to any Debtor, each Debtor may (A) in the ordinary course
of such Debtor's business, (I) abandon, assign, sell, lease, exchange or
otherwise transfer of dispose of any Equipment of such Debtor that is obsolete
or worn-out, (II) sell or exchange any Equipment of such Debtor in connection
with the acquisition by such Debtor of other Equipment that is at least as
valuable as such Equipment, that such Debtor intends to use for substantially
the same purposes as such Equipment and that is not subject to any security
interest or other lien or encumbrance, except for Permitted Liens, (III) assign
any Account of such Debtor for purposes of collection, (IV) assign, sell, lease,
exchange or otherwise transfer or dispose of any Inventory of such Debtor other
than in partial or complete satisfaction of any indebtedness, liability or
obligation and (V) dispose of any money of such Debtor or funds in any Deposit
Account of such Debtor in partial or complete satisfaction of any indebtedness,
liability or obligation of such Debtor incurred in the ordinary course of such
Debtor's business and (B) dispose of any money of such Debtor, funds in any
Deposit Account of such Debtor or funds in any other account of such Debtor
evidenced by a certificate of deposit if such money is held, or if such Deposit
account or other account is maintained, for personal, family or household
purposes.
bb. No Debtor shall use, operate, permit the use or operation of, or
assign, sell, lease, exchange or otherwise transfer or dispose of, any of the
Collateral in any manner that (i) would or might violate, or would or might
result in any violation of, any environmental or other statute, regulation or
other law (including, but not limited to, the Environmental Protection Act, the
Occupational Safety and Health Act, the Comprehensive Environmental Response
Compensation and Liability Act and the Resource Conservation and Recovery Act),
any policy providing any insurance on any Goods included in the Collateral or
any warranty with respect to any such Goods or (ii) would or might result in any
such insurance not being paid or in any such warranty not being honored.
cc. No Debtor shall remove, or permit the removal of, any of the
Collateral from any location indicated in any questionnaire submitted to the
Secured Party by any of the undersigned in connection with this Agreement as a
location where any of the Collateral will be kept, except that any mobile
Equipment included in the Collateral may be removed for not more than thirty
days at a time from any location indicated in any such questionnaire as a
location where such mobile Equipment will be kept.
dd. No Debtor shall materially alter or permit the material alteration of
any Fixture or piece of Equipment included in the Collateral.
ee. No Debtor shall cause or permit any Goods included in the Collateral
to (i) become a Fixture or (ii) be or become an accession to any Goods not
included in the Collateral.
ff. No Debtor shall cause or permit any Goods included in the Collateral
to be placed in any warehouse that may issue a negotiable Document with respect
to such Goods.
gg. No Debtor shall assign, sell, exchange, convert or otherwise transfer
or dispose of, take any other action with respect to, or permit the assignment,
sale, exchange, conversion or other transfer or disposition of or the taking of
any other action with respect to, any General Intangible or Instrument not
included in the Collateral if such assignment, sale, exchange, conversion or
other transfer or disposition or such taking of such other action would be
required to be considered in determining whether the sale or other disposition
of any General Intangible or Instrument included in the Collateral was
permissible without registration pursuant to the Securities Act of 1933.
hh. No Debtor who or which controls any issuer of any stock or share
included in the Collateral shall permit, and no Debtor who or which by acting
with any other Person or with other Persons would cause such control to exist
shall take any action to permit, such issuer to issue (i) any such stock or
share in addition to that or those heretofore issued or (ii) any option, warrant
or other right to purchase any such stock or share.
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ii. Upon and after (i) the occurrence or existence of any Event of Default
or (ii) the delivery, giving or sending by the Secured Party to any Debtor of
any notice not to do so, no Debtor shall, without the prior written consent of
the Secured Party, (A) request, demand, accept, collect, enforce, extend, renew,
refinance, modify, compound, subordinate, accelerate, settle, adjust or
compromise, enter into any composition of, replace, cancel, release, surrender,
abandon, discharge, realize upon, commence, prosecute, settle or compromise any
action or other legal proceeding relating to, waive any right or remedy relating
to or otherwise terminate, impair or otherwise affect any indebtedness,
liability or obligation of any Account Debtor or other Person relating to, or
give any receipt, release or discharge relating to, any Account, Chattel Paper,
General Intangible, Instrument, Document or Deposit Account included in the
Collateral or (B) attempt or agree or otherwise incur any obligation to do
anything described in clause (A) of this sentence.
jj. Promptly upon the request of the Secured Party made upon or at any
time and from time to time after the occurrence or existence of any Event of
Default, each Debtor shall assemble (i) all Goods included in the Collateral,
except for Fixtures, growing crops and standing timber, and (ii) all Chattel
Paper, Instruments, Documents and records included in the Collateral, and make
them available to the Secured Party at each place reasonably convenient to the
Secured Party and to such Debtor as the Secured Party shall designate
(including, but not limited to, any promises of such Debtor).
kk. Promptly upon the request of the Secured Party:
i. Each Debtor shall enter into each warehousing, lockbox or other
custodial arrangement with respect to any of the Collateral that the Secured
Party shall deem necessary or desirable at the sole option of the Secured Party.
ii. Each Debtor shall provide to the Secured Party all information, in
form and substance satisfactory to the Secured Party, that the Secured Party
shall deem necessary or desirable at the sole option of the Secured Party to (A)
identify the nature, extent, value, age and location of any of the Collateral,
(B) identify or contact any Account Debtor or other Person obligated with
respect to any Account, Chattel Paper, General Intangible, Instrument, Document
or Deposit Account included in the Collateral or (C) verify any insurance on
any Goods included in the Collateral.
iii. Each Debtor shall permit each officer, employee, accountant, attorney
and other agent of the Secured Party to inspect the Collateral and to examine,
audit, copy and extract each record included in the Collateral.
iv. Each Debtor shall provide to the Secured Party a writing, in form and
substance satisfactory to the Secured Party, (A) signed by each Person having
any interest, whether as an owner, mortgagee or lessee or otherwise, in any real
property to which are affixed, or in or on which are installed or located, any
Goods included in the Collateral or in or on which is located any Chattel Paper,
Instrument, Document or record included in the Collateral, (B) disclaiming any
interest of such Person in such Goods, Chattel Paper, Instrument, Document or
record and (C) containing the agreement of such Person to the Secured Party,
upon and at any time and from time to time after the occurrence or existence of
any Event of Default, (I) entering upon such real property or upon any other
real property of such Person to which are affixed, or in or on which are
installed or located, any such Goods or in or on which is located any such
Chattel Paper, Instrument, Document or record, (II) taking possession of and
removing from such real property or from such other real property any Goods
included in the Collateral and affixed thereto or installed or located therein
or thereon or any Chattel Paper, Instrument, Document or record included in the
Collateral and located therein or thereon and (III) remaining on, and using,
such real property or such other real property in the examination, storage,
preparation for any sale, lease or other disposition or sale, lease or other
disposition of such Goods or in the examination, audit, copying or extraction of
such record, without by doing so incurring any liability to such Person, except
for unreasonable damage to such real property or to such other real property
directly resulting from doing so.
v. Each Debtor shall provide to the Secured Party a writing, in form and
substance satisfactory to the Secured Party, (A) signed by each Person having
any interest, whether as an owner, secured party or lessee or otherwise, in any
Goods not included in the Collateral to which are affixed, or in or on which are
installed, any Goods included in the Collateral, (B) disclaiming any interest of
such Person in such Goods included in the Collateral and (C) containing the
agreement of such Person to the Secured Party, upon and at any time and from
time to time after the occurrence or existence of any Event of Default, taking
possession of and removing such Goods included in the Collateral from such Goods
not included in the Collateral, without by doing so incurring any liability to
such Person, except for unreasonable damage to such Goods not included in the
Collateral directly resulting from doing so.
vi. Each Debtor shall provide all information and assistance, execute and
deliver each writing, and take each other action, that the Secured Party shall
deem necessary or desirable at the sole option of the Secured Party in
connection with the verification of any Account, Chattel Paper, General
Intangible, Instrument, Document or Deposit Account included in the Collateral.
vii. Each Debtor shall deliver each Chattel Paper, Document and record
included in the Collateral to the Secured Party with each endorsement,
instrument of assignment and other writing that the Secured Party shall deem
necessary or desirable at the sole option of the Secured Party to accomplish the
assignment or other transfer of such Chattel Paper, Document or record to the
Secured Party.
viii. Each Debtor shall execute and deliver or file each form and other
writing (including, but not limited to, any notice of proposed sale of
securities pursuant to Rule 144 of the Securities and Exchange Commission), and
take each other action (including, but not limited to, making public any
nonpublic material adverse information with respect to any issuer of any General
Intangible or Instrument included in the Collateral), that the Secured Party
shall deem necessary or desirable at the sole option of the Secured Party to
permit the sale or other disposition of any such General Intangible or
Instrument without registration pursuant to the Securities Act of 1933.
ix. Each Debtor who or which controls any issuer of any General Intangible
or Instrument included in the Collateral or otherwise has the right to effect
registration of such General Intangible or Instrument pursuant to the Securities
Act of 1933 shall (A) cause such General Intangible or Instrument to be so
registered, (B) take each other action (including, but not limited to, complying
with any "blue sky" or securities statute, regulation or other law and
delivering to the Secured Party appropriate quantities of prospectuses) that the
Secured Party shall deem necessary or desirable at the sole option of the
Secured Party to permit the public sale or other disposition of such General
Intangible or Instrument by the Secured Party in each jurisdiction that the
Secured Party shall select at the sole option of the Secured Party and (C)
execute and deliver to the Secured Party a writing, in form and substance
satisfactory to the Secured Party, indemnifying in connection with such sale or
other disposition each Person who or which is an underwriter (statutory or
other) of such General Intangible or Instrument against each liability, cost and
expense (including, but not limited to, if such Person retains counsel for
advice, for litigation or for any other purpose, each attorney's fee and
disbursement) incurred by such Person as a direct or indirect result of such
sale or other disposition.
x. Each Debtor shall execute and deliver each financing statement,
amendment of any financing statement, application for any certificate of title,
notice of lien, instrument of assignment and other writing, and take each other
action, that the Secured Party shall deem necessary or desirable at the sole
option of the Secured Party (i) to perfect or accomplish any Security interest,
(ii) otherwise to accomplish any purpose of this Agreement, (iii) in connection
with any transaction contemplated by this Agreement or (iv) in connection with
any of the Collateral.
5. Authorization and Power of Attorney. The Secured Party is irrevocably
and unconditionally authorized to take, and each Debtor irrevocably and
unconditionally appoints the Secured Party as the attorney-in-fact of such
Debtor, with full power of substitution and of revocation, to take, in the name
of such Debtor or otherwise and otherwise as shall be determined by the Secured
Party at the sole option of the Secured Party, each action relating to any of
the Collateral that, subject to this Agreement, such Debtor could take in the
same manner, to the same extent and with the same effect as if such Debtor were
to take such action; provided, however, that, until any notice of intention to
do so shall be delivered, given or sent by the Secured Party to any Debtor upon
or at any time after the occurrence or existence of any Event of Default, (a)
the Secured Party may not, pursuant to such authorization or as such
attorney-in-fact, (i) exercise or direct the exercise of any right to vote or
give any consent, ratification or waiver with respect to any General Intangible
or Instrument included in the Collateral or (ii) except as expressly permitted
by this Agreement, sell, lease or otherwise dispose of any of the Collateral and
(b) each Debtor shall have the right to exercise any right to vote or give any
consent, ratification or waiver with respect to
4
any General Intangible or Instrument included in the Collateral that such Debtor
would have but for this Agreement unless doing so would or might have any
adverse effect on the value of such General Intangible or Instrument as security
for the payment of the Obligations or otherwise be inconsistent or incompatible
with any provision or purpose of this Agreement. Such power of attorney is
coupled with an interest in favor of the Secured Party and shall not be
terminated or otherwise affected by the death, disability or incompetence of any
Debtor. Without limiting the generality of the first sentence of this Section 5,
pursuant to such authorization and as such attorney-in-fact, the Secured Party
may, in the name of any Debtor or otherwise at the sole option of the Secured
Party, (a) execute and deliver any financing statement or instrument of
assignment relating to any of the Collateral, (b) endorse, or execute and
deliver any instrument of assignment relating to, and deliver any of the
Collateral including, but not limited to, any instrument drawn by any company
issuing any insurance on any Goods included in the Collateral), whether such
endorsement or assignment is to the Secured Party or otherwise, (c) execute and
deliver any writing, or give any communication in any other form, requesting any
transfer, pledge or release from pledge of any Uncertificated Security included
in the Collateral, (d) execute and deliver or file any form or other writing
(including, but not limited to, any notice of proposed sale of
securities pursuant to Rule 144 of the Securities and Exchange Commission), or
take any other action (including, but not limited to, making public any
nonpublic material adverse information with respect to any issuer of any General
Intangible or Instrument included in the Collateral), that the Secured Party
shall deem necessary or desirable at the sole option of the Secured Party to
permit the sale or other disposition of any such General Intangible or
Instrument without registration pursuant to the Securities Act of 1933, (e)
receive and collect any mail addressed to any Debtor, direct the place of
delivery of any such mail to any location designated by the Secured Party, open
any such mail and remove from any such mail and retain any enclosure evidencing,
or otherwise relating to any of the Collateral, (f) obtain, adjust, settle or
cancel any insurance on any Goods included in the Collateral, (g) use any
payment in connection with any such insurance, including, but not limited to,
any refund of any unearned premium therefor to pay any of the Obligations,
whether due or not due, as the Secured Party shall determine at the sole option
of the Secured Party, (h) take any action described in clause (A) of Section 4e
of this Agreement or (i) execute and deliver any other writing, or take any
other action, that the Secured Party shall deem necessary or desirable at the
sole option of the Secured Party (i) to perfect or accomplish any Security
Interest, (ii) otherwise to accomplish any purpose of this Agreement, (iii) in
connection with any transaction contemplated by this Agreement or (iv) in
connection with any of the Collateral. Each debtor revokes each power of
attorney (including, but not limited to, any proxy) heretofore granted by such
Debtor with respect to any General Intangible or Instrument included in the
Collateral.
6. Certain Rights, Remedies and Duties.
a. With respect to the Collateral, the Secured Party shall have each
applicable right and remedy of a secured party pursuant to the Uniform
Commercial Code of the State of New York and each applicable right and remedy
pursuant to any other statute, regulation or other law or pursuant to this
Agreement.
b. The Secured Party shall have the right to file in any public office,
without the signature of any Debtor, each financing statement relating to any of
the Collateral that the Secured Party shall deem necessary or desirable at the
sole option of the Secured Party. Each carbon, photographic or other
reproduction of this Agreement or of any financing statement relating to any of
the Collateral shall be sufficient as a financing statement.
c. The Secured Party shall have the right to direct any company issuing
any insurance on any Goods included in the Collateral to make directly and
solely to the Secured Party any payment in connection therewith (including, but
not limited to, any refund of any unearned premium therefor).
d. The Secured Party shall have the right to verify each Account, Chattel
Paper, General Intangible, Instrument, Document and Deposit Account included in
the Collateral in any manner or through any medium that the Secured Party
considers appropriate, whether directly with any Account Debtor or other Person
obligated with respect thereto or otherwise and whether in the name of any
Debtor or otherwise, at the sole option of the Secured Party.
e. The Secured Party shall have the right to (i) notify each Account
Debtor and other Person obligated with respect to any Account, Chattel Paper,
General Intangible, Instrument or Deposit Account included in the Collateral of
the interest of the Secured Party therein, (ii) direct such Account Debtor or
other Person to deliver to the Secured Party directly any record evidencing, or
otherwise relating to such Account, Chattel Paper, General Intangible,
Instrument or Deposit Account, (iii) direct such Account Debtor or other Person
to make payment with respect to such Account, Chattel Paper, General Intangible,
Instrument or Deposit Account directly and solely to the Secured Party and
(iv) take control of all Proceeds of such Account, Chattel Paper, General
Intangible, Instrument or Deposit Account.
f. The Secured Party shall have the right to transfer to or register in
the name of the Secured Party or of any nominee of the Secured Party any General
Intangible, Instrument or Deposit Account included in the Collateral so that the
Secured Party or such nominee shall appear as the sole owner of record thereof.
Each such transfer or registration may be made with or without reference to this
Agreement or to any Security Interest.
g. Upon and at any time and from time to time after the occurrence or
existence of any Event of Default:
i. The Secured Party shall have the right to use each Fixture and piece of
Equipment included in the Collateral for the purposes of preserving any Goods
included in the Collateral, of completing any work in process included in the
Collateral and of preparing any such Goods for any sale, lease or other
disposition.
ii. The Secured Party shall have the right, without any judicial process
but without any breach of the peace, to (A) enter upon any promises of any
Debtor, (B) take possession of, and remove from any such premises, any Goods,
Chattel Paper, Instrument, Document or record included in the Collateral and (C)
remain on and use any such premises in completing any work in process included
in the Collateral or in preparing for any sale, lease, or other disposition, in
selling, leasing or otherwise disposing of, or in collecting, any of the
Collateral and (C) without the payment of any compensation of any kind, use each
trademark, service ▇▇▇▇, trade style, trade name, patent, copyright, license,
franchise and similar General Intangible included in the Collateral to the
extent of any Debtor's rights therein for the purpose of exercising any right or
remedy pursuant to this Agreement or any other right or remedy relating to any
of the Collateral; and, to such extent for such purpose, each Debtor irrevocably
grants to the Secured Party a license in each such trademark, service ▇▇▇▇,
trade style, trade name, patent, copyright, license, franchise and similar
General Intangible.
iii. If the Secured Party opts for the private sale or other disposition
of any General Intangible or Instrument included in the Collateral, the Secured
Party shall have the right to (A) restrict the number of prospective bidders in
connection with such sale or other disposition so as to comply with the
Securities Act of 1933 and (B) restrict such prospective bidders to Persons who
will agree to purchase such General Intangible or Instrument for their own
accounts for investment and not with a view to distribution or resale. No such
restriction or other restriction on such sale or other disposition that the
Secured Party shall deem necessary or desirable at the sole option of the
Secured Party in light of any "blue sky" or securities statute, regulation or
other law shall be deemed to be a factor in determining such sale or other
disposition to have been made in other than a commercially reasonable manner.
iv. The Secured Party shall have the right to perform any obligation of
any Debtor pursuant to this Agreement.
h. Until (i) the occurrence or existence of any Event of Default or (ii)
any notice to the contrary shall be delivered, given or sent by the Secured
Party to any Debtor, the Secured Party shall not have any right to retain any
interest, dividend, distribution or similar income consisting of money or of a
check or other draft and payable on account of any General Intangible or
Instrument included in the Collateral, and shall pay to any Debtor any such
interest, dividend, distribution or similar income received by it prior thereto.
i. The Secured Party shall apply all proceeds received by it from any
sale, lease or other disposition of, or from any collection of, any of the
Collateral or otherwise on account of any of the Collateral (including, but not
limited to, as money payable pursuant to any insurance on any Goods included in
the Collateral) first to costs and expenses described in Section 10 of this
Agreement and then to such other of the Obligations, whether due or not due, as
the Secured Party shall determine at the sole option of the Secured Party.
7. Standards of Care. If any portion of the Collateral shall be
transferred to or registered in the name of the Secured Party or of any nominee
of
5
The Secured Party or shall be in the possession or under the control of the
Secured Party, the Secured Party shall be deemed to have exercised reasonable
care in the custody or preservation of such portion of the Collateral. If,
subject to the following sentence, it (a) accords such portion of the Collateral
treatment substantially equal to the treatment that it accords its own assets of
a similar nature or (b) takes such action in the custody or preservation of such
portion of the Collateral as is reasonably specified in any notice delivered or
sent by any Debtor and received by it in a reasonable time to evaluate and take
such action; provided, however, that (i) any failure by the Secured Party to
take such action shall not of itself be deemed to be a failure to exercise such
reasonable care and (ii) in no event shall the Secured Party be obligated to
take such action if it determines at its sole option that doing so would or
might have any adverse affect on the value of any of the Collateral as security
for the payment of the Obligations or otherwise be inconsistent or incompatible
with any provision or purpose of this Agreement. In no event shall the Secured
Party be obligated to (a) preserve any right or remedy against any prior party
obligated pursuant to any Chattel Paper or Instrument included in the
Collateral, whether or not such Chattel Paper or Instrument is in the possession
or under the control of the Secured Party, (b) ascertain any maturity, call,
exchange, conversion, redemption, offer, tender or similar matter relating to
any General Intangible, Instrument or Deposit Account included in the Collateral
or provide to any Debtor any notice thereof, whether or not the Secured Party
has knowledge thereof, or (c) provide to any Debtor any proxy statement, notice
or other communication received by the Secured Party or by any nominee of the
Secured Party and relating to any of the Collateral.
8. Obligations Immediately Due; Termination of Obligation to Lend.
a. Upon and at any time and from time to time after the occurrence or
existence of any Event of Default other than an Event of Default described in
clause (iv) of Section 16e of this Agreement, all of the Obligations remaining
unpaid shall, at the sole option of the Secured Party and without any notice,
demand, presentment or protest of any kind, become immediately due,
notwithstanding any agreement to the contrary. Upon the Occurrence or existence
of any Event of Default described in such clause (iv), all of the Obligations
remaining unpaid shall without any notice, demand, presentment or protest of any
kind, automatically become immediately due, notwithstanding any agreement to the
contrary. Nothing in this Section 8a shall render any portion of the Obligations
that is payable on demand payable otherwise than on demand or in any other way
affect any right or remedy of the Secured Party with respect to any such portion
of the Obligations.
b. Upon the occurrence or existence of any Event of Default, any
obligation of the Secured Party to grant any or any additional loan, credit or
other financial accommodation to any Debtor shall terminate, notwithstanding any
agreement to the contrary.
9. Representations and Warranties.
a. Each of the undersigned represents and warrants to the Secured Party as
follows:
i. Each answer contained in any questionnaire submitted to the Secured
Party by him, her or it in connection with this Agreement is true and correct.
ii. His, her or its execution, delivery to the Secured Party and
performance of this Agreement do not and will not (A) violate, or result in any
violation of, any statute, regulation or other law or any judgment, order or
award of any court, agency or other governmental authority or of any arbitrator
or (B) violate, result in any violation of, constitute (whether immediately or
after notice, after notice of time or after both notice and lapse of time) any
default under, or result in or require the imposition or creation of any
security interest in, or of any other lien or encumbrance upon, any of his, her
or its assets pursuant to, any agreement to which he, she or it is a party or by
which he, she or it or any of his, her or its assets is bound, except for this
Agreement.
iii. Each authorization, approval, permit and consent from, each
registration and filing with, each declaration and notice to, and each other act
by or relating to, any Person required as a condition of his, her or its
execution, delivery to the Secured Party or performance of this Agreement has
been duty obtained, made, given or done, and is in full force and effect.
iv. If it is not an individual, its execution, delivery to the Secured
Party and performance of this Agreement (A) are and will be in furtherance of
its purposes and within its power and authority, (B) do not and will not
violate, result in any violation of, or result in or require the imposition or
creation of any security interest in, or of any other lien or encumbrance upon,
any of its assets pursuant to, (i) any certificate or articles of incorporation,
by-laws, partnership agreement, articles of association or other charter,
organizational or governing document of it or (ii) any resolution or other
action of record of any shareholders or members of it, of any board of directors
or trustees of it or of any other Person responsible for governing it, and (C)
have been duly authorized by each necessary action of any shareholders or
members of it, of any board of directors or trustees of it or of any other
Person responsible for governing it.
v. He, she or it has not heretofore abandoned, assigned, sold, leased,
exchanged, converted or otherwise transferred or disposed of any of the
Collateral or any interest in any of the Collateral, except as fully and
accurately described in Exhibit A attached to and made a part of this Agreement.
vi. He, she or it has not heretofore extended, renewed, refinanced,
modified, compounded, subordinated, accelerated, settled, adjusted or
compromised, entered into any composition of, replaced, canceled, released or
surrendered, exercised any option or right of subscription relating to, settled
or compromised any action or other legal proceeding relating to, or waived any
right or remedy relating to or otherwise terminated, impaired or otherwise
affected any indebtedness, liability or obligation of any Account Debtor or of
any other Person relating to, any Account, Chattel Paper, General Intangible,
Instrument, Document or Deposit Account included in the Collateral, except as
fully and accurately described in Exhibit A attached to and made a part of this
Agreement.
vii. There exists no demand, claim, counterclaim, setoff or defense, no
action or other legal proceeding, and no outstanding judgment, order or award of
any court, agency or other governmental authority or of any arbitrator, relating
to any of the Collateral or questioning the validity of, or rendering invalid,
this Agreement or any action taken or to be taken pursuant to this Agreement,
except for demands, claims, counterclaims, setoffs, defenses, actions and other
legal proceedings and judgments, orders and awards fully and accurately
described in Exhibit A attached to and made a part of this Agreement.
viii. There is not on file in any public office any presently effective
financing statement relating to any of the Collateral, naming him, her or it as
a debtor and naming any Person other than the Secured Party as a secured party,
except for financing statements fully and accurately described in Exhibit A
attached to and made a part of this Agreement.
ix. There exists no presently effective certificate of title, and no
application for any certificate of title or notice of lien, relating to any of
his, her or its Goods and naming any Person other than the Secured Party as a
secured party, except for certificates of title, applications and notices of
lien fully and accurately described in Exhibit A attached to and made a part of
this Agreement.
x. There exists no (A) presently effective registration of any transfer or
pledge of any Uncertificated Security included in the Collateral, (B)
outstanding order to register any transfer or pledge of any such Uncertificated
Security, (C) notification of an security interest in, or of any other lien or
encumbrance upon, any such Uncertificated Security or (D) such Uncertificated
Security that is shown on the records of any clearing corporation other than in
the name of any Debtor, except for registrations, orders, notifications and
Uncertificated Securities fully and accurately described in Exhibit A attached
to and made a part of this Agreement.
xi. There exists no Security Interest in, and no other lien or encumbrance
upon, any of the Collateral, except for Permitted Liens.
xii. There is no restriction on any assignment or other transfer by him,
her or it of any of the Collateral, except for compliance with any "blue sky" or
securities statute, regulation or other law.
xiii. The real property on which any crop included in the Collateral is
growing or is to be grown, or on which any timber included in the Collateral is
or is to be standing, is fully and accurately described in Exhibit A attached to
and made a part of this Agreement.
b. At each time this Agreement is in effect as to any Debtor, such Debtor
shall be deemed to represent and warrant to the Secured Party as follows:
6
i. Each Instrument, Document and Deposit Account included in the
Collateral at such time is genuine, is in all respects what it purports to be,
and is enforceable in accordance with its terms against each Person obligated
with respect thereto.
ii. Each Account, Chattel Paper and General Intangible included in the
Collateral at such time is genuine, is in all respect what it purports to be,
and is enforceable in accordance with its terms against each Account Debtor and
other Person obligated with respect thereto, and each sum represented by any
Debtor to the Secured Party as owing by such Account Debtor or other Person with
respect thereto is actually and unconditionally owing by such Account Debtor or
other Person, except for any applicable normal cash discount, without any
counterclaim, setoff or defense. The aggregate sum represented at such time by
any Debtor to the Secured Party as owing by Account Debtors and other Persons
with respect to Accounts, Chattel Paper and General Intangibles included in the
Collateral is the aggregate sum actually and unconditionally owing by Account
Debtors and other Persons with respect thereto at such time, except for
applicable normal cash discounts.
10. Expenses. Each Debtor shall pay to the Secured Party on demand each
cost and expense (including, but not limited to, if the Secured Party retains
counsel for advice, for litigation or for any other purpose, each attorney's fee
and disbursement) incurred by the Secured Party (a) in searching any public
record for, in filing or in recording in any public office, or in obtaining from
any public office any certificate relating to, any financing statement,
certificate of title, application for any certificate of title, notice of lien,
instrument of assignment or other writing relating to any of the Collateral, (b)
in performing any obligation of any Debtor pursuant to this Agreement, (c) in
taking any action pursuant to Section 5 of this Agreement, (d) in connection
with the custody or preservation of any of the Collateral or (e) in endeavoring
to (i) enforce any indebtedness, liability or obligation of any Debtor pursuant
to this Agreement, (ii) preserve or exercise any right or remedy pursuant to
this Agreement, whether against any Debtor or otherwise, (iii) preserve or
exercise any right or remedy relating to, take possession of, collect or
enforce, have registered pursuant to the Securities Act of 1933, prepare for any
sale, lease or other disposition, assign, sell, lease, exchange, convert or
otherwise transfer or dispose of, or realize upon, any of the Collateral, (iv)
obtain any information relating to any Uncertificated Security included in the
Collateral from the issuer of such Uncertificated Security or register any
transfer or pledge of such Uncertificated Security with such issuer or (v)
defend against any claim, regardless of the basis or outcome thereof and whether
asserted affirmatively, as a counterclaim, setoff or defense or otherwise,
asserted against the Secured Party as a direct or indirect result of the
execution and delivery to the Secured Party of this Agreement by any of the
undersigned, except for any claim for any tax imposed by any government or
political subdivision upon any income of the Secured Party or for any interest
or penalty relating to any such tax. After such demand for payment of any cost
or expense incurred by the Secured Party in performing any obligation of any
Debtor pursuant to Section 4f, 4h, 4j, 4k or 4z of this Agreement, each Debtor
shall pay interest at the highest rate permitted by applicable law on the
portion of such cost or expense remaining unpaid.
11. Cumulative Nature, Nonexclusive Exercise and Waivers of Rights and
Remedies.
a. All rights and remedies of the Secured Party pursuant to this Agreement
or otherwise shall be cumulative, and no such right or remedy shall be exclusive
of any other such right or remedy.
b. No single or partial exercise by the Secured Party of any right or
remedy pursuant to this Agreement or otherwise shall preclude any other or
further exercise thereof, or any exercise of any other such right or remedy, by
the Secured Party.
c. No course of dealing or other conduct heretofore pursued, accepted or
acquiesced in, no course of performance or other conduct hereafter pursued,
accepted or acquiesced in, no oral or written agreement or representation
heretofore made, and no oral agreement or representation hereafter made, by the
Secured Party, whether or not relied or acted upon, and no usage of trade,
whether or not relied or acted upon, shall operate as a waiver of any right or
remedy of the Secured Party pursuant to this Agreement or otherwise. No delay by
the Secured Party in exercising any such right or remedy, whether or not relied
or acted upon, shall operate as a waiver of any right of the Secured Party to
exercise the same or any other such right or remedy on such or any future
occasion without any notice or demand of any kind. No waiver by the Secured
Party of any such right or remedy shall be effective unless made in a writing
duty executed by the Secured Party and specifically referring to such waiver. No
waiver by the Secured Party on any one occasion of any such right or remedy
shall operate as a waiver thereof or of any other such right or remedy on any
future occasion.
12. Entire Agreement; Modification; Termination; Nonimpairment; Certain
Consents and Waivers.
a. This Agreement contains the entire agreement between the Secured Party
and each Debtor with respect to the subject matter of this Agreement, and
supersedes each course of dealing or other conduct heretofore pursued, accepted
or acquiesced in, and each oral or written agreement and representation
heretofore made, by the Secured Party with respect thereto, whether or not
relied or acted upon.
b. No course of performance or other conduct hereafter pursued, accepted
or acquiesced in, and no oral agreement or representation hereafter made, by the
Secured Party, whether or not relied or acted upon, and no usage of trade,
whether or not relied or acted upon, shall modify or terminate this Agreement as
to any Debtor on impair or otherwise affect any Security Interest, any
indebtedness, liability or obligation of any Debtor pursuant to this Agreement
or any right or remedy of the Secured Party pursuant to this Agreement or
otherwise.
c. No Modification of this Agreement shall be effective unless made in a
writing duty executed by the Secured Party and specifically referring to each
provision of this Agreement being modified.
d. Except as expressly provided in this Agreement, this Agreement shall
not be modified or terminated as to any Debtor, and no Security Interest, no
indebtedness, liability or obligation of any Debtor pursuant to this Agreement,
and no right or remedy of the Secured Party pursuant to this Agreement or
otherwise shall be impaired or otherwise affected, by any act, omission or other
thing, whether occurring before or after the termination of this Agreement as to
such Debtor with respect to any of the Obligations. Each Debtor consents,
without any notice of any kind, to each act, omission and other thing that would
or might, but for such consent, modify or terminate this Agreement as to any
Debtor or impair or otherwise affect any Security Interest or any such
indebtedness, liability, obligation, right or remedy. Without limiting the
generality of the preceding two sentences, this Agreement shall not be modified
or terminated as to any Debtor by, neither any Security Interest nor any such
indebtedness, liability, obligation, right or remedy shall be impaired or
otherwise affected by, and such consent shall apply to (i) any extension of any
of the Obligations, regardless of the length of such extension and regardless of
whether such extension was preceded by another or by others, (ii) any renewal,
refinancing, modification, compounding, subordination, acceleration,
composition, settlement, adjustment, compromise, reaffirmation, invalidity,
irregularity, unenforceability or impairment of, any replacement, cancellation,
discharge, assignment, sale, exchange, conversion or other transfer of
disposition of, or any grant of any participation in, any of the Obligations,
(iii) any modification or termination of any writing relating to any of the
Obligations, to any of the Collateral or to any Other Collateral, (iv) any
acceptance of any Other Obligor, (v) any replacement, release or discharge of,
or any modification of any indebtedness, liability or obligation of, any other
Debtor or any Primary Obligor, Other Obligor or other Person, (vi) any taking,
holding, continuation, collection, modification, increase or decrease in value
or impairment of, any replacement, cancellation, release, surrender,
abandonment, discharge, assignment, sale, lease, exchange, conversion or other
transfer or disposition of, any termination of any insurance on, any relying or
realizing upon, any grant, perfection, subordination or enforcement of any
security interest in, or of any other lien or encumbrance upon, any failure to
call for, take, hold, continue, collect, insure, preserve or protect, to
replace, assign, sell, lease, exchange, convert or otherwise transfer or dispose
of, to rely or realize upon or to perfect, keep perfected or enforce any
security interest in, or any other lien or encumbrance upon, or any delay in
calling for, taking, continuing, collecting, insuring, preserving or protecting,
in replacing, assigning, selling, leasing, exchanging, converting or otherwise
transferring or disposing of, in relying or realizing upon or in perfecting,
keeping perfected or enforcing any security interest in, or any other lien or
encumbrance upon, any of the Collateral or any Other Collateral, regardless of
its value, (vii) any security interest or other lien or encumbrance not being
created in favor of the Secured Party, (viii) any of the Collateral or any Other
Collateral being or becoming subject to any security interest or other lien or
encumbrance (whether or not prior to any security interest or other lien or
encumbrance
7
in favor of the Secured Party), subject to any defense or restriction or
unenforceable or impaired, (ix) any exercise, delay in the exercise or waiver of
any failure to exercise, or any forbearance or other indulgence relating to, any
right or remedy of the Secured Party or of any other Person against any Debtor,
Primary Obligor, Other Obligor or other Person or relating to any of the
Obligations, to any of the Collateral or to any Other Collateral, (x) any
failure of the Secured Party or of any other Person to make, prove or vote any
claim relating to any of the Obligations, to any of the Collateral or to any
Other Collateral in any case or other proceeding pursuant to any Bankruptcy Law,
(xi) the occurrence or existence of any Event of Default, (xii) the Obligations
being at any time or from time to time reduced and then increased or being at
any time or from time to time paid in full, (xiii) any refusal or other failure
of the Secured Party or of any other Person to grant any or any additional loan,
credit or other financial accommodation to any Debtor or Primary Obligor, (xiv)
any refusal or other failure of the Secured Party or of any other Person
heretofore or hereafter to provide to any Debtor any information relating to any
other Debtor, to any Primary Obligor, Other Obligor or other Person or to the
business, operations, assets, affairs or condition (financial or other) of any
other Debtor or of any Primary Obligor, Other Obligor or other Person or so to
provide any such information completely and accurately, (xv) any notice to the
Secured Party or to any other Person from any Debtor, Primary Obligor, Other
Obligor or other Person not to grant any or any additional loan, credit or other
financial accommodation to any Debtor or Primary Obligor, not to extend, renew,
refinance, modify or replace any of the Obligations or to take or not to take
any other action, (xvi) the acceptance by the Secured Party or by any other
Person of any instrument or other writing intended by any other Person to create
an accord and satisfaction with respect to any of the Obligations, (xvii) the
manner or order of any sale, lease, exchange, conversion or other transfer or
disposition of any of the Collateral or of any Other Collateral, (xviii) the
manner or order of application of any money received or applied in payment of
any of the Obligation, (xix) any change in the ownership or membership of any
Debtor, Primary Obligor, Other Obligor or other Person, (xx) any change in the
location, business, fame, identity or structure of any Debtor, Primary Obligor,
Other Obligor or other Person, (xxi) the expiration of the period of any statute
of limitations with respect to any action or other legal proceeding against any
other Debtor, or against any Primary Obligor, Other Obligor or other Person,
relating to this Agreement, to any of the Obligations, to any of the Collateral
or to any Other Collateral or (xxii) the termination of this Agreement as to any
other Debtor, whether by agreement, by operation of law or otherwise.
e. Each Debtor waives, without any notice of any kind, each act and other
thing upon which, but for such waiver, any Security Interest, any indebtedness,
liability or obligation of any Debtor pursuant to this Agreement, or any right
or remedy of the Secured Party pursuant to this Agreement or otherwise, would or
might be conditioned. Without limiting the generality of the preceding sentence,
neither any Security Interest nor any such indebtedness, liability, obligation,
right or remedy shall be conditioned upon, and such waiver shall apply to, (i)
the acceptance of this Agreement by the Secured Party, (ii) any demand upon, or
any presentment or protest to, any Debtor, Primary Obligor, Other Obligor or
other Person, (iii) any notice to any Debtor, Primary, Obligor, Other Obligor or
other Person of any nonpayment, dishonor, default or protest, of the acceptance
of this Agreement by the Secured Party, of the incurring of any of the
Obligations or of any other matter or (iv) any exercise of any right or remedy
of the Secured Party of or any other Person against any Debtor, Primary Obligor,
Other Obligor or other Person or relating to any of the Obligations or to any
Other Collateral.
f. Each Debtor waives without any notice of any kind, each right of
redemption or appraisal arising in connection with any sale or other disposition
of any of the Collateral.
g. This Agreement shall not terminate as to any Debtor with respect to any
of the Obligations until written notice of (i) its termination by such Debtor or
(ii) if such Debtor is an individual, the death of such Debtor or the judicial
declaration of such Debtor's incompetence shall have been received by the
Secured Party and the Secured Party shall have had a reasonable period of time
to act thereupon. After any written notice of any termination, death or judicial
declaration of incompetence by or relating to any Debtor shall have been so
received and a reasonable time to act thereupon shall have expired, this
Agreement shall (i) continue in full force and effect as to such Debtor, and as
to each Successor of such Debtor, with respect to (A) each portion of the
Obligations arising before such receipt of such notice and the expiration of
such period of time, (B) each portion of the Obligations arising after such
receipt of such notice and the expiration of such period of time as a direct or
indirect result of any loan, credit or other financial accommodation agreed to
by the Secured Party before such receipt of such notice and the expiration of
such period of time, (C) each portion of the Obligations arising after such
receipt of such notice and the expiration of such period of time as a direct or
indirect result of any portion of the Obligations described in clause (i)(A) or
(i)(B) of this sentence (including, but not limited to, (i) each extension,
renewal, refinancing, modification and replacement of any portion of the
Obligations described in such clause (i)(A) or (i)(B) that is made after such
receipt of such notice and the expiration of such period of time and (ii) all
interest and other charges accruing after such receipt of such notice and the
expiration of such period of time with respect to any portion of the Obligations
described in such clause (i)(A) or (i)(B) or with respect to any such extension,
renewal, refinancing, modification or replacement), (D) each described in
Section 4i of this Agreement or a cost or expense described in Section 10 of
this Agreement and (E) the Collateral, whether existing or arising before or
after such receipt of such notice and the expiration of such period of time,
and (ii) terminate as to such Debtor, and as to each Successor of such Debtor,
with respect to each portion of the Obligations that arises after such receipt
of such notice and the expiration of such period of time and is not described in
clause (i)(B), (i)(C) or (i)(D) of this sentence. With respect to this
Agreement, the sole effect of such receipt of such notice and the expiration of
such period of time shall be to terminate this Agreement to the extent provided
in clause (ii) of the preceding sentence. Upon such receipt of such notice, any
obligation of the Secured Party to grant any or any additional loan, credit or
other financial accommodation to any Debtor shall terminate, notwithstanding any
agreement to the contrary.
h. Understanding that (i) because registration of any General Intangible
or Instrument included in the Collateral pursuant to the Securities Act of 1933
may not have been effected, because any General Intangible or Instrument
included in the Collateral may have been acquired by a Debtor or by another
Person for his, her or its own account for investment and not with a view to
distribution or to resale or because of other circumstances relating to any
General Intangible or Instrument included in the Collateral, there may be
restrictions and limitations affecting the Secured Party in any attempt
expeditiously to sell or otherwise dispose of such General Intangible or
Instrument, (ii) in the absence of any agreement to the contrary, the Secured
Party may have a general duty to attempt to obtain a fair price for such General
Intangible or Instrument if the Secured Party sells or otherwise disposes of
such General Intangible or Instrument even though the Obligations may be paid
in full through realization of a lesser price for such General Intangible or
Instrument and (iii) the Secured Party is not to have any such general duty,
each Debtor waives each right to hold the Secured Party responsible for selling
or for otherwise disposing of such General Intangible or Instrument at an
inadequate price even if the Secured Party in good faith accepts the first offer
received for, or does not approach more than one possible purchaser of, such
General Intangible or Instrument.
13. Governing Law; Jurisdiction; Certain Consents and Waivers.
a. This Agreement shall be governed by and construed, interpreted and
enforced in accordance with the internal law of the State of New York, without
regard to principles of conflict of laws.
b. Each action and other legal proceeding relating to this Agreement
commenced by the Secured Party may be litigated in any court that is either a
court of record of the State of New York or a court of the United States located
in the State of New York. Each such action and other legal proceeding not
commenced by the Secured Party shall be litigated in such a court.
c. Each Debtor (i) consents in each action and other legal proceeding
relating to this Agreement commenced by the Secured Party to the personal
jurisdiction of any court that is either a court of record of the State of New
York or a court of the United States located in the State of New York, (ii)
waives each objection to the laying of venue of any such action or other legal
proceeding, (iii) waives personal service of process in each such action and
other legal proceeding, (iv) consents to the making of service of process in
each such action and other legal proceeding by registered mail directed to such
Debtor at the last address of such Debtor shown in the records relating to this
Agreement maintained by the Secured Party, with such service of process to be
deemed completed five days after the mailing thereof, (v) waives in each such
action and other legal proceeding each right to trial by jury and each right to
assert any counterclaim or setoff or any defense based upon any statute of
limitations or upon any claim of laches, (vi) waives each right to attack
any final judgment that is obtained as a direct or indirect result of any such
action or other legal proceeding, and (vii) consents
8
to each such final judgment being sued upon in any court having jurisdiction
with respect thereto and enforced in the jurisdiction in which such court is
located as if issued by such court.
14. Notices.
a. Each notice to, and each demand upon, any Debtor by the Secured Party
relating to this Agreement may be (i) delivered in person in writing, (ii)
delivered in person orally with a subsequent confirmation sent by mail, by
telex, by telegram or by mailgram, (iii) given by telephone with a subsequent
confirmation sent by mail, by telex, by telegram or by mailgram or (iv) sent by
mail, by telex, by telegram or by mailgram. Each such notice and demand
delivered in person orally or given by telephone shall be deemed to have been
delivered or given when so communicated. Each such notice, demand and
confirmation sent to any Debtor by mail, by telex, by telegram or by mailgram
may be directed to such Debtor at the last address of such Debtor shown in the
records relating to this Agreement maintained by the Secured Party. Each such
notice, demand and confirmation shall be deemed to have been sent (i) if sent by
mail, when deposited in the mail, first-class or certified postage prepaid, or
when delivered to any post office for sending by registered mail, directed as
provided in the preceding sentence or (ii) if sent by telex, by telegram or by
mailgram, when delivered to any telex operator or telegraph or mailgram office
directed as provided in the preceding sentence. Each requirement under
applicable law of reasonable notice to any Debtor by the Secured Party of any
event shall be deemed to have been met if notice of such event is delivered,
given or sent to such Debtor by the Secured Party as provided in this Section
14a at least ten days before the date on or after which such event is to occur.
b. Each notice to, and each demand upon, the Secured Party by any Debtor
relating to this Agreement (including, but not limited to, Section 12g of this
Agreement), and each notice to the Secured Party of the death of any Debtor or
of the judicial declaration of any Debtor's incompetence, shall specifically
refer to this Agreement, and shall be delivered in person in writing or sent by
registered mail. Each such notice and demand shall be deemed to have been
delivered or sent only when actually received by an officer of the Secured Party
at the chief executive office of the Secured Party.
15. General.
a. If there is more than one Debtor, each of them shall be jointly and
severally liable pursuant to this Agreement.
b. This Agreement shall be binding upon each Debtor and upon each heir and
legal representative of each Debtor, and shall inure to the benefit of, and be
enforceable by the Secured Party, each Successor of the Secured Party and each
direct or indirect assignee or other transferee of any of the Obligations.
c. Each agreement, consent, waiver, appointment as attorney-in-fact and
other thing made, given or done in this Agreement by any of the undersigned
shall be on his, her or its own behalf and on behalf of each of his, her or its
Successors.
d. Except as expressly provided in this Agreement, each right and remedy
of the Secured Party pursuant to this Agreement, and each action of the Secured
Party pursuant to the authorization and appointment as attorney-in-fact
contained in Section 5 of this Agreement, may be exercised or taken (i) at any
time and from time to time, (ii) at the sole option of the Secured Party, (iii)
without any notice or demand of any kind and (iv) whether or not any Event of
Default has occurred or existed, but the Secured Party shall not be obligated to
exercise any such right or remedy or to take any such action. Each request of
the Secured Party pursuant to this Agreement may be made (i) at any time and
from time to time, (ii) at the sole option of the Secured Party and (iii)
whether or not any Event of Default has occurred or existed.
e. Upon and at any time and from time to time after the occurrence or
existence of any Event of Default, (i) the Secured Party shall have the right to
set off against all of the Obligations remaining unpaid each indebtedness,
liability and obligation of the Secured Party in any capacity to any Debtor in
any capacity, whether alone or otherwise and whether or not then due,
(including, but not limited to, any such indebtedness, liability or obligation
arising as a direct or indirect result of any Instrument or Deposit Account),
and (ii) each holder of any participation in any portion of the Obligations
shall have the right (which may be exercised by such holder in accordance with
clauses (i), (ii) and (iii) of the first sentence of Section 15d of this
Agreement as though it were a right of the Secured Party pursuant to this
Agreement) to set off against all of such portion of the Obligations remaining
unpaid each indebtedness, liability and obligation of such holder in any
capacity to any Debtor in any capacity, whether alone or otherwise and whether
or not then due, (including, but not limited to, any such indebtedness,
liability or obligation arising as a direct or indirect result of any Instrument
or Deposit Account). Each exercise of such right by the Secured Party or by such
holder shall be deemed to be immediately effective at the time the Secured Party
or such holder opts therefor even though evidence thereof is not entered on the
records of the Secured Party or of such holder until later.
f. In conjunction with the Secured Party's assignment or other transfer
of, or in conjunction with the Secured Party's grant of any participation in,
any of the Obligations, the Secured Party shall have the right to assign or
otherwise transfer, or to grant any participation in, this Agreement, any of the
Secured Party's rights and remedies pursuant to this Agreement, any of the
Collateral or any interest in any of the Collateral. Upon any assignment or
other transfer of any portion of any of the Collateral by the Secured Party,
each responsibility of the Secured Party with respect to such portion of the
Collateral shall terminate.
g. If the Secured Party (i) in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure with
respect to any of the Obligations, is of the opinion that the Collateral is not
sufficient or has declined or may decline in value or is of the opinion that
there is insufficient public information with respect to any General Intangible
or Instrument included in the Collateral to permit the sale or other disposition
of such General Intangible or Instrument without registration pursuant to the
Securities Act of 1933 and (ii) delivers, gives or sends notice of such
insecurity or opinion to any Debtor, such Debtor shall provide to the Secured
Party such Other Collateral as shall be satisfactory to the Secured Party.
h. Solely to the extent required by any statute, regulation or other law
to make the Collateral available for the payment of the Obligations, each Debtor
guarantees the payment, without any setoff or other deduction, of the
Obligations, without any limitation as to amount.
i. Each Account Debtor and other Person obligated with respect to any
Account, Chattel Paper, General Intangible, Instrument, Document or Deposit
Account included in the Collateral may accept without question any exercise by
the Secured Party of any right or remedy pursuant to this Agreement or otherwise
with respect thereto, and shall have no liability to any Debtor as a direct or
indirect result of doing so.
j. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law.
If, however, any such provision shall be prohibited by or invalid under such
law, it shall be deemed modified to conform to the minimum requirements of such
law, or, if for any reason it is not deemed so modified, it shall be prohibited
or invalid only to the extent of such prohibition or invalidity without the
remainder thereof or any other such provision being prohibited or invalid.
k. Any provision of this Agreement that prohibits any Debtor from taking
any action shall be construed to prohibit such Debtor from taking such action
directly or indirectly.
l. Except as expressly provided in this Agreement, any reference in this
Agreement to any statute, regulation or other law shall be deemed to be as of
any time a reference to such statute, regulation or other law as in effect at
such time or, if such statute, regulation or other law is not in effect at such
time, a reference to any similar statute, regulation or other law in effect at
such time.
m. In this Agreement, headings of sections are for convenience of
reference only, and are not of substantive effect.
16. Definitions. For purposes of this Agreement:
a. "Bankruptcy Law" means (i) any bankruptcy or insolvency statute,
regulation or other law or (ii) any other statute, regulation or other law
relating to the relief of debtors, to the readjustment, composition or extension
of indebtedness, to liquidation or to reorganization.
b. "Collateral" means collectively, wherever located, whether now owned or
hereafter acquired or arising, whether owned alone or otherwise, whether or not
subject to Article 9 of the Uniform Commercial Code of the State of New York,
whether or not described in any schedule heretofore or hereafter
9
delivered to the Secured Party and whether or not in the possession or under the
control of, or enroute to or from, the Secured Party in any capacity or any
other Person acting on behalf of the Secured Party, (i) all Goods, Accounts,
Chattel Paper, General Intangibles, Instruments, Documents, Deposit Accounts and
money of each Debtor other than any Consumer Goods of any Debtor, (ii) all
demands, claims and rights (including, but not limited to, (A) all claims
arising out of tort, all rights represented by any judgment, all rights to money
payable pursuant to any insurance, all rights of setoff, all rights to payment
pursuant to any letter of credit and all other claims and rights to the payment
of money and (B) all rights as a seller of Goods, whether to reclaim Goods or
stop Goods in transit or otherwise) of each Debtor other than any claim for
wages, salary and other compensation of any Debtor as an employee, (iii) all
direct or indirect additions to, all direct or indirect extensions, renewals and
replacements of, all direct or indirect increases in, all direct or indirect
profits, interest, dividends, distributions and other income and payments on
account of, and all direct or indirect proceeds of any replacement, release,
surrender, discharge, assignment, sale lease, exchange, conversion or other
transfer or disposition of, of any collection of, or of any exercise of any
option or right of subscription relating to, any of the things described in
clauses (i) and (ii) of this sentence, whether arising from any action taken by
any Debtor or by the Secured Party or otherwise and whether arising from any
exchange, conversion, stock split, spin-off, reclassification, merger,
consolidation or other absorption, sale of assets or combination or shares or
otherwise, (iv) all Proceeds and Products of any of the things described in
clauses (i) through (iv) of this sentence and (v) all records (including, but
not limited to, all records maintained on computer software and all schedules,
invoices, shipping documents, delivery receipts, purchase orders and written
agreements) of each Debtor evidencing, or otherwise relating to, any of the
things described in clauses (i) through (iv) of this sentence.
c. "Debtor" means (i) any of the undersigned or (ii) any Successor of any
of the undersigned.
d. "Equipment" has the meaning given it for purposes of Article 9 of the
Uniform Commercial Code of the State of New York as in effect on the date of
this Agreement, and, with respect to any Person, includes, but is not limited
to, (i) any machinery, vehicle or furniture constituting equipment of such
Person and (ii) any part, accessory, attachment, accession or tool installed
in, affixed to, or used or intended to be used in connection with, any equipment
of such Person.
e. An "Event of Default" occurs or exists if (i) any Debtor, Primary
Obligor or Other Obligor defaults in the payment when due, whether by
acceleration or otherwise, of any sum, whether payable for principal, for
interest or otherwise, whether the obligation to make payment thereof now exists
or hereafter arises and whether or not constituting part of the Obligations,
that is now or hereafter owing by him, her or it to the Secured Party or to any
other Person, the maturity of any such sum is accelerated or there occurs or
exists any event or condition that permits, or, after notice, after lapse of
time or after both notice and lapse of time, would permit, the acceleration of
the maturity of any such sum, (ii) any Debtor, Primary Obligor or Other Obligor
defaults in the performance when due of any obligation, whether now existing or
hereafter arising, that is now or hereafter owing by him, her or it to the
Secured Party or to any other Person other than an obligation to pay money or
there occurs or exists any event or condition that constitutes, or, after
notice, after lapse of time or after both notice and lapse of time, would
constitute, any default with respect to any such obligation, (iii) any Debtor,
Primary Obligor or Other Obligor is dissolved, ceases to exist, participates or
agrees to participate in any merger, consolidation or other absorption, assigns,
sells or otherwise transfers or disposes of all or substantially all of his, her
or its assets, makes or permits what might be a fraudulent transfer or
fraudulent conveyance of any of his, her or its assets, makes any bulk sale,
sends any notice of any intended bulk sale, dies, becomes incompetent or
insolvent (however such insolvency is evidenced), generally fails to pay his,
her or its debts as they become due, fails to pay, withhold or collect any tax
as required by any statute, regulation or other law, suspends or ceases his, her
or its present business has served or filed against him, her or it or against
any of his, her or its assets any attachment, levy, tax lien, warrant or similar
lien other than a Permitted Lien or has entered against him, her or it or
against any of his, her or its assets any judgment, order or award of any court,
agency or other governmental authority or of any arbitrator, (iv) any Debtor has
any receiver, trustee, liquidator, sequestrator or custodian of him, her or it
or of any of his, her or its assets appointed (whether with or without his, her
or its consent), makes any assignment for the benefit of creditors or commences
or has commenced against him, her or it any case or other proceeding pursuant to
any Bankruptcy Law or any formal or informal proceeding for the dissolution,
liquidation or winding up of the affairs of, or for the settlement of claims
against, him, her or it, (v) any Primary Obligor or Other Obligor has any
receiver, trustee, liquidator, sequestrator or custodian of him, her or it or of
any of his, her or its assets appointed (whether with or without his, her or its
consent), makes any assignment for the benefit of creditors or commences or has
commenced against him, her or it any case or other proceeding pursuant to any
Bankruptcy Law or any formal or informal proceeding for the dissolution,
liquidation or winding up of the affairs of, or for the settlement of claims
against, him, her or it, (vi) any representation or warranty made in this
Agreement, or any representation or warranty heretofore or hereafter made, or
any financial statement heretofore or hereafter provided to the Secured Party by
or on behalf of any Debtor, Primary Obligor or Other Obligor, proves, as of the
date of such representation, warranty or financial statement, to have been
incorrect or misleading in any material respect or, if a financial statement, to
have omitted any substantial contingent of unliquidated liability of, or any
substantial claim against, such Debtor, Primary Obligor or Other Obligor or
there occurred, and was not disclosed to the Secured Party, before the execution
and delivery to the Secured Party of this Agreement by the undersigned any
material adverse change in any information disclosed in any such representation
or warranty heretofore so made or in any such financial statement heretofore so
provided, (vii) there occurs any loss, theft, destruction or substantial decline
in the value of, or any substantial damage to, any of the Collateral or (viii)
the Secured Party in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure with respect to any of the
Obligations or is of the opinion that the Collateral is not sufficient or has
declined or may decline in value, whether or not the Secured Party has asked any
Debtor, Primary Obligor or Other Obligor for any Other Collateral.
f. "General Intangible" has the meaning given it for purposes of Article 9
of the Uniform Commercial Code of the State of New York as in effect on the date
of this Agreement, and, with respect to any Person, includes, but is not limited
to, (i) any computer software of such Person, (ii) any Uncertificated Security
of such Person or any other security of such Person not evidenced by an
instrument, (iii) any trademark, service ▇▇▇▇, trade style, trade name, patent,
copyright, license or franchise or such Person and (iv) goodwill of such Person.
g. "Goods" has the meaning given it for purposes of Article 9 of the
Uniform Commercial Code of the State of New York as in effect on the date of
this Agreement, and, with respect to any Person, includes, but is not limited
to, any Fixture, Equipment, Inventory or Farm Product of such Person.
h. "Inventory" has the meaning given it for purposes of Article 9 of the
Uniform Commercial Code of the State of New York as in effect on the date of
this Agreement, and, with respect to any Person, includes, but is not limited
to, any inventory of such Person that is returned, repossessed, reclaimed or
stopped in transit or is raw material or work in process.
i. "Obligations" means collectively all indebtedness, liabilities and
obligations for the payment of money, regardless of kind, of class or of form
and whether for the payment of principal or of interest or otherwise, incurred
for any business, commercial, agricultural or consumer purpose or otherwise, now
existing or hereafter arising, created directly (including, but not limited to,
all indebtedness, liabilities and obligations arising as a direct or indirect
result of any overdraft) or by any assignment or other transfer, direct or
indirect, absolute or contingent (including, but not limited to, all
indebtedness, liabilities and obligations arising as a direct or indirect result
of any guaranty, endorsement or other assurance or as a direct or indirect
result of any letter of credit), similar or dissimilar, related or unrelated,
due or not due, contractual or tortious, liquidated or unliquidated or arising
by operation of law or otherwise, that are now or hereafter owing by any Debtor
or Primary Obligor in any capacity, whether alone or otherwise, to the Secured
Party in any capacity, whether or not allowed as a claim against such Debtor or
Primary Obligor in any case or other proceeding pursuant to any Bankruptcy Law.
j. "Other Collateral" means, whether now existing or hereafter arising,
(i) any guaranty, endorsement or other assurance, any collateral or other
security, or any subordination, now or hereafter directly or indirectly securing
the payment of, or otherwise now or hereafter directly or indirectly applicable
to, any of the Obligations, except for the Collateral, (ii) any indebtedness,
liability or obligation of the Secured Party to any Debtor, Primary Obligor or
Other Obligor that is now or hereafter available for setoff by the Secured Party
against any of the Obligations (including, but not limited to, any such
indebtedness, liability or obligation arising as a direct or indirect result of
any Instrument or Deposit Account) or (iii) any asset of any Debtor, Primary
Obligor or Other Obligor that is now or hereafter subject to any banker's lien
of the Secured Party.
10
k. "Other Obligor" means, other than any Debtor or Primary Obligor, any
Person (i) who or which is now or hereafter directly or indirectly liable for
the payment of any of the Obligations, whether as a maker, drawer, acceptor,
endorser, guarantor, surety or accommodation party or otherwise, (including, but
not limited to, if any Debtor or Primary Obligor is a partnership, any general
partner of such Debtor or Primary Obligor) or (ii) any asset of whom or of which
now or hereafter directly or indirectly secures the payment of any of the
Obligations.
l. "Permitted Lien" means (i) any security interest in, or any other lien
or encumbrance upon, any of the Collateral fully and accurately described in
Exhibit A attached to and made a part of this Agreement, (ii) any security
interest in, or any other lien or encumbrance upon, any of the Collateral in
favor of the Secured Party, (iii) any lease of any inventory included in the
Collateral by any Debtor as a lessor in the ordinary course of his, her or its
business and without interference with the conduct of his, her or its business
or operations, (iv) any pledge or deposit of any General Intangible, Instrument,
Deposit Account or money included in the Collateral that is made by any Debtor
in the ordinary course of his, her or its business (A) in connection with any
workers' compensation, unemployment insurance, social security or similar
statute, regulation or other law or (B) to secure the payment of any
indebtedness, liability or obligation arising in connection with any letter of
credit, bid, tender, trace or government contract, lease, statute, regulation or
other law or surety, appeal or performance bond, or of any similar indebtedness,
liability or obligation, not incurred in connection with the borrowing of any
money or in connection with the payment of the deferred purchase price of any
asset, (v) any attachment, levy or similar lien against any of the Collateral
arising in connection with any action or other legal proceeding so long as (A)
the validity of the claim or judgment secured thereby is being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted,
(B) adequate reserves have been appropriately established for such claim or
judgment, (C) the execution or other enforcement of such attachment, levy or
similar lien is effectively stayed and (D) neither such claim or judgment nor
such attachment, levy or similar lien has any material adverse effect on any
Debtor or on the business, operations, assets, affairs or condition (financial
or other) of any Debtor, (vi) any statutory lien upon any of the Collateral in
favor of the United States for any amount paid to any Debtor as a progress
payment pursuant to any government contract, (vii) any statutory lien upon any
of the Collateral securing the payment of any tax, assessment, fee, charge, fine
or penalty imposed by any government or political subdivision upon any Debtor or
upon any of the assets, income and franchises of any Debtor or the payment of
any demand or claim of any materialman, mechanic, carrier, warehouseman,
garageman or landlord against any Debtor so long as such tax, assessment, fee,
charge, fine, penalty, demand or claim is not yet due or (A) the validity of
such tax, assessment, fee, charge, fine penalty, demand or claim is being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, (B) adequate reserves have been appropriately established
for such tax, assessment, fee, charge, fine, penalty, demand or claim, (C) the
execution or other enforcement of such statutory lien is effectively stayed and
(D) neither the failure to pay such tax, assessment, fee, charge, fine, penalty,
demand or claim nor such statutory lien has any material adverse effect on any
Debtor or on the business, operations, assets, affairs or condition (financial
or other) of any Debtor or (viii) any reservation, exception, encroachment,
easement, right-of-way, covenant, condition, restriction, lease or similar title
exception or encumbrance affecting the title to any Fixture included in the
Collateral but not interfering with the conduct of the business or operations of
any Debtor.
m. "Person" means (i) any individual, corporation, partnership, joint
venture, trust, unincorporated association, government or political subdivision,
(ii) any court, agency or other governmental authority or (iii) any other
entity, body, organization or group.
n. "Primary Obligor" means (i) the Borrower or (ii) any Successor of the
Borrower.
o. "Security Interest" means any security interest granted, or any
assignment, pledge or hypothecation made, pursuant to Section 2a of this
Agreement.
p. "Successor" means, with respect to any Person, (i) if such Person is an
individual, the estate of such Person, (ii) if such Person is not an individual,
any direct or indirect successor of such Person (including, but not limited to,
(A) if such Person is a corporation, any other corporation into which such
Person is hereafter directly or indirectly merged, consolidated or otherwise
absorbed and (B) if such Person is a partnership, any other partnership
hereafter created as a direct or indirect result of the admission of any new
partner or as a direct or indirect result of the death or withdrawal of any
partner) or (iii) any other Person to whom or to which all or substantially all
of the assets or such Person are hereafter directly or indirectly assigned or
otherwise transferred.
Dated February 2, 1996 CVC Holdings, Inc.
---------------------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Senior VP Finance
---------------------------------------
ACKNOWLEDGMENT
STATE OF NEW YORK )
:SS.
COUNTY OF MONROE )
On the ______ day of February in the year 1996, before me personally came ▇▇▇▇▇▇
-------
▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
|_| Individual to me known and known to me to be the person(s) described in
and who executed the above instrument, and __he (they jointly
and severally) acknowledged to me that __he (they) executed
the same.
|_| Partnership to me known and known to me to be a member of the partnership
described in and which executed the above instrument, and __he
duly acknowledged to me that __he executed the above
instrument for and on behalf of said partnership.
|X| Corporation to me known, who, being by me duly sworn, did depose and say
that __he resides at Rochester, New York; that __he is the
Senior VP Finance of CVC HOLDINGS, INC., the corporation
described in and which executed the above instrument; and that
__he signed his(her) name thereto by order of the board of
directors of said corporation.
▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
NOTARY PUBLIC in the State of New York ----------------------------------
MONROE COUNTY Notary Public
My Commission Expires March 9, 1997
FOR BANK USE ONLY: Authorization confirmed. /s/ [ILLEGIBLE]
------------------------------------
Exhibit A
Permitted Financing Statements and Other Evidences of Lien (Section 4x):
A UCC-1 financing statement shown in a New York Department of State UCC
search against Borrower dated 1/23/96 ("Thru Date" - 1/5/96), delivered to
Secured Party by CSC Networks.
11
Permitted Transfers, Pledges and Other Actions with Respect to Uncertificated
Securities (Section 4y):
NONE
Exceptions to Representations and Warranties (Clauses (v), (vi), (vii), (viii),
(ix) and (x) of Section 9a):
NONE
Description of Real Property on Which Crop or Timber Located (Clause (xiii) of
Section 9a):
NONE
Permitted Liens (Clause (i) of Section 16l):
Collateral described in the UCC-1 financing statements referred to in
"Permitted Financing Statements" above.
QUESTIONNAIRE
1. What is the complete name of the undersigned (giving, if the undersigned is a
corporation, the name exactly as it appears in the certificate or articles of
incorporation or other charter document of the undersigned or, if the
undersigned is a partnership, the name exactly as it appears in the partnership
agreement or other organizational document of the undersigned or, if there is
none, in any assumed name certificate of the undersigned)?
CVC Holdings, Inc.
2. Does the undersigned do business under any name other than the name indicated
in the answer to question 1? If so, what is each such other name?
CVC Products, CVC Products, Inc.
3. What is the address (including county) of the residence, only place of
business of chief executive office of the undersigned?
▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
4. What is the address (including county) of each place of business of the
undersigned other than the address indicated in the answer to question 3?
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
5. What is the address of each location at which any of the Goods, Chattel
Paper, Instruments, Documents and records of the undersigned included in the
Collateral is or will be kept other than the locations the addresses of which
are indicated in the answers to questions 3 and 4?
None
6. If any of the Goods, Chattel Paper, Instruments, Documents and records of the
undersigned included in the Collateral is in the possession of any Person other
than the undersigned, what are the name and address of each such other Person?
None
7. What are the name and address of each Person other than the undersigned who
or which has any interest, whether as an owner, mortgagee or lessee or
otherwise, in any real property to which is affixed, or in or on which is
installed or located, any of the Goods of the undersigned included in the
Collateral or in or on which is located any of the Chattel Paper, Instruments,
Documents and records of the undersigned included in the Collateral?
Security Capital Mutual ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mission Falls Corp. C/O
Spectrum Interest, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ (▇▇▇▇▇ ▇▇▇)
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated February 2, 1996 CVC Holdings, Inc.
------------------------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Senior V.P. Finance
------------------------------------------
12
