BNY FINANCIAL CORPORATION
GENERAL SECURITY AGREEMENT
In consideration of loans, credit or other financial accommodation
extended or continued from time to time to, or on the guaranty, endorsement or
other assurance of, the undersigned ("OBLIGOR") by BNY Financial Corporation
("BNY"), Obligor hereby agrees as follows:
1. SECURITY INTEREST.
(a) To secure the payment and performance of all of the
Obligations, Obligor hereby grants to BNY a continuing security interest in, and
assigns and pledges to BNY, the Collateral.
(b) (i) "COLLATERAL" shall mean and include:
(A) all Receivables;
(B) all Equipment;
(C) all General Intangibles;
(D) all Inventory;
(E) all Real Property;
(F) all Instrument Collateral;
(G) all Leasehold Interests;
(H) all of the Obligor's right, title and interest in and to
(1) investment property, contract rights, instruments, documents and chattel
paper; (2) its goods and other property including, but not limited to all
merchandise returned or rejected by customers, relating to or securing any of
the Receivables; (3) all of the Obligor's rights as a consignor, a consignee, an
unpaid vendor, mechanic, artisan, or other lienor, including stoppage in
transit, set off, detinue, replevin, reclamation and repurchase; (4) all
additional amounts due to the Obligor from any customer relating to the
Receivables; (5) other property, including warranty claims relating to any goods
securing this Agreement; (6) if and when obtained by the Obligor, all real and
personal property of third parties in which the Obligor has been granted a lien
or security interest as security for the payment or enforcement of Receivables;
and (7) any other goods, personal property or real property now owned or
hereafter acquired in which the Obligor has expressly granted a security
interest or may in the future grant a security interest to the BNY hereunder, or
in any amendment or supplement hereto, or under any other agreement between the
BNY and the Obligor;
(I) all of the Obligor's ledger sheets, ledger cards, files,
correspondence, records, books of account, business papers, computers, computer
software
(owned by the Obligor or in which it has an interest), computer programs, tapes,
disks and documents relating to clauses (A), (B), (C), (D), (E), (F), (G), or
(H) above; and
(J) all proceeds and products of clauses (A), (B), (C), (D),
(E), (F), (G) and (H) above in whatever form, including, but not limited to:
cash, deposit accounts (whether or not comprised solely of proceeds),
certificates of deposit, insurance proceeds (including hazard, flood and credit
insurance), negotiable instruments and other instruments for the payment of
money, chattel paper, security agreements or documents.
(ii) "OBLIGATIONS" shall mean and include all indebtedness,
liabilities, obligations, covenants and duties of Obligor to BNY or any
Affiliate of BNY (including those which BNY or such Affiliate may have acquired
from others) of every kind, nature and description, direct or indirect, absolute
or contingent, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of law or otherwise, now existing of
hereafter arising, and whether or not evidenced by any note or other instrument
or agreement and whether or not for the payment of money, including, but not
limited to, indebtedness, obligations and liabilities to BNY or such Affiliate
of Obligor as a member of any partnership, syndicate, association or other
group, or as a guarantor of the Obligations of any other entity to BNY or such
affiliate.
(iii) Affiliate, Equipment, General Intangibles, Instrument
Collateral, Inventory, Leasehold Interest, Real Property, Receivables, and
certain other terms used herein are defined in Section 13 hereof.
2. RANK AND PERFECTION OF SECURITY INTEREST.
(a) Obligor will not grant or permit to exist, nor shall there
exist, any security interest in, lien, attachment, levy or encumbrance upon, or
assignment or pledge as security of, any of the Collateral, except the security
interest of and assignment and pledge to BNY hereunder and Permitted Liens.
(b) (i) Obligor will take all action requested by BNY, or which
may be necessary or desirable, to perfect, continue, evidence, preserve, protect
or validate the security interest of and assignment and pledge to BNY hereunder
or to enable BNY to exercise and enforce its rights hereunder, including, but
not limited to, (A) executing and delivering one or more notices, statements,
agreements or other writings, and (B) delivering to BNY, and stamping or
otherwise marking, in such manner as BNY may specify, any and all chattel paper,
instruments, letters and advices of credit and documents constituting part of
the Collateral, in each case endorsed or accompanied by such instruments of
assignment as BNY may specify.
(ii) Obligor hereby authorizes BNY, at its option but without
any obligation so to do, to file financing and continuation statements and
amendments to financing statements, naming Obligor as debtor, with respect to
any of the Collateral without the signature of Obligor, and agrees that a
carbon, photographic or other reproduction of this Agreement or of a financing
statement is sufficient as a financing statement.
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3. COVENANTS RELATING TO COLLATERAL. Obligor covenants that:
(a) It shall at all times: (i) be the sole owner of each and every
item of Collateral, (ii) defend the Collateral against the claims and demands of
all persons and (iii) in the case of tangible property constituting part of the
Collateral, (A) properly maintain and keep in good order and repair such
property and (B) keep such property fully insured with responsible companies
acceptable to BNY against such risks as such Collateral may be subject to, or as
BNY may request, under policies containing loss payable clauses naming BNY as
loss payee as its interests may appear and otherwise in form and substance
satisfactory to BNY, and providing that: (1) all proceeds thereof shall be
payable to BNY, (2) such insurance shall not be affected by any act or neglect
of Obligor or other owner of the property described in such policy; and (3) such
policy and loss payable clause may not be cancelled or amended except upon
thirty days' prior written notice to BNY;
(b) It will comply in all material respects with the requirements
of all leases, mortgages and other instruments relating to premises where any
Collateral is located;
(c) It will not sell or otherwise dispose of any of the
Collateral, except that, if the same constitute Collateral, (i) accounts may be
collected in the ordinary course of business, and (ii) inventory may be sold in
the ordinary course of business, and (iii) worn out or obsolete equipment may be
sold by Obligor and (iv) as otherwise agreed to by BNY;
(d) It will give BNY prompt notice of (i) any change in (A) its
name, identity or corporate structure, (B) the location of its chief executive
office or any other place of business, or (C) the location of any of the
Collateral or its books and records concerning any accounts, (ii) the location
of each new place of business opened by Obligor, (iii) each new location of any
Collateral, and (iv) any substantial loss or depreciation in the value of any of
the Collateral, and will provide BNY with such other information as to the
Collateral as BNY may request.
(e) It will (i) whether or not BNY shall have exercised its rights
under Section 4(b)(iii) hereof, receive and hold all Distributions (other than
Ordinary Distributions BNY has released pursuant to the provisions of Section
4(c) hereof) and other Instrument Collateral in trust for BNY, and not commingle
the same with any of its other funds or property and immediately deliver the
same to BNY in the identical form received and (ii) give BNY copies of all
notices and other communications received by Obligor with respect to any
instruments registered in the name of Obligor constituting part of the
Collateral.
4. PRE-EVENT OF DEFAULT RIGHTS.
(a) At any time and from time to time: (i) BNY may and is hereby
authorized to transfer into or register in the name of itself or its nominee any
instruments or documents constituting a part of the Collateral without notice to
Obligor; (ii) with respect to instruments, if any, constituting part of the
Collateral that are registered in the name of BNY, BNY may receive and retain
all Distributions, other than Ordinary Distributions that BNY has released
pursuant to Section 4(c); and (iii) Obligor will: (A) permit representatives of
BNY during normal business hours to inspect its premises and books and records
pertaining to the Collateral and make extracts from such books and records; and
(B) upon request, enter into warehousing, lockbox or
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other custodial arrangements satisfactory to BNY. The costs of such inspections
shall be subject to the provisions of Section 4.10 of the Affiliate Loan
Agreements.
(b) BNY may (i) at any time after the occurrence of an Event of
Default and during its continuance: with respect to instruments, if any,
constituting part of the Collateral, BNY may, by notice to Obligor, terminate
Obligor's rights under Section 4(c) hereof (in which case BNY's release pursuant
to such Section of any and all Ordinary Distributions shall thereupon be
automatically revoked) and, in its own or Obligor's name, exercise any and all
powers with respect to such instruments with the same force and effect as could
Obligor; (ii) BNY may, without notice to Obligor: (A) after the occurrence of an
Event of Default and during its continuance, if the Collateral consists in whole
or in part of accounts of or other claims or rights of Obligor (including
accounts, claims and rights which are Collateral by reason of their constituting
proceeds), notify the account debtors with respect to such accounts, and all
other persons against whom Obligor has such claims or rights, of BNY's rights
hereunder, collect all amounts payable with respect to such accounts, claims and
rights directly and apply such collections to the repayment of the Obligations
in such order as it may elect; (B) after the occurrence of an Event of Default
and during its continuance, in its own or Obligor's name, demand, ▇▇▇ for,
collect or receive any money or property payable or receivable on account of or
in exchange for, make any compromise or settlement with respect to, or modify
any of the terms of any of, the Collateral as BNY may in its sole discretion
elect; (C) after the occurrence of an Event of Default and during its
continuance, if the Collateral includes any of Obligor's accounts, receive and
open mail addressed to Obligor and change the address for delivery of Obligor's
mail to an address designated by BNY and notify the postal authorities of any
such change; (D) at any time, in the name and on behalf of Obligor, endorse
instruments and other evidences of payment collected or received by BNY on
account of the Collateral; and (E) after the occurrence of an Event of Default
and during its continuance, appropriate and hold, or apply (directly or by way
of set-off) to the payment of the Obligations (whether or not then due), all
money of Obligor then or thereafter in possession of BNY, all amounts
representing Distributions then or thereafter in the possession of BNY, the
balance of every deposit account (demand or time, matured or unmatured) of
Obligor then or thereafter with BNY and every other claim of Obligor then or
thereafter against BNY; and (iii) Obligor will, upon request of BNY: (A) receive
and hold all proceeds of Collateral in trust for BNY and not commingle any
collections with any of its other funds; and (B) immediately deliver such
collections to BNY in the identical form received.
(c) Unless and until BNY exercises its rights under Section 4(b),
Obligor may, with respect to any instruments constituting part of the
Collateral, (i) collect and receive for its own use all Ordinary Distributions
(and for such purpose and to that extent, BNY hereby releases each such
Distribution from the Collateral, such release to be effective in the case of
each Ordinary Distribution at the time thereof); and (ii) vote and give
consents, ratifications and waivers with respect to such instruments except to
the extent that any such would, in the sole judgment of BNY, detract from the
value of such instruments as Collateral hereunder, and from time to time upon
request from Obligor, BNY shall deliver to Obligor suitable assignments, orders
and proxies so that Obligor may receive such Distributions and cast such votes,
consents, ratifications and waivers; each such request from Obligor shall
constitute a representation and warranty by Obligor hereunder that there is no
reason at such time for BNY to deem itself to be insecure or the risk of
non-payment or non-performance of any of the Obligations to be increased.
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(d) BNY may after the occurrence of an Event of Default and during
its continuance, obtain the appointment of a receiver of any of the Collateral
and Obligor waives any right to notice of and consents to such appointment.
5. EVENTS OF DEFAULT.
(a) The occurrence of any one or more of the following events
shall constitute an "Event of Default" :
(i) failure by Obligor to pay any principal or interest on
the Obligations when due, whether at maturity or by reason of acceleration
pursuant to the terms of this agreement or by notice of intention to prepay, or
by required prepayment or failure to pay any other liabilities or make any other
payment, fee or charge provided for herein when due;
(ii) the occurrence of an "Event of Default" under, and as
such quoted term is defined in, the Affiliate Loan Agreements;
(iii) any representation or warranty made or deemed made by
Obligor in this Agreement or any related agreement or in any certificate,
document of financial or other statement furnished at any time in connection
herewith or therewith shall prove to have been misleading in any material
respect on the date when made or deemed to have been made;
(iv) issuance of a notice of lien, charge, claim, levy
assessment, injunction or attachment against a material portion of the Obligor's
property which is not stayed or lifted within thirty (30) days;
(v) failure or neglect of the Obligor to perform, keep or
observe any term, provision, condition, covenant contained herein;
(vi) any judgment is rendered or judgment liens filed against
the Obligor for an amount in excess of $100,000 which within thirty (30) days of
such rendering or filing is not either satisfied, stayed or discharged of
record;
(vii) any Obligor or any Affiliated Borrower of shall (A)
apply for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its property, (B) admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business, (C) make a general assignment for the benefit of creditors, (D)
commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (E) be adjudicated a bankrupt or insolvent, (F) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, (G) acquiesce to, or fail to have dismissed, within thirty (30) days,
any petition filed against it in any involuntary case under such bankruptcy
laws, or (H) take any action for the purpose of effecting any of the foregoing;
(viii)any change in Obligor's condition or affairs (financial
or otherwise) which in BNY's good faith opinion materially impairs the
Collateral or the ability of Obligor to perform its Obligations under this
Agreement;
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(ix) if any lien created hereunder or provided for hereby or
under any related agreement for any reason ceases to be or is not a valid and
perfected lien having a first priority interest;
(x) a default of the obligations of Obligor under any other
agreement with any person (other than BNY) to which it is a party shall occur
which adversely affects, in any material respect, its condition, affairs or
prospects (financial or otherwise) which default is not cured within any
applicable grace period;
(xi) in the event that TII Industries, Inc. fails to own 100%
of the issued and outstanding capital stock of Obligor;
(xii) any material provision of this Agreement shall, for any
reason, cease to be valid and binding on Obligor, or Obligor shall so claim in
writing to BNY; and
(xiii)failure by Obligor to deliver to BNY on or before April
30, 1998, a physical count of Obligor' Inventory, the results of which physical
count of Inventory shall be acceptable to BNY in its sole discretion, together
with adjustments to Obligor' books and records, if any, as a result of such
physical count of Inventory, which adjustments, if any, shall be acceptable to
BNY in its sole discretion.
(b) The occurrence of an Event of Default shall be conclusively
presumed to have increased the risk of non-payment or non-performance of the
Obligations.
6. POST-EVENT OF DEFAULT RIGHTS. Upon the occurrence of an Event of
Default (such default not having previously been cured), and at any time or from
time to time thereafter:
(a) In the case of any Event of Default, other than an Event of
Default referred to in clause (vii) of paragraph (a) of Section 5, BNY may
declare, by notice to Obligor, any and all of the Obligations immediately due
and payable, and, in the case of any Event of Default referred to in clause
(vii) or (ix) of paragraph (a) of Section 5, all of the Obligations shall
automatically be and become due and payable, in either case without any other
presentment, demand, protest or notice of any kind, anything in any other
agreement to the contrary notwithstanding;
(b) BNY shall have no obligation to make further loans, extensions
of credit or other financial accommodations to or on behalf of Obligor, anything
in any other agreement to the contrary notwithstanding;
(c) BNY may exercise all other rights to which it is entitled
hereunder, including but not limited to those specified in Section 4 hereof;
(d) Obligor shall, upon request of BNY, assemble the Collateral
and maintain or deliver it into the possession of BNY at such place or places as
BNY may designate and as are reasonably convenient to both BNY and Obligor;
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(e) BNY may (i) without notice, demand or other process, and
without charge, enter any of Obligor's premises and, without breach of the
peace, until BNY completes the enforcement of its rights in the Collateral, take
possession of such premises or place custodians in exclusive control thereof,
remain on such premises and use the same and any of Obligor's equipment for the
purpose of completing any work-in-process, preparing any Collateral for
disposition and disposing of or collecting any Collateral, and (ii) in the
exercise of its rights under this Agreement, without payment of compensation of
any kind, use any and all trademarks, trade styles, trade names, patents, patent
applications, licenses, franchises and the like to the extent of Obligor's
rights therein and Obligor hereby grant a license for that purpose; and
(f) If the Collateral consists in whole or in part of instruments
and BNY elects to sell or otherwise dispose of such instruments, (i) Obligor
will, if it controls the issuer of such instruments, or if it otherwise has the
right to effect such registration, and if BNY deems such registration to be
desirable, cause such instruments to be registered under the Securities Act of
1933, as amended, and take all other action, including but not limited to
complying with the "blue sky" or securities laws of the several states and
delivering to BNY appropriate quantities of prospectuses, necessary or
appropriate so as to permit the public sale of other disposition thereof by BNY
in such jurisdictions as BNY may select, and indemnify, in the form then
customary, all persons who are underwriters, statutory or otherwise, of such
instruments in connection with such sale or disposition, such indemnity, to the
extent applicable to BNY, to be in addition to that afforded BNY under Section
8(c) hereof, and (ii) BNY may elect not to exercise its rights under clause (i)
and in that event may, if in its judgment it shall be necessary or desirable so
to do, restrict the number of prospective bidders so as to comply with the
provisions of Section 5 of such Securities Act, and restrict such prospective
bidders to persons who will represent and agree that they are purchasing the
instruments in question for their own account for investment and not with a view
to the distribution or resale of any thereof and who will further agree that
such instruments purchased by them may bear an appropriate restrictive legend to
that effect.
7. GENERAL REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Obligor hereby
represents, warrants and agrees that:
(a) The execution, delivery and performance of this Agreement are
within its powers, corporate or otherwise, have been duly authorized by all
required action and do not and will not contravene any law or any agreement or
undertaking to which it is a party or by which it may in any way be bound or, if
Obligor is a corporation, its certificate of incorporation or bylaws;
(b) Obligor will promptly (but in no event later than ten (10)
days after such request) furnish BNY with all information concerning its
business and financial condition as BNY may reasonably request; and
(c) Each of the representations and warranties contained in the
Questionnaire, if any, submitted to BNY by Obligor in connection with this
Agreement is true and correct on the date hereof as if made on the date hereof
and all other information, including financial statements and projections,
furnished to BNY at any time by or on behalf of Obligor was and will be complete
and correct in all material respects to the extent necessary for the purpose of
presenting the subject matter thereof fairly to BNY.
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8. EXPENSES OF OBLIGOR'S DUTIES; BNY'S RIGHT TO PERFORM ON OBLIGOR'S
BEHALF; BNY'S EXPENSES AND INDEMNIFICATION.
(a) Obligor's agreements and duties hereunder shall be performed
by it at its sole cost and expense.
(b) If Obligor shall fail to do any act or thing which it has
covenanted to do hereunder, BNY may (but shall not be obligated to ) do the same
or cause it to be done, either in its name or in the name and on behalf of
Obligor, and Obligor hereby irrevocably authorizes BNY so to act.
(c) Obligor agrees to reimburse BNY for all costs and reasonable
expenses, including attorney's fees and disbursements, incurred, and to
indemnify and hold BNY harmless from and against all losses suffered, by BNY in
connection with (i) BNY's exercise of any right or remedy granted to it
hereunder, (ii) any claim and the prosecution or defense thereof arising out of
or in any way connected with this Agreement, and (iii) the collection or
enforcement of the Obligations.
(d) Amounts payable by Obligor under this Section 8 shall
constitute Obligations which shall be payable on demand.
9. NO WAIVERS OF RIGHTS HEREUNDER; RIGHTS CUMULATIVE.
(a) No delay by BNY in exercising any right hereunder, or under
any of the other Obligations, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right preclude other or further exercises
thereof or the exercise of any other right. No waiver of any of the other
Obligations shall be enforceable against BNY unless in writing and signed by an
officer of BNY, and unless it expressly refers to the provision affected; any
such waiver shall be limited solely to the specific event waived.
(b) All rights granted BNY hereunder shall be cumulative and shall
be supplementary of and in addition to those granted or available to BNY with
respect to the other Obligations or under applicable law and nothing herein
shall be construed as limiting any such other right.
10. ASSIGNMENT; PARTICIPATIONS.
(a) BNY may assign any or all of the Obligations and may transfer
therewith any or all of the Collateral therefor in accordance with the
provisions of the Affiliate Loan Agreements and the transferee shall have the
same rights with respect thereto as had BNY. Upon such transfer, BNY shall be
released from all responsibility for the Collateral so transferred.
(b) BNY may from time to time sell or otherwise grant
participations in any of the Obligations in accordance with the provisions of
the Affiliate Loan Agreements and the holder of any such participation shall,
subject to the terms of any agreement between BNY and such holder, be entitled
to the same benefits with respect to any Collateral for the Obligations in which
such holder is a participant as BNY. Obligor agrees that each such holder may
exercise any and
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all rights of banker's lien, set-off and counterclaim with respect to its
participation in the Obligations as fully as though Obligor were directly
indebted to such holder in the amount of such participation.
11. CONTINUING AGREEMENT; TERMINATION.
(a) This Agreement shall be a continuing agreement and shall apply
to all future Obligations, notwithstanding that at any particular time all of
the Obligations then outstanding shall have been paid in full.
(b) This Agreement shall continue in full force and effect until
written notice of termination shall have been received by BNY at its address
stated below, but, notwithstanding any such notice, this Agreement shall
continue in full force and effect until all Obligations then outstanding
(whether absolute or contingent) shall have been paid in full and all rights of
BNY hereunder shall have satisfied or other arrangements for the securing of
such rights satisfactory to BNY shall have been made. Upon receipt of any such
notice, BNY shall have no obligation to make further loans, extensions of credit
or other financial accommodations to or on behalf of Obligor, anything in any
other agreement to the contrary notwithstanding.
12. GOVERNING LAW; JURISDICTION; CERTAIN WAIVERS.
(a) This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of New York, and BNY shall
have the rights and remedies of a secured party under applicable law, including
but not limited to the Uniform Commercial Code of New York.
(b) OBLIGOR AGREES THAT ALL ACTIONS AND PROCEEDINGS RELATING
DIRECTLY OR INDIRECTLY TO THIS AGREEMENT OR ANY OF THE OTHER OBLIGATIONS SHALL
BE LITIGATED IN COURTS LOCATED WITHIN THE STATE OF NEW YORK OR ELSEWHERE AS BNY
MAY SELECT AND THAT SUCH COURTS ARE CONVENIENT FORUMS AND SUBMITS TO THE
PERSONAL JURISDICTION OF SUCH COURTS.
(c) Obligor waives personal service of process and consents that
service of process upon it may be made by certified or registered mail, return
receipt requested, directed to Obligor at its address last specified for notices
hereunder, and service so made shall be deemed completed two days after the same
shall have been so mailed.
(d) OBLIGOR WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BETWEEN IT AND BNY AND WAIVES THE RIGHT TO ASSERT IN ANY ACTION OR
PROCEEDING WITH REGARD TO THIS AGREEMENT OR ANY OF THE OBLIGATIONS ANY OFFSETS
OR COUNTERCLAIMS WHICH IT MAY HAVE.
(e) BNY shall not be required to take any steps necessary to
preserve rights against prior parties.
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13. DEFINITIONS. As used herein:
(a) All terms defined in Article 1 or 9 of the New York Uniform
Commercial Code as in effect on the date of this Agreement (other than the term
"Collateral") are used herein (including in Schedule A hereto) with the meanings
therein given; such terms include but are not limited to "account," "chattel
paper," "deposit account," "document," "equipment," "investment property,"
"general intangibles," "goods," "instrument," "inventory," "money," and
"security interest."
(b) The following terms shall have the indicated meanings:
"AFFILIATE" of BNY shall mean a corporation that directly or indirectly controls
or is controlled by, or is under common control with, BNY. "DISTRIBUTIONS" shall
mean Ordinary Distributions and Extraordinary Distributions; "ORDINARY
DISTRIBUTIONS" shall mean cash dividends to the extent paid out of retained
earnings, and interest paid in cash, in each case with respect to all
instruments constituting part of the Collateral, except to the extent that any
such dividend is made in connection with a partial or total liquidation or a
reduction of capital, or any such interest is penalty interest, or, in each
case, to the extent the same is not in the ordinary course; and "EXTRAORDINARY
DISTRIBUTIONS" shall mean all dividends, interest and distributions on or in
respect of and all proceeds of such instruments other than Ordinary
Distributions.
"AFFILIATED BORROWERS" shall mean, individually and
collectively, TII Industries, Inc., a corporation organized under the laws of
the State of Delaware; TII Corporation, a corporation organized under the laws
of the State of Delaware; TII-Ditel, Inc., a corporation organized under the
laws of the State of North Carolina; Crown Tool & Die Company, Inc., a
corporation organized under the laws of the Commonwealth of Puerto Rico, and
their respective successors and assigns.
"AFFILIATE LOAN AGREEMENTS" shall mean shall notes,
instruments, mortgages, agreements, guaranties and other documents now or
hereafter executed and/or delivered by and among BNY and each of the Affiliated
Borrowers, as the same now exist or may hereafter be amended, restated, renewed,
replaced, extended or otherwise modified.
"EQUIPMENT" shall mean and include all of the Obligor's goods
(excluding Inventory) whether now owned or hereafter acquired and wherever
located including, without limitation, all equipment, machinery, apparatus,
motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories
and all replacements and substitutions therefor or accessions thereto.
"GENERAL INTANGIBLES" shall mean and include all of the
Obligor's general intangibles, whether now owned or hereafter acquired
including, without limitation, all choses in action, causes of action, corporate
or other business records, inventions, designs, patents, patent applications,
equipment formulations, manufacturing procedures, quality control procedures,
trademarks, trade secrets, goodwill, copyrights, registrations, licenses,
franchises, customer lists, tax refunds, tax refund claims, computer programs,
all claims under guaranties, security interests or other security held by or
granted to the Obligor to secure payment of any of the Receivables by an account
debtor, all rights of indemnification and all other intangible property of every
kind and nature (other than Receivables).
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"INSTRUMENT COLLATERAL" shall mean (a) all Distributions on or
in respect of (i) the instruments or investment property listed in Schedule A,
or (ii) any instruments or property which constitute Instrument Collateral by
virtue of any provision of this definition (whether, in either case, upon
conversion of convertible securities included therein or through stock split,
spin-off, reclassification, merger, consolidation, sale of assets, combination
of shares or otherwise) and (b) all other instruments and other property issued
with respect to or in exchange for (i) the instruments listed in Schedule A or
(ii) any instruments or other property which constitute Instrument Collateral by
virtue of any provision of this definition (whether, in either case, upon
conversion of convertible securities included therein or through stock split,
spin-off, reclassification, merger, consolidation, sale of assets, combination
of shares or otherwise).
"INVENTORY" shall mean all of the Obligor's now owned or
hereafter acquired inventory, goods, merchandise and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all raw materials, work in process, finished goods and materials and
supplies of any kind, nature or description which are or might be used or
consumed in the Obligor's business or used in selling or furnishing such goods,
merchandise and other personal property, and all documents of title or other
documents representing them.
"LEASEHOLD INTERESTS" shall mean all of the Obligor's right,
title and interest in and to the premises located at Local ▇▇. ▇, ▇▇▇▇▇ ▇▇. ▇,
Seccion 3B, within the Industrial Free Zone of San ▇▇▇▇▇ de Marcoris,
Municipality and Province of San ▇▇▇▇▇ de Marcoris.
"PERMITTED LIENS" shall mean (a) liens in favor of BNY; (b)
liens for taxes, assessments or other governmental charges not delinquent, or,
being contested in good faith and by appropriate proceedings and with respect to
which proper reserves have been taken by Obligor; (c) deposits or pledges to
secure obligations under workmen's compensation, social security or similar
laws, or under unemployment insurance; (d) deposits or pledges to secure bids,
tenders, contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds and other obligations of like
nature arising in the ordinary course of Obligor's business; and (e) judgment
liens that have been stayed or bonded and mechanics', workmen's, materialmen's,
carriers' or other like liens arising in the ordinary course of Obligor's
business with respect to obligations which are not due or which are being
contested in good faith by Obligors.
"REAL PROPERTY" shall mean all of the Obligor's right, title
and interest in and to any now owned or hereafter acquired real property and all
buildings and improvements located thereon.
"RECEIVABLES" shall mean and include all of the Obligor's
accounts, contract rights, instruments, documents, chattel paper, general
intangibles relating to accounts, drafts and acceptances, and all other forms of
obligations owing to the Obligor arising out of or in connection with the sale
or lease of Inventory or the rendition of services, all guarantees and other
security therefor, whether secured or unsecured, now existing or hereafter
created, and whether or not specifically sold or assigned to the BNY hereunder.
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(c) The words "it" or "its" as used herein shall be deemed to
refer to individuals and to business entities.
14. NOTICES.
Any notice or request hereunder may be given to Obligor and to BNY
at their respective addresses set forth below or at such other address as may
hereafter be specified in a notice designated as a notice of change of address
under this Section. Any notice or request hereunder shall be given by (a) hand
delivery, (b) registered or certified mail, return receipt requested, (c) telex
or telegram, subsequently confirmed by registered or certified mail, or (d)
telefax to the number set out below (or such other number as may hereafter be
specified in a notice designated as a notice of change of address) with
telephone communication to a duly authorized officer of the recipient confirming
its receipt as subsequently confirmed by registered or certified mail. Notices
and requests shall, in the case of those by mail or telegram, be deemed to have
been given three (3) Business Days after mailing, or when delivered to the
telegraph office addresses as provided in this Section.
(a) If to BNY, at: BNY FINANCIAL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: BNY FINANCIAL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
OTTERBOURG, STEINDLER, HOUSTON
& ▇▇▇▇▇, PC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. Brand, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Obligor, at: TII INTERNATIONAL, INC.
c/o TII Industries, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
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Any requirement under applicable law of reasonable notice by BNY to
Obligor of any event shall be met if notice is given to Obligor in the manner
prescribed above at least seven days before (a) the date of such event or (b)
the date after which such event will occur.
15. GENERAL.
(a) If this Agreement is executed by two or more Obligors, they
shall be jointly and severally liable hereunder, all provisions hereof regarding
the Obligations or the Collateral shall apply to the Obligations and Collateral
of any or all of them and the termination of this Agreement as to one or more of
such Obligors shall not terminate this Agreement as to any remaining Obligors.
(b) This Agreement shall be binding upon the heirs, executors,
administrators, assigns or successors of each of the undersigned Obligors and
shall inure to the benefit of and be enforceable by BNY, its successors,
transferees and assigns.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Dated, in New York, New York: April 30, 1998
TII INTERNATIONAL, INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------
Title: VICE PRESIDENT-FINANCE
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Accepted in New York, New York, on April 30, 1998
BNY FINANCIAL CORPORATION
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Title: SENIOR VICE PRESIDENT
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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SCHEDULE A
All of the "Pledged Securities" as said term is defined in that certain Stock
Pledge and Security Agreement dated the date hereof executed by Obligor in favor
of BNY.
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