MORTGAGE, SECURITY AGREEMENT, AND ASSIGNMENT
THIS MORTGAGE, SECURITY AGREEMENT, AND ASSIGNMENT is granted this 10th
day of February, 2000 to
FAMILY BANK, FSB, for itself and as collateral agent for the
benefit of each of the Lenders (as defined below) (hereinafter,
the "Mortgagee"), with offices at 000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx
by
DYNAMICS RESEARCH CORPORATION, a Massachusetts corporation
(hereinafter, the "Mortgagor") with a principal office at 00
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx,
in consideration of the mutual covenants contained herein and benefits derived
herefrom, and for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Mortgagor agrees to the following terms
and conditions:
ARTICLE 1 - GRANT OF MORTGAGE INTEREST
To secure the Mortgagor's prompt, punctual, and faithful payment and
performance of all and each of the Mortgagor's present and future Liabilities
(as defined herein) to the Mortgagee and each of the Lenders arising under a
certain Loan and Security Agreement of even date between, among others, the
Mortgagor, the Mortgagee and Xxxxx Brothers Xxxxxxxx & Co. (as amended,
modified or replaced, the "Credit Agreement"), (Family Bank, FSB, Xxxxx
Brothers Xxxxxxxx & Co. and such other lenders as may become parties to the
Credit Agreement shall herein above and hereinafter be collectively referred
to as the "Lenders") including , without limitation, (i) a certain
Revolving Credit Note of even date made by, among others, the Mortgagor
payable to Family Bank, FSB in the original principal amount of
$10,000,000.00, (ii) a certain Revolving Credit Note of even date made by,
among others, the Mortgagor payable to Xxxxx Brothers Xxxxxxxx and Co. in the
original principal amount of $10,000,000.00, (iii) a certain Term Note of even
date made by, among others, the Mortgagor payable to Family Bank, FSB in the
original principal amount of $2,500,000.00, and (iv) a certain Term Note of
even date made by, among others, the Mortgagor payable to Xxxxx Brothers
Xxxxxxxx and Co. in the original principal amount of $5,000,000.00, and any
extensions, renewals, substitutions, modifications, or replacements of any of
the foregoing (hereinafter, singly and collectively, the "Notes"), the
Mortgagor hereby grants, mortgages, assigns, and transfers to the Mortgagee
with MORTGAGE COVENANTS, the Collateral (as defined herein). The Mortgagor
intends to convey and hereby does convey to the Mortgagee with MORTGAGE
COVENANTS (to be included within the Collateral), the premises conveyed to the
Mortgagor by deed recorded with the Essex County Registry of Deeds to secure
the Liabilities.
ARTICLE 2 - GRANT OF SECURITY INTEREST AND ASSIGNMENT
2-1. Security Interest. To secure the Mortgagor's prompt,
punctual, and faithful payment and performance of all and each of the present
and future Liabilities to the Mortgagee and each of the Lenders, including,
without limitation, those arising under the Credit Agreement, the Notes, and a
certain Unlimited Guaranty of even date (the "Guaranty") pursuant to which
the Mortgagor unconditionally guaranteed the payment and performance of all
obligations and liabilities of DRC Encoder, Inc., DRC Metrigraphics, Inc., DRC
Software, Inc. and DRC Telecom, Inc. to the Lenders under the Credit
Agreement, the Mortgagor hereby grants to the Mortgagee a continuing security
interest in and to, and assigns to the Mortgagee, the Collateral.
2-2. Financing Statement. This Agreement is intended to take
effect as a security agreement and is to be filed with the above described
Registry of Deeds or Land Registration Office in lieu of a financing statement
pursuant to Massachusetts General Laws Chapter 106 (hereinafter, the "UCC")
Section 9-402.
ARTICLE 3 - CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
3-1. Liabilities. "Liabilities" includes, without limitation, the
obligations of the Mortgagor to the Mortgagee and each of the Lenders under
the Credit Agreement, the Notes, the Guaranty and any and all other liabil-
ities, debts, and obligations now or hereafter at any time owing by the
Mortgagor to the Mortgagee or any other Lender, each of every kind, nature and
description in connection with the Credit Agreement or any other Loan
Documents (as defined in the Credit Agreement). "Liabilities" also includes,
without limitation, all interest and other amounts which may be charged to the
Mortgagor and/or which may be due from the Mortgagor to the Mortgagee or any
other Lender from time to time and all costs and expenses now or hereafter
incurred or paid by the Mortgagee or any other Lender in respect of this
Agreement and any other Loan Document (including, without limitation, Costs
of Collection, attorneys' reasonable fees, and all court and litigation costs
and expenses).
3-2. Costs of Collection. "Costs of Collection" includes, without
limitation, all attorneys' reasonable fees, out of pocket expenses incurred by
the Mortgagee's attorneys, and all costs incurred by the Mortgagee, which
costs and expenses are directly or indirectly related to or in respect of the
Mortgagee's efforts to collect or enforce any of the Liabilities and/or to
exercise or enforce any of the Mortgagee's rights, remedies, or powers against
or in respect of the Mortgagor and/or any other guarantor or person liable in
respect of the Liabilities (whether or not suit is instituted in connection
with such efforts).
3-3. Collateral. "Collateral" shall include all and each of the
following, whether singly or collectively, whether real property, personal
property, or a combination thereof, whether now owned or now due or now
existing, or in which the Mortgagor has an interest, or hereafter, at any time
in the future, acquired, arising, or to become due, or in which the Mortgagor
obtains an interest, and all proceeds, products, substitutions and accessions
of or to any of the following:
(a) the land with buildings and improvements whether now
existing or hereafter constructed or located thereon, situated in
Andover, Massachusetts, as more particularly described on Exhibit A
annexed hereto, and known and numbered as 00 Xxxxxxxx Xxxx (hereinafter,
the "Mortgaged Premises");
(b) all right, title and interest of the Mortgagor in all
furnaces, ranges, heaters, plumbing goods, gas and electric fixtures,
screens, screen doors, mantels, shades, storm doors and windows,
awnings, oil burners and tanks or other equipment, gas or electric
refrigerators and refrigerating systems, ventilating and air
conditioning apparatus and equipment, door xxxx and alarm systems,
sprinkler and fire extinguishing systems, portable or sectional build-
ings, and all other fixtures of whatever kind or nature owned by the
Mortgagor, now or in the future contained in or on the Mortgaged
Premises, and any and all similar fixtures hereinafter installed in the
Mortgaged Premises in any manner which renders such articles usable in
connection therewith;
(c) all easements, covenants, agreements and rights which are
appurtenant to or benefit the Mortgaged Premises;
(d) all right, title and interest of the Mortgagor in and to
all machinery, equipment, furniture, inventory, building supplies, and
appliances, owned by the Mortgagor, used or useful in the construction,
operation, maintenance, or occupation of the Mortgaged Premises or any
portion or unit thereof;
(e) all leases, tenancies, and occupancies, whether written
or not, regarding all or any portion of the foregoing (a through d)
(hereinafter, the "Leases"), all guarantees and security relating
thereto, together with all income and profit arising therefrom or from
any of the foregoing Subparagraphs (a) through (d), and all payments due
or to become due thereunder (hereinafter, the "Rental Payments"),
including, without limitation, all rent, additional rent, damages,
insurance payments, taxes, insurance proceeds, condemnation awards, or
any payments with respect to options contained therein (including any
purchase option);
(f) all funds held by the Mortgagee as tax or insurance escrow payments;
(g) all proceeds received from the sale, exchange, collection
or other disposition of any of the foregoing Subparagraphs (a) through (f);
all insurance proceeds relating to all or any portion of the
foregoing Subparagraphs (a) through (f); and all awards, damages,
proceeds, or refunds from any state, local, federal or other takings of,
and all municipal tax abatements relating to, all or any portion of the
foregoing Subparagraphs (a) through (f); and
(h) all rights, remedies, representations, warranties, and
privileges pertaining to any of the foregoing Subparagraphs (a) through (g).
ARTICLE 4 - REPRESENTATIONS, WARRANTIES AND COVENANTS
4-1. Insurance. The Mortgagor hereby covenants and agrees to
maintain public liability insurance, rent loss insurance, flood hazard
insurance, all risk insurance, builder's risk insurance, and such other
insurance against such casualties or contingencies as may be reasonably re-
quired by the Mortgagee in sums and with companies satisfactory to the Mort-
gagee. All policies shall contain a provision requiring at least thirty (30)
days advance notice to the Mortgagee before any cancellation or modification.
All insurance on the Collateral shall be for the benefit of and deposited
with the Mortgagee, shall be first payable to the Mortgagee, and shall include
such endorsement in favor of the Mortgagee as the Mortgagee may specify.
4-2. Insurance, Eminent Domain. The Mortgagor shall advise the
Mortgagee of each claim made by the Mortgagor under any policy of insurance or
any proposed taking by any state, federal, or local authority, which covers
all or any portion of the Collateral and, at the Mortgagee's option in each
instance, will permit the Mortgagee, to the exclusion of the Mortgagor, to
conduct the adjustment of each such claim in excess of $100,000.00. The
Mortgagor hereby appoints the Mortgagee as the Mortgagor's attorney in fact
after the occurrence and during the continuance of any Event of Default to
obtain, adjust, or settle any insurance claim or taking or cancel any
insurance described in this section and to endorse in favor of the Mortgagee
any and all drafts and other instruments with respect to such insurance or
taking. The within appointment, being coupled with an interest, is irrevo-
cable until this Agreement is terminated by a written instrument executed by a
duly authorized officer of the Mortgagee. The Mortgagee shall not be liable
for any loss sustained on account of any exercise pursuant to said power
unless such loss is caused by the willful misconduct and actual bad faith of
the Mortgagee. The Mortgagee may, at its option, make any proceeds available
to the Mortgagor to repair or reconstruct the Collateral (subject to such
disbursement procedures as the Mortgagee may establish) or apply any proceeds
of such insurance against the Liabilities, whether or not such have matured,
in accordance with the terms hereof. Notwithstanding the foregoing, to the
extent that proceeds of such insurance are less than $25,000.00 and there is
no then existing Event of Default, the Mortgagee shall make such proceeds
available to the Mortgagor to repair or reconstruct the Collateral (subject to
such disbursement procedures as the Mortgagee may establish).
4-3. Statutory Compliance. The Mortgagor shall comply with, shall
not use any of the Collateral in violation of, and shall cause the Collateral
to be in material compliance with, each and every statute, regulation,
ordinance, decision, directive, order, by-law, or rule of any federal, state,
municipal, and other governmental authority which has or claims jurisdiction
over the Mortgagor or any of the Collateral.
4-4. Title to Collateral. The Mortgagor is, and shall hereafter
remain, the owner of the Collateral free and clear of all voluntary or
involuntary liens, encumbrances, attachments, security interests, purchase
money security interests, assignments, mortgages, charges or other liens or
encumbrances of any nature whatsoever, with the exceptions of (a) the mortgage
and security interest created herein, (b) liens for real estate taxes not yet
due and payable, (c) liens noted on Mortgagee's Loan Policy of Title
Insurance, and (d) liens permitted under the Credit Agreement.
4-5. Condition of Collateral. The Collateral is, and shall
hereafter remain, in good repair, well maintained and in good working order.
The Mortgagor shall not cause or permit to be suffered any waste, destruction
or loss (whether or not such loss is insured against) to the Collateral or any
part thereof.
4-6. Taxes and other Costs. To the extent payment is not provided
for in Section 4-8 herein, the Mortgagor shall pay when due all real and
personal property taxes, assessments, charges, and other taxes assessed
against it, and all insurance premiums relative to the Collateral. The
Mortgagor agrees that the Mortgagee may, at its option, after the occurrence
and during the continuance of an Event of Default, pay any taxes or insurance
premiums, the payment of which is then due, discharge any liens or
encumbrances on any of the Collateral, or take any other action that the
Mortgagee may deem proper to repair, insure, maintain, or preserve any of the
Collateral or the Mortgagee's rights therein. The Mortgagor will pay to the
Mortgagee on demand all amounts so paid or incurred by the Mortgagee.
4-7. Property of Third Parties. Except as permitted by the Credit
Agreement, the Mortgagor shall not lease any item of property owned by a third
party for use in the construction, maintenance, or occupation of the Mortgaged
Premises or any portion or unit thereof; the Mortgagor shall not suffer or
permit any item of property owned by a third party to be affixed, attached, or
installed on, upon or within, or be located at, the Mortgaged Premises, or any
portion or unit thereof, which may be subject to any security interest, lien,
encumbrance or charge which is prior or superior to the interest granted
herein.
4-8. Tax and Insurance Escrow. In addition to other payments
herein required, the Mortgagor shall, at the Mortgagee's option, pay to the
Mortgagee monthly on the first of each month, or such other day of the month
as may be designated by the Mortgagee during the term hereof, and for so long
as the Liabilities secured by this Agreement shall remain unpaid, an amount
equal to one-twelfth (1/12th) of the municipal taxes and assessments which the
Mortgagee estimates will become payable on account of the Mortgaged Premises
for the year next succeeding any period for which such taxes and assessments
have been paid or escrowed hereunder, and/or one-twelfth (1/12th) of the
insurance premiums which the Mortgagee estimates will become payable on
account of the Collateral for the year next succeeding any period for which
such premiums have been paid or escrowed hereunder, sufficient to enable
Mortgagee to accumulate at least thirty (30) days prior to the dates upon
which such municipal taxes and assessments or insurance premiums are payable
the amounts then due and payable. Further, the Mortgagor shall pay to the
Mortgagee on demand the amount of any deficiency of the funds so collected
when the actual amount of such taxes and assessments or insurance premiums
become known. The Mortgagee shall maintain such funds in an interest bearing
account which may not be commingled with other funds of the Mortgagee and all
interest on such funds shall be payable to the Mortgagor. The Mortgagee shall
apply said funds to the payment of municipal taxes and assessments or insur-
ance premiums, as applicable, to the extent such amounts are determined by the
Mortgagee to be due and payable. In the event the Mortgagee collects such tax
or insurance payments hereunder, the Mortgagor shall deliver to the Mortgagee
the bills representing any such amounts within ten (10) days of the receipt
thereof by the Mortgagor. Notwithstanding the provisions of this Section 4-8,
upon an occurrence of an event which is, or, solely with the passage of time,
would be, an Event of Default hereunder, the Mortgagee shall not be required
to apply such funds as provided above, and may set off such funds against the
Liabilities and apply any such funds towards the Liabilities in accordance
with the terms hereof.
4-9. Future Action Additional Information. Except as set forth on
Exhibit 7-16 of the Credit Agreement, the Mortgagor shall do all such things,
furnish all such financial and other information, and execute all such
documents from time to time hereafter as the Mortgagee may reasonably request
in accordance with the terms of the Credit Agreement.
4-10. Oil, Hazardous Materials and Toxic Substances. (a) Except as
set forth on Exhibit 7-16 of the Credit Agreement, the Mortgagor represents
that neither the Mortgagor nor any person for whose conduct the Mortgagor is
responsible, including, but not limited to, tenants or users of the Mortgaged
Premises, ever:
(i) owned, occupied, or operated a site or vessel on
which any hazardous material or oil was or is stored, transported, or
disposed of (except in compliance with all laws, ordinances, and
regulations pertaining thereto);
(ii) directly or indirectly transported, stored,
treated or disposed, or arranged for the transport, storage, treatment
or disposal of any hazardous material or oil (except in compliance with
all laws, ordinances, and regulations pertaining thereto);
(iii) caused or was legally responsible for any
release, or threat of release, of any hazardous material or oil on the
Mortgaged Premises;
(iv) received notification from any federal, state, or
other governmental authority of: (x) any potential, known, or threat of
release of any hazardous material or oil on (whether from the Mortgaged
Premises or from another property offsite of the Mortgaged Premises) or
from the Mortgaged Premises, or any other site or vessel owned,
occupied, or operated either by the Mortgagor or any person for whose
conduct the Mortgagor is responsible or whose liability may result in a
lien on the Mortgaged Premises; or (y) the incurrence of any expense or
loss by such governmental authority, or by any other person, in con-
nection with the assessment, containment, or removal of any release, or
threat of release, of any hazardous material or oil from the Mortgaged
Premises or any such site or vessel.
(b) Except as set forth on Exhibit 7-16 of the Credit
Agreement, the Mortgagor represents and warrants that no hazardous material or
oil was ever, or is now, stored on (except in compliance with all laws,
ordinances, and regulations pertaining thereto), transported, or disposed of
on the Mortgaged Premises.
(c) The Mortgagor shall:
(i) not store (except in compliance with all laws,
ordinances, and regulations pertaining thereto), or dispose of any
hazardous material or oil on the Mortgaged Premises;
(ii) neither directly nor indirectly transport or arrange
for the transport of any hazardous material or oil (except in compliance
with all loans, ordinances, and regulations pertaining thereto;
(iii) take all such action, including, without
limitation, the conducting of engineering tests (at the sole expense of
the Mortgagor) (x) to confirm that no hazardous material or oil is or
ever was stored or released on the Mortgaged Premises; (y) to assess,
contain, and remove any such hazardous material or oil on the Mortgaged
Premises; and (z) to qualify for any insurance program or safe harbor
which may be available under any federal, state or local law, including,
without limitation, Massachusetts General Laws Chapter 21E, as amended;
(iv) provide the Mortgagee with immediate written
notice upon: (x) the Mortgagor's obtaining knowledge of any potential or
known release, or threat of release, of any hazardous material or oil on
(whether from the Mortgaged Premises or from another property offsite of
the Mortgaged Premises) or from the Mortgaged Premises, or any other
site or vessel owned, occupied, or operated by the Mortgagor or by any
person for whose conduct the Mortgagor is responsible or whose liability
may result in a lien on the Mortgaged Premises; (y) the Mortgagor's
receipt of any notice to such effect from any federal, state, or other
governmental authority; and (z) the Mortgagor's obtaining knowledge of
any incurrence of any expense or loss by such governmental authority in
connection with the assessment, containment, or removal of any hazardous
material or oil for which expense or loss the Mortgagor may be liable or
for which expense a lien may be imposed on the Mortgaged Premises; and
(v) comply with all laws, judgments, decrees, orders,
rules, and regulations pertaining to environmental matters relating to
the use, storage, containment, and removal of hazardous material or oil,
including, without limitation, those arising under Massachusetts General
Laws Chapter 21E, as amended, and any other federal, state or local
statute, rule, regulation, ordinance, or decree.
(d) The Mortgagor shall indemnify, defend, and hold the
Mortgagee harmless of and from any claim brought or threatened against the
Mortgagee by the Mortgagor, any guarantor or endorser of the Liabilities, or
any governmental agency or authority or any other person (as well as from
attorneys' reasonable fees and expenses in connection therewith) on account of
the presence of hazardous material or oil on the Mortgaged Premises, the
release of hazardous material or oil on or from the Mortgaged Premises, or the
failure by the Mortgagor to comply with the terms and provisions hereof (each
of which may be defended, compromised, settled, or pursued by the Mortgagee
with counsel of the Mortgagee's selection, but at the expense of the Mortga-
gor). This indemnification includes any costs and expenses that the Mortgagee
may incur (i) in defending or protecting its security interest or the priority
thereof, or (ii) for assessment, containment and/or removal of any hazardous
material or oil from all or any portion of the Mortgaged Premises or any
surrounding areas. The within indemnification shall survive payment of the
Liabilities and/or any termination, release, or discharge executed by the
Mortgagee in favor of the Mortgagor. The foregoing indemnification shall not
apply to any claim that is directly caused by the Mortgagee's negligence or
intentional misconduct.
(e) All terms used in this Section are being used with the
meanings given those terms in Massachusetts General Laws, Chapter 21E, as
amended.
4-11. Mortgage Conditions. This Mortgage, Security Agreement and
Assignment is upon the STATUTORY CONDITION, upon breach of which, the
Mortgagee shall have the STATUTORY POWER OF SALE.
4-12. Compliance with Leases. The Mortgagor is not in default
under any terms and conditions of any Lease and shall, during the term of this
Agreement, perform all of the obligations of the Mortgagor under any such
Lease within the period that such performance is required.
4-13. Collection of Rents. The Mortgagor agrees not to collect or
accept the payment of any Rental Payments, or other income or profit from, or
on account of, any Lease or the use or occupation of the Collateral, in
advance of the time when such payment becomes due unless such amount is
delivered to the Mortgagee to be applied toward the Liabilities in accordance
with Section 8-3 hereof.
4-14. Modification of Lease. The Mortgagor will not modify or
consent to the modification of any provision of, or cancel, terminate or
accept the early cancellation or termination, of any Lease.
4-15. Leases. The Mortgagor shall not enter into any Lease without
the prior written consent of the Mortgagee. Each such Lease shall be in form
and substance satisfactory to the Mortgagee and shall include a provision con-
firming that the Lease is subordinate to the lien of this Agreement and
consenting to the assignment provided for herein of the Lease to the
Mortgagee. The Mortgagor shall furnish the Mortgagee, upon the request of the
Mortgagee, with copies of each and every Lease and any other information
relative to each such Lease and the tenant thereunder. The Mortgagor will
take all action as may be requested by the Mortgagee in furtherance of the
rights of the Mortgagee hereunder, including, without limitation, obtaining
estoppel certificates and agreements (in form satisfactory to the Mortgagee)
from each tenant subordinating the Lease to the lien of this Agreement and
consenting to the assignment of the Lease provided for herein, and taking all
appropriate action to lease any portions of the Mortgaged Premises not occu-
pied by the Mortgagor.
4-16. Superior Mortgage. The Mortgagor does hereby covenant and agree to
faithfully and fully comply with and abide by each and every term, covenant,
and condition of any superior mortgage or mortgages on the Mortgaged Premises.
The Mortgagee is hereby expressly authorized, permitted, and directed, in its
sole discretion, and at its option, to advance all sums necessary to cure any
default under any such mortgage. The Mortgagor further covenants and agrees
not to modify, change, alter, or extend any of the terms or conditions of any
such prior mortgage, and not to request, accept, or allow the disbursement
hereafter of any advances which are to be secured by any such mortgage.
4-17. Appraisals. In addition to the current appraisal conducted
of the Mortgaged Premises (the cost of which shall be borne by the
Mortgagor), the Mortgagor shall from time to time, at the Mortgagee's option,
assist the Mortgagee in obtaining a further appraisal (the "Appraisal") of the
Mortgaged Premises by an appraiser satisfactory to the Mortgagee. The
Appraisal shall be in form and substance satisfactory to the Mortgagee, and
if conducted after the occurrence of an Event of Default, the costs of the
Appraisal shall be borne by the Mortgagor.
ARTICLE 5 - MORTGAGOR'S USE OF COLLATERAL
Except during the continuance of any event which is, or solely with the
passage of time would be, an Event of Default hereunder, the Mortgagor shall
be authorized to occupy, operate, manage, hold, or otherwise use the Collater-
al in the ordinary and reasonable course of the Mortgagor's business and
collect, when due, the Rental Payments, subject, however, to the terms and
provisions hereof.
ARTICLE 6 - EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any one or more of the
Events of Default under the Credit Agreement of even date between the
Mortgagor and the Mortgagee (the "Events of Default"), any and all Liabilities
of the Mortgagor to the Mortgagee shall become immediately due and payable,
without notice or demand, at the option of the Mortgagee. The occurrence of
any such Event of Default shall also constitute, without notice or demand, a
default under all other Loan Documents, whether now existing or hereafter
arising.
ARTICLE 7 - RIGHTS AND REMEDIES UPON DEFAULT
7-1. Rights and Remedies Upon Default. Upon the occurrence and during
the continuance of any Event of Default, the Mortgagee shall have all the
rights of a mortgagee and a secured party under the Massachusetts General
Laws, in addition to which the Mortgagee shall have all of the following
rights and remedies:
(a) with or without taking possession, to collect any
proceeds of the Collateral;
(b) to take possession of all or a portion of the Collateral;
(c) with or without taking possession of the Collateral, to
sell, lease, or otherwise dispose of any or all of the Collateral in its
then condition or following such preparation or processing as the
Mortgagee deems advisable;
(d) with or without taking possession of the Collateral, and
without assuming the obligations of the Mortgagor thereunder, to
exercise the rights of the Mortgagor under, to use, or to benefit from
any of the easements, covenants, agreements and rights referred to in
Section 3-3(c), hereof or any Leases;
(e) with or without taking possession of the Collateral and
with or without bringing any action or proceeding, either directly, by
agent, or by the appointment of a receiver, manage, lease, sublease, or
operate the Collateral on such terms as the Mortgagee, in its sole dis-
cretion, deems proper or appropriate;
(f) to apply all or any portion of the Collateral, or the
proceeds thereof, towards (but not necessarily in complete satisfaction of)
the Liabilities;
(g) to exercise the Statutory Power of Sale.
7-2. Sale or Other Disposition of Collateral. Any sale or other
disposition of the Collateral may be at public or private sale, to the extent
such private sale is authorized under the Massachusetts General Laws, upon
such terms and in such manner as the Mortgagee deems advisable. The Mortgagee
may conduct any such sale or other disposition of the Collateral upon the
Mortgaged Premises, in which event the Mortgagee shall not be liable for any
rent or charge for such use of the Mortgaged Premises. The Mortgagee may
purchase the Collateral, or any portion of it, at any sale held under this
Article. With respect to any Collateral to be sold pursuant to the UCC, the
Mortgagee shall give the Mortgagor at least ten (10) days written notice of
the date, time, and place of any proposed public sale, or such additional
notice as may be required under Massachusetts General Laws, and of the date
after which any private sale or other disposition may be made. The Mortgagee
may sell any of the Collateral as part of the Mortgaged Premises, or any
portion or unit thereof, at the foreclosure sale or sales conducted pursuant
hereto. The Mortgagor waives any right to require the marshalling of any of
its assets in connection with any disposition conducted pursuant hereto. In
the event all or part of the Collateral is included at any foreclosure sale
conducted pursuant hereto, a single total price for the Collateral, or such
part thereof as is sold, may be accepted by the Mortgagee with no obligation
to distinguish between the application of such proceeds amongst the property
comprising the Collateral.
7-3. Collection of Proceeds of Collateral. In connection with the
exercise by the Mortgagee of the rights and remedies provided herein after the
occurrence and during the continuance of an Event of Default:
(a) The Mortgagee may notify any of the Mortgagor's debtors
relating to proceeds of the Collateral, either in the name of the
Mortgagee or the Mortgagor, to make payment directly to the Mortgagee or
such other address as may be specified by the Mortgagee, may advise any
person of the Mortgagee's interest in and to the Collateral, and may
collect directly from the obligors thereon all amounts due on account of
the Collateral;
(b) At the Mortgagee's request, the Mortgagor will provide
written notification to any or all of said debtors concerning the
Mortgagee's interest in the Collateral and will request that such
debtors forward payment thereof directly to the Mortgagee;
(c) The Mortgagor shall hold any proceeds and collections of
any of the Collateral in trust for Mortgagee and shall not commingle
such proceeds or collections with any other funds of the Mortgagor; and
(d) The Mortgagor shall deliver all such proceeds to the
Mortgagee immediately upon the receipt thereof by the Mortgagor in the
identical form received, but duly endorsed or assigned on behalf of the
Mortgagor to the Mortgagee.
7-4. Use and Occupation of Collateral. In connection with the
Mortgagee's exercise of the Mortgagee's rights under this Article after the
occurrence and during the continuance of an Event of Default: the Mortgagee
may enter upon, occupy, and use all or any part of the Collateral and may
exclude the Mortgagor from the Mortgaged Premises or portion thereof as may
have been so entered upon, occupied, or used; the Mortgagee shall not be
required to remove any of the Collateral from the Mortgaged Premises upon the
Mortgagee's taking possession thereof, and may render any Collateral unusable
to the Mortgagor; in the event the Mortgagee manages the Mortgaged Premises,
the Mortgagor shall pay to the Mortgagee on demand a reasonable fee for the
management thereof in addition to the Liabilities provided for herein and; the
Mortgagee may make such alterations, renovations, repairs, and replacements to
the Collateral, as the Mortgagee, in its sole discretion, deems proper or
appropriate.
7-5. Partial Sales. The Mortgagor agrees that, in case the
Mortgagee in the exercise of the Power of Sale contained herein or in the
exercise of any other rights hereunder given, elects to sell in parcels, said
sales may be held from time to time and that the power shall not be exhausted
until all of the Collateral not previously released shall have been sold,
notwithstanding that the proceeds of such sales exceed, or may exceed, the
Liabilities then secured thereby.
7-6. Assembly of Collateral. Upon the occurrence and during the
continuance of any Event of Default, the Mortgagee may require the Mortgagor
to assemble any personal property included in the Collateral and make it
available to the Mortgagee, at the Mortgagor's sole risk and expense, at a
place or places which are reasonably convenient to both the Mortgagee and
Mortgagor.
7-7. Power of Attorney. Upon the occurrence and during the
continuance of any Event of Default, the Mortgagor hereby irrevocably
constitutes and appoints the Mortgagee as the Mortgagor's true and lawful
attorney, to take any action with respect to the Collateral to preserve,
protect, or realize upon the Mortgagee's interest therein, each at the sole
risk, cost and expense of the Mortgagor, but for the sole benefit of the
Mortgagee. The rights and powers granted the Mortgagee by the within
appointment include, but are not limited to, the right and power to: (i)
prosecute, defend, compromise, settle, or release any action relating to the
Collateral; (ii) endorse the name of the Mortgagor in favor of the Mortgagee
upon any and all checks or other items constituting remittances or proceeds of
the Collateral; (iii) sign and endorse the name of the Mortgagor on, and to
receive as secured party, any of the Collateral; (iv) sign and file or record
on behalf of the Mortgagor any financing or other statement in order to
perfect or protect the Mortgagee's security interest; (v) enter into leases or
subleases relative to all or a portion of the Mortgaged Premises; or (vi)
manage, operate, maintain, or repair the Mortgaged Premises. The Mortgagee
shall not be obligated to perform any of such acts or to exercise any of such
powers, but if the Mortgagee elects so to perform or exercise, the Mortgagee
shall not be accountable for more than it actually receives as a result of
such exercise of power, and shall not be responsible to Mortgagor except for
the Mortgagee's willful misconduct and actual bad faith. All powers conferred
upon the Mortgagee by this Agreement, being coupled with an interest, shall be
irrevocable until terminated by a written instrument executed by a duly
authorized officer of the Mortgagee.
7-8. Rights and Remedies. The rights, remedies, powers, privileges, and
discretions of the Mortgagee hereunder (hereinafter the Mortgagee's Rights and
Remedies), shall be cumulative and not exclusive of any rights or remedies
which it would otherwise have. No delays or omissions by the Mortgagee in
exercising or enforcing any of the Mortgagee's Rights and Remedies shall
operate as or constitute a waiver thereof. No waiver by the Mortgagee of any
default hereunder or under any other agreement shall operate as a waiver of
any other default hereunder or under any other agreement. No single or
partial exercise of the Mortgagee's Rights or Remedies, and no other agreement
or transaction, of whatever nature entered into between the Mortgagee and the
Mortgagor at any time, whether before, during, or after the date hereof,
preclude any other or further exercise of the Mortgagee's Rights and Remedies.
No waiver or modification on the Mortgagee's part on any one occasion shall
be deemed a waiver on any subsequent occasion, nor shall it be deemed a
continuing waiver. All of the Mortgagee's Rights and Remedies under this
Agreement or any other agreement or transaction shall be cumulative, and not
alternative or exclusive, and may be exercised by the Mortgagee at such time
or times and in such order of preference as the Mortgagee in its sole
discretion may determine.
ARTICLE 8 - MISCELLANEOUS
8-1. Successors and Assigns. In the event the ownership of the
Collateral, or any part thereof, becomes vested in a person other than the
Mortgagor, the Mortgagee may, without notice to the Mortgagor, deal with such
successor or successors in interest with reference to this Agreement and the
Liabilities in the same manner as with the Mortgagor, without in any way
waiving the default occasioned by such transfer of ownership or in any way
vitiating or discharging the Mortgagor's liability hereunder or upon the
Liabilities, and no compromise, settlement, release or sale of the Collateral,
no forbearance on the part of the Mortgagee, and no alteration, amendment,
cancellation, waiver or modification of any term or condition or extension of
the time for payment of the Liabilities given by the Mortgagee shall operate
to release, discharge, modify, change or affect the original liability of the
Mortgagor herein, either in whole or in part, notice of any action being
waived.
8-2. Set Off. Except for tax and insurance escrow funds which are
provided for in Section 4-8 herein, all deposits or other sums at any time
credited by or due from the Mortgagee to the Mortgagor, and all cash, secu-
rities, instruments, or other property of the Mortgagor in the possession of
the Mortgagee (whether for safekeeping, or otherwise) shall at all times
constitute security for the Liabilities, and may be applied or set off by the
Mortgagee against the Liabilities at any time whether or not the Liabilities
are then due or other collateral is then available to the Mortgagee.
8-3. Application of Proceeds. The proceeds of any collection,
sale, or disposition of the Collateral, or of any other payments received
hereunder, shall be applied toward the Liabilities in accordance with the
terms of the Credit Agreement. The Mortgagor shall remain liable to the
Mortgagee for any deficiency remaining following such application.
8-4. Waiver. (a) Except to the extent required by the Credit
Agreement or any other Loan Document, the Mortgagor WAIVES notice of non-
payment, demand, presentment, protest and all forms of demand and notice, both
with respect to the Liabilities and the Collateral.
(b) Except to the extent required by the Credit Agreement or
any other Loan Document, the Mortgagor, if entitled to it, WAIVES the right to
notice and/or hearing prior to the exercise of any of the Mortgagee's Rights
and Remedies.
8-5. Responsibility of Mortgagee. The Mortgagee shall not be
liable for any loss sustained by the Mortgagor resulting from any action,
omission, or failure to act by the Mortgagee with respect to the exercise or
enforcement of its rights under this Agreement or its relationship with the
Mortgagor unless such loss is caused by the willful misconduct and actual bad
faith of the Mortgagee. This Agreement and the Mortgagee's exercise of its
rights hereunder shall not operate to place any responsibility upon the
Mortgagee for the control, care, management, or repair of the Collateral, nor
shall it operate to place any responsibility upon the Mortgagee to perform the
obligations of the Mortgagor under any Lease, or to make the Mortgagee
responsible or liable for any waste committed on the Mortgaged Premises, any
damages or defective condition of the Mortgaged Premises, or any negligence in
the management, upkeep, repair, or control of the Mortgaged Premises.
8-6. Indemnification. (See Credit Agreement).
8-7. Binding on Successors. This Agreement shall be binding upon
the Mortgagor and the Mortgagor's heirs, executors, administrators, represen-
tatives, successors, and assigns and shall inure to the benefit of the Mort-
gagee and the Mortgagee's successors and assigns. This provision shall not in
any way be deemed to be a waiver by the Mortgagee of any Event of Default
provided for herein.
8-8. Severability. Any determination that any provision of this
Agreement or any application thereof is invalid, illegal, or unenforceable in
any respect in any instance shall not affect the validity, legality, and en-
forceability of such provision in any other instance, nor the validity,
legality, or enforceability of any other provision of this Agreement.
8-9. Consent. The Mortgagor may take any action herein prohibited,
or omit to perform any act required to be performed by it, if the Mortgagor
shall obtain the prior written consent by a duly authorized officer of the
Mortgagee for each such action, or omission to action.
8-10. Payment of Costs. The Mortgagor shall pay on demand all
reasonable Costs of Collection and all reasonable expenses of the Mortgagee
in connection with the preparation, execution, and delivery of this Agreement
and of any other documents and agreements between the Mortgagor and the
Mortgagee, including, without limitation, attorneys' reasonable fees and
disbursements, and all reasonable expenses which the Mortgagee may hereafter
incur in connection with the collection of the Liabilities or the protection
or enforcement of any of the Mortgagee's rights against the Mortgagor, any
Collateral, and any guarantor or endorser of the Liabilities. The Mortgagor
authorizes the Mortgagee to pay all such expenses and to charge the same to
any account of the Mortgagor with the Mortgagee.
8-11. Additional Advances. All amounts which the Mortgagee may
advance under any Sections of this Agreement shall be repayable to the
Mortgagee with interest at the highest rate charged under the Notes, on
demand, shall be a Liability, and may be charged by the Mortgagee to any
deposit account which the Mortgagor maintains with the Mortgagee.
8-12. Waiver of Jury Trial. The Mortgagor (as well as all partners
and beneficiaries of the Mortgagor, and all guarantors, endorsers and sureties
to the Mortgagee of the Liabilities) hereby makes the following waiver,
knowingly, voluntarily, and intentionally, and understands that the Mortgagee,
in entering into any loan arrangements or making any financial accommodations
to the Mortgagor, whether now or in the future, is relying on such waiver.
THE MORTGAGOR (AS WELL AS ALL PARTNERS AND BENEFICIARIES OF THE MORTGAGOR, AND
ALL GUARANTORS, ENDORSERS AND SURETIES TO THE MORTGAGEE OF THE LIABILITIES)
HEREBY IRREVOCABLY WAIVES ANY PRESENT OR FUTURE RIGHT OF THE MORTGAGOR (OR OF
SUCH PARTNERS, BENEFICIARIES, GUARANTORS, ENDORSERS AND SURETIES, AS THE CASE
MAY BE) TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN WHICH THE
MORTGAGEE IS OR BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED
BY OR AGAINST THE MORTGAGEE OR IN WHICH THE MORTGAGEE IS JOINED AS A PARTY
LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF OR IS IN RESPECT OF, ANY
RELATIONSHIP BETWEEN THE MORTGAGOR OR ANY OTHER PERSON AND THE MORTGAGEE.
8-13. Governing Law. This Agreement and all rights and obligations
hereunder, including matters of construction, validity and performance, shall
be governed by the laws of The Commonwealth of Massachusetts. The Mortgagor
submits itself to the jurisdiction of the courts of said Commonwealth for all
purposes with respect to this Agreement and the Mortgagor's relationship with
the Mortgagee.
8-14. Integration. This Agreement and the other Loan Documents
incorporate all discussions and negotiations between the Mortgagee and the
Mortgagor, either express or implied, concerning the matters included herein,
any custom, usage, or course of dealing to the contrary notwithstanding. No
such discussions, negotiations, custom, usage, or course of dealing shall
limit, modify or otherwise affect the provisions hereof. No modification,
amendment or waiver of any provision of this Agreement is effective unless
executed in writing by the party to be charged with such modification,
amendment or waiver, and if such party be the Mortgagee, then by a duly
authorized officer thereof.
DYNAMICS RESEARCH CORPORATION
("Mortgagor")
By: /s/Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
By: /s/Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, SS. February 10, 2000
Then personally appeared the above named Xxxxx X. Xxxxx, as
President of Dynamics Research Corporation, and Xxxxx X. Xxxxxxx as
Treasurer of Dynamics Research Corporation, and acknowledged the foregoing
instrument to be their free act and deed, and the free act and deed of
Dynamics Research Corporation, before me,
Xxxxx Xxxxxx
Notary Public
My Commission Expires: 5/19/00
