EXHIBIT 99.8
SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated as of January 21, 2005 (this "Agreement"),
is executed by CITEL TECHNOLOGIES LIMITED, a company organized under the laws of
England and Wales with its chief executive office and principal place of
business located at Wheatcroft Business Park, Xxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxx, Xxxxxx Xxxxxxx, XX00 0XX ("CITEL U.K."), and CITEL TECHNOLOGIES,
INC., a Delaware corporation with its chief executive office and principal place
of business located at 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000
("CITEL U.S." and, together with CITEL U.K., the "CITEL Parties"), and VERSO
TECHNOLOGIES, INC., a Minnesota corporation (the "Secured Party").
WHEREAS, pursuant to Section 4.2(b) of that certain Asset Purchase
Agreement, dated January 21, 2005 by and among the Secured Party, certain
subsidiaries of the Secured Party, the CITEL Parties, MCK CANADA OPERATIONS
INC., a company organized under the laws of the Province of British Columbia
(the "Purchase Agreement"), CITEL U.K. and CITEL U.S. executed and delivered to
the Secured Party that certain Secured Convertible Promissory Note in original
aggregate principal amount of $3,500,000.00 (the "Note") in partial payment of
the purchase price payable pursuant to the Purchase Agreement;
WHEREAS, the CITEL Parties benefit from the loan evidenced by the Note;
and
WHEREAS, the Note is intended to be secured by a security interest in the
Assets and this Agreement is intended to be the Security Agreement referred to
in the Note;
NOW, THEREFORE, in consideration of the above premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the CITEL Parties, the CITEL Parties hereby agree with the
Secured Party as follows:
SECTION 1. DEFINITIONS.
(a) As used herein, the terms "ASSETS" and "INTELLECTUAL PROPERTY" shall
have the meanings ascribed thereto in the Purchase Agreement.
(b) For the purposes of this Agreement:
"APPLICABLE LAW" means all applicable provisions of constitutions,
statutes, laws, rules, regulations and orders of all governmental bodies and all
orders, rulings and decrees of all courts and arbitrators.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which banks in Atlanta, Georgia are authorized or required by law to close.
"COLLATERAL" means (a) all of the Assets, including the Intellectual
Property, except the Assets described in Schedule 1 hereto, to the extent that
such Assets are utilized in the products manufactured or sold by the MCK
Business as of the Closing, but excluding any derivations thereof developed by
or on behalf of the CITEL Parties on or after the date hereof, wherever such
Assets are located, and (b) all products and proceeds of or pertaining to the
foregoing, including cash or other property which were proceeds and are
recovered by a bankruptcy trustee or otherwise as a preferential transfer by any
CITEL Party.
"DEFAULT" means any of the events specified in the definition of Event of
Default, whether or not there has been satisfied any requirement for giving of
notice, lapse of time or the happening of any other condition.
"EVENT OF DEFAULT" means (a) a breach by any CITEL Party of any of its
representations or warranties contained herein, or (b) a breach by either CITEL
Party signatory to the Note of any of its covenants or agreements contained
herein or in the Note, and such breach is not cured within fifteen (15) Business
Days after the earlier of (i) such CITEL Party's receipt of written notice of
such breach and (ii) such CITEL Party's actual knowledge of such breach.
"LIEN," as applied to the property of any Person, means any security
interest, lien, encumbrance, mortgage, deed to secure debt, deed of trust,
pledge, charge, conditional sale or other title retention agreement, or other
encumbrance of any kind covering any property of such Person, or upon the income
or profits therefrom or any agreement to convey any of the foregoing or any
other agreement or interest covering the property of a Person which is intended
to provide collateral security for the obligation of such Person.
"OBLIGATIONS" means, individually and collectively:
(i) all obligations of the CITEL Parties owing to the Secured Party
under or with respect to this Agreement or the Note; and
(ii) all renewals, substitutions, modifications, extensions and
supplements to any of the foregoing.
"PERMITTED LIENS" means:
(i) Liens securing taxes, assessments and other governmental charges
or levies not yet due and payable unless contested in good faith pursuant to
appropriate procedures;
(ii) Liens securing obligations to materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals, and other
similar Liens arising in the ordinary course of business, provided in each such
case that the Lien is either not yet due and payable, is contested in good faith
pursuant to appropriate procedures, or does not concern a material portion of
the Collateral;
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(iii) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workmen's compensation, unemployment insurance or similar legislation;
(iv) Liens consisting of encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the use of real
property, that do not materially detract from the value of such property or
impair the use thereof in the business of any CITEL Party;
(v) Liens in favor of any Senior Creditor (as that term is used in
the Note);
(vi) Liens in favor of the Secured Party;
(vii) Liens in favor of National Westminster Bank plc pursuant to a
mortgage debenture, dated February 13, 1996, or any extension, renewal,
refinancing or replacement thereof;
(viii) Liens arising from pre- or post-judgment attachment, seizure,
a writ or distress warrant, levy, or other similar process (A) the enforcement
of which is stayed or satisfied within 30 days after entry or (B) which do not
secure amounts individually or in the aggregate at any time exceeding $100,000;
(ix) Liens in favor of banks or other financial institutions arising
in connection with deposit accounts held at such institutions; and
(x) any other Liens not described above arising in the ordinary
course of business and securing in the aggregate not more than $100,000 from
time to time.
"PERSON" means an individual, corporation, partnership, limited liability
company, association, trust or unincorporated organization, or a government or
any agency or political subdivision thereof.
"UCC" means the Uniform Commercial Code of the State of New York, as in
effect from time to time.
(c) Unless otherwise set forth herein to the contrary, all terms not
otherwise defined herein and which are defined in the UCC are used herein with
the meanings ascribed to them in the UCC. However, if a term is defined in
Article 9 of the UCC differently than in another Article of the UCC, the term
has the meaning specified in Article 9 of the UCC.
SECTION 2. GRANT OF SECURITY. To secure the prompt and complete payment,
observance and performance when due (whether at stated maturity, by acceleration
or otherwise) of all of the Obligations, the CITEL Parties hereby collaterally
assign and pledge to the Secured Party, and grant to the Secured Party a
security interest and lien in and to, the Collateral to the extent each CITEL
Party has an interest therein. The security
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interest granted herein shall be second in priority only to the Lien in favor of
any Senior Creditor.
SECTION 3. FINANCING STATEMENTS; PPSA FILINGS.
(a) The CITEL Parties agree to furnish to the Secured Party promptly upon
request therefor any information required by part 5 of Article 9 of the UCC or
the analogous part of Article 9 of the Uniform Commercial Code of any Uniform
Commercial Code jurisdiction for the sufficiency or filing office acceptance of
any financing statement or amendment.
(b) With respect to any collateral that resides in Canada, each CITEL
Party jointly and severally covenants and agrees with the Secured Party that
each CITEL Party shall from time to time forthwith at the request of the Secured
Party execute and deliver all such financing statements, schedules, assignments
and documents, and do all such further acts and things as may be reasonably
required by the Secured Party to: effectively carry out the full intent and
meaning of this Agreement; to better evidence and perfect the security interest,
lien, assignment and pledge granted hereby pursuant to the Personal Property
Security Act (or similar legislation) of any jurisdiction in Canada; or to
enforce the security interest, lien, assignment, pledge and remedies provided
hereunder, and the CITEL Party hereby irrevocably constitutes and appoints the
Secured Party, or any receiver appointed by the court or the Secured Party, the
true and lawful attorney of the CITEL Party, with full power of substitution, to
do any of the foregoing in the name of the CITEL Party whenever and wherever the
Secured Party or any such receiver may consider it to be necessary or expedient.
(c) With respect to any collateral that resides in the United Kingdom,
each CITEL Party jointly and severally covenants and agrees with the Secured
Party that the security agreement will be registered at the UK Companies
Registry within 21 days of the date hereof.
SECTION 4. OTHER ACTIONS. Further to insure the attachment, perfection and
priority of, and the ability of the Secured Party to enforce, the Secured
Party's security interest in the Collateral, each CITEL Party agrees, in each
case at such CITEL Party's own expense, to take any other action reasonably
requested by the Secured Party to insure the attachment, perfection and, first
priority (subject to Permitted Liens) of, and the ability of the Secured Party
to enforce, the Secured Party's security interest in any and all of the
Collateral.
SECTION 5. REPRESENTATIONS AND WARRANTIES REGARDING LEGAL STATUS. The CITEL
Parties jointly and severally represent and warrant to the Secured Party as
follows: (a) the correct corporate or limited liability company name of each
CITEL Party is set forth in the first paragraph of this Agreement, and no CITEL
Party conducts business under any trade name other than as set forth on Schedule
5, (b) the Internal Revenue Service taxpayer identification number, as
applicable, of each CITEL Party is as set forth on Schedule 5, (c) each CITEL
Party is a Person of the type, and is organized in the jurisdiction, set forth
in the introductory paragraph hereof, (d) each CITEL Party's
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principal place of business is accurately set forth in the introductory
paragraph hereof, (e) each CITEL Party has the right, power and capacity to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby, (f) the execution and delivery and performance by each
CITEL Party of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of such CITEL Party, (g) this Agreement has been
duly and validly executed and delivered by each CITEL Party and constitutes each
CITEL Party's legal, valid and binding obligation, enforceable in accordance
with its terms and (h) the execution and delivery of this Agreement by each
CITEL Party, the consummation by each CITEL Party of the transactions
contemplated herein and the performance of the covenants and agreements of each
CITEL Party contained herein will not, with or without the giving of notice or
the lapse of time, or both (i) violate or conflict with any of the provisions of
the articles or certificate of incorporation or bylaws or other organizational
documents of such CITEL Party, (ii) violate, conflict with or result in a breach
or default under or cause termination of any term or condition of any mortgage,
indenture, contract, license, permit, instrument or other agreement to which
such CITEL Party is a party or by which such CITEL Party or any of its assets
may be bound or (iii) violate any Applicable Law to which such CITEL Party is a
party or by which such CITEL Party or any of its assets may be bound.
SECTION 6. COVENANTS REGARDING LEGAL STATUS. Each CITEL Party covenants with the
Secured Party as follows: without providing at least fifteen (15) Business Days'
prior written notice to the Secured Party, such CITEL Party will not change (a)
its name, its place of business or, if more than one, chief executive office, or
its mailing address or organizational identification number if it has one, or
(b) its type of organization, jurisdiction of organization or other legal
structure.
SECTION 7. INTENTIONALLY OMITTED.
SECTION 8. COVENANTS REGARDING COLLATERAL GENERALLY. Each CITEL Party further
covenants with the Secured Party as follows: (a) except for items that are not
material, and except as permitted by Section 8(h) below, tangible items of the
Collateral will be kept at such CITEL Party's principal place of business as set
forth in the first paragraph hereof or those locations listed in Schedule 5
hereto, and such CITEL Party will not remove the Collateral from such locations,
without providing at least two (2) Business Days' prior written notice to the
Secured Party, (b) except for the security interest herein granted and Permitted
Liens, such CITEL Party shall own the Collateral free from any Lien, and such
CITEL Party shall defend the same against all claims and demands of all persons
at any time claiming any such Lien therein, (c) other than Permitted Liens, such
CITEL Party shall not pledge, mortgage or create, or suffer to exist any Lien,
in the Collateral in favor of any Person other than the Secured Party, (d)
except for items that are not material, such CITEL Party shall keep the tangible
Collateral in good order and repair, ordinary wear and tear excepted, and will
not use the same in violation of any Applicable Law or any policy of insurance
thereon, (e) such CITEL Party shall permit the Secured Party, or its designee,
to inspect the tangible Collateral during normal business hours upon reasonable
prior notice, (f) such CITEL Party will promptly pay when due all taxes,
assessments, governmental charges and levies upon the Collateral or incurred in
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connection with the use or operation of the Collateral or incurred in connection
therewith, except for such taxes, assessments, governmental charges and levies
contested in good faith pursuant to appropriate procedures, (g) such CITEL Party
shall use the Collateral in compliance in all material respects with all
Applicable Laws and (h) such CITEL Party shall not sell, transfer or otherwise
dispose, or offer to sell, transfer or otherwise dispose, of the Collateral or
any interest therein except for (i) sales and leases of inventory in the
ordinary course of business; and (ii) so long as no Event of Default has
occurred and is continuing, sales or other dispositions of obsolescent items of
equipment in the ordinary course of business; and (iii) other sales of tangible
items of Collateral that are not material. For purposes of the foregoing clause
(h), the non-exclusive licensing of Collateral constituting Intellectual
Property shall not constitute a sale, transfer or disposition of Collateral or
an interest therein.
SECTION 9. INSURANCE. The CITEL Parties shall at all times maintain insurance on
the Collateral against loss or damage by fire, theft, burglary, pilferage, loss
in transit and similar hazards and risks in such minimum amounts and on such
terms as the CITEL Parties maintain for their other properties of like kind and
character, and in any event, consistent with prevailing business practices for
other companies in the CITEL Parties' industry and locations. All such policies
shall be issued under policies with the CITEL Parties' existing insurers, or by
other or different insurers reasonably acceptable to the Secured Party. All
premiums on such insurance shall be paid by the CITEL Parties and certified
copies of the policies, or other evidence of insurance reasonably acceptable to
the Secured Party, shall be delivered to the Secured Party promptly upon the
Secured Party's reasonable request. All insurance policies required under this
Section shall contain standard lender's loss payable clauses, naming the Secured
Party, as loss payee, and providing that: (i) no such insurance shall be
affected by any act or neglect of the insured or owner of the property described
in such policy, subject to policy terms and conditions; and (ii) such policies
and loss payable clauses may not be canceled, materially amended or terminated
with respect to the Secured Party unless at least twenty (20) (or in the case of
a material amendment or termination, ten (10)) Business Days' prior written
notice is given to the Secured Party.
SECTION 10. COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
(a) Expenses Incurred by the Secured Party. In the Secured Party's
reasonable discretion, if any CITEL Party fails to do so in accordance with the
terms of Sections 8 and 9 hereof, the Secured Party may discharge taxes and
other encumbrances at any time levied or placed on any of the Collateral (other
than Permitted Liens), maintain any of the Collateral, make repairs thereto and
pay any necessary filing fees or insurance premiums. The CITEL Parties agree to
reimburse the Secured Party on demand for all expenditures so made. The Secured
Party shall have no obligation to any CITEL Party or any other person to make
any such expenditures, nor shall the making thereof be construed as a waiver or
cure of any Default or Event of Default.
(b) Secured Party's Obligations and Duties. Anything herein to the
contrary notwithstanding, the CITEL Parties shall remain obligated and liable
under each contract or agreement comprised in the Collateral to be observed or
performed by the CITEL
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Party thereunder. The Secured Party shall not have any obligation or liability
under any such contract or agreement by reason of or arising out of this
Agreement or the receipt by the Secured Party of any payment relating to any of
the Collateral, nor shall the Secured Party be obligated in any manner to
perform any of the obligations of any CITEL Party under or pursuant to any such
contract or agreement, to make inquiry as to the nature or sufficiency of any
payment received by the Secured Party in respect of the Collateral or as to the
sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Secured Party or to which the Secured Party may be entitled at
any time or times. The Secured Party's sole duty with respect to the custody,
safe keeping and physical preservation of the Collateral in their possession,
under Section 9-207 of the UCC or otherwise, shall be to deal with such
Collateral in the same manner as the Secured Party deals with similar property
for its own account.
SECTION 11. NOTIFICATION TO ACCOUNT DEBTORS AND OTHER PERSONS OBLIGATED ON
COLLATERAL. The CITEL Parties shall, at the request and option of the Secured
Party during a continuance of an Event of Default, and subject to the rights of
holders of Permitted Liens, notify account debtors and other persons obligated
on any of the Collateral of the security interest of the Secured Party, in any
account, chattel paper, general intangible, instrument or other Collateral and
that payment thereof is to be made directly to the Secured Party, or to any
financial institution designated by the Secured Party as the Secured Party's
agent therefor, and the Secured Party may itself, if an Event of Default shall
have occurred and be continuing, without demand upon the CITEL Parties, so
notify account debtors and other persons obligated on Collateral. After the
making of such a request or the giving of any such notification, each CITEL
Party shall hold any proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by such CITEL Party as
trustee for the Secured Party without commingling the same with other funds of
such CITEL Party and shall turn the same over to the Secured Party in the
identical form received, together with any necessary endorsements or
assignments. The Secured Party shall apply the proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Collateral
received by the Secured Party to the Obligations, such proceeds to be
immediately credited after final payment in cash or other immediately available
funds of the items giving rise to them.
SECTION 12. POWER OF ATTORNEY.
(a) Appointment and Powers of Secured Party. Each CITEL Party hereby
irrevocably constitutes and appoints the Secured Party, and any officer of the
Secured Party, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place and
stead of such CITEL Party or in such Person's own name, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments that may be necessary or
useful to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives said attorneys the power and right, on
behalf of such CITEL Party, without notice to or assent by such CITEL Party, to
do
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the following: during the continuance of an Event of Default, generally to sell,
transfer, pledge, make any agreement with respect to or otherwise dispose of or
deal with any of the Collateral in such manner as is consistent with the UCC and
as fully and completely as though the Secured Party were the absolute owner
thereof for all purposes, and to do, at such CITEL Party's expense, at any time,
or from time to time, all acts and things which the Secured Party deems
necessary or advisable to protect, preserve or realize upon the Collateral and
the Secured Party's security interest therein, in order to effect the intent of
this Agreement, all no less fully and effectively as such CITEL Party might do,
including, without limitation, (A) the filing and prosecuting of registration
and transfer applications with the appropriate federal, state or local agencies
or authorities with respect to trademarks, copyrights and patentable inventions
and processes, and (B) the execution, delivery and recording, in connection with
any sale or other disposition of any Collateral, of the endorsements,
assignments or other instruments of conveyance or transfer with respect to such
Collateral.
(b) Ratification by the CITEL Party. To the extent permitted by Applicable
Law, the CITEL Parties hereby ratify all that said attorneys shall lawfully do
or cause to be done in accordance with the terms and by virtue hereof. This
power of attorney is a power coupled with an interest and is irrevocable.
(c) No Duty on Secured Party. The powers conferred on the Secured Party
hereunder are solely to protect the interests of the Secured Party in the
Collateral and shall not impose any duty upon the Secured Party to exercise any
such powers. The Secured Party shall be accountable only for the amounts that it
actually receives as a result of the exercise of such powers, and neither it nor
any officers, directors or employees of the Secured Party shall be responsible
to any CITEL Party for any act or failure to act, except for the such Person's
own gross negligence or willful misconduct.
SECTION 13. RIGHTS AND REMEDIES. During the continuance of an Event of Default,
the Secured Party, without any other notice to or demand upon the CITEL Parties,
shall have in any jurisdiction in which enforcement hereof is sought, in
addition to all other rights and remedies, the rights and remedies of a secured
party under the UCC and any additional rights and remedies as may be provided to
a secured party in any jurisdiction in which Collateral is located or
enforcement is sought, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Secured Party may, so far
as the CITEL Parties can give authority therefor, enter upon any premises on
which the Collateral may be situated and remove the same therefrom. The Secured
Party may in their discretion require the CITEL Parties to assemble all or any
part of the Collateral at such location or locations within the jurisdiction(s)
of the CITEL Parties' principal office(s). Unless the Collateral is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market, the Secured Party shall give to the CITEL Parties at least
ten (10) Business Days' prior written notice of the time and place of any public
sale of Collateral or of the time after which any private sale or any other
intended disposition is to be made. The CITEL Parties hereby acknowledge that
ten (10) Business Days' prior written notice of such sale or sales shall be
reasonable notice.
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SECTION 14. NO WAIVER BY SECURED PARTY, ETC. The Secured Party shall not be
deemed to have waived any of its rights and remedies in respect of the
Obligations or the Collateral unless such waiver shall be in writing and signed
by the Secured Party. No delay or omission on the part of the Secured Party in
exercising any right or remedy shall operate as a waiver of such right or remedy
or any other right or remedy. A waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future occasion.
All rights and remedies of the Secured Party with respect to the Obligations or
the Collateral, whether evidenced hereby or by any other instrument or papers,
shall be cumulative and may be exercised singularly, alternatively, successively
or concurrently at such time or at such times as the Secured Party deems
expedient.
SECTION 15. SURETYSHIP WAIVERS BY CITEL PARTIES. Each of the CITEL Parties in
its capacity as a surety for the other CITEL Parties waives demand, notice,
protest, notice of acceptance of this Agreement, notice of loans made, credit
extended, Collateral received or delivered or other action taken in reliance
hereon and all other demands and notices of each description. With respect to
both the Obligations and the Collateral, the CITEL Parties assent to any
extension or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Secured Party may deem advisable. The Secured Party
shall not have any duty as to the collection or protection of the Collateral or
any income therefrom, the preservation of rights against prior parties, or the
preservation of any rights pertaining thereto beyond any duties imposed by
Applicable Law and the Purchase Agreement. The CITEL Parties further waive any
and all other suretyship defenses.
SECTION 16. MARSHALLING. The Secured Party shall not be required to marshal any
present or future collateral security (including but not limited to the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of the rights and remedies of the Secured Party
hereunder and of the Secured Party in respect of such collateral security and
other assurances of payment shall be cumulative and in addition to all other
rights and remedies, however existing or arising. To the extent that they
lawfully may, the CITEL Parties hereby agree that they will not invoke any
Applicable Law relating to the marshalling of collateral which might cause delay
in or impede the enforcement of the Secured Party's rights and remedies under
this Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which any
of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that they lawfully may, the CITEL Parties hereby irrevocably waive
the benefits of all such laws.
SECTION 17. PROCEEDS OF DISPOSITIONS; EXPENSES. The CITEL Parties agree to pay
to the Secured Party on demand any and all reasonable expenses, including
reasonable attorneys' fees and disbursements, paid by the Secured Party in
protecting, preserving or enforcing the Secured Party's rights and remedies
under or in respect of any of the Obligations or any of the Collateral. After
deducting all of said expenses, the residue of
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any proceeds of collection or sale or other disposition of Collateral shall, to
the extent actually received in cash, be applied to the payment of the
Obligations in such order or preference as the Secured Party may determine,
proper allowance and provision being made for any Obligations not then due. Upon
the final payment and satisfaction in full of all of the Obligations and after
making any payments required by Sections 9-608(a)(1)(C) or 9-615(a)(3) of the
UCC, any excess shall be returned to the CITEL Parties. In the absence of final
payment and satisfaction in full of all of the Obligations, the CITEL Parties
shall remain liable for any deficiency.
SECTION 18. OVERDUE AMOUNTS. Until paid, all amounts due and payable by the
CITEL Parties hereunder shall be a debt secured by the Collateral and shall
bear, whether before or after judgment, interest at the rate of interest set
forth in the Note for overdue principal.
SECTION 19. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 20. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or consent to any departure by the CITEL Parties herefrom shall in any
event be effective unless the same shall be in writing and signed by the party
or parties hereto, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 21. NOTICES. Unless otherwise provided herein, communications provided
for hereunder shall be in writing and shall be mailed, telecopied, couriered or
delivered, as follows: if to the CITEL Parties, to their addresses for notices
set forth in the Purchase Agreement; if to the Secured Party, to the address for
notices of the Secured Party set forth in the Note; or, as to each party, at
such other address as shall be designated by such party in a written notice to
the other parties. All such notices and other communications to the CITEL
Parties or the Secured Party shall be deemed given when delivered personally, or
faxed (transmission confirmed), or otherwise actually received; shall be deemed
given three (3) Business Days after they are mailed by certified mail (postage
pre-paid and return receipt requested); and shall be deemed given one (1)
Business Day after they are sent by overnight courier service.
SECTION 22. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under Applicable Law, such provisions shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Agreement.
SECTION 23. INTENTIONALLY OMITTED.
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SECTION 24. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which, taken
together, shall constitute but one and the same instrument.
SECTION 25. MISCELLANEOUS. The headings of each section of this Agreement are
for convenience only and shall not define or limit the provisions thereof. All
Schedules attached hereto are incorporated herein and made a part hereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
CITEL Parties and their respective successors and assigns, and shall inure to
the benefit of the Secured Party and its respective successors and assigns. If
any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein. The
CITEL Parties acknowledge receipt of a copy of this Agreement.
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IN WITNESS WHEREOF, each of the Secured Party and the CITEL Parties has
caused this Agreement to be duly executed and delivered by its duly authorized
officer as of the day first above written.
CITEL TECHNOLOGIES LIMITED
By: /s/ Xxxxxxx Xxxxxx Xxxxxxxx
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Title: Chief Executive Officer
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CITEL TECHNOLOGIES LIMITED
By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------------------
Title: Secretary
----------------------------------
CITEL TECHNOLOGIES, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
------------------------------------
Title: Chief Executive Officer,
President and Secretary
----------------------------------
VERSO TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Title: Executive Vice President and
Chief Financial Officer
----------------------------------
SCHEDULE 1
2
SCHEDULE 5
3
+
