EXHIBIT 10.2
Security Agreement
(Accounts, Inventory and Equipment)
THIS AGREEMENT is made this 20 day of January, 1998, between
CoreStates Bank, N.A.*, a national banking association (the "Bank"), and
ImageMax, Inc. (the "Debtor").
1. DEFINITIONS. As used herein and in any separate agreement between
the Bank and the Debtor in connection with this Agreement:
a. "Account" means any right to payment for goods sold or leased or
for services rendered which is not evidenced by an Instrument or Chattel Paper,
whether or not it has been earned by performance including all rights to payment
under a charter or other contract involving the use or hire of a vessel and all
rights incident to such charter or contract.
b. "Qualified Account" means any Account meeting all of the
following specifications: (i) it is lawfully owned by the Debtor and subject to
no lien, security interest or prior assignment, and the Debtor has the right of
assignment thereof and the power to grant a security interest therein; (ii) it
is a valid and enforceable Account, representing the undisputed indebtedness of
an Account Debtor to the Debtor; (iii) it is not subject to any defense,
set-off, counter-claim, credit, allowance or adjustment; (iv) no substantial
part of any goods, the sale of which has given rise to the Account, has been
returned, rejected, lost or damaged; (v) if it arises from the sale of goods by
the Debtor, such sale was an absolute sale and not on consignment or on approval
or on a sale or return basis nor subject to any other repurchase or return
agreement, and such goods have been shipped to the Account Debtor; (vi) if it
arises from the performance of services, such services have actually been
performed; (vii) it arose in the ordinary course of the Debtor's business;
(viii) no notice of the Bankruptcy, receivership, reorganization, insolvency, or
financial embarrassment of the Account Debtor has been received; (ix) the
Account Debtor is not a subsidiary or affiliate of the Debtor, does not control
the Debtor, and is not under the control of or under common control with the
Debtor, and (x) the Account meets such other specifications and requirements
which may from time to time be established by the Bank.
c. "Account Debtor" means the Person who is obligated on an Account
or General Intangible.
d. "Chattel Paper" means a writing or writings which evidence both
a monetary obligation and a security interest in or a lease of specific goods.
e. "Collateral" means (i) all of the Debtor's Inventory now owned
or hereafter acquired; (ii) all of the Debtor's Documents of Title now owned or
hereafter acquired; (iii) all of the
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*CoreStates Bank, N.A. also conducts business as Philadelphia National Bank,
as CoreStates First Pennsylvania Bank and as CoreStates Xxxxxxxx Bank.
Debtor's Accounts now existing or hereafter arising; (iv) all of the Debtor's
Farm Products now existing or hereafter arising; (v) all of the Debtor's General
Intangibles, Chattel Paper and Instruments now existing or hereafter acquired or
arising; (vi) all guarantees of the Debtor's existing and future Accounts and
General Intangibles and all other security held by the Debtor for the payment or
satisfaction thereof; (vii) the goods or the services, the sale or lease or
performance of which gave rise to any Account or General Intangible of the
Debtor, including any returned goods; (viii) all of the Debtor's Equipment now
owned or hereafter acquired; (ix) any balance or share belonging to the Debtor
of any deposit, agency or other account with any bank and any other amounts
which may be owing from time to time by any bank to the Debtor; (x) all property
of any nature whatsoever of the Debtor now or hereafter in the possession of or
assigned or hypothecated to the Bank for any purpose; and (xi) all Proceeds of
all of the foregoing, including all Proceeds of other Proceeds.
f. "Debtor" means the Person who executes this Agreement as such.
The Debtor may be either a borrower from the Bank or a guarantor of the
indebtedness of another to the Bank, and in either case is the Person obligated
to pay the Liabilities secured hereby.
g. "Document of Title" means a xxxx of lading, dock warrant, dock
receipt, warehouse receipt or order for the delivery of goods, and also any
other document which in the regular course of business or financing is treated
as adequately evidencing that the Person in possession of it is entitled to
receive, hold and dispose of the document and the goods it covers.
h. "Farm Products" means crops or livestock or supplies used or
produced in farming operations or products of crops or livestock in their
unmanufactured states (such as ginned cotton, woolclip, maple syrup, milk and
eggs), if they are in the possession of a Debtor engaged in raising, fattening,
grazing or other farming operations.
i. "Equipment" means tangible personal property held by the Debtor
for use primarily in business and includes equipment, machinery, furniture,
fixtures, dies, tools, and all accessories and parts now or hereafter affixed
thereto.
j. "General Intangibles" means all personal property of every kind
and description of Debtor other than goods, Accounts, Chattel Paper, Documents
of Title, Instruments and money, and includes without limitation choses in
action, books, records, customer lists, tax, insurance and other kinds of
refunds, patents, trademarks, copyrights, trade names, plans, licenses and other
rights in personal property.
k. "Instrument" means a negotiable instrument or a security or any
other writing which evidences a right to the payment of money and is not itself
a security agreement or lease and is of a type which is, in ordinary course of
business, transferred by delivery with any necessary indorsement or assignment.
l. "Inventory" means tangible personal property held by the Debtor
for sale or lease or to be furnished under contracts of service, tangible
personal property which the Debtor has so leased or furnished, and raw
materials, work in process and materials used, produced or consumed in Debtor's
business, and shall include tangible personal property returned to the Debtor by
the purchaser following a sale thereof by the Debtor and tangible personal
property represented by Documents of
Title. All equipment, accessories and parts at any time attached or added to
items of Inventory or used in connection therewith shall be deemed to be part of
the Inventory.
m. "Liabilities" means all existing and hereafter incurred or
arising indebtedness, obligations and liabilities of the Debtor to the Bank,
whether absolute or contingent, direct or indirect and out of whatever
transactions arising, and includes without limitation, all matured and unmatured
indebtedness, obligations and liabilities of the Debtor under or in connection
with existing and future loans and advances evidenced by promissory notes or
otherwise, letters of credit, acceptances, all other extensions of credit,
repurchase agreements, security agreements, mortgages, overdrafts, foreign
exchange contracts and all other contracts for payment or performance,
indemnities, and all indebtedness, obligations and liabilities under any
guaranty or surety agreement, or as co-maker or co-obligor with any person for
any of the foregoing, including without limitation all interest, expenses, costs
(including collection costs) and fees (including reasonable attorney's fees and
prepayment fees) incurred, arising or accruing (whether prior or subsequent to
the filing of any bankruptcy petition by or against any Debtor) under or in
connection with any of the foregoing, and further including all such
indebtedness, obligations and liabilities of the Debtor (i) to others which the
Bank may have obtained by assignment, participation, subrogation, merger or
otherwise, and (ii) to subsidiaries of the Bank.
n. "Person" means an individual, a corporation, a government or
governmental subdivision or agency or instrumentality, a business trust, an
estate, a trust, a partnership, a cooperative, an association, two or more
Persons having a joint or common interest, or any other legal or commercial
entity.
o. "Proceeds" means whatever is received when Collateral is sold,
exchanged, collected or otherwise disposed of, including without limitation
insurance proceeds.
2. SECURITY INTEREST IN COLLATERAL. As Security for the payment of the
Liabilities the Debtor hereby assigns to the Bank and grants to the Bank a lien
upon and security interest in the Collateral. Without the written consent of the
Bank, the Debtor will not create, incur, assume or suffer to exist any other
liens or security interests in the Collateral.
3. COLLECTION OF ACCOUNTS. The Bank hereby authorizes the Debtor to
collect all Accounts from the Account Debtors. The Proceeds of Accounts so
collected by the Debtor shall be received and held by the Debtor in trust for
the Bank. Unless otherwise agreed by the Bank, the Debtor shall deliver to the
Bank within one day of the receipt thereof by the Debtor all Proceeds in the
form of cash, checks, drafts, notes and other remittances received in payment of
or on account of any of the Debtor's Accounts. Such Proceeds shall be deposited
in a special non-interest bearing bank account (the "Cash Collateral Account")
maintained with the Bank over which the Bank alone shall have power of
withdrawal. All Proceeds other than cash shall be deposited in precisely the
form in which received, except for the addition thereto of the endorsement of
the Debtor when necessary to permit collection of the items, which endorsement
the Debtor agrees to make. The Debtor will not commingle any such Proceeds with
any of the Debtor's other funds or property but will hold them separate and
apart from any other funds or property and upon an express trust for the Bank
until deposit thereof is made in the Cash Collateral Account. Periodically, at
the Bank's discretion, the Bank will apply all or any part of the collected
Proceeds of Accounts on deposit in the Cash Collateral Account to the payment in
full or in part of such of the Liabilities and in such order as the Bank may
elect. The
authority hereby given to the Debtor to collect the Proceeds of Accounts in
trust for the Bank may be terminated by the Bank at any time. The Bank shall
have the right at any time, acting if it so chooses in the Debtor's name, to
collect the Debtor's Accounts itself, to sell, assign, compromise, discharge or
extend the time for payment of any Account, to institute legal action for the
collection of any Account, and to do all acts and things necessary or incidental
thereto. The Debtor hereby ratifies all that the Bank shall do by virtue hereof.
The Bank may at any time, without notice to the Debtor, notify any Account
Debtor that the Account payable by such Account Debtor has been assigned to the
Bank and is to be paid directly to the Bank. At the Bank's request the Debtor
shall so notify Account Debtors and shall indicate on all xxxxxxxx to Account
Debtors that payments thereon are to be made to the Bank. Without the written
consent of the Bank, the Debtor shall not compromise, discharge, extend the time
for payment of or otherwise grant any indulgence or allowance with respect to
any Account.
4. PROCESSING AND SALES OF INVENTORY. So long as the Debtor is not in
default hereunder, the Debtor shall have the right, in the regular course of its
business, to process and sell its Inventory.
5. OTHER AGREEMENTS OF DEBTOR.
a. The Debtor shall keep complete and accurate books and records
and make all necessary entries therein to reflect the quantities, costs, values
and location of its Inventory and Equipment, and the transactions and facts
giving rise to its Accounts and General Intangibles and all payments, credits
and adjustments applicable thereto. The Debtor shall keep the Bank fully and
accurately informed as to the location of all such books and records pertaining
to the Collateral and shall permit the Bank's agents to have access to all such
books and records and any other records pertaining to the Debtor's business
which the Bank may request and, if deemed necessary to the Bank, to remove them
from the Debtor's place of business or any other place where the same may be
found for the purpose of examining, auditing and copying the same. Any of the
Debtor's books and records so removed by the Bank's agents shall be returned to
the Debtor by the Bank as soon as the Bank shall have completed its inspection,
audit or copying thereof. The Bank shall have the right to communicate with
Account Debtors and Debtor's accountant to the extent reasonably necessary to
verify account balances and any information provided by the Debtor. The Bank's
right to take possession of the Debtor's books and records pertaining to the
Collateral shall be enforceable at law by action of replevin or by any other
appropriate remedy at law or in equity, and the Debtor consents to the entry of
judicial orders or injunctions enforcing such right without any notice to the
Debtor or any opportunity to be heard.
b. In the event that any lien, assessment or tax liability against
the Debtor shall arise, whether or not entitled to priority over the security
interest of the Bank created hereby, the Debtor shall give prompt notice thereof
in writing to the Bank. The Bank shall have the right (but shall be under no
obligation) to pay any tax or other liability of the Debtor deemed by the Bank
to affect its interest. The Debtor shall repay to the Bank any sums which the
Bank shall have so paid, together with interest thereon at the rate payable by
the Debtor, at the time of payment by the Bank, with respect to the Liabilities
(or the highest such rate, if there be more than one), but in no event less than
six percent (6%) per annum and the Debtor's liability to the Bank for such
repayment with interest shall be included in the Liabilities. In addition, the
Bank shall be subrogated to the extent of the payment made by it to all rights
of the recipient of such payment against the assets of the Debtor. The Debtor
shall
furnish to the Bank at such times as the Bank may require proof satisfactory to
the Bank of the making of payments or deposits required by applicable law with
respect to amounts withheld by the Debtor from wages and salaries of employees
and amounts contributed by the Debtor on account of federal and other income or
wage taxes and amounts due under the Federal Insurance Contributions Act. The
Debtor represents, warrants and agrees that, in respect to all employee pension
or other benefit plans maintained by the Debtor or any of its subsidiaries, the
Debtor is in full compliance, and will continue to comply fully, with the
Employee Retirement Income Security Act of 1974, as amended and all rules and
regulations adopted thereunder or pursuant thereto. The Debtor continuously
represents and warrants to the Bank that all Collateral consisting of goods has
been and will continue to be produced in compliance with the requirements of the
Fair Labor Standards Act, including Sections 206 and 207 thereof, and will
immediately notify Bank if Debtor has any reason to believe otherwise.
c. If any of the Debtor's Accounts or General Intangibles arises
out of a contract with the United States or any department, agency or
instrumentality thereof, the Debtor will immediately notify the Bank thereof in
writing and execute any instruments and take any steps required by the Bank in
order that the security interest of the Bank hereunder in the Debtor's General
intangibles under such contract and in all Accounts arising thereunder and in
the Proceeds thereof shall be perfected under the provisions of the Federal
Assignment of Claims Act.
d. If any of the Debtor's Accounts is or becomes evidenced by a
promissory note, a trade acceptance or any other instrument for the payment of
money, the Debtor will promptly deliver such instrument to the Bank
appropriately endorsed to the Bank's order. Regardless of the form of such
endorsement, the Debtor hereby waives presentment, demand, notice of dishonor,
protest and notice of protest and all other notices with respect thereto.
e. The Debtor will keep its Inventory and Equipment insured against
such casualties and in such amounts as the Bank shall require. All insurance
policies shall be written for the benefit of the Debtor as the insured, and
shall name the Bank as loss payee, and such policies shall be delivered to and
held by the Bank. All such policies of insurance shall provide for at least ten
days' advance notice in writing to the Bank of any cancellation thereof, and
shall insure Bank notwithstanding the act or neglect to act of Debtor. If the
Debtor fails to pay the premiums on any such insurance, the Bank shall have the
right (but shall be under no obligation) to pay such premiums for the Debtor's
account. The Debtor shall repay to the Bank any sums which the Bank shall have
so paid, together with interest thereon at the rate payable by the Debtor, at
the time of payment by the Bank, with respect to the Liabilities (or the highest
such rate, if there by more than one), but in no event less than six percent
(6%) per annum and the Debtor's liability to the Bank for such repayment with
interest shall be included in the Liabilities. The Debtor hereby assigns to the
Bank any return or unearned premium which may be due upon cancellation of any
such policies for any reason whatsoever and directs the insurers to pay to the
Bank any amounts so due. The Debtor's rights to receive payment of such return
or unearned premiums and the proceeds of any such insurance are included in the
Accounts and General Intangibles which are hereby subjected to a security
interest.
f. The Debtor will maintain the Equipment in good condition and
repair, and will pay the cost of repairs to or maintenance of the same and will
not permit anything to be done that may impair the value of the Equipment.
g. The Bank shall have the right to take possession of any
Inventory and the Debtor hereby assigns to the Bank its right of stoppage in
transit with respect to any Inventory. All costs of transportation, packing,
storage and insurance of any Inventory which the Bank may take into its
possession shall be promptly repaid to the Bank by the Debtor, together with
interest thereon at the rate payable by the Debtor, at the time of payment by
the Bank, with respect to the Liabilities (or the highest such rate, if there be
more than one), but in no event less than six percent (6%) per annum and the
Debtor's liability to the Bank for such repayment with interest shall be
included in the Liabilities. If any of the Debtor's Inventory is or becomes
represented by a Document of Title, the Bank may require that such Document of
Title be in such form as to permit the Bank or anyone to whom the Bank may
negotiate the same to obtain delivery of the Inventory represented thereby, and
that it be delivered into the possession of the Bank.
h. At such intervals as the Bank may require, the Debtor shall
submit to the Bank a schedule reflecting in form and detail satisfactory to the
Bank the quantities, cost and value of its Inventory and Equipment, and the
amounts of all its outstanding Accounts and the amount of the Accounts which are
Qualified Accounts and the value of all its General Intangibles. The Bank may
also require the Debtor to submit to the Bank copies of the invoices pertaining
to all or any of its Accounts and evidence of shipment of the Inventory the sale
or leasing of which have given rise to such Accounts.
i. The Debtor shall promptly notify the Bank of any event causing
deterioration, loss or depreciation in value of any substantial portion of the
Debtor's Inventory or Equipment and the amount of such loss or depreciation. The
Debtor shall permit the Bank's agents to have access to its Inventory and
Equipment from time to time, as requested by the Bank, for purposes of
examination, inspection, and appraisal thereof and verification of the Debtor's
records pertaining thereto. Upon demand by the Bank, in the case of Inventory
and upon default by the Debtor in the case of Equipment, the Debtor shall
assemble the Inventory and Equipment and make them available to the Bank at such
place as may be designated by the Bank which is reasonably convenient to both
parties. At the request of the Bank, the Debtor shall lease warehousing space in
the Debtor's own premises to the Bank for the purpose of taking any Inventory
into the custody of the Bank without removal thereof from such premises and will
erect such structures and post such signs as the Bank may require in order to
place such Inventory under the exclusive control of the Bank.
j. The Debtor will promptly notify the Bank (i) of any material
adverse change in the Debtor's financial condition or in the financial condition
of any Account Debtor or in the collectibility of any of its Accounts, (ii) of
all claims, rejections, returns and adjustments which may result in a reduction
of the liability of any Account Debtor or an Account, and (iii) of any Qualified
Account which shall cease for any reason to meet the specifications fixed hereby
for Qualified Accounts.
k. The Debtor warrants that the Debtor's chief executive office and
all of its offices where it keeps its records concerning the Collateral, all
locations at which it keeps its Inventory and Equipment and all locations at
which it maintains a place of business are listed in Section 18 hereof. Debtor
further warrants that Debtor has no plans for the removal of the Collateral to
any location not set forth in Section 18. The Debtor shall promptly notify the
Bank in writing of any change in the Debtor's name, chief executive office or
the location of the Debtor's records, of any
change in the location of the Collateral, of any change in the location of any
place of business and of the establishment of any new place of business. If any
of the Collateral or any of the Debtor's records concerning the Collateral are
at any time to be located on premises leased by the Debtor or on premises owned
by the Debtor, subject to a mortgage or other lien, the Debtor shall obtain and
deliver to the Bank, prior to the delivery of any Collateral or records
concerning the Collateral to said premises, an agreement in form satisfactory to
the Bank, waiving the landlord's or mortgagee's or lienholder's rights to
enforce any claim against the Debtor for moneys due under the lease, mortgage or
other lien by levy of distraint or other similar proceedings against the
Collateral or the Debtor's records concerning the Collateral and assuring the
Bank's ability to have access to the Collateral and the Debtor's records
concerning the Collateral in order to exercise its rights hereunder to take
possession thereof.
l. The Debtor shall pay to the Bank on demand, with interest at the
rate payable by the Debtor, at the time of payment by the Bank, with respect to
the Liabilities (or the highest such rate, if there be more than one), but in no
event less than six percent (6%) per annum, any and all expenses (including
reasonable attorney's fees and legal expenses, filing fees, searches, and
termination costs), which may have been incurred by the Bank (i) to enforce
payment of any Account or to enforce any General Intangibles or to enforce any
of the Liabilities, whether as against an Account Debtor, the Debtor or any
guarantor or surety of any Account Debtor or of the Debtor; or (ii) in the
enforcement, prosecution or defense of any action growing out of or connected
with the subject matter of this Agreement, the Liabilities, the Collateral or
any of the Bank's rights therein or thereto; or (iii) in connection with the
custody, preservation, use, operation, preparation for sale or sale of any
Collateral; or (iv) in connection with preparation and completion of this
Agreement and any and all related agreements and consummation of the financing
arrangements described herein and any modification or extension thereof; or (v)
with respect to the enforcement, protection or preservation from time to time of
the Bank's rights under this Agreement or with respect to the Collateral. The
Debtor's liability to the Bank for such repayment with interest shall be
included in the Liabilities and is secured by the Collateral.
m. The Debtor shall provide the Bank with all financial statements
or other financial documents as the Bank may from time to time require. The
Debtor further covenants and agrees to execute from time to time any and all
agreements and documents (including financing statements) which the Bank may
request in order to perfect its lien on the Collateral and otherwise carry out
the provisions of this Agreement. The Debtor further authorizes the Bank to file
a carbon, photographic or other reproduction of this Agreement or a financing
statement previously filed under this Agreement as a financing statement in any
jurisdiction. If certificates of title are issued or outstanding with respect to
any of the Collateral, the Debtor will cause the security interest of the Bank
to be properly noted thereon and will promptly deliver such certificates to the
Bank.
n. Without the prior written consent of the Bank, the Debtor shall
not sell or otherwise dispose of its Equipment and, except in the ordinary
course of business, the Debtor shall not sell or dispose of its Inventory.
6. ENVIRONMENTAL MATTERS.
a. As used in this Agreement, the following terms shall have the
following meanings: (i) "Environmental Laws" means any and all applicable
federal, state and local
environmental laws, rules and regulations whether now existing or hereafter
enacted together with all amendments, modifications and supplements thereof; and
(ii) "Hazardous Materials" means any contaminants, hazardous substances,
regulated substances, or hazardous wastes which may be the subject of liability
pursuant to any Environmental Law.
b. The Debtor represents and warrants that no property owned or
leased by the Debtor or any subsidiary of the Debtor is in violation of any
Environmental Laws, no Hazardous Materials are present on said property and
neither the Debtor nor any subsidiary of the Debtor has been identified in any
litigation, administrative proceeds or investigation as a responsible party for
any liability under any Environmental Laws.
c. The Debtor shall not use, generate, treat, store, dispose of or
otherwise introduce, or permit any subsidiary to use, generate, treat, store,
dispose of or otherwise introduce, any Hazardous Materials into or on any
property owned or leased by the Debtor, and will not, and will not permit any
subsidiary to, cause, suffer, allow or permit anyone else to do so, except in an
environmentally safe manner through methods which have been approved by and meet
all of the standards of the federal Environmental Protection Agency and any
other federal, state or local agency with authority to enforce Environmental
Laws. The Debtor hereby agrees to indemnify, reimburse, defend and hold harmless
the Bank and its directors, officers, agents and employees ("Indemnified
Parties") for, from and against all demands, liabilities, damages, costs,
claims, suits, actions, legal or administrative proceedings, interest, losses,
expenses and reasonable attorney's fees (including any such fees and expenses
incurred in enforcing this indemnity) asserted against, imposed on or incurred
by any of the Indemnified Parties, directly or indirectly pursuant to or in
connection with the application of any Environmental Law, to acts or omissions
occurring at any time on or in connection with any property owned or leased by
the Debtor or any subsidiary of the Debtor or any business conducted thereon.
7. DEFAULT. The Debtor shall be in default hereunder upon the
occurrence of any of the following events:
a. The nonpayment when due of any amount payable on any of the
Liabilities by the Debtor or by any other person liable, either absolutely or
contingently, for payment, including endorsers, guarantors and sureties (each
such person is referred to as a "Obligor");
b. If the Debtor or any Obligor has failed to observe or perform
any existing or future agreement of any nature whatsoever with the Bank (other
than those described in clause (a) above);
c. If any representation, warranty, certificate, financial
statement or other information made or given by the Debtor or any Obligor to the
Bank is materially incorrect or misleading;
d. If the Debtor or any Obligor shall become insolvent or make an
assignment for the benefit of creditors or if any petition shall be filed by or
against the Debtor or any Obligor under any bankruptcy or insolvency law;
e. The entry of any judgment against the Debtor or any Obligor
which remains unsatisfied for 15 days or the issuance of any attachment, tax
lien, levy or garnishment against any property of material value in which the
Debtor or any Obligor has an interest;
f. If any attachment, levy, garnishment or similar legal process is
served upon the Bank as a result of any claim against the Debtor or any Obligor
or against any property of the Debtor or any Obligor;
g. The dissolution, merger, consolidation or change in control (as
control is defined in Rule 12b-2 under the Securities Exchange Act of 1934) of
any Debtor which is a corporation or partnership, or the sale or transfer of any
substantial portion of any Debtor's assets, or if any agreement for such
dissolution, merger, or consolidation, change in control, sale or transfer is
entered into without the written consent of Bank;
h. The death of any Debtor or Obligor who is a natural person;
i. If the Bank determines reasonably and in good faith that an
event has occurred or a condition exists which has had, or is likely to have, a
material adverse effect on financial condition or creditworthiness of the Debtor
or any Obligor;
j. If the Debtor or any Obligor shall fail to remit promptly when
due to the appropriate government agency or authorized depository, any amount
collected or withheld from any employee of the Debtor for payroll taxes, Social
Security payments or similar payroll deductions;
k. If any Obligor shall attempt to terminate or disclaim such
Obligor's liability for the Liabilities;
l. If the Bank shall reasonably and in good faith determine and
notify the Debtor that any collateral is insufficient as to quality or quantity;
m. If the debtor shall fail to pay when due any material
indebtedness for borrowed money other than to the Bank; or
n. If the Debtor shall be notified of the failure of the Debtor or
any Obligor to provide such financial and other information promptly when
reasonably requested by the Bank.
8. ACCELERATION AND ENFORCEMENT RIGHTS. Whenever the Debtor shall be
in default as aforesaid, (i) the Bank may declare the entire unpaid amount of
such of the Liabilities as are not then due and payable to become immediately
due and payable without notice to or demand on any Obligor; and (ii) the Bank
may at its option exercise from time to time any or all rights and remedies
available to it under the Uniform Commercial Code or otherwise available to it,
including the right to collect, receipt for, settle, compromise, adjust, xxx
for, foreclose or otherwise realize upon any of the Collateral and to dispose of
any of the Collateral at public or private sale(s) or other proceedings, with or
without advertisement, and the Debtor agrees that the Bank or its nominee may
become the purchaser at any such sale(s). Bank shall have the unconditional
right to retain and obtain the full benefit of all Collateral until all
Liabilities of the Debtor to the Bank are paid and satisfied in
full. If any notification of intended disposition of the Collateral is required
by law, such notice shall be deemed reasonable if mailed at least 7 days before
such disposition addressed to the Debtor at its Address shown herein. If any
Note secured hereby is payable on demand, Bank's right to require payment shall
not be restricted or impaired by the absence, non-occurrence or waiver of an
Event of Default, and it is understood that if such Note is payable on demand,
the Bank may require payment at any time.
9. APPLICATION OF COLLATERAL. The Proceeds of any Collateral received
by the Bank at any time before or after default, whether from sale of Collateral
or otherwise, may be applied to the payment in full or in part of such of the
Liabilities and in such order as the Bank may elect. The Debtor, to the extent
that it has any right, title or interest in any of the Collateral, authorized
Bank to proceed against the Collateral in any order that Bank may determine and
waives and releases any right to require the Bank to collect any of the
Liabilities from any source other than from the Collateral under any theory of
marshaling of assets, or otherwise, and specifically authorizes the Bank to
proceed against any of the Collateral in which the Debtor has a right, title or
interest with respect to any of the Liabilities in any manner that the Bank may
determine.
10. POWER OF ATTORNEY. The Debtor does hereby appoint any officer or
agent of the Bank as the Debtor's true and lawful attorney-in-fact, with power
to endorse the name of the Debtor upon any notes, checks, drafts, money orders,
or other instruments of payment or Collateral that may come into possession of
Bank; to sign and endorse the name of the Debtor upon any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
Account Debtors, assignments, verifications and notices in connection with
Accounts, and any instruments or documents relating thereto or to the Debtor's
rights therein; and to give written notice to such office and officials of the
United States Postal Service to effect such change or changes of address so that
all mail addressed to the Debtor may be delivered directly to Bank (Bank will
return all mail not related to the Liabilities or the Collateral); granting unto
Debtor's said attorney full power to do any and all things necessary to be done
with respect to the above transactions as fully and effectually as Debtor might
or could do, and hereby ratifying all that said attorney shall lawfully do or
cause to be done by virtue hereof. This power of attorney shall be irrevocable
for the term of this Agreement and all transactions hereunder.
11. TERM. The term of this Agreement shall commence with the date
hereof and end on the date when, after receipt of written notice of the
termination of this Agreement from either party to the other, which notice may
be given by either party at any time, there shall be no Liabilities outstanding.
12. SUCCESSORS AND ASSIGNS. All provisions herein shall inure to, and
become binding upon, the heirs, executors, administrators, successors,
representatives, receivers, trustees and assigns of the parties, provided,
however, that this Agreement shall not be assignable by the Debtor without the
prior written approval of the Bank.
13. CONFESSION OF JUDGMENT. The Debtor hereby irrevocably authorizes
and empowers any attorney of any court of record to appear for and confess
judgment against the Debtor for the unpaid amount of the Liabilities as
evidenced by an affidavit signed by an officer of the Bank setting forth the
amount then due, plus 15% thereof, but no less than $5,000, as an attorney's
commission, with costs of suit, release of errors, and without right of appeal.
If a copy hereof, verified by an affidavit, shall have been filed in said
proceeding, it shall not be necessary to file the original as a warrant of
attorney. The Debtor waives the right to any stay of execution and the benefit
of all exemption laws now or hereafter in effect. No single exercise of the
foregoing warrant and power to confess judgment shall be deemed to exhaust the
power, whether or not any such exercise shall be held by any court to be
invalid, voidable, or void, but the power shall continue undiminished and may be
exercised from time to time as often as the Bank shall elect, until all
Liabilities have been paid in full.
14. THE DEBTOR'S AUTHORITY AND CAPACITY, ETC. The Debtor represents
and warrants that the Bank is obtaining and shall maintain at all times a first
lien on all of the Collateral. If the Debtor is a corporation, the Debtor
further represents and warrants that it is duly organized, validly in existence
and in good standing in its state of incorporation and any other state where the
nature or extent of its business requires qualification, that the execution and
performance by the Debtor of this Agreement and any related agreements is
authorized by the Debtor's Board of Directors and does not violate the Articles
of Incorporation or By-Laws of the Debtor or any other Agreement or contract by
which the Debtor is bound. The Debtor represents and warrants that this
Agreement is the legal, valid and binding obligation of the Debtor enforceable
against the Debtor in accordance with its terms.
15. CONSENT TO JURISDICTION AND VENUE. IN ANY LEGAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, EACH UNDERSIGNED PARTY
HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED IN ANY COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA WHERE
THE BANK MAINTAINS AN OFFICE AND AGREES NOT TO RAISE ANY OBJECTION TO SUCH
JURISDICTION OR TO THE LAYING OR MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING
IN SUCH COUNTY. EACH UNDERSIGNED PARTY AGREES THAT SERVICE OF PROCESS IN ANY
SUCH PROCEEDING MAY BE DULY EFFECTED UPON IT BY MAILING A COPY THEREOF, BY
REGISTERED MAIL, POSTAGE PREPAID, TO EACH UNDERSIGNED PARTY.
16. WAIVER OF JURY TRIAL. EACH UNDERSIGNED PARTY HEREBY WAIVES, AND
THE BANK BY ITS ACCEPTANCE HEREOF THEREBY WAIVES, TRIAL BY JURY IN ANY LEGAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE BANK TO ENTER INTO, ACCEPT OR RELY UPON THIS
AGREEMENT.
17. MISCELLANEOUS. The construction and interpretation of this
Agreement and all agreements shall be governed by the laws of the Commonwealth
of Pennsylvania. No modification hereof shall be binding or enforceable unless
in writing and signed by the party against whom enforcement is sought. If any
provision of this Agreement is determined to be unenforceable or invalid, such
determination shall not affect or impair the remaining provisions of this
Agreement. No rights are intended to be created hereunder for the benefit of any
third party beneficiary hereof. The
individual signatory(ies) on behalf of the Debtor represents that he (they) is
(are) authorized to execute this Agreement on behalf of the Debtor. This
Agreement supplements the Debtor's obligations under any promissory notes or
separate agreements with the Bank.
18. LOCATIONS OF DEBTOR. The Debtor represents and warrants that the
following addresses (together with any additional addresses which may be shown
on any attached schedule) correctly set forth all of the locations where the
Debtor maintains a place of business, its records or the Collateral.
Chief Executive Office: Xxx Xxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, XX 00000
Other Locations:
19. NAME OF DEBTOR. The Debtor represents and warrants that the name
of the Debtor shown on this Agreement is the correct, full legal name of the
Debtor and that the Debtor has not at any time changed its name, identify or
corporate structure, been the surviving corporation in a merger, acquired any
other business, or engaged in business under an assumed name or trade name
except as set forth below.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto under seal and intending to be legally bound on the day and year
first above written.
ImageMax, Inc. Corestates Bank, N.A.
-------------------------------------------
(Name of Corporate or Partnership Director)
By /s/ Xxxxx X. Xxxxx By /s/ Xxxxxxx Xxxxxxxx
----------------------------- ------------------------
(Authorized Signature) (Signature)
Xxxxx X. Xxxxx, Treasurer Xxxxxxx Xxxxxxxx, Vice President
------------------------- --------------------------------
(Print Name and Title) (Print Name and Title)
0000 Xxxxxx Xxxx
--------------------------------
(Number, Street)
Plymouth Meeting, PA
--------------------------------
(City)
(Seal)
----------------------------------
(Signature of Individual Debtor)
----------------------------------------
(Print Name of Individual Debtor)
----------------------------------------------
(Print Trade Style or Fictitious Name, if any)
