EXHIBIT 10(f)
SECURITY AGREEMENT
Howtek, Inc. a Delaware corporation with a principal place of business at 00
Xxxx Xxx. (hereinafter called the "debtor"), subject to the terms and conditions
hereof, hereby assigns, mortgages, pledges, transfers and grants a continuing
security interest to ______________ (hereinafter called the "Secured Party"), in
all of the Debtor's right and interest in and to all accounts, contract rights,
rights to payment, inventory, equipment, intangible property, patents and other
property or rights of any kind. The property described above shall hereafter be
collectively referred to as the "Collateral."
The Collateral is pledged and mortgaged and a security interest therein is
granted to the Secured Party, as security for payment of all sums due under
certain Secured Term Note (the "Note") of the Debtor in the original aggregate
principal amount of $________ (hereinafter referred to as the "obligations")
issued by the Debtor to ___________, dated as of _____________.
1. Covenants Re Collateral.
(a) The Debtor will join with the Secured Party in executing appropriate
financing statements under the Uniform Commercial Code (the "Code") and will at
all times and from time to time, at the request of the Secured Party, do, make,
execute and deliver all such additional and further acts, things, deeds,
assurances, instruments and financing statements as the Secured Party may
require, to vest more completely and assure to the Secured Party its rights
hereunder in or to the Collateral, including without limitation, the
preparation, execution and delivery of any additional financing statements and
security agreements extending to any Collateral which is, or may subsequently
become located outside the State of New Hampshire. The Debtor hereby appoints
the Secured Party as its authorized agent and attorney-in-fact to execute and
file appropriate financing statements, continuation statements and termination
statements in each and every jurisdiction in which the Collateral is or may be
located, now or in the future.
(b) The Secured Party shall be under no obligation to take steps necessary
to preserve its rights in any Collateral against other parties but may do so at
its option and at the expense of the Debtor. At its option and upon prior
written notice to the Debtor, the Secured Party may discharge any taxes, liens,
security interests or other encumbrances to which any Collateral is at any time
subject, and may, upon the failure of the Debtor so to do, purchase insurance on
any Collateral and pay for the preservation thereof, and the Debtor agrees to
reimburse the Secured Party on demand for any payments made or expenses incurred
by the Secured Party pursuant to the foregoing authorization. The Secured Party
may, at any time after default hereunder, take control of the Collateral to
which the Secured Party is entitled hereunder or under applicable law.
2. Events of Default.
If any of the following circumstances or events shall occur and be continuing
(individually, an "Event of Default"):
(a) failure by the Debtor to pay the principal on the Note when due by
its terms, or any installment thereof, for ten (10) after notice of any
default in payment has been made in writing to the Debtor by the Secured
Party; or
(b) the cessation of the business of the Debtor as a going concern; or
(c) the failure of the Debtor to perform or observe any other term,
covenant or agreement contained in this Agreement, or the Note on its part
to be performed or observed and any such failure remains unremedied for
thirty (30) days after notice of such breach has been provided to the
Debtor; or
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(d) the Debtor's ability to pay the Obligations shall be impaired
because the Debtor shall be involved in financial difficulties as evidenced
(i) by its admitting in writing its inability to pay its debts generally as
they become due; (ii) by its commencement of a voluntary case under Title
11 of the United States Code, the Federal Bankruptcy Code, as from time to
time in effect, or by its authorizing, by appropriate proceedings of its
Board of Directors or other government body, the commencement of such
voluntary case; (iii) by its filing an answer or other pleading admitting
or failing to deny the material allegations of a petition filed against it
commencing provided, or by its failing to controvert timely the material
allegations of any such petition; (iv) by the entry of an order of relief
in any involuntary case commenced under such laws, except that the Debtor
shall have a reasonable period, not to exceed ninety (90) days, to have
such order revoked; (v) by its otherwise seeking relief as a debtor under
any applicable law, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors, or by its consenting to or acquiescing in such relief;
(vi) by the entry of an order by a court of competent jurisdiction (a)
finding it to be bankrupt or insolvent; (b) ordering or approving its
liquidation, reorganization or any modification or alteration of the rights
of its creditors, or (c) assuming custody of, or appointing a receiver or
other custodian for, all or a substantial part of its property or assets;
or (vii) by its making an assignment for the benefit of, or entering into a
composition with, its creditors, or appointing or consenting to the
appointment of a receiver or other custodian for all or a substantial part
of its property;
then, and in any such event, the Secured Party may, by notice to the
Debtor, declare the entire unpaid principal amount of the Note, all
interest accrued and unpaid thereon and all other amounts payable under
this Agreement to be forthwith due and payable, whereupon the Note, all
such accrued interest shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Debtor.
3. Annulment of Defaults.
Section 2 above is subject to the condition that, if at any time after the
principal of any of the Note or the Obligations shall have become due and
payable, and before any judgment or decree for the payment of the moneys so due,
or any thereof, shall have been entered, all arrears of interest upon all the
Note and all other sums payable under the Note or this Agreement (except the
principal of the Note which by such declaration shall have become payable) shall
have been duly paid, and every other default shall have been made good or cured,
then and in every such case the Secured Party shall, by written instrument filed
with the Debtor, rescind and annul such declaration and its consequences; but no
such rescission or annulment shall extend to or affect any subsequent default or
Event of Default or impair any right consequent thereon.
4. Rights and Remedies on Default.
Upon the occurrence of any event of Default, and at any time thereafter, the
Secured Party shall have the rights and remedies of a secured party under the
Code in addition to the rights and remedies provided herein or in any other
instrument or agreement executed by Debtor. Wherever notification with respect
to the sale or other disposition of Collateral is required by law, such
notification of the time and place of public sale, or of the date after which a
private sale or other intended disposition is to be made, shall be deemed
reasonable if given to the Debtor at least twenty (20) days before the time of
such public sale, or the date after which any such private sale or other
intended disposition is to be made, as the case may be. Expenses of retaking,
holding, preparing for sale, selling or the like with respect to the Collateral,
shall include the Secured Party's reasonable attorneys' fees and the legal
expenses.
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5. General Intangibles and Names.
Upon the occurrence of any Event of Default or at any time thereafter, on
request of the Secured Party, the Debtor shall execute and deliver to such
Secured Party any and all instruments as may be required to further vest in the
Secured Party the right to the Collateral.
6. Waiver of Demand.
DEBTOR WAIVES ANY AND ALL RIGHTS THAT IT MAY HAVE TO NOTICE OF JUDICIAL HEARING
IN ADVANCE OF THE ENFORCEMENT OF ANY OF THE SECURED PARTY'S RIGHTS HEREUNDER,
INCLUDING, WITHOUT LIMITATION THE SECURED PARTY'S RIGHTS FOLLOWING AN EVENT OF
DEFAULT TO TAKE IMMEDIATE POSSESSION OF THE COLLATERAL AND EXERCISE ITS RIGHTS
WITH RESPECT THERETO. With respect both to the Obligations and the Collateral,
the Debtor assents to any extension or postponement of the time of payment of
any other indulgence, to any substitution, exchange or release of 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, adjusting or discharge of any thereof, all in such
manner and at such time or times as the Secured Party may deem advisable.
7. General.
Any condition or restriction hereinabove imposed with respect to the Debtor may
be waived, modified or suspended by the Secured Party but only on the Secured
Party's consent in writing and only as so expressed in such writing and not
otherwise. The Secured Party shall not be deemed to have waived any of its other
rights hereunder or under any other agreement, instrument or paper signed by
Debtor unless such waiver be in writing and signed by the Secured Party. No
delay or omission on the part of the Secured Party in exercising any right shall
operate as a waiver of such right or any other right. 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. The Secured Party's rights and remedies, whether
evidenced hereby or by any other agreement, instrument or paper, shall be
cumulative and may be exercised separately or concurrently. Any demand upon, or
notice to, Debtor that the Secured Party may elect to give shall be effective
when deposited in the mails by first class mail, postage prepaid, addressed to
Debtor at the address shown at the beginning of this Security Agreement or as
modified by any notice given after the date hereof. If any term or condition
hereof shall be invalid or unenforceable to any extent or in any application,
then the remainder hereof shall not be affected thereby, and each and every term
and condition hereof shall be void and enforced to the fullest extent and in the
broadest application permitted by law. Whenever there are no Obligations
outstanding hereunder and no commitment on the part of any Secured Party under
any agreement which might give rise to any Obligation, the Debtor may then
terminate this Agreement upon written notice to the Secured Party. This
Agreement and all rights and obligation hereunder, including matters of
construction, validity and performance, shall be governed by the internal laws
of the State of New Hampshire.
IN WITNESS WHEREOF, this Security Agreement is executed as an instrument under
seal by each of the undersigned Debtor and Secured Party as of this ____ day of
____________.
Howtek, Inc.
/s/ W. Xxxxx Xxxx Witness: /s/ Xxxxxxxxx Xxxxxxx
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By: W. Xxxxx Xxxx, President & CEO
/s/ Witness: /s/
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Secured Party
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