EXHIBIT 10.7
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is entered into as of
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December 20, 1999 by and among PARTMINER, INC., a New York corporation (the
"Company") and the Company's subsidiaries indicated on the signature pages
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hereto (together with the Company, each individually an "Obligor" and
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collectively the "Obligors"), and HAIC INC., a Delaware corporation (the
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"Lender").
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RECITALS
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WHEREAS, pursuant to that certain Credit Agreement dated as of the date hereof
(as amended, modified, extended, renewed or replaced from time to time, the
"Credit Agreement"), among the Obligors and the Lender, the Lender has agreed to
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make a Loan upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lender to make the Loan under the Credit
Agreement that the Obligors shall have executed and delivered this Security
Agreement to the Lender.
NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definitions.
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(a) Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the
Credit Agreement, and the following terms which are defined in
the Uniform Commercial Code in effect in the State of New York on
the date hereof are used herein as so defined: Accounts and
Inventory.
(b) In addition, the following terms shall have the following
meanings:
"Secured Obligations": the collective reference to the following:
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(a) The prompt performance and observance by the Obligors of all
obligations of the Obligors under the Credit Agreement, the Note,
this Security Agreement and the other Loan Documents to which the
Obligor is a party; and
(b) All other indebtedness, liabilities and obligations of any
kind or nature, now existing or hereafter arising, owing from any
Obligor to the Lender under the Loan Documents, howsoever
evidenced, created, incurred or acquired,
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whether primary, secondary, direct, contingent, or joint and
several, including, without limitation, all obligations and
liabilities reasonably incurred in connection with collecting and
enforcing the Secured Obligations.
2. Grant of Security Interest in the Collateral. To secure the
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prompt payment and in full when due, whether by lapse of time,
acceleration or otherwise, of the Secured Obligations, each Obligor
hereby grants to the Lender, a continuing security interest in, any
and all right, title and interest of such Obligor in and to the
following, whether now owned or existing or owned, acquired, or
arising hereafter (collectively, the "Collateral"):
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(a) all Accounts
(b) all Inventory
(c) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks, and
related data processing software (owned by such Obligor
or in which it has an interest) that at any time
evidence or contain information directly relating to
the Accounts and Inventory or are otherwise necessary
or helpful in the collection thereof or realization
thereupon; and
(d) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing.
The Obligors and the Lender, hereby acknowledge and agree that the security
interest created hereby in the Collateral constitutes continuing collateral
security for all of the Secured Obligations, whether now existing or hereafter
arising.
3. Provisions Relating to Accounts.
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(a) Anything herein to the contrary notwithstanding, each of the
Obligors shall remain liable under each of the Accounts to
observe and perform all the conditions and obligations to be
observed and performed by it thereunder, except as it otherwise
may determine in its reasonable business judgment, all in
accordance with the terms of any agreement giving rise to each
such Account. The Lender shall not have any obligation or
liability under any Account (or any agreement giving rise
thereto) by reason of or arising out of this Security Agreement
or the receipt by the Lender of any payment relating to such
Account pursuant hereto, nor shall the Lender be obligated in any
manner to perform any of the obligations of an Obligor under or
pursuant to any Account (or any agreement giving rise thereto),
to make any payment, to make any inquiry as to the nature or the
sufficiency of
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any payment received by it or as to the sufficiency of any
performance by any party under any Account (or any agreement
giving rise thereto), 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 it or to which it may
be entitled at any time or times.
(b) Once during each calendar month or at any time after the
occurrence and during the continuation of an Event of Default,
the Lender shall have the right, but not the obligation, to make
test verifications of the Accounts in any manner and through any
medium that it reasonably considers advisable, and the Obligors
shall furnish all such assistance and information as the Lender
may reasonably require in connection with such test
verifications. Upon the occurrence of an Event of Default and
during the continuation thereof, the Lender in its own name or in
the name of others may reasonably communicate with account
debtors on the Accounts to verify with them to the Lender's
reasonable satisfaction the existence, amount and terms of any
Accounts.
4. Representations and Warranties. Each Obligor hereby represents
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and warrants to the Lender that: (provided that such representations
and warranties with respect to IQXpert Holdings Inc., IQXpert Inc. and
ExtraTime Technologies Inc. shall be subject to subparagraph (f)
below)
(a) Chief Executive Office; Books & Records. As of the date
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hereof, each Obligor's chief executive office and chief place of
business is (and for the prior four months have been) located at
the locations set forth on Schedule 1 hereto and each Obligor
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keeps its primary books and records at such locations.
(b) Location of Collateral. As of the date hereof, the location
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of all the Accounts and Inventory owned by each Obligor is as
shown on Schedule 1 hereto.
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(c) Ownership. Each Obligor is the legal and beneficial owner of
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its Collateral and has the right to pledge, sell, assign or
transfer the same. As of the date hereof, each Obligor's legal
name is as shown in this Security Agreement and no Obligor has in
the past four months changed its name.
(d) Security Interest/Priority. This Security Agreement creates
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a valid security interest in favor of the Lender, in the
Collateral of such Obligor and, when properly perfected by
filing, shall constitute a valid perfected security interest in
such Collateral, free and clear of all Liens (except for
Permitted Liens).
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(e) Accounts. (i) Each Account of the Obligors and the papers
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and documents relating thereto are genuine and in all material
respects what they purport to be, (ii) each Account arises out of
(A) a bona fide sale of goods sold and delivered by such Obligor
(or is in the process of being delivered) or (B) services
theretofore actually rendered by such Obligor to, the account
debtor named therein and (iii) no Account of an Obligor is
evidenced by any Instrument or Chattel Paper.
(f) Exceptions. Anything herein to the contrary notwithstanding,
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if any representation and warranty in this Section 4 with respect
to IQXpert Holdings Inc., IQXpert Inc. or ExtraTime Technologies
Inc. would have been false or incorrect if made on November 30,
1999, then Obligors shall not be deemed to be in breach of such
representation or warranty with respect to IQXpert Holdings Inc.,
IQXpert Inc. or ExtraTime Technologies, Inc. on or after the date
hereof by reason of any of the facts or circumstances that would
have made such representation and warranty false or incorrect on
November 30, 1999.
5. Covenants. Each Obligor covenants that, so long as any of the
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Secured Obligations remain outstanding or any Loan Document is in
effect, such Obligor shall:
(a) Other Liens. Defend the Collateral against the claims and
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demands of all other parties claiming an interest therein except
any Person claiming by, through or under the Lender, use
commercial best efforts to keep the Collateral free from all
Liens (except for Permitted Liens), and not sell, exchange,
transfer, assign, lease or otherwise dispose of the Collateral or
any interest therein, except that prior to the occurrence of an
Event of Default, the Borrowers may sell Inventory in the
ordinary course of the Borrowers business.
(b) Instruments/Chattel Paper. If any amount payable under or in
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connection with any of the Collateral shall be or become
evidenced by any Instrument or Chattel Paper, promptly deliver
such Instrument or Chattel Paper to the Lender, duly indorsed in
a manner satisfactory to the Lender, to be held as Collateral
pursuant to this Security Agreement.
(c) Change in Location. Not, without providing reasonable
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written notice to the Lender and without filing such amendments
to any previously filed or additional financing statements as the
Lender may reasonably require, (a) change the location of its
chief executive office and chief place of business (as well as
its principal books and records) from the locations set forth on
Schedule 1 hereto, (b) change the location of a material amount
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of its Collateral from the locations set forth for such Obligor
on Schedule 1 hereto, or (c) change its name, be party to a
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merger, consolidation or other change in structure that would
require amendment to any previously filed financing statement.
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(d) Perfection of Security Interest. Execute and deliver to the
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Lender such agreements, assignments or instruments (including
affidavits, notices, reaffirmations and amendments and
restatements of existing documents, as the Lender may reasonably
request) and do all such other things as the Lender may
reasonably deem necessary or appropriate (i) to assure to the
Lender its security interests hereunder, including such financing
statements (including renewal statements) or amendments thereof
or supplements thereto or other instruments as the Lender may
from time to time reasonably request in order to perfect and
maintain the security interests granted hereunder in accordance
with the UCC, (ii) to consummate the transactions contemplated
hereby and (iii) to otherwise protect and assure the Lender of
its rights and interests hereunder. To that end, each Obligor
agrees that the Lender may file one or more financing statements
disclosing the Lender's security interest in any or all of the
Collateral of such Obligor without, to the extent permitted by
law, such Obligor's signature thereon, and further each Obligor
also hereby irrevocably makes, constitutes and appoints the
Lender, its nominee or any other person whom the Lender may
designate, as such Obligor's attorney in fact with full power and
for the limited purpose to sign in the name of such Obligor any
such financing statements, or amendments and supplements to
financing statements, renewal financing statements, notices or
any similar documents which in the Lender's reasonable discretion
would be necessary, appropriate or convenient in order to perfect
and maintain perfection of the security interests granted
hereunder, such power, being coupled with an interest, being and
remaining irrevocable so long as the Credit Agreement is in
effect or any amounts payable thereunder or under any other Loan
Document, shall remain outstanding. Each Obligor hereby agrees
that a carbon, photographic or other reproduction of this
Security Agreement or any such financing statement is sufficient
for filing as a financing statement by the Lender without notice
thereof to such Obligor wherever the Lender may in its sole
discretion desire to file the same. In the event for any reason
the law of any jurisdiction other than New York becomes or is
applicable to the Collateral of any Obligor or any part thereof,
or to any of the Secured Obligations, such Obligor agrees to
execute and deliver all such instruments and to do all such other
things as the Lender in its sole discretion reasonably deems
necessary or appropriate to preserve, protect and enforce the
security interests of the Lender under the law of such other
jurisdiction (and, if an Obligor shall fail to do so promptly
upon the reasonable request of the Lender, then the Lender may
execute any and all such requested documents on behalf of such
Obligor pursuant to the power of attorney granted hereinabove).
If any Collateral is in the possession or control of an Obligor's
agents and the Lender so requests, such Obligor agrees to notify
such agents in writing of the Lender's security interest therein
and, upon the Lender's request, instruct them to hold all such
Collateral for the Lender's account and subject to the Lender's
instructions. Each Obligor agrees to xxxx its
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books and records to reflect the security interest of the Lender
in the Collateral.
(e) Treatment of Accounts. Not grant or extend the time for
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payment of any Account, or compromise or settle any Account for
less than the full amount thereof, or release any person or
property, in whole or in part, from payment thereof, or allow any
credit or discount thereon, other than as normal and customary in
the ordinary course of an Obligor's business.
(f) Insurance. Insure, repair and replace the Collateral of such
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Obligor as set forth in the Credit Agreement. All insurance
proceeds shall be subject to the security interest of the Lender
hereunder.
6. Advances by Lenders. On failure of any Obligor to materially
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perform any of the covenants and agreements contained herein, the
Lender may, upon written notice to Obligor and after a reasonable
opportunity to cure (unless, in the Lender's reasonable judgment, a
cure period could have a detrimental effect on the value of the
security) at its sole option and in its sole discretion, perform the
same and in so doing may expend such sums as the Lender may reasonably
deem advisable in the performance thereof, including, without
limitation, the payment of any insurance premiums, the payment of any
taxes, a payment to obtain a release of a Lien or potential Lien,
expenditures made in defending against any adverse claim and all other
expenditures which the Lender may make for the protection of the
security hereof or which may be compelled to make by operation of law.
All such sums and amounts so expended shall be repayable by the
Obligors on a joint and several basis promptly upon timely notice
thereof and demand therefor, shall constitute additional Secured
Obligations and shall bear interest from the date said amounts are
expended at the Default Rate. No such performance of any covenant or
agreement by the Lender on behalf of any Obligor, and no such advance
or expenditure therefor, shall relieve the Obligors of any default
under the terms of this Security Agreement or the other Loan
Documents. The Lender may make any payment hereby authorized in
accordance with any xxxx, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged
without inquiry into the accuracy of such xxxx, statement or estimate
or into the validity of any tax assessment, sale, forfeiture, tax
lien, title or claim except to the extent such payment is being
contested in good faith by an Obligor in appropriate proceedings and
against which adequate reserves are being maintained in accordance
with GAAP.
7. Events of Default.
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The occurrence of an event which under the Credit Agreement would constitute an
Event of Default shall be an Event of Default hereunder (an "Event of Default").
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8. Remedies.
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(a) General Remedies. Upon the occurrence of an Event of Default
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and during continuation thereof, and after written notice by the
Lender to the Obligors, the Lender shall have, in addition to the
rights and remedies provided herein, in the Loan Documents, or by
law (including, but not limited to, the rights and remedies set
forth in the Uniform Commercial Code of the jurisdiction
applicable to the affected Collateral), the rights and remedies
of a secured party under the UCC (regardless of whether the UCC
is the law of the jurisdiction where the rights and remedies are
asserted and regardless of whether the UCC applies to the
affected Collateral), and further, the Lender may, with or
without judicial process or the aid and assistance of others, (i)
enter on any premises on which any of the Collateral may be
located and, without resistance or interference by the Obligors,
take possession of the Collateral, (ii) dispose of any Collateral
on any such premises, (iii) require the Obligors to assemble and
make available to the Lender at the expense of the Obligors any
Collateral at any place and time designated by the Lender which
is reasonably convenient to both parties, (iv) remove any
Collateral from any such premises for the purpose of effecting
sale or other disposition thereof, and/or (v) without demand and
without advertisement, notice, hearing or process of law, all of
which each of the Obligors hereby waives to the fullest extent
permitted by law, at any place and time or times, sell and
deliver any or all Collateral held by or for it at public or
private sale, by one or more contracts, in one or more parcels,
for cash, upon credit or otherwise, at such prices and upon such
terms as the Lender deems advisable, in its sole discretion
(subject to any and all mandatory legal requirements). In
addition to all other sums due the Lender with respect to the
Secured Obligations, the Obligors shall pay the Lender all
reasonable documented costs and expenses incurred by the Lender
including, but not limited to, reasonable attorneys' fees and
court costs, in obtaining or liquidating the Collateral, in
enforcing payment of the Secured Obligations, or in the
prosecution or defense of any action or proceeding by or against
the Lender or the Obligors concerning any matter arising out of
or connected with this Security Agreement, any Collateral or the
Secured Obligations, including, without limitation, any of the
foregoing arising in, arising under or related to a case under
the Bankruptcy Code. To the extent the rights of notice cannot be
legally waived hereunder, each Obligor agrees that any
requirement of reasonable notice shall be met if such notice is
personally served on or mailed, postage prepaid, to the Borrower
in accordance with the notice provisions of Section 9.7 of the
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Credit Agreement at least 10 days before the time of sale or
other event giving rise to the requirement of such notice. The
Lender shall not be obligated to make any sale or other
disposition of the Collateral regardless of notice having been
given. To the extent permitted by law, the Lender may be a
purchaser at any such sale. To the extent permitted by applicable
law, each of the Obligors hereby waives all of its rights of
redemption with respect to any such sale. Subject to the
provisions of applicable law, the Lender may postpone or cause
the postponement of the sale of all or any portion of the
Collateral by announcement at the time and place of such sale,
and such sale
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may, without further notice, to the extent permitted by law, be
made at the time and place to which the sale was postponed, or
the Lender may further postpone such sale by announcement made at
such time and place.
(b) Remedies relating to Accounts. Upon the occurrence of an
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Event of Default and during the continuation thereof, whether or
not the Lender has exercised any or all of its rights and
remedies hereunder, each Obligor will promptly upon request of
the Lender instruct all account debtors to remit all payments in
respect of Accounts to a mailing location selected by the Lender.
In addition, upon the occurrence and during the continuation of
an Event of Default, the Lender or its designee may notify any
Obligor's customers and account debtors that the Accounts of such
Obligor have been assigned to the Lender or of the Lender's
security interest therein, and may (either in its own name or in
the name of an Obligor or both) demand, collect (including
without limitation by way of a lockbox arrangement), receive,
take receipt for, sell, xxx for, compound, settle, compromise and
give acquittance for any and all amounts due or to become due on
any Account, and, in the Lender's discretion, file any claim or
take any other action or proceeding to protect and realize upon
the security interest of the Lender in the Accounts. Each Obligor
acknowledges and agrees that the Proceeds of its Accounts
remitted to or on behalf of the Lender in accordance with the
provisions hereof shall be solely for the Lender's own
convenience and that such Obligor shall not have any right, title
or interest in such Proceeds except as expressly provided herein.
The Lender shall have no liability or responsibility to any
Obligor for acceptance of a check, draft or other order for
payment of money bearing the legend "payment in full" or words of
similar import or any other restrictive legend or endorsement or
be responsible for determining the correctness of any remittance.
Each Obligor hereby agrees to indemnify the Lender from and
against all liabilities, damages, losses, actions, claims,
judgments, costs, expenses, charges and reasonable attorneys'
fees suffered or incurred by the Lender because of the
maintenance of the foregoing arrangements, except as relating to
or arising out of the gross negligence or willful misconduct or
unlawful conduct of the Lender or its officers or employees. In
the case of any investigation, litigation or other proceeding,
the foregoing indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by an Obligor,
its directors, shareholders or creditors or the Lender or any
other Person.
(c) Access. In addition to the rights and remedies hereunder,
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upon the occurrence of an Event of Default and during the
continuance thereof, the Lender shall have the right to
reasonably enter and remain upon the various premises of the
Obligors without cost or charge to the Lender, and use the same,
together with materials, supplies, books and records of the
Obligors for the purpose of collecting and liquidating the
Collateral, or for preparing for sale and conducting the sale of
the Collateral, whether by foreclosure, auction or otherwise. In
addition, the Lender may remove
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Collateral, or any part thereof, from such premises and/or any
records with respect thereto, in order to effectively collect or
liquidate such Collateral.
(d) Nonexclusive Nature of Remedies. Failure by the Lender to
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exercise any right, remedy or option under this Security
Agreement, any other Loan Document, or as provided by law, or any
delay by the Lender in exercising the same, shall not operate as
a waiver of any such right, remedy or option. No waiver hereunder
shall be effective unless it is in writing, signed by the party
against whom such waiver is sought to be enforced and then only
to the extent specifically stated, which in the case of the
Lender shall only be granted as provided herein. To the extent
permitted by law, neither the Lender nor any party acting as
attorney for the Lender, shall be liable hereunder for any acts
or omissions or for any error of judgment or mistake of fact or
law other than their gross negligence or willful misconduct or
unlawful conduct hereunder. The rights and remedies of the Lender
under this Security Agreement shall be cumulative and not
exclusive of any other right or remedy which the Lender may have.
(e) Retention of Collateral. In addition to the rights and
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remedies hereunder, upon the occurrence of an Event of Default
and during the continuation thereof, the Lender may, after
providing the notices required by Section 9-505(2) of the UCC and
otherwise complying with the requirements of applicable law of
the relevant jurisdiction, to the extent the Lender is in
possession of any of the Collateral, retain the Collateral in
satisfaction of the Secured Obligations. Unless and until the
Lender shall have provided such notices, however, the Lender
shall not be deemed to have retained any Collateral in
satisfaction of any Secured Obligations for any reason.
(f) Deficiency. In the event that the proceeds of any sale,
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collection or realization are insufficient to pay all amounts to
which the Lender is legally entitled, the Obligors shall be
jointly and severally liable for the deficiency, together with
interest thereon at the Default Rate, together with the
reasonable costs of collection and the reasonable fees of any
attorneys employed by the Lender to collect such deficiency. Any
surplus remaining after the full payment and satisfaction of the
Secured Obligations shall be returned to the Obligors or to
whomsoever a court of competent jurisdiction shall determine to
be entitled thereto.
9. Additional Rights of the Lender.
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(a) Power of Attorney. In addition to other powers of attorney
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contained herein, each Obligor hereby designates and appoints the
Lender, and each of its designees, as attorney-in-fact of such
Obligor, irrevocably and with power of substitution (to the
extent permitted by applicable law), with authority to take any
or all of the following actions upon the occurrence and during
the continuance of an Event of Default:
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(i) to demand, collect, settle, compromise, adjust, give
discharges and releases, all as the Lender may reasonably
determine;
(ii) to commence and prosecute any actions at any court for
the purposes of collecting any Collateral and enforcing any
other right in respect thereof;
(iii) to defend, settle or compromise any action brought and,
in connection therewith, give such discharge or release as the
Lender may deem reasonably appropriate;
(iv) receive, open and dispose of mail addressed to an
Obligor and endorse checks, notes, drafts, acceptances, money
orders, bills of lading, warehouse receipts or other
instruments or documents evidencing payment, shipment or
storage of the goods giving rise to the Collateral of such
Obligor on behalf of and in the name of such Obligor, or
securing, or relating to such Collateral;
(v) sell, assign, transfer, make any agreement in respect
of, or otherwise deal with or exercise rights in respect of,
any Collateral or the goods or services which have given rise
thereto, as fully and completely as though the Lender were the
absolute owner thereof for all purposes;
(vi) adjust and settle claims under any insurance policy
relating thereto;
(vii) execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing
statements, security agreements, affidavits, notices and other
agreements, instruments and documents that the Lender may
determine necessary in order to perfect and maintain the
security interests and liens granted in this Security
Agreement and in order to fully consummate all of the
transactions contemplated therein;
(viii) institute any foreclosure proceedings that the Lender
may deem appropriate; and
(ix) do and perform all such other acts and things as the
Lender may reasonably deem to be necessary, proper or
convenient in connection with the Collateral.
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This power of attorney is a power coupled with an interest and
shall be irrevocable for so long as any of the Secured Obligations remain
outstanding or any Loan Document is in effect. The Lender shall be under
no duty to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Lender in
this Security Agreement, and shall not be liable for any failure to do so
or any delay in doing so. The Lender shall not be liable for any act or
omission or for any error of judgment or any mistake of fact or law in its
individual capacity or its capacity as attorney-in-fact except acts or
omissions resulting from its gross negligence or willful misconduct or
unlawful conduct. This power of attorney is conferred on the Lender solely
to protect, preserve and realize upon its security interest in the
Collateral.
(b) The Lender's Duty of Care. Other than the exercise of
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reasonable care to assure the safe custody of the Collateral
while being held by the Lender hereunder, the Lender shall have
no duty or liability to preserve rights pertaining thereto, it
being understood and agreed that the Obligors shall be
responsible for preservation of all rights in the Collateral, and
the Lender shall be relieved of all responsibility for the
Collateral upon surrendering it or tendering the surrender of it
to the Obligors. The Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment
substantially equal to that which the Lender accords its own
property, which shall be no less than the treatment employed by a
reasonable and prudent Lender in the industry, it being
understood that the Lender shall not have responsibility for
taking any necessary steps to preserve rights against any parties
with respect to any of the Collateral.
10. Application of Proceeds. Upon the occurrence and during the
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continuance of an Event of Default, any payments in respect of the
Secured Obligations and any proceeds of the Collateral, when received
by the Lender in cash or its equivalent, will be applied in reduction
of the Secured Obligations and each Obligor irrevocably waives the
right to direct the application of such payments and proceeds and
acknowledges and agrees that the Lender shall have the continuing and
exclusive right to apply and reapply any and all such payments and
proceeds in the Lender's sole discretion, notwithstanding any entry to
the contrary upon any of its books and records.
11. Costs of Counsel. If at any time hereafter, whether upon the
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occurrence of an Event of Default or not, the Lender employs counsel
to prepare amendments, waivers or consents with respect to this
Security Agreement, or to take action or make a response in or with
respect to any legal proceeding relating to this Security Agreement or
relating to the Collateral, or to protect the Collateral or exercise
any rights or remedies under this Security Agreement or with respect
to the Collateral, then the Obligors agree to promptly pay upon demand
any and all such reasonable documented costs and expenses of the
Lender all of which costs and expenses shall constitute Secured
Obligations hereunder.
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12. Continuing Agreement.
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(a) This Security Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect so long
as any of the Secured Obligations remain outstanding or any Loan
Document is in effect. Upon such payment and termination, this
Security Agreement shall be automatically terminated and the
Lender shall, upon the request and at the expense of the
Obligors, forthwith release all of its liens and security
interests hereunder and shall execute and deliver all UCC
termination statements and/or other documents reasonably
requested by the Obligors evidencing such termination.
Notwithstanding the foregoing all releases and indemnities
provided hereunder shall survive termination of this Security
Agreement; but with respect to the indemnities for a period of 24
months following such termination.
(b) This Security Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Secured Obligations
is rescinded or must otherwise be restored or returned by the
Lender as a preference, fraudulent conveyance or otherwise under
any bankruptcy, insolvency or similar law, all as though such
payment had not been made; provided that in the event payment of
all or any part of the Secured Obligations is rescinded or must
be restored or returned, all reasonable costs and expenses
(including without limitation any reasonable legal fees and
disbursements) incurred by the Lender in defending and enforcing
such reinstatement shall be deemed to be included as a part of
the Secured Obligations.
13. Amendments; Waivers; Modifications. This Security Agreement and
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the provisions hereof may not be amended, waived, modified, changed,
discharged or terminated except as set forth in Section 9.3 of the
-----------
Credit Agreement.
14. Successors in Interest. This Security Agreement shall create a
----------------------
continuing security interest in the Collateral and shall be binding
upon each Obligor, its successors and assigns and shall inure,
together with the rights and remedies of the Lender hereunder, to the
benefit of the Lender and its successors and permitted assigns;
provided, however, that none of the Obligors may assign its rights or
-------- -------
delegate its duties hereunder without the prior written consent of the
Lender, and the Lender may not assign its rights or delegate its
duties hereunder, other than to an affiliate of the Lender, without
the prior written consent of the Obligors. To the fullest extent
permitted by law, each Obligor hereby releases the Lender, and its
successors and assigns, from any liability for any act or omission
relating to this Security Agreement or the Collateral, except for any
liability arising from the gross negligence or willful misconduct or
unlawful conduct of the Lender, or its officers or employees.
15. Notices. All notices required or permitted to be given under this
-------
Security Agreement shall be in conformance with Section 9.7 of the
-----------
Credit Agreement.
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16. Counterparts. This Security Agreement may be executed in any
------------
number of counterparts, each of which where so executed and delivered
shall be an original, but all of which shall constitute one and the
same instrument. It shall not be necessary in making proof of this
Security Agreement to produce or account for more than one such
counterpart signed by each of the parties.
17. Headings. The headings of the sections and subsections hereof are
--------
provided for convenience only and shall not in any way affect the
meaning or construction of any provision of this Security Agreement.
18. Governing Law; Submission to Jurisdiction; Venue.
------------------------------------------------
(a) This Security Agreement shall be construed in accordance with and
governed by the local laws of the State of New York applicable to
contracts executed and to be performed in such state.
(b) Obligors hereby submit to the jurisdiction of the courts of the
State of New York in New York County or the United States
District Court for the Southern District of New York, in
connection with any action or proceeding arising out of or
relating to this Security Agreement. Obligors hereby irrevocably
appoint the Company, with an address at 000 Xxxx Xxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, as their agent to receive service of
copies of summons and complaints and any other process which may
be served in any action or proceeding arising hereunder. Such
service may be made by mailing or delivering a copy of such
process by registered or certified mail, postage prepaid, to
Obligors in care of the Company's address set forth above, to the
attention of the Company's General Counsel, and Obligors hereby
irrevocably authorize and direct the Company to accept such
service on their behalf. Obligors agree that a final judgement in
any such action or proceeding shall be conclusive, subject to
appellate relief, and may be enforced in other jurisdictions by
suit on the judgement or in any other manner provided by law.
Nothing in this Security Agreement shall affect the right of the
Lender to serve legal process in any other manner permitted by
law or affect the right of the Lender to bring any action or
proceeding against Obligors or any of their properties in the
courts of the other jurisdictions to the extent otherwise
permitted by the law.
(c) To the extent that any Obligor has or hereafter may acquire: (i)
any immunity from the jurisdiction of any court of the State of
New York in New York County or the United States District Court
for the Southern District of New York or from any legal process
out of any such court (whether through service or notice,
attachment prior to judgement, attachment in aid of execution,
execution or otherwise) with respect to itself or its property,
or (ii) any objection to the laying of the venue or of an
inconvenient forum or any suit, action or proceeding, if brought
in the State of New York in New York County or the United States
District Court for the Southern District of
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New York under process served in accordance with this Security
Agreement, such Obligor hereby irrevocably waives such immunity
or objection in respect of any suit, action or proceeding arising
out of or relating to this Security Agreement.
19. Waiver of Jury Trial. EACH OF THE PARTIES OF THIS SECURITY
--------------------
AGREEMENT HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SECURITY
AGREEMENT. EACH SUCH PARTY HEREBY ACKNOWLEDGES THAT IT WAS REPRESENTED
BY COUNSEL IN ITS ENTERING INTO THIS SECURITY AGREEMENT AND IT WAS
EXPLAINED THE MEANING OF THIS WAIVER OF JURY TRIAL.
20. Severability. If any provision of this Security Agreement is
------------
determined to be illegal, invalid or unenforceable, such provision
shall be fully severable and the remaining provisions shall remain in
full force and effect and shall be construed without giving effect to
the illegal, invalid or unenforceable provisions.
21. Entirety. This Security Agreement and the other Loan Documents
--------
constitute the entire contract between the parties relative to the
subject matter hereof. Any previous agreement among the parties with
respect to the transactions contemplated herein is superseded by this
Security Agreement and the other Loan Documents.
22. Survival. All representations and warranties of the Obligors
--------
hereunder shall survive the execution and delivery of this Security
Agreement, the other Loan Documents, the delivery of the Note and the
making of the Loan so long as any of the Secured Obligations remain
outstanding or any other Loan Document is in effect.
23. Other Security. To the extent that any of the Secured Obligations
--------------
are now or hereafter secured by property other than the Collateral
(including, without limitation, real property and securities owned by
an Obligor), or by a guarantee, endorsement or property of any other
Person, then the Lender shall have the right to proceed against such
other property, guarantee or endorsement upon the occurrence of any
Event of Default and during the continuation, and the Lender shall
have the right, in its sole discretion, to determine which rights,
security, liens, security interests or remedies the Lender shall at
any time pursue, relinquish, subordinate, modify or take with respect
thereto, without in any way modifying or affecting any of them or any
of the Lender's rights or the Secured Obligations under this Security
Agreement or under any other of the Loan Documents.
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24. Joint and Several Obligations of Obligors.
-----------------------------------------
(a) Each of the Obligors is accepting joint and several
liability hereunder in consideration of the financial
accommodation to be provided by the Lender under the Credit
Agreement, for the mutual benefit, directly and indirectly, of
each of the Obligors and in consideration of the undertakings of
each of the Obligors to accept joint and several liability for
the obligations of each of them.
(b) Each of the Obligors jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety
but also as a co-debtor, joint and several liability with the
other Obligors with respect to the payment and performance of all
of the Secured Obligations arising under this Security Agreement,
and the other Loan Documents, it being the intention of the
parties hereto that all the Obligations shall be the joint and
several obligations of each of the Obligors without preferences
or distinction among them.
(c) Notwithstanding any provision to the contrary contained
herein or in any other of the Loan Documents, to the extent the
obligations of an Obligor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each
Obligor hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).
Each of the parties hereto has caused a counterpart of this Security Agreement
to be duly executed and delivered as of the date first above written.
OBLIGORS:
---------
PARTMINER, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Name:
Title:
IQXPERT HOLDINGS INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
16
Name:
Title:
IQXPERT, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Name:
Title:
EXTRATIME TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Name:
Title:
ACCURATE COMPONENTS INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Name:
Title:
MARKET TRADING CONCEPTS, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Name:
Title:
Accepted and agreed to as of the date first above written.
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LENDER:
HAIC INC.
By: /s/ Xxxxxxx Xxxxx
----------------------
Name:
Title:
