THIS DOCUMENT IS A COPY OF THE EXHIBIT FILED ON OCTOBER 24, 1996
PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
AMENDED AND RESTATED
SECURITY AGREEMENT
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THIS AMENDED AND RESTATED SECURITY AGREEMENT is made this 10th day of
October 1996 by and between DELTA COMPUTEC INC., a New York corporation with its
principal office and place of business at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 ("Debtor"), and NATIONAL CANADA FINANCE CORP., a Delaware
corporation with an office and place of business at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ("Secured Party").
W I T N E S S E T H :
WHEREAS, Debtor and Delta Data Net, Inc. ("DDI") executed and delivered to
Secured Party a General Security Agreement dated April 1, 1994 (the "1994
Security Agreement"); and
WHEREAS, on the date hereof, Secured Party is assigning to Xxxxxx X.
Xxxxxxx XX ("Xxxxxxx") a portion of its rights under the 1994 Security
Agreement, including all rights with respect to DDI; and
WHEREAS, to the extent not assigned to Xxxxxxx, Debtor and Secured Party
desire to amend and restate the 1994 Security Agreement in its entirety; and
NOW, THEREFORE, Debtor and Secured Party agree as follows:
1. Security Interest. Debtor hereby reaffirms and grants to Secured Party a
security interest ("Security Interest") in all of Debtor's Spare Parts Inventory
(as such term is defined below) of whatever kind and type and wherever located,
whether now owned or hereafter acquired (collectively, "Collateral"). "Spare
Parts Inventory" means the Debtor's inventory of piece parts and whole units
kept in reserve to support its contract customer base. Piece parts are used to
repair customers' units that fail. Whole units are kept on hand generally to be
used as loaners in the event that a customer's unit cannot be repaired promptly.
Contemporaneously with the execution and delivery of this Security Agreement,
Debtor will deliver to Secured Party a complete list of Debtor's Spare Parts
Inventory as of a date within five days prior to October 9, 1996.
2. Indebtedness Secured. The Security Interest secures payment of a certain
Amended and Restated Promissory Note dated the date hereof between Debtor and
Secured Party in the original principal amount of $750,000 and any substitution
for or replacement or modification thereof, including principal, interest and
other amounts (i.e., attorney's fees, costs and expenses) due under the Amended
and Restated Promissory Note ("Indebtedness").
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3. Representations and Warranties of Debtor. Debtor represents and
warrants, and so long as any Indebtedness remains unpaid shall be deemed
continuously to represent and warrant, that:
(a) Debtor is the owner of the Collateral free of all security
interests or other encumbrances, except the Security Interest and except as
shown on Schedule 3(a) annexed hereto (collectively, "Permitted
Encumbrances"), if any;
(b) Debtor is duly organized and validly existing under the laws of
the State of New York and is duly qualified and in good standing in every
jurisdiction in which failure to do so qualified would have a material
adverse effect on its business or assets;
(c) Debtor is authorized to enter into this Security Agreement and the
execution, delivery and performance of this Agreement by Debtor will not
violate, or be in contravention of, Debtor's certificate of incorporation,
by-laws, or other corporate documents or any indenture, agreement or
undertaking to which Debtor is a party or by which Debtor may be bound;
(d) Debtor is engaged in business operations; Debtor's chief executive
office is specified in the first paragraph of this Agreement; and Debtor's
records concerning the Collateral are kept at one of the addresses
specified on Schedule 3(e) of this Agreement;
(e) All of the Collateral is located at one of the addresses specified
on Schedule 3(e) to this Agreement; and
(f) Any and all tradenames, division names, assumed names and other
names under which Debtor transacts any part of its business are specified
on Schedule 3(f) annexed hereto, if any.
4. Covenants of Debtor. So long as any Indebtedness remains unpaid, Debtor:
(a) Will defend the Collateral against the claims and demands of all
other parties, except purchasers and lessees in the ordinary course of
Debtor's business; will keep the Collateral free from all security
interests or other encumbrances, except the Security Interest and except as
shown of Schedule 3(a) hereto; and, except with respect to the sale or
lease of Collateral in the ordinary course of Debtor's business, will not
sell, transfer, lease, assign, deliver or otherwise dispose of any
Collateral or any interest therein, or move the Collateral to any location
except those specified on Schedule 3(e) without the prior written consent
of Secured Party;
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(b) Will keep, in accordance with generally accepted accounting
principles consistently applied, accurate and complete records concerning
the Collateral; at Secured Party's request, will xxxx any and all such
records to indicate the Security Interest; and will permit Secured Party or
its agents at any reasonable time during regular business hours to inspect
the Collateral and to audit and make extracts from such records or any of
Debtor's books, ledgers, reports, correspondence or other records;
(c) Will notify Secured Party promptly in writing of any change in
Debtor's chief executive office, of any change in the address at which the
Collateral or records concerning the Collateral are kept and of any change
in Debtor's name, identity or corporate structure;
(d) Will keep the Collateral in good condition and repair; and will
not use the Collateral in violation of any provisions of this Security
Agreement, of any applicable statute, regulation or ordinance or of any
policy insuring the Collateral;
(e) Will pay all taxes, assessments and other charges of every nature
which may be levied or assessed against the Collateral; will insure the
Collateral against risks, and in coverage, form and amount, satisfactory to
Secured Party, and, will cause each policy to be payable additionally to
Secured Party and deliver each policy or certificate of insurance therefor
to Secured Party; and
(f) In connection herewith, will execute and deliver to Secured Party
such financing statements and other documents, do such other things
relating to the Security Interest as Secured Party may reasonably request,
pay all costs of title searches and filing financing statements,
assignments or other documents in all public offices requested by Secured
Party; but will not, without the prior written consent of Secured Party,
file or authorize or permit to be filed in any public office any financing
statement naming Debtor as debtor and not naming Secured Party as secured
party, except in connection with any Permitted Encumbrances.
5. Verification of Collateral. Secured Party shall have the right to verify
all or any Collateral in any reasonable manner and through any medium Secured
Party may consider reasonably appropriate, and Debtor agrees to furnish all
assistance and information and perform any acts which Secured Party may
reasonably require in connection therewith.
6. Payments. After the occurrence of an Event of Default, and the
expiration of any cure period related to such Event of Default, all payments on
and from Collateral received by Secured Party directly or from Debtor shall be
applied to the
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Indebtedness in such order and manner and at such time as Secured Party shall,
in its sole discretion, determine.
7. Events of Default.
(a) The occurrence of an Event of Default under the Amended and
Restated Promissory Note dated the date hereof between Debtor and Secured
Party, as the same may be amended from time to time ("Note"), shall
constitute an Event of Default hereunder.
(b) Upon the happening of any Event of Default, and the expiration of
any cure period related to such Event of Default, Secured Party's rights
and remedies with respect to the Collateral shall be those of a Secured
Party under the Uniform Commercial Code and under any other applicable law,
as the same may from time to time be in effect, in addition to those rights
granted herein and in any other agreement now or hereafter in effect
between Debtor and Secured Party. Secured Party may require Debtor to
assemble the Collateral and make it available to Secured Party at a place
or places designated by Secured Party.
(c) Without in any way requiring notice to be given in the following
manner, Debtor agrees that any notice by Secured Party of sale or
disposition of any Collateral, whether required by the Uniform Commercial
Code or otherwise, shall constitute reasonable notice to Debtor if such
notice is mailed by regular mail, postage prepaid, at least ten (10) days
prior to such action, to the address of Debtor set forth in the first
paragraph of this Security Agreement or to any other address which Debtor
has specified in writing to Secured Party as the address to which notices
hereunder shall be given to Debtor.
(d) Debtor agrees to pay on demand all reasonable costs and expenses
incurred by Secured Party in enforcing this Security Agreement, in
realizing upon or protecting any Collateral, including, without limitation,
if Secured Party retains counsel for advise, suit, insolvency proceedings
or any of the above purposes, the reasonable attorneys' fees and expenses
incurred by Secured Party.
8. Miscellaneous.
(a) Debtor hereby authorizes Secured Party, at Debtor's expense, to
file such financing statement or statements relating to the Collateral
without Debtor's signature thereon as Secured Party at its option may
reasonably deem appropriate, and appoints Secured Party as Debtor's
attorney-in-fact (without requiring Secured Party) to execute any such
financing statement or statements in Debtor's name and to perform all other
acts which Secured Party deems reasonably appropriate to perfect and
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continue the Security Interest and to protect and preserve the Collateral.
(b) Upon Debtor's failure to perform any of its duties hereunder,
Secured Party may, but shall not be obligated to, perform any or all such
duties in any reasonable manner, and Debtor shall pay an amount equal to
the expense thereof to Secured Party forthwith upon written demand by
Secured Party.
(c) No course of dealing and no delay or omission by Secured Party in
exercising any right or remedy hereunder shall operate as a waiver thereof
or of any other right or remedy, and no single or partial exercise thereof
shall preclude any other or further exercise thereof or the exercise of any
other right or remedy. Secured Party may remedy any default by Debtor
hereunder or within any reasonable manner without waiving the default
remedied and without waiving any other prior or subsequent default by
Debtor. All rights and remedies of, Secured Party hereunder are cumulative.
(d) The rights and benefits of Secured Party hereunder shall, if
Secured Party so agrees, inure to any party acquiring any interest in the
Indebtedness or any part thereof.
(e) Secured Party and Debtor as used herein shall include the heirs,
executors or administrators, or successors or assigns, of those parties.
(f) No modification, rescission, waiver, release or amendment of any
provisions of this Security Agreement shall be binding except by a written
agreement subscribed by Debtor and by Secured Party.
(g) This Security Agreement is made under, and shall be governed by
and construed under the laws of the State of New York applicable to
contracts made and to be performed entirely within the State of New York
and without giving effect to choice of law principles of the State of New
York.
(h) All terms, unless otherwise defined in this Security Agreement or
in any financing statement, shall have the definitions set forth in the
Uniform Commercial Code adopted in New York State, as the same may from
time to time be in effect.
(i) This Security Agreement is and is intended to be a continuing
Security Agreement and shall remain in full force and effect until all of
the Indebtedness shall be finally and irrevocably paid in full.
(j) This Security Agreement amends and restates the 1994 Security
Agreement except to the extent of the
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assignment by Secured Party of its rights in the 1994 Security Agreement to
Xxxxxxx.
9. Waiver of Jury Trial. The Debtor agrees that any suit, action or
proceeding, whether claim or counterclaim, brought or instituted by the Debtor
or any successor or assign of the Debtor on or with respect to this Security
Agreement or the dealings of the parties with respect hereto, shall be tried
only by a court and not by a jury. THE DEBTOR HEREBY KNOWING, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING. Further, the Debtor waives any right it may have to claim or
recover, in any such suite, action or proceeding, any special exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. THE DEBTOR ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT THE SECURED PARTY WOULD
NOT ENTER INTO THIS DOCUMENT WITH THE DEBTOR IF THE WAIVERS SET FORTH IN THIS
SECTION WERE NOT A PART OF THIS DOCUMENT.
10. Counterparts. This Security Agreement may be executed in several
counterparts, and all so executed shall constitute one agreement, binding on all
of the parties hereto, notwithstanding that all of the parties are not signatory
to the original or the same counterpart.
DELTA COMPUTEC INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name:
Title:
NATIONAL CANADA FINANCE CORP.
By: /s/ E. Xxxx Xxxxxxx
-------------------------------------
Name:
Title:
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SCHEDULE 3(a)
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Permitted Liens and Encumbrances
Security Interest granted to Xxxxxx X. Xxxxxxx XX.
Page 105 of 207 Pages
SCHEDULE 3(e)
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Collateral Locations
Chicago Rochester
DCI c/o Harris Bank 000 Xxxxx Xxxxxx Xxxxxxxxx
000 Xxxx Xxxxxx Xxxxxxxxx, Xxx Xxxx 00000
3rd Floor
Xxxxxxx, Xxxxxxxx 00000
Dallas Teterboro
0000 X. Xxxxxxx 000 000 Xxxxxx Xxxxxx
Xxxxx 0000 Xxxxxxxxx, Xxx Xxxxxx 00000
Xxxxx Xxxxxx, Xxxxx 00000
Houston Washington
00000 Xxxxx Xxxxx Xxxxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxx 000 Xxxxxx, Xxxxxxxx 00000
Xxxxxxx, Xxxxx 00000
Philadelphia
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Page 106 of 207 Pages
SCHEDULE 3(f)
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Trade Names
1. DCI
2. The DCI Companies
3. PC Reserve
4. R & M Associates
5. Data Net
6. Data Span
7. SAI/Delta
8. Computer Support Inc.
9. Delta CompuTec Inc.
Page 107 of 207 Pages
