THIS DOCUMENT IS A COPY OF THE EXHIBIT FILED ON OCTOBER 24, 1996
PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
AMENDED AND RESTATED
GENERAL SECURITY AGREEMENT
--------------------------
THIS AMENDED AND RESTATED GENERAL SECURITY AGREEMENT is made this 10th day
of October, 1996 by and among DELTA COMPUTEC INC. and DELTA DATA NET, INC., both
New York corporations with their principal offices and places of business at 000
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (collectively, "Debtor"), and XXXXXX
X. XXXXXXX XX, an individual with an office and place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx (collectively, the "Secured Party").
W I T N E S S E T H :
WHEREAS, Debtor executed and delivered to National Canada Finance
Corporation ("NCFC") a General Security Agreement dated April 1, 1994 (the "1994
Security Agreement");
WHEREAS, on the date hereof, NCFC is assigning to Secured Party a portion
of its rights under the 1994 Security Agreement; and
WHEREAS, to the extent assigned to Secured Party, Debtor and Secured Party
desire to amend and restate the 1994 Security Agreement in its entirety;
NOW, THEREFORE, Debtor and Secured Party agree as follows:
1. Security Interest. Debtor hereby grants to Secured Party a security
interest ("Security Interest") in all personal property and fixtures of Debtor,
of whatever kind and type and wherever located, whether now owned or hereafter
acquired, including, without limitation, all fixtures, equipment, inventory,
accounts, general intangibles, documents, instruments and chattel paper,
together with all proceeds and products thereof in any form, and parts,
accessories, attachments, special tools, additions and accessions thereto, and
all increases therein or profits received therefrom, and in all substitutions
therefore, and including any account items received by, or amounts deposited in,
an account maintained by Borrower at any Lock Box maintained for the benefit of
Secured Party (collectively, "Collateral").
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 and any substitution for or replacement or modification thereof,
including principal, interest and other amounts (i.e., attorney's fees, costs
and expenses) under the Amended and Restated Promissory Note (the
"Indebtedness"), which Amended and Restated Promissory Note is governed by the
terms of a certain Amended and
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Restated Credit Agreement dated the date hereof between the Debtor and the
Secured Party (the "Credit Agreement").
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 per ormance 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;
(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;
(g) Each account, general intangible and Chattel Paper constituting
Collateral is genuine and enforceable in accordance with its terms against
the party obligated to pay it "Account Debtor"); and
(h) The amount represented by Debtor to Secured Party as owing by each
Account Debtor or by all Account Debtors is the correct amount actually and
unconditionally owing by such Account Debtor or Debtors, except for normal
cash discounts where applicable.
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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 including, without limitation, defenses, setoffs, claims and
counterclaims asserted by any Account Debtor against Debtor and/or Secured
Party, except, as to inventory, 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 Inventory 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;
(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 deliver to Secured Party upon demand, any Chattel Paper
constituting, representing or relating to the Collateral or any part
thereof, and any schedules, invoices, shipping, documents, delivery
receipts, purchase orders, contracts or other documents representing or
relating to the Collateral or any part thereof;
(d) 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;
(e) Will not, without Secured Party's written consent which consent
will not be unreasonably withheld or delayed, make or agree to make any
alteration, modification or cancellation of, or substitution for, or
credits, adjustments or allowances on accounts, general intangibles or
chattel paper constituting any Collateral (other than in the ordinary
course of Debtor's business), and will notify Secured Party promptly of any
material default by any Account Debtor in payment or other performance of
his obligations with respect to any such Collateral;
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(f) Will keep the tangible 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;
(g) 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
(h) In connection herewith, will execute and deliver to Secured Party
such financing statements, assignments (including, without limitation, if
any of Debtor's accounts arise out of contracts with the United States or
any department, agency or instrumentality thereof, assignments required to
comply with the Federal Assignment of Claims Act) 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. Notification and Payments. From time to time while the Lock Box
Operating Agreement dated the date hereof between the Debtor and Manufacturers
and Traders Trust Company is in force and effect, or any substitute arrangement,
and in any event, after the occurrence of an Event of Default, (a) Secured Party
may notify all or any Account Debtors of the Security Interest and may also
direct such Account Debtors to make all payments on Collateral to Secured Party
and (b) Secured Party may notify Debtor in writing, before or after notification
to Account Debtors and without waiving in any manner the Security Interest, that
any payment on and from the Collateral received by Debtor (i) shall be held by
Debtor in trust for Secured Party in the medium in which received; (ii) shall
not be commingled with any assets of Debtor; and (iii) shall be turned over to
Secured Party not later than the next business day following the day of their
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receipt. All payments on and from Collateral received by Secured Party directly
or from Debtor shall be applied to the 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 Credit Agreement
shall constitute an Event of Default hereunder.
(b) Upon the happening of any 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) After the occurrence of an Event of Default hereunder, Secured
Party may demand, collect and xxx on any of the accounts, chattel paper and
general intangibles (in either Debtor's or Secured Party's name at the
latter's option) with the right to enforce, compromise, settle or discharge
such Collateral, and may indorse Debtor's name on any and all checks,
commercial paper, and any other instruments pertaining to or constituting
such Collateral.
(c) 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.
(d) 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 in 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.
(e) 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.
(f) Secured Party and Debtor as used herein shall include the heirs,
executors or administrators, or successors or assigns, of those parties.
(g) 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. 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.
(i) 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.
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(j) 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.
(k) This Security Agreement amends and restates the 1994 Security
Agreement to the extent of the assignment by NCFC of its rights in the 1994
Security Agreement to the Secured Party.
DELTA COMPUTEC INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name:
Title:
DELTA DATA NET, INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name:
Title:
/s/ Xxxxxx X. Xxxxxxx XX
------------------------------
XXXXXX X. XXXXXXX XX
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SCHEDULE 3(a)
-------------
Permitted Liens and Encumbrances
Security Interest in spare parts inventory granted to NCFC.
Page 179 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 Xxxxxxx, 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
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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.
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