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Exhibit 10.7
PLEDGE AND SECURITY AGREEMENT - ALL ASSETS
THIS PLEDGE AND SECURITY AGREEMENT - ALL ASSETS is entered into as of
September 26, 1996 by and between TRITON SYSTEMS, INC., a Mississippi
corporation (the "Borrower") and The First National Bank of Boston, a national
banking association (the "Secured Party").
WHEREAS, Borrower and Secured Party are parties to a Credit Agreement
dated as of the date hereof (as it may be amended, supplemented or otherwise
modified, the "Credit Agreement"), pursuant to which Secured Party may from time
to time, as provided therein, make loans and otherwise extend credit to
Borrower; and
WHEREAS, Secured Party's willingness to make such loans and credit
available to Borrower is subject to the condition, among others, that Borrower
executes and delivers this Security Agreement;
NOW, THEREFORE, in consideration of these premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower hereby agrees for the benefit of Secured Party, as
follows:
1. Defined Terms. The following terms when used herein shall
have the respective meanings set forth in this Section. Unless
otherwise defined herein, capitalized terms set forth herein shall
have such defined meanings as are in the Credit Agreement.
"Accounts;" "Accounts Receivable" means all "accounts", as
such term is defined in Section 9-106 of the UCC, now or hereafter
owned by Borrower, and also means and includes any right of Borrower to
payment for goods sold or leased or for services rendered that Borrower
may now have or hereafter acquire, whether or not such right has been
earned by performance, including, without limitation, all accounts,
account receivable, book debts, instruments and chattel paper, leases,
notes, drafts, acceptances, payments under leases of Inventory or
Equipment or sale of Inventory or Equipment and other forms of
obligations now or hereafter received by or belonging or owing to
Borrower for goods sold or leased and/or services rendered, all
guaranties and security therefor, all goods giving rise thereto and all
rights pertaining to such goods, including, without limitation, the
rights of a seller under the UCC to reclaim such goods or stop them in
transit, and all of Borrower's rights in, to and under all purchase
orders, instruments and other documents now or hereafter delivered by
or to it evidencing obligations for and representing payment for goods
sold or leased and/or services rendered, and all monies due or to
become due to Borrower under all contracts for the sale or lease of
goods and/or the performance of
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services, now in existence or hereafter arising, including, without
limitation, the right to receive the Proceeds of such purchase orders
and contracts.
"Collateral" means all of the Borrower's tangible and
intangible personal property and fixtures, now owned or hereafter
acquired, including, without limitation, (a) all Accounts, Instruments
and Documents, and General Intangibles in which Borrower now or
hereafter has any right, title or interest, including, without
limitation, (i) all moneys, residues and property of any kind due and
to become due under any contract or in any depository account, (ii) any
damages arising out of or for breach or default in respect of any such
Accounts, Instruments and Documents, or General Intangibles, and (iii)
all other amounts from time to time paid or payable under or in
connection therewith; (b) all Equipment now owned or hereafter
acquired; (c) all Inventory now owned or hereafter acquired; (d) all
farm products as that term is defined in Section9-109(3) of the UCC;
and (e) to the extent not otherwise included, all accessions to and
additions to, substitutions for, and replacements, Proceeds and
products of any and all of the foregoing.
"Encumbrance" means any mortgage, lease, conditional sales
agreement, title retention agreement, security interest, Lien or other
encumbrance.
"Equipment" means all "equipment", as such term is defined in
Section 9-109(2) of the UCC, now or hereafter owned by Borrower, and
also means and includes all personal property constituting machinery,
equipment, plant, furnishings, fixtures, and other fixed assets now
owned or hereafter acquired by Borrower, including, without limitation,
all items of machinery and equipment of any kind, nature and
description, as well as trucks and vehicles of every description,
trailers, handling and delivery equipment and office furniture, and all
additions to, substitutions for, replacements of or accessions to any
of the foregoing items and all attachments, components, parts
(including spare parts) and accessories, whether installed thereon or
affixed thereto, and all fuel for any thereof.
"General Intangibles" means all "general intangibles", as such
term is defined in Section 9-106 of the UCC, and all intangible
personal property not included in Accounts, or in Instruments and
Documents, now or hereafter owned or acquired by Borrower, and also
means and includes all right, title and interest of Borrower now or
hereafter owned or acquired in intellectual property, patents, patent
applications, goodwill, trademarks, trademark applications, trade
names, service marks, copyrights, permits, licenses, federal, state, or
local tax refunds, claims under insurance policies (whether or not
Proceeds), other rights (if any) to payment, rights of set
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off, chooses in action, rights under judgments, computer programs and
software, customer lists, and all contracts and agreements to, or of
which Borrower is a party or beneficiary, and all leasehold interests
of Borrower in real estate to the extent considered personal property
under applicable law and includes, without limitation, all contract
rights in that certain Stock Purchase and Redemption Agreement dated
July 25, 1996 by and among the Borrower, Summit and Borrower's Key
Officers.
"Instruments and Documents" means all "instruments,"
"documents," "deposit accounts," and "chattel paper," as defined in
Section 9-105 of the UCC, all securities, and includes, without
limitation, all warehouse receipts and other documents of title,
policies and certificates of insurance, checking, savings, and other
bank accounts, certificates of deposit, checks, notes and drafts, now
or hereafter acquired, to the extent not included in Accounts.
"Inventory" means all "inventory", as such term is defined in
Section 9-109(4) of the UCC, now owned or hereafter acquired by
Borrower, and also means and includes all inventory, wherever located,
now owned or hereafter acquired by Borrower, or in which Borrower now
has or hereafter may acquire any right, title or interest, including,
without limitation, all consigned goods and all goods and other
personal property now or hereafter owned by Borrower that are held for
sale or lease or are furnished or are to be furnished under a contract
of service or that constitute raw materials, work in process or
materials used or consumed or to be used or consumed in Borrower's
business, or in the processing, packaging or shipping of the same, and
all finished goods.
"Proceeds" has the meaning given such term under the UCC and,
in any event, includes (but is not limited to) (a) any and all proceeds
of any insurance, indemnity, warranty or guaranty payable from time to
time with respect to any of the Collateral, (b) any and all payments
(in any form whatsoever) made or due and payable from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental
authority (or any Person acting under color of governmental authority),
(c) whatever is received upon any collection, exchange, sale, lease or
other disposition of any of the Collateral and any property into which
any of the Collateral is converted, whether cash or non-cash proceeds,
and (d) any and all other products of, or any rents, profits or other
amounts from time to time paid or payable under, or in connection with,
any of the Collateral.
"Security Agreement" or "Agreement" means this Pledge and
Security Agreement - All Assets, as it may be amended, supplemented or
otherwise modified, from time to time.
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2. Grant of Security Interest. As collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of all the Obligations and to induce Secured Party
to enter into the Credit Agreement and make the Loans in accordance with the
terms thereof, Borrower hereby sells, assigns, conveys, mortgages, pledges,
hypothecates and transfers to Secured Party, and hereby grants to Secured Party
a security interest in, all of Borrower's right, title and interest in, to and
under the Collateral.
3. Representations and Warranties. The Borrower hereby
represents and warrants to the Secured Party that:
(a) The execution, delivery and performance of this Agreement has
been duly authorized by all necessary action, corporate or otherwise, and do not
and will not (i) require any consent or approval of the stockholders of the
Borrower, if any; (ii) contravene the terms of the charter, by-laws or other
organizational papers of the Borrower; (iii) violate any applicable law, rule or
regulation of any governmental agency; (iv) contravene any provision of any
agreement, instrument, order or undertaking binding on the Borrower or by which
any of its properties are bound or affected; (v) other than as contemplated
hereby, result in or require the imposition of any Encumbrance on any of the
properties of the Borrower; or (vi) other than filings required by the Uniform
Commercial Code, require the approval or consent of, or filing or registration
with, any governmental or other agency or authority, or any other party.
(b) The Borrower is, and in the case of property acquired after the
date hereof, will be, the sole legal and equitable owner of the Collateral,
holding good and marketable title to the same free and clear of all Encumbrances
except for the security interests granted hereunder or permitted hereby, and has
good right and legal authority to assign, deliver, and create a security
interest in the Collateral in the manner herein contemplated. The Collateral is
genuine and is what it is purported to be. The Collateral is not subject to any
restriction that would prohibit or restrict the assignment, delivery or creation
of the security interests contemplated hereunder.
(c) Intentionally Blank
(d) Except as disclosed to the Secured Party in writing, the amount
represented by the Borrower to the Secured Party from time to time as owing by
each account debtor will at such time be the correct amount actually and
unconditionally owing by such account debtor(s) thereunder.
(e) The name of the Borrower set forth in the caption hereof is its
correct corporate name, and the Borrower is not now doing business and has not
during the last five (5) years done business under any other name.
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(f) All of the Collateral is located at the locations as set forth
in the Credit Agreement Schedule 6.22.
(g) This Agreement, together with the filing of Uniform Commercial
Code financing statements in the appropriate offices for the locations of
Collateral listed in this Agreement, create a valid and continuing first lien
(except for Permitted Liens) on and perfected security interest in the
Collateral (except for property located in the United States in which a security
interest may not be perfected by filing under the Uniform Commercial Code) and
is enforceable as such against creditors of the Borrower, any owner of the real
property where any of the Collateral is located, any purchaser of such real
property and any present or future creditor obtaining a lien on such real
property. Other than as disclosed in the Credit Agreement, no financing
statement under the Uniform Commercial Code of any state or other instrument
evidencing a lien that names the Borrower as debtor is on file in any
jurisdiction and the Borrower has not signed any currently effective financing
statement or any agreement authorizing the filing of any such financing
statement or instrument.
(h) The Borrower shall defend its title to and the Secured Party's
interest in the Collateral against all claims and take any action necessary to
remove any encumbrances other than those permitted under the Credit Agreement
and defend the right, title and interest of the Secured Party in and to any of
the Borrower's rights in the Collateral.
4. Covenants. The Borrower covenants and agrees that from and after the
date of this Security Agreement and until the Obligations are fully satisfied
and the Credit Agreement is terminated:
(a) Location of Collateral. The Collateral will be kept only at the
locations set forth in the Credit Agreement and the Borrower will not remove the
Collateral (other than sales in the ordinary course of business) from such
jurisdictions without the prior written consent of the Secured Party.
(b) Further Documentation; Pledge of Instruments. At any time and
from time to time, at its sole expense, the Borrower will, promptly upon request
by the Secured Party, duly execute and deliver any and all such further
instruments and documents and take such further action as Secured Party may
reasonably deem desirable in obtaining the full benefits of this Security
Agreement and of the rights and powers herein granted, including, without
limita- tion, the filing of any financing or continuation statements under the
UCC in effect in any jurisdiction with respect to the liens and security
interests granted hereby. The Borrower also hereby authorizes the Secured Party
to file any such financing or continuation statement without the signature of
the Borrower or to file a photocopy of this Agreement as a financing statement
to the extent permitted by applicable law. If any Collateral, or if any
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amount payable under or in connection with any of the Collateral, shall be or
become evidenced by any negotiable document of title, or by any promissory note
or other instrument, such document, note or instrument shall be immediately
delivered to the Secured Party hereunder, duly endorsed in a manner satisfactory
to the Secured Party.
(c) Intentionally Deleted
(d) Limitations on Dispositions of Inventory and Equipment. The
Borrower will not sell, transfer, lease or otherwise dispose of any of its
interest in the Collateral or attempt, offer or contract to do so, except for
the disposition in the ordinary course of business of Inventory or Equipment or
other Collateral that has become worn out or obsolete or is immaterial and
unnecessary in Borrower's business operation and of Inventory. The Borrower will
not transfer any Inventory on consignment, or attempt, offer or contract to do
so.
(e) Notices Regarding Collateral. The Borrower will advise the
Secured Party promptly, in reasonable detail, (i) of any lien or claim made or
asserted against any of the Collateral (other than Permitted Liens), (ii) of all
material disputes with respect to the Collateral, and the basis therefor, and
(iii) of the occurrence of any other event that would have a material adverse
effect on the Collateral taken as a whole or on the security interests created
hereunder.
(f) Agreements Regarding Accounts.
1. The Borrower will at all reasonable times and upon reasonable notice
allow the Secured Party to examine, inspect or make extracts from or copies of
the Borrower's books and records, inspect the Collateral and arrange for
verification of Accounts constituting Collateral directly with the Borrower's
accountants, the account debtors or by other methods in the manner provided in
Section 7.9 of the Credit Agreement.
2. The Borrower will diligently collect all of its Accounts
constituting Collateral until the Secured Party exercises its rights to collect
the Accounts pursuant to this Agreement. The Borrower shall, at the request of
the Secured Party, after the occurrence of any Event of Default, notify account
debtors of the security interest of the Secured Party in any Account and that
payment thereof is to be made directly to the Secured Party. Upon request of the
Secured Party, after the occurrence of any Event of Default, any proceeds of
Accounts or Inventory constituting Collateral received by the Borrower, whether
in the form of cash, checks, notes or other instruments, shall be held in trust
for the Secured Party and the Borrower shall deliver said proceeds daily to the
Secured Party, without commingling, in the identical form received (properly
endorsed or assigned where required to enable the Secured Party to collect
same).
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(g) Indemnification. In any suit, proceeding or action brought by
the Secured Party under any Accounts, Instruments and Documents, or any General
Intangibles for any sum owing thereunder or to enforce any provision thereof,
the Borrower will save, indemnify and keep the Secured Party harmless from and
against all reasonable expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction or liability whatsoever
of the obligee thereunder arising out of a breach by the Borrower of any
agreement, indebtedness or liability at any time owing to or in favor of such
obligee or its successors from the Borrower, and all such obligations of the
Borrower shall be and remain enforceable against the Borrower and shall not be
enforceable against the Secured Party.
(h) Maintenance of Records. The Borrower will keep and maintain, at
Borrower's address as first written above or such other place as Borrower
notifies Secured Party at least 30 days in advance and at its own cost and
expense, satisfactory and complete records of the Collateral, including, without
limitation, a record of all payments received and all credits granted with
respect to the Collateral and all other dealings with the Collateral. The
Borrower will xxxx its books and records pertaining to the Collateral to
evidence this Security Agreement and the security interests granted hereby. For
the Secured Party's further security, the Borrower agrees that the Secured Party
shall have a special property interest in all of its books and records
pertaining to the Collateral (including, without limitation, customer lists,
correspondence with present or future or prospective suppliers or customers,
advertising materials, credit files, computer tapes, programs, printouts, and
all other computer materials, records and electronic data processing software),
and after demand and after the occurrence of an Event of Default the Borrower
will deliver and turn over any such books and records to the Secured Party or to
its representatives at any reasonable time on demand of the Secured Party. The
Borrower may make copies of such books and records before its delivery to the
Secured Party, provided that such copying does not unreasonably delay such
delivery.
(i) Protect Rights of Secured Party. The Borrower will, upon the
Secured Party's written request, defend the right, title and interest of the
Secured Party in and to any of the Collateral against the claims and demands of
all Persons whomsoever.
(j) Maintenance of Insurance. The Borrower will maintain with
financially sound and reputable companies satisfactory to the Secured Party
insurance policies as set forth in the Credit Agreement. All such insurance
proceeds received by the Secured Party may be applied by the Secured Party in
its discretion to the satisfaction of the Obligations or to repair or replace
any Collateral which sustained the casualty, except as otherwise required by
applicable law; provided, however, that if such proceeds are less than
$100,000.00 for any claim and $300,000.00 in
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the aggregate, so long as no Default has occurred and is continuing and no Event
of Default has occurred, the Bank shall allow the Borrower to use such proceeds
to repair, replace or rebuild such damaged property.
(k) Further Identification of Collateral. The Borrower will furnish
to the Secured Party from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Secured Party may reasonably request, all in
reasonable detail.
(l) Maintenance of Equipment. Except as permitted by 4(d) hereof,
the Borrower will keep and maintain each item of Equipment in good operating
condition, ordinary wear and tear excepted, and the Borrower will provide all
maintenance and service and all repairs necessary for such purpose.
(m) Assignment of Claims. If any of the Accounts arise out of
contracts with the United States, or any state, or any department, agency or
instrumentality of either, Borrower shall immediately so notify Secured Party
and execute such instruments of assignment and take such other measures as may
be required to assign such Accounts to Secured Party and provide proper notice
thereof to the government under the Federal Assignment of Claims Act or any
applicable state assignment of claims act.
5. Secured Party's Appointment as Attorney-in-Fact.
(a) The Borrower hereby irrevocably constitutes and appoints the
Secured Party and each officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Borrower and in the name of
the Borrower or in its own name, from time to time, but only to be used after
demand for the purpose of carrying out the terms of this Security Agreement, to
take any and all appropriate action and to execute any and all documents and
instruments that may be necessary or desirable to accomplish the purposes of
this Security Agreement and, without limiting the generality of the foregoing,
hereby gives the Secured Party the power and right, on behalf of the Borrower,
without notice to or assent by the Borrower to do the following after the
occurrence of an Event of Default:
(i) to ask, demand, collect, receive and give acquittances and
receipts for any and all moneys due and to become due to Borrower under any
Account, or otherwise, and, in the name of the Borrower or its own name or
otherwise, to take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due to
Borrower and to file any claim or to take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the Secured Party for
the purposes of collecting any and all such moneys due whenever payable;
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(ii) to pay or discharge taxes or liens levied or placed on
or threatened against the Collateral, to effect any repairs or any insurance
called for by the terms of this Security Agreement and to pay all or any part of
the premiums therefor and the costs thereof; and
(iii) (A) to direct any party liable for any payment to
Borrower under any Account, or otherwise, to make payment of any and all moneys
due and to become due thereunder directly to the Secured Party or as the Secured
Party shall direct; (B) to receive payment of and receipt for any and all
moneys, claims and other amounts due and to become due at any time in respect of
or arising out of any Collateral; (C) to sign and endorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with Accounts and
other documents relating to the Collateral; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any
other right in respect of any Collateral; (E) to defend any suit, action or
proceeding brought against the Borrower with respect to any Collateral; (F) to
settle, compromise or adjust any suit, action or proceeding described above and,
in connection therewith, to give such discharges or releases as the Secured
Party may deem appropriate; (G) after demand, to notify the postal authorities
to change the address for delivery of any mail of the Borrower to an address
designated by the Secured Party, and to receive, open, and dispose of all mail
addressed to the Borrower; and (H) after demand, otherwise to sell, transfer,
pledge, make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Secured Party were the absolute
owner thereof for all purposes, and to do, at the Secured Party's option and the
Borrower's expense, at any time or from time to time, all acts and things that
the Secured Party reasonably deems necessary to protect, preserve or realize
upon the Collateral and the Secured Party's security interests therein, in order
to effect the intent of this Security Agreement, all as fully and effectively as
the Borrower might do.
The Borrower hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof except for actions committed in bad faith or with
gross negligence or willful misconduct. This power of attorney is a power
coupled with an interest and shall be irrevocable.
(b) The powers conferred on the Secured Party hereunder are solely
to protect the interests of the Secured Party in the Collateral and shall not
impose any duty or obligation upon the Secured Party to exercise any such
powers. The Secured Party shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall be responsible
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to the Borrower for any act or failure to act, except for its own willful
misconduct, gross negligence or bad faith.
6. Performance by Secured Party of the Borrower's Obligations. If the
Borrower fails to perform or comply with any of its agreements contained herein
and the Secured Party, as provided for by the terms of this Security Agreement,
shall itself perform or comply, or otherwise cause performance or compliance,
with such agreement, the reasonable costs and expenses of the Secured Party
incurred in connection with such performance or compliance shall be paid by the
Borrower on demand and until so paid shall be added to the principal amount of
the Loan and shall bear interest (calculated on the basis of a 360-day year for
the actual days elapsed) at the same rate as provided in the Loan Documents for
overdue amounts.
7. Events of Default. The occurrence of any Event of Default under the
Credit Agreement shall constitute an Event of Default hereunder.
8. Remedies, Rights Upon Default. If an Event of Default occurs:
(a) (i) All payments received by the Borrower under or in connection
with any of the Collateral shall be held by the Borrower in trust for the
Secured Party, shall be segregated from other funds of the Borrower and shall
forthwith upon receipt by the Borrower be turned over to the Secured Party, in
the same form as received by the Borrower (duly endorsed by the Borrower to the
Secured Party, if required).
(ii) Any and all such payments so received by the Secured Party
(whether from the Borrower or otherwise) shall be held by the Secured Party as
collateral security for, and then or at any time thereafter, may be applied in
whole or in part for the benefit of the Secured Party against, all or any part
of the Obligations in such order as the Secured Party, in its discretion, may
determine.
(iii) The Secured Party shall have the right to seize and take
possession of any Collateral (or any paper, documents, correspondence, computer
tapes, programs, printouts and all other computer materials, records and
electronic data processing software relating to the Collateral) and may enter
the premises where they, or any of them, are located and occupy all or any
portion of the Borrower's premises without charge therefor for the purposes of
effecting such seizure. The Secured Party shall not be liable to the Borrower
for any damage suffered by the Borrower by reason of such entry or seizure
unless it results from the Secured Party's willful misconduct, gross negligence
or bad faith.
(iv) The Secured Party may hire and maintain at the Borrower's
principal office premises a custodian or independent
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contractor selected by the Secured Party who shall have full authority to do all
lawful acts necessary to protect the Secured Party's interests and to report to
the Secured Party thereon. The Borrower hereby agrees to cooperate with any such
Person and to do whatever the Secured Party may reasonably request to preserve
the Collateral.
(b) The Secured Party may exercise, after the occurrence of an Event
of Default, for the benefit of the Secured Party, in addition to all other
rights and remedies granted in this Security Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the UCC. Without limiting the
generality of the foregoing, the Borrower expressly agrees that in any such
event the Secured Party may, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or on the Borrower or any other Person,
all and each of which demands, advertisements and/or notices are (to the extent
permitted by applicable law) hereby expressly waived, forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
forthwith take possession and operate or use the Collateral or any part thereof
for the purpose of preserving it or its value, and/or forthwith sell, lease,
assign, give option or options to purchase, or sell or otherwise dispose of and
deliver the Collateral (or contract to do so), or any part thereof, in one or
more parcels at public or private sale or sales, at any exchange or broker's
board or at any of the Secured Party's offices or elsewhere, at such prices as
it may deem appropriate, for cash or on credit or for future delivery without
assumption of any credit risk and to collect all Accounts, including, without
limitation, direct all Account Debtors to make payments of all of their Accounts
owing to the Borrower directly to the Bank and to exercise every right, option,
power or authority inuring to the Borrower under the Purchase Contract as fully
as the Borrower could itself, including, directing the counterparty thereto to
make all payments under the indemnification provisions of Section 10.3 thereof
directly to the Lender. Secured Party shall have the right on any such public
sale or sales and, to the extent permitted by law, on any such private sale or
sales to purchase the whole or any part of said Collateral so sold, free of any
right or equity of redemption in the Borrower, which right or equity is (to the
extent permitted by applicable law) hereby expressly waived or released. The
Borrower further agrees, at the Secured Party's request, to assemble the
Collateral and make it available to the Secured Party at places that the Secured
Party shall reasonably select, whether at the Borrower's premises or elsewhere.
To the extent permitted by applicable law, the Borrower waives all
claims, damages and demands against the Secured Party arising out of the
repossession, retention, sale, or other disposition of the Collateral unless
resulting from such Secured Party's willful misconduct, gross negligence or bad
faith. The Borrower agrees
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that the Secured Party need not give more than ten (10) days' notice (which
notification shall be deemed given when mailed) of the time and place of any
public sale or of the time after which a private sale may take place and that
such notice is reasonable notification of such matters. No notification need be
given to the Borrower if it has signed, after demand, a statement renouncing or
modifying any right to notification of sale or other intended disposition. The
Borrower shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all amounts to which the
Secured Party is entitled, the Borrower also being liable for the reasonable
fees and expenses of any attorneys employed by Secured Party to collect such
deficiency. The Secured Party shall have the right, in its sole discretion, to
determine which rights, security, liens, guaranties or remedies the Secured
Party shall retain, pursue, release, subordinate, modify, or enforce, without in
any way modifying or affecting any of the other of them or any of its rights
hereunder.
(c) To the extent that it may lawfully do so, the Borrower agrees
that it will not at any time insist upon, plead or in any manner whatsoever
claim or take the benefit or advantage of any appraisement, valuation, stay,
extension or redemption laws, or any law permitting it to direct the order in
which the Collateral or any part thereof shall be sold, now or at any time
hereafter in force, which may delay, prevent or otherwise affect the performance
or enforcement of this Security Agreement or the Obligations and hereby
expressly waives all benefit or advantage of any such laws and covenants that it
will not hinder, delay or impede the execution of any power granted or delegated
to the Secured Party in this Security Agreement, but will suffer and permit the
execution of every such power as though no such laws were in force.
(d) To the extent not expressly provided for herein the Secured
Party shall also have all of its rights and remedies under the Credit Agreement.
(e) Borrower shall be responsible for any and all reasonable
expenses, including reasonable attorneys' fees and expenses, incurred or paid by
Secured Party in protecting or enforcing any rights of Secured Party hereunder,
including its right to take possession, store, operate, use and dispose of the
Collateral or to collect the Proceeds thereof. Secured Party shall also have the
right to pay all other sums deemed necessary or desirable by it for the
preservation and protection of the Collateral, or for the realization thereupon,
including taxes, insurance, salaries (directly related to the preservation or
use of the Collateral or continued operation of the Borrower's businesses to
that end), fees and costs. All such sums so paid by Secured Party shall be
"Obligations" within the meaning of this Security Agreement, due upon demand.
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13
9. Limitation on Secured Party's Duty in Respect to Collateral. Beyond
the safe custody thereof, the Secured Party shall have no duty as to any
Collateral in its possession or its nominee's or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto. In any suit, proceeding or action brought by Secured Party under any
Accounts, Instruments and Documents, or any General Intangibles for any sum
owing thereunder or to enforce any provision thereof, Borrower will save,
indemnify and keep Secured Party harmless from and against all reasonable
expense, loss or damage suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction or liability whatsoever of the obligee thereunder
arising out of a breach by Borrower of any agreement, indebtedness or liability
at any time owing to or in favor of such obligee or its successors from
Borrower, and all such obligations of Borrower shall be and remain enforceable
against Borrower.
10. Setoff. As security for the due payment and performance of all of
Borrower's Obligations to Secured Party now in existence or hereafter arising,
including, without limitation, Borrower's obligations hereunder, under the Note
and under the other Loan Documents, Borrower hereby grants to Secured Party a
lien on any and all deposits or other sums at any time credited by or due from
Secured Party and any affiliate of Secured Party to Borrower, whether in regular
or special depository accounts or otherwise, and any and all moneys, securities
and other property of Borrower, and the proceeds thereof, now or hereafter held
or received by or in transit to Secured Party from or for Borrower, whether for
safekeeping, custody, pledge, transmission, collection or otherwise, and any
such deposits, sums, moneys, securities and other property, may at any time,
after the occurrence of an Event of Default, be set off, appropriated and
applied by Secured Party against any of such Obligations, whether or not any of
the Obligations is then due or is secured by any other collateral, or, if it is
so secured, whether or not the other collateral held by Secured Party is
considered to be adequate.
11. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or on the Borrower or the Secured
Party shall be in writing and shall be given or made as provided in and subject
to the provisions of the Credit Agreement.
12. Severability. The provisions of this Agreement are severable, and
if any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
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14
13. No Waiver; Cumulative Remedies. The Secured Party shall not by any
act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver shall be valid unless in writing, signed by the
Secured Party and then only to the extent therein set forth. A waiver of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy that the Secured Party would otherwise have had on any
future occasion. No failure to exercise nor any delay in exercising, on the part
of any Secured Party, any right, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or future exercise thereof or the
exercise or any other right, power or privilege. The rights and remedies
hereunder provided are cumulative, may be exercised singly or concurrently and
are not exclusive of any rights and remedies under the other Loan Documents or
available at law or in equity.
14. No Oral Modification; Successors; Governing Law. None of the terms
or provisions of this Security Agreement may be waived, altered, modified or
amended except by an instrument in writing, duly executed by the Secured Party
(and the Borrower, except in the case of a waiver). This Security Agreement and
all obligations of the Borrower hereunder shall be binding on the respective
successors and assigns of the Borrower and shall, together with the rights and
remedies of the Secured Party hereunder, inure to the benefit of the Secured
Party and its respective successors and assigns; provided, however, that the
foregoing shall not be deemed to modify the prohibitions on assignments or
transfers by Borrower contained herein or in the Credit Agreement and other Loan
Documents. This Security Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the Commonwealth of Massachusetts,
provided, however, that with respect to the perfection of the Secured Party's
lien in the Collateral and the effect or non-perfection thereof, this Security
Agreement shall be governed by, and construed in accordance with the laws of the
jurisdiction where such Collateral is located, as such laws are made applicable
by Section 9-103 of the Uniform Commercial Code as in effect in the Commonwealth
of Massachusetts. The Credit Agreement, the Note and other Loan Documents
(except as otherwise specifically provided therein) shall be governed by
Massachusetts state law as provided in the Credit Agreement.
15. Further Indemnification. The Borrower agrees to pay, and to save
the Secured Party harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, or failure of Borrower to pay, any wages or
salaries or any excise, sales, payroll, unemployment or other taxes that may be
payable or
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15
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Security Agreement. This
covenant shall survive the termination of this Security Agreement.
16. Counterparts. This Security Agreement may be executed in any number
of separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
17. Descriptive Headings. The captions in this Security Agreement are
for convenience of reference only and shall not define or limit the provisions
hereof.
IN WITNESS WHEREOF, the parties have executed this Security Agreement
as an instrument under seal as of the date first written above.
Witness: TRITON SYSTEMS, INC.
/s/ [illegible] By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------- ------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
Witness: THE FIRST NATIONAL BANK OF BOSTON
/s/ [illegible] By: /s/ Xxxxxxx X. X'Xxxxx
-------------------------------- ------------------------------
Name: Xxxxxxx X. X'Xxxxx
Title: Managing Director
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16
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss: Boston September __, 1996
Then personally appeared the above-named __________________,
____________________ of Triton Systems, Inc., as aforesaid and acknowledged the
foregoing instrument to be his free act and deed in said capacity and the free
act and deed of said corporation, before me.
________________________________
Notary Public
My Commission Expires:
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss: Boston October 11, 1996
Then personally appeared the above-named Xxxxxxx X. X'Xxxxx, Managing
Director of The First National Bank of Boston as aforesaid and acknowledged the
foregoing instrument to be his free act and deed in said capacity and the free
act and deed of said The First National Bank of Boston, before me.
/s/ XxxxXxxxx Xxxxxxx
-------------------------------
Notary Public
My Commission Expires:
XXXXXXXXX XXXXXXX, Notary Public
My Commission Expires May 13, 0000
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00
XXXXX XX XXXXXXXXXXX
Xxxxxxxx Xxxxxx, ss. Sept. 25, 1996
Then personally appeared the above-named Xxxxxx X. Xxxxxxxx of Long
Beach, Mississippi and acknowledged the foregoing instrument to be their free
act and deed; before me.
/s/ [illegible]
------------------------------------
Notary Public
Print Name:
My commission expires: [illegible]
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