Exhibit No. 10(a)
IBF VI - Participating Income Corporation
Form SB-2, Amend. No. 2
File No. 333-71091
THIS INSTRUMENT IS SUBJECT TO AN INTERCREDITOR AND SUBORDINATION
AGREEMENT DATEIJ AS OF THE DATE HEREOF (THE "SUBORDINATION
AGREEMENT') AMONG THE BORROWER, THE LENDER AND SOVEREIGN BANK
(THE "BANK") WHICH, AMONG OTHER THINGS, SUBORDINATES THE
BORROWER'S OBLIGATIONS TO THE LENDER TO THE BORROWER'S
OBLIGATIONS TO THE BANK.
SECURED SUBORDINATED TERM NOTE
$3,000,000 August 25,
0000
Xxxxxx,
Xxxxxxxxxxxxx
FOR VALUE RECEIVED, the undersigned USM ACQUISITION CORP., a
Massachusetts corporation (the "Borrower"), promises to pay to
INTERBANK FUNDING CORP. (the "Lender", or order, at its office at
0000 Xxxxxxxxxxx, X.X., Xxxxxxxxxx XX 00000, the principal sum of
THREE MILLION DOLLARS ($3,000,000)
with interest from the date hereof on the unpaid balance of said
principal sum from time to time outstanding at the Interest Rate
as stated below, paid in arrears on the first day of each month
beginning on September 1, 1999, and on the Maturity Date (as
defined below).
Interest Rate. This Note shall bear interest at the rate
equal to 13.46% per annum (the "Interest Rate"). Upon the
occurrence of an Event of Default, (to the extent allowable by
law) overdue interest shall bear interest, and the Borrower
agrees to pay, at a rate ("Post-Default Rate") equal to two
percent (2%) in excess of the Interest Rate, payable on demand.
Prepayment. Subject to the restrictions set forth in the
Subordination Agreement, the Borrower, at its option, shall have
the right from time to time, without premium or penalty, to
prepay this Note at any time in part or in whole. The Borrower
shall also pay all accrued but unpaid interest at the time of any
such prepayment. Any partial payment of the indebtedness
evidenced by this note shall be applied first to interest hereon
accrued to the date of payment, then to the payment of other
amounts (except principal) at the time unpaid hereunder, and
finally to the unpaid principal hereof.
Payments. All payments of principal, interest and other
amounts payable on or in respect of this Note or the indebtedness
evidenced hereby shall be made to the Lender at the address
specified above and in lawful money of the United States of
America, in funds immediately available to the Lender as it may
direct. Whenever any payment to be made in respect hereto becomes
due on a day which is a Saturday, Sunday or legal holiday, the
maturity thereof shall be extended to the next succeeding
business day and interest hereon shall accrue at the applicable
rate during such extensions. Unless previously terminated by
agreement of the Lender and Borrower or otherwise, this Note
shall terminate and be due and payable at the close of business
on August 16, 2002 (the "Maturity Date").
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Events of Default and Acceleration. Each of the following
events shall constitute an event of default (an "Event of
Default") hereunder: (a) the failure to make any payment of
principal or interest hereunder when due; (b) any representation
or warranty made by the Borrower shall prove to be materially
incorrect when made; (c) the Borrower defaults on any other
indebtedness or obligations owed to the Lender with an original
principal amount greater than $50,000.00 in the aggregate
(including but not limited to Borrower's obligations under the
Security Agreement between Lender and Borrower of even date
herewith); (d) the Borrower defaults on any other indebtedness
owed to anyone other than the Lender beyond any applicable period
of grace; or (e) the Borrower makes an assignment for the benefit
of creditors, or bankruptcy or similar proceedings are commenced
by or against the Borrower, or all or a substantial part of the
Borrower's property is attached or a receiver, trustee or other
custodian is appointed therefor. At the option of the Lender,
this Note shall become immediately due and payable without notice
or demand upon the occurrence at any time of any Event of
Default, provided, however, that upon any event of Default
specified in subsection (e) above this Note shall become
immediately due and payable without any demand, notice or other
action by the Lender.
Costs of Collection. Should the indebtedness evidenced by
this Note or any part thereof be collected by action at law, or
in bankruptcy, receivership or other court proceedings, or should
counsel be retained for collection of this Note after default,
the Borrower agrees to pay, upon demand by the Lender, in
addition to principal and interest and other sums, if any, due
and payable hereon, court costs and reasonable attorneys' fees
and other collection charges, together with interest thereon at
the rate applicable under this Note to amounts past due, unless
prohibited by law, all without relief from valuation or
appraisement laws.
Waiver. No delay or omission on the part of the holder in
exercising any right hereunder shall operate as a waiver of such
right or of any other right of such holder, nor shall any delay,
omission or waiver on any one occasion be deemed a bar to or
waiver of the same or any other right on any future occasion. The
Borrower and every indorser or guarantor of this Note regardless
of the time, order or place of signing waives presentment,
demand, protest and notices of every kind and assents to any one
or more extensions or postponements of the time of payment or any
other indulgences, to any substitutions, exchanges or releases of
collateral if at any time there be available to the holder
collateral for this Note, and to the additions or releases of any
other parties or persons primarily or secondarily liable.
Massachusetts Law; Seal. All rights and obligations
hereunder shall be governed by the law of the Commonwealth of
Massachusetts, and this Note shall be deemed to be under seal.
Witness: USM ACQUISITION CORP.
By:
Title:
Witness:
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THIS INSTRUMENT IS SUBJECT TO AN INTERCREDITOR AND SUBORDINATION
AGREEMENT DATED AS OF THE DATE HEREOF (THE "SUBORDINATION
AGREEMENT") AMONG THE BORROWER, THE LENDER AND SOVEREIGN BANK
(THE "BANK") WHICH, AMONG OTHER THINGS, SUBORDINATES THE
BORROWER'S OBLIGATIONS TO THE LENDER TO THE BORROWER'S
OBLIGATIONS TO THE BANK.
SECURED SUBORDINATED REVOLVING CREDIT NOTE
$900,000 August- 25,1999
Boston, Massachusetts
FOR VALUE RECEIVED, the undersigned USM ACQUISITION CORP., a
Massachusetts corporation (the "Borrower"), promises to pay to
INTERBANK FUNDING CORP. (the "Lender"), or order, at its office
at 0000 Xxxxxxxxxxx, X.X., Xxxxxxxxxx XX 00000 the principal sum
of
NINE HUNDRED THOUSAND DOLLARS ($900,000)
or, if less, the principal amount of all Advances (as defined
below) made by the Lender from time to time hereunder, with
interest from the date hereof on the unpaid balance of said
principal sum from time to time outstanding at the Interest Rate
as stated below, paid in arrears on the first day of each month
beginning on August 1, 1999, and on the Maturity Date (as defined
below).
Advances. (a) Subject to the terms and conditions set forth
herein, the Lender agrees to make Advances to the Borrower from
time to time until the Maturity Date (as defined below) in an
aggregate principal amount that will not result in the Lender's
Advances exceeding the lesser of (i) the principal amount of this
Note or (ii) the Borrowing Base. The "Borrowing Base" shall be
determined by the Lender by reference to the most recent
Borrowing Base Certificate delivered by the Borrower to the
Lender as provided below and shall equal the sum of 20% of
Accounts and 45% of Inventory.
(b) The Borrower shall deliver a Borrowing Base Certificate
signed by the Chief Financial Officer of the Borrower in the form
attached hereto as Exhibit A to the Lender monthly no later than
15 days after the end of each month. "Accounts" means the face
amount of accounts of the Borrower located in the United States
for which goods have been shipped or delivered to an account
debtor in the United States, which are subject to a security
interest in favor of the Lender and which are not more than 60
days past due. "Inventory" means inventory of the Borrower in
good and marketable condition located in the United States,
valued on a first-in-first-out basis at fair market value, and
subject to a security interest in favor of the Lender. Within the
foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow
Advances. The Borrower hereby agrees to deliver promptly a
written notice to the Lender specifying any change in the
Borrower's borrowing base with the Bank. Upon receipt of any such
notice, the Lender reserves the right to adjust the Borrowing
Base .
(c) To make a request for Advances, Borrower shall provide
Lender with a written borrowing request for such Advances, and
Lender shall fund such Advances within two business days after
the receipt of such written request. All advances made by Lender
to the Borrower hereunder ("Advances") and all payments of the
principal thereof shall be endorsed by the holder of this Note on
the Schedule of Advances and Repayments attached hereto and shall
be reflected in the business records of Lender. The entries in
the Schedule of Advances and Repayments attached hereto and in
the business records of
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Lender shall constitute prima facie
evidence of the accuracy of the information so listed; provided,
however, that the failure of the holder of this Note to include
information as to any advance or payment on such Schedule of
Advances and Repayments or in such business records shall not in
any manner affect the obligation of the Borrower to repay any
advances made under this Note on or prior to the Maturity Date.
Lender Records. Lender is hereby irrevocably authorized (but
not required) to keep a record of the date and amount of each
payment of principal hereon. In the absence of manifest error,
such records shall constitute conclusive evidence thereof. No
failure on the part of Lender to establish such recordkeeping
system shall in any way affect the rights of Lender or the
obligations of the Borrower to repay advances under this Note on
or prior to the Maturity Date.
Interest Rate. This Note shall bear interest at the rate
equal to 12% per annum (the "Interest Rate"). Upon the occurrence
of an Event of Default, (to the extent allowable by law) overdue
interest shall bear interest, and the Borrower agrees to pay, at
a rate ("Post-Default Rate") equal to two percent (2%) in excess
of the Interest Rate, payable on demand.
Prepayment. Subject to the restrictions set forth in the
Subordination Agreement, the Borrower, at its option, shall have
the right from time to time, without premium or penalty, to
prepay this Note at any time in part or in whole. The Borrower
shall also pay all accrued but unpaid interest at the time of any
such prepayment. Any partial payment of the indebtedness
evidenced by this Note shall be applied first to interest hereon
accrued to the date of payment, then to the payment of other
amounts (except principal) at the time unpaid hereunder, and
finally to the unpaid principal hereof.
Payments. All payments of principal, interest and other
amounts payable on or in respect of this Note or the indebtedness
evidenced hereby shall be made to the Lender at the address
specified above and in lawful money of the United States of
America, in funds immediately available to the Lender as it may
direct. Whenever any payment to be made in respect hereto becomes
due on a day which is a Saturday, Sunday or legal holiday, the
maturity thereof shall be extended to the next succeeding
business day and interest hereon shall accrue at the applicable
rate during such extensions. Unless previously terminated by
agreement of the Lender and Borrower or otherwise, this Note and
the Advances hereunder shall terminate and be due and payable at
the close of business on August 16, 2002 (the "Maturity Date").
Events of Default and Acceleration. Each of the following
events shall constitute an event of default (an "Event of
Default") hereunder: (a) the failure to make any payment of
principal or interest hereunder when due; (b) any representation
or warranty made by the Borrower shall prove to be materially
incorrect when made; (c) the Borrower defaults on any other
indebtedness or obligations owed to the Lender with an original
principal amount greater than $50,000.00 in the aggregate
(including but not limited to Borrower's obligations under the
Security Agreement between Lender and Borrower of even date
herewith); (d) the Borrower defaults on any other indebtedness
owed to anyone other than the Lender beyond any applicable period
of grace; or (e) the Borrower makes an assignment for the benefit
of creditors, or bankruptcy or similar proceedings are commenced
by or against the Borrower, or all or a substantial part of the
Borrower's property is attached or a receiver, trustee or other
custodian is appointed therefor. At the option of the Lender,
this Note shall become immediately due and payable without notice
or demand upon the occurrence at any time of any Event of
Default, provided, however, that upon any event of Default
specified in subsection (e) above this Note shall become
immediately due and payable without any demand, notice or other
action by the Lender.
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Costs of Collection. Should the indebtedness evidenced by
this Note or any part thereof be collected by action at law, or
in bankruptcy, receivership or other court proceedings, or should
counsel be retained for collection of this Note after default,
the Borrower agrees to pay, upon demand by the Lender, in
addition to principal and interest and other sums, if any, due
and payable hereon, court costs and reasonable attorneys' fees
and other collection charges, together with interest thereon at
the rate applicable under this Note to amounts past due, unless
prohibited by law, all without relief from valuation or
appraisement laws.
Waiver. No delay or omission on the part of the holder in
exercising any right hereunder shall operate as a waiver of such
right or of any other right of such holder, nor shall any delay,
omission or waiver on any one occasion be deemed a bar to or
waiver of the same or any other right on any future occasion. The
Borrower and every indorser or guarantor of this Note regardless
of the time, order or place of signing waives presentment,
demand, protest and notices of every kind and assents to any one
or more extensions or postponements of the time of payment or any
other indulgences, to any substitutions, exchanges or releases of
collateral if at any time there be available to the holder
collateral for this Note, and to the additions or releases of any
other parties or persons primarily or secondarily liable.
Massachusetts Law; Seal. All rights and obligations
hereunder shall be governed by the law of the Commonwealth of
Massachusetts, and this Note shall be deemed to be under seal.
Witness: USM ACQUISITION CORP.
By:
Title:
Witness:
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SCHEDULE OF ADVANCES AND REPAYMENTS
1. ADVANCES
Date of Advance Amount of Advance
2. REPAYMENTS
Date of Repayment Amount of Repayment
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated as of August 25, 1999, is made
by and between USM ACQUISITION CORP., a Massachusetts corporation
having its principal place of business at 000 Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxxxx 00000 (the "Compan "), and INTERBANK
FUNDING CORP. whose principal place of business is 0000
Xxxxxxxxxxx, X.X., Xxxxxxxxxx XX 00000 (the "Secured Party").
WITNESSETH
WHEREAS, the Company has issued to the order of the Secured
Party on the date hereof its Secured Subordinated Term Note in
the original principal amount of $3,000,000 and a Secured
Subordinated Revolving Credit Note in the original principal
amount of $900,000 (as amended, the "Notes") pursuant to which
the Secured Party agreed, subject to the terms and conditions set
forth therein, to make a loan in such principal to the Company
(the "Loan");
WHEREAS, in connection with the execution and delivery of
the Notes, the Secured Party has requested and the Company has
agreed to enter into this Agreement, pursuant to which the
Company is granting liens and security interests in favor of the
Secured Party;
NOW, THEREFORE, in consideration of the willingness of the
Secured Party to agree, subject to the terms and conditions set
forth therein, to make the Loan to the Company, and for other
good and valuable consideration, receipt of which is hereby
acknowledged, it is hereby agreed as follows:
1. Security Interest . As security for the Secured
Obligations described in Section 2 hereof, the Company hereby
grants to the Secured Party a security interest in and lien on
all of the tangible and intangible personal property and fixtures
of the Company, including the property described below, whether
now owned or existing, or hereafter acquired or arising, together
with any and all additions thereto, replacements and
substitutions therefor, and proceeds and products thereof
(hereinafter referred to collectively as the "Collateral"):
(i) all inventory, goods, merchandise, raw materials,
supplies, goods in process, finished goods and other tangible
personal property held by the Company for processing, sale or
lease or furnished or to be furnished by the Company under
contracts of service or to be used or consumed in the Company's
business (the foregoing items in this clause (i) being sometimes
herein referred to collectively as "Inventory");
(ii) all accounts, accounts receivable and notes, drafts,
acceptances and other instruments representing or evidencing a
right to payment for goods sold or leased or for services
rendered whether or not earned by performance (the foregoing
items in this clause (ii) being sometimes herein' referred to
collectively as "Accounts Receivable"), as well as all right,
title and interest of the Company in the goods which have given
rise thereto, including the right of stoppage in transit;
(iii) all general intangibles of the Company, including
without limitation, goodwill and all present and future
intellectual property rights of the Company, including without
limitation, all trademark rights, all copyright rights, all
patent rights, all trade secrets, all know-how, and all causes of
action arising under all such intellectual property rights;
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(iv) all of the Company's chattel paper of every kind and
description, including all additions thereto and substitutions
therefor;
(v) all other rights of the Company to the payment of
money, including without limitation, amounts due from affiliates,
all tax refunds of every kind and nature including loss carryback
refunds, insurance proceeds, under factoring agreements, and all
rights to deposits or advance payments;
(vi) all customer lists, files, records (including without
limitation computer programs, disks, tapes and related electronic
data processing media) and writings of the Company or in which
the Company has an interest in any way relating to the foregoing
property and all rights of the Company to retrieval from third
parties of electronically processed and recorded information
pertaining to any of such property;
(vii) all of the Company's documents and instruments
(whether negotiable or non-negotiable);
(viii) all funds and investments in any collateral account
or accounts maintained from time to time by the Company with the
Secured Party;
(ix) all guaranties and securities for any of the foregoing;
and
(x) all of the Company's equipment, machinery, fixtures,
furniture, office supplies and vehicles.
2. Secured Obligations. The security interest hereby
granted shall secure the due and punctual payment and performance
of the following liabilities and obligations (herein called the
"Secured Obligations"):
(a) Principal of and premium, if any, and interest on the
Notes; and
(b) Any and all other indebtedness or obligations of the
Company to the Secured Party, whether direct or indirect,
absolute or contingent, due or to become due or now existing or
hereafter arising including, without limitation, any and all
other fees, premiums or penalties payable by the Company to the
Secured Party.
3. Special Warranties and Covenants of Company. The
Company hereby warrants and covenants to the Secured Party that:
(a) The address shown as the principal place of business of
the Company set forth in the introductory paragraph to this
Agreement is the current principal place of business of the
Company, and all of the Company's current additional places of
business, if any, and the locations of all of the Collateral
currently are listed on Schedule 3. The Company will not change
its principal or any other place of business, or the location of
any Collateral from the locations set forth in Schedule 3, or
make any change in the Company's name or conduct the Company's
business operations under any fictitious business name or trade
name, without, in any such case, at least thirty (30) days' prior
written notice to the Secured Party.
(b) Except for the security interest created hereunder and
the security interest in favor of Sovereign Bank ("Sovereign"),
the Company is the owner of the Collateral free from any lien,
security
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interest or encumbrance, and will defend the Collateral
against all claims and demands of all persons at any time
claiming the same or any interest therein nor will the Company
create, incur or permit to exist any mortgage, lien, charge,
encumbrance or security interest whatsoever with respect to its
Collateral except for the security interest in favor of
Sovereign.
(c) The Company will not sell or otherwise dispose of any
of the Collateral or any interest therein except in the ordinary
course of business.
(d) The Company will keep the Collateral in good order and
repair and adequately insured at all times in accordance with
commercially reasonable industry practice. The Company will pay
promptly when due all taxes and assessments on the Collateral or
for its use or operation, except for taxes and assessments to be
contested in good faith. The Secured Party may at its option
discharge any taxes, liens, security interests or other
encumbrances to which any Collateral is at any time subject, and
may, upon the failure of the Company so to do, purchase insurance
on any Collateral and pay for the repair, maintenance or
preservation thereof, and the Company agrees to reimburse the
Secured Party on demand for any payments made or expenses
incurred by the Secured Party pursuant to the foregoing
authorization and any unreimbursed amounts shall constitute
Secured Obligations for all purposes hereof.
(e) The Collateral may be transferred to a third party upon
an Event of Default without the consent of any other third party.
(f) The Company will promptly execute and deliver to the
Secured Party such financing statements, certificates and other
documents or instruments as may be necessary to enable the
Secured Party to perfect or from time to time renew the security
interest granted hereby, including, without limitation, such
financing statements, certificates and other documents as may be
necessary to perfect a security interest in any additional
Collateral hereafter acquired by the Company or in any
replacements or proceeds thereof. The Company authorizes and
appoints the Secured Party to execute such financing statements,
certificates and other documents in its stead, with full power of
substitution, as the Company's attorney in fact. The Company
further agrees that a carbon, photographic or other reproduction
of a security agreement or financing statement is sufficient as a
financing statement under this Agreement. With respect to any
investments or other Collateral hereunder which are book entry or
uncertificated securities, the Company authorizes the Secured
Party to cause its security interest therein to be noted on the
books and records of the issuer thereof or other registrar
therefor and to take such other actions as may be necessary to
perfect the Secured Party's security interest therein.
(g) The Company will give the Secured Party notice of each
office of the Company at which records of the Company pertaining
to all intangible items of Collateral are kept. Except as such
notice is given, the Company's records concerning all intangible
Collateral are and will be kept at the address shown at the
beginning of this Agreement as the principal place of business of
the Company.
4. Special Provisions Concerning, Accounts Receivable.
(a) Upon the occurrence and during the continuation of an
Event of Default, the Secured Party may notify or may require the
Company to notify account debtors obligated on any or all of the
Accounts Receivable to make payment directly to the Secured
Party.
(b) The Company hereby irrevocably appoints the Secured
Party the true and lawful attorney of the Company with full power
of substitution, in the name of the Secured Party or in the name of the
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Company or otherwise, for the sole benefit of the Secured
Party but at the sole expense of the Company, without notice to
or demand upon the Company: (i) to demand, collect, receive
payment of, receipt for, settle, compromise or adjust, and give
discharges and releases in respect of the Accounts Receivable or
any of them; (ii) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent
jurisdiction to collect the Accounts Receivable or any of them
and to enforce any other rights in respect thereof or in respect
of the goods which have given rise thereto; (iii) to defend any
suit, action or proceeding brought against the Company with
respect to any Account Receivable or the goods which have given
rise thereto; (iv) to settle, compromise or adjust any suit,
action or proceeding described in clause (ii) or (iii) above,
and, in connection therewith, to give such discharges or releases
as the Secured Party may deem appropriate; (v) to endorse checks,
notes, drafts, acceptances, money orders, bills of lading,
warehouse receipts or other instruments or documents evidencing
or securing the Accounts Receivable or any of them; (vi) to
receive, open and dispose of all mail addressed to the Company
and to notify the post office authorities to change the address
of delivery of mail addressed to the Company to such address,
care of the Secured Party, as the Secured Party may designate;
and (vii) generally to sell, assign, transfer, pledge, make any
agreement in respect of or otherwise deal with any Account
Receivable or the goods which have given rise thereto as fully
and completely as though the Secured Party were the absolute
owner thereof for all purposes; provided, however, that the
foregoing rights granted to the Secured Party pursuant to this
subsection (b) shall not be exercised by the Secured Party unless
an Event of Default shall have occurred and be continuing. The
powers conferred on the Secured Party by this Agreement are
solely to protect any interest of the Secured Party and shall not
impose any duty upon the Secured Party to exercise any such
power, and if the Secured Party shall exercise any such power, it
shall be accountable only for amounts that it actually receives
as a result thereof and shall not be responsible to the Company
except for gross negligence or willful misconduct. The Secured
Party shall be under no obligation to take steps necessary to
preserve the rights in any Collateral against prior parties but
may do so at its option. The Secured Party may at its option
transfer at any time to itself or to its nominee any securities
held as Collateral hereunder and receive the income thereon and
hold the same as Collateral hereunder.
5. Fixtures. It is the intention of the parties hereto
that none of the Collateral shall become fixtures and the Company
will take all such reasonable action or actions as may be
necessary to prevent any of the Collateral from becoming
fixtures. Without limiting the generality of the foregoing, the
Company will, if requested by the Secured Party, use its best
efforts to obtain waivers of lien, in form satisfactory to the
Secured Party, from each lessor of real property on which any of
the Collateral is or is to be located.
6. Events of Default. The Company shall be in default
under this Agreement upon the happening of any of the following
events or conditions (herein called "Events of Default"):
(a) The occurrence of an Event of Default under the Notes;
or
(b) The breach, violation or other non-performance of any
term, covenant, condition, agreement or obligation of the Company
contained herein.
7. Rights and Remedies of Secured Party. Upon the
occurrence of any Event of Default, such default not having
previously been remedied or cured, the Secured Party may declare
all of the Secured Obligations to be immediately due and payable
and shall then have the following rights and remedies:
(a) All rights and remedies provided by law, including,
without limitation, those provided by the Uniform Commercial
Code;
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(b) All rights and remedies provided in this Agreement; and
(c) All rights and remedies provided in the Notes, the
Guaranty or in any other agreement, document or instrument
pertaining to any of the Secured Obligations.
8. Royalty Free License. If at any time the Secured Party
has the right to dispose of any of the Collateral which is
subject to a patent, trademark or copyright which the Company
owns or controls through a license or otherwise, the Company
grants to the Secured Party a royalty free license to use any
such patent, trademark or copyright, in addition to the grant of
any security interest granted to the Secured Party in such
patent, trademark or copyright to dispose of any such Collateral.
Such royalty free license shall extend to any person or persons
purchasing such Collateral from the Secured Party.
9. Right of Secured Party to Dispose of Collateral. etc.
Without limiting the scope of Section 7 hereof, upon the
occurrence of any Event of Default, such default not having
previously been remedied or cured, but subject to the provisions
of the Uniform Commercial Code or other applicable law, the
Secured Party shall have the right to take possession of the
Collateral and, in addition thereto, the right to enter upon any
premises on which the Collateral or any part thereof may be
situated and remove the same therefrom. The Secured Party may
require the Company to make the Collateral (to the extent the
same is moveable) available to the Secured Party at a place to be
designated by the Secured Party which is reasonably convenient to
both parties. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a
recognized market, the Secured Party will give the Company at
least ten (10) days' prior written notice at the address of the
Company set forth above (or at such other address or addresses as
the Company shall specify in writing to the Secured Party) of the
time and place of any public sale thereof or of the time after
which any private sale or any other intended disposition thereof
is to be made. Any such notice shall be deemed to meet any
requirement hereunder or under any applicable law (including the
Uniform Commercial Code) that reasonable notification be given of
the time and place of such sale or other disposition. After
deducting all costs and expenses of collection, storage, custody,
sale or other disposition and delivery (including legal costs and
attorneys' fees) and all other charges against the Collateral,
the residue of the proceeds of any such sale or disposition shall
be applied to the payment of the Secured Obligations in such
order of priority as the Secured Party shall determine and any
surplus shall be returned to the Company or to any person or
party lawfully entitled thereto (including, if applicable, any
subordinated creditors of the Company). In the event the proceeds
of any sale, lease or other disposition of the Collateral
hereunder are insufficient to pay all of the Secured Obligations
in full, the Company will be liable for the deficiency, together
with interest thereon, at the maximum rate provided in the Notes,
and the cost and expenses of collection of such deficiency,
including (to the extent permitted by law), without limitation,
reasonable attorneys' fees, expenses and disbursements.
10. Right of Secured Party to Use and Operate Collateral.
Upon the occurrence and during the continuance of any Event of
Default, but subject to the provisions of the Uniform Commercial
Code or other applicable law, the Secured Party shall have the
right and power to take possession of all or any part of the
Collateral, and to exclude the Company and all persons claiming
under the Company wholly or partly therefrom, and thereafter to
hold, store, and/or use, operate, manage and control the same.
Upon any such taking of possession, the Secured Party may, from
time to time, at the expense of the Company, make all such
repairs, replacements, alterations, additions and improvements to
and of the Collateral as the Secured Party may deem proper. In
any such case the Secured Party shall have the right to manage
and control the Collateral and to carry on the business and to
exercise all rights and powers of the Company in respect thereto
as the Secured Party shall deem best, including the right to
enter into any and
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all such agreements with respect to the
operation of the Collateral or any part thereof as the Secured
Party may see fit; and the Secured Party shall be entitled to
collect and receive all rents, issues, profits, fees, revenues
and other income of the same and every part thereof. Such rents,
issues, profits, fees, revenues and other income shall be applied
to pay the expenses of holding and operating the Collateral and
of conducting the business thereof, and of all maintenance,
repairs, replacements, alterations, additions and improvements,
and to make all payments which the Secured Party may be required
or may elect to make, if any, for taxes, assessments, insurance
and other charges upon the Collateral or any part thereof, and
all other payments which the Secured Party may be required or
authorized to make under any provision of this Agreement
(including legal costs and attorneys' fees). The remainder of
such rents, issues, profits, fees, revenues and other income
shall be applied as provided in Section 11. Without limiting the
generality of the foregoing the Secured Party shall have the
right to apply for a receiver appointed by a court of competent
jurisdiction in any action taken by the Secured Party to enforce
its rights and remedies hereunder in order to manage, protect,
preserve, sell and otherwise dispose of all or any portion of the
Collateral and continue the operation of the business of the
Company, and to collect all revenues and profits thereof and
apply the same to the payment of all expenses and other charges
of such receivership, including the compensation of the receiver,
and to the payment of the Secured Obligations as aforesaid until
a sale or other disposition of such Collateral shall be finally
made and consummated.
11. Proceeds of Collateral. After deducting all costs and
expenses of collection, storage, custody, sale or other
disposition and delivery (including legal costs and attorneys'
fees) and all other charges against the Collateral, the residue
of the proceeds of any such sale or disposition shall be applied
to the payment of the Secured Obligations in the order of
priority as the Secured Party shall otherwise determine and any
surplus shall be returned to the Company or to any person or
party lawfully entitled thereto (including, if applicable, any
subordinated creditors of the Company). In the event the proceeds
of any sale, lease or other disposition of the Collateral
hereunder are insufficient to pay all of the Secured Obligations
in full, the Company will be liable for the deficiency, together
with interest thereon at the Post-Default Rate (as defined in the
Notes), and the cost and expenses of collection of such
deficiency, including (to the extent permitted by law), without
limitation, reasonable attorneys' fees, expenses and
disbursements.
12. Waivers. etc. The Company hereby waives presentment
demand, notice, protest and, except as is otherwise provided
herein, all other demands and notices in connection with this
Agreement or the enforcement of the Secured Party's rights
hereunder or in connection with any Secured Obligations or any
Collateral; consents to and waives notice of the granting of
renewals, extensions of time for payment or other indulgences to
the Company or to any account debtor in respect of any Account
Receivable, or substitution, release or surrender of any
Collateral, the addition or release of persons primarily or
secondarily liable on any Secured Obligation or on any Account
Receivable or other Collateral, the acceptance of partial
payments on any Secured Obligation or on any Account Receivable
or other Collateral and/or the settlement or compromise thereof.
No delay or omission on the part of the Secured Party in
exercising any right hereunder shall operate as a waiver of such
right or of any other right hereunder. Any waiver of any such
right on any one occasion shall not be construed as a bar to or
waiver of any such right on any such future occasion. THE COMPANY
FURTHER WAIVES ANY RIGHT IT MAY HAVE UNDER THE CONSTITUTION OF
THE COMMONWEALTH OF MASSACHUSETTS (OR UNDER THE CONSTITUTION OF
ANY OTHER STATE IN WHICH ANY OF THE COLLATERAL MAY BE LOCATED),
OR UNDER THE CONSTITUTION OF THE UNITED STATES OF AMERICA, TO
NOTICE (OTHER THAN ANY REQUIREMENT OF NOTICE PROVIDED HEREIN) OR
TO A JUDICIAL HEARING PRIOR TO THE EXERCISE OF ANY RIGHT OR
REMEDY PROVIDED BY THIS AGREEMENT TO THE SECURED PARTY AND WAIVES
ITS
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RIGHTS, IF ANY, TO SET ASIDE OR INVALIDATE ANY SALE DULY
CONSUMMATED IN ACCORDANCE WITH THE FOREGOING PROVISIONS HEREOF ON
THE GROUNDS (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED
WITHOUT A PRIOR JUDICIAL HEARING. The Company's waivers under
this Section have been made voluntarily, intelligently and
knowingly and after the Company has been apprised and counseled
by its attorneys as to the nature thereof and its possible
alternative rights.
13. Termination, Assignment; etc. This Agreement and the
security interest in the Collateral created hereby shall
terminate when all of the Secured Obligations have been paid and
finally discharged in full (provided that the Secured Party is no
longer obligated to make Loans under the Notes). No waiver by the
Secured Party or by any other holder of Secured Obligations of
any default shall be effective unless in writing nor operate as a
waiver of any other default or of the same default on a future
occasion. In the event of a sale or assignment by the Secured
Party of all or any of the Secured Obligations held by it, the
Secured Party may assign or transfer its rights and interests
under this Agreement in whole or in part to the purchaser or
purchasers of such Secured Obligations, whereupon such purchaser
or purchasers shall become vested with all of the powers and
rights of the Secured Party hereunder, and the Secured Party
shall thereafter be forever released and fully discharged from
any liability or responsibility hereunder with respect to the
rights and interests so assigned.
14. Reinstatement. Notwithstanding the provisions of
Section 13, this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any amount
received by the Secured Party in respect of the Collateral is
rescinded or must otherwise be restored or returned by the
Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company or upon the
appointment of any intervenor or conservator of, or trustee or
similar official for, the Company or any substantial part of its
properties, or otherwise, all as though such payments had not
been made.
15. Governmental Approvals, etc. Upon the exercise by the
Secured Party of any power, right, privilege or remedy pursuant
to this Agreement which requires any consent, approval,
registration, qualification or authorization of any governmental
authority or instrumentality, the Company will execute and
deliver, or will cause the execution and delivery of, all
applications, certificates, instruments and other documents and
papers that the Secured Party may be required to obtain for such
governmental consent, approval, registration, qualification or
authorization.
16. Certain Definitions. Capitalized terms used herein
without definition which are defined in the Notes shall have the
respective meanings ascribed to them in the Notes. In addition to
the descriptions contained in Section I hereof, the items of
Collateral referred to therein shall have all of the meanings
ascribed to them in the Uniform Commercial Code as in effect from
time to time.
17. Notices. Except as otherwise provided herein, notice to
the Company or to the Secured Party shall be deemed to have been
sufficiently given or served for all purposes hereof if mailed by
certified or registered mail, return receipt requested, as
follows:
(a) if to the Company, at the address set forth above in
this Agreement, to the attention of the President;
(b) if to the Secured Party, at the address set forth
above;
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or at such other address as the party to whom such notice is
directed may have designated in writing to the other party
hereto.
18. Miscellaneous. This Agreement shall inure to the
benefit of and be binding upon the Secured Party and the Company
and their respective successors and assigns, and the term
"Secured Party" shall be deemed to include any other holder or
holders of any of the Secured Obligations. In case any provision
in this Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby. The Section
headings in this Agreement are for convenience of reference only
and shall not be considered in construing this Agreement. This
Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of
which shall be an original, but all of which together shall
constitute one instrument.
19. Governing Law, Jurisdiction, Waiver of Jury Trial. This
Agreement shall be governed by the laws of the Commonwealth of
Massachusetts. The Company, to the extent that it may lawfully do
so, hereby consents to service of process and to be sued, in the
Commonwealth of Massachusetts and consents to the jurisdiction of
the courts of the Commonwealth of Massachusetts and the United
States District Court for the District of Massachusetts, as well
as to the jurisdiction of all courts to which an appeal may be
taken from such courts, for the purpose of any suit, action or
other proceeding arising out of this Agreement or any of its
obligations hereunder or with respect to the transactions
contemplated hereby, and expressly waives any and all objections
it may have as to venue in any such courts. The Company further
agrees that a summons and complaint commencing an action or
proceeding in any of such courts shall be properly served and
shall confer personal jurisdiction if served personally or by
certified mail to it at its address set forth above or as
otherwise provided under the laws of the Commonwealth of
Massachusetts. THE COMPANY IRREVOCABLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED
BY OR AGAINST THE COMPANY IN RESPECT OF ITS OBLIGATIONS HEREUNDER
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties have executed this Agreement
as a sealed instrument as of the date first above written.
USM ACQUISITION CORP.
By:
Name:
Title:
INTERBANK FUNDING CORP.
By:
Name:
Title:
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XXXXXXXX0
Location Of Collateral
000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
0000 Xxxxx 00x' Xx.
Xxxxx, XX 00000
-E-185-
Notice and Opportunity to Cure
Lender agrees to provide to InterBank Funding Corporation,
Attention: Xxxxx X. Xxxxxxx, 0000 Xxxxxxxxxxx Xxxxxx, XX,
Xxxxxxxxxx, X.X. 00000 ("InterBank"), copies of all notices to
Borrower, together with an opportunity to cure any default by
Borrower within 21 days after delivery of written notice by from
Lender to InterBank.
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