Exhibit 4.3
SECURITY AGREEMENT
THIS AGREEMENT is dated as of March 3, 1999, and is entered into by and
between CommercialWare, Inc., a Delaware corporation with a principal place of
business at 00 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Debtor") and
ASA International Ltd., a Delaware corporation with a principal place of
business at 00 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Secured
Party").
NOW THEREFORE, in consideration of the provisions herein contained, and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:
1. CREATION OF SECURITY INTEREST
The Debtor hereby grants to the Secured Party a security interest in the
collateral described in Section 2 below to secure the payment of the Debtor's
Obligations to the Secured Party described in Section 3 below.
2. COLLATERAL
The property which is subject to the security interest created by this
Agreement consists of the following (hereinafter referred to as the
"Collateral"):
All intellectual property of the Debtor, whether now owned or
hereafter acquired, or in which Debtor may now have or hereafter
acquired an interest, wherever located, including all trademarks,
trademark rights, service marks, service xxxx rights, copyrights,
trade names, trade name rights, fictitious business names, the rights
to the name "CommercialWare" and all variants thereof, works of
authorship, inventions, industrial models, industrial designs, utility
models and certificates of invention, designs, emblems and logos,
trade secrets, know-how, manufacturing formulae, technical
information, mask work registrations, inventions, franchises,
franchise rights, customer and supplier lists together with the
goodwill associated therewith and other proprietary rights used
primarily in connection with the business of the Debtor, any and all
substitutions therefor and replacements thereof, and any and all
additions and accessions thereto, and all proceeds and products
thereof.
The Debtor shall permit the Secured Party and/or its agents and
representatives to inspect the Collateral upon request during the Debtor's
normal business hours and upon reasonable notice to the Debtor.
3. DEBTOR'S OBLIGATIONS
This Agreement secures the payment of all amounts and performance of all
obligations of the Debtor (the "Obligations") as provided in (i) the License
granted pursuant to Section 1.5 of the Asset Purchase Agreement between the
Debtor and the Secured Party (the "Purchase Agreement"); and (ii) that certain
Promissory Note in the principal amount of $1,700,000 from the Debtor to the
Secured Party, dated the date hereof (the "Note").
4. COVENANTS OF DEBTOR
(a) The places where all records relating to the Collateral are presently
kept, and the Debtor's only places of business, are listed on Schedule A hereto.
The Debtor shall notify Secured Party not less than five (5) days before any
change is intended to be made in the foregoing addresses.
(b) The Debtor shall at all reasonable times and from time to time upon due
notice allow the Secured Party, by or through any of its officers, agents,
attorneys or accountants, to examine or inspect the Collateral wherever located
and to examine, inspect and make extracts from the Debtor's books and records.
The Debtor shall do, make, execute and deliver all such additional and further
acts, things, deeds, assurances and instruments as Secured Party may reasonably
require, to vest more completely in and assure to Secured Party its rights
hereunder and in or to the Collateral.
(c) The Debtor shall not sell, encumber, grant a security interest in or
dispose of or permit the sale, encumbrance or disposal of any Collateral without
the Secured Party's prior written consent.
(d) The Debtor shall perform any and all steps reasonably requested by the
Secured Party to perfect the Secured Party's security interest in the
Collateral, such as executing and filing financing or continuation statements in
form and substance satisfactory to the Secured Party, executing collateral
assignments of patents and trademarks (including filings at the United States
Patent and Trademark Office), and making notations of such security interest on
certificates of title. The Debtor hereby nominates and appoints the Secured
Party as attorney-in-fact to do all acts and things which the Secured Party may
deem reasonably necessary or advisable to perfect and continue perfected the
security interests created by this Agreement.
(e) The Debtor hereby covenants that (a) the Debtor will promptly pay any
and all taxes, assessments and governmental charges upon the Collateral prior to
the date penalties are attached thereto, except to the extent that such taxes,
assessments and charges shall be contested in good faith by the Debtor; (b) the
Debtor will immediately notify the Secured Party of any event causing a
substantial loss or diminution in the value of all or any material part of the
Collateral and an estimate of the amount of such loss or diminution; and (c) the
Debtor will not use the Collateral in violation of any statute or ordinance and
will keep the Collateral free from any adverse lien, security interest or
encumbrance, except as permitted herein, in good condition and will not waste or
destroy the same.
5. DEFAULT
Upon the occurrence of (i) the failure by the Debtor to observe any
provision or perform any other obligation set forth in this Agreement or the
Purchase Agreement; or (ii) an Event of Default as defined in the Note; the
Debtor shall be in default hereunder, and the Secured Party shall be entitled to
any and all remedies available under the Uniform Commercial Code in force in the
Commonwealth of Massachusetts on the date of this Agreement, including, but not
limited to, the repossession, sale or other disposition of all or any portion of
the Collateral. Any sale or other disposition of the Collateral may be at public
or private sale upon such terms and in such manner as the Secured Party
reasonably deems advisable, having due regard to compliance with any statute or
regulation which might affect, limit or apply to the Secured Party's disposition
of the Collateral. The Secured Party may conduct any such sale or other
disposition of the Collateral upon the Debtor's premises. The Secured Party
shall give the Debtor at least the minimum notice required by law of the date,
time and place of any proposed public sale, and of the date after which any
private sale or other disposition of the Collateral may be made. The Secured
Party may purchase the Collateral, or any portion of it, at any such sale.
6. GOVERNING LAW/BINDING EFFECT
This Agreement shall be construed according to the laws of the Commonwealth
of Massachusetts and shall be binding upon the successors and assigns of the
Debtor, and shall inure to the benefit of the successors and assigns of the
Secured Party.
7. WAIVERS
The Secured Party shall have the right to enforce any remedies hereunder
alternatively, successively or concurrently. A waiver of any default of the
Debtor shall not be a waiver of any subsequent, similar or other default. No
delay in the exercise of any of the Secured Party's rights or remedies hereunder
shall constitute a waiver of such right or remedy.
8. TERMINATION
This Agreement shall terminate when all of the Obligations have been paid
and the terms and covenants hereof have been performed in full. As soon as
practical following such termination, the Secured Party shall make the
appropriate governmental and regulatory filings (including a filing at the
United States Patent and Trademark Office) to terminate the Secured Party's
security interest in the Collateral.
Notwithstanding anything to the contrary contained herein, this Agreement
may be terminated by the Debtor with the prior consent of the Secured Party,
which consent shall not be unreasonably withheld, provided, however, that the
Debtor substitutes collateral security and/or guaranties for the Obligations of
equal or greater value than the Collateral, and expenses paid in connection with
such substitution (including reasonable legal or other necessary expenses) shall
be paid by the Debtor.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the date first above written.
WITNESS: DEBTOR:
COMMERCIALWARE, INC.
/s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxx Xxxxx
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Title: Chief Operating Officer
WITNESS: SECURED PARTY:
ASA INTERNATIONAL LTD.
/s/ XxxxXxx Xxxxxx By: /s/ Xxxxxxxx X. XxXxxxxx
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Title: Vicr President and Treasurer
SCHEDULE A
PLACES OF BUSINESS
1. 00 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000.
