Exhibit 10.6
Supplementary Security Agreement
Security Interest in Goods and Chattels
April 22, 1999
To: Fleet National Bank
Gentlemen:
This is a supplement to our Inventory and Accounts Receivable Security
Agreement (the "Agreement") with you bearing the effective date of even date
herewith. It is hereby incorporated into said Agreement, shall have a term
concurrent therewith and is a part thereof.
1. In addition to your other security, we hereby grant you a continuing
security interest in all machinery, equipment and other goods (as defined in
Article 9 of the Uniform Commercial Code) whether now owned or hereafter
acquired by us and wherever located, all replacements and substitutions therefor
or accessions thereto and all proceeds thereof (all herein referred to
collectively as "Collateral") and including, also without limitation, all
proceeds of fire or other insurance covering the aforesaid property.
2. The Collateral shall be security for all Obligations (as defined in
the Agreement). Until all Obligations have been fully satisfied, your security
interest in the Collateral shall continue in full force and effect and you will
at all times after the occurrence of any Event of Default under the letter
agreement described below have the right to the physical possession of the
Collateral and to maintain such possession on our premises or to remove the
Collateral or any part thereof to such other places as you may desire. If you
exercise your right to take possession of the Collateral, we shall, upon your
demand, assemble the Collateral and make it available to you at a place
reasonably convenient to you. In addition, with respect to all Collateral, you
shall have all of the rights and remedies set forth in the Agreement and all of
the rights and remedies provided in the Uniform Commercial Code.
3. [taken out]
4. We represent, warrant the covenant that (a) the Collateral is in our
possession at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxx of Middlesex, Commonwealth
of Massachusetts or other locations as contemplated by Section 4.10 of the
letter agreement; (b) we are the lawful owners of the Collateral and have the
sole right and lawful authority to deliver this instrument; (c) the Collateral
and every part thereof is and will be free and clear of all security interests,
liens and encumbrances of every kind, nature and description except as follows:
purchase money security interests and other exceptions permitted by letter
agreement of even date herewith between
the Borrower and the Bank and we will warrant and defend the Collateral against
the claims and demands of all persons; (d) we will keep the Collateral free and
clear of all attachments, levies, taxes, liens, security interests and
encumbrances of every kind and nature, except as listed above, and we will at
our own cost and expense, keep the Collateral in a good state of repair and will
not waste or destroy the same or any part thereof except for items disposed of
in the ordinary course to the extent expressly permitted by the aforesaid letter
agreement and will not be negligent in the care and use thereof; (e) we will not
without your prior written consent as provided in the letter agreement, sell,
assign, mortgage, lease or otherwise dispose of the Collateral except for
obsolete or worn out items disposed of in the ordinary course and except for
liens permitted by the aforesaid letter agreement; (f) we will insure the
Collateral in your name against loss or damage by fire, theft, burglary,
pilferage, loss in transit and such other hazards as you shall specify, in
amounts and under policies by insurers acceptable to you, and if we fail to do
so, you may procure such insurance and charge the cost to our loan account; (g)
as further assurance for the payment and performance of the Obligations, we
hereby assign to you (as further collateral for the Obligations) all sums,
including returned or unearned premiums, which may become payable under any
policy of insurance on the Collateral and we hereby direct each insurance
company issuing any such policy to make payment of such sums directly to you;
provided that so long as no Event of Default (as defined in the aforesaid letter
agreement) has occurred and is then continuing, the Bank will promptly release
to the Borrower insurance proceeds actually received by the Bank to the extent
that same are used by the Borrower for the repair and/or replacement of any
Collateral damaged or destroyed by any insured casualty; (h) except for items
disposed of in the ordinary course to the extent expressly permitted by the
aforesaid letter agreement, we will not remove the Collateral from its present
location without your prior written consent (other than removal to other
locations as contemplated by Section 4.10 of the letter agreement) and we will
at all times, allow you or your representatives free access to and right of
inspection of the Collateral (subject to the terms of the aforesaid letter
agreement); (i) we will comply with the material terms and conditions of any
leases covering the premises wherein the Collateral is located and any orders,
ordinances, laws or statutes of any city, state or other governmental department
having jurisdiction with respect to such premises or the conduct of business
thereon, and, when requested by you, we will execute any written instruments and
do any other acts reasonably necessary to effectuate more fully the purposes and
provisions of the Agreement; (j) we will indemnify and save you harmless from
all loss, cost, damage, liability or expenses including reasonable attorneys'
fees that you may sustain or incur by reason of defending or protecting your
security interest or the priority thereof or enforcing the Obligations, or in
the prosecution or defense of any action or proceeding concerning any matter
growing out of or connected with the Agreement, the Obligations or the
Collateral.
5. You may, at your option, discharge any taxes, liens, security
interests or other encumbrances at any time levied or placed on the Collateral
and not permitted
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by the letter agreement and you may pay for the maintenance and preservation of
the Collateral and we will reimburse you on demand for any payment made or any
reasonable expense incurred by you pursuant to the foregoing authority, with
interest at the rate provided in the Agreement.
Witnessed by: Very truly yours,
SYCAMORE NETWORKS, INC.
_______________________________ By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Its: President
Accepted at Boston, Massachusetts 4/27/99
FLEET NATIONAL BANK
By: /s/ Illegible
-----------------------------------------
Its: Vice President
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RIDER TO SUPPLEMENTARY SECURITY AGREEMENT
FROM SYCAMORE NETWORKS, INC.
TO FLEET NATIONAL BANK
The foregoing Supplementary Security Agreement - Security Interest in Goods
and Chattels (the "Supplementary Security Agreement") is modified as follows:
1. By inserting into clause (a) of Section 4 of the Supplementary
Security Agreement, immediately after the words "Commonwealth of Massachusetts",
the following:
"or other locations as contemplated by Section 4.10 of the letter
agreement"
2. By inserting into clause (e) of Section 4 of the Supplementary
Security Agreement, immediately after the words "written consent", the
following:
"as provided in the letter agreement"
3. By inserting into clause (g) of Section 4 of the Supplementary
Security Agreement, immediately after the words "assign to you", the following:
"(as further collateral for the Obligations)"
4. By adding to clause (g) of Section 4 of the Supplementary Security
Agreement, as the end of such clause (g), the following:
"; provided that so long as no Event of Default (as defined in the
aforesaid letter agreement) has occurred and is then continuing, the
Bank will promptly release to the Borrower insurance proceeds actually
received by the Bank to the extent that same are used by the Borrower
for the repair and/or replacement of any Collateral damaged or
destroyed by any insured casualty."
5. By inserting into clause (h) of Section 4 of the Supplementary
Security Agreement, immediately after the words "written consent", the
following:
"(other than removal to other locations as contemplated by Section
4.10 of the letter agreement)"
6. By inserting into clause (h) of Section 4 of the Supplementary
Security Agreement, immediately after the words "inspection of the Collateral",
the following:
"(subject to the terms of the aforesaid letter agreement)"
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