EXHIBIT 10.3
SECURITY AGREEMENT
September 1, 2004
THIS AGREEMENT is made among
Xxxxx Brothers Xxxxxxxx & Co., as Administrative Agent for the
Lenders party to the Loan Agreement (defined herein) (the "AGENT") with
offices at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000;
and
Dynamics Research Corporation (the "LEAD BORROWER"), a
Massachusetts corporation with its principal executive offices at 00
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx, as agent for itself;
DRC International Corporation ("INTERNATIONAL"), a
Massachusetts corporation with its principal executive offices at 00
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx;
X.X. Xxxx Associates, Inc. ("X.X. XXXX"), a Delaware
corporation with its principal executive offices at 00 Xxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxxxxxxx;
Xxxxxxxx Corporation ("XXXXXXXX"), a Delaware corporation with
its principal executive offices at 00 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxxx; and
Impact Innovations Group LLC ("IMPACT"), a Delaware limited
liability company with its principal executive offices at 00 Xxxxxxxx
Xxxx, Xxxxxxx, Xxxxxxxxxxxxx.
(Each of the Lead Borrower, International, X.X. Xxxx,
Xxxxxxxx, and Impact being sometimes hereinafter referred to
individually as a "BORROWER" and collectively as the "BORROWERS").
In consideration of the mutual covenants contained herein and
benefits to be derived herefrom, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agrees as follows:
1. - DEFINITIONS:
As used herein, the following terms have the following
meanings or are defined in the section of this Agreement so indicated.
"ACCOUNT DEBTOR": Has the meaning given that term in the UCC.
"ACCOUNTS" and "ACCOUNTS RECEIVABLE" include, without limitation,
"accounts" as defined in the UCC, and also all: accounts,
accounts receivable, receivables, and rights to payment
(whether or not earned by performance) for: property that has
been or is to be sold, leased, licensed, assigned, or
otherwise disposed of; services rendered or to be rendered; a
policy of insurance issued or to be issued; a secondary
obligation incurred or to be incurred; energy provided or to
be provided; for the use or hire of a vessel; arising out of
the use of a credit or charge card or information contained on
or used with that card; winnings in a lottery or other game of
chance; and also all Inventory which gave rise thereto, and
all rights associated with such Inventory, including the right
of stoppage in transit; all reclaimed, returned, rejected or
repossessed Inventory (if any) the sale of which gave rise to
any Account.
"AGENT": Is referred to in the Preamble.
"AGENT'S RIGHTS AND REMEDIES": Is defined in Section 5.f.
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"CHATTEL PAPER": Has the meaning given that term in the UCC.
"COLLATERAL": Is defined in Section 2.a.
"COLLATERAL INTEREST": Means any interest in property to secure an
obligation, including, without limitation, a security
interest, mortgage, and deed of trust.
"CONTRACT RIGHTS": includes, without limitation, "contract rights" as
now or formerly defined in the UCC and also any right to
payment under a contract not yet earned by performance and not
evidenced by an instrument or Chattel Paper.
"DEPOSIT ACCOUNT": Has the meaning given that term in the UCC and also
includes all demand, time, savings, passbook, or similar
accounts maintained with a bank.
"DOCUMENTS": Has the meaning given that term in the UCC.
"DOCUMENTS OF TITLE": Has the meaning given that term in the UCC.
"ENCUMBRANCE": Each of the following:
(a) A Collateral Interest or agreement to create
or grant a Collateral Interest; the interest of a lessor under
a Capital Lease; conditional sale or other title retention
agreement; sale of accounts receivable or chattel paper; or
other arrangement pursuant to which any Person is entitled to
any preference or priority with respect to the property or
assets of another Person or the income or profits of such
other Person; each of the foregoing whether consensual or
non-consensual and whether arising by way of agreement,
operation of law, legal process or otherwise.
(b) The filing of any financing statement under
the UCC or comparable law of any jurisdiction.
"EQUIPMENT": Includes, without limitation, "equipment" as defined in
the UCC, and also all furniture, store fixtures, motor
vehicles, rolling stock, machinery, office equipment, plant
equipment, tools, dies, molds, and other goods, property, and
assets which are used and/or were purchased for use in the
operation or furtherance of a Borrowers' business, and any and
all accessions or additions thereto, and substitutions
therefor.
"EVENTS OF DEFAULT": Has the meaning given that term in the Loan
Agreement.
"FIXTURES": Has the meaning given that term in the UCC.
"GENERAL INTANGIBLES": Includes, without limitation, "general
intangibles" as defined in the UCC; and also all: rights to
payment for credit extended; deposits; amounts due to any
Borrower; credit memoranda in favor of any Borrower; warranty
claims; tax refunds and abatements; insurance refunds and
premium rebates; all means and vehicles of investment or
hedging, including, without limitation, options, warrants, and
futures contracts; records; customer lists; telephone numbers;
goodwill; causes of action; judgments; payments under any
settlement or other agreement; literary rights; rights to
performance; royalties; license and/or franchise fees; rights
of admission; licenses; franchises; license agreements,
including all rights of any Borrower to enforce same; permits,
certificates of convenience and necessity, and similar rights
granted by any governmental authority; patents, patent
applications, patents pending, and other intellectual
property; internet addresses and domain names; developmental
ideas and concepts; proprietary processes; blueprints,
drawings, designs, diagrams, plans, reports, and charts;
catalogs; manuals; technical data;
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computer software programs (including the source and object
codes therefor), computer records, computer software, rights
of access to computer record service bureaus, service bureau
computer contracts, and computer data; tapes, disks,
semi-conductors chips and printouts; trade secrets rights,
copyrights, mask work rights and interests, and derivative
works and interests; user, technical reference, and other
manuals and materials; trade names, trademarks, service marks,
and all goodwill relating thereto; applications for
registration of the foregoing; and all other general
intangible property of any Borrower in the nature of
intellectual property; proposals; cost estimates, and
reproductions on paper, or otherwise, of any and all concepts
or ideas, and any matter related to, or connected with, the
design, development, manufacture, sale, marketing, leasing, or
use of any or all property produced, sold, or leased, by any
Borrower or credit extended or services performed, by any
Borrower, whether intended for an individual customer or the
general business of any Borrower, or used or useful in
connection with research by any Borrower.
"GOODS": Has the meaning given that term in the UCC, and also includes
all things movable when a security interest therein attaches
and also all computer programs embedded in goods and any
supporting information provided in connection with a
transaction relating to the program if (i) the program is
associated with the goods in such manner that it customarily
is considered part of the goods or (ii) by becoming the owner
of the goods, a Person acquires a right to use the program in
connection with the goods.
"INSTRUMENTS": Has the meaning given that term in the UCC.
"INVENTORY": Includes, without limitation, "inventory" as defined in
the UCC and also all: (a) Goods which are leased by a Person
as lessor; are held by a Person for sale or lease or to be
furnished under a contract of service; are furnished by a
Person under a contract of service; or consist of raw
materials, work in process, or materials used or consumed in a
business; (b) Goods of said description in transit; (c) Goods
of said description which are returned, repossessed and
rejected; (d) packaging, advertising, and shipping materials
related to any of the foregoing; (e) all names, marks, and
General Intangibles affixed or to be affixed or associated
thereto; and (f) Documents and Documents of Title which
represent any of the foregoing.
"INVESTMENT PROPERTY": Has the meaning given that term in the UCC.
"LEASEHOLD INTEREST": Any interest of a Borrower as lessee under any
Lease.
"LETTER-OF-CREDIT RIGHT": Has the meaning given that term in UCC and
also refers to any right to payment or performance under an
L/C, whether or not the beneficiary has demanded or is at the
time entitled to demand payment or performance.
"LOAN AGREEMENT": The Second Amended and Restated Loan Agreement,
dated of even date herewith, by and among the Borrowers, the
Agent, various banks and other financial institutions named
therein as lenders and others, all as the same may be amended
from time to time hereafter. Terms used herein which are
defined in the Loan Agreement are used herein as so defined.
In the event that the Loan Agreement is ever terminated or the
definition of any term used herein is deleted from the Loan
Agreement, then unless otherwise agreed in writing, such term
used herein which had been defined in the Loan Agreement shall
continue to be used herein as then most recently defined in
the Loan Agreement.
"PAYMENT INTANGIBLE": As defined in the UCC and also any general
intangible under which the Account Debtor's primary obligation
is a monetary obligation.
"PERMITTED LIEN": Has the meaning given that term in the Loan
Agreement.
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"PERSON": Any natural person, and any corporation, limited liability
company, trust, partnership, joint venture, or other
enterprise or entity.
"PERFECTION CERTIFICATE": Collectively, each Perfection Certificate
executed and delivered by each Borrower in connection with the
Loan Agreement.
"PROCEEDS": Includes, without limitation, "Proceeds" as defined in the
UCC and each type of property described in Section 2.a hereof.
"RECEIVABLES COLLATERAL": That portion of the Collateral which consists
of Accounts, Accounts Receivable, General Intangibles, Chattel
Paper, Instruments, Documents of Title, Documents, Investment
Property, Payment Intangibles, Letter-of-Credit Rights,
bankers' acceptances, and all other rights to payment.
"REQUIREMENTS OF LAW": Has the meaning given that term in the Loan
Agreement.
"SUPPORTING OBLIGATION": Has the meaning given that term in the UCC and
also refers to a Letter-of-Credit Right or secondary
obligation which supports the payment or performance of an
Account, Chattel Paper, a Document, a General Intangible, an
Instrument, or Investment Property.
"UCC": The Uniform Commercial Code as adopted and in effect in the
Commonwealth of Massachusetts, as amended from time to time.
2. - GRANT OF SECURITY INTEREST:
x. XXXXX OF SECURITY INTEREST. To secure the Borrowers' prompt,
punctual, and faithful performance of all and each of the
Liabilities, each Borrower hereby grants to the Agent, for the
ratable benefit of the Lenders, a continuing security interest
in and to, and assigns to the Agent, for the ratable benefit
of the Lenders, the following, and each item thereof, whether
now owned or now due, or in which that Borrower has an
interest, or hereafter acquired, arising, or to become due, or
in which that Borrower obtains an interest, and all products,
Proceeds, substitutions, and accessions of or to any of the
following (all of which, together with any other property in
which the Agent may in the future be granted a security
interest, is referred to herein as the "COLLATERAL"):
i. All Accounts and accounts receivable.
ii. All Inventory.
iii. All General Intangibles.
iv. All Equipment.
v. All Goods.
vi. All Fixtures.
vii. All Chattel Paper.
viii. All Letter-of-Credit Rights.
ix. All Payment Intangibles.
x. All Supporting Obligations.
xi. All books, records, and information relating to the
Collateral and/or to the operation of each Borrowers'
business, and all rights of access to such books,
records, and information, and all property in which
such books, records, and information are stored,
recorded, and maintained.
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xii. All Leasehold Interests.
xiii. All Investment Property, Instruments, Documents,
Deposit Accounts, money, policies and certificates of
insurance, deposits, impressed accounts, compensating
balances, cash, or other property.
xiv. All insurance proceeds, refunds, and premium rebates,
including, without limitation, proceeds of fire and
credit insurance, whether any of such proceeds,
refunds, and premium rebates arise out of any of the
foregoing. ( through ) or otherwise.
xv. All liens, guaranties, rights, remedies, and
privileges pertaining to any of the foregoing (
through ), including the right of stoppage in
transit.
provided, however, the term "Collateral" shall not include (i) any property for
which the grant of a security interest therein is prohibited by any applicable
Requirement of Law of any governmental authority; or (ii) any contract, license
or agreement which contains a provision that (A) prohibits the grant of a
security interest therein; or (B) provides a default may or shall occur
thereunder as a result of the grant of a security interest therein, unless any
required consents shall have been obtained.
b. COMMERCIAL TORT CLAIMS. If the Borrowers shall at any time,
acquire a commercial tort claim, the Borrowers shall promptly
notify the Agent in a writing signed by the applicable
Borrower of the brief details thereof and grant to the Agent,
for the ratable benefit of the Lenders, in such writing a
security interest therein and in the proceeds thereof, all
upon the terms of this Agreement, with such writing to be in
form and substance satisfactory to the Lenders.
c. EXTENT AND DURATION OF SECURITY INTEREST.
i. The security interest created and granted herein is
in addition to, and supplemental of, any security
interest previously granted by any Borrower to the
Agent, if any, and shall continue in full force and
effect applicable to all Liabilities until both
a) all Liabilities have been paid and/or
satisfied in full; and
b) the security interest created herein is
specifically terminated in writing by a duly
authorized officer of the Agent.
ii. It is intended that the Collateral Interests created
herein extend to and cover all assets of each
Borrower.
iii. Once all Liabilities have been paid and/or satisfied
in full and there is no further obligation on any
Lender to make any further financial accommodations
to or for the benefit of any Borrower, the Agent
agrees to release the Collateral from the security
interest and file, at the Borrowers' cost and
expense, such termination statements as may be
necessary or appropriate.
iv. Notwithstanding any provision contained in this
Agreement to the contrary, upon the occurrence of any
Collateral Release Event (as defined in the Loan
Agreement), this Agreement and the security interest
granted to the Agent hereunder shall immediately and
automatically terminate and have no further force or
effect.
3. - GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:
As a further inducement to the Agent and each Lender, each
Borrower, in addition to all other representations, warranties, and
covenants made by any Borrower in any other Loan Document, make those
representations, warranties, and covenants included in this Agreement.
a. ENCUMBRANCES.
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i. The Borrowers are, and shall hereafter remain, the
owners of the Collateral free and clear of all
Encumbrances other than any Permitted Liens.
ii. No Borrower has, and none shall have, possession of
any property on consignment to that Borrower.
iii. No Borrower shall acquire or obtain the right to use
any Equipment, the acquisition or right to use of
which Equipment is otherwise permitted by this
Agreement, in which Equipment any third party has an
interest, except for:
a) Equipment which is merely incidental to the
conduct of that Borrowers' business.
b) Equipment, the acquisition or right to use
of which has been consented to by the Agent,
which consent may be conditioned upon the
Agent's receipt of such agreement with the
third party which has an interest in such
Equipment as is satisfactory to the Agent.
b. FURTHER ASSURANCES.
i. All names under which each Borrower conducted its
business within the last five (5) years are set forth
in each Borrower's respective Perfection Certificate.
ii. All Persons with whom any Borrower ever consolidated
or merged, or from whom any Borrower ever acquired in
a single transaction or in a series of related
transactions substantially all of such Person's
assets are set forth in each Borrower's respective
Perfection Certificate.
iii. Except as provided for in the Loan Agreement, no
Borrower will undertake or commit to undertake any
action such that the results of that action, if
undertaken prior to the date of this Agreement, would
have been reflected on any of the Borrower's
respective Perfection Certificate.
iv. No Borrower is the owner of, nor has it any interest
in, Collateral which is not subject to a perfected
Collateral Interest in favor of the Agent (subject
only to Permitted Liens) to secure the Liabilities.
v. No Borrower will hereafter acquire any asset or any
interest in property which is not, immediately upon
such acquisition, subject to such a perfected
Collateral Interest in favor of the Agent to secure
the Liabilities (subject only to Permitted Liens).
vi. Each Borrower shall execute and deliver to the Agent
such instruments, documents, and papers, and shall do
all such things from time to time hereafter as the
Agent may reasonably request to carry into effect the
provisions and intent of this Agreement; to protect
and perfect the Agent's Collateral Interests in the
Collateral; and to comply with all applicable
statutes and laws, and facilitate the collection of
the Receivables Collateral. Each Borrower shall
execute all such instruments as may be reasonably
required by the Agent with respect to the recordation
and/or perfection of the Collateral Interests created
or contemplated herein.
vii. Each Borrower hereby authorizes the Agent to file
financing statements, without notice to the
Borrowers, with all appropriate jurisdictions in
order to perfect or protect the Agent's and Lender's
interest or rights hereunder, which financing
statements may indicate the Collateral as "all assets
of the Debtor" or words of similar effect, or as
being of an equal or lesser scope, or with greater
detail, all in Lender's discretion.
viii. This Agreement constitutes an authenticated record
which authorizes the Agent to file such financing
statements as the Agent determines as appropriate to
perfect or protect the Collateral Interests created
by this Agreement.
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ix. A carbon, photographic, or other reproduction of this
Agreement or of any financing statement or other
instrument executed pursuant to this Section b shall
be sufficient for filing to perfect the security
interests granted herein.
4. - AGENT AS BORROWERS' ATTORNEY-IN-FACT:
a. APPOINTMENT AS ATTORNEY-IN-FACT. Each Borrower hereby
irrevocably constitutes and appoints the Agent (acting through
any officer of the Agent) as that Borrowers' true and lawful
attorney, with full power of substitution, exercisable
following the occurrence and continuance of any Event of
Default, to convert the Collateral into cash at the sole risk,
cost, and expense of that Borrower, but for the sole benefit
of the Agent and the Lenders. The rights and powers granted
the Agent by this appointment include but are not limited to
the right and power to:
i. Prosecute, defend, compromise, or release any action
relating to the Collateral.
ii. Sign change of address forms to change the address to
which each Borrowers' mail is to be sent to such
address as the Agent shall designate; receive and
open each Borrowers' mail; remove any Receivables
Collateral and Proceeds of Collateral therefrom and
turn over the balance of such mail either to the Lead
Borrower or to any trustee in bankruptcy or receiver
of the Lead Borrower, or other legal representative
of a Borrower whom the Agent determines to be the
appropriate person to whom to so turn over such mail.
iii. Endorse the name of the relevant Borrower in favor of
the Agent upon any and all checks, drafts, notes,
acceptances, or other items or instruments; sign and
endorse the name of the relevant Borrower on, and
receive as secured party, any of the Collateral, any
invoices, schedules of Collateral, freight or express
receipts, or bills of lading, storage receipts,
warehouse receipts, or other documents of title
respectively relating to the Collateral.
iv. Sign the name of the relevant Borrower on any notice
to that Borrowers' Account Debtors or verification of
the Receivables Collateral; sign the relevant
Borrowers' name on any Proof of Claim in Bankruptcy
against Account Debtors, and on notices of lien,
claims of mechanic's liens, or assignments or
releases of mechanic's liens securing the Accounts.
v. Take all such action as may be necessary to obtain
the payment of any letter of credit and/or banker's
acceptance of which any Borrower is a beneficiary.
vi. Repair, manufacture, assemble, complete, package,
deliver, alter or supply goods, if any, necessary to
fulfill in whole or in part the purchase order of any
customer of each Borrower.
vii. Use, license or transfer any or all General
Intangibles of each Borrower.
b. NO OBLIGATION TO ACT. The Agent shall not be obligated to do
any of the acts or to exercise any of the powers authorized by
Section a herein, but if the Agent elects to do any such act
or to exercise any of such powers, it shall not be accountable
for more than it actually receives as a result of such
exercise of power, and shall not be responsible to any
Borrower for any act or omission to act except for any act or
omission to act as to which there is a final determination
made in a judicial proceeding (in which proceeding the Agent
has had an opportunity to be heard) which determination
includes a specific finding that the subject act or omission
to act had been grossly negligent or in actual bad faith.
5. - EVENTS OF DEFAULT. RIGHTS AND REMEDIES UPON DEFAULT:
a. RIGHTS OF ENFORCEMENT. Upon and following the occurrence of
any Event of Default which consists of the entry of an order
for relief with respect to any Borrower and, at the option of
the Agent, upon the occurrence and during continuance of any
other Event of Default and at all times thereafter, the Agent
shall have all of the rights and remedies of a secured party
upon default under
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the UCC, in addition to which the Agent shall have all and
each of the following rights and remedies:
i. To give notice to any of the Borrowers' customs
brokers to follow the instructions of the Agent as
provided in any written agreement or undertaking of
such broker in favor of the Agent.
ii. To collect the Receivables Collateral with or without
the taking of possession of any of the Collateral.
iii. To take possession of all or any portion of the
Collateral.
iv. To sell, lease, or otherwise dispose of any or all of
the Collateral, in its then condition or following
such preparation or processing as the Agent deems
advisable and with or without the taking of
possession of any of the Collateral.
v. To apply the Receivables Collateral or the Proceeds
of the Collateral towards (but not necessarily in
complete satisfaction of) the Liabilities.
vi. To exercise all or any of the rights, remedies,
powers, privileges, and discretions under all or any
of the Loan Documents.
B. SALE OF COLLATERAL. Upon the occurrence and during continuance
of any other Event of Default, and subject to applicable law,
i. Any sale or other disposition of the Collateral may
be at public or private sale upon such terms and in
such manner as the Agent deems advisable, having due
regard to compliance with any statute or regulation
which might affect, limit, or apply to the Agent's
disposition of the Collateral.
ii. Unless the Collateral is perishable or threatens to
decline speedily in value, or is of a type
customarily sold on a recognized market (in which
event the Agent shall provide the Lead Borrower such
notice as may be practicable under the
circumstances), the Agent shall give the Lead
Borrower at least ten (10) days prior notice, by
authenticated record, 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. Each Borrower agrees that
such written notice shall satisfy all requirements
for notice to that Borrower which are imposed under
the UCC or other applicable law with respect to the
exercise of the Agent's rights and remedies upon
default.
iii. The Agent and any Lender may purchase the Collateral,
or any portion of it at any sale held under this
Article.
iv. If any of the Collateral is sold, leased, or
otherwise disposed of by the Agent on credit, the
Liabilities shall not be deemed to have been reduced
as a result thereof unless and until payment is
finally received thereon by the Agent.
v. The Agent shall apply the proceeds of the Agent's
exercise of its rights and remedies upon default
pursuant to this Article 5.
c. OCCUPATION OF BUSINESS LOCATION. In connection with the
Agent's exercise of the Agent's rights under this Article 5,
the Agent may, at any time after an Event of Default has
occurred and is continuing, enter upon, occupy, and use any
premises owned or occupied by each Borrower, and may exclude
each Borrower from such premises or portion thereof as may
have been so entered upon, occupied, or used by the Agent. The
Agent shall not be required to remove any of the Collateral
from any such premises upon the Agent's taking possession
thereof, and may render any Collateral unusable to the
Borrowers. In no event shall the Agent be liable to any
Borrower for use or occupancy by the Agent of any premises
pursuant to this Article 5, nor for any charge (such as wages
for any Borrowers' employees and utilities) incurred in
connection with the Agent's exercise of the Agent's Rights and
Remedies.
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x. XXXXX OF NONEXCLUSIVE LICENSE. Each Borrower hereby grants to
the Agent a royalty free nonexclusive irrevocable license to
use, apply, and affix any trademark, trade name, logo, or the
like in which any Borrower now or hereafter has rights, such
license being with respect to the Agent's exercise of the
rights hereunder including, without limitation, in connection
with any completion of the manufacture of Inventory or sale or
other disposition of Inventory.
e. ASSEMBLY OF COLLATERAL. At any time after an Event of Default
has occurred and is continuing, the Agent may require any
Borrower to assemble the Collateral and make it available to
the Agent at the Borrowers' sole risk and expense at a place
or places which are reasonably convenient to both the Agent
and the Lead Borrower.
f. RIGHTS AND REMEDIES. The rights, remedies, powers, privileges,
and discretions of the Agent hereunder (the "AGENT'S RIGHTS
AND REMEDIES") shall be cumulative and not exclusive of any
rights or remedies which it would otherwise have. No delay or
omission by the Agent in exercising or enforcing any of the
Agent's Rights and Remedies shall operate as, or constitute, a
waiver thereof. No waiver by the Agent of any Event of Default
or of any default under any other agreement shall operate as a
waiver of any other default hereunder or under any other
agreement. No single or partial exercise of any of the Agent's
Rights or Remedies, and no express or implied agreement or
transaction of whatever nature entered into between the Agent
and any person, at any time, shall preclude the other or
further exercise of the Agent's Rights and Remedies. No waiver
by the Agent of any of the Agent's Rights and Remedies on any
one occasion shall be deemed a waiver on any subsequent
occasion, nor shall it be deemed a continuing waiver. The
Agent's Rights and Remedies may be exercised at such time or
times and in such order of preference as the Agent may
determine. The Agent's Rights and Remedies may be exercised
without resort or regard to any other source of satisfaction
of the Liabilities.
6. - GENERAL:
a. NOTICES. All notices, demands, and other communications made
in respect of this Agreement shall be as provided in the Loan
Agreement.
b. PROTECTION OF COLLATERAL. The Agent has no duty as to the
collection or protection of the Collateral beyond the safe
custody of such of the Collateral as may come into the
possession of the Agent.
c. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the Borrowers and their respective representatives,
successors, and assigns and shall enure to the benefit of the
Agent and each Lender and their respective successors and
assigns. In the event that the Agent or any Lender assigns or
transfers its rights under this Agreement, the assignee shall
thereupon succeed to and become vested with all rights,
powers, privileges, and duties of such assignor hereunder and
such assignor shall thereupon be discharged and relieved from
its duties and obligations hereunder.
d. SEVERABILITY. Any determination that any provision of this
Agreement or any application thereof is invalid, illegal, or
unenforceable in any respect in any instance or with respect
to any Borrower, shall not affect the validity, legality, or
enforceability of such provision in any other instance, or
with respect to any other Borrower, or the validity, legality,
or enforceability of any other provision of this Agreement.
e. POWER OF ATTORNEY. In connection with all powers of attorney
included in this Agreement, each Borrower hereby grants unto
the Agent (acting through any of its officers), exercisable
upon the occurrence and during the continuance of any Event of
Default, full power to do any and all things necessary or
appropriate in connection with the exercise of such powers as
fully and effectually as that Borrower might or could do,
hereby ratifying all that said attorney shall do or cause to
be done by virtue of this Agreement. No power of attorney set
forth in this Agreement shall be affected by any disability or
incapacity suffered by any Borrower and each shall survive the
same. All powers conferred upon the Agent by this Agreement,
being coupled with an interest,
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shall be irrevocable until this Agreement is terminated by a
written instrument executed by a duly authorized officer of
the Agent.
f. APPLICATION OF PROCEEDS. The proceeds of any collection, sale,
or disposition of the Collateral, or of any other payments
received hereunder, shall be applied towards the Liabilities
in such order and manner as provided for in the Loan
Agreement. The Borrowers shall remain liable for any
deficiency remaining following such application.
g. INTENT. It is intended that:
i. This Agreement take effect as a sealed instrument.
ii. The scope of all Collateral Interests created by this
Agreement be broadly construed in favor of the Agent
and that they cover all assets of each Borrower.
iii. All Collateral Interests created by this Agreement
secure all Liabilities, whether now existing or
contemplated or hereafter arising.
iv. All reasonable costs, expenses, and disbursements
incurred by the Agent in connection with such
Person's relationship(s) with any Borrower shall be
borne by the Borrowers.
h. MASSACHUSETTS LAW. This Agreement and all rights and
obligations hereunder, including matters of construction,
validity, and performance, shall be governed by the law of The
Commonwealth of Massachusetts.
i. CONSENT TO JURISDICTION.
i. Each Borrower agrees that any legal action,
proceeding, case, or controversy against any Borrower
with respect to any Loan Document may be brought in
the Superior Court of Suffolk County Massachusetts or
in the United States District Court, District of
Massachusetts, sitting in Boston, Massachusetts, as
the Agent may elect in the Agent's sole discretion.
By execution and delivery of this Agreement, each
Borrower, for itself and in respect of its property,
accepts, submits, and consents generally and
unconditionally, to the jurisdiction of the aforesaid
courts.
ii. Each Borrower WAIVES personal service of any and all
process upon it, and irrevocably consents to the
service of process out of any of the aforementioned
courts in any such action or proceeding by the
mailing of copies thereof by certified mail, postage
prepaid, to the Lead Borrower at the Lead Borrower's
address for notices as specified herein, such service
to become effective five (5) Business Days after such
mailing.
iii. Each Borrower WAIVES any objection based on forum non
conveniens and any objection to venue of any action
or proceeding instituted under any of the Loan
Documents and consents to the granting of such legal
or equitable remedy as is deemed appropriate by the
Court.
iv. Nothing herein shall affect the right of the Agent to
bring legal actions or proceedings in any other
competent jurisdiction.
v. Each Borrower agrees that any action commenced by any
Borrower asserting any claim arising under or in
connection with this Agreement or any other Loan
Document shall be brought solely in the Superior
Court of Suffolk County Massachusetts or in the
United States District Court, District of
Massachusetts, sitting in Boston, Massachusetts, and
that such Courts shall have exclusive jurisdiction
with respect to any such action.
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EXECUTED under seal as of the date first written above.
DYNAMICS RESEARCH CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
DRC INTERNATIONAL CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
X.X. XXXX ASSOCIATES, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
XXXXXXXX CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
IMPACT INNOVATIONS GROUP LLC
By:_________________________________
Name:_______________________________
Title:______________________________
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XXXXX BROTHERS XXXXXXXX & CO.
By:_________________________________
Name:_______________________________
Title:______________________________
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