Exhibit 10.26
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of May 21, 1998 between JAPANESE
LANGUAGES SERVICES, INC., a Massachusetts corporation (the "COMPANY") and
SILICON VALLEY BANK (the "BANK"), a California chartered bank.
W I T N E S E T H :
WHEREAS, pursuant to the Loan Agreement dated as of September
26, 1997 among Lionbridge Technologies Holdings B.V. and Lionbridge Technologies
B.V., each a Netherlands company with limited liability (together, the
"BORROWERS") and the Bank (the "ORIGINAL LOAN AGREEMENT"), the Bank agreed,
subject to the terms and conditions thereof, to make credit extensions to the
Borrowers to be evidenced by their promissory note payable to the order of the
Bank, also dated September 26, 1997 (the " ORIGINAL NOTE");
WHEREAS, the Borrowers wish to enter into a Loan Document
Modification Agreement of even date herewith amending the Original Loan
Agreement (the Original Loan Agreement as so amended, and as the same may
hereafter be further amended, modified, supplemented, extended or restated from
time to time, the "LOAN AGREEMENT") pursuant to which they will issue to the
Bank an Amended and Restated Note of even date herewith in the original
principal amount of $8,000,000 (as the same may hereafter be amended, modified,
increased, supplemented, extended or restated from time to time, the "NOTE");
WHEREAS, in order to induce the Bank to enter into the Loan
Document Modification Agreement, the Company has agreed to enter into a
guarantee of the obligations of the Borrowers under the Loan Agreement (as the
same may be amended, supplemented, extended, or restated from time to time, the
"GUARANTEE") and to grant a security interest in and to the Collateral (which is
hereafter defined and which includes the assets of the Company set forth in
SECTION 3 hereof) to secure its obligations under the Guarantee;
WHEREAS, the Company is a wholly-owned subsidiary of
Lionbridge Technologies Holdings, Inc. which is the registered and beneficial
owner of approximately 39.6% of the outstanding capital stock of Lionbridge
Technologies Holdings B.V. which in turn is the registered owner of all the
outstanding capital stock of Lionbridge Technologies B.V. and as a consequence
the Company will derive benefit from the Bank's agreement to make credit
extensions to the Borrowers;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the
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parties agree as follows:
SECTION 1. DEFINITIONS
Except for the terms defined below or elsewhere in this Agreement, the
terms used herein shall have the respective meanings provided for in the Loan
Agreement:
"ACCOUNTS" means all "accounts" (as defined in the UCC) now
owned or hereafter acquired by the Company and shall also mean and
include all accounts receivable, contract rights, book debts, notes,
drafts and other obligations or indebtedness owing to the Company
arising from the sale, lease or exchange of goods or other property
and/or the performance of services by it (including any obligation
which might be characterized as an account, contract right or general
intangible under the UCC) and all the Company's rights in, to and under
all purchase orders for goods, services or other property, and all the
Company's rights to any goods, services or other property represented
by any of the foregoing (including returned or repossessed goods and
unpaid sellers' rights of rescission, replevin, reclamation and rights
to stoppage in transit) and all monies due to or to become due to the
Company under all contracts for the sale, lease or exchange of goods or
other property and/or the performance of services by it (whether or not
yet earned by performance on the part of the Company), in each case
whether now in existence or hereafter arising or acquired, including
the right to receive the proceeds of said purchase orders and contracts
and all collateral security and guarantees of any kind given by any
Person with respect to any of the foregoing.
"COLLATERAL" has the meaning set forth in SECTION 3.
"DOCUMENTS" means all "documents" (as defined in the UCC) or
other receipts covering, evidencing or representing goods, now owned or
hereafter acquired, by the Company.
"EQUIPMENT" means all "equipment" (as defined in the UCC) now
owned or hereafter acquired by the Company, including, without limitation, all
motor vehicles, trucks and trailers.
"GENERAL INTANGIBLES" means all "general intangibles" (as
defined in the UCC) now owned or hereafter acquired by the Company,
including, without limitation, all (a) obligations or indebtedness
owing to the Company (other than Accounts) from whatever source
arising, (b) information, customer lists,
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identification of suppliers, data, plans, blueprints, specifications,
designs, drawings, recorded knowledge, surveys, engineering reports,
test reports, manuals, materials standards, catalogs, computer and
automatic machinery software and programs and the like pertaining to
the business of the Company, (c) field repair data, sales data, and
other information relating to sales or service of products now or
hereafter manufactured, (d) accounting information and all media in or
on which any of the information, knowledge, data or records may be
recorded or stored and all computer programs used for the compilation
or printout thereof, (e) causes of action, claims and warranties now or
hereafter owned or acquired by the Company in respect of any of the
items listed above and (f) all tax refunds to which the Company is
entitled.
"INSTRUMENTS" means all "instruments", "chattel paper" or
"letters of credit" (each as defined in the UCC) evidencing,
representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, any of the Accounts,
including promissory notes, drafts, bills of exchange and trade
acceptances, now owned or hereafter acquired by the Company.
"INVENTORY" means all "inventory" (as defined in the UCC), now
owned or hereafter acquired by the Company, wherever located, and shall
also mean and include, without limitation, all raw materials and other
materials and supplies, work-in-process and finished goods and any
products made or processed therefrom and all substances, if any,
commingled therewith or added thereto.
"PERFECTION CERTIFICATE" means a certificate substantially in
the form of Exhibit A hereto, completed with the schedules and
attachments contemplated thereby to the satisfaction of the Bank, and
duly executed by the chief financial officer of the Company.
"PERMITTED FINANCING STATEMENTS" means any financing
statements naming the Company as Debtor filed solely pursuant to
Section 9-408 of the UCC.
"PERMITTED LIENS" means the Liens on the Collateral permitted
to be created, assumed or to exist pursuant to the definition in the
Loan Agreement.
"PROCEEDS" means all proceeds of, and all other profits,
rentals or receipts, in whatever form, arising from the collection,
sale, lease, exchange, assignment, licensing or other disposition of,
or realization upon, Collateral, including, without limitation, all
claims of the Company against third parties for loss of, damage to or
destruction of, or for proceeds payable under, or unearned
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premiums with respect to, policies of insurance in respect of, any
Collateral, and any condemnation or requisition payments with respect
to any Collateral, in each case whether now existing or hereafter
arising.
"SECURED OBLIGATIONS" means all obligations of the Company
under or in connection with the Guarantee, whether now existing or
hereafter incurred or created, joint or several, direct or indirect,
absolute or contingent, due or to become due, matured or unmatured,
liquidated or unliquidated, arising by contract, operation of law or
otherwise.
"SECURITY INTERESTS" means the security interests granted
pursuant to SECTION 3 hereof, as well as all other security interests
created or assigned as additional security for the Secured Obligations
pursuant to the provisions of this Agreement.
"UCC" means the Uniform Commercial Code in effect on the date
hereof in Massachusetts; provided that if by reason of law, the
perfection or effect of perfection or non-perfection of the Security
Interests in any Collateral is governed by the Uniform Commercial Code
in effect in a jurisdiction other than Massachusetts, "UCC" means the
Uniform Commercial Code in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect
of perfection or non-perfection.
SECTION 2. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants as follows:
(a) The Company has good title to all of the Collateral, free and clear
of any Liens other than the Permitted Liens and the Security Interests.
(b) Neither the Company nor its predecessors has performed any acts
which might prevent the Bank from enforcing any of the terms of this Agreement
or which would limit the Bank in any such enforcement. Other than the Permitted
Financing Statements and financing statements or other similar or equivalent
documents or instruments with respect to the Security Interests, no financing
statement, mortgage, security agreement or similar or equivalent document or
instrument covering all or any part of the Collateral is on file or of record in
any jurisdiction in which such filing or recording would be effective to perfect
a Lien on such Collateral. No Collateral is in the possession of any Person
(other than the Company) asserting any claim thereto or security interest
therein, except that the Bank or its designee may have possession of
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Collateral as contemplated hereby.
(c) Prior to the first borrowing under the Loan Agreement, the Company
shall deliver the Perfection Certificate to the Bank. The information set forth
therein shall be correct and complete.
(d) When UCC financing statements in appropriate form have been filed
in the offices specified in the Perfection Certificate to the extent that a
security interest therein may be perfected by filing pursuant to the UCC, the
Security Interests shall constitute valid and perfected security interests in
the Collateral (except Inventory in transit), in each case prior to all other
Liens and rights of others therein.
(e) Except for the filings referred to in paragraph (d) above, no
authorization, approval or other action by, and no notice of filing with, any
Governmental Authority that has not been received, taken or made is required (i)
for the grant by the Company of the Security Interests or for the execution,
delivery or performance of this Agreement by the Company, (ii) for the
perfection and maintenance of the Security Interests as first priority security
interests and liens, or (iii) for the exercise by the Bank of the rights or the
remedies in respect of the Collateral pursuant to this Agreement.
(f) The Inventory and Equipment are insured in accordance with the
requirements of this Security Agreement and the Loan Agreement.
SECTION 3. THE SECURITY INTERESTS
(a) In order to secure the full and punctual payment of the Secured
Obligations in accordance with their respective terms, the Company hereby
hypothecates, assigns, pledges and grants to the Bank a continuing security
interest and lien in and to all right, title and interest of the Company in the
following property, whether now owned or existing or hereafter acquired or
arising and regardless of where located (all being collectively referred to as
the "COLLATERAL"):
(i) Accounts;
(ii) Inventory;
(iii) General Intangibles;
(iv) Documents;
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(v) Instruments;
(vi) Equipment;
(vii) All monies and property of any kind of the Company in the
possession or under the control of the Bank;
(viii) All books and records (including customer lists, marketing
information, credit files, price lists, operating records, vendor and supplier
price lists, sales literature, computer programs, printouts and other computer
materials and records) of the Company pertaining to any of the Collateral; and
(ix) All Proceeds of, attachments or accessions to, or substitutions
for all or any of the Collateral described in Clauses (i) through (viii) hereof.
(b) The Security Interests are granted as security only and shall not
subject the Bank to, or transfer or in any way affect or modify, any obligation
or liability of the Company with respect to any of the Collateral or any related
transaction.
SECTION 4. FURTHER ASSURANCES; COVENANTS
The Company covenants as follows:
(a) The Company will not change (i) the locations of its principal
place of business or its chief executive office, (ii) its federal tax
identification number, (iii) the locations where it keeps or holds any
Collateral or related records from the applicable locations described in the
Perfection Certificate, or (iv) its name, identity or corporate structure in any
manner, without giving the Bank 30 days prior written notice. In the event of
any such change, the Company shall, at its cost and expense, cooperate with the
Bank and cause to be filed or recorded additional financing statements,
amendments or supplements to existing financing statements, continuation
statements or other documents required to be recorded or filed in order to
perfect and protect the Security Interests. The Company shall not, in any event,
make any such change if such change would cause the Security Interests in any
Collateral to lapse or cease to be perfected.
(b) The Company will, from time to time, at its expense, execute,
deliver, file and record any statement, assignment, instrument, document,
agreement or other paper and take any other action (including, without
limitation, any filings of financing or continuation statements under the UCC)
that the Bank may from time to time reasonably determine to be necessary or
desirable in order to create, preserve, upgrade in rank (to
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the extent required hereby), perfect, confirm or validate the Security Interests
or to enable the Bank to (i) obtain the full benefits of this Agreement, or (ii)
to exercise and enforce any of its rights, powers and remedies hereunder with
respect to any of the Collateral. At the Bank's request, the Company will use
reasonable efforts to obtain the consent of any Person that is necessary or
desirable to effect the pledge hereunder of any right, title, claims and
benefits now owned or hereafter acquired by the Company in and to any General
Intangible. To the extent permitted by law, the Company hereby authorizes the
Bank to execute and file financing statements or continuation statements without
the Company's signature appearing thereon. The Company agrees that a carbon,
photographic or other reproduction of this Agreement or of a financing statement
is sufficient as a financing statement. The Company shall pay the costs of, or
incidental to, any recording or filing of any financing or continuation
statements concerning the Collateral.
(c) If any warehouseman, bailee or any of the Company's agents or
processors possesses or controls any Collateral, the Company shall, upon the
request of the Bank, notify such warehouseman, bailee, agent or processor of the
Security Interests created hereby and to hold all such Collateral for the Bank's
account subject to the Bank's instructions.
(d) The Company shall keep complete and accurate books and records
relating to the Collateral, and stamp or otherwise xxxx them in such manner as
the Bank may reasonably request in order to reflect the Security Interests.
(e) The Company will promptly deliver and pledge each Instrument to the
Bank, appropriately endorsed to the Bank without recourse, provided that so long
as no Event of Default shall have occurred and be continuing it, the Company may
retain for collection in the ordinary course any Instruments it receives in the
ordinary course of business and the Bank shall, promptly upon request of the
Company, make appropriate arrangements for making any other Instrument pledged
by the Company available to it for purposes of presentation, collection or
renewal (any such arrangement to be effected, to the extent deemed appropriate
by the Bank, against trust receipt or like document).
(f) The Company shall use its best efforts to cause to be collected
from its account debtors, as and when due, any and all amounts owing under or on
account of each Account (including, without limitation, Accounts which are
delinquent, such Accounts to be collected in accordance with lawful collection
procedures and the Company's standard procedures) and apply forthwith upon
receipt all such amounts so collected to the outstanding balance of such
Account, except that, unless an Event of Default has occurred and is continuing
and the Bank is exercising its rights hereunder to
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collect Accounts, the Company may allow in the ordinary course of business as
adjustments to amounts owing under its Accounts (i) an extension or renewal of
the time of payment, or settlement for less than the total unpaid balance, which
the Company finds appropriate in accordance with prudent business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise, all
in accordance with the Company's ordinary course of business consistent with its
historical collection practices. The costs and expenses (including, without
limitation, attorney's fees) of collection, whether incurred by the Company or
the Bank, shall be borne by the Company.
(g) Upon the occurrence and during the continuance of any Event of
Default, upon the request of the Bank, the Company will promptly notify (and the
Company hereby authorizes the Bank so to notify) each account debtor in respect
of any Account or Instrument that such Collateral has been assigned to the Bank,
and that any payments due or to become due in respect of such Collateral are to
be made directly to the Bank or any designee of the Bank. Following such request
of the Bank, the Company shall hold all proceeds from collection of Accounts as
trustee for the Bank (without commingling the same with other funds of the
Company) and shall turn the same over to the Bank immediately upon receipt in
the form received (duly endorsed by the Company to the Bank, if required). The
Bank shall apply the proceeds of such collections it receives to the Secured
Obligations in accordance with SECTION 8 of this Agreement. The application of
the proceeds of such collections shall be conditional upon the final payment in
cash of the items so collected. If any item is not so paid or the Bank is
required for any reason to return any payment made, the Bank may reverse any
credit given in respect of such item.
(h) Without the prior written consent of the Bank, the Company will not
(a) sell, lease, exchange, assign or otherwise dispose of, or grant any option
with respect to, any Collateral other than Inventory and obsolete or worn-out
property and equipment and, in the case of any such permitted sale or exchange,
the Security Interests created hereby in such item (but not in any Proceeds
arising from such sale or exchange) shall cease immediately without any further
action on the part of the Bank; or (b) create, incur or suffer to exist any Lien
with respect to any Collateral, except for Permitted Liens and the Security
Interests;
(i) The Company will maintain, with financially sound and reputable
companies, insurance policies (i) insuring all Inventory and Equipment against
loss by fire, explosion, theft and other casualties reasonably satisfactory to
the Bank and (ii) insuring the Company and the Bank against liability for
personal injury and property damage relating to Inventory and Equipment, such
policies to be in such form and amounts and having such coverage as is
reasonably satisfactory to the Bank, with losses payable to the Bank as sole
loss payee. All such insurance shall (A) provide that no termination,
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cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the Bank of
written notice thereof, (B) in the case of the policies referenced in clause
(ii) above, name the Bank as additional insured and (C) be otherwise reasonably
satisfactory to the Bank.
(j) The Company will keep each item of Equipment in good order and
repair and will not use the same in violation of law or any policy of insurance
thereon.
(k) The Company will, promptly upon request, provide to the Bank all
information and evidence it may reasonably request concerning the Collateral
(including without limitation, the names, addresses, face value, and date of
invoices for each debtor obligated on each Account) to enable the Bank to
enforce the provisions of this Agreement.
SECTION 5. GENERAL AUTHORITY
The Company hereby irrevocably appoints the Bank its true and lawful
attorney, with full power of substitution, in the name of the Company, the Bank,
or otherwise, for the sole use and benefit of the Bank, but at the Company's
expense, to the extent permitted by law to exercise, at any time and from time
to time while an Event of Default has occurred and is continuing, all or any of
the following powers with respect to all or any of the Collateral:
(a) to endorse the Company's name on any checks, notes,
acceptances, money orders, drafts, filings or other forms of
payment or security that may come into the Bank's possession,
(b) to demand, xxx for, collect, receive and give
acquittance for any and all monies due or to become due thereon or
by virtue thereof,
(c) to settle, compromise, compound, prosecute or defend
any action or proceeding with respect thereto,
(d) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, as fully and
effectively as if the Bank were the absolute owner, and
(e) to extend the time of payment thereof and to make any
allowance and other adjustments with reference thereto;
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PROVIDED that the Bank shall give the Company not less than ten days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral, except any Collateral which is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market. The Company agrees that such notice constitutes "reasonable
notification" within the meaning of Section 9-504(3) of the UCC.
SECTION 6. REMEDIES UPON EVENT OF DEFAULT
(a) If any Event of Default has occurred and is continuing, the Bank
may exercise all rights of a secured party under the UCC (whether or not in
effect in the jurisdiction where such rights are exercised) and, in addition,
the Bank may, without being required to give any notice, except as herein
provided or as may be required by law, sell any and all of the Collateral at
public or private sale, for cash, upon credit or for future delivery, and at
such prices as the Bank may deem satisfactory. The Bank may be the purchaser of
any or all of the Collateral so sold at any public sale (or, if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations, at any private
sale) and thereafter hold the same, absolutely, free from any right or claim of
whatsoever kind. The Company will execute and deliver such documents and take
such other action as the Bank deems necessary or advisable in order that any
such sale may be made in compliance with law. Upon any such sale the Bank shall
have the right to deliver, assign and transfer to the purchaser the Collateral
so sold. Each purchaser at any such sale shall hold the Collateral so sold to it
absolutely, free from any claim or right of whatsoever kind, including any
equity or right of redemption of the Company. The Company, to the extent
permitted by law, hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or hereafter
adopted. The notice (if any) of such sale required by SECTION 5 hereof shall (i)
in case of a public sale, state the time and place fixed for such sale, and (ii)
in the case of a private sale, state the day after which such sale may be
consummated. Any such public sale shall be held at such time(s) within ordinary
business hours and at such places as the Bank may fix in the notice of such
sale. At any such sale the Collateral may be sold in one lot as an entirety or
in separate parcels, as the Bank may determine. The Bank shall not be obligated
to make any such sale pursuant to any such notice. The Bank may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by the Bank until
the selling price is paid by the purchaser thereof, but the Bank shall not incur
any liability in case of the failure of such purchaser to take up and pay for
the Collateral so sold and, in case of any such failure, such Collateral may
again be sold
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upon like notice. The Bank, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
(b) For the purpose of enforcing its rights and remedies under this
Agreement, the Bank may (i) require the Company to, and the Company agrees that
it will, at its expense and upon the request of the Bank, forthwith assemble all
or any part of the Collateral as directed by the Bank and make it available at a
place designated by the Bank which is, in its opinion, reasonably convenient to
the Bank, whether at the premises of the Company or otherwise, (ii) to the
extent permitted by law, enter, with or without process of law and without
breach of the peace, any premise where any of the Collateral may be located, and
without charge or liability to it seize and remove such Collateral from such
premises, (iii) have access to and use the Company's books and records relating
to the Collateral and (iv) prior to the disposition of the Collateral, store or
transfer it without charge in or by means of any storage or transportation
facility owned or leased by the Company, process, repair or recondition it or
otherwise prepare it for disposition in any manner and to the extent the Bank
deems appropriate to preserve and enhance its value and, in connection with such
preparation and disposition, use, as a licensee (or if no decline in the value
of the Collateral would result, otherwise) without charge any trademark, trade
name, copyright, patent or technical process used by the Company.
SECTION 7. LIMITATION ON DUTY OF BANK IN RESPECT OF COLLATERAL.
Beyond the safe custody thereof in accordance with law, the Bank shall
have no duty as to any Collateral in the possession or control of the Bank or
any agent or bailee, or any income thereon, or as to the preservation of rights
against prior parties or any other rights pertaining thereto. The Bank shall be
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equivalent to that which it accords its own property of like
nature, and shall not be liable or responsible for any loss or damage to any of
the Collateral, or for any diminution in the value thereof, by reason of the act
or omission of any warehouseman, carrier, forwarding agency, consignee or other
agent or bailee selected by the Bank in good faith and in the absence of gross
negligence.
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SECTION 8. APPLICATION OF PROCEEDS
Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral shall be applied by the Bank in the following order of priorities:
FIRST, to payment of the expenses of such sale or other
realization, including reasonable compensation to the Bank and its agents and
counsel in connection therewith, and all expenses, liabilities and advances
incurred or made by the Bank in connection therewith, and any other unreimbursed
expenses for which the Bank is to be reimbursed pursuant to the Guaranty, or
SECTION 9 hereof and unpaid fees owing to the Bank under the Loan Agreement;
SECOND, to the payment of accrued but unpaid interest in
connection with the Secured Obligations;
THIRD, to the payment of all other Secured Obligations, until
all Secured Obligations shall have been paid in full; and
FINALLY, to payment to the Company or its successors or
assigns, or as a court of competent jurisdiction may direct, of any surplus then
remaining from such proceeds.
The Bank may make distributions hereunder in cash or in kind or in any
combination thereof.
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SECTION 9. EXPENSES
In the event that the Company fails to comply with the provisions of
the Loan Agreement, the Guarantee, or this Agreement, such that the value of any
Collateral or the validity, perfection, rank or value of any Security Interest
is thereby diminished or potentially diminished or put at risk, the Bank may
effect such compliance on behalf of the Company, and the Company shall reimburse
the Bank for the costs thereof within two Business Days of demand therefor. All
insurance expenses and all reasonable expenses of protecting, storing,
warehousing, appraising, insuring, handling, maintaining, and shipping the
Collateral, any and all excise, property, sales, and use taxes imposed by any
state, federal, or local authority on any of the Collateral, or in respect of
the sale or other disposition thereof, shall be borne by the Company; and if the
Company fails to promptly pay any portion thereof when due, the Bank may, at its
option, but shall not be required to, pay the same and charge the Company's
account therefor, and the Company agrees to reimburse the Bank therefor on
demand. All sums so paid or incurred by the Bank for any of the foregoing and
any and all other sums for which the Company may become liable hereunder and all
reasonable costs and expenses (including attorneys' fees, legal expenses and
court costs) reasonably incurred by the Bank in enforcing or protecting the
Security Interests or any of their rights or remedies under this Agreement,
shall, together with interest thereon until paid at the rate applicable to
advances made under the Loan Agreement, be additional Secured Obligations
hereunder.
SECTION 10. TERMINATION OF SECURITY INTERESTS
Upon the indefeasible payment in full of all Secured Obligations and
the termination of the Commitment, the Security Interests shall terminate and
all rights to the Collateral shall revert to the Company, and this Security
Agreement shall terminate and no longer be of any force and effect.
SECTION 11. NOTICES
All notices, approvals, requests, demands and other communications
hereunder shall be given in accordance with the Loan Agreement.
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SECTION 12. WAIVERS, NON-EXCLUSIVE REMEDIES
No failure on the part of the Bank to exercise, and no delay in
exercising and no course of dealing with respect to, any right under the Loan
Agreement, the Guarantee, or this Agreement shall operate as a waiver thereof;
nor shall any single or partial exercise by the Bank of any right under the Loan
Agreement, the Guarantee, or this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The rights in this
Agreement, the Guarantee, and the Loan Agreement are cumulative and are not
exclusive of any other remedies provided by law.
SECTION 13. SUCCESSORS AND ASSIGNS
This Agreement is for the benefit of the Bank and its successors and
assigns, and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the indebtedness
so assigned, may be transferred with such indebtedness. This Agreement shall be
binding on the Company and its successors and assigns.
SECTION 14. CHANGES IN WRITING
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only in writing signed by the Company and
the Bank.
SECTION 15. MASSACHUSETTS LAW
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, EXCEPT AS OTHERWISE REQUIRED BY
MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY
THE LAWS OF ANY JURISDICTION OTHER THAN THE COMMONWEALTH OF MASSACHUSETTS ARE
GOVERNED BY THE LAWS OF SUCH JURISDICTION.
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SECTION 16. SEVERABILITY
If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (a) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Bank in order to carry out the
intentions of the parties hereto as nearly as may be possible; and (b) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 17. COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
JAPANESE LANGUAGE SERVICES, INC.
By:
------------------------------
Name:
Title:
SILICON VALLEY BANK
By:
------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
EXHIBIT A
PERFECTION CERTIFICATE
OF
JAPANESE LANGUAGE SERVICES, INC.
The undersigned, the chief financial officer of Japanese Language
Services, Inc., a Massachusetts corporation (the "COMPANY"), hereby certifies to
Silicon Valley Bank (the "BANK") with reference to the Security Agreement dated
as of May ___, 1998, between the Company and the Bank (the terms defined therein
being used herein as therein defined) as follows:
1. NAMES. (a) The exact corporate name of the Company as it appears in
its certificate of incorporation is as follows:
Japanese Language Services, Inc.
(b) Set forth below is each other corporate name the Company has had
since its organization, together with the date of the relevant change:
(c) Set forth below is a description of each change by the Company
of its identity or corporate structure in any way within the past five years:
(d) The following is a list of all other names (including trade
names or similar appellations) used by the Company or any of its divisions or
other business units at any time during the past five years:
(e) The Federal tax identification number of the Company is as
follows:
-2-
2. CURRENT LOCATIONS. (a) The chief executive office of the Company is
located at the following address:
(b) The following are all the locations where the Company maintains
any books or records relating to any Accounts:
Mailing
Name Address City State
---- ------- ---- -----
(c) The following are all the locations where Equipment and
Inventory of the Company are located:
Mailing
Name Address City State
---- ------- ---- -----
(d) The following are all the places of business of the Company not
identified above:
-3-
Mailing
Name Address City State
---- ------- ---- -----
3. PRIOR LOCATIONS. Set forth below is the information required by
subparagraphs (a), (b), (c) and (d) of paragraph 2 with respect to each location
or place of business maintained by the Company at any time during the past five
years:
4. UNUSUAL TRANSACTIONS. All Accounts have been originated by the
Company and all Equipment has been acquired by the Company in the ordinary
course of its business.
5. FILE SEARCH REPORTS. Attached hereto as Schedule A is a true copy of
a file search report in each jurisdiction identified in paragraph 2 or 3 above
with respect to each name set forth in paragraph 1 above together with a true
copy of each financing statement or other filing identified in such file search
reports. To the best knowledge of the Company, no other financing statements
have been filed listing the Company as a debtor and no such filings are pending
except in favor of the Bank.
IN WITNESS WHEREOF, I have hereunto set my hand this __ day of
___________, 1998.
---------------------------
Name:
----------------------
Title:
----------------------
