Exhibit 2.6
GENERAL SECURITY AGREEMENT
(Tangible and Intangible Personal Property)
IMPERIAL BANK
Member FDIC
This Agreement is executed on February 26, 1999 , by RESEARCH ENGINEERS, INC., A
DELAWARE CORPORATION (hereinafter called "Obligor").
In consideration of financial accommodations given, to be given or continued,
the Obligor grants to IMPERIAL BANK (hereinafter called "Bank") a security
interest in (a) all property (i) delivered to Bank by Obligor, (ii) which shall
be in Bank's possession or control in any matter or for any purpose, (iii)
described below, (iv) now owned or hereafter acquired by Obligor of the type or
class described below and/or in any supplementary schedule hereto, or in any
financing statement filed by Bank and executed by or on behalf of Obligor; (b)
all deposits accounts of Obligor at Bank and (c) the proceeds, increase and
products of such property, all accessions thereto, and all property which
Obligor may receive on account of such collateral which Obligor will immediately
deliver to Bank (collectively referred to as "Collateral") to secure payment and
performance of all of Obligor's present or future debts or obligations to Bank,
whether absolute or contingent (hereafter referred to as "Debt"). Unless
otherwise defined, words used herein have the meanings given them in the
California Uniform Commercial Code.
Collateral:
A. VEHICLE, VESSEL, AIRCRAFT:
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Identification License or
Year Make/Manufacturer Model and Serial No. Registration No. New or Used
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Engine or other equipment:
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(For aircraft - original ink signature on copy to FAA)
B. DEPOSIT ACCOUNTS:
Type Account Number Amount $
------------------- ----------------------- --------
In name of
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Depository AND ALL EXTENSIONS OR RENEWALS THEREOF.
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C. ACCOUNTS, INTANGIBLES AND OTHER: (Describe)
SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF BY THIS REFERENCE.
The collateral not in Bank's possession will be located at: 00000 Xxxx
Xxxxx Xxxxxxx, Xxxxx Xxxxx, XX 00000
|_| If checked, the Obligor is executing this Agreement as an Accommodation
Debtor only and the Obligor's liability is limited to the security interest
granted in the Collateral described herein. The party being accommodated is
("Borrower"). All the terms and provisions on page 2 hereof are incorporated
herein as though set forth in full, and constitute a part of this Agreement.
Signature
Name (indicate title, if applicable) Address
RESEARCH ENGINEERS, INC., By: /S/ XXXXX XXXXXXXXXX 00000 Xxxx Xxxxx Xxxxxxx
A DELAWARE CORPORATION -------------------- Xxxxx Xxxxx, XX 00000
Xxxxx Xxxxxxxxxx, EVP/COO
By: /S/ XXXXX XXXXX
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Xxxxx X. Xxxxx, CFO/Secretary
L 552 E (Rev 9/97) Distribution: Bank/Customer/File Page 1 of 2
SECURITY AGREEMENT (CONTINUED)
Obligor represents, warrants and agrees:
1. Obligor will immediately pay (a) any Debt when due, (b) Bank's costs of
collecting the Debt, of protecting, insuring or realizing on Collateral, and any
expenditure of Bank pursuant hereto, including attorneys' fees and expenses,
with interest at the rate of 24% per year, or the rate applicable to the Debt,
whichever is less, from the date of expenditure, and (c) any deficiency after
realization of Collateral.
2. Obligor will use the proceeds of any loan that becomes Debt hereunder for the
purpose indicated on the application therefore, and will promptly contract to
purchase and pay the purchase price of any property which becomes Collateral
hereunder from the proceeds of any loan made for that purpose.
3. As to all Collateral in Obligor's possession (unless specifically otherwise
agreed to by Bank in writing), Obligor will:
(a) Have, or has, possession of the Collateral at the location disclosed
to Bank and will not remove the Collateral from the location.
(b) Keep the Collateral separate and identifiable.
(c) Maintain the Collateral in good and saleable condition, repair it if
necessary, clean, feed, shelter, water, medicate, fertilize,
cultivate, irrigate, prune and otherwise deal with the Collateral in
all such ways as are considered good practice by owners of like
property, use it lawfully and only as permitted by insurance policies,
and permit Bank to inspect the Collateral at any reasonable time.
(d) Not sell, contract to sell, lease, encumber or transfer the Collateral
(other than inventory Collateral) until the Debt has been paid, even
though Bank has a security interest in proceeds of such Collateral.
4. As to Collateral which is inventory and accounts, Obligor:
(a) May, until notice from Bank, sell, lease or otherwise dispose of
inventory Collateral in the ordinary course of business only, and
collect the cash proceeds thereof.
(b) Will, upon notice from Bank, deposit all cash proceeds as received in
a demand deposit account with Bank, containing only such proceeds and
deliver statements identifying units of inventory disposed of,
accounts which gave rise to proceeds, and all acquisitions and returns
of inventory as required by Bank.
(c) Will receive in trust, schedule on forms satisfactory to the Bank and
deliver to Bank all non-cash proceeds other than inventory received in
trade.
(d) If not in default, may obtain release of Bank's interest in individual
units of inventory upon request, therefore, payment to Bank of the
release price of such units shown on any Collateral schedule
supplementary hereto, and compliance herewith as to proceeds thereof.
5. As to Collateral which are accounts, chattel paper, general intangibles and
proceeds described in 4(c) above, Obligor warrants, represents and agrees:
(a) All such Collateral is genuine, enforceable in accordance with its
terms, free from default, prepayment, defense and conditions precedent
(except as disclosed to and accepted by Bank in writing), and is
supported by consecutively numbered invoices to, or rights against,
the debtors thereon. obligor will supply Bank with duplicate invoices
or other evidence of Obligor's rights on Bank's request;
(b) All persons appearing to be obligated on such Collateral have
authority and capacity to contract;
(c) All chattel paper is in compliance with law as to form, content and
manner of preparation and execution and has been properly registered,
recorded, and/or filed to protect Obligor's interest thereunder;
(d) If an account debtor shall also be indebted to Obligor on another
obligation, any payment made by him not specifically designated to be
applied on any particular obligation shall be considered to be a
payment on the account in which Bank has a security interest. Should
any remittance include a payment not on an account, it shall be
delivered to Bank and, if no event of default has occurred, Bank shall
pay Obligor the amount of such payment;
(e) Obligor agrees not to compromise, settle or adjust any account or
renew or extend the time of payment thereof without Bank's prior
written consent.
6. Obligor owns all Collateral absolutely, and no other person has or claims any
interest in any Collateral, except as disclosed to and accepted by Bank in
writing. Obligor will defend any proceeding which may affect title to or
Bank's security interest in any Collateral, and will indemnify and hold Bank
free and harmless from all costs and expenses of Bank's defense.
7. Obligor will pay when due all existing or future charges, liens or
encumbrances on and all taxes and assessments now or hereafter imposed on or
affecting the Collateral and, if the Collateral is in Obligor's possession,
the realty on which the Collateral is located.
8. Obligor will insure the Collateral with Bank as loss payee in form and
amounts with companies, and against risks and liability satisfactory to Bank,
and hereby assigns such policies to Bank, agrees to deliver them to Bank at
Bank's request, and authorizes Bank to make any claim thereunder, to cancel
the insurance on Obligor's default, and to receive payment of and endorse any
instrument in payment of any loss or return premium. If Obligor should fail
to deliver the required policy or policies to the Bank, Bank may, at
Obligor's cost and expense, without any duty to do so, get and pay for
insurance naming as the insured, at Bank's option, either both Obligor and
Bank, or only Bank, and the cost thereof shall be secured by this Security
Agreement, and shall be repayable as provided in Paragraph 1 above.
9. Obligor will give Bank any information it requires. All information at any
time supplied to Bank by Obligor (including, but not limited to, the value
and condition of Collateral, financial statements, financing statements, and
statements made in documentary Collateral) is correct and complete, and
Obligor will notify Bank of any adverse change in such information. Obligor
will promptly notify Bank of any change of Obligor's residence. chief
executive office or mailing address.
00.Xxxx is irrevocably appointed Obligor's attorney-in-fact to do any act which
Obligor is obligated hereby to do, to exercise such rights as Obligor may
exercise, to use such equipment as Obligor might use, to enter Obligor's
premises to give notice of Bank's security interest, and to collect
Collateral and proceeds and to execute and file in Obligor's name any
financing statements and amendments thereto required to perfect Bank's
security interest hereunder, all to protect and preserve the Collateral and
Bank's rights hereunder. Bank may:
(a) Endorse, collect and receive delivery or payment of instruments and
documents constituting Collateral;
(b) Make extension agreements with respect to or affecting Collateral,
exchange it for other Collateral, release persons liable thereon or
take security for the payment thereof, and compromise disputes in
connection therewith;
(c) Use or operate Collateral for the purpose of preserving Collateral or
its value and for preserving or liquidating Collateral.
11.If more than one Obligor signs this Agreement, their liability is joint and
several. Any Obligor who is married agrees that recourse may be had against
separate property for the Debt. Discharge of any Obligor except for full
payment, or any extension, forbearance, change of rate of interest, or
acceptance, release or substitution of Collateral or any impairment or
suspension of Bank's rights against an Obligor, or any transfer of an
Obligor's interest to another shall not affect the liability of any other
Obligor. Until the Debt shall have been paid or performed in full, Bank's
rights shall continue even if the Debt is outlawed. All Obligors waive: (a)
any right to require Bank to proceed against any Obligor before any other, or
to pursue any other remedy; (b) presentment, protest and notice of protest,
demand and notice of nonpayment, demand or performance, notice of sale, and
advertisement of sale; (c) any right to the benefit of or to direct the
application of any Collateral until the Debt shall have been paid; (d) and
any right of subrogation to Bank until Debt shall have been paid or performed
in full.
12.Upon default, at Bank's option, without demand or notice, all or any part of
the Debt shall immediately become due. Bank shall have all rights given by
law, and may sell, in one or more sales, Collateral in any county where Bank
has an office. Bank may purchase at such sale. Sales for cash or on credit to
a wholesaler, retailer or user of the Collateral, or at public or private
auction, are all to be considered commercially reasonable. Bank may require
Obligor to assemble the Collateral and make it available to Bank at the
entrance to the location of the Collateral, or a place designated by Bank.
Defaults shall include:
(a) Obligor's failure to pay or perform this or any agreement with Bank or
breach of any warranty herein, or Borrower's failure to pay or perform
any agreement with Bank.
(b) Any change in Obligor's or Borrower's financial condition which in
Bank's judgment impairs the prospect of Borrower's payment or
performance.
(c) Any actual or reasonably anticipated deterioration of the Collateral
or in the market price thereof which causes it, in Bank's judgment, to
become unsatisfactory as security.
(d) Any levy or seizure against Borrower or any of the Collateral.
(e) Death, termination of business, assignment for creditors, insolvency,
appointment of receiver, or the filing of any petition under
bankruptcy or debtor's relief laws of, by or against Obligor or
Borrower or any guarantor of the Debt.
(f) Any warranty or representation which is false or is believed in good
faith by Bank to be false.
00.Xxxx's acceptance of partial or delinquent payments or the failure of Bank
to exercise any right or remedy shall not waive any obligation of Obligor or
Borrower or right of Bank to modify this Agreement, or waive any other
similar default.
14.On transfer of all or any part of the Debt, Bank may transfer all or any
part of the Collateral. Bank may deliver all or any part of the Collateral to
any Obligor at any time. Any such transfer or delivery shall discharge Bank
from all liability and responsibility with respect to such Collateral
transferred or delivered. This Agreement benefits Bank's successors and
assigns and binds Obligor's heirs, legatees, personal representatives,
successors and assigns. obligor agrees not to assert against any assignee of
Bank any claim or defense that may exist against Bank. Time is of the
essence. This Agreement and supplementary schedules hereto contain the entire
security agreement between Bank and Obligor. Obligor will execute any
additional agreements, assignments or documents reasonably required by Bank
to carry this Agreement into effect.
15.This Agreement shall be governed by and construed in accordance with the
laws of the State of California, to the jurisdiction of whose courts the
Obligor hereby agrees to submit. Obligor agrees that service of process may
be accomplished by any means authorized by California law. All words used
herein in the singular shall be considered to have been used in the plural
where the context and construction so require.
00.Xx the extent that Obligor acquires any trademarks, service marks, trade
names and service names and/or the goodwill associated therewith, copyrights,
patents and/or patent applications (collectively 'Intellectual Property),
Obligor shall give prompt notice thereof to Bank and shall take any and all
actions requested from time to time by Bank to perfect Obligor's interest in
such Intellectual Property and to perfect Bank's first priority interest
therein. Without limiting the generality of the foregoing, the Obligor agrees
as follows: Upon Obligor creating, writing, producing or acquiring any
software, computer source codes or other computer programs (collectively, the
'Software'), Obligor shall promptly register such Software with the U.S.
Copyright Office and to the extent Obligor's rights therein are acquired from
any third party, Obligor shall promptly upon such acquisition file with the
U.S. Copyright Office any and all documents necessary to perfect Obligor's
rights therein. Upon Obligor creating, writing, producing or otherwise
acquiring any Software, Obligor shall give prompt notice thereof to Bank.
Obligor shall execute and deliver to Bank any and all copyright mortgages,
UCC financing statements and other documents and instruments which Bank may
request in connection with the Bank perfecting its first priority security
interest in such Software.
L 552 E (Rev 9/97) Page 2 of 2
Attachment to General Security Agreement
EXHIBIT "A" COLLATERAL DESCRIPTION
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All personal property of Obligor (herein referred to as "Obligor" or "Debtor')
whether presently existing or hereafter created, written, produced or acquired,
including, but not limited to: (i) all accounts receivable, accounts, chattel
paper, contract rights (including, without limitation, royalty agreements,
license agreements and distribution agreements), documents, instruments, money,
deposit accounts and general intangibles including, without limitation, returns,
repossessions, books and records relating thereto, and equipment containing said
books and records, all investment property including securities and securities
entitlement, (ii) all software, computer source codes and other computer
programs (collectively, the "Software Products"), and all common law and
statutory copyrights and copyright registrations, applications for registration,
now existing or hereafter arising, United States of America and foreign,
obtained or to be obtained on or in connection with the Software Products, or
any parts thereof or any underlying or component elements of the Software
Products together with the right to copyright and all rights to renew or extend
such copyrights and the right (but not the obligation) of Bank (herein referred
to as "Bank" or "Secured Party") to xxx in its own name and/or in the name of
the Debtor for past, present, and future infringements of copyright, (iii) all
goods including, without limitation, equipment and inventory (including, without
limitation, all export inventory), (iv) all guarantees and other security
therefor, (v) all trademarks, service marks, trade names and service names and
the goodwill associated therewith, (vi) (a) all patents and patent applications
filed in the United States Patent and Trademark Office or any similar office of
any foreign jurisdiction, and interests under patent license agreements,
including, without limitation, the inventions and improvements described and
claimed therein, (b) licenses pertaining to any patent whether Debtor is
licensor or licensee, (c) all income, royalties, damages, payments, accounts and
accounts receivable now or hereafter due and/or payable under and with respect
thereto, including, without limitation, damages and payments for past, present
or future infringements thereof, (d) the right (but not the obligation) to xxx
for past, present and future thereof, (e) all rights corresponding thereto
throughout the world in all jurisdictions in which such patents have been issued
or applied for, and (f) the reissues, divisions, continuations, renewals,
extensions and continuations-in-part with any of the foregoing (all of the
foregoing patents and applications and interests under patent license
agreements, together with the items described in clauses (a) through (f) in this
paragraph are sometimes herein individually and collectively referred to as the
"Patents"), and (vii) all products and proceeds including, without limitation,
insurance proceeds, of any of the foregoing.
To the extent that Obligor acquires any trademarks, service marks, trade
names and service names and/or the goodwill associated therewith, copyrights,
patents and/or patent applications (collectively "Intellectual Property"),
Obligor shall give prompt notice thereof to Bank and shall take any and all
actions reasonably requested from time to time by Bank to perfect Obligor's
interest in such Intellectual Property and to perfect Bank's first priority
security interest therein. Without limiting the generality of the foregoing, the
Obligor further agrees as follows: Upon Obligor creating, writing, producing or
acquiring any material software, computer source codes or other computer
programs (collectively, the "Software"), Obligor shall promptly register such
Software with the U.S. Copyright Office before selling or licensing the
Software, and to the extent Obligor's rights therein are acquired from any third
party, Obligor shall promptly upon such acquisition file with the U.S. Copyright
Office any and all documents necessary to perfect Obligor's fights therein. Upon
Obligor creating, writing, producing or otherwise acquiring any material
Software, Obligor shall give prompt notice thereof to Bank. Obligor shall
execute and deliver to Bank any and all copyright mortgages, UCC financing
statements and other documents and instruments which Bank may request in
connection with the Bank perfecting its first priority security interest in such
Software.
RESEARCH ENGINEERS, INC., a Delaware corporation
By:
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Xxxxx Xxxxxxxxxx, EVP/COO
By: -------------------------
Xxxxx X. Xxxxx, CFO/Secretary
