THIS NOTE MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT AS PROVIDED HEREIN. THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS
OF AN ASSET PURCHASE AGREEMENT DATED AS OF JULY 13, 2000, AS AMENDED, BY
AND AMONG HOLDER, MAKER, AQUIS GROUP AND AQUIS COMMUNICATIONS. A COPY OF
THIS AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE MAKER.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND NO OFFER, TRANSFER OR
ASSIGNMENT OF THIS NOTE MAY BE MADE IN THE ABSENCE OF SUCH REGISTRATION OR
AN OPINION OF COUNSEL SATISFACTORY TO SUNSTAR IP COMMUNICATIONS, LLC, A
DELAWARE LIMITED LIABILITY COMPANY ("MAKER"), THAT SUCH REGISTRATION IS NOT
REQUIRED.
Sunstar IP Communications, LLC
10.0% NOTE
DUE OCTOBER 31, 2000
--------------------
$1,329,018 August 31, 2000
FOR VALUE RECEIVED, the Maker hereby promises to pay to Aquis IP
Communications, Inc., a Delaware corporation (the "Holder"), the principal sum
of $1,329,018, together with interest thereon, as provided herein.
1. PAYMENT OF INTEREST. The Maker promises to pay interest (computed on the
basis of actual days elapsed commencing on October 1, 2000 and a year of 360
days) on the unpaid principal amount of this Note at an interest rate equal to
10.0% per annum. The Maker shall pay interest commencing on the last Business
Day of October, 2000 and, if the Maturity Date is extended once pursuant to
Section 2 below, the last Business day of November, 2000 and, if the Maturity
Date is extended twice pursuant to Section 2 below, the last Business Day of
November, 2000 as well as the last Business Day of December, 2000 (each a
"Payment Date"). For purposes of this Note, "Business Day" shall mean any day
other than a Saturday, Sunday, or days on which financial institutions in New
York, New York are authorized or required to be closed by applicable law.
2. PAYMENT OF PRINCIPAL. Any remaining amounts of unpaid principal and
accrued and unpaid interest owing hereunder shall in any event become due and
payable, and shall be paid, on the last Business Day of October, 2000 (the
"Maturity Date"); provided, however, that such Maturity Date (a) shall be
extended to the last Business Day of November, 2000 if, at least two (2)
Business Days prior to October 31, 2000, Maker pays to Holder an additional cash
payment in the amount of $50,000 and (b) shall be extended to the last Business
Day of December, 2000 if, at least two (2) Business Days prior to November 30,
2000, Maker pays to Holder an additional cash payment in the amount of $50,000.
3. PAYMENT OF ADDITIONAL AMOUNTS. In addition to the payments provided for
in Sections 1 and 2 hereof, Maker shall reimburse Holder for all costs of
collection of sums due hereunder, including, without limitation, reasonable
attorneys' fees and expenses and court costs. This Note shall evidence all such
sums so advanced and paid.
4. METHOD OF PAYMENT. Both principal and interest are payable to the Holder
in lawful currency of the United States of America in immediately available
funds without set off, counterclaim or deduction. If any payment under this Note
is due on a date which is not a Business Day, such payment shall be made on the
next succeeding Business Day, and no additional interest shall be made payable
with respect to the period from such original due date to such next succeeding
Business Day provided that such payment shall be made on such succeeding
Business Day. Payment of the principal sum and interest shall be made at the
place which the Holder from time to time shall direct to the Maker in writing.
5. PREPAYMENT. The Maker may prepay, at its option upon five days prior
written notice to the Holder, without premium or penalty, the Note in whole or
in part at any time or from time to time at 100% of the then unpaid principal
amount plus accrued interest, if any, to the date of prepayment.
6. EVENTS OF DEFAULT. An "Event of Default" under this Note shall occur if
any of the following shall occur:
(a) the Maker fails to make any payment of principal or interest
hereunder when due;
(b) proceedings in bankruptcy, or for reorganization of Maker, or for
the readjustment of any of its debts, under the Bankruptcy Code or any part
thereof, or under any other laws, whether state or federal, for the relief of
debtors, now or hereafter existing, shall be commenced by Maker, or shall be
commenced against Maker, which proceedings against Maker shall not be discharged
within 30 days of their commencement; or
(c) a receiver or trustee shall be appointed for Maker or any
substantial part of its assets, or any proceedings shall be instituted for the
dissolution or the full or partial liquidation of Maker and such receiver or
trustee shall not be discharged within 30 days of his appointment, or such
proceedings shall not be discharged within 30 days of their commencement, or
Maker shall discontinue business or materially change the nature of its
business.
7. WAIVER OF PRESENTMENT. The Maker waives presentment for payment, demand,
notice of demand, notice of non-payment or dishonor, protest, and notice of
protest of this Note (other than any notices required herein).
8. ACCELERATION. If an Event of Default set forth in Section 6 occurs and
is continuing, the Holder may, by written notice (the "Acceleration Notice") to
the Maker, declare all unpaid principal and accrued interest on this Note then
outstanding to be immediately due and
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payable to Holder. Upon the occurrence of an Event of Default under Section
5(c), all unpaid principal and accrued interest on this Note then outstanding
shall immediately become due and payable, without presentment, demand, protest
or any notice of any kind, all of which are hereby expressly waived anything
contained herein to the contrary notwithstanding.
9. RESCISSION; REMEDIES. The Holder by written notice to the Maker may
rescind a declaration of acceleration. A delay or omission by the Holder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
10. SECURITY AGREEMENT. Maker hereby acknowledges that in connection with
executing this Note, Maker and Holder shall enter into a Security Agreement
substantially in the form attached hereto as EXHIBIT A whereby Maker shall xxxxx
Xxxxxx a security interest in the Purchased Assets as set forth therein.
11. NOTICES. Any notice, writing, or other communication required or
permitted to be given pursuant to this Note shall be in writing and shall be
telecopied, delivered personally or by a nationally recognized overnight courier
service or mailed, first-class, United States certified mail, return receipt
requested, and addressed as follows:
If to the Maker, then to:
Sunstar IP Communications, LLC
0000 X. Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, XX 00000
Attention: Xxxx X. Xxxxx, Vice President
If to the Holder, then to:
Aquis Communications, Inc.
0000X Xxxxx 00
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
With a copy to:
Dechert
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX x0x00
Attention: Xxxxx X. Xxxx, Esquire
Fax: (000) 000-0000
or to such other address as the other party hereto shall be notified as
aforesaid. All notices, writings or other communications given, as aforesaid,
shall be deemed to be given when received by telecopy, delivered personally or
received by mail or courier, as applicable.
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12. ASSIGNMENT. This Note is not transferrable by the Maker and the Maker
may not transfer any right or interest that it may have in, or to, or under this
Note. Subject to compliance with applicable federal and state securities laws as
confirmed by written opinion addressed to the Maker by Holder's counsel, this
Note and all rights hereunder are transferable, in whole or in part, without
charge to the Holder hereof (except for transfer taxes), upon surrender of this
Note properly endorsed.
13. ASSET PURCHASE AGREEMENT. This Note is issued by the Maker pursuant and
subject to the terms of an Asset Purchase Agreement, dated as of July 13, 2000,
by and among the Maker, the Holder, Aquis Communications Group, Inc., a Delaware
corporation ("Aquis Group"), and Aquis Communications, Inc., a Delaware
corporation ("Aquis Communications"), as amended on the date hereof pursuant to
the terms of the Amendment No. 1 to Asset Purchase Agreement among Holder,
Maker, Aquis Group and Aquis Communications (the "Asset Purchase Agreement").
14. GOVERNING LAW. This Note shall be governed by and construed and
enforced in accordance with the laws of the State of New York without regard to
conflicts of laws principles.
15. MISCELLANEOUS. Wherever used in this Note, the singular shall include
the plural and the plural shall include the singular, and the use of any gender
or the neuter shall include all genders and the neuter.
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IN WITNESS WHEREOF, the undersigned has executed, acknowledged, sealed and
delivered this Note as of the date first hereinabove set forth.
SUNSTAR IP COMMUNICATIONS, LLC
By /s/ XXXX XXXXX
----------------
Name: Xxxx Xxxxx
Title: President and Chief Executive Officer
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EXHIBIT A
SECURITY AGREEMENT
This is a Security Agreement (the "Agreement") dated as of August 31, 2000
by and between Aquis IP Communications, Inc., a Delaware corporation ("Secured
Party") and Sunstar IP Communications, LLC, a Delaware limited liability company
("Debtor").
BACKGROUND
The defined terms used in this Security Agreement shall have the respective
meanings set forth in Section 1 hereof unless elsewhere defined herein. Defined
terms used in this Security Agreement but not otherwise defined herein shall
have the respective meanings given such terms in the Asset Purchase Agreement.
Pursuant to the Asset Purchase Agreement, Debtor paid $300,000 in cash and
issued to Secured Party the Note for the balance of the Closing Purchase Price
as consideration for the Purchased Assets.
It is a requirement under the Asset Purchase Agreement that Debtor deliver
to Secured Party this Security Agreement in order to secure the payment of all
indebtedness referred to below.
TERMS
In consideration of the mutual promises and covenants herein contained, and
intending to be legally bound hereby, Secured Party and Debtor agree as follows:
16.
SECTION 1 - DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following meanings:
"AGREEMENT" means this Agreement, as the same may from time to time
hereinafter be amended, supplemented or otherwise modified.
"ASSET PURCHASE AGREEMENT" means the Asset Purchase Agreement dated as of
July 13, 2000 among Debtor, Secured Party, Aquis Communications Group, Inc. and
Aquis Communications, Inc., as amended on the date hereof and as the same may be
further amended, supplemented or otherwise modified.
"BUSINESS DAY" means a day other than a Saturday, Sunday or a day on which
banking institutions in New York, New York are authorized or obligated by law or
executive order to close.
"CAPITAL LEASE OBLIGATIONS" means, for any Person, all obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) property to the extent such obligations are required
to be classified and accounted for as a capital lease on a
balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"COLLATERAL" means all of the collateral described in Section 2.1.
"DOLLARS" and "$" means lawful money of the United States of America.
"EVENT OF DEFAULT" means an event specified in Section 5.1.
"GAAP" means United States generally accepted accounting principles applied
on a consistent basis for the periods in question.
"INDEBTEDNESS" means, for any Person: (a) indebtedness created, issued or
incurred by such Person for borrowed money (whether by loan or the issuance and
sale of debt securities or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of property or services, other than (i) trade accounts
payable (other than for borrowed money) arising in the ordinary course of
business, and (ii) accrued expenses incurred in the ordinary course of business;
(c) Indebtedness of others secured by a Lien on the property of such Person,
whether or not the respective indebtedness so secured has been assumed by such
Person; (d) obligations of such Person (contingent or otherwise) in respect of
letters of credit or similar instruments issued or accepted by banks and other
financial institutions for account of such Person; (e) Capital Lease Obligations
of such Person; and (f) Indebtedness described in the foregoing clauses (a)
through (e) of others guaranteed by such Person; PROVIDED, HOWEVER, that in no
event shall contingent obligations be treated as Indebtedness.
"LAWS" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs or decrees of any government or political subdivision or
agency thereof, or any court or similar entity.
"LIEN" means any statutory or common law consensual or non-consensual
mortgage, pledge, security interest, encumbrance, lien, right of setoff, claim,
or charge of any kind. Liens include any conditional sale or other title
retention transaction (other than an operating lease), any sale-leaseback
transaction, and any transaction that is regarded as a secured transaction under
the Uniform Commercial Code.
"LOAN DOCUMENTS" means the Note and financing statements described herein
and any other document, agreement or instrument made pursuant to this Agreement
or contemplated hereby.
"NOTE" means the 10.0% Note due October 31, 2000 of Debtor in favor of
Secured Party dated the date hereof.
"OBLIGATIONS" means the obligations of Debtor to pay the principal of and
interest on the Note in accordance with the terms thereof, and to satisfy all of
its other indebtedness, liabilities and obligations to Secured Party, of every
kind and description, whether hereunder or otherwise, now existing or hereafter
incurred, direct or indirect, absolute or contingent, due or to become due,
including, without limitation, all interest, fees, charges and expenses, and any
extensions, modifications, renewals of such indebtedness or substitutions
therefor, which may arise out of, under or in connection with this Agreement,
the Note and any other document executed in connection
herewith and therewith, including any expenses and costs of collection and
enforcement (including the fees and expenses of its counsel).
"PERSON" means any individual, corporation, partnership, association,
joint-stock company, trust, incorporated organization, joint venture, court or
government or political subdivision or agency thereof.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as in effect in
the State of New York.
1.2 ACCOUNTING TERMS. Any accounting terms used in this Agreement which are
not specifically defined herein shall have the meanings customarily given them
in accordance with GAAP.
SECTION 2 - COLLATERAL SECURITY
2.1 RIGHTS IN PROPERTY HELD BY DEBTOR. As collateral security for the
prompt satisfaction of all Obligations, including payment of the indebtedness
evidenced by the Note, Debtor hereby grants to Secured Party, a first priority
security interest in all the following property, whether now owned or hereafter
acquired by Debtor, or in which Debtor now has or at any time in the future may
acquire any right, title or interest, together with all replacements therefor
and all proceeds thereof (including insurance proceeds thereof) (collectively,
the "Collateral"):
(a) all of Debtor's right, title and interest in the Purchased Assets;
and
(b) all cash and non-cash proceeds, products and insurance proceeds of
the foregoing.
2.2 PRIORITY OF LIENS; ENFORCEMENT. The foregoing security interest shall
be senior to all Liens on the Collateral.
2.3 FINANCING STATEMENTS. Debtor will (a) immediately execute such
financing statements (including amendments thereto and continuation statements
thereof) and other documents in form satisfactory to Secured Party as Secured
Party may specify to perfect or continue the perfection of any security interest
granted to Secured Party; (b) pay or reimburse Secured Party for all costs of
filing or recording the same in such public offices as Secured Party may
designate; and (c) take such other steps as Secured Party may reasonably direct,
to perfect Secured Party's interest in the Collateral.
2.4 ATTORNEY-IN-FACT. Debtor hereby appoints Secured Party as its
attorney-in-fact (without requiring Secured Party to act as such) to execute any
financing statement in the name of Debtor and to perform all other acts that
Secured Party deems appropriate to perfect and continue its security interest
in, and to protect and preserve, the Collateral.
SECTION 3 - DEBTOR'S AFFIRMATIVE COVENANTS
Debtor covenants and agrees that, from and after the date of this Agreement
and so long as Debtor shall be indebted to Secured Party, unless Secured Party
shall otherwise consent in writing, it will comply with the following covenants:
3.1 NOTICE OF DEFAULT. If any officer of Debtor knows of any Event of
Default which shall have occurred or knows of the occurrence of any event which,
upon notice or passage of time, or both, would constitute an Event of Default,
Debtor shall immediately, upon acquiring knowledge of same, furnish to Secured
Party a statement as to such occurrence, specifying the nature and extent
thereof. If Debtor receives a notice of default from any creditor other than
Secured Party, Debtor shall deliver to Secured Party a copy of such notice of
default immediately upon its receipt thereof.
3.2 DEFENSE OF TITLE AND FURTHER ASSURANCES. Debtor shall, at its sole
expense, defend title to the Collateral and promptly, upon Secured Party's
request, do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, instruments,
transfers, powers of attorney, mortgages or assurances as may be required in
connection with the transactions contemplated by this Agreement, including any
security agreement, financing statement or other writing necessary to evidence,
preserve, protect or enforce Secured Party's rights and interests to or in the
Collateral or in any other collateral security agreed to by the parties hereto.
3.3 LIMITATION ON SALE OF PURCHASED ASSETS. Debtor shall not sell, assign,
transfer, lease, convey, abandon or otherwise dispose of, voluntarily or
involuntarily, any of the Purchased Assets or income or profits therefrom.
3.4 MAINTENANCE OF COLLATERAL. Debtor shall not move any of the Collateral
from the locations specified in Section 4.2 without (a) giving Secured Party 30
days prior written notice and (b) first taking all action required by Section
2.3 with respect to such Collateral.
3.5 COMPLIANCE WITH AGREEMENT. Debtor shall observe, perform and comply
with all of Debtor's covenants made in this Agreement and with all material
agreements to which it is subject.
SECTION 4 - REPRESENTATIONS AND WARRANTIES
To induce Secured Party to enter into this Agreement, Debtor represents and
warrants to Secured Party as follows:
4.1 SECURITY. The provisions of this Agreement are effective to create in
favor of Secured Party a legal, valid and enforceable security interest in all
right, title and interest of Debtor in the Collateral as described herein, and
when financing statements have been filed in the offices of the jurisdictions in
which such property is located, this Agreement shall constitute a fully
perfected Lien on all right, title and interest of Debtor in the Collateral
described herein, subject to no prior Liens. The property which is subject to
the Lien hereunder constitutes all the property of any nature of Debtor acquired
pursuant to the Asset Purchase Agreement.
4.2 LOCATION OF COLLATERAL. The location of the collateral is at the
address set forth on Exhibit A hereto. In the event that Debtor discovers that
any representation made in this
Section is untrue or incorrect for any reason, it will immediately notify
the Secured Party and take such actions as may be necessary to make such
representation true and correct.
4.3 ASSET PURCHASE AGREEMENT REPRESENTATIONS. No representation or warranty
by Debtor contained in the Asset Purchase Agreement or in any certificate or
other document furnished by Debtor pursuant thereto contains any untrue
statement of material fact or omits to state a material fact necessary to make
such representation or warranty not misleading in light of the circumstances
under which it was made.
4.4 LOAN REPRESENTATIONS. No representation or warranty by Debtor contained
herein or in any certificate or other document furnished by Debtor pursuant
hereto contains any untrue statement of material fact or omits to state a
material fact necessary to make such representation or warranty not misleading
in light of the circumstances under which it was made.
SECTION 5 - DEFAULT
5.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following
shall constitute an Event of Default hereunder:
(a) Debtor shall fail to pay when due, any payment of principal,
interest, fees or expenses payable under the Note.
(b) Debtor shall fail to observe or perform any obligation (including,
but not limited to, the obligations contained in Section 7.2 of the Asset
Purchase Agreement), other than the obligation for payment of money under the
Note, and such failure shall continue for 10 days after the earlier of (1) the
date written notice of such failure is mailed by Secured Party, or (2) the date
Secured Party is notified of such failure or should have been so notified
pursuant to the provisions hereof.
(c) Any representation, warranty or certificate made or furnished by or
on behalf of Debtor to Secured Party in connection with this Agreement shall be
materially false, incorrect, incomplete or misleading when made.
(d) Debtor shall admit its inability to pay its debts as they mature, or
shall make an assignment for the benefit of its creditors.
(e) Proceedings in bankruptcy, or for reorganization of Debtor, or for
the readjustment of any of its debts, under the Bankruptcy Code or any part
thereof, or under any other Laws, whether state or federal, for the relief of
debtors, now or hereafter existing, shall be commenced by Debtor, or shall be
commenced against Debtor, which proceedings against Debtor shall not be
discharged within 30 days of their commencement.
(f) A receiver or trustee shall be appointed for Debtor or any
substantial part of its assets, or any proceedings shall be instituted for the
dissolution or the full or partial liquidation of Debtor and such receiver or
trustee shall not be discharged within 30 days of his appointment, or such
proceedings shall not be discharged within 30 days of their commencement, or
Debtor shall discontinue business or materially change the nature of its
business.
(g) Debtor shall suffer a final judgment for the payment of money in
excess of $500,000 and shall not discharge the same within a period of 30 days
unless execution thereon is effectively bonded or stayed pending further
proceedings.
(h) Any execution or attachment shall be levied against the Collateral
or any properties of Debtor, and such execution or attachment shall not be set
aside, discharged or stayed within 30 days after the same shall have been
levied.
SECTION 6 - SECURED PARTY'S RIGHTS AND REMEDIES UPON DEFAULT
6.1 ACCELERATION. Upon the occurrence of an Event of Default (other than
under Section 5.1(f)), and in every such event and at any time thereafter,
Secured Party may, at its option, declare all Obligations due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived, anything contained herein or in any of the other Loan
Documents to the contrary notwithstanding. Upon the occurrence of an Event of
Default under Section 5.1(f), all Obligations shall immediately become due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived anything contained herein or in any of the
other Loan Documents to the contrary notwithstanding.
6.2 REMEDIES. Secured Party shall have, in addition to the rights and
remedies given it by this Agreement, all those allowed by all applicable Laws,
including, without limitation, the Uniform Commercial Code. Without limiting the
generality of the foregoing, Secured Party may immediately, without demand or
notice of any kind to Debtor (except as specifically required by this
Agreement), all of which are hereby expressly waived, and without advertisement,
sell at public or private sale or otherwise realize upon the whole or, from time
to time, any part of the Collateral, or any interest which Debtor may have
therein. After deducting from the proceeds of sale or other disposition of the
Collateral all expenses (including all expenses for legal services), Secured
Party shall apply such proceeds toward the satisfaction of the Obligations, in
such order as it shall determine in its sole discretion. Any remainder of the
proceeds after satisfaction in full of the Obligations shall be distributed as
required by applicable Laws. At any such sale or other disposition, Secured
Party may, to the extent permissible under applicable Laws, purchase the whole
or any part of the Collateral, free from any rights of redemption or
appraisement on the part of Debtor, which rights are hereby waived and released.
Notice of any sale or other disposition shall be given to Debtor at the address
hereinafter set forth, or such other address of Debtor as may from time to time
be shown on Secured Party's records, at least five days before the time of any
intended public sale or the time after which any intended private sale or other
disposition of the Collateral is to be made, which Debtor hereby agrees shall be
reasonable notice of such sale or other disposition. Debtor agrees to assemble,
or to cause to be assembled, at its own expense, the Collateral at such place or
places as Secured Party shall designate. Without limiting the generality of any
of the rights and remedies conferred upon Secured Party under this section,
Secured Party may, to the full extent permitted by applicable Laws:
(a) enter upon the premises of Debtor, exclude and remove therefrom all
officers, directors and employees of Debtor and take immediate possession of the
Collateral, either personally or through any agent, or by means of a receiver
appointed by a court of competent jurisdiction, using all necessary force to do
so (in Secured Party's sole discretion);
(b) at Secured Party's option, use, operate, manage and control the
Collateral in any lawful manner;
(c) collect, receive and administer all rents, income, revenue,
earnings, issues and profits (including the Accounts), and proceeds therefrom;
(d) maintain, repair, renovate, alter or remove all or any part of the
Collateral, as Secured Party may determine in its sole discretion;
(e) make exchanges, substitutions or surrenders of all or any part of
the Collateral;
(f) compromise, extend or renew any of the Collateral or deal with the
same as it may deem advisable;
(g) notify postal authorities to change the address for the delivery of
mail to Debtor to such address or post office box as Secured Party may designate
and receive and open all mail addressed to Debtor;
(h) remove from Debtor's place of business all records relating to or
evidencing any of the Collateral or without cost or expense to Secured Party
make such use of the Debtor's place of business as may be reasonably necessary
to administer, manage and collect the Collateral;
(i) institute and prosecute legal and equitable proceedings to enforce
collection of the Obligations of Debtor to Secured Party, or to realize upon any
of the Collateral;
(j) settle, renew, extend, compromise, compound, exchange or adjust
claims in respect of any of the Collateral or any legal proceedings brought in
respect thereof;
(k) subrogate to all of Debtor's interests, rights and remedies in
respect to the Collateral, including the right to stop delivery and to reclaim
Collateral which the account debtor has returned, rejected, revoked acceptance
of or failed to return, and which have been consigned or diverted, to take
possession of and to sell or dispose of the Collateral;
(l) set off and apply to all or any part of the Obligations all moneys,
credits and other property of any nature whatsoever of Debtor now or any time
hereafter in the possession of Secured Party or of any Person on behalf of
Secured Party, in transit to or from Secured Party, or under the control or
custody of or on deposit with Secured Party;
(m) if Debtor shall fail to pay the Obligations or otherwise fail to
perform, observe or comply with any of the conditions, covenants, terms,
stipulations or agreements contained in this Agreement, Secured Party, without
notice to or demand upon Debtor and without waiving or releasing any of the
Obligations or any Event of Default, may (but shall be under no obligation to)
at any time thereafter make such payment or perform such act for the account and
at the expense of Debtor, and may enter upon the premises of Debtor for that
purpose and take all such action thereon as Secured Party may consider necessary
or appropriate for such purpose. All sums so paid or advanced by Secured Party
and all costs and expenses (including, without limitation, attorneys' fees and
expenses) incurred in connection therewith, together with interest thereon at
the interest rate charged on the Note from the date of payment, advance or
incurring until paid in full, shall be paid by Debtor to Secured Party, on
demand, and shall constitute and become a part of the Obligations; and
(n) such other and further acts and deeds in the name of Debtor as
Secured Party may deem necessary or advisable to the extent necessary for
Secured Party to realize upon any of the Collateral.
6.3 ENFORCEMENT AND WAIVER BY SECURED PARTY. Secured Party shall have the
right at all times to enforce the provisions of this Agreement and the documents
delivered pursuant hereto in strict accordance with the terms hereof and
thereof, notwithstanding any conduct or custom on the part of Secured Party in
refraining from so doing at any time or times. The failure or delay of Secured
Party at any time or times to enforce its rights and remedies under such
provisions, strictly in accordance with the same, shall not be construed as
having created a custom in any way or manner contrary to specific provisions of
this Agreement or as having in any way or manner modified or waived the same.
All rights and remedies of Secured Party are cumulative and concurrent, may be
exercised by Secured Party singly, successively or together, or at such time or
times and in such order of preference as Secured Party may so determine, and the
exercise of one right or remedy by Secured Party shall not be deemed a waiver of
any other right or remedy.
SECTION 7 - MISCELLANEOUS
7.1 CONSTRUCTION. The provisions of this Agreement shall be in addition to
those of any guaranty, security agreement, note or other evidence of liability
held by Secured Party, all of which shall be construed as complementary to each
other. In the event of ambiguity or inconsistency between this Agreement and any
agreement, document or instrument made pursuant hereto, the terms of this
Agreement shall govern. Nothing herein contained shall prevent Secured Party
from enforcing the Note, any or all other notes, guarantees or security
agreements in accordance with their respective terms.
7.2 FURTHER ASSURANCE. From time to time, Debtor will execute and deliver
to Secured Party such additional documents and will provide such additional
information as Secured Party may reasonably require, to carry out the terms of
this Agreement and to be informed of Debtor's status and affairs.
7.3 COSTS, EXPENSES AND FEES PAID AND PAYABLE TO SECURED PARTY.
(a) Debtor agrees to pay on demand all attorneys' fees, search fees,
filing fees and other expenses incurred by Secured Party in connection with the
preparation, administration or enforcement of this Agreement or other Loan
Documents, or any renewal, extension, amendment or modification of this
Agreement and other Loan Documents, and all such fees and expenses shall be a
part of the Obligations hereunder and shall be paid on the Closing Date or at
such later time as services are performed or expenses incurred.
(b) Debtor agrees that all costs, expenses and reasonable attorneys'
fees incidental to the custody, care, management, sale or collection of, or
realization upon, any of the Collateral or in any way relating to the care,
enforcement or protection of the Collateral or the enforcement of any and all
rights of Secured Party either hereunder or under any applicable law or custom,
shall become part of the Obligations, be payable on demand, and be entitled to
the benefit of this Agreement, and Secured Party may at any time apply to the
payment of all such costs and expenses all moneys of Debtor or other proceeds
arising from the possession or disposition of all or any portion of the
Collateral.
(c) NOTICES. Any notices or consents required or permitted by this
Agreement shall be in writing and shall be deemed delivered if delivered in
person, telecopied, or if sent by certified mail, postage prepaid, return
receipt requested, or if sent by a nationally recognized overnight courier
service, as follows, unless such address is changed by written notice hereunder:
If to Debtor:
Sunstar IP Communications, LLC
0000 X. Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, XX 00000
Attention: Xxxx X. Xxxxx, Vice President
If to Secured Party:
Aquis Communications, Inc.
0000X Xxxxx 00
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
With a copy to:
Dechert
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX x0x00
Attention: Xxxxx X. Xxxx, Esquire
Fax: (000) 000-0000
All notices, writing or other communications given, as aforesaid, shall be
deemed to be given when received by telecopy, delivered personally or received
by mail or courier, as applicable.
7.5 WAIVER AND RELEASE BY DEBTOR. To the maximum extent permitted by
applicable Laws, Debtor:
(a) waives (1) demand, protest, presentment and notice of dishonor of
all commercial paper at any time held by Secured Party on which Debtor is in any
way liable; and (2) notice and opportunity to be heard, after acceleration in
the manner provided in Section 6.1, before exercise by Secured Party of the
remedies of self-help, set-off or of other summary procedures permitted by any
applicable Laws or by any agreement with Debtor; and
(b) releases Secured Party and its officers, attorneys, agents and
employees from all claims for loss or damage caused by any act or omission on
the part of any of them in connection with or arising out of this Agreement, the
other Loan Documents, any transactions contemplated hereunder or thereunder or
the Collateral or otherwise, except for grossly negligent or reckless conduct.
7.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Debtor contained in this Agreement will survive the making and
execution of this Agreement.
7.7 APPLICABLE LAW. The substantive laws of the State of New York shall
govern the construction of this Agreement and the rights and remedies of the
parties hereto.
7.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. Debtor hereby
irrevocably appoints each and every officer of Debtor as its attorneys upon whom
may be served any notice, process or pleading in any action or proceeding
against it arising out of or in connection with this Agreement, the Note or any
of the Loan Documents; and Debtor hereby consents that any action or proceeding
against it may be commenced and maintained in any court within the State of New
York or in the United States District Court for the Southern District of New
York by service of process on any such officer; and Debtor agrees that the
courts of the State of New York and the United States District Court for the
Southern District of New York shall have jurisdiction with respect to the
subject matter hereof and the person of Debtor. Notwithstanding the foregoing,
Secured Party in its absolute discretion may also initiate proceedings in the
courts of any other jurisdiction in which Debtor may be found or in which any of
its assets or any of the Collateral may be located.
7.9 BINDING EFFECT, ASSIGNMENT AND ENTIRE AGREEMENT. This Agreement shall
inure to the benefit of, and shall be binding upon, the respective heirs,
executors, administrators, successors and permitted assigns of the parties
hereto. Debtor shall not assign any of its rights or obligations hereunder
without the prior written consent of Secured Party. This Agreement, the Note,
the other Loan Documents and any other documents executed and delivered pursuant
hereto, constitute the entire agreement between the parties, superseding all
prior agreements relating to the subject matter hereof.
7.10 MODIFICATIONS. No modification or waiver of any provision of this
Agreement or of the Note, nor consent to any departure by Debtor therefrom,
shall in any event be effective unless the same shall be in writing, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on Debtor in any case shall
entitle Debtor to any other or future notice or demand in the same, similar or
other circumstance.
7.11 SEVERABILITY. If any provision of this Agreement shall be held invalid
under any applicable law, such invalidity shall not affect any other provision
of this Agreement which can be given effect without the invalid provision. To
this end, the provisions hereof are severable.
7.12 NO RESPONSIBILITY OF SECURED PARTY; INDEMNIFICATION. Secured Party
shall not be deemed to have assumed any liability or responsibility to Debtor or
any Person for the correctness, validity or genuineness of any instruments or
documents that may be released or endorsed to Debtor by Secured Party (which
shall automatically be deemed to be without recourse to Secured Party in any
event), or for the existence, character, quantity, quality, condition, value or
delivery of any Goods purporting to be represented by any such documents; and
Secured Party, by accepting such security interest in the Collateral or by
releasing any such Collateral to Debtor, shall not be deemed to have assumed any
obligation or liability to any supplier or account debtor or to any other
Person, and Debtor agrees to indemnify and defend Secured Party and hold it
harmless in respect to any claim or proceeding arising out of any matter
referred to in this Section 7.12.
7.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
7.14 HEADINGS. The headings in this Agreement are for convenience only and
shall not limit or otherwise affect any of the terms hereof.
7.15 WAIVER OF TRIAL BY JURY. Debtor and Secured Party waive trial by jury
in any suit or proceeding brought in connection with this Agreement or the
transactions contemplated hereunder.
7.16 ADVICE OF COUNSEL. Debtor acknowledges that it has been advised by its
counsel with respect to this transaction and this Agreement, including, without
limitation, any waivers contained herein.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
AQUIS IP COMMUNICATIONS, INC.
By: /s/ D. XXXXX XXXXXXXX
----------------------------------
Name: D. Xxxxx Xxxxxxxx
Title: Vice President
SUNSTAR IP COMMUNICATIONS, INC.
By: /s/ XXXX XXXXX
----------------------------------
Name: Xxxx Xxxxx
Title: President and Chief Executive Officer
EXHIBIT A
to
Security Agreement
Location of Collateral:
0000 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
0000 X. Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, XX 00000
