SECURITY AGREEMENT
The undersigned, ACCESS SOLUTIONS, INC., a Delaware corporation with a
principal place of business at 000 Xxx Xxx Xxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx
00000 (the "Debtor") hereby grants to XXXXXXX X. XXXXX an individual resident of
the State of Rhode Island having an address c/o Point Xxxxxx Corporation, 000
Xxxxxxxx Xxxxx Xxxxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 (the "Secured Party"), a
security interest in certain of Debtor's assets, both presently owned and after
acquired, and all proceeds thereof, as set forth below:
All of Debtor's accounts, accounts receivable, contract rights, notes,
drafts, acceptances, instruments and proceeds, claims and choses in action
arising out of or in connection with that certain civil action now pending
in the United States District Court for the District of Rhode Island
captioned : Access Solutions International, Inc. v. Data/Xxxx Development,
Inc. and Xxxxxxx Kodak Company, X.X.Xx. 97-0501-L (the "Lawsuit").
(all hereinafter sometimes collectively referred to as "Collateral"); to secure
the payment of any and all indebtedness and liabilities whatsoever of Debtor to
Secured Party whether direct, indirect, absolute or contingent, due or to become
due and whether now existing or hereafter arising and howsoever evidenced or
acquired, and arising in connection with that certain Loan Agreement of even
date herewith by and between Debtor and Secured Party (the "Loan Agreement"),
and that certain $1,000,000 Secured Promissory Note of even date herewith made
by Debtor and payable to Secured Party (the "Note") (hereinafter sometimes
referred to as "obligation" or "obligations").
I. WARRANTIES AND COVENANTS
Debtor hereby warrants and covenants that:
A. Except for prior security interests previously disclosed to Secured
Party (if any) and except for the security interest granted hereby, Debtor is
the owner of presently owned Collateral and will be the owner of Collateral
hereafter acquired free from any adverse lien, security interest or encumbrance,
and Debtor will defend the Collateral against the claims and demands of all
persons at any time claiming the same or any interest therein.
B. Except for financing statements evidencing existing security interests
previously disclosed to Secured Party (if any), no financing statements covering
any Collateral are on file in any public office, and at the request of Secured
Party, Debtor will join with Secured Party in executing one or more (i)
financing statements pursuant to the Uniform Commercial Code; and (ii) other
documents necessary or advisable to perfect the security interests evidenced
hereby, all in form satisfactory to Secured Party, and Debtor will pay the cost
of filing the same or filing or recording this agreement in all public offices
wherever filing or recording is deemed by Secured Party to be necessary or
desirable.
C. Debtor will keep the Collateral free from any future adverse lien,
security interest or encumbrances.
D. Debtor will keep all records concerning the Collateral at the
location(s) listed on affixed Exhibit A. Debtor will not remove any of such
records from said offices without written consent of Secured Party.
II. ADDITIONAL RIGHTS OF THE PARTIES
A. Secured Party may, at its election, discharge taxes, liens or security
interests or other encumbrances at any time levied or placed on the Collateral.
Debtor agrees to reimburse Secured Party on demand for any payment made, or any
expense incurred by Secured Party pursuant to the foregoing authorization, and
in any event all such payments and expenses shall constitute an obligation
hereunder.
B. Until the occurrence of an Event of Default, Debtor may have possession
of the Collateral and use it in any lawful manner not inconsistent with this
Agreement and not inconsistent with any policy of insurance thereon.
C. Debtor hereby irrevocably designates and appoints Secured Party its true
and lawful attorney with full power of substitution to execute, deliver, and
record in the name of Debtor all financing statements, continuation statements,
title certificate lien applications and other documents deemed by Secured Party
to be necessary or advisable to perfect or to continue the perfection of the
security interests granted hereunder.
D. A carbon, photographic, or other reproduction of a security agreement or
a financing statement is sufficient as a financing statement.
III. EVENTS OF DEFAULT
Debtor shall be in default under this Agreement upon the happening of any
of the following events or conditions (individually and collectively as "Event
of Default"):
(a) Failure by the Debtor to observe or perform any covenant or
agreement referred to herein and any such failure remains unremedied for
thirty (30) days after written notice thereof shall have been given to the
Debtor by the Secured Party;
(b) The falsity in any material respect of any warranty,
representation or statement made or furnished to Secured Party by or on
behalf of Debtor;
(c) Sale or transfer of any of the Collateral;
(d) the occurrence of a default or an event of default under any
agreement, instrument or other document between the Secured Party and the
Debtor, including, without limitation, the Note and the Loan Agreement.
In addition, this Security Agreement is entitled to the benefit of the Loan
Agreement, which Loan Agreement, among other things, contains provisions for the
acceleration of the maturity of the obligations secured hereby upon the
happening of certain stated events of default, which events of default shall be
deemed Events of Default under this Security Agreement.
IV. REMEDIES
A. If an Event of Default occurs:
1. Secured Party may declare all obligations secured hereby to be
immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived.
2. Secured Party may exercise and shall have any and all rights
and remedies accorded it by the Uniform Commercial Code. Secured Party
may require Debtor to assemble the Collateral and make it available to
Secured Party at a place to be designated by Secured Party which is
reasonably convenient to both parties. The requirement of reasonable
notice shall be met, if notice is mailed, postage prepaid, to Debtor
or other person entitled thereto at least ten (10) days (including
non-business days) before the time of sale or disposition of the
Collateral. Debtor shall pay to Secured Party on demand any and all
expenses, including legal expenses and attorney's fees, incurred or
paid by Secured Party in protecting or enforcing any rights of Secured
Party hereunder, including its right to take possession of the
Collateral, storing and disposing of the same or in collecting the
proceeds thereof.
3. Secured Party shall have the right to notify any and all
account debtors to make payment thereof directly to Secured Party.
Debtor hereby irrevocably designates and appoints Secured Party its
true and lawful attorney with full power of substitution in its own
name or in the name of Debtor to demand, collect, receive, receipt
for, xxx for, compound and give acquittance for, any and all amounts
due and to become due on the Accounts and to endorse the name of
Debtor on all commercial paper given in payment or part-payment
thereof and in its discretion to file any claim or take any other
action which Secured Party may deem necessary or appropriate to
protect and preserve and realize upon the security interest of Secured
Party in the Collateral.
B. Debtor understands and agrees Secured Party may exercise its rights
hereunder without affording Debtor an opportunity for a preseizure hearing
before Secured Party, through judicial process or otherwise, takes possession of
the Collateral upon the occurrence of an Event of Default, and Debtor expressly
waives its constitutional right, if any, to such prior hearing.
C. No delay in accelerating the maturity of any obligation as aforesaid or
in taking any other action with respect to any Event of Default or in exercising
any rights with respect to the Collateral shall affect the rights of Secured
Party later to take such action with respect thereto, and no waiver as to one
Event of Default shall affect rights as to any other default.
D. All rights of Secured Party hereunder shall inure to the benefit of its
successors and assigns; and all obligations of Debtor shall bind the successors
or assigns of Debtor. This agreement was executed and delivered in the Rhode
Island and all the provisions hereof shall be construed by and administered in
accordance with the local laws of the Rhode Island, including without limitation
the Uniform Commercial Code except to the extent that the perfection of security
interests or the exercise of a secured party's remedies may be governed by the
laws of a jurisdiction other than the Rhode Island. This agreement shall become
effective when it is signed by Debtor. Debtor acknowledges receipt of a copy of
this agreement.
IN WITNESS WHEREOF, this Security Agreement has been executed by the
parties hereto all as of May 8, 1998.
ACCESS SOLUTIONS
INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name: Xxxxxx X. Xxxxx
Title: President and CEO
XXXXXXX X. XXXXX
/s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
EXHIBIT A
Business Locations of Debtor
1. 000 Xxx Xxx Xxxx, Xxxxx Xxxxxxxxx, XX 00000
2. 000 Xxxxx 00, Xxxxxxxxx Xxxxxxx, XX 00000
EXHIBIT 2.02
PAPERCLIP SOFTWARE, INC. MERGER TERMS AND CONDITIONS
EXHIBIT 3.01
SUBSIDIARIES
PaperClip Acquisition Corp., a Delaware corporation.
