SECURITY AGREEMENT
ALL PERSONAL PROPERTY AND FIXTURES
BORROWER GRANTOR
This Agreement is executed and delivered at Dayton, Ohio as of this 20th day of
November, 1996 by Paravant Computer Systems, Inc ('Grantor'), whose mailing
address is ▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇, to National City
Bank of Dayton ('Bank'), a national banking association having its banking
office at ▇ ▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
1. Grant of Interest. To secure the prompt payment in full of the Subject Debt
as and when the respective parts thereof become due, whether by lapse of time,
by acceleration of maturity, or otherwise, Grantor hereby grants Bank a security
interest in the Collateral. As to Collateral not now in existence or in which
Grantor does not presently have any rights, Bank's security interest shall
automatically attach thereto immediately when the same comes into existence and
Grantor acquires any rights therein, in each case without the making or doing of
any further or other act or thing. 'Collateral' means, collectively, all
Inventory, all Accounts, all Chattel Paper, all Documents, all Equipment,
including, without limitation, any Equipment described in Exhibit A (the
'Supplemental Schedule'), if any, to this Agreement, all fixtures, including,
without limitation, any fixtures described in the Supplemental Schedule, if any,
all General Intangibles, all Instruments, all Receivables, and all
Uncertificated securities in which Grantor now has or hereafter acquires any
rights, and all replacements and substitutions therefor and additions and
accessions thereto, all property (except any consumer goods), tangible or
intangible, in which Grantor now has or hereafter acquires any rights and which
now or hereafter is in Bank's control (by document of title or otherwise) or
possession or is owed by Bank to Grantor, including, without limitation, the
cash collateral account described in subsection 6.5, replacements and
substitutions for, and all additions and accessions to, all or any part of the
property hereinbefore described, all Products of all or any part of the goods
hereinbefore described, and all Proceeds of all or any part of the property,
including, without limitation, Products, hereinbefore described.
2. Definitions. As used in this Agreement, except where the context clearly
requires otherwise, 'Account' means any right to payment for goods sold or
leased or for services rendered which is not evidenced by an Instrument or
Chattel Paper, whether or not it has been earned by performance, and includes,
without limitation, all rights to payment earned or unearned under a charter or
other contract involving the use or hire of a vessel and all rights incident to
the charter or contract; 'Account Debtor' means any Person who, or any of whose
property, shall at the time in question be obligated in respect of all or any
part of a Receivable or any part thereof and includes, without limitation,
co-makers, indorsers, guarantors, pledgors, hypothecators, mortgagors, and any
other Person who agrees, conditionally or otherwise, to make any loan to,
purchase from, or investment in, any other Account Debtor or otherwise assure
Grantor against loss on any Receivable in which Borrower now has or hereafter
acquires any rights; 'Affiliate' means, when used with reference to any Person
(the 'subject'), a Person that is in control of, under the control of, or under
common control with, the subject, the term 'control' meaning the possession,
directly or indirectly, of the power to direct the management or policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise; 'Agreement' means this Security Agreement (including, without
limitation, each amendment, if any, hereto) 'Bank Debt' means, collectively,
all Debt to Bank, whether incurred directly to Bank or acquired by it by
purchase, pledge, or otherwise, and whether participated to or from Bank in
whole or in part; 'Chattel Paper' means a writing or writings (other than a
charter or other contract involving the use or hire of a vessel) which evidence
both a monetary obligation and a security interest in or a lease of specific
goods, and, when a transaction is evidenced both by such a security agreement or
lease and by an Instrument or series of Instruments, the group of writings taken
together constitutes Chattel Paper; 'Debt' means, collectively, all obligations
of the Person or Persons in question, including, without limitation, every such
obligation whether owing by one such Person alone or with one or more other
Persons in a joint, several, or joint and several capacity, whether now owing or
hereafter arising, whether owing absolutely or contingently, whether created by
loan, overdraft, guaranty of payment, or other contract, or by quasi-contract,
tort, statute, other operation of law, or otherwise; 'Default' means (a) the
nonpayment of the Subject Debt or any part thereof when due or (b) the
occurrence or existence of any event, condition, or other thing (other than any
event, condition, or other thing which would constitute a 'Default' pursuant to
the next preceding clause (a)) which gives (or which with the lapse of any
applicable grace period, the giving of notice, or both would give)
Bank the right to accelerate or which automatically accelerates the maturity of
any of the Subject Debt; 'Document' means (a) a document that purports to be
issued by or addressed to a bailee and that purports to cover goods that are in
the bailee's possession that are either identified or fungible portions of an
identified mass, and includes a ▇▇▇▇ of lading, dock warrant, dock receipt,
warehouse receipt, or order for the delivery of goods, and any other document
that in the regular course of business or financing is treated as adequately
evidencing that the Person in possession of it is entitled to receive, hold, and
dispose of the document and the goods it covers or (b) a receipt issued by the
owner of goods including distilled spirits or agricultural commodities that are
stored under a statute requiring a bond against withdrawal or a license for the
issuance of receipts in the nature of a warehouse receipt; 'Equipment' means
goods that (a) are used or bought for use primarily in business, including,
without limitation, farming or a profession, or by a Person who is a non-profit
organization or a governmental subdivision or agency or (b) are not Inventory,
farm products, or consumer goods; 'General Intangible' means any personal
property, including things in action, other than goods, Accounts, Chattel Paper,
Documents, Instruments, and money; 'Instrument' means a negotiable instrument,
or a certificated security, or any other writing which evidences a right to the
payment of money and is not itself a security agreement or lease and is of a
type which is in the ordinary course of business transferred by delivery with
any necessary indorsement or assignment; 'Inventory' means goods that are held
by a person who holds them for sale or lease or to be furnished under contracts
of service or if that Person has so furnished them, or if they are raw
materials, work in process, or materials used or consumed in a business, except
that Inventory does not include Equipment; 'Obligor' means any Person who, or
any of whose property, shall at the time in question be obligated in respect of
all or any part of the Bank Debt of Grantor and (in addition to Grantor)
includes, without limitation, co-makers, indorsers, guarantors, pledgors,
hypothecators, mortgagors, and any other Person who agrees, conditionally or
otherwise, to make any loan to, purchase from, or investment in, any other
Obligor or otherwise assure such other Obligor's creditors or any of them
against loss; 'Person' means an individual or entity of any kind, including,
without limitation, any association, company, cooperative, corporation,
partnership, trust, governmental body, or any other form or kind of entity;
'Prime Rate' means the fluctuating rate per annum which is publicly announced
from time to time by Bank as being its so-called 'prime rate' or 'base rate'
thereafter in effect, with each change in the Prime Rate automatically,
immediately, and without notice changing the Prime Rate thereafter applicable
hereunder, it being acknowledged that the Prime Rate is not necessarily the
lowest rate of interest then available from Bank on fluctuating-rate loans;
'Proceeds' means whatever is received or receivable upon sale, exchange,
collection, or other disposition of any property or Proceeds, whether directly
or indirectly, and includes, without limitation, the proceeds of any casualty,
liability, or title insurance relating to any such property and any goods or
other property returned after any such sale, exchange, collection, or other
disposition; 'Products' means property directly or indirectly resulting from
any manufacturing, processing, assembling, or commingling of any goods',
'Receivable' means any claim for or right to payment, however arising, whether
classified as an Account, a General Intangible, or otherwise, whether contingent
or fixed, whether or not evidenced by any writing, and, if so evidenced, whether
evidenced by Chattel Paper, one or more Instruments, or otherwise; 'Related
Writing' means this Agreement and any indenture, note, guaranty, assignment,
mortgage, security agreement, subordination agreement, notice, financial
statement, legal opinion, certificate, or other writing of any kind pursuant to
which all or any part of the Bank Debt of Grantor is issued, which evidences
or secures all or any part of the Bank Debt of Grantor, which governs the
relative rights and priorities of Bank and one or more other Persons to payments
made by, or the property of, any Obligor, which is delivered to Bank pursuant
to another such writing, or which is otherwise delivered to Bank by or on behalf
of any Person (or an employee, officer, auditor, counsel, or agent of any
Person) in respect of or in connection with all or any part of the Bank Debt
or Grantor; 'Subject Debt' means, collectively, all Bank Debt created or
incurred by Grantor; 'Uncertificated Security' means a share, participation, or
other interest in property or the enterprise of the issuer or an obligation of
the issuer which is (a) not represented by an instrument and the transfer of
which is registered upon books maintained for that purpose by or on behalf of
the issuer; (b) of a type commonly dealt in on securities exchanges or markets,
and (c) either one of a class or series or by its terms divisible into a class
or series of shares, participations, interests, or obligations; and the
foregoing definitions shall be applicable to the respective plurals of the
foregoing defined terms.
3. Representations and Warranties. Grantor represents and warrants to Bank as
follows:
3.1. Existence. Grantor is a corporation organized and in good
standing under Florida law.
3.2. Taxpayer Identification and Legal Name. Grantor's social security
or federal taxpayer identification number is ▇▇▇▇▇▇▇▇▇. Except as set forth
in the Supplemental Schedule, if any, Grantor is not known among creditors
by, and does not use or do business under, any name other than the name of
Grantor first set forth above.
3.3. Authority. Each Person, if any, executing and delivering this
Agreement on behalf of Grantor or any other Person has been duly authorized
to do so, and this Agreement is valid and enforceable against Grantor in
accordance with its terms.
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3.4 Location of Chief Executive Office and Collateral. Grantor's chief executive
office is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇
Grantor keeps all of Grantor's records relating to the Collateral at Grantor's
chief executive office. All goods in which Grantor has any rights are kept at
Grantor's chief executive office, at the other locations, if any, described in
the Supplemental Schedule, if any, to this Agreement, and, with respect to
certain goods, at such other locations to which Grantor is entitled to move
those goods pursuant to subsection 5.1.
3.5 Ownership. Grantor owns all of the Collateral described in the most recent
financial statements furnished by Grantor to Bank or in which Grantor has
thereafter acquired any rights absolutely free from any assignment, attachment,
lease, license, mortgage, security interest, or other lien, and free from any
other claim, right, or interest of any kind, except for any in favor of or
consented to by Bank. No assignment, financing statement, or other writing
(except any evidencing any lien or interest expressly permitted by this
Agreement) describing the Collateral or any part thereof is on file in any
public office.
General Provisions Applicable to All Collateral. The provisions of this section
4 shall apply with respect to all types of Collateral:
4.1 Further Assurance. Grantor will, at Grantor's expense, make and do all such
acts and things (including, without limitation, the delivery to Bank of any
Chattel Paper, Document, Instrument, or other writing of any kind the possession
of which perfects a security interest therein) as Bank may from time to time
require for the better evidencing, perfection, protection, or validation of, or
realization of the benefits of, its security interest. Without limiting the
generality of the foregoing, Grantor will, at Grantor's expense, upon each
request of Bank, (a) sign and file or permit Bank to file such financing
statements and other writings as Bank may from time to time require and in such
public offices as Bank may from time to time require, (b) comply with every
other requirement deemed necessary by Bank for the perfection of its security
interest, (c) execute and deliver such affidavits, assignments, financing
statements, indorsements of specific items of Collateral, mortgages, powers of
attorney, security agreements, and other writings, as Bank may from time to time
require, each in form and substance satisfactory to Bank, and (d) cause all
applicable certificates of title (in the case of any motor vehicle or other
chattels in which Bank has been granted a security interest pursuant to this
Agreement and which is subject to any certificate of title law) to be duly noted
with Bank's security interest and to be deposited with Bank. Without diminishing
or impairing any obligation of Grantor under this Agreement, a carbon,
photographic, or other reproduction of this Agreement shall be sufficient as a
financing statement.
4.2 Notice. Grantor will give Bank
(a) not less than seven (7) days' prior written notice of any change in
Grantor's name, in the location of its chief executive office or in the
location at which it keeps any records relating to the Collateral or any
part thereof, or of any other change in circumstances which affects or
may affect the continuing efficacy of any financing statement filed in
respect of Bank's security interest or the continuing status of Bank's
security interest as the first priority lien on the Collateral or any
part thereof.
(b) immediate written notice whenever any Person other than Grantor or
Bank claims any lien or other right or interest of any kind in any of the
Collateral, and
(c) immediate written notice whenever Grantor acquires rights in any
Collateral that is subject to (i) a treaty or statute of the United
States which provides for national or international registration or a
national or international certificate of title or which specifies a place
of filing different from that specified in the Uniform Commercial Code as
in effect on the date hereof in the jurisdiction in which Bank's banking
office is located or (ii) a certificate of title statute of another
jurisdiction under the law of which indication of a security interest is
required as a condition of perfection.
4.3 Records. Grantor will at all times keep accurate and complete records of the
Collateral. Bank (or one or more Persons selected by Bank) shall have the right
at all reasonable times to examine, inspect, and make extracts from Grantor's
books and records and to examine, appraise, and protect the Collateral.
4.4 Dispositions and Encumbrances. Grantor will not, without in each case
obtaining Bank's consent,
(a) sell or otherwise dispose of any Collateral or any interest therein,
except if and to the extent that the sale or other disposition is expressly
permitted by this Agreement or
(b) suffer or permit any Collateral (i) to be or become subject to any
assignment, lease, attachment, mortgage, security interest, or other lien, or
any other claim, right, or interest of any kind, except for any in favor of
or consented to by Bank or (ii) to be described in any mortgage, financing
statement, or other writing, except any evidencing any lien or interest
expressly permitted by this Agreement.
Special Provisions Applicable to Goods. The provisions of this section 5 shall
apply with respect to all goods in which Bank has been granted a security
interest pursuant to this Agreement.
5.1 Movement and Attachment to Real Property. Grantor will not suffer or permit
any goods in which Bank has been granted a security interest pursuant to this
Agreement to be moved from Grantor's chief executive office or the locations, if
any, described in the Supplemental Schedule, if any, to this Agreement, as the
location of the goods in question on the date hereof, except if and to the
extent that the goods are either inventory being shipped to or from Grantor in
the ordinary course of business or are mobile goods which are of a type normally
used in more than one jurisdiction and are in fact so used by Grantor in the
ordinary course of business. Grantor will not under any circumstances suffer or
permit any goods in which Bank has been so granted a security interest to be or
become a fixture without Bank's consent.
5.2 Maintenance of Goods, Taxes and Preservation Costs. Grantor will maintain in
good condition all goods in which Bank has been granted a security interest
pursuant to this Agreement, and will pay promptly all assessments, levies,
taxes, and other charges pertaining thereto, and all repair, maintenance, and
preservation costs in respect thereof. If Grantor does not do so, the, and in
each such case, Bank shall have the right, at its option, to pay the same, and
Grantor will, on Bank's demand, reimburse Bank for all amounts Bank so pays.
5.3 Insurance. Grantor will at all times keep all goods in which Bank has been
granted as security interest under so-called 'cause of loss special form,
policies of insurance issued by such companies and in such amounts (but in no
case less than the greater of the full replacement value thereof or the amount
necessary to prevent the operation of any applicable coinsurance policy shall be
deemed to have been made without any representation or warranty of any kind,
Grantor hereby assuming the burden of ensuring that each such issuer and each
such amount is adequate for the protection of Grantor and all other Persons.
Grantor will cause each policy of insurance covering any goods in which Bank has
been granted a security interest pursuant to this Agreement to (a) require the
insurer to give Bank written notice not less than thirty (30) days prior to any
cancellation, expiration, modification, or non-renewal of the policy, (b) have
attached thereto (i) a lender's loss payable endorsement in favor of Bank,
entitling Bank to collect any and all proceeds payable under the policy and
providing in effect that the rights and interests of Bank thereunder are
independent of, and shall not be diminished or impaired by, any action,
inaction, or breach of condition on the part of Grantor and (ii) a waiver of
abrogation endorsement, and (c) be otherwise in form and substance satisfactory
to Bank. Grantor will seasonably pay all premiums for the foregoing policies of
insurance and will cause the issuer of each such policy to deliver an original
counterpart thereof directly to Bank. Grantor hereby assigns to Bank any
returned or unearned premiums due upon cancellation of any such insurance and
directs insurer to pay to Bank all amounts so due. All or any portion of amounts
received by Bank in payment of insurance losses or returned or unearned premiums
may, at Bank's option, be applied to the Subject Debt (with such allocation to
the respective parts thereof and the respective due dates thereof as Bank in its
sole discretion may from time to time deem advisable) or to the repair,
replacement, or restoration of the goods insured. Grantor hereby irrevocably
appoints Bank as Grantor's attorney-in-fact to adjust all insurance losses, to
sign all applications, receipts, releases, and other writings necessary to
collect any such loss and any returned or unearned premiums, to execute proofs
of loss, to make settlements, to indorse and collect any check or other item
payable to Grantor issued in connection therewith, and to apply the same to
payment of the Subject Debt as hereinbefore provided. If Grantor does not
maintain insurance pursuant to this subsection, then, and in each such case,
Bank shall have the right to obtain such insurance or obtain insurance covering
only Bank's interest, and, if Bank elects to do either, Grantor will, on Bank's
demand, reimburse Bank for all amounts Bank expends in doing so.
4 Acquisition and Disposition of Inventory. Grantor will not
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(a) sell or other wise dispose of any inventory, except that so long as no
Default exists, Grantor shall have the right, in the ordinary course of
business but not otherwise, to process and sell inventory for customary
prices, provided, that Grantor shall immediately deposit the proceeds of
each such sale to the cash collateral account, if any then exists, pursuant
to subsection 6.5, or, if none then exists, to the credit of Grantor's
general checking account with Bank or
(b) permit any goods in which Bank has been granted a security interest
pursuant to this Agreement to be evidenced by any warehouse receipt or other
document of title (other than any ▇▇▇▇ of lading or similar Document
covering inventory that has been sold in accordance with this section) or by
any lease, conditional sale agreement, or other Chattel Paper of any kind.
6. Special Provisions Applicable to Receivables. The provisions of this
section 6 shall apply with respect to all Receivables in which Bank has been
granted a security interest pursuant to this Agreement:
6.1 Notice: Government Receivables; Non-Accounts. Grantor will give
Bank immediate written notice whenever any Receivable (a) arises out of
a contract with or order from the United States of America or any
department, agency, instrumentality, or political subdivision thereof
or (b) does not take the form of an Account or is evidenced in whole or
in part by Chattel Paper or any instrument.
6.2 Collection of Receivables by Grantor. Subject to the provisions of
subsection 6.3. Grantor will collect the Receivables in the ordinary
course of business for the benefit of both Bank and Grantor at no cost
or expense to Bank. Until any Default shall have occurred and
thereafter unless and until Bank shall have advised Grantor to the
contrary, Grantor shall have the right in the ordinary course of
business, to grant such waivers and consents to, enter into such
compromises with, and otherwise deal with the Account Debtors in
respect of the Receivables as Grantor in good faith may from time to
time deem advisable.
6.3 Direct Payment to Bank or Lockbox. Bank shall have the right, (a)
in the event of any Default, to instruct the Account Debtors, at
Grantor's expense, to thereafter make their payments in respect of the
Receivables directly to Bank and (b) in any event, by giving prior
notice to Grantor, from time to time to require Grantor to instruct the
Account Debtors thereafter to mail their payments to a post office
lockbox which Bank shall maintain at Grantor's expense and to which
only Bank shall have access. Following Bank's exercise of either such
right, Grantor will not, without in each case first obtaining Bank's
consent, demand payment in respect of any Receivable, and if Grantor
shall at any time receive any payment in respect of any Receivable,
Grantor will in each case give Bank prompt notice thereof, hold the
amount so received in trust for the benefit of Bank, and promptly remit
the same to Bank in the very form in which received but with all
necessary endorsements and assignments to facilitate Bank's collection
thereof.
6.4 Authority of Account Debtors. Grantor irrevocably authorizes and
directs each Account Debtor to honor any demand by Bank that all
payments in respect of the Receivables thereafter be paid directly to
Bank. In each such case the Account Debtor may continue directing all
such payments to Bank until the Account Debtor shall have received
written notice from Bank either that the Subject Debt has been paid in
full or that Bank no longer claims a security interest in the
Receivables. No Account Debtor shall have any responsibility to inquire
into Bank's right to make any such demand or to follow Bank's
disposition of any moneys paid to Bank by the Account Debtor.
6.5 Deposits. All payments in respect in respect of the Receivables
shall, at Bank's option, be deposited either to a checking account
maintained by Grantor with Bank or to a cash collateral account which
shall bear no interest, over which Bank shall have sole dominion and
control, and from which only Bank may withdraw funds, whichever option
Bank shall from time to time elect by giving Grantor written notice
thereof. Bank shall have no responsibility to ascertain whether any
such payment is the correct amount owing. Each such deposit shall be
subject to Bank's general rules and regulations except to the extent,
if any, inconsistent with this Agreement.
6.6 Withdrawal and Application of Funds. Bank may from time to time
withdraw funds from the cash collateral account at will. Bank shall be
under no obligation to withdraw funds from the cash collateral account,
except that upon each request of Grantor, Bank shall, if no Default
then exists, withdraw all such funds that are then collected. All funds
so withdrawn shall be applied to the payment of the Subject Debt with
such allocation to the respective parts thereof and the respective due
dates thereof as Bank in its sole discretion may from time to time deem
advisable (except that so long as no Default exists, Bank shall not
apply any such withdrawal to any Subject Debt that is not then due
without first obtaining Grantor's consent). If any funds so withdrawn
and applied are recovered from Bank by any trustee in bankruptcy or any
other Person or are discovered not to have been collected and
collection thereof is denied to Bank, Bank shall have the right to
reverse any such application to the extent the funds are recovered from
or not collected by Bank. Bank in its discretion may from time to time
release to Grantor (or to Grantor's order) any or any of the funds then
held in the cash collateral account, but no such release or releases
shall commit Bank thereafter to make any further or other such
releases.
6.7 Vouchers, Receipts, and Indorsements. Bank shall have full power
and authority to executed and deliver such vouchers and receipts in
respect of the Receivables, such endorsements of checks, and such other
writings in respect of the foregoing as Bank may from time to time deem
advisable. In connection with the foregoing Bank shall have full power
and authority to sign Grantor's signature to all such vouchers,
receipts, endorsements, and other writings whenever Bank deems such
action advisable.
6.8 Verification of Receivables. Bank shall have the right, at any time
and from time to time, to arrange for verification of Receivables
directly with Account Debtors or by such other methods as Bank shall
deem advisable.
7. Maintenance and Defense of General Intangibles. Subject in each case to
any security interest in favor of Bank and Bank's rights in respect thereof, and
further subject to section 6 governing Receivables, Grantor will, until any
Default shall have occurred and thereafter unless and until Bank shall have
advised Grantor to the contrary, without expense to Bank, maintain enforce, and
exercise Grantor's rights in all General Intangibles (except any which are of no
material value) and defend and protect those intangibles against dilution,
diminution in value, infringement, misappropriation, and unauthorized use.
8. Effects of Default. Bank shall at all time times have all of the rights
of secured party under the law of the jurisdiction in which Bank's banking
office is located and, in addition, if any Default shall occur or commence to
exist, then, and in each such case, the following provisions shall apply:
8.1 Possession of Goods and Records. Bank shall have the right to take
possession of all goods in which Bank has been granted a security
interest pursuant to this Agreement, or such part of those goods as
Bank may from time to time deem advisable, and Grantor will, on each
demand of Bank, assemble and make available to Bank at such place or
place as Bank may reasonable require such of those goods as Bank shall
designate. Grantor will, on Bank's demand, deliver to Bank all of
Grantor's books and records in respect of the Collateral.
8.2 Enforcement of Rights. Bank shall have the right in its sole
discretion to enforce payment of the Receivables by suit or otherwise,
and to maintain and enforce rights in respect of any general
Intangibles, but Bank shall have no duty to institute any suit or to
take any other action or, having started any suit or the taking of any
other action, to thereafter continue the same. In each case bank may
proceed with counsel of Bank's choosing.
8.3 Exercise of Rights. Bank shall have full power and right to
exercise any and all rights in respect of the Collateral as if Bank
were the sole beneficial owner thereof and may, without limitation,
grant such waivers and consents to, and enter into such compromises
with, the Account Debtors and other Persons, release (regardless of
whether Bank receives any consideration therefor) any security for or
any account Debtor or other Person liable on any Receivable, and grant
the Account Debtors and other Persons such other indulgences as Bank in
good faith may from time to time deem advisable.
8.4. Disposition. Bank shall have the right to sell or otherwise
dispose of the Collateral or any part thereof or any interest therein
at any time or from time to time. Bank shall give Grantor not less than
ten (10) days' prior notice of either the date after which any intended
private sale is to be made or the time and place of any intended public
sale, except that Bank need give no such notice in the case of
Collateral which Bank in good faith determines to be declining speedily
in value or which is customarily sold on a recognized market. Grantor
waives advertisement of any such sale and (except only to the extent
notice is specifically required by the next preceding sentence) waives
notice of any kind in respect of such sale. At any public sale Bank may
purchase the Collateral or any part thereof free from any right of
redemption, which right Grantor hereby waives. After deducting any and
all fees, costs, and expenses (including, without limitation, the fees
and disbursements of legal counsel) incurred in assembling, taking,
repairing, storing, and selling or otherwise disposing of the
Collateral or any part thereof or any interest therein, Bank shall have
the right to
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apply the net proceeds of sale to the Subject Debt with such allocation to the
respective parts thereon and the respective due dates thereof as Bank in its
sole discretion may from time to time deem advisable, and Grantor shall be
liable for any deficiency.
9. Power of Attorney. Grantor hereby irrevocably constitutes and appoints Bank,
through its employees and agents, with full power of substitution, as Grantor's
true and lawful attorney-in-fact, with full irrevocable power and authority in
the place of Grantor and in the name of Grantor or in Bank's own name, for the
purpose of carrying out the terms of this Agreement, to perform, at any time and
from time to time, each agreement contained in this Agreement that is on
Grantor's part to be complied with, and to take any and all actions and to
execute and deliver any and all writings which may be necessary or desirable to
give Bank the full benefit of this Agreement, in each case as Bank may from time
to time deem advisable, Grantor hereby agreeing that Bank shall owe no duty
whatever to Grantor to perform any such agreement, to take any such action, or
to execute or deliver any such writing, or, having done so any one or more
times, to thereafter continue doing so. Without limiting the generality of the
foregoing, Grantor hereby revocably authorizes Bank, at any time and from time
to time, to (a) fill in any blank space contained in this Agreement or any other
Related Writing, (b) to correct patent errors, to complete and correct the
description of Collateral, and to complete the date herein or therein, and (c)
to sign on Grantor's behalf and file, at Grantor's expense and without Grantor's
signature, such affidavits, assignments, financing statements, indorsements of
specific items of Collateral, mortgages, powers of attorney, security
agreements, and other writings as Bank may from time to time deem advisable for
the better evidencing, perfection, protection, or validation of, or realization
of the benefits of, the security interest granted pursuant to this Agreement.
10. Unconditional and Continuing Security Interest. Grantor's obligations under
this Agreement and the granting of a security interest to Bank pursuant to this
Agreement and unconditional and effective immediately, and (except for
obligations surviving indefinitely pursuant to section 16) those obligations and
the security interest so granted shall continue in full effect until the Subject
Debt shall have been paid in full and thereafter until Bank shall have delivered
to Grantor (or such other Person or Persons who Bank determines in good faith to
be entitled to the same) all Collateral (except any applied to the Subject Debt)
in Bank's possession and until each assignment, financing statement, or other
writing describing the Collateral or any part thereof and naming Bank (or its
successor or assigns, if any) as assignee or secured party, as the case may be,
shall have been released or terminated of record as to all of the Collateral
therein described, regardless of the lapse of time, regardless of the fact that
there may be a time or times when no Subject Debt is outstanding, regardless of
any act, omission, or course of dealing whatever on Bank's part, and regardless
of any other event, condition, or thing.
11. Grantor's Assent to Extensions, Releases, and Settlements. With respect to
the Collateral, Grantor assents to any extension or postponement at the time of
payment thereof or any other indulgence in connection therewith, to any
exchange, release, replacement, or substitution of Collateral, to any addition
or release of any Account Debtor, to any acceptance of any partial payment
thereon and to any adjustment, compromise, or settlement in respect thereof, all
in such manner and at such time or times as Bank shall deem advisable.
12. Bank's Duties Limited. Bank shall have no duty as to the collection or
protection of Collateral or any income therefrom, nor as to the preservation of
rights against prior parties, beyond the safe custody of any Collateral in
Bank's possession. Bank shall have no liability for its delivery of any property
to any Person or Persons who Bank determines in good faith to be entitled to the
same.
13. No Setoff. Grantor hereby waives any and all now existing or hereafter
arising rights to recoup or offset any obligation of Grantor under or in
connection with this Agreement or any Related Writing against any claim or right
of Grantor against Bank.
14. Indemnity: Administration, Enforcement, and Termination; Interest. Grantor
will reimburse Bank, on Bank's demand from time to time, for any and all fees,
costs, and expenses (including, without limitation, the fees and disbursements
of legal counsel) incurred by Bank in administering this Agreement and in
enforcing, exercising, or protecting its rights under this Agreement or under
applicable law, or in attempting to do any of the foregoing. Grantor agrees that
if and when Bank's security interest shall have terminated in accordance with
the provisions of this Agreement, Grantor will, on Bank's demand from time to
time, reimburse Bank for any and all fees, costs, and expenses (including,
without limitation, the fees and disbursements of legal counsel) incurred by
Bank in releasing or terminating each assignment, financing statement, or other
writing signed pursuant to this Agreement or in notifying Account Debtors of any
such release or termination. If any amount owning under this Agreement is not
paid when due, then, and in each such case, Grantor shall pay, on Bank's demand,
interest on that amount from the due date thereof until paid in full at a
fluctuating rate equal to four percent (4%) per annum plus the Prime Rate.
15. Waivers; Remedies; Application of Payments. Bank may from time to time in
its discretion grant waivers and consents in respect of this Agreement or any
other Related Writing or assent to amendments thereof, but no such waiver,
consent, or amendment shall be binding upon Bank business set forth in a writing
(which writing shall be narrowly construed) signed by Bank. No course of dealing
in respect of, nor any omission or delay in the exercise of, any right, power,
or privilege by Bank shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or other exercise thereof or of any
other, as each such right, power, or privilege may be exercised either
independently or concurrently with others and as often and in such order as Bank
may deem expedient. Each right, power, or privilege specified or referred to in
this Agreement is in addition to and not in limitation of any other rights,
powers, and privileges that Bank may otherwise have or acquire by operation of
law, by other contract, or otherwise. Bank shall be entitled to equitable
remedies with respect to each breach or anticipatory repudiation of any
provision of this Agreement, and Grantor hereby waives any defense which might
be asserted to bar any such equitable remedy. Bank shall have the right to apply
proceeds and payments in respect of the Subject Debt with such allocation to the
respective parts thereof and the respective due dates thereof as Bank its sole
discretion may from time to time deem advisable.
16. Other Provisions. The provisions of this Agreement shall bind Grantor and
Grantor's executors, heirs, successors, and assigns and benefit Bank and its
successors and assigns. Except for Grantor and Bank and their respective
successors and assigns, there are no intended beneficiaries of this agreement,
provided, that Bank shall have the right, in its discretion, to designate, at
any time and from time to time, one or more Account Debtors as ended
beneficiaries of subsection 6.4. The provisions of sections 11 through 19, both
inclusive, shall survive the payment in full of the Subject Debt to termination
of the security interest granted pursuant to this Agreement. The several
captions to different sections and subsections of this agreement are inserted
for convenience only and shall be ignored in interpreting the provisions
thereof. Each reference to a section includes a reference to all subsections
thereof (i.e., those having the same character or characters to the left of the
decimal point), except where the context clearly does not so permit. If any
provision in this Agreement shall be or become illegal or unenforceable in
any case, then that provision shall be deemed defined in that case so as to
be legal and enforceable to the maximum extent permitted by law while most
nearly preserving its original intent, and in the case the illegality or
unenforceability of that provision shall affect neither that provision in any
other case nor any other provision. Interest for any end period shall accrue on
the first day thereof but not on the last day thereof (unless the last day is
the first day) and in each case shall be computed the basis of a 360-day year
and the actual number of days in the period. In no event shall interest
accrue at a higher rate than the maximum rate, if is permitted by law. Bank
shall have the right to furnish to its Affiliates, and to such other Persons
as Bank shall deem advisable for the conduct of its business, information
concerning the business, financial condition, and property of Grantor, the
amount of the Bank Debt of Grantor, and the terms, conditions, and other
provisions applicable to the respective parts thereof. This Agreement shall be
governed by the law (excluding conflict of laws ???s) of the jurisdiction in
which Bank's banking office is located.
17. Integration. This Agreement and, to the extent consistent with this
Agreement, the other Related Writings, set forth the entire agreement of Grantor
and Bank as to its subject matter, and may not be contradicted by evidence of
any agreement or statement unless made in a writing (which writing shall be
narrowly construed) signed by Bank contemporaneously with or after the execution
and delivery of this Agreement.
18. Notices and Other Communications. Each notice, demand, or other
communication, whether or not received, shall be deemed to have been given to
Grantor whenever Bank shall have mailed a writing to that effect by certified or
registered mail to Grantor at Grantor's mailing address (or any other address
of which Grantor shall have given Bank notice after the execution and delivery
of this Agreement); however, no other method of giving final notice to Grantor
is hereby precluded. Each communication to be given to Bank shall be in writing
and shall be given to Bank's Corporate Banking Department at Bank's banking
office (or any other address of which Bank shall have given notice to Grantor
after the execution and delivery this Agreement). Grantor hereby assumes all
risk arising out of or in connection with each communication given or attempted
by Grantor in contravention of this section. Bank shall be entitled to rely on
each communication believed in good faith by Bank to be genuine.
4
19. Jurisdiction and Venue; Waiver of Jury Trial. Any action, claim,
counterclaim, crossclaim, proceeding, or suit, whether at law or in equity,
whether sounding in tort, contract, or otherwise at any time arising under or in
connection with this Agreement or any other Related Writing, the administration,
enforcement, or negotiation of this Agreement or any other Related Writing, or
the performance of any obligation in respect of this Agreement or any other
Related Writing (each such action, claim, counterclaim, crossclaim, proceeding,
or suit, an 'Action') may be brought in any federal or state court located in
the city in which Bank's banking office is located. Grantor hereby
unconditionally submits to the jurisdiction of any such court with respect to
each such Action and hereby waives any objection Grantor may now or hereafter
have to the venue of any such Action brought in any such court. Grantor HEREBY,
AND EACH HOLDER OF THE Subject Debt OR ANY PART THEREOF, KNOWINGLY AND
VOLUNTARILY WAIVES JURY TRIAL IN RESPECT OF ANY Action.
Grantor: Paravant Computer Systems Inc
______________________________________
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________
Title: President
(complete only if required) And By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_________________
Title: Chief Financial Officer
