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Exhibit 10.5
BORROWER SECURITY AGREEMENT
BORROWER SECURITY AGREEMENT, dated as of February 20, 1997, made by SIGHT
RESOURCE CORPORATION, a Delaware corporation (the "BORROWER"), in favor of
CREDITANSTALT CORPORATE FINANCE, INC., a Delaware corporation (the "LENDER") as
the holder of the Secured Obligations described below.
WITNESSETH:
WHEREAS, the Borrower is a party to the Credit Agreement, dated as of the
date hereof (as amended, supplemented or otherwise modified from time to time,
the "CREDIT AGREEMENT"), between the Borrower and the Lender;
WHEREAS, pursuant to the Credit Agreement, the Lender has agreed to make
certain extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of the Lender to
make its extensions of credit to the Borrower under the Credit Agreement that
the Borrower shall have executed and delivered this Security Agreement to the
Lender;
NOW, THEREFORE, in consideration of the premises and to induce the Lender
to enter into the Credit Agreement and to induce the Lender to make its
extensions of credit under the Credit Agreement, the Borrower hereby agrees as
follows:
1. Defined Terms.
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1.1 Definitions.
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(a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date
hereof are used herein as so defined: Accounts, Chattel Paper,
Documents, Equipment, Farm Products, General Intangibles, Instruments,
Inventory and Proceeds.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Security Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"CODE": the Uniform Commercial Code as from time to time in effect in
the State of New York.
"COLLATERAL": as defined in Section 2.
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"COLLATERAL ACCOUNT": the Collateral Account as defined in Section 3.
"COPYRIGHTS": means all of the following to the extent that the
Borrower now or hereafter has any right, title or interest therein: (i) all
United States copyrights in all Works, whether published or unpublished,
now existing or hereafter created or acquired, including, without
limitation, the copyrights in the Works listed in SCHEDULE 1 hereto, all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, registrations, recordings and
applications in the United States Copyright Office, and (ii) all renewals
thereof.
"COPYRIGHT LICENSES": means any written agreement, naming the Borrower
as licensor or licensee, granting any right under any Copyright, including,
without limitation, the agreements described in SCHEDULE 1 hereto, as the
same may be amended, supplemented or otherwise modified from time to time,
including, without limitation, (i) all rights of the Borrower to receive
moneys due and to become due to it thereunder or in connection therewith,
(ii) all rights of the Borrower to damages arising out of or for breach or
default in respect thereof and (iii) all rights of the Borrower to exercise
all remedies thereunder; provided that the term "Copyright Licenses" shall
not include any license (or any contract or agreement giving rise thereto)
by the Borrower of property of another Person where such contract or
agreement prohibits the assignment or encumbrance of such license (or the
contract or agreement giving rise thereto), except to the extent that such
prohibition would be ineffective pursuant to Section 9-318(4) of the UCC.
"PATENTS": (a) all letters patent of the United States or any other
country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in SCHEDULE 2, and (b) all applications
for letters patent of the United States or any other country and all
divisions, continuations and continuations-in-part thereof, including,
without limitation, any thereof referred to in SCHEDULE 2.
"PATENT LICENSE": any written agreement providing for the grant by or
to the Borrower of any right to manufacture, use or sell any invention
covered by a Patent, including, without limitation, any thereof referred to
in SCHEDULE 2.
"RECEIVABLE": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"SECURED OBLIGATIONS": shall be the collective reference to the unpaid
principal of and interest on the Notes and all other obligations and
liabilities (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Loans and interest accruing at the then applicable rate provided in the
Credit Agreement after the filing of any
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petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding), of the Borrower to the Lender whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Credit
Agreement, this Agreement, the Notes, the Warrant Agreement, the other Loan
Documents or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to
the Lender that are required to be paid by the Borrower pursuant to the
terms of the Credit Agreement, this Agreement or any other Loan Document).
"TERMINATION DATE": the date which all Secured Obligations shall have
been irrevocably paid in full and the Commitments shall have been
terminated.
"TRADEMARKS": (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and the
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, including, without limitation, any thereof referred to in
SCHEDULE 3, and (b) all renewals thereof.
"TRADEMARK LICENSE": means any written agreement providing for the
grant by or to the Borrower of any right to use any Trademark, including,
without limitation, any thereof referred to in SCHEDULE 3.
"WORKS": any tangible expression of an idea of any Person.
1.2. Other Definitional Provisions.
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(a) The words "hereof," "herein", "hereto" and "hereunder" and
words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. GRANT OF SECURITY INTEREST. As collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations, the Borrower hereby
grants to the
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Lender a security interest in all of the following property now owned or at any
time hereafter acquired by the Borrower or in which the Borrower now has or at
any time in the future may acquire any right, title or interest (collectively,
together with all amounts on deposit in the Collateral Account from time to
time, the "COLLATERAL"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Copyrights;
(d) all Copyright Licenses;
(e) all Documents;
(f) all Equipment;
(g) all General Intangibles;
(h) all Instruments;
(i) all Inventory;
(j) all Patents;
(k) all Patent Licenses;
(l) all Trademarks;
(m) all Trademark Licenses;
(n) all books and records pertaining to the Collateral; and
(o) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
3. Collateral Account.
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3.1. ESTABLISHMENT OF COLLATERAL ACCOUNT. At the request of the
Lender, there shall be established and at all times thereafter there shall
be maintained by the Borrower, a non-interest bearing cash collateral
account with Creditanstalt-Bankverein, Greenwich, Connecticut Branch, or as
designated by the Lender, (and as long as no Default or Event of Default
has occurred and is continuing, with the consent of the Borrower, not to be
unreasonably withheld), any other United States Depository institution or
subsidiary or branch of a foreign bank licensed under the laws of the
United States or any state thereof, or any successor thereto (the
"COLLATERAL ACCOUNT") subject to the terms of this Agreement.
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3.2. RIGHTS, TITLE AND INTEREST OF COLLATERAL ACCOUNT. All right,
title and interest in and to the Collateral Account shall vest exclusively
in the Lender. The Borrower shall have no rights with respect to the
Collateral Account and the Lender shall have sole dominion and control over
the Collateral Account and the monies deposited therein. Monies deposited
in the Collateral Account shall constitute security for the Secured
Obligations. The Borrower hereby pledges and assigns to the Lender and
hereby grants to the Lender a security interest in, all right, title or
interest (if any) which the Borrower now has or may hereafter have or
purport or claim to have in or to the Collateral Account and all monies
held therein, any investments made with such monies and any and all
certificates or instruments from time to time representing or evidencing
such investments (and all proceeds thereof).
3.3. MAINTAINING THE COLLATERAL ACCOUNT. Until the Termination Date of
this Agreement, all monies received by the Lender while a Default or an
Event of Default has occurred and is continuing, all monies received
pursuant to subsection 4.5(a) and Section 9 of the Credit Agreement, and
any monies received as a result of investments made as contemplated by
Section 4 hereof, shall be deposited in the Collateral Account.
4. INVESTMENT OF MONIES. Pending the disbursement thereof pursuant to the
terms of this Agreement, all monies in the Collateral Account shall (to the
extent it is practical to do so) be invested by the Lender in Cash Equivalents
(as defined in the Credit Agreement). All such investments shall be evidenced
either (a) by negotiable certificates or instruments which are held by or for
the account of the Lender or (b) by book entries maintained in a State in which
the Lender may be granted by book entries a security interest in the securities
relating thereto. In the absence of its gross negligence or willful misconduct,
the Lender shall not have any ability out of or in connection with any
investment made in accordance with the provisions herein or for any loss or
decline in value of any investment or from any loss resulting directly or
indirectly from any investment made pursuant to and in accordance with the
provisions hereof.
5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants that:
5.1. TITLE; NO OTHER LIENS. Except for the security interest granted
to the Lender pursuant to this Agreement and the other Liens permitted to
exist on the Collateral pursuant to the Credit Agreement, the Borrower owns
each item of the Collateral free and clear of any and all Liens or claims
of others. No financing statement or other public notice with respect to
all or any part of the Collateral is on file or of record in any public
office, except such as have been filed in favor of the Lender pursuant to
this Agreement or as are permitted pursuant to the Credit Agreement.
5.2. PERFECTED FIRST PRIORITY LIENS. The security interests granted
pursuant to this Agreement (a) constitute perfected security interests in
the Collateral in favor of the Lender, as collateral security for the
Secured Obligations and (b) are prior to all other Liens on the Collateral
in existence on the date hereof except as set forth on SCHEDULE V to the
Credit Agreement.
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5.3. INVENTORY AND EQUIPMENT. The Inventory and the Equipment are kept
at the locations listed on SCHEDULE 4.
5.4. CHIEF EXECUTIVE OFFICE. The Borrower's chief executive office is
located at 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX
5.5. FARM PRODUCTS. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
6. COVENANTS. The Borrower covenants and agrees with the Lender that, from
and after the date of this Agreement until the Secured Obligations shall have
been paid in full and the Commitments shall have expired or otherwise been
terminated:
6.1 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER. If any amount payable
under or in connection with any of the Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Instrument or Chattel
Paper shall be immediately delivered to the Lender, duly indorsed in a
manner satisfactory to the Lender, to be held as Collateral pursuant to
this Agreement.
6.2. Maintenance of Insurance.
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(a) The Borrower will maintain, with financially sound and
reputable companies, insurance policies insuring the Inventory and
Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Lender, such
policies to be in such form and amounts and having such coverage as
may be reasonably satisfactory to the Lender, with losses payable to
the Borrower and the Lender as their respective interests may appear.
(b) All such insurance shall (1) provide that no cancellation,
material reduction in amount or material change in coverage thereof
shall be effective until at least 30 days after receipt by the Lender
of written notice thereof, (2) name the Lender as an insured party and
(3) be reasonably satisfactory in all other respects to the Lender.
(c) The Borrower shall deliver to the Lender a report of a
reputable insurance broker with respect to such insurance in each
calendar year and such supplemental reports with respect thereto as
the Lender may from time to time reasonably request.
6.3. MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER
DOCUMENTATION.
(a) The Borrower shall maintain the security interest created by
this Agreement as a perfected security interest having at least the
priority described in subsection 5.2 and shall defend such security
interest against the claims and demands of all Persons whomsoever.
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(b) At any time and from time to time, upon the written request
of the Lender, and at the sole expense of the Borrower, the Borrower
will promptly and duty execute and deliver such further instruments
and documents and take such further actions as the Lender may
reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein
granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in
any jurisdiction with respect to the security interests created
hereby.
6.4. CHANGES IN LOCATIONS, NAME, ETC. The Borrower will not unless it
shall have given the Lender at least 30 days prior written notice of such
change (or, in the case of Inventory and Equipment, at least 10 days prior
written notice, to the extent that the Borrower has taken such action as
reasonably may be required of it to maintain the continuous perfection of
the Lender's security interest in such Inventory or Equipment, as the case
may be):
(a) permit any of the Inventory (other than goods-in-transit and
immaterial amounts of goods in temporary locations in the ordinary
course of business) or Equipment to be kept at a location other than
those listed on SCHEDULE 4; or
(b) change the location of its chief executive office from that
specified in subsection 5.4;
(c) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Lender in connection
with this Agreement would become seriously misleading.
6.5. FURTHER IDENTIFICATION OF COLLATERAL. The Borrower will furnish
to the Lender from time to time statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Lender may reasonably request, all in
reasonable detail.
6.6 NOTICES. The Borrower will advise the Lender promptly, in
reasonable detail, at its address provided in subsection 11.2 of the Credit
Agreement of (a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral and
(b) the occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the Collateral or
on the security interests created hereby.
7. PROVISIONS RELATING TO RECEIVABLES.
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7.1 BORROWER REMAINS LIABLE UNDER RECEIVABLES. Anything herein to the
contrary notwithstanding, the Borrower shall remain liable under each of
the Receivables to observe and perform all the conditions and obligations
to be observed and
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performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Receivable. The Lender shall not have
any obligation or liability under any Receivable (or any agreement giving
rise thereto) by reason of or arising out of this Agreement or the receipt
by the Lender of any payment relating to such Receivable pursuant hereto,
nor shall the Lender be obligated in any manner to perform any of the
obligations of the Borrower under or pursuant to any Receivable (or any
agreement giving rise thereto), to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party under any Receivable (or any
agreement giving rise thereto), to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any
time or times.
7.2 ANALYSIS OF RECEIVABLES. The Lender shall have the right to make
test verifications of the Receivables in any manner and through any medium
that it reasonably considers advisable, and the Borrower shall furnish all
such assistance and information as the Lender may reasonably require in
connection with such test verifications. At any time and from time to time,
upon the Lender's reasonable request and at the expense of the Borrower,
the Borrower shall cause independent public accountants or others
satisfactory to the Lender to furnish to the Lender reports showing
reconciliations, aging and test verifications of, and trial balances for,
the Receivables. The Lender, in its own name or in the name of others, may
during such time as a Default or an Event of Default shall have occurred
and be continuing, communicate with the obligors on the Receivables to
verify with them to the Lender's satisfaction the existence, amount and
terms of any Receivables.
7.3 Collections On Receivables.
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(a) The Lender hereby authorizes the Borrower to collect the
Receivables subject to the Lender's direction and control, and the
Lender may curtail or terminate said authority at any time when a
Default or an Event of Default has occurred and is continuing and may
then direct that payments on the Receivables be made directly to the
Lender in accordance with the provisions of subsection 11.1. If
required by the Lender at any time when a Default or an Event of
Default has occurred and is continuing any payments of Receivables,
when collected by the Borrower, (1) shall be forthwith (and, in any
event, within two Business Days) deposited by the Borrower in the
exact form received, duly indorsed by the Borrower to the Lender if
required, in a Collateral Account maintained under the sole dominion
and control of the Lender, subject to withdrawal by the Lender only as
provided in subsection 10.3 and (2) until so turned over, shall be
held by the Borrower in trust for the Lender, segregated from other
funds of the Borrower.
(b) Each such deposit of Proceeds of Receivables shall be
accompanied by a report (in the form customarily prepared by the
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Borrower for its internal purposes) identifying in reasonable detail
the nature and source of the payments included in the deposit.
(c) At the Lender's request at any time when a Default or an
Event of Default has occurred and is continuing the Borrower shall
deliver to the Lender all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the
Receivables, including, without limitation, all original orders,
invoices and shipping receipts.
7.4. Representations and Warranties.
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(a) No amount payable to the Borrower under or in connection with
any Receivable is evidenced by any Instrument or Chattel Paper which
has not been delivered to the Lender.
(b) None of the obligors on any material portion of the
Receivables is a Governmental Authority.
(c) The amounts represented by the Borrower to the Lender from
time to time as owing to the Borrower in respect of the Receivables
will at such times be accurate in all material respects.
7.5. Covenants.
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(a) Other than in the ordinary course of business consistent with
its past practice, the Borrower will not (i) grant any extension of
the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release,
wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any
Receivable, (v) amend, supplement or modify any Receivable in any
manner that could adversely affect the value thereof or (vi) fail to
exercise promptly and diligently each and every material right which
it may have under each agreement giving rise to a Receivable (other
than any right of termination).
(b) The Borrower will deliver to the Lender a copy of each
material demand, notice or document received by it that questions the
validity or enforceability of more than 5% of the aggregate amount of
the then outstanding Receivables.
(8) Provisions Relating to Patents and Trademarks.
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8.1 Representations and Warranties.
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(a) SCHEDULE 2 refers to all Patents and material Patent Licenses
owned by the Borrower in its own name on the date hereof.
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(b) SCHEDULE 3 refers to all Trademarks registered with
Governmental Authorities and material Trademark Licenses owned by the
Borrower in its own name on the date hereof.
(c) To the best of the Borrower's knowledge, each Patent and
Trademark is on the date hereof valid, subsisting, unexpired,
enforceable and has not been abandoned, except where such abandonment
would not reasonably be expected to have a Material Adverse Effect.
(d) Except as set forth in either SCHEDULE 2 or SCHEDULE 3, none
of such Patents and Trademarks is on the date hereof the subject of
any exclusive licensing or franchise agreement.
(e) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the
validity or enforceability of any Patent or Trademark in any respect
that could reasonably be expected to have a Material Adverse Effect.
(f) No action or proceeding is pending on the date hereof seeking
to limit, cancel or question the validity of any Patent or Trademark,
which, if adversely determined, would have a Material Adverse Effect
on the value of any material Patent or Trademark.
8.2. Covenants.
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(a) The Borrower (either itself or through licensees) will (1)
maintain each material Trademark in full force free from any claim of
abandonment for non-use, (2) maintain as in the past the quality of
products and services offered under such Trademark, (3) employ such
Trademark with the appropriate notice of registration (if deemed
advisable by management in its reasonable discretion) and (4) not (and
not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby such Trademark may become
invalidated.
(b) The Borrower will not knowingly do any act, or omit to do any
act, whereby any material Patent may become abandoned or dedicated.
(c) The Borrower will notify the Lender immediately if it knows,
or has reason to know, that any application or registration relating
to any material Patent or Trademark may become abandoned or dedicated,
or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office or any court or tribunal in any country) regarding
the Borrower's ownership of any material Patent or Trademark or its
right to register the same or to keep and maintain the same.
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(d) Whenever the Borrower, either by itself or through any agent,
employee, licensee or designee, shall file an application for the
registration of any Patent or Trademark with the United States Patent
and Trademark Office or any similar office or agency in any other
country or any political subdivision thereof, the Borrower shall
report such filing to the Lender within five Business Days after the
last day of the fiscal quarter in which such filing occurs. Upon
request of the Lender, the Borrower shall execute and deliver any and
all agreements, instruments, documents, and papers as the Lender may
request to evidence the Lender security interest in any Patent or
Trademark and the goodwill and general intangibles of the Borrower
relating thereto or represented thereby.
(e) The Borrower will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United
States Patent and Trademark Office, or any similar office or agency in
any other country or any political subdivision thereof, to maintain
and pursue each material application (and to obtain the relevant
registration) and to maintain each registration of the material
Patents and Trademarks, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability.
(f) In the event that any Patent or Trademark is infringed,
misappropriated or diluted by a third party, the Borrower shall (i)
take such actions as the Borrower shall reasonably deem appropriate
under the circumstances to protect such Patent or Trademark and (ii)
if such Patent or Trademark is of material economic value, promptly
notify the Lender after it learns thereof and where appropriate in
accordance with its reasonable business judgment, xxx for
infringement, misappropriation or dilution, to seek injunctive relief,
and to recover any and all damages for such infringement,
misappropriation or dilution.
9. Copyrights.
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9.1. Representations and Warranties.
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(a) SCHEDULE 1 refers to all material Copyrights registered with
or applied for a Governmental Authority and material Copyright
Licenses owned by the Borrower in its own name on the date hereof.
(b) To the best of the Borrower's knowledge, each material
Copyright is on the date hereof valid, subsisting, unexpired,
enforceable and has not been abandoned.
(c) Except as set forth in SCHEDULE 1, none of such Copyrights is
on the date hereof the subject of any exclusive licensing or franchise
agreement.
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(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the
validity of any Copyright in any respect that could reasonably be
expected to have a Material Adverse Effect.
(e) No action or proceeding is pending on the date hereof seeking
to cancel or question the validity of any Copyright which, if
adversely determined, would have a Material Adverse Effect.
9.2 Covenants.
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(a) The Borrower (either itself or through licensees) will (i)
employ the appropriate notice of copyright for each work subject to
copyright protection to the extent necessary to protect any material
registered Copyright relating to such work and (ii) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby any material Copyright may become
invalidated.
(b) The Borrower will not knowingly (either itself or through
licensees) do any act, or omit to do any act, whereby any material
Copyright may become injected into the public domain.
(c) The Borrower will notify the Lender immediately if it knows,
or has reason to know, that any material Copyright may become injected
into the public domain or of any adverse determination or development
(including, without limitation, the institution of, or any such
determination or development in, any court or tribunal in the United
States or any political subdivision thereof) regarding the Borrower's
ownership of any such Copyright or its validity.
(d) On each January 31 following the date hereof (or, if the
Lender reasonably so requests in writing, more often), if the Borrower
owns any registered Copyrights, the Borrower either itself or through
any agent, employee, licensee or designee, shall provide to the Lender
a document confirming the Lender's security interest in each
registered Copyright with respect to which the Borrower acquires an
interest during the two preceding calendar quarters, duly executed and
in proper form for filing in the United States Copyright Office or
other applicable United States Governmental Authority. Upon request of
the Lender, the Borrower shall execute and deliver any and all
additional agreements, instruments, documents, and papers as the
Lender may reasonably request to confirm the Lender's security
interest in such Copyright, and the Borrower hereby constitutes the
Lender as its attorney-in-fact to file all such writings for the
foregoing purposes, all lawful acts of such attorney being hereby
ratified and confirmed; such power being coupled with an interest is
irrevocable until the Termination Date (as defined herein).
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(e) The Borrower will take all necessary steps, as it shall deem
appropriate under the circumstances, in accordance with its reasonable
business judgment, to maintain and pursue each material application
filed (and to obtain the relevant registration) and to maintain to the
extent permitted by law each registration of each material Copyright
owned by the Borrower including, without limitation, filing of
applications for renewal, where necessary.
(f) The Borrower will promptly notify the Lender of any material
infringement of any material Copyright owned by it of which it becomes
aware and will take such actions as it shall reasonably deem
appropriate under the circumstances to protect such Copyright,
including, where appropriate in accordance with its reasonable
business judgment, the bringing of suit or the settling of actual or
potential suits for infringement, seeking injunctive relief and
seeking to recover any and all damages for such infringement.
10 Remedies.
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10.1. NOTICE TO OBLIGORS. Upon the request of the Lender at any time
when a Default or an Event of Default has occurred and is continuing the
Borrower shall notify obligors on the Receivables that the Receivables have
been assigned to the Lender and that payments in respect thereof shall be
made directly to the Lender.
10.2. PROCEEDS TO BE TURNED OVER TO THE LENDER. In addition to the
rights of the Lender specified in subsection 7.3 with respect to payments
of Receivables, when a Default or an Event of Default has occurred and is
continuing all Proceeds received by the Borrower consisting of cash, checks
and other near-cash items shall be held by the Borrower in trust for the
Lender, segregated from other funds of the Borrower, and shall, forthwith
upon receipt by the Borrower, be turned over to the Lender in the exact
form received by the Borrower (duly indorsed by the Borrower to the Lender,
if required) and held by the Lender in the Collateral Account. All Proceeds
while held by the Lender in the Collateral Account (or by the Borrower in
trust for the Lender) shall continue to be held as collateral security for
all the Secured Obligations and shall not constitute payment thereof until
applied as provided in subsection 10.3.
10.3. APPLICATION OF PROCEEDS. At such intervals as may be agreed upon
by the Borrower and the Lender, or, if an Event of Default has occurred and
is continuing at any time at the Lender's election, the Lender may apply
all or any part of Proceeds held in any Collateral Account in payment of
the Secured Obligations in such order as the Lender may elect, and any part
of such funds which the Lender elects not so to apply and deems not
required as collateral security for the Secured Obligations shall be paid
over from time to time by the Lender to the Borrower or to whomsoever may
be lawfully entitled to receive the same. Any balance of such Proceeds when
no Default or Event of Default is continuing shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same. Any
balance of such Proceeds remaining after the
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Secured Obligations shall have been paid in full and the Commitments under
(and as defined in) the Credit Agreement shall have expired or otherwise
been terminated shall be paid over to the Borrower or to whomsoever may be
lawfully entitled to receive the same.
10.4. CODE REMEDIES. If an Event of Default has occurred and is
continuing, the Lender may exercise, in addition to all other rights and
remedies granted to it in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under the Code. Without limiting the
generality of the foregoing, the Lender, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon the
Borrower or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or
any part thereof, and/or may forthwith sell, lease, assign, give option or
options to purchase, or otherwise dispose of and deliver the Collateral or
any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange, broker's board
or office of the Lender or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or
equity of redemption in the Borrower, which right or equity is hereby
waived or released. The Borrower further agrees, at the Lender's request,
to assemble the Collateral and make it available to the Lender at places
which the Lender shall reasonably select, whether at the Borrower's
premises or elsewhere. To the extent permitted by applicable law, the
Borrower waives all claims, damages and demands it may acquire against the
Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given
at least 10 days before such sale or other disposition.
11. LENDER APPOINTMENT AS ATTORNEY-IN-FACT; LENDER PERFORMANCE OF
BORROWER'S OBLIGATIONS.
11.1. POWERS. The Borrower hereby irrevocably constitutes and appoints
the Lender and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Borrower and in the name
of the Borrower or in its own name, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, and, without
limiting the generality of the foregoing, the Borrower hereby gives the
Lender the power and right, on behalf of the Borrower, without notice to or
assent by the Borrower, to do any or all of the following:
(a) at any time when a Default or an Event of Default has
occurred and is continuing in the name of the Borrower or its own
name,
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or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or with respect to any other
Collateral and file any claim or take any other action or proceeding
in any court of law or equity or otherwise deemed appropriate by the
Lender for the purpose of collecting any and all such moneys due under
any Receivable or with respect to any other Collateral whenever
payable;
(b) in the case of any Copyright, Patent or Trademark, execute
and deliver any and all agreements, instruments, documents and papers
as the Lender may request to evidence the Lender's security interest
in such Copyright, Patent or Trademark and the goodwill and general
intangibles of the Borrower relating thereto or represented thereby;
(c) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(d) execute, in connection with any sale provided for in
subsection 12.4, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(e) at any time when a Default or an Event of Default has
occurred and is continuing (1) direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys due
or to become due thereunder directly to the Lender or as the Lender
shall direct; (2) ask or demand for, collect, receive payment of and
receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral;
(3) sign and indorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection
with any of the Collateral; (4) commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce
any other right in respect of any Collateral; (5) defend any suit,
action or proceeding brought against the Borrower with respect to any
Collateral; (6) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, to give such discharges or
releases as the Lender may deem appropriate; (7) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which
any such Copyright, Patent or Trademark pertains), throughout the
world for such term or terms, on such conditions, and in such manner,
as the Lender shall in its sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral as fully and
completely as though the Lender were the absolute
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owner thereof for all purposes, and do, at the Lender's option and the
Borrower's expense, at any time, or from time to time, all acts and
things which the Lender deems necessary to protect, preserve or
realize upon the Collateral and the Lender's security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as the Borrower might do.
11.2. PERFORMANCE BY LENDER OF BORROWER'S OBLIGATIONS. If the Borrower
fails to perform or comply with any of its agreements contained herein, the
Lender, at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such agreement.
11.3 BORROWER'S REIMBURSEMENT OBLIGATION. The expenses of the Lender
incurred in connection with actions undertaken as provided in this Section,
together with interest thereon at a rate equal to the rate per annum at
which interest would then be payable on past due ABR Loans under the Credit
Agreement, from the date of payment by the Lender to the date reimbursed by
the Borrower, shall be payable by the Borrower to the Lender on demand.
11.4. RATIFICATION; POWER COUPLED WITH AN INTEREST. The Borrower
hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof in accordance with the terms of this Agreement. All
powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this Agreement is terminated and
the security interests created hereby are released.
12. DUTY OF THE LENDER. The Lender's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to use reasonable care in the
custody and preservation of such Collateral. Neither the Lender, nor any of its
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Borrower or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Lender hereunder are solely to protect the Lender's
interests in the Collateral and shall not impose any duty upon the Lender to
exercise any such powers. The Lender shall be accountable only for amounts that
its actually receives as a result of the exercise of such powers, and neither it
nor any of its officers, directors, employees or agents shall be responsible to
the Borrower for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
13. EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of the
Code, the Borrower authorizes the Lender to file financing statements with
respect to the Collateral without the signature of the Borrower in such form and
in such filing offices as the Lender reasonably determines appropriate to
perfect the security interests of the Lender under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
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14. NOTICES. All notices, requests and demands to or upon the Lender or the
Borrower hereunder shall be effected in the manner provided for in subsection
10.2 of the Credit Agreement.
15. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
16. Amendments in Writing; No Waiver; Cumulative Remedies.
-----------------------------------------------------
16.1 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by the Borrower and the Lender, provided
that any provision of this Agreement imposing obligations on the Borrower
may be waived by the Lender in a written instrument executed by the Lender.
16.2 NO WAIVER BY COURSE OF CONDUCT. The Lender shall not by any act
(except by a written instrument pursuant to subsection 16.1), delay,
indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or in any breach of
any of the terms and conditions hereof. No failure to exercise, nor any
delay in exercising, on the part of the Lender any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Lender of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy
which the Lender would otherwise have on any future occasion.
16.3 REMEDIES CUMULATIVE. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive
of any other rights or remedies provided by law.
17. SECTION HEADINGS. The Section and subsection headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of the Borrower and shall inure to the benefit of the
Lender and its successors and assigns.
19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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20. RELEASE OF COLLATERAL AND TERMINATION. The Lender shall release the
Collateral from the Lien created hereby, and this Agreement and all obligations
of the Lender and the Borrower hereunder shall terminate on the Termination
Date.
IN WITNESS WHEREOF, the undersigned has caused this Security Agreement to
be duly executed and delivered as of the date first above written.
SIGHT RESOURCE CORPORATION
By:
-----------------------
Xxxx XxxXxxxxx
Vice President, Finance and
Administration
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Schedule 1
----------
COPYRIGHTS AND COPYRIGHT LICENSES
None.
20
Schedule 2
----------
PATENTS AND PATENT LICENSES
None.
21
Schedule 3
----------
TRADEMARKS AND TRADEMARK LICENSES
Xxxx Jurisdiction Number Date Issued or Filed
---- ------------ ------ --------------------
Sight Resource USA Ser. No. 74/730,677 08/19/95
22
Schedule 4
----------
Page 1 of 2
-----------
INVENTORY AND EQUIPMENT
SIGHT RESOURCE CORPORATION
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Massachusetts Eye and Ear Infirmary
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxx Eye Associates
000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
The R.I. Eye Institute
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Allegheny University
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
RK Care Associates
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
St. Xxxxxx Eye Center
0000 Xxxx Xxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
International EyeCare
000 Xxxxxxxx, Xxxxx X
XxXxxxx, XX 00000
International EyeCare
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
23
Schedule 4
----------
Page 2 of 2
-----------
Xxxxx Clinic - North
0 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Advanced Eye Care
000 X. Xxxxxxxxx, Xxxxx X
Xxxx Xxxxx, XX 00000
Cambridge Eye Associates, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
