EXHIBIT 10.9.2
SECURITY AGREEMENT
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SECURITY AGREEMENT (the "Agreement"), made this 4th day of
October, 1996, by and between AMERICAN ELECTROMEDICS CORP., a
Delaware corporation, with a principal place of business at 00
Xxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000 (the "Debtor"), and
CITIZENS BANK NEW HAMPSHIRE, a guaranty savings bank organized
under the laws of the State of New Hampshire with an address of
Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx 00000(xxx "Secured
Party").
WITNESSETH:
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WHEREAS, pursuant to a Loan Agreement of even date (the
"Loan Agreement"), Secured Party has granted to Debtor certain
credit facilities including a revolving line of credit loan in
the principal amount of up to Four Hundred Thousand Dollars
($400,000.00) (the "Revolving Line of Credit Loan"), and a term
loan in the principal amount of Five Hundred Thousand Dollars
($500,000.00) (the "Term Loan") (collectively, the Revolving Line
of Credit Loan and the Term Loan are sometimes hereinafter
referred to as the "Loan"), all as set forth and described in the
Loan Agreement; and
WHEREAS, the obligation of the Secured Party to make the
Loan to the Debtor is subject to the condition, among others,
that the Debtor shall execute and deliver this Agreement and
grant the security interests hereinafter described. Terms not
otherwise defined herein shall have the meanings ascribed to them
in the Loan Agreement.
NOW, THEREFORE, in consideration of the willingness of the
Secured Party to make the Loan to the Debtor and for other good
and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. Security Interest. As security for the Secured
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Obligations described in Section 2 hereof, Debtor hereby grants
to the Secured Party a first priority security interest in and
lien on all of the property and assets of each Debtor, including,
but not limited to the property of the types described below
(hereinafter referred to collectively as the "Collateral"):
(a) All equipment, including machinery, motor
vehicles, office equipment, furniture, fixtures, along with
all other parts, tools, trade-ins, repairs, accessories,
accessions, modifications, and replacements, whether now
owned or subsequently acquired, constructed, or attached or
added to, or placed in, the foregoing (collectively, the
"Equipment");
(b) All inventory, wherever located, including goods,
merchandise and other personal property, held for sale or
lease or furnished or to be furnished under a contract of
service, or constituting raw materials, work in process or
materials used or consumed in the Debtor's business, or
consigned to others or held by others for return to the
Debtor, whether now owned or subsequently acquired or
manufactured and wherever located (collectively, the
"Inventory");
(c) All accounts receivable, including, without
limitation, accounts, contracts, contract rights, chattel
paper, instruments, rents, deposits, general intangibles,
and any other obligations of any kind whether now existing
or hereafter arising out of or in connection with the sale
or lease of goods or the rendering of services, and all
rights now or hereafter existing in and to all security
agreements, notes, leases, licenses, franchises, supply
agreements, and other contracts securing or otherwise
relating to any such accounts, contracts, contract rights,
chattel paper, instruments, rents, deposits, general
intangibles, or obligations (any and all such accounts,
contracts, contract rights, chattel paper, instruments,
rents, deposits, general intangibles, and obligations being
the "Receivables", and any and all such security agreements,
notes, leases, licenses, franchises, supply agreements, and
other contracts being the "Related Contracts");
(d) All general intangibles, including, but not
limited to, corporate names, trade names, trademarks, trade
secrets, patents, proprietary rights, intellectual property,
books and records, customer lists, blue prints and plans,
computer programs, tapes and related electronic data,
processing software, and all corporate ledgers;
(e) Any and all additions, accessions, substitutions
or replacements to or for any of the foregoing;
(f) Any and all products and proceeds of any or all of
the foregoing, including, without limitation, cash, cash
equivalents, tax refunds and the proceeds of insurance
policies providing coverage against the loss or destruction
of or damage to any of the Collateral, or any indemnity,
warranty, or guarantee payable by reason of loss or damage
to or otherwise with respect to any of the Collateral
(whether or not the Secured Party is the loss payee
thereof);
(g) All of the Debtor's after-acquired property of the
kinds and types described in paragraphs (a) (f) herein;
(h) All records and data relating to any of the
property described above, whether in the form of a writing,
photograph, microfilm, microfiche, or electronic media,
together with all of the Debtor's right, title, and interest
in and to all computer software required to utilize, create,
maintain and process any of such records or data or
electronic media; and
also in (1) all checks, money, securities, bank accounts, deposit
accounts, and other accounts in the possession of or held by the
Secured Party whether in the name of the Debtor or in the name of
the Secured Party, and (2) all other property given by the Debtor
to the Secured Party pursuant to this Agreement. Additionally,
Debtor shall deliver to Secured Party assignment(s) of all United
States registered trademark(s) of Debtor now or hereafter
obtained. Upon an Event of Default hereunder and in connection
with disposition of the Collateral, the Secured Party or its
assignee may file such assignment(s) with the United States
Patent and Trademark Office, pursuant to an exercise of its
security interest hereunder, to effect a transfer of said
trademark(s). Prior to such time as Secured Party is entitled to
exercise its rights hereunder, the Secured Party shall hold all
assignments of trademarks hereunder in escrow.
2. Secured Obligations. The security interest hereby
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granted shall secure the following (the "Secured Obligations"):
(a) The Debtor's repayment of the principal amount of
up to Nine Hundred Thousand Dollars ($900,000.00), together
with interest, late charges, and any other applicable
charges, to the Secured Party pursuant to the Loan;
(b) The Debtor's payment or performance of its
obligations under the Loan Agreement and under the other
Loan Documents (as defined, described and identified in the
Loan Agreement, hereinafter the "Loan Documents"), as the
same may be amended, modified, extended, renewed, replaced
or restated;
(c) The payment of all other sums with interest and
charges thereon advanced in accordance herewith to protect
the validity, security, and priority of this Agreement, the
Loan Agreement, or the Loan Documents; and
(d) Any and all other indebtedness of Debtor to
Secured Party of every kind and description, direct or
indirect, absolute or contingent, due or to become due,
regardless of how they arose or were acquired, now existing
or hereafter arising.
3. Warranties and Representations of the Debtor. Debtor
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hereby makes the following representations and warranties which
shall survive the execution and delivery of this Agreement and
shall be continuing representations and warranties as long as any
Secured Obligation remains outstanding:
(a) All representations and warranties made in the
Loan Agreement and the Loan Documents relating to the Debtor
and the Collateral are true, accurate and complete in all
material respects;
(b) The Debtor's principal place of business is
located at the address first set forth above; the Debtor's
executive offices and the office where its books and records
are kept and are to be kept concerning the Receivables,
Related Contracts, and other Collateral are at the aforesaid
address; and the Debtor has no other places of business
except those set forth on Schedule I hereto;
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(c) The Debtor conducts business only under and
through the corporate, business and trade names first set
forth above.
(d) No material authorization, approval or other
action by, and no notice to or filing with, any governmental
authority or other person is required either (i) for the
grant by the Debtor of the security interests granted hereby
or for the execution, delivery or performance of this
Agreement by the Debtor, or (ii) for the perfection of or
the exercise by the Secured Party of its respective rights
and remedies hereunder, except the filing of financing
statements;
(e) The Debtor has good and marketable title to all of
the Collateral pledged by it hereunder, free and clear of
any liens, security interests, encumbrances or interests or
claims of any other person or entity, except those set forth
on Schedule II hereto, and there are no sums owed with
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respect to the Collateral other than as disclosed on the
Debtor's financial statements delivered to the Secured
Party;
(f) Upon the filing of UCC-1 financing statements
being delivered at or prior to the execution hereof, the
Secured Party will have a valid, perfected first security
interest in all of the Collateral which may be perfected by
filing of financing statements.;
(g) The Debtor has not performed any acts which might
prevent the Secured Party from enforcing any of the material
terms and conditions of this Agreement or which would limit
any of them in any such enforcement;
(h) Schedule III attached hereto sets forth the
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description and location of all Collateral not located at
the Debtor's principal place of business, together with a
list of the record owners of and record holders of liens
against the real estate on which such Collateral is located;
and
(i) No effective financing statements or other similar
instrument in effect covering all or any part of the
Collateral is on file in any recording office, except as may
have been filed in favor of Secured Party relating to this
Agreement.
4. Affirmative Covenants of the Debtor.
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(a) The Debtor shall promptly notify and provide the
Secured Party with a complete description of the opening of
any new places of business, the closing of any existing
places of business, the conduct of business under any names
or through any entities other than those set forth herein,
the relocation of any of the Collateral to any new place of
business or any other act which would affect the financing
statements filed by the Secured Party;
(b) The Debtor shall continuously take all steps that
are necessary or prudent to protect the security interests
of the Secured Party in the Collateral;
(c) The Debtor shall defend the Collateral against the
claims and demands of all persons;
(d) The Debtor shall deliver and pledge to the Secured
Party, endorsed or accompanied by instruments of assignment
or transfer satisfactory to the Secured Party, any
instruments, documents, and chattel paper which the Secured
Party may reasonably specify;
(e) The Debtor shall comply, in all material respects,
with all governmental regulations applicable to the
Collateral or any part thereof or to the operation of the
Debtor's business; provided, however, that the Debtor may
contest any governmental regulation in any reasonable manner
which shall not in the reasonable opinion of the Secured
Party adversely affect the Secured Party's rights or the
first priority of its security interest in the Collateral;
(f) The Debtor shall pay promptly when due, all taxes,
assessments and governmental charges or levies imposed upon
the Collateral or in respect of its income or profits
therefrom, as well as all claims of any kind, except that no
such charge need be paid if (i) the validity thereof is
being contested in good faith by appropriate proceedings,
(ii) such proceedings do not involve any danger of the sale,
forfeiture or loss of any of the Collateral or any interest
therein; and (iii) such charge is adequately reserved
against in accordance with the generally accepted accounting
principles;
(g) The Debtor shall cause the Equipment to be
maintained and preserved in the same condition, repair and
working order as when new, and shall make all repairs,
replacements, additions, and other improvements necessary to
maintain the Equipment in such good condition;
(h) The Debtor shall maintain Inventory sufficient to
meet the needs of its business;
(i) The Debtor shall preserve all beneficial Related
Contracts;
(j) The Debtor shall take all commercially reasonable
steps necessary to collect the Receivables;
(k) The Debtor shall assure that (i) no Receivable is
or shall be subject to any defense, offset, counterclaim,
discount, or allowance, (ii) no agreement under which any
deduction, discount, credit or allowance of any kind may be
granted or allowed shall have been or shall thereafter be
made by Debtor with any account party without the consent of
Secured Party, (iii) all statements made and all unpaid
balances appearing in the invoices, documents, agreements
relating to each Receivable are and shall be true, genuine,
and correct in all respects, and (iv) no Receivable shall be
converted to a note or other instrument unless the same
shall be delivered to the possession of the Secured Party
within ten (10) days of the date of execution of such note
or instrument;
(l) The Debtor shall, with respect to any Collateral
which consists of trucks, automobiles, or other motor
vehicles, or any other Collateral required to be titled,
deliver all titles thereto to the Secured Party to be held
by the Secured Party and Debtor shall make, execute, and
deliver any and all applications, and take such other action
to assure that the Secured Party is listed of record as the
first priority and sole lienholder on all title
certificates;
(m) Debtor shall keep accurate and complete records
listing and describing the Collateral, and when requested by
Secured Party, Debtor shall give Secured Party a certificate
listing and describing the Collateral and setting forth the
total value of the Inventory, the total value of the
Equipment, the amount of the Receivables designating how
many days the Receivables are from the date of invoice, the
face value of any instruments, and any other information
Secured Party may request. Secured Party shall have the
right at any time to inspect the Collateral and to audit and
make copies of any records or other writings which relate to
the Collateral or the general financial condition of Debtor.
Secured Party may remove such records and writings for the
purpose of having copies made thereof;
(n) The Debtor shall advise the Secured Party
promptly, in reasonable detail, (i) of any lien, security
interest, encumbrance, or claim made or asserted against any
of the Collateral, (ii) of any material change, substantial
loss or depreciation in the composition of the Collateral,
and (iii) of the occurrence of any other material adverse
effect on the aggregate value, enforceability or
collectibility of the Collateral or on the security
interests created hereunder;
(o) The Debtor shall give, execute, deliver and file
or record in the proper governmental offices, any
instrument, paper or document, including, but not limited
to, one or more financing statements under the Uniform
Commercial Code, reasonably satisfactory to the Secured
Party, or take any action which the Secured Party may deem
necessary or desirable in order to create, preserve,
perfect, extend, continue, modify, terminate or otherwise
effect any security interest granted pursuant hereto, or to
enable the Secured Party to exercise or enforce any of its
rights hereunder; and
(p) The Debtor shall keep, and stamp or otherwise
xxxx, any of its documents, instruments and chattel paper
and its books and records relating to any of the Collateral
in such manner as the Secured Party may reasonably require.
5. Covenants of the Debtor. Except as otherwise provided
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in the Loan Agreement or in this Agreement, without the prior
written consent of the Secured Party, the Debtor shall not:
(a) Transfer, sell or assign any of the Collateral
other than in the ordinary course of business;
(b) Allow or permit any other security interest or
lien to attach to any of the Collateral;
(c) File, authorize, or permit to be filed in any
jurisdiction any financing statement relating to any of the
Collateral unless the Secured Party is named as sole secured
party;
(d) Permit any of the Collateral to be levied upon
under any legal process;
(e) Permit anything to be done that may materially
impair the value of any of the Collateral or the security
therein intended to be afforded hereby; or
(f) Use the Collateral in violation of any law or in
any manner inconsistent with any policy of insurance
thereon.
6. Fixtures. It is the intention of the parties hereto
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that none of the Collateral shall become fixtures. Without
limiting the generality of the foregoing, the Debtor will, if
requested by the Secured Party, obtain waivers of lien, in form
satisfactory to the Secured Party, from each mortgagee or lessor
of real property (other than the Secured Party) on which any of
the Collateral is or is to be located.
7. Insurance. Debtor shall, at its own expense, maintain
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insurance covering the Collateral against such risks, with such
insurers, in such form, and in such amounts as shall from time to
time be required by Secured Party, but in any event, in such
amounts and with such coverage as is customary in Debtor's type
of business. All insurance policies shall be written so as to be
payable in the event of loss to Secured Party and shall provide
for thirty (30) days' written notice to Secured Party of
cancellation or modification. At the request of Secured Party,
all insurance policies shall be furnished to and held by Secured
Party. Debtor hereby assigns to Secured Party return premiums,
dividends and other amounts which may be or become due upon
cancellation of any such policies for any reason whatsoever and
directs the insurers to pay Secured Party any sums so due.
Secured Party is hereby appointed as attorney irrevocable to
collect return premiums, dividends and other amounts due on any
insurance policy and the proceeds of such insurance, to settle
any claims with the insurers in the event of loss or damage, to
endorse settlement drafts and, upon the occurrence of an Event of
Default (as defined hereinbelow), to cancel, assign, or surrender
any insurance policies. If, while any Secured Obligations are
outstanding, any return premiums, dividends, other amounts or
proceeds are paid to Secured Party under such policies, Secured
Party may, at Secured Party's option, take either or both of the
following actions: (i) apply such return premiums, dividends,
other amounts and proceeds in whole or in part to the payment or
satisfaction of any of the Secured Obligations in whatever order
Secured Party determines; or (ii) pay over such return premiums,
dividends, other amounts and proceeds in whole or in part to
Debtor for the purpose of repairing or replacing the Collateral
destroyed or damaged, any return premiums, dividends, other
amounts and proceeds so paid over by Secured Party to be secured
by this Agreement.
8. Receivables. Debtor agrees that Secured Party may
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communicate with account debtors in order to verify the
existence, amount, and terms of any Receivables. Secured Party
may notify account debtors of the security interests established
herein and require that payments on Receivables be made directly
to Secured Party, and upon the request of Secured Party, Debtor
shall notify account debtors and indicate on all xxxxxxxx that
payments and returns are to be made directly to Secured Party.
In furtherance of the foregoing, Debtor hereby appoints Secured
Party attorney irrevocable with full power to collect,
compromise, endorse, sell, or otherwise deal with the Receivables
or proceeds thereof and to perform the terms of any contract in
order to create Receivables in Secured Party's name or in the
name of Debtor. This Agreement may be, but need not be,
supplemented by separate assignments of Receivables and contract
rights and, if such assignments are given, the rights and
security interests given thereby shall be in addition to and not
in limitation of the rights and security interests granted by
this Agreement.
9. Events of Default. The following events shall be
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deemed "Events of Default" hereunder:
(a) An Event of Default under the Loan Agreement or
any of the Loan Documents;
(b) Any representation or warranty or statement of
fact made to Secured Party at any time by Debtor is false or
misleading or becomes false or misleading in any material
respect;
(c) Debtor fails to observe or perform any covenant,
warranty, or agreement required to be observed or performed
by it under this Agreement;
(d) Debtor shall be in default under any obligation
undertaken by Debtor which default has a material adverse
effect on the financial condition of Debtor or on the value
of the Collateral;
(e) Uninsured loss, theft, damage, or destruction of
any substantial portion of any of the Collateral; or (f)
Any Debtor or any guarantor of any of the Secured
Obligations is or becomes insolvent or is involved in any
financial difficulty as evidenced by (i) an assignment,
composition, or similar device for the benefit of creditors,
(ii) general failure to pay debts when due, (iii) attachment
or receivership of assets not dissolved within thirty (30)
days, (iv)the appointment of a custodian, trustee, or
receiver for a substantial portion of any of their
respective properties, (v) the liquidation or sale of all or
substantially all of their respective properties, (vi) the
filing by any Debtor or any guarantor of a petition under
any Chapter of the United States Bankruptcy Code or the
institution of any other proceeding under any law relating
to bankruptcy, bankruptcy reorganization, insolvency or
relief of Debtors, or (vii) the filing against any Debtor or
any guarantor of an involuntary petition under any Chapter
of the United States Bankruptcy Code or the institution of
any other proceeding under any law relating to bankruptcy,
bankruptcy reorganization, insolvency or relief of debtors
where such proceeding is not dismissed within sixty (60)
days from the date on which it is filed or instituted.
10. Rights and Remedies of Secured Party on Default. Upon
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the occurrence of any Event of Default, Secured Party shall have,
by way of example and not of limitation, the following rights and
remedies:
(a) Secured Party may declare the Secured Obligations,
or any of them, to be immediately due and payable without
presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived;
(b) In addition to all other rights and remedies
contained in this Agreement, the Loan Agreement, and in the
Loan Documents, Secured Party may exercise the rights and
remedies accorded Secured Party by the Uniform Commercial
Code or by any other applicable law, all of which rights and
remedies shall be cumulative and non-exclusive to the extent
permitted by law;
(c) Secured Party shall have the right to enter and/or
remain upon the Premises of Debtor, or any other place or
places where any of the Collateral is located and kept,
without any obligation to pay rent to Debtor or others, and
remove Collateral therefrom to the premises of the Secured
Party or any agent of Secured Party for such time as Secured
Party may desire in order to maintain, collect, sell and/or
prepare the Collateral for sale, liquidation or collection;
(d) Secured Party may require the Debtor at Debtor's
cost to assemble the Collateral and make it available to
Secured Party at a place designated by Secured Party;
(e) Secured Party may take possession of and use and
operate the Collateral in the manner and for the purposes as
set forth in Section 11 hereinbelow;
(f) Secured Party may sell, lease, or otherwise
dispose of the Collateral as set forth in Section 12
hereinbelow;
(g) Secured Party shall have the right to set-off,
without notice to the Debtor, any and all deposits or other
sums at any time or times credited or due from Secured Party
to Debtor, whether in a special account or other account or
represented by a certificate of deposit (whether or not
matured); which deposit and other sums shall at all times
constitute additional security for the Secured Obligations;
(h) Secured Party may perform any warranty, covenant
or agreement which Debtor has failed to perform under this
Agreement; and
(i) Secured Party may take any other action which
Secured Party deems necessary or desirable to protect the
Collateral or the security interests granted herein.
11. Rights of Secured Party to Use and Operate Collateral.
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Upon the occurrence of any Event of Default, but subject to the
provisions of the Uniform Commercial Code or other applicable
law, the Secured Party shall have the right and power to take
possession of all or any part of the Collateral, and to exclude
the Debtor and all persons claiming under the Debtor wholly or
partly therefrom, and thereafter to hold, store, and/or use,
operate, manage and control the same. Upon any such taking of
possession, the Secured Party may, from time to time, at the
expense of the Debtor, make all such repairs, replacements,
alterations, additions and improvements to and of the Collateral
as the Secured Party may reasonably deem proper. In any such
case, subject as aforesaid, the Secured Party shall have the
right to manage and control the Collateral and to carry on the
business and to exercise all rights and powers of the Debtor in
respect thereto as the Secured Party shall deem best, including
the right to enter into any and all such agreements with respect
to the leasing and/or operation of the Collateral or any part
thereof as the Secured Party may see fit; and the Secured Party
shall be entitled to collect and receive all rents, issues,
profits, fees, revenues and other income of the same and every
part thereof. Such rents, issues, profits, fees, revenues and
other income shall be applied to pay the expenses of holding and
operating the Collateral and of conducting the business thereof,
and of all maintenance, repairs, replacements, alterations,
additions and repairs, replacements, alterations, additions and
improvements, and to make all payments which the Secured Party
may be required or may elect to make, if any, for taxes,
assessments, insurance and other charges upon the Collateral or
any part thereof, and all other payments which the Secured Party
may be required or authorized to make under any provision of this
Agreement (including reasonable legal costs and attorneys' fees).
The remainder of such rents, issues, profits, fees, revenues and
other income shall be applied to the payment of the Secured
Obligations in such order of priority as the Secured Party may
determine in its sole discretion and any surplus shall be
returned to the Debtor. Without limiting the generality of the
foregoing, the Secured Party shall have the right to apply for
and have a receiver appointed by a court of competent
jurisdiction in any action taken by the Secured Party to enforce
their rights and remedies hereunder in order to manage, protect
and preserve the Collateral and continue the operation of the
business of the Debtor and to collect all revenues and profits
thereof and apply the same to the payment of all expenses and
other charges of such receivership including the compensation of
the receiver and to the payment of the Secured Obligations as
aforesaid until a sale or other disposition of such Collateral
shall be finally made and consummated.
12. Rights of Secured Party to Sell Collateral. Upon (10)
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days prior written notice by registered or certified mail by
Secured Party to Debtor at the address of the Debtor set forth
above (or at such other address or addresses as the Debtor shall
specify in writing by like notice to the Secured Party) of the
time and place of any intended disposition of Collateral, then
Secured Party shall have the right and power to sell, assign,
lease, or otherwise dispose of the Collateral from any business
premises of the Debtor, either at public auction or private sale,
by liquidation sale or other disposition, or as if the sale was
being made in the ordinary course of Debtor's business, with or
without notice to the public that the said sale or disposition is
for the benefit of the Secured Party; provided, however, that if
the Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market,
then Secured Party shall have the right and power to dispose of
the Collateral without prior notice to Debtor and Debtor
expressly waives any rights to notice under such circumstances.
The notices described above shall be deemed to meet any
requirement hereunder or under any applicable law (including the
Uniform Commercial Code) that reasonable notification be given of
the time and place of such sale or other disposition. After
deducting all costs and expenses of collection, storage, custody,
sale or other disposition and delivery (including reasonable
legal costs and attorneys' fees) and all other charges against
the Collateral, the residue of the proceeds of any such sale or
disposition shall be applied to the payment of the Secured
Obligations in such order of priority as the Secured Party may
determine in its sole discretion and any surplus shall be
returned to the Debtor. In the event the proceeds of any sale,
lease or other disposition of the Collateral hereunder are
insufficient to pay all of the Secured Obligations in full, the
Debtor will be liable for the deficiency, together with interest
thereon at the maximum rate provided in the Loan Agreement and
the cost and expenses of collection of such deficiency,
including, without limitation, reasonable fees of attorneys,
experts, and agents, expenses and disbursements.
13. Attorney-in-Fact. The Secured Party is hereby
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appointed the attorney-in-fact, with full power of substitution,
of the Debtor for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any
instruments (including, without limitation, financing or
continuation statements, conveyances, assignments, and transfers)
which the Secured Party may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-
fact is coupled with an interest and is irrevocable. The Debtor
shall indemnify and hold harmless the Secured Party from and
against any liability or damage which it may incur in the
exercise and performance, in good faith, of the Secured Party's
powers and duties as such attorney-in-fact.
14. Waiver, etc. The Debtor hereby waives presentment,
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demand, notice, protest and, except as is otherwise provided
herein, all other demands and notices in connection with this
Agreement or the enforcement of the Secured Party's rights
hereunder or in connection with any Secured Obligations or any
Collateral. The Debtor further consents to and waives notice of
the granting of renewals, extensions of time for payment or other
indulgences to the Debtor or to any account debtor in respect of
any Receivable, substitution, release or surrender of any
Collateral, addition or release of persons primarily or
secondarily liable on any Secured Obligation or on any Receivable
or other Collateral, or the acceptance of partial payments on any
Secured Obligation or on any account receivable or other
Collateral and/or the settlement or compromise thereof. No delay
or omission on the part of the Secured Party in exercising any
right hereunder shall operate as a waiver of such right or of any
other right hereunder. Any waiver of any such right on any one
occasion shall not be construed as a bar to or waiver of any such
right on any such future occasion.
15. Termination; Assignments, etc. This Agreement and the
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security interest in the Collateral created hereby shall
terminate when all of the Secured Obligations have been paid,
performed, and finally discharged in full. In the event of a
sale or assignment by the Secured Party of all or any of the
Secured Obligations held by it, such Secured Party may assign or
transfer its rights and interests under this Agreement in whole
or in part to the purchaser or purchasers of such Secured
Obligations, whereupon such purchaser or purchasers shall become
vested with all of the powers and rights of such Secured Party
hereunder, and such Secured Party shall thereafter be forever
released and fully discharged from any liability or
responsibility hereunder, with respect to the rights and
interests so assigned.
16. Notices. All notices, requests, demands and other
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communications provided for hereunder shall be in writing
(including telegraphic communication) and shall be either mailed
by certified mail, return receipt requested, or delivered by
overnight courier service, to the applicable party at the
addresses first set forth above, or, as to each party, at such
other address as shall be designated by such parties in a written
notice to the other party complying as to delivery with the terms
of this Section. All such notices, requests, demands and other
communication shall be effective on the date of first attempted
delivery.
17. Miscellaneous.
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(a) The powers conferred on the Secured Party
hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for monies
actually received by it hereunder, the Secured Party shall
not have any duty as to any Collateral or as to the taking
of any necessary steps to preserve any right of it or of the
Debtor against other parties pertaining to any Collateral;
(b) No provision hereof shall be amended except by a
writing signed by the Secured Party and the Debtor;
(c) Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the
extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof;
(d) This Agreement shall be binding upon and shall
inure to the benefit of the successors and assigns of the
Secured Party and the Debtor;
(e) No delay, failure to enforce, or single or partial
exercise on the part of the Secured Party in connection with
any of its rights hereunder shall constitute an estoppel or
waiver thereof, or preclude other or further exercises or
enforcement thereof and no waiver of any default hereunder
shall be a waiver of any subsequent default; and
(f) This Agreement shall be governed as to its
validity, interpretation and effect in accordance with the
laws of the State of New Hampshire.
IN WITNESS WHEREOF, the undersigned have set their hands and
seals to this Agreement all as of the day and year first above
written.
DEBTOR
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AMERICAN ELECTROMEDICS CORP.
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx,
------------------------ ----------------------------
Witness Chief Financial Officer
----------------------------------
Signature and Title/Duly Authorized
SECURED PARTY
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CITIZENS BANK NEW HAMPSHIRE
/s/ Xxxxxxxx X. Xxxxxxx By: /s/Xxxxxxx X. Xxxxxxxx, Asst. VP
------------------------ ---------------------------------
Signature and Title/Duly Authorized
SECURITY AGREEMENT
SCHEDULE I
-----------
List of Other Business Locations
-------------------------------------
SECURITY AGREEMENT
SCHEDULE II
------------------
List of Other Liens and Encumbrances, etc.
----------------------------------------------------
NONE
SECURITY AGREEMENT
SCHEDULE III
-----------------
Other Collateral Location
-----------------------------
