LOAN AGREEMENT
LOAN AGREEMENT dated as of March 31, 1998 entered into by and
between Lernout & Hauspie Speech Products N.V., a Belgian corporation
("Lender") and VASCO Data Security International, Inc., a Delaware
corporation ("Borrower").
W I T N E S S E T H:
WHEREAS, Borrower has requested that Lender make available to
Borrower a line of credit in the amount of up to $3,000,000 to
finance Borrower's working capital needs;
WHEREAS, Lender is willing to do so, but only on the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and Lender agree as follows.
1. CERTAIN DEFINITIONS. As used herein the terms set forth on
Schedule I hereto shall have the meanings set forth thereon.
2. THE LOAN.
(a) At any time after the date hereof through April 30, 1998
(the "Commitment Period"), Lender shall, at Borrower's request, make
a loan to Borrower (the "Loan"), subject to the terms and conditions
contained in this Agreement and in an aggregate amount not to exceed
$3,000,000. Once repaid, the Loan may not be reborrowed. The Loan
shall be due and payable as set forth in the Note.
(b) The Loan shall be evidenced by a Note in the form of
Exhibit A hereto and shall be secured by a security interest in all
of the assets of Borrower pursuant to a Security Agrement in the form
of Exhibit B hereto. The Loan shall bear interest and be payable as
set forth in the Note.
(c) Proceeds of the Loan shall be used by Borrower to finance
Borrower's working capital needs.
(d) Borrower may request that Lender advance the Loan on not
less than fourteen (14) days' prior written notice to Lender, made
after the satisfaction of the conditions precedent set forth below.
The Lender shall make only one advance hereunder. Lender shall make
the Loan available to Borrower by wire transfer or otherwise as
Borrower requests in its notice to advance the Loan (provided that
Borrower shall reimburse Lender for any administrative expense (wire
transfer fees and the like) incurred by Lender in connection with
such advance methods, except for an advance by bank or certified
check).
3. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants to the Lender that:
(a) Organization and Qualification. The Borrower is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all
required corporate power and authority to own its property, to carry
on its business as presently conducted and to carry out the
transactions contemplated hereby.
(b) Charter. The Borrower has delivered to counsel to the
Lender true and complete copies of its Certificate of Incorporation
or equivalent document as amended from time to time (the "Charter")
and by-laws ("By-laws") as currently in effect.
(c) Capitalization. The authorized capital stock of the
Borrower consists of 75,000,000 shares of common stock, $.001 par
value ("Common Stock") of which 20,316,585 shares are validly issued
and outstanding, fully paid and non-assessable. Except as disclosed
in the Prospectus attached hereto as Exhibit C, (a) there are no
outstanding warrants, options, preemptive rights or other rights to
purchase or acquire, or any agreements providing for the issuance or
sale of (contingent or otherwise), or any commitments or claims of
any character relating to, any of the Borrower's capital stock or any
shares of stock or securities convertible into or exchangeable for
any such capital stock, and (b) there are no securities of the
Borrower convertible into or exchangeable for shares of capital stock
of the Borrower. Except as disclosed in the Prospectus attached
hereto as Exhibit C, there are no restrictions on the transfer of the
Borrower's capital stock, other than those imposed by applicable
federal and state securities laws.
(d) Authorization of Transaction. The execution, delivery and
performance of this Agreement have been duly authorized by all
necessary corporate or other action of the Borrower and it is the
valid and binding obligation of the Borrower, enforceable in
accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors. The
issuance of the Note pursuant to the terms of this Agreement is duly
and validly authorized, and no further approval or authority of the
shareholders or the directors of the Borrower or of any governmental
authority or agency will be required for the issuance and sale of the
Note as contemplated by this Agreement.
(e) Approvals; Compliance With Laws. The execution, delivery
and performance of this Agreement and the transactions contemplated
hereby (i) do not require any approval or consent of, or filing with,
any governmental agency or authority in the United States of America
or otherwise which has not been obtained and which is not in full
force and effect as of the date hereof, (ii) will not conflict with
or constitute a breach or violation of the Charter or By-laws of the
Borrower, and (iii) will not result in a violation of or any law or
regulation to which it is subject.
(f) Disclosure. Neither this Agreement, together with any
financial statement, schedule, exhibit, or other statement (written
or oral) pertaining to the Borrower, made, delivered or communicated
to the Lender by the Borrower or any representative thereof in
connection with this Agreement and the transactions related thereto,
contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which they
were made.
4. BORROWER'S AGREEMENTS. The Borrower agrees as follows:
(a) Borrower will notify Lender, at least thirty (30) days
prior to any such event, of any change in Borrower's exact legal
name, any change in its place of business or location as set forth in
the preamble to this Agreement, or its establishment of any new place
of business or location, or any change in Borrower's organizational
structure.
(b) The Borrower will deliver to the Lender until such time as
the Borrower becomes a reporting Borrower under the Exchange Act of
1934, as amended (the "Exchange Act"), such financial statements and
other information as the Borrower may provide to any other security
holder or lender to the Borrower; and (b) with reasonable promptness,
such other financial data related to the business, affairs and
financial condition of the Borrower and any subsidiaries as is
available to the Borrower and as from time to time the Lender may
reasonably request.
(c) Except as consented to by the Lender, the Borrower shall
not pay or set apart for payment to holders of capital stock, any
dividends, and the Borrower shall not redeem or purchase any shares
of capital stock.
(d) The Borrower may not amend the Charter or By-laws of the
Borrower in such a manner as may adversely affect the rights of the
Lender hereunder, the Note or any Common Stock to be issued in
connection herewith or therewith.
(e) The Borrower will permit representatives designated by the
Lender, at its expense, to visit and inspect any of the properties of
the Borrower (or any subsidiary), and to inspect and make extracts of
the books and records of the Borrower, and to discuss the affairs,
finances, and accounts of the Borrower with its officers, all to such
reasonable extent and at such reasonable times and intervals as the
representatives may reasonably request. If the Borrower determines
that such inspection might result in the disclosure of trade secrets
or other confidential information, the Borrower may require such
persons to sign nondisclosure agreements with respect thereto.
(f) The Borrower will maintain and cause each of its
subsidiaries now in existence or hereinafter acquired or created to
maintain its corporate existence in good standing and comply with all
applicable laws and regulations of the United States or of any state
or states thereof or of any political subdivisions thereof or of any
government authority, where failure to so comply would have a
material adverse effect on the Borrower and its subsidiaries, taken
as a whole; provided, however, that nothing herein shall prohibit the
Borrower from liquidating or dissolving any of its subsidiaries into
the Borrower or merging any of its subsidiaries with or into the
Borrower or any other Subsidiary.
(g) The Lenders shall have such registration rights with
respect to the shares of Common Stock as may be issuable upon
conversion of the Note, as are no less favorable than any
registration rights granted to any other securityholder of the
Borrower, whether now or hereafter existing.
5. CONVERSION.
(a) Conversion Right. Subject to and in compliance with the
provisions of this Section 5, all or any part of the principal amount
and unpaid interest outstanding under the Note may, at the option of
the holder thereof, be converted at any time or from time to time
into fully-paid and non-assessable shares of Common Stock of the
Borrower.
(b) Applicable Conversion Value. Subject to adjustment as
hereinafter provided, the number of shares of Common Stock into which
the Note may be converted shall be equal to (i) the aggregate amount
of principal and unpaid interest outstanding under the Note on the
Conversion Date (as defined below) divided by (ii) the average of the
high and low bid and ask prices for the Common Stock for the ten (10)
consecutive trading days immediately preceding March 12, 1998, or
$5.6813 per share.
(c) Adjustment for Dividends; Reclassification, etc. In case
at any time or from time to time after the date hereof, the holders
of Common Stock (or other capital stock of the Borrower) shall have
received, or (on or after the record date fixed for the determination
of shareholders eligible to receive) shall have become entitled to
receive, without payment therefor (i) other or additional stock or
other securities or property (including cash) by way of dividend or
(ii) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement, then and in each such case the holder of the Note, on
the conversion thereof as provided in this Section 5, shall be
entitled to receive the amount of stock and other securities and
property (including cash) which such holder would hold on the date of
such conversion if on the date hereof he had been the holder of
record of the number of shares of Common Stock issuable upon
conversion of the Note and had thereafter, during the period from the
date hereof to and including the date of such conversion, retained
such shares and all such other or additional stock and other
securities and property (including cash) receivable thereby as
aforesaid during such period, giving effect to all adjustments called
for during such period under this Section 5.
(d) Adjustment for Reorganization, Consolidation, Merger, etc.
In case at any time or from time to time, the Borrower shall (i)
effect a reorganization, (ii) consolidate with or merger into any
other person or entity, or (iii) transfer all or substantially all of
its properties or assets to any other person or entity under any plan
or arrangement contemplating the dissolution of the Borrower, then,
in each such case, the holder of the Note, on the conversion thereof
as provided in this Section 5 at any time after the consummation of
such reorganization, consolidation or merger or the effective date of
such dissolution, as the case may be, shall receive, in lieu of the
Common Stock issuable on such exercise prior to such consummation or
such effective date, the stock or other securities and property
(including cash) to which such holder would have been entitled upon
such consummation or in connection with such transaction, as the case
may be, if such holder had so converted its Note, immediately prior
thereto, all subject to further adjustment thereafter as provided
under this Section 5.
(e) Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any
transfer) referred to in paragraph (d) above, each Note shall
continue in full force and effect and the terms hereof shall be
applicable to the shares of stock and other securities and property
receivable on the conversion of the Note after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and
shall be binding upon the issuer of any such stock or other
securities, including, in the case of any such transfer, the person
or entity acquiring all or substantially all of the properties or
assets of the Borrower.
(f) Exercise of Conversion Privilege. To exercise its
conversion privilege, the holder of the Note shall surrender such
Note being converted to the Borrower at its principal office, and
shall give written notice to the Borrower at that office that such
holder elects to convert such Note, or a portion thereof. The date
when such written notice is received by the Borrower, together with
the Note being converted, shall be the "Conversion Date." As
promptly as practicable after the Conversion Date, the Borrower shall
issue and shall deliver to the holder of the Note being converted, or
on its written order, such certificate or certificates as it may
request for the number of shares of Common Stock, as applicable,
issuable upon the conversion of such Note in accordance with the
provisions of this Agreement.
(g) Reservation of Common Stock. The Borrower shall at all
times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the
conversion of the Note, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding Note and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding, the Borrower shall take such
corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be
sufficient for such purpose.
(h) No Dilution or Impairment. The Borrower will not, by
amendment of its Charter or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of the Note, but will
at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holders of shares
of Common Stock issuable upon conversion of the Note against dilution
or other impairment. Without limiting the generality of the
foregoing, the Borrower (a) will not increase the par value of any
shares of stock receivable on the conversion of the Note above the
amount payable therefor on such conversion, (b) will take all such
action as may be necessary or appropriate in order that the Borrower
may validly and legally issue fully paid and nonassessable shares of
stock on the conversion of all Note from time to time outstanding,
(c) will not transfer all or substantially all of its properties and
assets to any other person or entity, or consolidate with or merge
into any other person or entity or permit any such person or entity
to consolidate with or merge into the Borrower (if the Borrower is
not the surviving person), unless such other person or entity shall
expressly assume in writing and will be bound by all the terms of the
Note.
6. EVENTS OF DEFAULT; REMEDIES. Upon the occurrence and
during the continuance of an Event of Default (as defined on Schedule
I hereto), (a) the Borrower shall have no further right to request
the Loan hereunder, (b) the Loan shall bear interest at the Default
Rate of Interest, as defined in the Note, (c) the Lender may by
notice to Borrower accelerate the payment of the Loan and all other
obligations of Borrower hereunder and demand payment thereof; and (d)
Lender may proceed to enforce payment of any of the foregoing and
shall have and may exercise any and all rights under the Uniform
Commercial Code or which are afforded to Lender herein, in the
Security Agreement and other collateral documents executed in
connection herewith, or otherwise.
7. EXPENSES. Borrower agrees to pay Lender on demand any and
all reasonable out-of-pocket costs and expenses of any nature
(including without limitation reasonable attorneys' fees and
disbursements) which may be incurred by Lender in connection with
exercise of Lender's rights against the Borrower after an Event of
Default; any exercise of Lender's right of acceleration; any
enforcement, collection or other proceedings with respect to the
Loan; or any bankruptcy, insolvency or other similar proceedings of
the Borrower.
8. CONDITIONS PRECEDENT.
Borrower acknowledges and agrees that Lender will not make the
Loan hereunder, nor will Lender entertain any request from Borrower
for the Loan hereunder, unless and until all of the following
conditions have been satisfied and remain satisfied as of the date of
funding the Loan: (a) Representations and Warranties. Borrower's
representations and warranties contained herein shall be correct and
complete in all material respects;
(b) Covenants. Borrower shall be in compliance in all material
respects with all covenants and agreements contained herein;
(c) No Events of Default. There shall exist no Event of
Default or any event which, with the passage of time or the giving of
notice or both, would constitute an Event of Default; and
(d) Delivery of Documents. Borrower shall have delivered, or
caused to be delivered, to Lender such documents, including without
limitation the Note, the Security Agreement and UCC-1 financing
statements naming Lender as secured party, duly executed by the
Borrower, and in form and substance reasonably satisfactory to
Lender, as Lender shall reasonable request in its sole discretion.
9. MISCELLANEOUS PROVISIONS.
(a) Notices. Unless otherwise specified herein, all other
notices hereunder shall be in writing directed to the addresses shown
on the first page of this Agreement. Written notices and
communications shall be effective and shall be deemed received on the
day when delivered by hand or by facsimile transmission; on the next
business day, if by commercial overnight courier; and on the third
business day, if by registered or certified mail, postage prepaid.
(b) No Waiver. No failure to exercise and no delay in
exercising, on the part of Lender, any right or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or
the exercise of any other right or remedy. Waiver by Lender of any
right or remedy on any one occasion shall not be construed as a bar
to or waiver thereof or of any other right or remedy on any future
occasion. Lender's rights and remedies hereunder, under any agreement
or instrument supplemental hereto or under any other agreement or
instrument shall be cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided
by law.
(c) Assignment. This Agreement shall be binding upon and shall
inure to the benefit of Borrower and Lender and their respective
successors and assigns; PROVIDED THAT Borrower may not assign or
transfer any rights or obligations hereunder without Lender's prior
written consent.
(d) Governing Law; Jurisdiction. This Agreement shall be
governed by the laws of the Commonwealth of Massachusetts (other than
its laws relating to conflicts of laws).
Executed as an instrument under seal on the date set forth
above.
VASCO DATA SECURITY
INTERNATIONAL, INC.
By: ________________________________
Name: T. Xxxxxxx Xxxx
Title: CEO
LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.
By: ________________________________
Xxxxxx Xxxxxxx
Vice President Finance and Strategic
Planning
EXHIBIT A
CONVERTIBLE NOTE
$3,000,000.00 Boston, Massachusetts
April 1, 1998
FOR VALUE RECEIVED, the undersigned VASCO DATA SECURITY
INTERNATIONAL, INC., a Delaware corporation ("Maker"), hereby
promises to pay to the order of LERNOUT & HAUSPIE SPEECH PRODUCTS
N.V., a Belgian corporation, at its place of business at Xxxx-
Xxxxxxxxxxxxxx 0, 0000 Xxxxx, Xxxxxxx ("Lender"), the sum of THREE
MILLION DOLLARS ($3,000,000.00), or so much as may have been advanced
to Maker as provided in that certain Loan Agreement (the "Loan
Agreement") dated as of March 31, 1998 between Maker and Lender,
together with interest on the unpaid principal amount from time to
time outstanding prior to demand at a fixed rate per annum equal to
one percent (1%) over the Prime Rate in effect as of the date hereof.
Prior to the occurrence of an Event of Default, as defined in the
Loan Agreement, interest shall be payable quarterly on the first
business day of each of July and October. All outstanding principal
and interest shall be due and payable in full on January 4, 1999.
After the occurrence and during the continuance of an Event of
Default, (a) principal outstanding hereunder shall bear interest at a
fixed rate equal to the sum of the Prime Rate in effect as of the
date hereof plus four percent (4%) per annum (the "Default Rate of
Interest"), and (b) the Lender shall be entitled to accelerate all
outstanding principal and interest due hereunder and demand immediate
payment in full of the same.
Interest payable under this Note is subject to Belgian withholding
tax, at a rate of 15% as of the date hereof. Each payment of
interest hereunder shall be increased by an amount equal to one-half
of the withholding tax obligation of the Lender with respect to such
payment.
This Note is convertible at the option of the holder hereof into
shares of Common Stock of the Maker in the manner set forth in the
Loan Agreement.
Interest and fees shall be calculated on the basis of a 360-day year
times the actual number of days elapsed. "Prime Rate," as used
herein, shall mean for any day the highest "prime rate" published in
The Wall Street Journal under the heading "Money Rates" on such day
(or on the next day on which The Wall Street Journal is published).
In no event shall interest payable hereunder exceed the highest rate
permitted by applicable law. To the extent any interest received by
Lender exceeds the maximum amount permitted, such payment shall be
credited to principal, and any excess remaining after full payment of
principal shall be refunded to Maker. This Note evidences borrowings
under the Loan Agreement and is secured by and entitled to the
benefits of the provisions of the Loan Agreement and any other
instruments or documents executed in connection therewith. The
principal of this Note is subject to prepayment in full or in part at
any time without premium or penalty; provided, however, that Maker
shall give Lender at least five (5) business days prior written
notice of any prepayment to permit Lender to exercise its conversion
rights as provided in the Loan Agreement prior to such repayment.
Maker and all guarantors and endorsers hereby waive presentment,
demand, notice, protest, and all other demands and notices in
connection with the delivery, acceptance, performance and enforcement
of this Note, and assent to extensions of the time of payment or
forbearance or other indulgence without notice. No delay or omission
of Lender in exercising any right or remedy hereunder shall
constitute a waiver of any such right or remedy. Acceptance by
Lender of any payment after demand shall not be deemed a waiver of
such demand. A waiver on one occasion shall not operate as a bar to
or waiver of any such right or remedy on any future occasion.
Executed as an instrument under seal as of the date first above
written.
WITNESS: VASCO DATA SECURITY
INTERNATIONAL, INC.
By:
Name: T. Xxxxxxx Xxxx
Title: CEO
EXHIBIT B
SECURITY AGREEMENT
SECURITY AGREEMENT made by VASCO DATA SECURITY INTERNATIONAL,
INC. (the "Debtor") in favor of LERNOUT & HAUSPIE SPEECH PRODUCTS N.
V. (the "Secured Party"). In consideration of the agreement of
Secured Party to extend credit or other financial accommodations to
the Debtor, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Debtor
hereby agrees for the benefit of Secured Party as follows:
1. Grant of Security Interest. As collateral security for the
payment and performance when due of the Obligations (defined below),
the Debtor hereby collaterally assigns, mortgages, and pledges to
Secured Party, and hereby grants to Secured Party a security interest
in, all of the Debtor's right, title and interest in, to and under
the Collateral (defined below).
"Collateral" means all the Debtor's present and future right,
title and interest in and to any of the following property,
wherever located and whether now owned or hereafter acquired:
All of the Debtor's tangible and intangible personal property,
including without limitation, all inventory, equipment and other
goods, all accounts receivable, notes, drafts, acceptances,
instruments and documents, contract rights, chattel paper,
general intangibles, deposit accounts, books and records, and
all cash and non-cash proceeds of the foregoing in whatever form
received, including without limitation insurance proceeds;
provided, however, that Collateral shall not include patents or
other intellectual property. Any of the foregoing terms which
are specifically defined in the Uniform Commercial Code as in
effect in the Commonwealth of Massachusetts shall have the
meanings given therein.
"Obligations" means any and all payment and performance
obligations of the Debtor to Secured Party, now existing or
hereafter arising, direct or indirect, absolute or contingent,
due or to become due, liquidated or unliquidated, including
without limitation, Debtor's obligations to Secured Party under
that certain Loan Agreement dated as of the date hereof (the
"Loan Agreement"), and that certain $3,000,000 Convertible Note
executed in connection therewith.
2. Secured Party's Rights and Obligations. Debtor shall remain
liable under all accounts receivable, instruments and documents and
general intangibles. Secured Party shall not have any obligation or
liability under any accounts receivable, instruments and documents or
general intangibles by reason of this Security Agreement nor shall
Secured Party be required to perform the Debtor's obligations
pursuant thereto. At any time, Secured Party shall have the right to
verify accounts receivable constituting a portion of the Collateral
and Debtor agrees to cooperate with Secured Party in arranging for
such verification. After an Event of Default, Secured Party may
notify account debtors that the accounts receivable have been
assigned to Secured Party and that payments shall be made directly to
Secured Party. At the request of Secured Party at any time after an
Event of Default, the Debtor will so notify such account debtors.
Notwithstanding any such action, Secured Party shall have no
obligation to inquire as to the sufficiency of any payment received
by it or to take any action to collect or enforce the payment of any
account receivable.
3. Further Assurances. Debtor will join with Secured Party in
executing such UCC financing statements as Secured Party may request
and will pay the cost of filing the same in all public office where
filing is deemed necessary or desirable by Secured Party. At Secured
Party's request from time to time, the Debtor will execute and
deliver any and all such further instruments and documents and take
such further actions as Secured Party may reasonably deem desirable
in obtaining the full benefits of this Security Agreement. The
Debtor also hereby authorizes Secured Party to execute on behalf of
the Debtor and file UCC financing or continuation statements with
appropriate jurisdictions in order to perfect the security interests
granted herein.
4. Events of Default. The occurrence of any Event of Default as
defined in the Loan Agreement shall constitute an Event of Default
hereunder.
5. Remedies Upon Default. If a Event of Default occurs, Secured
Party may declare all Obligations secured hereby immediately due and
payable and shall have all of the rights and remedies of a secured
party under the Uniform Commercial Code as now in effect in the
Commonwealth of Massachusetts or under other applicable law. Without
limitation, Secured Party may notify Debtor's account or contract
debtors (or other obligors whose obligations to Debtor secure this
agreement) of Secured Party's security interest and that such account
or contract debtors are to make payments directly to Secured Party.
Secured Party may send this notice in Debtor's name or in Secured
Party's name, and at Secured Party's request Debtor will join in
Secured Party's notice, provide written confirmation of Secured
Party's security interest and request that payment be sent to Secured
Party. Secured Party may enforce this obligation by specific
performance. Secured Party may collect all amounts due on the
accounts and accounts receivable. Upon and after notification by
Secured Party to Debtor, Debtor shall hold any proceeds and
collections of any of the collateral in trust for Secured Party and
shall not commingle such proceeds or collections with any other of
Debtor's funds, and Debtor shall deliver all such proceeds to Secured
Party immediately upon Debtor's receipt thereof in the identical form
received and duly endorsed or assigned to Secured Party. At the
request of Secured Party, the Debtor shall cause the
Collateral, or such portion of the Collateral as Secured Party may
direct, to be assembled for Secured Party at such location
(including, without limitation, Debtor's business address) as Secured
Party may request. Secured Party will give to the Debtor reasonable
notice of the time and place of any public sale of Collateral or of
the time after which any private sale or other intended disposition
thereof is to be made. Such requirement of reasonable notice shall
be met if such notice is mailed postage prepaid to the address of the
Debtor set forth in this Agreement at least ten (10) days before the
time of the proposed sale or disposition. Any such sale may take
place from Debtor's location or such other location as Secured Party
may designate. Debtor shall remain liable for any deficiency in
payment of the Obligations after any such sale.
Debtor hereby irrevocably appoints Secured Party as its true and
lawful attorney-in-fact with full power of substitution to take such
actions in the name of the Debtor or Secured Party to carry out the
terms of this Agreement and to protect, enforce, preserve or perfect
Secured Party's rights hereunder. Such power of attorney is
irrevocable and shall be deemed to be coupled with an interest.
6. Miscellaneous. Expenses of enforcing Secured Party's rights
hereunder including, but not limited to, preparation for sale,
selling or the like and Secured Party's reasonable attorneys' fees
and other expenses shall be payable by Debtor and shall be secured
hereby. None of the terms or provisions of this Agreement may be
waived, altered, modified or amended except by an instrument in
writing, duly executed by Secured Party and Debtor. Secured Party's
rights and remedies hereunder or under any other agreement or
instrument shall be cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies
provided by law. This Agreement shall be binding on and inure to the
benefit of the respective successors and assigns of the Debtor and
Secured Party. This Agreement shall be governed by the laws
governing the Loan Agreement.
EXECUTED an instrument under seal as of March 31, 1998.
VASCO DATA SECURITY
INTERNATIONAL, INC.
By: _______________________________
Name: T. Xxxxxxx Xxxx
Title: CEO
UCC financing statements to be filed in:
__________________________________
__________________________________
EXHIBIT C
[PROSPECTUS]
SCHEDULE I - DEFINITIONS
"Event of Default" means any one or more of the following events:
(a) failure by Borrower to pay any principal, interest or
other amount due hereunder or on account of the Loan, within
five (5) days of the date when due;
(b) failure by Borrower to perform or discharge, observe
or comply with any of its covenants or agreements set forth
herein or in the Note or Security Agreement, (or any of the
other security documents delivered in connection herewith);
(c) any representation, warranty of Borrower to Lender set
forth herein is found to have been false or misleading in any
material respect as of the time when made;
(d) Borrower's liquidation, termination, dissolution or
ceasing to carry on any substantial part of its current
business;
(e) a change in control with respect to Borrower or
consummation by Borrower of a reorganization, merger or
consolidation with any other person or entity, transfer of all
or substantially all of its assets or properties or consummation
of any other plan or arrangement involving a similar
extraordinary corporate transaction.
(f) commencement by Borrower of a voluntary proceeding
seeking relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law, or seeking
appointment of a trustee, receiver, liquidator or other similar
official for it or any substantial part of its assets; or its
consent to any of the foregoing in an involuntary proceeding
against it; or Borrower shall generally not be paying its debts
as they become due or admit in writing its inability to do so;
or an assignment for the benefit of, or the offering to or
entering into by Borrower of any composition, extension,
reorganization or other agreement or arrangement with, its
creditors; or
(g) commencement of an involuntary proceeding against
Borrower seeking relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law, or seeking
appointment of a trustee, receiver, liquidator or other similar
official for it or any substantial part of its assets, which
proceeding is not dismissed or stayed within sixty (60) days.
"Note" means the note executed and delivered by Borrower to Lender in
the form of Exhibit A hereto, made to evidence the Loan.
"Security Agreement' means the security agreement executed and
delivered by Borrower to Lender in the form of Exhibit B hereto,
entered into in connection with the Loan.
"Loan" has the meaning given in Section 2(a) hereof.
