EXECUTION
SECURITY AGREEMENT
December 5, 1997
MicroOptical Devices, Inc.
0000-X Xxxxxx Xxxx Xxxxx, X.X.
Xxxxxxxxxxx, Xxx Xxxxxx 00000
(Individually and collectively "Debtor")
First Union National Bank
0000 Xxxxxxx 00
Xxxxxx, Xxx Xxxxxx 00000
(Hereinafter referred to as the "Bank")
For value received and to secure the payment and performance of the guaranteed
obligations under that Unconditional Guaranty dated of even date herewith,
given by Debtor to Bank guaranteeing obligations of EMCORE Corporation
("Borrower") to Bank, its successors and assigns, and any extensions, renewals,
modifications or novations thereof (the "Guaranty"), and all costs and expenses
incurred by Bank to obtain, preserve, perfect and enforce the security interest
granted herein and to maintain, preserve, and collect the property subject to
the security interest (collectively, "Guaranty Obligations"), Debtor hereby
grants to Bank a continuing first priority and only security interest in and
lien upon the following described property, now owned or hereafter acquired,
any additions, accessions, or substitutions thereof and thereto (including but
not limited to investment property and security entitlements), and all cash and
non-cash proceeds and products thereof (collectively, "Collateral"):
All accounts, contract rights, leases, and any other rights of Debtor to
payment for goods sold or leased or for services rendered; furniture;
furnishings; fixtures; equipment; machinery; accessories; moveable trade
fixtures; goods held for sale or being processed for sale in Debtor's business,
including all raw materials, supplies, and other materials used or consumed in
Debtor's business, goods in process, finished goods, and all other items
customarily classified as inventory; building improvement and construction
materials, supplies and equipment; chattel paper; instruments; documents; all
funds on deposit with Bank and its affiliates; and all general intangibles; as
well as all parts, replacements, substitutions, profits, products and cash and
non-cash proceeds of the foregoing (including insurance and condemnation
proceeds payable by reason of condemnation of or loss or damage thereto) in any
form and wherever located.
All stocks and bonds together with all cash and non-cash proceeds thereof
(including investment property, security entitlements, and dividends).
All instruments, documents, chattel paper, goods, moneys, securities, drafts,
and other property of Debtor now in possession of and at any time and from time
to time hereafter delivered to Bank, its agents or affiliates, whether for
safekeeping, pledge, custody, transmission, collection, or otherwise, and all
of Debtor's deposits, balances, sums, proceeds, and credits with, and any of
its claims against Bank and affiliates of Bank, at any time existing, together
with the increases and profits received therefrom and the proceeds thereof,
including insurance payable because of loss or damage thereto.
All of Debtor's demand deposit accounts, checking accounts, time savings
accounts, certificates of deposit or other accounts of any nature maintained in
or with Bank and affiliates of Bank.
All equipment, all accessories and parts that become a part of the equipment by
accession, and all supplies used or to be used in connection therewith.
All general intangibles (including, without limitation, all contract rights,
tax refunds and tax refund claims, choses in action, causes of action,
corporate or other business records, inventions, designs, patents, patent
applications, trademarks, trade names, trade secrets, goodwill, copyrights,
registrations, licenses, franchises, claims under guaranties, security
interests or other security held or granted to secure payment of contracts by
account debtors, all rights to indemnification and all other intangible
property of every kind and nature).
All inventory, including all raw materials and work in process to be processed
into such inventory, and all accessions, attachments and other additions to,
substitutes for, replacements for, improvements to and returns of such
inventory, all accounts arising from the disposition of inventory.
All security deposits, escrow, other deposits and other security provided by
lessees, subleases, or other obligor under any leases, subleases, occupancy
agreements, or other contracts assigned to Bank.
Debtor hereby represents and agrees that:
OWNERSHIP. Debtor owns the Collateral or Debtor will purchase and acquire
rights in the Collateral within ten days of the date advances are made under
the Loan Documents. If Collateral is being acquired with the proceeds of an
advance under the Loan Documents, Debtor authorizes Bank to disburse proceeds
directly to the seller of the Collateral. The Collateral is free and clear of
all liens, security interests, and claims, and Debtor will keep the Collateral
free and clear from all liens, security interests and claims, other than those
granted to Bank.
NAME AND OFFICES. There has been no change in the name of Debtor, or the name
under which Debtor conducts business, within the 5 years preceding the date of
execution of this Security Agreement and Debtor has not moved its executive
offices or residence within the 5 years preceding the date of execution of this
Security Agreement except as previously reported in writing to Bank. The
taxpayer identification number of Debtor as provided herein is correct.
TITLE/TAXES. Debtor has good and marketable title to Collateral and will
warrant and defend same against all claims. Debtor will not transfer, sell, or
lease Collateral (except in the ordinary course of business). Debtor agrees to
pay promptly all taxes and assessments upon or for the use of Collateral and on
this Security Agreement. At its option, Bank may discharge taxes, liens,
security interests or other encumbrances at any time levied or placed on
Collateral. Debtor agrees to reimburse Bank, on demand, for any such payment
made by Bank. Any amounts so paid shall be added to the Guaranty Obligations.
WAIVERS. Debtor waives presentment, demand, protest, notice of dishonor, notice
of default, demand for payment, notice of intention to accelerate, and notice
of acceleration of maturity. Debtor further agrees not to assert against Bank
as a defense (legal or equitable), as a set-off, as a counterclaim, or
otherwise, any claims Debtor may have against any seller or lessor that
provided personal property or services relating to any part of the Collateral.
Debtor waives all exemptions and homestead rights with regard to the
Collateral. DEBTOR WAIVES ANY AND ALL RIGHTS TO NOTICE OR TO HEARING PRIOR TO
BANK'S TAKING IMMEDIATE POSSESSION OR CONTROL OF ANY COLLATERAL, and to any
bond or security which might be required by applicable law prior to the
exercise of any of Bank's remedies against any Collateral.
EXTENSIONS, RELEASES. Debtor agrees that Bank may extend, renew or modify any
of the Guaranty Obligations and grant any releases, compromises or indulgences
with respect to any security for the Guaranty Obligations, or with respect to
any party liable for the Guaranty Obligations, all without notice to or
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consent of Debtor and without affecting the liability of Debtor or the
enforceability of this Security Agreement.
NOTIFICATIONS OF CHANGE. Debtor will notify Bank in writing at least 30 days
prior to any change in: (i) Debtor's chief place of business and/or residence;
(ii) Debtor's name or identity; or (iii) Debtor's corporate/organizational
structure. Debtor will keep Collateral at the location(s) previously provided
to Bank until such time as Bank provides written advance consent to a change of
location. Debtor will bear the cost of preparing and filing any documents
necessary to protect Bank's liens.
COLLATERAL CONDITION AND LAWFUL USE. Debtor represents that Collateral is in
good repair and condition and that Debtor shall use reasonable care to prevent
Collateral from being damaged or depreciating. Debtor shall immediately notify
Bank of any material loss or damage to Collateral. Debtor shall not permit any
item of equipment to become a fixture to real estate or an accession to other
personal property. Debtor represents it is in compliance in all respects with
all federal, state and local laws, rules and regulations applicable to its
properties, Collateral, operations, business, and finances, including, without
limitation, any federal or state laws relating to liquor (including 18 U.S.C.
ss. 3617, et seq.) or narcotics (including 21 U.S.C. ss. 801, et seq.) and all
applicable federal, state and local laws, and regulations intended to protect
the environment.
RISK OF LOSS AND INSURANCE. Debtor shall bear all risk of loss with respect to
the Collateral. The injury to or loss of Collateral, either partial or total,
shall not release Debtor from payment or other performance hereof. Debtor
agrees to obtain and keep in force casualty and hazard insurance on Collateral
naming Bank as loss payee. Such insurance is to be in form and amounts
satisfactory to Bank. All such policies shall provide to Bank a minimum of 30
days written notice of cancellation. Debtor shall furnish to Bank such
policies, or other evidence of such policies satisfactory to Bank. Bank is
authorized, but not obligated, to purchase any or all insurance or "Single
Interest Insurance" protecting such interest as Bank deems appropriate against
such risks and for such coverage and for such amounts, including either the
loan amount or value of the Collateral, all at its discretion, and at Debtor's
expense. In such event, Debtor agrees to reimburse Bank for the cost of such
insurance and Bank may add such cost to the Guaranty Obligations. Debtor shall
bear the risk of loss to the extent of any deficiency in the effective
insurance coverage with respect to loss or damage to any of the Collateral.
Debtor hereby assigns to Bank the proceeds of all such insurance and directs
any insurer to make payments directly to Bank. Debtor hereby appoints Bank its
attorney-in-fact, which appointment shall be irrevocable and coupled with an
interest for so long as the Guaranty Obligations are unpaid, to file proof of
loss and/or any other forms required to collect from any insurer any amount due
from any damage or destruction of Collateral, to agree to and bind Debtor as to
the amount of said recovery, to designate payee(s) of such recovery, to grant
releases to insurer, to grant subrogation rights to any insurer, and to endorse
any settlement check or draft. Debtor agrees not to exercise any of the
foregoing powers granted to Bank without the Bank's prior written consent.
ADDITIONAL COLLATERAL. If at any time Collateral is unsatisfactory to Bank,
then on demand of Bank, Debtor shall immediately furnish such additional
Collateral satisfactory to Bank to be held by Bank as if originally pledged
hereunder and shall execute such additional security agreements and financing
statements as requested by Bank.
FINANCING STATEMENTS. No financing statement (other than any filed by Bank or
disclosed above) covering any of Collateral or proceeds thereof is on file in
any public filing office. This Security Agreement, or a copy thereof, or any
financing statement executed hereunder may be recorded. On request of Bank,
Debtor will execute one or more financing statements in form satisfactory to
Bank and will pay all costs and expenses of filing the same or of filing this
Security Agreement in all public filing offices, where filing is deemed by Bank
to be desirable. Bank is authorized to file financing statements relating to
Collateral without Debtor's signature where authorized by law. Debtor appoints
Bank as its attorney-in-fact to execute
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such documents necessary to accomplish perfection of Bank's security interest.
The appointment is coupled with an interest and shall be irrevocable as long as
any Guaranty Obligations remain outstanding. Debtor further agrees to take such
other actions as might be requested for the perfection, continuation and
assignment, in whole or in part, of the security interests granted herein. If
certificates are issued or outstanding as to any of the Collateral, Debtor will
cause the security interests of Bank to be properly protected, including
perfection of notation thereon.
LANDLORD/MORTGAGEE WAIVERS. Debtor shall cause each mortgagee of real property
owned by Debtor and each landlord of real property leased by Debtor to execute
and deliver instruments satisfactory in form and substance to Bank by which
such mortgagee or landlord waives its rights, if any, in the Collateral.
STOCK, DIVIDENDS. If, with respect to any security pledged hereunder, a stock
dividend is declared, any stock split made or right to subscribe is issued, all
the certificates for the shares representing such stock dividend, stock split
or right to subscribe will be immediately delivered, duly endorsed, to the Bank
as additional collateral, and any cash or non-cash proceeds and products
thereof, including investment property and security entitlements will be
immediately delivered to Bank. If Debtor has granted to Bank a security
interest in securities, Debtor acknowledges that such grant includes all
investment property and security entitlements, now existing or hereafter
arising, relating to such securities. In addition, Debtor agrees to execute
such notices and instructions to securities intermediaries as Bank may
reasonably request.
CONTRACTS, CHATTEL PAPER, ACCOUNTS, GENERAL INTANGIBLES. Debtor warrants that
Collateral consisting of contract rights, chattel paper, accounts, or general
intangibles is (i) genuine and enforceable in accordance with its terms except
as limited by law; (ii) not subject to any defense, set-off, claim or
counterclaim of a material nature against Debtor except as to which Debtor has
notified Bank in writing; and (iii) not subject to any other circumstances that
would impair the validity, enforceability, value, or amount of such Collateral
except as to which Debtor has notified Bank in writing. Debtor shall not amend,
modify or supplement any lease, contract or agreement contained in Collateral
or waive any provision therein, without prior written consent of Bank.
ACCOUNT INFORMATION. From time to time, at the Bank's request, Debtor shall
provide Bank with schedules describing all accounts and contracts, including
customers' addresses, credited or acquired by Debtor and at the Bank's request
shall execute and deliver written assignments of contracts and other documents
evidencing such accounts and contracts to Bank. Together with each schedule,
Debtor shall, if requested by Bank, furnish Bank with copies of Debtor's sales
journals, invoices, customer purchase orders or the equivalent, and original
shipping or delivery receipts for all goods sold, and Debtor warrants the
genuineness thereof.
ACCOUNT AND CONTRACT DEBTORS. After a Default occurs, Bank shall have the right
to notify the account and contract debtors obligated on any or all of the
Collateral to make payment thereof directly to Bank and Bank may take control
of all proceeds of any such Collateral, which rights Bank may exercise at any
time. The cost of such collection and enforcement, including attorneys' fees
and expenses, shall be borne solely by Debtor whether the same is incurred by
Bank or Debtor. After a Default occurs, upon demand of Bank, Debtor will, upon
receipt of all checks, drafts, cash and other remittances in payment on
Collateral, deposit the same in a special bank account maintained with Bank,
over which Bank also has the power of withdrawal.
If a Default occurs, no discount, credit, or allowance shall be granted by
Debtor to any account or contract debtor and no return of merchandise shall be
accepted by Debtor without Bank's consent. Bank may, after Default, settle or
adjust disputes and claims directly with account contract debtors for amounts
and upon terms that Bank considers advisable, and in such cases, Bank will
credit the Guaranty Obligations with the
PAGE 4
net amounts received by Bank, after deducting all of the expenses incurred by
Bank. Debtor agrees to indemnify and defend Bank and hold it harmless with
respect to any claim or proceeding arising out of any matter related to
collection of Collateral.
GOVERNMENT CONTRACTS. If any Collateral covered hereby arises from obligations
due to Debtor from any governmental unit or organization, Debtor shall
immediately notify Bank in writing and execute all documents and take all
actions demanded by Bank to ensure recognition by such governmental unit or
organization of the rights of Bank in the Collateral.
INVENTORY. So long as no Default has occurred, Debtor shall have the right in
the regular course of business, to process and sell Debtor's inventory, unless
Bank shall hereafter otherwise direct in writing. Upon demand of Bank, Debtor
will, upon receipt of all checks, drafts, cash and other remittances, in
payment of Collateral sold, deposit the same in a special bank account
maintained with Bank, over which Bank also has the power of withdrawal. Debtor
shall comply with all federal, state, and local laws, regulations, rulings, and
orders applicable to Debtor or its assets or business, in all respects. Without
limiting the generality of the previous sentence, Debtor shall comply with all
requirements of the federal Fair Labor Standards Act in the conduct of its
business and the production of inventory. Debtor shall notify Bank immediately
of any violation by Debtor of the Fair Labor Standards Act, and a failure of
Debtor to so notify Bank shall constitute a continuing representation that all
inventory then existing has been produced in compliance with the Fair Labor
Standards Act.
INSTRUMENTS, CHATTEL PAPER. Any Collateral that is instruments, chattel paper
and negotiable documents will be properly assigned to, deposited with and held
by Bank, unless Bank shall hereafter otherwise direct or consent in writing.
Bank may, without notice, before or after maturity of the Guaranty Obligations,
exercise any or all rights of collection, conversion, or exchange and other
similar rights, privileges and options pertaining to Collateral, but shall have
no duty to do so.
COLLATERAL DUTIES. Bank shall have no custodial or ministerial duties to
perform with respect to Collateral pledged except as set forth herein; and by
way of explanation and not by way of limitation, Bank shall incur no liability
for any of the following: (i) loss or depreciation of Collateral (unless caused
by its willful misconduct), (ii) its failure to present any paper for payment
or protest, to protest or give notice of nonpayment, or any other notice with
respect to any paper or Collateral, or (iii) its failure to present or
surrender for redemption, conversion or exchange any bond, stock, paper or
other security whether in connection with any merger, consolidation,
recapitalization, or reorganization, arising out of the refunding of the
original security, or for any other reason, or its failure to notify any party
hereto that Collateral should be so presented or surrendered.
TRANSFER OF COLLATERAL. The Bank may assign its rights in the Collateral or any
part thereof to any assignee who shall thereupon become vested with all the
powers and rights herein given to the Bank with respect to the property so
transferred and delivered, and the Bank shall thereafter be forever relieved
and fully discharged from any liability with respect to such property so
transferred, but with respect to any property not so transferred the Bank shall
retain all rights and powers hereby given.
SUBSTITUTE COLLATERAL. With prior written consent of Bank, other Collateral may
be substituted for the original Collateral herein in which event all rights,
duties, obligations, remedies and security interests provided for, created or
granted shall apply fully to such substitute Collateral.
INSPECTION, BOOKS AND RECORDS. Debtor will at all times keep accurate and
complete records covering each item of Collateral, including the proceeds
therefrom. Bank, or any of its agents, shall have the right, at intervals to be
determined by Bank and without hindrance or delay, to inspect, audit, and
examine the Collateral and to make extracts from the books, records, journals,
orders, receipts,
PAGE 5
correspondence and other data relating to Collateral, Debtor's business or any
other transaction between the parties hereto. Debtor will at its expense
furnish Bank copies thereof upon request.
CROSS COLLATERALIZATION LIMITATION. As to any other existing or future consumer
purpose loan made by Bank to Debtor, within the meaning of the Federal Consumer
Credit Protection Act, Bank expressly waives any security interest granted
herein in Collateral that Debtor uses as a principal dwelling and household
goods.
ATTORNEYS' FEES AND OTHER COSTS OF COLLECTION. Debtor shall pay all of Bank's
reasonable expenses incurred in enforcing this Agreement and in preserving and
liquidating Collateral, including but not limited to, reasonable arbitration,
paralegals', attorneys' and experts' fees and expenses, whether incurred
without the commencement of a suit, in any trial, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.
DEFAULT. If any of the following occurs, a default ("Default") under this
Security Agreement shall exist: (i) The failure of timely payment or
performance of any of the Guaranty Obligations or a default or any Event of
Default (as such term is defined in the applicable Loan Document) under any
Loan Document; (ii) Any breach of any representation or agreement contained or
referred to in this Security Agreement or other Loan Document; (iii) Any loss,
theft, substantial damage, or destruction of Collateral not fully covered by
insurance, or as to which insurance proceeds are not remitted to Bank within 30
days of the loss; any sale (except the sale of inventory in the ordinary course
of business), lease, or encumbrance of any of Collateral without prior written
consent of Bank; or the making of any levy, seizure, or attachment on or of
Collateral which is not removed within 10 days; or (iv) the dissolution of,
termination of existence of, loss of good standing status by, appointment of a
receiver for, assignment for the benefit of creditors of, or commencement of
any bankruptcy or insolvency proceeding by or against Debtor, its Subsidiaries
or Affiliates ("Affiliate" shall have the meaning as defined in 11 U.S.C. ss.
101; and "Subsidiary" shall mean any corporation of which more than 50% of the
issued and outstanding voting stock is owned directly or indirectly by Debtor),
if any, or any general partner of or the holder(s) of the majority ownership
interests in Debtor or any party to the Loan Documents.
REMEDIES ON DEFAULT (INCLUDING POWER OF SALE). If a Default occurs, all of the
Guaranty Obligations shall be immediately due and payable, without notice and
Bank shall have all the rights and remedies of a secured party under the
Uniform Commercial Code. Without limitation thereto, Bank shall have the
following rights and remedies: (i) to take immediate possession of Collateral,
without notice or resort to legal process, and for such purpose, to enter upon
any premises on which Collateral or any part thereof may be situated and to
remove the same therefrom, or, at its option, to render the Collateral unusable
or dispose of said Collateral on Debtor's premises; (ii) to require Debtor to
assemble the Collateral and make it available to Bank at a place to be
designated by Bank; (iii) to exercise its right of set-off or bank lien as to
any monies of Debtor deposited in demand, checking, time, savings, certificate
of deposit or other accounts of any nature maintained by Debtor with Bank or
Affiliates of Bank, without advance notice, regardless of whether such accounts
are general or special; (iv) to dispose of Collateral, as a unit or in parcels,
separately or with any real property interests also securing the Guaranty
Obligations, in any county or place to be selected by Bank, at either private
or public sale (at which public sale bank may be the purchaser) with or without
having the Collateral physically present at said sale. Any notice of sale,
disposition or other action by Bank required by law and sent to Debtor at
Debtor's address shown above, or at such other address of Debtor as may from
time to time be shown on the records of Bank, at least 5 days prior to such
action, shall constitute reasonable notice to Debtor. Notice shall be deemed
given or sent when mailed postage prepaid to Debtor's address as provided
herein. Bank shall be entitled to apply the proceeds of any sale or other
disposition of the Collateral, and the payments received by Bank with respect
to any of the Collateral, to the Guaranty Obligations in such order and manner
as Bank may determine. Collateral that is subject to rapid declines in value
and is customarily sold in recognized markets may be disposed of by Bank in a
recognized market for such collateral without providing notice of sale.
PAGE 6
REMEDIES ARE CUMULATIVE. No failure on the part of Bank to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Bank or any right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any remedies provided by law, in equity, or
in other Loan Documents.
MISCELLANEOUS. (i) AMENDMENTS AND WAIVERS. No waiver, amendment or modification
of any provision of this Security Agreement shall be valid unless in writing
and signed by an officer of Bank. No waiver by Bank of any Default shall
operate as a waiver of any other Default or of the same Default on a future
occasion. Neither the failure of, nor any delay by, Bank in exercising any
right, power or privilege granted pursuant to this Security Agreement shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any other right, power or privilege.
(ii) ASSIGNMENT. All rights of Bank hereunder are freely assignable, in whole
or in part, and shall inure to the benefit of and be enforceable by Bank, its
successors, assigns and affiliates. Debtor shall not assign its rights and
interest hereunder without the prior written consent of Bank, and any attempt
by Debtor to assign without Bank's prior written consent is null and void. Any
assignment shall not release Debtor from the Guaranty Obligations. This
Security Agreement shall be binding upon Debtor, and the heirs, personal
representatives, successors, and assigns of Debtor. (iii) APPLICABLE LAW;
CONFLICT BETWEEN DOCUMENTS. This Security Agreement shall be governed by and
construed under the law of the state in which the office of Bank as stated
above is located without regard to that state's conflict of laws principles. If
any terms of this Security Agreement conflict with the terms of any commitment
letter or loan proposal, the terms of this Security Agreement shall control.
(iv) JURISDICTION. Debtor irrevocably agrees to non-exclusive personal
jurisdiction in the state in which the office of Bank as stated above is
located. (v) SEVERABILITY. If any provision of this Security Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective but only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Security Agreement. (vi) NOTICES. Any notices to Debtor shall be
sufficiently given, if in writing and mailed or delivered to the address of
Debtor shown above or such other address as provided hereunder; and to Bank, if
in writing and mailed or delivered to Bank's office address shown above or such
other address as Bank may specify in writing from time to time. In the event
that the Debtor changes Debtor's mailing address at any time prior to the date
the Guaranty Obligations are paid in full, Debtor agrees to promptly give
written notice of said change of address by registered or certified mail,
return receipt requested, all charges prepaid. (vii) CAPTIONS. The captions
contained herein are inserted for convenience only and shall not affect the
meaning or interpretation of this Security Agreement or any provision hereof.
The use of the plural shall also mean the singular, and vice versa. (viii) LOAN
DOCUMENTS. The term "Loan Documents" refers to all documents, whether now or
hereafter existing, executed in connection with the Guaranty Obligations,
including, without limitation, the Revolving Loan and Security Agreement dated
as of March 31,1997 ("Loan Agreement") between the Borrower and the Bank
together with all of the "Loan Documents" (as such term is defined in the Loan
Agreement) and may include, without limitation and whether executed by
Borrower, Debtor or others, commitment letters, loan agreements, guaranty
agreements, other security agreements, letters of credit, instruments,
financing statements, mortgages, deeds of trust, deeds to secure debt, and any
amendments or supplements (excluding swap agreements as defined in 11 U.S.C.
ss. 101). (ix) JOINT AND SEVERAL LIABILITY. If more than one person has signed
this Security Agreement, such parties are jointly and severally obligated
hereunder. (x) BINDING CONTRACT. Debtor by execution and Bank by acceptance of
this Security Agreement, agree that each party is bound by all terms and
provisions of this Security Agreement.
This Security Agreement shall automatically be deemed effective and in full
force and effect upon the occurrence of the "Effective Time" (as such term is
defined in the Agreement and Plan of Merger dated , 1997, among the Borrower,
EMKR Acquisition Corporation, the Debtor and the principal stockholders of
Debtor).
PAGE 7
IN WITNESS WHEREOF, Debtor, on the day and year first written above, has caused
this Security Agreement to be executed under seal.
MICROOPTICAL DEVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
____________________________________
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: President & CEO
PAGE 8
SCHEDULE A TO UCC
Schedule A to UCC from MicroOptical Devices, Inc. ("Debtor") and for the
benefit of First Union National Bank ("Secured Party").
Description of Collateral:
All accounts, contract rights, leases, and any other rights of Debtor to
payment for goods sold or leased or for services rendered; furniture;
furnishings; fixtures; equipment; machinery; accessories; moveable trade
fixtures; goods held for sale or being processed for sale in Debtor's business,
including all raw materials, supplies, and other materials used or consumed in
Debtor's business, goods in process, finished goods, and all other items
customarily classified as inventory; building improvement and construction
materials, supplies and equipment; chattel paper; instruments; documents; all
funds on deposit with Bank and its affiliates; and all general intangibles; as
well as all parts, replacements, substitutions, profits, products and cash and
non-cash proceeds of the foregoing (including insurance and condemnation
proceeds payable by reason of condemnation of or loss or damage thereto) in any
form and wherever located.
All stocks and bonds together with all cash and non-cash proceeds thereof
(including investment property, security entitlements, and dividends).
All instruments, documents, chattel paper, goods, moneys, securities, drafts,
and other property of Debtor now in possession of and at any time and from time
to time hereafter delivered to Bank, its agents or affiliates, whether for
safekeeping, pledge, custody, transmission, collection, or otherwise, and all
of Debtor's deposits, balances, sums, proceeds, and credits with, and any of
its claims against Bank and affiliates of Bank, at any time existing, together
with the increases and profits received therefrom and the proceeds thereof,
including insurance payable because of loss or damage thereto.
All of Debtor's demand deposit accounts, checking accounts, time savings
accounts, certificates of deposit or other accounts of any nature maintained in
or with Bank and affiliates of Bank.
All equipment, all accessories and parts that become a part of the equipment by
accession, and all supplies used or to be used in connection therewith.
All general intangibles (including, without limitation, all contract rights,
tax refunds and tax refund claims, choses in action, causes of action,
corporate or other business records, inventions, designs, patents, patent
applications, trademarks, trade names, trade secrets, goodwill, copyrights,
registrations, licenses, franchises, claims under guaranties, security
interests or other security held or granted to secure payment of contracts by
account debtors, all rights to indemnification and all other intangible
property of every kind and nature).
All inventory, including all raw materials and work in process to be processed
into such inventory, and all accessions, attachments and other additions to,
substitutes for, replacements for, improvements to and returns of such
inventory, all accounts arising from the disposition of inventory.
All security deposits, escrow, other deposits and other security provided by
lessees, subleases, or other obligor under any leases, subleases, occupancy
agreements, or other contracts assigned to Bank.
All products and proceeds (including investment property and security
entitlements) of any of the property described above in any form, and all
proceeds of such products.
