SECURITY AGREEMENT
Exhibit 10.3
December
___, 2007
TECHNOLOGY
RESEARCH CORPORATION
0000
000xx Xxxxxx Xxxxx
Xxxxxxxxxx,
Xxxxxxx 00000
("Debtor")
WACHOVIA
BANK, NATIONAL ASSOCIATION
000
Xxxxx
Xxxxxx
Xxxxxxxxxxxx,
Xxxxxxx 00000
("Bank")
For
value
received and to secure payment and performance of the Promissory Note executed
by Debtor (also referred to herein as “Borrower”) dated as of even date
herewith, in the original principal amount of $6,000,000.00, payable to Bank,
and any extensions, renewals, modifications or novations thereof (the “Note”),
this Security Agreement, the other Loan Documents, swap agreements (as defined
in 11 U.S.C. § 101, as in effect from time to time) executed in connection with
or related to the Loan Documents, future advances, 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, "Secured Obligations"), Debtor hereby grants
to
Bank a continuing security interest in and lien upon the following described
property, whether now owned or hereafter acquired, and any additions,
replacements, accessions, or substitutions thereof and all cash and non-cash
proceeds and products thereof (collectively, "Collateral"):
All
accounts, together with all chattel paper and instruments, and all credit
insurance, guaranties, letters of credit, and other security for any of the
foregoing.
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
the 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
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
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.
The
securities referenced on Schedule "1" attached hereto and by this reference
incorporated herein.
Debtor
hereby represents and agrees that:
OWNERSHIP. Debtor
owns the Collateral. The Collateral is free and clear of all liens,
security interests, and claims except those previously reported in writing
to
and approved by Bank, and Debtor will keep the Collateral free and clear
from
all liens, security interests and claims, other than those granted to or
approved by Bank. Debtor will not borrow on margin or other credit
secured by the Account or property in the Account from any party other than
Bank. All securities and security entitlements pledged as Collateral
are fully paid and non-assessable and if certificated, have been delivered
to
Bank with unrestricted endorsements. All income, dividends, earnings
and profits with respect to the Collateral shall be reported for state and
federal income tax purposes as attributable to the Debtor and not Bank, and
Bank
or any other person authorized to report income distributions, is authorized
to
issue IRS Forms 1099 indicating Debtor as the recipient of such income, earnings
and profits.
NAME
AND OFFICES; JURISDICTION OF
ORGANIZATION. The name and address of Debtor appearing at the
beginning of this Agreement are Debtor’s exact legal name and the address of its
chief executive office. There has been no change in the name of
Debtor, or the name under which Debtor conducts business, within the five
years
preceding the date hereof. Debtor has not moved its chief executive
office within the five years preceding the date hereof except as previously
reported in writing to Bank. Debtor is organized under the laws of
the State of Florida and has not changed the jurisdiction of its organization
within the five years preceding the date hereof except as previously reported
in
writing to Bank.
TITLE/TAXES. Debtor
has good and marketable title to the Collateral and will warrant and defend
same
against all claims. Debtor will not transfer, sell, or lease
Collateral (except as permitted herein). 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
Secured Obligations.
WAIVERS. Debtor
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 or against any other party liable to Bank for all
or any
part of the Secured Obligations. Debtor waives all exemptions and
homestead rights with regard to the Collateral. Debtor waives any and
all rights 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. All rights of Bank and security interests hereunder, and
all obligations of Debtor hereunder, shall be absolute and unconditional,
not
discharged or impaired irrespective of (and regardless of whether Debtor
receives any notice of): (i) any lack of validity or enforceability
of any Loan Document; (ii) any change in the time, manner or place of payment
or
performance, or in any term, of all or any of the Secured Obligations or
the
Loan Documents or any other amendment or waiver of or any consent to any
departure from any Loan Document; or (iii) any exchange, insufficiency,
unenforceability, enforcement, release, impairment or non-perfection of any
collateral, or any release of or modifications to or insufficiency,
unenforceability or enforcement of the obligations of any guarantor or other
obligor. To the extent permitted by law, Debtor hereby waives any
rights under any valuation, stay, appraisement, extension or redemption laws
now
existing or which may hereafter exist and which, but for this provision,
might
be applicable to any sale or disposition of the Collateral by Bank; and any
other circumstance which might otherwise constitute a defense available to,
or a
discharge of any party with respect to the Secured Obligations.
NOTIFICATIONS;
LOCATION OF
COLLATERAL. Debtor will notify Bank in writing at least 30
days prior to any change in: (i) Debtor's chief place of business;
(ii) Debtor's name; (iii) Debtor's corporate/organizational structure; or
(iv)
the jurisdiction in which Debtor is organized. In addition, Debtor
shall promptly notify Bank of any claims or alleged claims of any other person
or entity to the Collateral or the institution of any litigation, arbitration,
governmental investigation or administrative proceedings against or affecting
the Collateral. 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 the Collateral is in good repair
and condition and that Debtor shall use reasonable care to prevent Collateral
from being damaged or depreciating, normal wear and tear
excepted. Debtor shall immediately notify Bank of any material loss
or damage to Collateral. Debtor shall not permit any item of
Collateral to become an accession to other property unless such property
is also
Collateral hereunder. Debtor represents it is in compliance in all
respects with all laws, rules and regulations applicable to the Collateral
and
its properties, operations, business, and finances.
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 property insurance
on the Collateral with a Lender’s Loss Payable Endorsement in favor of Bank and
commercial general liability insurance naming Bank as Additional Insured
and
such other insurance as Bank may require from time to time. Such
insurance is to be in form and amounts satisfactory to Bank and issued by
reputable insurance carriers satisfactory to Bank with a Best Insurance Report
Key Rating of at least “A-“. 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. If Debtor fails to obtain or maintain in force such
insurance or fails to furnish such evidence, 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 Secured
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 property insurance covering the Collateral up to the amount of the Secured
Obligations 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
Secured 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 Bank's prior written consent.
FINANCING
STATEMENTS, CERTIFICATES OF
TITLE, POWER OF ATTORNEY. No financing statement (other than
any filed or approved by Bank) covering any Collateral is on file in any
public
filing office. Debtor authorizes the filing of one or more financing
statements covering the Collateral in form satisfactory to Bank, and without
Debtor’s signature where authorized by law, agrees to deliver certificates of
title on which Bank’s lien has been indicated covering any Collateral subject to
a certificate of title statute, and will pay all costs and expenses of filing
or
applying for the same or of filing this Security Agreement in all public
filing
offices, where filing is deemed by Bank to be desirable. Upon the
occurrence and continuance of a Default, Debtor hereby constitutes and appoints
Bank the true and lawful attorney of Debtor with full power of substitution
to
take any and all appropriate action and to execute any and all documents,
instruments or applications that may be necessary or desirable to accomplish
the
purpose and carry out the terms of this Security Agreement, including, without
limitation, endorsements desirable for transfer or delivery of any Collateral,
registration of any Collateral under applicable laws, retitling any Collateral,
receipt, endorsement and/or collection of all checks and other orders for
payment of money payable to Debtor with respect to Collateral. The
foregoing power of attorney is coupled with an interest and shall be irrevocable
until all of the Secured Obligations have been paid in full. Neither
Bank nor anyone acting on its behalf shall be liable for acts, omissions,
errors
in judgment, or mistakes in fact in such capacity as
attorney-in-fact. Debtor ratifies all acts of Bank as
attorney-in-fact. Debtor agrees to take such other actions, at
Debtor’s expense, as might be requested for the perfection, continuation and
assignment, in whole or in part, of the security interests granted herein
and to
assure and preserve Bank’s intended priority position. If
certificates, passbooks, or other documentation or evidence is/are issued
or
outstanding as to any of the Collateral, Debtor will cause the security
interests of Bank to be properly protected, including perfection by notation
thereon or delivery thereof to Bank. Upon Bank's request, Debtor
will, at its own expense: (i) do all things determined by Bank
to be desirable to register such Collateral or qualify for an exemption from
registration, under the provisions of all applicable securities laws, and
(ii) otherwise do or cause to be done all other acts and things as may be
necessary to make the sale of the Collateral valid, binding and in compliance
with applicable law.
LANDLORD/MORTGAGEE
WAIVERS. Debtor shall use its best efforts to 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 subordinates its rights,
if any, in the Collateral.
STOCK,
DIVIDENDS. If, with respect to any securities 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. 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. Notwithstanding anything herein to the contrary, the Bank
shall have no right to receive and the Debtor shall be under no obligation
to
deliver any shares or other evidences of an equity interest in any controlled
foreign corporation (as defined in Section 957 of the Internal Revenue Code
of
1986, as amended) as additional Collateral, to the extent that more than
65% of
the total combined voting power of all classes of stock of such controlled
foreign corporation entitled to vote will constitute Collateral hereunder,
or be
otherwise pledged to the Bank.
NO
TRADING OF
COLLATERAL. Until a Default occurs, Debtor shall have the
right to vote the securities pledged hereunder and to collect and receive
all
cash dividends and interest distributed periodically in the ordinary course
by
the obligor or issuer of such Collateral or part thereof; provided, however,
Debtor may not sell, transfer, exchange for other property or cash (“Trade”) or
otherwise exercise rights with respect to such Collateral or receive any
distributions or proceeds from Trades of such Collateral without the prior
written consent of Bank, and any such distributions or proceeds received
by
Debtor shall be held in trust for, and immediately delivered to,
Bank. Any consent pursuant to this paragraph shall be in Bank's sole
discretion.
CONTROL. Debtor
will cooperate with Bank in obtaining control with respect to Collateral
consisting of electronic chattel paper. Debtor
authorizes and directs Third Party to comply with the terms of this Security
Agreement, to enter into a Control Agreement, to xxxx its records to show
the
security interest of and/or the transfer to Bank of the property pledged
hereunder and to mail monthly statements to the Bank, in addition to Debtor,
to
the address provided herein.
CHATTEL
PAPER, ACCOUNTS, GENERAL
INTANGIBLES. Debtor warrants that Collateral consisting of
chattel paper, accounts, or general intangibles is (i) genuine and enforceable
in accordance with its terms; (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. Debtor will not create any tangible chattel paper without
placing a legend on the chattel paper acceptable to Bank indicating that
Bank
has a security interest in the chattel paper. Debtor will not create
any electronic chattel paper without taking all steps deemed necessary by
Bank
to confer control of the electronic chattel paper upon Bank in accordance
with
the UCC.
ACCOUNT
INFORMATION. From time to time, at Bank's request, Debtor
shall provide Bank with schedules describing all accounts, including customers'
addresses, created or acquired by Debtor and at Bank's request shall execute
and
deliver written assignments of contracts and other documents evidencing such
accounts 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
DEBTORS. If
a Default should occur, Bank shall have the right to notify the account 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. If a Default
should occur or 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 should occur, no discount, credit, or allowance shall be granted
by
Debtor to any account 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 debtors for amounts and
upon
terms that Bank considers advisable, and in such cases Bank will credit the
Secured Obligations with the 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 deemed necessary 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. If a Default should
occur or 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 agrees to notify Bank immediately in the event
that any inventory purchased by or delivered to Debtor is evidenced by a
xxxx of
lading, dock warrant, dock receipt, warehouse receipt or other document of
title
and to deliver such document to Bank upon request.
INSTRUMENTS,
CHATTEL PAPER,
DOCUMENTS. Any Collateral that is, or is evidenced by,
instruments, chattel paper or negotiable documents will be properly assigned
to
and the originals of any such Collateral in tangible form 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
Secured Obligations, exercise any or all rights of collection, conversion,
or
exchange and other similar rights, privileges and options pertaining to such
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 or gross negligence), (ii) 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,
(iii)
failure to ascertain, notify Debtor of, or take any action in connection
with
any conversion, call, redemption, retirement or any other event relating
to any
of the Collateral, or failure to notify any party hereto that Collateral
should
be presented or surrendered for any such reason. Debtor acknowledges
that Bank is not an investment advisor or insurer with respect to the
Collateral; and Bank has no duty to advise Debtor of any actual or anticipated
changes in the value of the Collateral.
TRANSFER
OF
COLLATERAL. Bank may assign its rights in Collateral or any
part thereof to any assignee who shall thereupon become vested with all the
powers and rights herein given to Bank with respect to the property so
transferred and delivered, and 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, Bank shall
retain all rights and powers hereby given.
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, at Debtor’s
expense, to inspect, audit, and examine the Collateral during normal business
hours and to make copies of and extracts from the books, records, journals,
orders, receipts, 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. For the
further security of Bank, it is agreed that Bank has and is hereby granted
a
security interest in all books and records of Debtor pertaining to the
Collateral.
COMPLIANCE
WITH
LAW. Debtor will comply with all federal, state and local laws
and regulations, applicable to it, including without limitation, laws and
regulations relating to the environment, labor or economic sanctions, in
the
creation, use, operation, manufacture and storage of the Collateral and the
conduct of its business.
REGULATION
U. None of the
proceeds of the credit secured hereby shall be used directly or indirectly
for
the purpose of purchasing or carrying any margin stock in violation of any
of
the provisions of Regulation U of the Board of Governors of the Federal Reserve
System ("Regulation U"), or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry margin stock
or
for any other purchase which might render the Loan a "Purpose Credit" within
the
meaning of Regulation U.
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
actually incurred in enforcing this Security Agreement and in preserving
and
liquidating Collateral, including but not limited to, reasonable arbitration,
paralegals', attorneys' and experts' fees and expenses, whether incurred
with or
without the commencement of a suit, 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: Loan Document
Default. A default under any Loan Document which is not cured within any
applicable cure
period. Collateral Loss
or
Destruction. 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. Collateral
Sale, Lease or Encumbrance. Any sale, lease, or encumbrance of
any Collateral not specifically permitted herein without prior written consent
of Bank. Levy,
Seizure or Attachment. The making of any levy, seizure, or
attachment on or of Collateral which is not removed within 10
days. Unauthorized
Collection of Collateral. Any attempt to collect, cash in or
otherwise recover deposits that are Collateral. Third Party
Breach. Any default or breach by a Third Party of any
provision contained in any Control Agreement executed in connection with
any of
the Collateral. Unauthorized
Termination. Any attempt to terminate, revoke, rescind,
modify, or violate the terms of this Security Agreement or any Control Agreement
without the prior written consent of Bank.
REMEDIES
ON DEFAULT (INCLUDING POWER
OF SALE). If a Default occurs 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 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 or its affiliate’s right of
set-off or Bank lien as to any monies of Debtor deposited in deposit accounts
and investment 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 Secured
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. In addition to
the foregoing, Bank shall be authorized to: transfer into Bank's name
or the name of its nominee, all or any part of the Collateral; receive all
interest, dividends, and other proceeds of the Collateral; notify any person
obligated on any Collateral of the security interest of Bank therein and
require
such person to make payment directly to Bank; demand, xxx for, collect or
receive the Collateral and any proceeds thereof, and/or make any settlement
or
compromise as Bank deems desirable with respect to any Collateral; and exercise
any voting, conversion, registration, purchase or other rights of an owner,
holder or entitlement holder of the Collateral. Debtor agrees that
Bank may exercise its rights under this Security Agreement without regard
for
the actual or potential tax consequences to Debtor under federal or state
law
and without regard to any instructions or directives given Bank by Debtor.
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 Secured 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. Debtor waives any and all requirements that the Bank sell or
dispose of all or any part of the Collateral at any particular time, regardless
of whether Debtor has requested such sale or disposition.
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.
INDEMNIFICATION. Debtor
shall protect, indemnify and save harmless Bank from and against all losses,
liabilities, obligations, claims, damages, penalties, fines, causes of action,
costs and expenses (including, without limitation, reasonable attorneys’ fees
and expenses) (collectively, “Damages”) imposed upon, incurred by or asserted or
assessed against Bank on account of or in connection with (i) the Loan Documents
or any failure or alleged failure of Debtor to comply with any of the terms
of,
or the inaccuracy or breach of any representation in, the Loan Documents,
(ii)
the Collateral or any claim of loss or damage to the Collateral or any injury
or
claim of injury to, or death of, any person or property that may be occasioned
by any cause whatsoever pertaining to the Collateral or the use, occupancy
or
operation thereof, (iii) any failure or alleged failure of Debtor to comply
with
any law, rule or regulation applicable to it or to the Collateral or the
use,
occupancy or operation of the Collateral (including, without limitation,
the
failure to pay any taxes, fees or other charges), (iv) any Damages whatsoever
by
reason of any alleged action, obligation or undertaking of Bank relating
in any
way to or any matter contemplated by the Loan Documents, or (v) any claim
for
brokerage fees or such other commissions relating to the Collateral or the
Secured Obligations. Nothing contained herein shall require Debtor to
indemnify Bank for any Damages resulting from Bank’s gross negligence or its
willful misconduct, and such indemnity shall be effective only to the extent
of
any Damages that may be sustained by Bank in excess of any net proceeds received
by it from any insurance of Debtor (other than self-insurance) with respect
to
such Damages. The indemnity provided for herein shall survive payment
of the Secured Obligations and shall extend to the officers, directors,
employees and duly authorized agents of Bank. In the event Bank
incurs any Damages arising out of or in any way relating to the transaction
contemplated by the Loan Documents (including any of the matters referred
to in
this section), the amounts of such Damages shall be added to the Secured
Obligations, shall bear interest, to the extent permitted by law, at the
interest rate borne by the Secured Obligations from the date incurred until
paid
and shall be payable on demand.
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
Debtor
and 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. (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 Secured 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
interpreted in accordance with federal law and, except as preempted by federal
law, the laws of the state named in Bank's address on the first page hereof
without regard to that state's conflict of laws principles, except to the
extent
that the UCC requires the application of the law of a different
jurisdiction. 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 named in the Bank’s address on the first
page hereof. (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) Payments. All
payments shall be mailed to Commercial Loan Services, P. X. Xxx 000000, Xxxxxxx,
XX 00000-0000; or such other address as provided by Bank in
writing. (vii) 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 Wachovia
Bank,
National Association, Mail Code VA7628, P. O. Xxx 00000, Xxxxxxx,
XX 00000 or Wachovia Bank, National Association, Mail Code VA7628, 00
Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 or such other address as
Bank may specify in writing from time to time. Notices to Bank must
include the mail code. In the event that Debtor changes Debtor's
mailing address at any time prior to the date the Secured 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. (viii) 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. (ix) Joint
and Several Liability. If more than one party 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. (xi) Final
Agreement. This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be contradicted
by
evidence of prior, contemporaneous or subsequent agreements of the
parties. There are no unwritten agreements between the
parties.
DEFINITIONS. Loan
Documents. The
term "Loan Documents" refers to all documents, including this Agreement,
whether
now or hereafter existing, executed in connection with or related to the
Secured
Obligations, and may include, without limitation and whether executed by
Debtor
or others, commitment letters that survive closing, loan agreements, promissory
notes, guaranty agreements, deposit or other similar agreements, other security
agreements, letters of credit and applications for letters of credit, security
instruments, financing statements, mortgage instruments, any renewals or
modifications, whenever any of the foregoing are executed, but does not include
swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to
time). Third
Party. The term
“Third Party” means any Broker, Collateral
Agent, Securities Intermediary and/or
bank which from time to time maintains a securities account, and is acting
in
such capacity, for Debtor or maintains a deposit account for Debtor with
respect
to any part of the Collateral. UCC. “UCC” means
the Uniform Commercial Code as presently and hereafter enacted in the
Jurisdiction. Terms
defined in the UCC. Any term used in this Agreement and in any
financing statement filed in connection herewith which is defined in the
UCC and
not otherwise defined in this Agreement or any other Loan Document has the
meaning given to the term in the UCC.
IN
WITNESS WHEREOF,
Debtor, on the day and year first written above, has caused this Security
Agreement to be duly executed under seal.
DEBTOR:
|
TECHNOLOGY
RESEARCH CORPORATION,
A
Florida Corporation
By:
________________________________
Xxxx
Xxxxxx,
As
its President
|
STATE
OF
PENNSYLVANIA
)
COUNTY
OF
____________ )
The
foregoing instrument was acknowledged before me on _____________, 2007, by
Xxxx
Xxxxxx, as
President of TECHNOLOGY
RESEARCH CORPORATION, a Florida corporation on behalf of the corporation,
___ who is personally known to me, or ___ who has produced a driver's license
as
identification.
|
Notary
Public
Print
Name:
Commission
No.:
My
Commission expires:
|
SCHEDULE
"1"
TO
SECURITY
AGREEMENT
100%
of
the Non-Voting stock of TECHNOLOGY RESEARCH CORPORATION / HONDURAS, S.A.
DE C.V.
which constitutes ____________ shares, Certificate Numbers
_______________.
65%
of
the Voting stock of TECHNOLOGY RESEARCH CORPORATION / HONDURAS, S.A. DE C.V.
which constitutes ____________ shares, Certificate Numbers
_______________.
