EXHIBIT 10.5
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SECURITY AGREEMENT
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SECURITY AGREEMENT (the "Agreement"), made this 30th day of October,
2000, by and between LASERTEL, INC., an Arizona corporation, with a principal
place of business at 0000 Xxxxx Xxxx Xxxxxx Xxxxxxx, Xxxxxx, Xxxxxxx 00000 (the
"Debtor"), and CITIZENS BANK NEW HAMPSHIRE, a guaranty savings bank organized
under the laws of the State of New Hampshire with an address of 000 Xxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxxxxx 03101(the "Secured Party").
WITNESSETH:
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WHEREAS, pursuant to a Loan Agreement dated December 18, 1996, amended
by Amendments to Loan Agreement and Related Loan Documents dated February 6,
1998, December 3, 1998, May 26, 1999, and of even date herewith, respectively,
by and between the Bank and the Borrower, as the same may be amended from time
to time (as amended, the "Loan Agreement"), Secured Party has granted to Debtor
(i) a revolving line of credit loan in the principal amount of up to Sixteen
Million Dollars ($16,000,000.00), (ii) a mortgage term loan in the principal
amount of Six Million Nine Hundred Thousand Dollars ($6,900,000.00), and (iii) a
second mortgage term loan in the principal amount of Four Million Dollars
($4,000,000.00) (collectively, the "Loan"), all as set forth and described in
the Loan Agreement; and
WHEREAS, as a condition to the Bank agreeing to the extension of the
Loan, the Debtor has agreed to execute a Guaranty Agreement of even date (the
"Guaranty");
WHEREAS, the obligation of the Secured Party to make the Loan to
Borrower is subject to the condition, among others, that the Debtor shall
execute and deliver this Agreement and grant the security interests hereinafter
described. Terms not otherwise defined herein shall have the meanings ascribed
to them in the Loan Agreement.
NOW, THEREFORE, in consideration of the willingness of the Secured
Party to make the Loan to Debtor and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. Security Interest. As security for the Secured Obligations described
in Section 2 hereof, Debtor hereby grants to the Secured Party a first priority
security interest in and lien on all of the property and assets of the Debtor,
including, but not limited to the property of the types described below
(hereinafter referred to collectively as the "Collateral"):
(a) All equipment, including machinery, motor vehicles, office
equipment, furniture, fixtures, along with all other parts, tools,
trade-ins, repairs, accessories, accessions, modifications, and
replacements, whether now owned or subsequently acquired, constructed,
or attached or added to, or placed in, the foregoing (collectively, the
"Equipment");
(b) All inventory, wherever located, including goods,
merchandise and other personal property, held for sale or lease or
furnished or to be furnished under a contract of service, or
constituting raw materials, work in process or materials used or
consumed in the Debtor's business, or consigned to others or held by
others for return to the Debtor, whether now owned or subsequently
acquired or manufactured and wherever located (collectively, the
"Inventory");
(c) All accounts receivable, including, without limitation,
accounts, contracts, contract rights, chattel paper, instruments,
rents, deposits, general intangibles, and any other obligations of any
kind whether now existing or hereafter arising out of or in connection
with the sale or lease of goods or the rendering of services, and all
rights now or hereafter existing in and to all security agreements,
notes, leases, licenses, franchises, supply agreements, and other
contracts securing or otherwise relating to any such accounts,
contracts, contract rights, chattel paper, instruments, rents,
deposits, general intangibles, or obligations (any and all such
accounts, contracts, contract rights, chattel paper, instruments,
rents, deposits, general intangibles, and obligations being the
"Receivables", and any and all such security agreements, notes, leases,
licenses, franchises, supply agreements, and other contracts being the
"Related Contracts");
(d) All general intangibles, including, but not limited to,
corporate names, trade names, trademarks, trade secrets, inventions,
patents (applied for, pending and issued), proprietary rights,
intellectual property, books and records, customer lists, blue prints
and plans, computer programs, tapes and related electronic data,
processing software, and all corporate ledgers;
(e) Any and all additions, accessions, substitutions or
replacements to or for any of the foregoing;
(f) Any and all products and proceeds of any or all of the
foregoing, including, without limitation, cash, cash equivalents, tax
refunds and the proceeds of insurance policies providing coverage
against the loss or destruction of or damage to any of the Collateral,
or any indemnity, warranty, or guarantee payable by reason of loss or
damage to or otherwise with respect to any of the Collateral (whether
or not the Secured Party is the loss payee thereof);
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(g) All of the Debtor's after-acquired property of the kinds
and types described in paragraphs (a) - (f) herein;
(h) All records and data relating to any of the property
described above, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of the
Debtor's right, title, and interest in and to all computer software
required to utilize, create, maintain and process any of such records
or data or electronic media; and
also in (1) all checks, money, securities, bank accounts, deposit accounts, and
other accounts in the possession of or held by the Secured Party whether in the
name of the Debtor or in the name of the Secured Party, and (2) all other
property given by the Debtor to the Secured Party pursuant to this Agreement.
2. Secured Obligations. The security interest hereby granted shall
secure the following (the "Secured Obligations"):
(a) Debtor's repayment of the principal amount of up to Twenty
Six Million Nine Hundred Thousand Dollars ($26,900,000.00), together
with interest, late charges, costs, expenses, and any other applicable
charges, to the Secured Party pursuant to the Loan;
(b) Debtor's payment or performance of its obligations under
the Guaranty and under the other Loan Documents (as defined, described
and identified in the Loan Agreement, hereinafter the "Loan
Documents"), as the same may be amended, modified, extended, renewed,
replaced or restated;
(c) The payment of all other sums with interest and charges
thereon advanced in accordance herewith to protect the validity,
security, and priority of this Agreement, the Guaranty, or the Loan
Documents; and
(d) Any and all other indebtedness of Debtor to Secured Party
of every kind and description, direct or indirect, absolute or
contingent, due or to become due, regardless of how they arose or were
acquired, now existing or hereafter arising.
3. Warranties and Representations of the Debtor. Debtor hereby makes
the following representations and warranties which shall survive the execution
and delivery of this Agreement and shall be continuing representations and
warranties as long as any Secured Obligation remains outstanding:
(a) All representations and warranties made in the Guaranty,
the Loan Agreement and the Loan Documents relating to the Debtor and
the Collateral are true, accurate and complete in all material
respects;
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(b) The Debtor's principal place of business is located at the
address first set forth above; the Debtor's executive offices and the
office where its books and records are kept and are to be kept
concerning the Receivables, Related Contracts, and other Collateral are
at the aforesaid address; and the Debtor has no other places of
business except those set forth on Schedule I hereto;
(c) The Debtor conducts business only under and through the
corporate, business and trade names first set forth above.
(d) No material authorization, approval or other action by,
and no notice to or filing with, any governmental authority or other
person is required either (i) for the grant by the Debtor of the
security interests granted hereby or for the execution, delivery or
performance of this Agreement by the Debtor, or (ii) for the perfection
of or the exercise by the Secured Party of its respective rights and
remedies hereunder, except the filing of financing statements;
(e) The Debtor has good and marketable title to all of the
Collateral pledged by it hereunder, free and clear of any liens,
security interests, encumbrances or interests or claims of any other
person or entity, except those set forth on Schedule II hereto, and
there are no sums owed with respect to the Collateral other than as
disclosed on the Debtor's financial statements delivered to the Secured
Party;
(f) Upon the filing of UCC-1 financing statements being
delivered at or prior to the execution hereof, the Secured Party will
have a valid, perfected first security interest in all of the
Collateral which may be perfected by filing of financing statements.;
(g) The Debtor has not performed any acts which might prevent
the Secured Party from enforcing any of the material terms and
conditions of this Agreement or which would limit any of them in any
such enforcement;
(h) Schedule III attached hereto sets forth the description
and location of all Collateral not located at the Debtor's principal
place of business, together with a list of the record owners of and
record holders of liens against the real estate on which such
Collateral is located; and
(i) No effective financing statements or other similar
instrument in effect covering all or any part of the Collateral is on
file in any recording office, except as may have been filed in favor of
Secured Party relating to this Agreement.
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4. Affirmative Covenants of the Debtor.
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(a) The Debtor shall promptly notify and provide the Secured
Party with a complete description of the opening of any new places of
business, the closing of any existing places of business, the conduct
of business under any names or through any entities other than those
set forth herein, the relocation of any of the Collateral to any new
place of business or any other act which would affect the financing
statements filed by the Secured Party;
(b) The Debtor shall continuously take all steps that are
necessary or prudent to protect the security interests of the Secured
Party in the Collateral;
(c) The Debtor shall defend the Collateral against the claims
and demands of all persons;
(d) The Debtor shall deliver and pledge to the Secured Party,
endorsed or accompanied by instruments of assignment or transfer
satisfactory to the Secured Party, any instruments, documents, and
chattel paper which the Secured Party may reasonably specify;
(e) The Debtor shall comply, in all material respects, with
all governmental regulations applicable to the Collateral or any part
thereof or to the operation of the Debtor's business; provided,
however, that the Debtor may contest any governmental regulation in any
reasonable manner which shall not in the reasonable opinion of the
Secured Party adversely affect the Secured Party's rights or the first
priority of its security interest in the Collateral;
(f) The Debtor shall pay promptly when due, all taxes,
assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as
all claims of any kind, except that no such charge need be paid if (i)
the validity thereof is being contested in good faith by appropriate
proceedings, (ii) such proceedings do not involve any danger of the
sale, forfeiture or loss of any of the Collateral or any interest
therein; and (iii) such charge is adequately reserved against in
accordance with the generally accepted accounting principles;
(g) The Debtor shall cause the Equipment to be maintained and
preserved in good condition, repair and working order, and shall make
all repairs, replacements, additions, and other improvements necessary
to maintain the Equipment in such good condition;
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(h) The Debtor shall maintain Inventory sufficient to meet the
needs of its business;
(i) The Debtor shall preserve all beneficial Related
Contracts;
(j) The Debtor shall take all commercially reasonable steps
necessary to collect the Receivables;
(k) The Debtor shall assure that (i) no Receivable is or shall
be subject to any defense, offset, counterclaim, discount, or
allowance, (ii) no agreement under which any deduction, discount,
credit or allowance of any kind may be granted or allowed shall have
been or shall thereafter be made by Debtor with any account party
without the consent of Secured Party, (iii) all statements made and all
unpaid balances appearing in the invoices, documents, agreements
relating to each Receivable are and shall be true, genuine, and correct
in all respects, and (iv) no Receivable shall be converted to a note or
other instrument unless the same shall be delivered to the possession
of the Secured Party within ten (10) days of the date of execution of
such note or instrument;
(l) The Debtor shall, with respect to any Collateral which
consists of trucks, automobiles, or other motor vehicles, or any other
Collateral required to be titled, deliver all titles thereto to the
Secured Party to be held by the Secured Party and Debtor shall make,
execute, and deliver any and all applications, and take such other
action to assure that the Secured Party is listed of record as the
first priority and sole lienholder on all title certificates;
(m) Debtor shall keep accurate and complete records listing
and describing the Collateral, and when requested by Secured Party,
Debtor shall give Secured Party a certificate listing and describing
the Collateral and setting forth the total value of the Inventory, the
total value of the Equipment, the amount of the Receivables designating
how many days the Receivables are from the date of invoice, the face
value of any instruments, and any other information Secured Party may
request. Secured Party shall have the right at any time to inspect the
Collateral and to audit and make copies of any records or other
writings which relate to the Collateral or the general financial
condition of Debtor. Secured Party may remove such records and writings
for the purpose of having copies made thereof;
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(n) The Debtor shall advise the Secured Party promptly, in
reasonable detail, (i) of any lien, security interest, encumbrance, or
claim made or asserted against any of the Collateral, (ii) of any
material change, substantial loss or depreciation in the composition of
the Collateral, and (iii) of the occurrence of any other material
adverse effect on the aggregate value, enforceability or collectibility
of the Collateral or on the security interests created hereunder;
(o) The Debtor shall give, execute, deliver and file or record
in the proper governmental offices, any instrument, paper or document,
including, but not limited to, one or more financing statements under
the Uniform Commercial Code, reasonably satisfactory to the Secured
Party, or take any action which the Secured Party may deem necessary or
desirable in order to create, preserve, perfect, extend, continue,
modify, terminate or otherwise effect any security interest granted
pursuant hereto, or to enable the Secured Party to exercise or enforce
any of its rights hereunder; and
(p) The Debtor shall keep, and stamp or otherwise xxxx, any of
its documents, instruments and chattel paper and its books and records
relating to any of the Collateral in such manner as the Secured Party
may reasonably require.
5. Negative Covenants of the Debtor. Except as otherwise provided in
the Loan Agreement or in this Agreement, without the prior written consent of
the Secured Party, the Debtor shall not:
(a) Transfer, sell or assign any of the Collateral other than
in the ordinary course of business;
(b) Allow or permit any other security interest or lien to
attach to any of the Collateral;
(c) File, authorize, or permit to be filed in any jurisdiction
any financing statement relating to any of the Collateral unless the
Secured Party is named as sole secured party;
(d) Permit any of the Collateral to be levied upon under any
legal process;
(e) Permit anything to be done that may materially impair the
value of any of the Collateral or the security therein intended to be
afforded hereby; or
(f) Use the Collateral in violation of any law or in any
manner inconsistent with any policy of insurance thereon.
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6. Fixtures. It is the intention of the parties hereto that none of the
Collateral shall become fixtures. Without limiting the generality of the
foregoing, the Debtor will, if requested by the Secured Party, obtain waivers of
lien, in form satisfactory to the Secured Party, from each mortgagee or lessor
of real property (other than the Secured Party) on which any of the Collateral
is or is to be located.
7. Insurance. Debtor shall, at its own expense, maintain insurance
covering the Collateral against such risks, with such insurers, in such form,
and in such amounts as shall from time to time be required by Secured Party, but
in any event, in such amounts and with such coverage as is customary in Debtor's
type of business. All insurance policies shall be written so as to be payable in
the event of loss to Secured Party and shall provide for thirty (30) days'
written notice to Secured Party of cancellation or modification. At the request
of Secured Party, all insurance policies shall be furnished to and held by
Secured Party. Debtor hereby assigns to Secured Party return premiums, dividends
and other amounts which may be or become due upon cancellation of any such
policies for any reason whatsoever and, after the occurrence of an Event of
Default (as defined hereinbelow), directs the insurers to pay Secured Party any
sums so due. Secured Party is hereby appointed as attorney irrevocable to
collect after the occurrence of an Event of Default return premiums, dividends
and other amounts due on any insurance policy and the proceeds of such
insurance, to settle any claims with the insurers in the event of loss or
damage, to endorse settlement drafts and, after the occurrence of an Event of
Default, to cancel, assign, or surrender any insurance policies. If, prior to
the occurrence of an Event of Default , any return premiums, dividends, other
amounts or proceeds are paid to Debtor under such policies, Debtor shall take
either or both of the following actions: (i) apply such return premiums,
dividends, other amounts and proceeds in whole or in part to the payment or
satisfaction of any of the Secured Obligations; or (ii) use such return
premiums, dividends, other amounts and proceeds for the purpose of repairing or
replacing the Collateral destroyed or damaged. If, after the occurrence of an
Event of Default, any return premiums, dividends, other amounts or proceeds are
paid to Secured Party under such policies, such return premiums, dividends,
other amounts and proceeds shall be applied to the payment of any of the Secured
Obligations.
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8. Receivables. Debtor agrees that Secured Party may communicate with
account debtors in order to verify the existence, amount, and terms of any
Receivables. After the occurrence of an Event of Default, Secured Party may
notify account debtors of the security interests established herein and require
that payments on Receivables be made directly to Secured Party, and upon the
request of Secured Party, Debtor shall notify account debtors and indicate on
all xxxxxxxx that payments and returns are to be made directly to Secured Party.
In furtherance of the foregoing, Debtor hereby appoints Secured Party attorney
irrevocable with full power after the occurrence of an Event of Default to
collect, compromise, endorse, sell, or otherwise deal with the Receivables or
proceeds thereof and to perform the terms of any contract in order to create
Receivables in Secured Party's name or in the name of Debtor. This Agreement may
be, but need not be, supplemented by separate assignments of Receivables and
contract rights and, if such assignments are given, the rights and security
interests given thereby shall be in addition to and not in limitation of the
rights and security interests granted by this Agreement.
9. Events of Default. The following events shall be deemed "Events of
Default" hereunder:
(a) An Event of Default under the Guaranty, the Loan Agreement
or any of the Loan Documents;
(b) Any representation or warranty or statement of fact made
to Secured Party at any time by Debtor is false or misleading or
becomes false or misleading in any material respect;
(c) Debtor fails to observe or perform any covenant, warranty,
or agreement required to be observed or performed by it under this
Agreement, which default is not cured within the applicable grace
period provided in Section X. of the Loan Agreement;
(d) Debtor shall be in default under any obligation undertaken
by Debtor which default has a material adverse effect on the financial
condition of Debtor or on the value of the Collateral;
(e) Uninsured loss, theft, damage, or destruction of any
substantial portion of any of the Collateral; or
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(f) Any Debtor or any guarantor of any of the Secured
Obligations is or becomes insolvent or is involved in any financial
difficulty as evidenced by (i) an assignment, composition, or similar
device for the benefit of creditors, (ii) general failure to pay debts
when due, (iii) attachment or receivership of assets not dissolved or
satisfactorily bonded within thirty (30) days, (iv)the appointment of a
custodian, trustee, or receiver for a substantial portion of any of
their respective properties, (v) the liquidation or sale of all or
substantially all of their respective properties, (vi) the filing by
any Debtor or any guarantor of a petition under any Chapter of the
United States Bankruptcy Code or the institution of any other
proceeding under any law relating to bankruptcy, bankruptcy
reorganization, insolvency or relief of Debtors, or (vii) the filing
against any Debtor or any guarantor of an involuntary petition under
any Chapter of the United States Bankruptcy Code or the institution of
any other proceeding under any law relating to bankruptcy, bankruptcy
reorganization, insolvency or relief of debtors where such proceeding
is not dismissed within sixty (60) days from the date on which it is
filed or instituted.
10. Rights and Remedies of Secured Party on Default. Upon the
occurrence of any Event of Default, Secured Party shall have, by way of example
and not of limitation, the following rights and remedies:
(a) Secured Party may declare the Secured Obligations, or any
of them, to be immediately due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly
waived;
(b) In addition to all other rights and remedies contained in
this Agreement, the Loan Agreement, and in the Loan Documents, Secured
Party may exercise the rights and remedies accorded Secured Party by
the Uniform Commercial Code or by any other applicable law, all of
which rights and remedies shall be cumulative and non-exclusive to the
extent permitted by law;
(c) Secured Party shall have the right to enter and/or remain
upon the Premises of Debtor, or any other place or places where any of
the Collateral is located and kept, without any obligation to pay rent
to Debtor or others, and remove Collateral therefrom to the premises of
the Secured Party or any agent of Secured Party for such time as
Secured Party may desire in order to maintain, collect, sell and/or
prepare the Collateral for sale, liquidation or collection;
(d) Secured Party may require the Debtor at Debtor's cost to
assemble the Collateral and make it available to Secured Party at a
place designated by Secured Party;
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(e) Secured Party may take possession of and use and operate
the Collateral in the manner and for the purposes as set forth in
Section 11 hereinbelow;
(f) Secured Party may sell, lease, or otherwise dispose of the
Collateral as set forth in Section 12 hereinbelow;
(g) Secured Party shall have the right to set-off, without
notice to the Debtor, any and all deposits or other sums at any time or
times credited or due from Secured Party to Debtor, whether in a
special account or other account or represented by a certificate of
deposit (whether or not matured); which deposit and other sums shall at
all times constitute additional security for the Secured Obligations;
(h) Secured Party may perform any warranty, covenant or
agreement which Debtor has failed to perform under this Agreement; and
(i) Secured Party may take any other action which Secured
Party deems necessary or desirable to protect the Collateral or the
security interests granted herein.
11. Rights of Secured Party to Use and Operate Collateral.
Upon the occurrence of any Event of Default, but subject to the
provisions of the Uniform Commercial Code or other applicable law, the
Secured Party shall have the right and power to take possession of all
or any part of the Collateral, and to exclude the Debtor and all
persons claiming under the Debtor wholly or partly therefrom, and
thereafter to hold, store, and/or use, operate, manage and control the
same. Upon any such taking of possession, the Secured Party may, from
time to time, at the expense of the Debtor, make all such repairs,
replacements, alterations, additions and improvements to and of the
Collateral as the Secured Party may reasonably deem proper. In any such
case, subject as aforesaid, the Secured Party shall have the right to
manage and control the Collateral and to carry on the business and to
exercise all rights and powers of the Debtor in respect thereto as the
Secured Party shall deem best, including the right to enter into any
and all such agreements with respect to the leasing and/or operation of
the Collateral or any part thereof as the Secured Party may see fit;
and the Secured Party shall be entitled to collect and receive all
rents, issues, profits, fees, revenues and other income of the same and
every part thereof. Such rents, issues, profits, fees, revenues and
other income shall be applied to pay the expenses of holding and
operating the Collateral and of conducting the business thereof, and of
all maintenance, repairs, replacements, alterations, additions and
repairs, replacements, alterations, additions and improvements, and to
make all payments which the Secured Party may be required or may elect
to make, if any, for taxes, assessments, insurance and other charges
upon the Collateral or any part thereof, and all other payments which
the Secured Party may be required or authorized to make under any
provision of this Agreement (including reasonable legal costs and
attorneys' fees).
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The remainder of such rents, issues, profits, fees, revenues and other
income shall be applied to the payment of the Secured Obligations in
such order of priority as the Secured Party may determine in its sole
discretion and any surplus shall be returned to the Debtor. Without
limiting the generality of the foregoing, the Secured Party shall have
the right to apply for and have a receiver appointed by a court of
competent jurisdiction in any action taken by the Secured Party to
enforce their rights and remedies hereunder in order to manage, protect
and preserve the Collateral and continue the operation of the business
of the Debtor and to collect all revenues and profits thereof and apply
the same to the payment of all expenses and other charges of such
receivership including the compensation of the receiver and to the
payment of the Secured Obligations as aforesaid until a sale or other
disposition of such Collateral shall be finally made and consummated.
12. Rights of Secured Party to Sell Collateral. After an Event of
Default, upon (10) days prior written notice by registered or certified mail by
Secured Party to Debtor at the address of the Debtor set forth above (or at such
other address or addresses as the Debtor shall specify in writing by like notice
to the Secured Party) of the time and place of any intended disposition of
Collateral, then Secured Party shall have the right and power to sell, assign,
lease, or otherwise dispose of the Collateral from any business premises of the
Debtor, either at public auction or private sale, by liquidation sale or other
disposition, or as if the sale was being made in the ordinary course of Debtor's
business, with or without notice to the public that the said sale or disposition
is for the benefit of the Secured Party; provided, however, that if the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, then Secured Party shall have the
right and power to dispose of the Collateral without prior notice to Debtor and
Debtor expressly waives any rights to notice under such circumstances. The
notices described above shall be deemed to meet any requirement hereunder or
under any applicable law (including the Uniform Commercial Code) that reasonable
notification be given of the time and place of such sale or other disposition.
After deducting all costs and expenses of collection, storage, custody, sale or
other disposition and delivery (including reasonable legal costs and attorneys'
fees) and all other charges against the Collateral, the residue of the proceeds
of any such sale or disposition shall be applied to the payment of the Secured
Obligations in such order of priority as the Secured Party may determine in its
sole discretion and any surplus shall be returned to the Debtor. In the event
the proceeds of any sale, lease or other disposition of the Collateral hereunder
are insufficient to pay all of the Secured Obligations in full, the Debtor will
be liable for the deficiency, together with interest thereon at the maximum rate
provided in the Loan Agreement and the cost and expenses of collection of such
deficiency, including, without limitation, reasonable fees of attorneys,
experts, and agents, expenses and disbursements.
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13. Attorney-in-Fact. The Secured Party is hereby appointed the
attorney-in-fact, with full power of substitution, of the Debtor for the purpose
of carrying out the provisions of this Agreement after an Event of Default and
taking any action and executing any instruments (including, without limitation,
financing or continuation statements, conveyances, assignments, and transfers)
which the Secured Party may deem necessary or advisable to accomplish the
purposes hereof, which appointment as attorney-in-fact is coupled with an
interest and is irrevocable. The Debtor shall indemnify and hold harmless the
Secured Party from and against any liability or damage which it may incur in the
exercise and performance, in good faith, of the Secured Party's powers and
duties as such attorney-in-fact.
14. Waiver, etc. The Debtor hereby waives presentment, demand, notice,
protest and, except as is otherwise provided herein, all other demands and
notices in connection with this Agreement or the enforcement of the Secured
Party's rights hereunder or in connection with any Secured Obligations or any
Collateral. The Debtor further consents to and waives notice of the granting of
renewals, extensions of time for payment or other indulgences to the Debtor or
to any account debtor in respect of any Receivable, substitution, release or
surrender of any Collateral, addition or release of persons primarily or
secondarily liable on any Secured Obligation or on any Receivable or other
Collateral, or the acceptance of partial payments on any Secured Obligation or
on any account receivable or other Collateral and/or the settlement or
compromise thereof. No delay or omission on the part of the Secured Party in
exercising any right hereunder shall operate as a waiver of such right or of any
other right hereunder. Any waiver of any such right on any one occasion shall
not be construed as a bar to or waiver of any such right on any such future
occasion.
15. Termination; Assignments, etc. This Agreement and the security
interest in the Collateral created hereby shall terminate when all of the
Secured Obligations have been paid, performed, and finally discharged in full.
In the event of a sale or assignment by the Secured Party of all or any of the
Secured Obligations held by it, such Secured Party may assign or transfer its
rights and interests under this Agreement in whole or in part to the purchaser
or purchasers of such Secured Obligations, whereupon such purchaser or
purchasers shall become vested with all of the powers and rights of such Secured
Party hereunder, and such Secured Party shall thereafter be forever released and
fully discharged from any liability or responsibility hereunder, with respect to
the rights and interests so assigned.
16. Notices. All notices, requests, demands and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and shall be either mailed by certified mail, return receipt requested, or
delivered by overnight courier service, to the applicable party at the addresses
first set forth above, or, as to each party, at such other address as shall be
designated by such parties in a written notice to the other party complying as
to delivery with the terms of this Section. All such notices, requests, demands
and other communication shall be effective on the date of first attempted
delivery.
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17. Miscellaneous.
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(a) The powers conferred on the Secured Party hereunder are
solely to protect its interest in the Collateral and shall not impose
any duty upon it to exercise any such powers. Except for the safe
custody of any Collateral in its possession and the accounting for
monies actually received by it hereunder, the Secured Party shall not
have any duty as to any Collateral or as to the taking of any necessary
steps to preserve any right of it or of the Debtor against other
parties pertaining to any Collateral;
(b) No provision hereof shall be amended except by a writing
signed by the Secured Party and the Debtor;
(c) Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof;
(d) This Agreement shall be binding upon and shall inure to
the benefit of the successors and assigns of the Secured Party and the
Debtor;
(e) No delay, failure to enforce, or single or partial
exercise on the part of the Secured Party in connection with any of its
rights hereunder shall constitute an estoppel or waiver thereof, or
preclude other or further exercises or enforcement thereof and no
waiver of any default hereunder shall be a waiver of any subsequent
default; and
(f) This Agreement shall be governed as to its validity,
interpretation and effect in accordance with the laws of the State of
New Hampshire.
(g) Notwithstanding any other provision of this Agreement or
the other Loan Documents to the contrary, the security interests
granted hereunder to the Secured Party shall not be, and shall not
deemed to be, an assignment of any contract or agreement of the Debtor
which does not permit such an assignment under the terms and conditions
of such contract or agreement; provided, however, that the foregoing
shall in no manner limit the effect of the collateral assignment
hereunder to the Secured Party of the accounts arising under such
contracts or agreements for the payment of money now due or hereafter
becoming due to the Debtor thereunder, or of the security interests of
the Secured Party therein, or of the Secured Party's rights with
respect thereto under this Agreement.
14
IN WITNESS WHEREOF, the undersigned have set their hands and seals to
this Agreement all as of the day and year first above written.
DEBTOR
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LASERTEL, INC.
/s/ Xxxxxxxx XxXxx Xxxxxx By: /s/ Xxxxx X Xxxxxxx, Secretary/Treasurer
------------------------- ----------------------------------------
Witness Signature and Title
Duly Authorized
SECURED PARTY
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CITIZENS BANK NEW HAMPSHIRE
/s/ Xxxxxxxx Xxxxxxx By: /s/ Xxxx Xxxxxxx
------------------------- ----------------------------------------
Witness Xxxx Xxxxxxx, Vice President
15
SECURITY AGREEMENT
SCHEDULE I
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List of Other Business Locations
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16
SECURITY AGREEMENT
SCHEDULE II
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List of Other Liens and Encumbrances, etc.
------------------------------------------
See attached
17
SECURITY AGREEMENT
SCHEDULE III
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Other Collateral Location
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18
