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EXHIBIT 99.3
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of this 31st day of December 1995,
is made by and among, NEI/GTEL Environmental Laboratories, Inc., a Delaware
corporation ("Debtor"), Nytest Environmental Inc., a Delaware Corporation
("Parent") and GTEL Environmental Laboratories, Inc., a Delaware corporation
("Secured Party").
WHEREAS, Debtor, Parent and Secured Party have entered into an Asset
and Business Purchase Agreement dated December 28, 1995 (the "Asset Purchase
Agreement"), whereby Debtor purchased substantially all of the assets, subject
to certain liabilities, of Secured Party;
WHEREAS, Debtor issued to Secured Party, in partial consideration for
the assets, a Subordinated Convertible Note of even date herewith in the
original principal amount of $1,254,000 (the "Note"); and
WHEREAS, Debtor and Parent desire to secure all of the obligations of
Debtor under the Note by granting to Secured Party a security interest in all
of Debtor's assets on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Security Interest. As collateral security for the payment,
performance and observance of the Note and all other obligations of
Debtor and/or Parent to Secured Party or any of its Affiliates (as
such term is defined below) (collectively, the "Obligations"), Debtor
hereby grants to Secured Party a security interest in and a right of
setoff against all of the property, plant and equipment of Debtor
purchased by Debtor under the Asset Purchase Agreement, wherever
located set forth together with any and all additions thereto and
replacements and proceeds thereof (the "Collateral"), including, the
following:
(a) All of Debtor's (i) equipment, machinery, vehicles, furniture
and fixtures, all attachments, accessions and property now or
hereafter affixed thereto, and all substitutions and
replacements thereof; and (ii) books, records and other
property relating to the foregoing; and
(b) All of Debtor's right, interest or title to any and all
products and proceeds of any of the foregoing, in any form
(including, without limitation, any insurance proceeds and
claims by Debtor against third parties for loss or damage to
or destruction of any or all of the foregoing property and
proceeds of proceeds).
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2. Representations, Warranties and Covenants. Debtor and Parent, jointly
and severally, represent, warrant and covenant as follows:
(a) Debtor has full corporate power, authority and legal right to
pledge and grant a security interest in all of the Collateral
pursuant to this Agreement, and this Agreement constitutes the
legal, valid and binding obligation of Debtor and Parent,
enforceable against them in accordance with its terms.
(b) No consent of any other party (including, without limitation,
stockholders or creditors of Debtor or Parent) and no consent,
authorization, approval, or other action by, and no notice to
or filing with, any governmental authority or regulatory body
is required and has not been obtained either (x) for the
pledge by Debtor of the Collateral pursuant to this Agreement,
or (y) for the execution, delivery or performance of this
Agreement.
(c) All filings, registrations and recordings necessary,
appropriate or reasonably requested by Secured Party to
create, preserve, protect and perfect the security interest
granted by Debtor to Secured Party hereby in respect of the
Collateral and required to be made on or before the date
hereof have been accomplished. The security interest granted
to Secured Party pursuant to this Agreement in and to the
Collateral constitutes and hereafter will constitute a
perfected security interest therein (assuming fully executed
UCC-1 Financing Statements are properly filed with the
Secretary of State of the state in which the Collateral is
located as listed on Schedule A and in the towns or counties
in which the Collateral is located as listed on Schedule A),
superior and prior to the rights of all other persons therein,
except for those holders of Senior Indebtedness, as defined in
the Note, and subject to no other Liens (as such term is
defined below).
(d) Debtor is, as of the date hereof, and, as to Collateral
acquired by it from time to time after the date hereof, Debtor
will be, the owner of all Collateral free from any Lien,
except Permitted Liens (as such term is defined below) or
other right, title or interest of any person other than
Secured Party or holders of Senior Indebtedness, and Debtor
shall defend the Collateral against all claims and demands of
all persons at any time claiming any interest therein adverse
to Secured Party.
(e) Except for financing statements evidencing obligations of
Debtor to holders of Senior Indebtedness, there is no
financing statement on file in any jurisdiction (or similar
statement, notice of assignment or instrument of registration
under the law of any jurisdiction) covering or purporting to
cover any interest of any kind in the Collateral, and Debtor
shall not execute or authorize to be filed in any public
office any financing statement (or similar statement, notice
of assignment or instrument of registration under the law of
any jurisdiction) relating to the Collateral, except financing
statements filed or to be filed in respect of, and
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covering the security interests granted hereby by Debtor or
granted by Debtor to such holders.
(f) The chief executive office of Debtor is located at Xxxxxxxxxxx
Xxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000 and the chief
executive office of the Parent is located at 00 Xxxxxxx
Xxxxxxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx. Debtor and Parent shall
not move their respective chief executive offices until, (i)
they shall have given to Secured Party not less than 15 days'
prior written notice of their intention so to do, setting
forth the new location (which shall be in the continental
United States of America) and such other information in
connection therewith as Secured Party may reasonably request,
and (ii) with respect to such new location, Debtor shall have
taken all action reasonably satisfactory to Secured Party to
maintain the perfection and proof of the security interest of
Secured Party in the Collateral intended to be granted hereby,
including, without limitation, obtaining waivers of landlord's
or warehouseman's liens with respect to such new location.
(g) Debtor shall not change its corporate name until (i) it shall
have given to Secured Party not less than 15 days' prior
written notice of its intention so to do, clearly describing
such new name and providing such other information in
connection therewith as Secured Party may request, and (ii)
with respect to such new name, Debtor shall have taken all
action reasonably satisfactory to Secured Party to maintain
the perfection and proof of the security interest of Secured
Party in the Collateral intended to be granted hereby.
(h) All of the Collateral held on the date hereof by Debtor is
located at the locations shown on Schedule B hereto. All
Collateral now held or subsequently acquired shall be kept at
any of the locations shown on Schedule B hereto or such new
location as Debtor may establish, provided, however, that
before establishing such new location, (i) Debtor shall have
given Secured Party fifteen (15) days prior notice thereof,
clearly describing such new location (which shall be in the
continental United States of America) and shall have provided
such other information in connection therewith as Secured
Party may reasonably request, and (ii) with respect to such
new location, Debtor shall have taken all action reasonably
satisfactory to Secured Party to maintain the perfection and
proof of the security interest in the Collateral intended to
be granted hereby, including, without limitation, obtaining
waivers of landlord's or warehouseman's liens with respect to
such new location.
(i) Debtor will not assign, transfer, sell, lease or otherwise
dispose of any Collateral except (x) in the ordinary course of
business or (ii) to Parent or to any entity in which Parent
owns and maintains greater than two-thirds of the voting stock
( "Direct Subsidiary" and any entity in which a Direct
Subsidiary owns and maintains greater then two-thirds of the
voting stock (such a subsidiary and any direct subsidiary are
hereinafter referred to as a "Controlled Subsidiary"),
provided, however, that Parent shall, and shall cause each
such Controlled
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Subsidiary to which any Collateral has been assigned,
transferred, sold, leased or otherwise disposed, to comply
with the covenants and obligations set forth herein.
(j) Debtor will use the Collateral for lawful purposes only, and
in conformity with all applicable laws, ordinances and
regulations.
(k) The Collateral is now and shall remain personal property, and
Debtor will not permit any material part of the Collateral to
become a fixture without prior written notice to and consent
of Secured Party and without first making all arrangements,
and delivering, or causing to be delivered, to Secured Party
all instruments and documents, including, without limitation,
waivers and subordination agreements by any landlords or
mortgagees, reasonably requested by and reasonably
satisfactory in form and substance to Secured Party to
preserve and protect the security interest granted herein, and
to effectuate or maintain the priority thereof, against all
persons.
(l) Parent will maintain at its chief executive office proper
books of account and records in accordance with generally
accepted accounting principles applied on a consistent basis,
and will deliver to Secured Party the following:
(i) as soon as available and in any event within fifty
(50) days after the end of each quarter of each
fiscal year of Parent, a consolidated balance sheet
of Parent as of the end of such quarter, statements
of income, stockholders' equity and the related
statements of cash flows of Parent for the period
commencing at the end of the previous fiscal year and
ending with the end of such quarter, setting forth in
each case in comparative form the corresponding
figures for the corresponding period of the preceding
fiscal year in reasonable detail and prepared in
accordance with generally accepted accounting
principles consistently applied (subject to year-end
audit adjustments) in the form filed with the United
States Securities and Exchange Commission ("SEC") or,
if no such filings are made, such financial
information shall be duly certified by the President
or Chief Financial Officer; and
(ii) as soon as available and in any event within one
hundred five (105) days after the end of each fiscal
year of Parent, a copy of the annual audit report for
such year for Parent, including therein a
consolidated balance sheet of Parent as of the end of
such fiscal year and statements of income and
stockholders' equity and of cash flows of Parent for
such fiscal year, all duly certified by independent
public accountants, which, if filed with the SEC, may
be in such form as so filed.
(m) Secured Party and its agents, advisors and counsel may, at
Secured Party's expense, visit and inspect any of the
facilities of Debtor for the purpose inspecting the
Collateral, at reasonable times and with reasonable prior
notice during normal business hours in a manner not disruptive
to Debtor's business.
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Debtor and Parent will furnish to Secured Party such other
information as it from time to time may reasonably request.
(n) Debtor will maintain insurance with financially sound and
reputable insurance companies or associations in such amounts
and covering such risks as is usually carried by companies
engaged in similar businesses and owning similar properties in
the same general areas in which Debtor operates, provided,
however, that the insurance coverage for the Collateral shall
at least equal its replacement cost. Such insurance policies
shall be endorsed to name Secured Party as an additional
insured party. Upon Secured Party's reasonable request from
time to time, certificates evidencing the required insurance
coverage shall be delivered by Debtor to Secured Party and the
policies shall provide that any material change in or
cancellation of any policy under which certificates are issued
shall not be valid until Secured Party has received fifteen
(15) days prior written notice of such change or cancellation.
(o) Debtor will preserve and maintain its corporate existence,
rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified, as a foreign
corporation in each jurisdiction in which such qualification
is necessary in view of its business and operations or the
ownership of its properties, including, without limitation,
all jurisdictions in which any of the Collateral is located.
Debtor shall preserve and maintain all licenses and other
rights to use patents, processes, licenses, trademarks, trade
names, inventions, intellectual property rights or copyrights
owned or possessed by it and necessary to the conduct of its
business.
(p) Debtor will pay and discharge when due and payable, all lawful
taxes, subject to any available extensions, assessments and
governmental charges or levies imposed upon the income,
profits, property or business of Debtor; provided, however,
that any such tax, assessment, charge or levy need not be paid
if the validity thereof shall currently be contested in good
faith by appropriate proceedings and if Debtor shall have set
aside on its books adequate reserves with respect thereto, and
provided, further, that Debtor will pay all such taxes,
assessments, charges or levies forthwith upon the commencement
of proceedings to foreclose any Lien which may have attached
to the Collateral as security therefor.
(q) Debtor will keep the Collateral in good operating condition in
all material respects, reasonable wear and tear excepted, and
from time to time make all needful and proper repairs,
renewals, replacements, additions and improvements thereto.
(r) Debtor will not create, incur, assume or suffer to exist any
Lien of any nature, upon or with respect to any of the
Collateral or assign or otherwise convey any right to receive
income, except Permitted Liens.
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(s) Debtor will not incur or suffer to exist any Indebtedness (as
such term is defined below) except:
(i) Senior Indebtedness;
(ii) Indebtedness secured by purchase money security
interests securing the purchase price of goods and
services and capitalized equipment leases, but
specifically excluding any sale leaseback of all or
any portion of the Collateral; and
(iii) Current liabilities, other than for money borrowed,
of Debtor incurred in the ordinary course of business.
(t) Debtor will not permit any change in the nature of the
business of Debtor or merge or consolidate with any other
person, except with Parent or with a Controlled Subsidiary,
provided, however, that Parent shall, and shall cause the
Controlled Subsidiary with which the merger or consolidation
has occurred, to comply with the covenants and obligations set
forth herein.
(u) Debtor will not purchase, redeem, retire, or otherwise acquire
for value any shares of its capital stock (or rights, options
or warrants to purchase such shares) now or hereafter
outstanding or return any capital to its stockholders, and
Debtor shall not declare or pay any dividends or make any
distribution of assets to its stockholders as such.
(v) Debtor will not sell, transfer, lease or otherwise dispose of,
in one transaction or a series of transactions, all or
substantially all of its assets, except to the Parent or a
Controlled Subsidiary, provided, however, that Parent shall,
and shall cause the Controlled Subsidiary to which the assets
have been sold, transferred, leased or otherwise disposed, to
comply with the covenants and obligations set forth herein.
(w) Debtor and Parent shall cause Debtor to conduct its business
in the ordinary course and Parent shall not permit or cause
work typically performed by Debtor to be performed by another
Affiliate of Debtor or to take any other actions to purposely
diminish the value of the Collateral;
(x) Parent will continue to own at all times all of the issued and
outstanding capital stock of Debtor;
(y) Debtor will not enter into any transaction or agreement with
Parent or any Affiliate of Debtor or Parent, except agreements
and transactions on terms no less favorable to Debtor than it
would obtain in a transaction between unrelated parties.
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(z) Debtor will not guarantee any Indebtedness except Senior
Indebtedness and will not make any loan or advance to any
person, except customary travel and entertainment advances to
employees.
(aa) Debtor and Parent will, at their sole cost and expense,
perform all acts and execute all documents reasonably
requested by Secured Party from time to time to evidence,
perfect, maintain or enforce Secured Party's security interest
granted herein, and to effectuate or maintain the priority
thereof or otherwise to carry out the provisions and purposes
of this Agreement.
(bb) Debtor and Parent shall promptly advise Secured Party of any
event or occurrence which results in or is likely to result in
a breach of the covenants contained herein, describing such
event or occurrence in reasonable detail. Debtor and Parent
will also promptly advise Secured Party of any facts which
cast any doubt upon the accuracy or completeness in any
material respects of any of the representations and warranties
contained herein.
For purposes of this Agreement, the following terms shall have the
meanings:
"Affiliate" has the meaning ascribed to that term in Rule
12b-2 under the Securities Exchange Act of 1934, or any
successor rule.
"Indebtedness" shall mean, with respect to any person, (i) all
obligations of such person for borrowed money, or with respect
to deposits or advances of any kind (other than deposits,
advances or excess payments accepted in connection with the
sale by such Person of products or services in the ordinary
course of business), (ii) all obligations of such person
evidenced by bonds, debentures, notes or similar instruments,
(iii) all obligations of such person upon which interest
charges are customarily paid (other than obligations accepted
in connection with the purchase by such person of products or
services in the ordinary course of business), (iv) all
obligations of such person under conditional sale or other
title retention agreements relating to property purchased by
such person, (v) all obligations of such person issued or
assumed as the deferred purchase price of property or services
(other than accounts payable to suppliers incurred in the
ordinary course of business and paid when due), (vi) all
Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien or security interest on
property owned or acquired by such person whether or not the
obligations secured thereby have been assumed, (vii) all
obligations of such person under leases required to be
accounted for as capital leases under generally accepted
accounting principles, and (viii) all guarantees of such
person.
"Lien" shall mean any mortgage, pledge, assignment, security
interest, encumbrance, lien or charge of any kind, any
conditional sale or other title retention agreement or any
lease in the nature thereof (including any agreement to give
any of the foregoing).
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"Permitted Liens" shall mean:
(a) for taxes, assessments or governmental charges or
levies on property of Debtor if the same shall not at the time
be delinquent or thereafter can be paid without penalty, or
are being contested in good faith and by appropriate
proceedings;
(b) imposed by law, such as carriers, warehousemen's and
mechanics' Liens and other similar Liens arising in the
ordinary course of business;
(c) arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation;
(d) arising from any litigation or proceeding which is
being contested in good faith by appropriate proceedings,
provided, however, that no execution or levy has been made;
(e) securing the performance of bids, tenders, contracts
(other than for the repayment of borrowed money), statutory
obligations and surety bonds; and
(f) Securing the Senior Indebtedness.
3. Events of Default. Debtor and Parent shall be in default under this
Agreement upon the happening of any of the following events or
conditions (herein called "Events of Default"):
(i) The occurrence of an Event of Default under the Note;
(ii) Debtor or Parent shall fail to perform any of its obligations
under this Agreement, including, without limiting the
generality of the foregoing, any covenants under Section 2
herein, and such failure shall continue beyond ten (10) days
after notice of such failure to perform is provided by Secured
Party to Debtor or Parent, as the case may be; or
(iii) Any representation, warranty or statement made by Debtor or
Parent herein is found to have been false or misleading in any
material respect as of the time when made.
4. Remedies Upon Default. Upon the occurrence of an Event of Default and
at any time thereafter while such Event of Default remains unremedied
and unwaived, Secured Party may, without notice to or demand upon
Debtor or Parent, declare any Obligations immediately due and payable
and Secured Party shall have the following rights and remedies (to the
extent permitted by applicable law), in addition to all rights and
remedies of a secured party under the UCC, at law or in equity, all
such rights and
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remedies being cumulative, not exclusive and enforceable
alternatively, successively or concurrently:
(a) Secured Party may, at any time and from time to time, with or
without judicial process or the aid and assistance of others,
enter upon any premises in which any Collateral may be located
and, without resistance or interference by Debtor or Parent,
take possession of the Collateral, and/or dispose of any
Collateral on any such premises, and/or require Debtor or
Parent to assemble and make available to Secured Party, at the
expense of Debtor and Parent, any Collateral at any place and
time designated by Secured Party which is reasonably
convenient to both parties, and/or remove any Collateral from
any such premises for the purpose of effecting sale or other
disposition thereof and/or sell, resell, lease, assign and
deliver, grant options for or otherwise dispose of any
Collateral in its then condition or following any commercially
reasonable preparation or processing, at public or private
sale or proceedings or otherwise, by one or more contracts, in
one or more parcels, at the same or different times, with or
without having the Collateral at the place of sale or other
disposition, for cash and/or credit, and upon any terms, at
such place(s) and time(s) and to such person(s) as Secured
Party deems best, all without demand, notice or advertisement
whatsoever except that where an applicable statute requires
reasonable notice of sale or other disposition Debtor and
Parent hereby agree that the sending of ten (10) days' notice
by certified mail, return receipt requested, to Debtor's and
Parent's address set forth in Section 11 hereof, or such other
address as Debtor and Parent may provide to Secured Party from
time to time, shall be deemed reasonable notice thereof. If
any Collateral is sold by Secured Party upon credit or for
future delivery, Secured Party shall not be liable for the
failure of the purchaser to pay for same and in such event
Secured Party may resell such Collateral in accordance with
the terms set forth above. Secured Party may buy any
Collateral at any public sale and, if any Collateral is of a
type customarily sold in a recognized market or is of the type
which is the subject of widely distributed standard price
quotations, Secured Party may buy such Collateral at private
sale and in each case may make payment therefor by any means.
(b) Secured Party may apply the cash proceeds actually received
from any sale or other disposition of Collateral to the
reasonable expenses of retaking, holding, preparing for sale,
selling, leasing and the like, to reasonable attorneys' fees
and all reasonable legal, travel and other expenses which may
be incurred by Secured Party in attempting to collect the
Obligations or enforce this Agreement or in the prosecution or
defense of any action or proceeding related to the subject
matter of this Agreement; and then to the Obligations in such
order and as to principal or interest as Secured Party may
determine in its sole discretion; and Debtor shall remain
liable and will pay Secured Party on demand any deficiency
remaining after the application of such cash proceeds,
together with interest thereon at the highest rate then
payable on the Obligations and the balance of any expenses
unpaid, with any surplus to be paid to Debtor, subject to any
duty of Secured
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Party imposed by law to the holder of any subordinate security
interest in the Collateral known to Secured Party.
(c) Secured Party may appropriate, set off and apply to the
payment of the Obligations, any Collateral in or coming into
the possession of Secured Party or its agents, without notice
to Debtor or Parent and in such manner as Secured Party may,
in its reasonable discretion, determine without regard to the
existence or sufficiency of other collateral therefor.
5. Power of Attorney. To effectuate the terms and provisions hereof,
Debtor, so long as an Event of Default has occurred and is continuing,
hereby designates and appoints Secured Party and each of its designees
or agents as attorney-in-fact of Debtor, irrevocably and with power of
substitution, with authority to: (i) endorse the name of Debtor on
any notes, acceptances, checks, drafts, money orders, instruments or
other evidences of Collateral that may come into Secured Party's
possession; (ii) sign the name of Debtor on any invoices, documents,
drafts against and notices to account debtors or obligors of Debtor,
assignments and requests for verification of accounts; (iii) execute
proofs of claim and loss; (iv) execute endorsements, assignments or
other instruments of conveyance or transfer with respect to
instruments which constitute the Collateral; (v) adjust and compromise
any claims under insurance policies or otherwise; (vi) execute
releases; (vii) receive, open and dispose of all mail addressed to
Debtor and notify the Post Office authorities to change the address
for delivery of mail addressed to Debtor to such address as Secured
Party may designate; and (viii) do all other acts and things necessary
or advisable in the sole discretion of Secured Party to carry out and
enforce this Agreement or the Obligations. All acts done under the
foregoing authorization are hereby ratified and approved and neither
Secured Party nor any designee or agent thereof shall be liable for
any acts of commission or omission, for any error of judgment or for
any mistake of fact or law provided, that Secured Party shall not be
relieved of liability to the extent its or its agent's or designee's
act, error or mistake constituted gross negligence or willful
misconduct. This power of attorney being coupled with an interest is
irrevocable while any Obligations shall remain unpaid.
6. Care of Collateral. Secured Party shall have the duty to exercise
reasonable care in the custody and preservation of any Collateral in
its possession, which duty shall be fully satisfied if Secured Party
accords such Collateral treatment substantially the same as that which
it accords similar property owned by it, and, with respect to Secured
Party's custody and preservation of any of the Collateral in Secured
Party's possession, Debtor and Parent release Secured Party from, and
agree to indemnify, defend, and hold harmless Secured Party with
respect to, any third party claims, causes of actions, and demands at
any time arising out of or with respect to Secured Party's custody
and/or preservation of the Collateral at any time in Secured Party's
possession, except that such release and indemnity shall not be
applicable to the extent that any such claims, causes of actions, or
demands have resulted from Secured Party's gross negligence or willful
misconduct. Secured Party's prior recourse to any Collateral shall
not constitute a condition of any demand, suit or proceeding for
payment or collection of the Obligations.
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7. Expenses. So long as an Event of Default has occurred and is
continuing, upon demand, Debtor and Parent, jointly and severally,
will pay to Secured Party the amount of any and all reasonable
expenses, including the fees and expenses of its counsel and the fees
and expenses of any experts and agents, which Secured Party may incur
in connection with (i) the collection of the Obligations, (ii) the
administration of this Agreement, (iii) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of
the Collateral, (iv) the exercise or enforcement of any of the rights
of Secured Party hereunder, or (v) the failure by Debtor and/or Parent
to perform or observe any of the provisions hereof. All amounts
payable by Debtor and/or Parent under this Section shall be due upon
demand and shall be part of the Obligations. Debtor's and Parent's
obligations under this Section shall survive the termination of this
Agreement and the discharge of Debtor's and Parent's other obligations
hereunder.
8. Indemnification.
(a) Debtor and Parent jointly and severally agree to indemnify,
reimburse and hold Secured Party and its respective
successors, assigns, employees, officers, directors, agents,
attorneys and servants (collectively, "Indemnities") harmless
from and against any and all liabilities, obligations,
damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all reasonable costs and expenses
(including, without limitation, reasonable attorneys' fees and
expenses) of whatsoever kind and nature imposed on, asserted
against, or incurred by any of the Indemnitees, in any way
relating to or arising out of this Agreement or in any other
way connected with the administration of the transactions
contemplated hereby or the enforcement of any of the terms
hereof, or the preservation of any rights hereunder, or in any
way relating to or arising out of the manufacture, processing,
ownership, ordering, purchase, delivery, testing, control,
lease, possession, operation or other disposition or use of
the Collateral by the Indemnitees (including, without
limitation, latent or other defects, whether or not
discoverable); provided, that Debtor and Parent shall have no
obligation to an Indemnitee hereunder to the extent that such
indemnified liabilities arise from the gross negligence or
willful misconduct of such Indemnitee. Upon written notice by
any Indemnitee of the assertion of such a liability,
obligation, damage, injury, penalty, claim, demand, action,
judgment or suit, Debtor and/or Parent shall assume full
responsibility for the defense thereof. If any action, suit
or proceeding arising from any of the foregoing is brought
against any Indemnitee, Debtor and/or Parent shall, if
requested by such Indemnitee, defend such action, suit or
proceeding. Each Indemnitee shall, unless any other
Indemnitee has made the request described in the preceding
sentence and such request has been complied with, have the
right to employ its own counsel (or internal counsel) to
investigate and control the defense of any matter covered by
the indemnity set forth in this Section, and the fees and
expenses of such counsel shall be paid by Debtor and Parent;
provided that, only to the extent no conflict exists between
and among the Indemnitees as reasonably determined by the
Indemnitees, Debtor and/or Parent shall not be obligated to
pay the fees and expenses or more than
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one counsel for all Indemnitees as a group with respect to any
such matter, action, suit or proceeding.
(b) Contribution. If and to the extent that the obligations of
Debtor and Parent under this Section are unenforceable for any
reason, Debtor and Parent hereby agree to, jointly and
severally, make the maximum contribution to the payment and
satisfaction of such obligations that is permissible under
applicable law.
(c) Survival. The obligations of Debtor and Parent contained in
this Section shall survive the termination of this Agreement
and the discharge of Debtor's and Parent's other obligations
hereunder.
9. Waivers. No act, omission or delay by Secured Party or course of
dealing between Secured Party and Debtor or Parent shall constitute a
waiver of the rights and remedies of Secured Party hereunder. No
single or partial waiver by Secured Party of any Event of Default or
right or remedy which it may have shall operate as a waiver of any
other Event of Default, right or remedy or of the same Event of
Default, right or remedy on a future occasion. Debtor and Parent
hereby waive presentment, notice of dishonor and protest of all
instruments included in or evidencing any Obligations or Collateral,
and all other notices and demands whatsoever (except as expressly
provided herein).
10. Governing Law; Jurisdiction; etc. This Agreement shall be governed by
and construed in accordance with the law of the Commonwealth of
Massachusetts (without giving effect to the conflict of laws
principles thereof). Any legal action or proceeding with respect to
this Agreement may be brought in the courts of the Commonwealth of
Massachusetts or of the United States of America for the District of
Massachusetts, and, by execution and delivery of this Agreement, each
of Debtor and Parent hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the
aforesaid courts. Each of Holder, Debtor and Parent hereby knowingly,
voluntarily, intentionally and irrevocably waives, in connection with
any such action or proceeding: (i) any objection, including, without
limitation, any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to
the bringing of any such action or proceeding in such respective
jurisdictions and (ii) to the maximum extent not prohibited by law,
any right it may have to a trial by jury in respect of any litigation
directly or indirectly arising out of, under or in connection with
this Agreement. Each of Holder, Debtor and Parent irrevocably
consents to the service of process of any of the aforementioned courts
in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at the address
set forth in Section 11 below, or at such other address as it may
provide to the other parties hereto from time to time. Nothing herein
shall affect the right of a party hereto to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise
proceed against a party in any other jurisdiction.
11. Notices. Unless otherwise provided herein, all notices, requests,
consents and other communications hereunder shall be in writing, shall
be addressed to the receiving party's address set forth below or to
such other address as a party may designate by notice
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hereunder, and shall be either (i) delivered by hand, (ii) sent by
reputable overnight courier by next day, priority, or (iii) sent by
registered or certified mail, return receipt requested, postage
prepaid.
If to Debtor or Parent: Nytest Environmental Inc.
00 Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Attention: President
with a copy to: Xxxxxxx X. Xxxxxx, Esq.
000 Xxx Xxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
Fax.: (000) 000-0000
If to Secured Party: Groundwater Technology, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Chief Financial Officer
with a copy to: Groundwater Technology, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
All notices, requests, consents and other communications hereunder
shall be deemed to have been given either (i) if by hand, at the time
of the delivery thereof to the receiving party at the address of such
party set forth above, (ii) if sent by overnight courier, on the next
business day following the day such notice is delivered to the courier
service, or (iii) if sent by registered or certified mail, on the 5th
business day following the day such mailing is made.
12. Amendments and Waivers. No provision hereof shall be modified,
altered or limited except by a written instrument expressly referring
to this Agreement and to such provision, and executed by Debtor,
Parent and Secured Party.
13. Severability. In the event that any court of competent jurisdiction
shall determine that any provision, or any portion thereof, contained
in this Agreement shall be unreasonable or unenforceable in any
respect, then such provision shall be deemed limited to the extent
that such court deems it reasonable and enforceable, and as so limited
shall remain in full force and effect. In the event that such court
shall deem any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall
nevertheless remain in full force and effect.
14. Benefit of Agreement; Continuing Security Interest. This Agreement
and all Obligations shall be binding upon the administrators,
successors and assigns of Debtor and Parent and shall, together with
the rights and remedies of Secured Party hereunder, inure to the
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benefit of Secured Party, its successors, endorsees and assigns. This
Agreement shall create a continuing security interest in the
Collateral which shall remain in full force and effect until payment
in full of the Obligations.
15. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement of any kind not
expressly set forth in this Agreement shall affect, or be used to
interpret, change or restrict, the express terms and provisions of
this Agreement.
16. Restoration of Rights. In the event Secured Party shall have
instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to Secured Party, then and in
every such case, the parties hereto shall be restored to their
respective former positions and rights hereunder with respect to the
Collateral, and all rights, remedies and powers of Secured Party shall
continued as if no such proceeding had been instituted.
17. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original and all of which shall together constitute one and the same
agreement.
18. Captions. The captions of the sections of this Agreement have been
inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed or caused this
Agreement to be executed as a sealed instrument as of the date first above set
forth.
NEI/GTEL ENVIRONMENTAL LABORATORIES, INC.
By:/s/ Xxxx Xxxxxxx
-------------------------------------
Xxxx Xxxxxxx, President
NYTEST ENVIRONMENTAL INC.
By:/s/ Xxxx Xxxxxxx
-------------------------------------
Xxxx Xxxxxxx, President
GTEL ENVIRONMENTAL LABORATORIES, INC.
By:/s/ Xxxx Xxxxxxx
-------------------------------------
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SCHEDULE A
LOCATIONS OF COLLATERAL
1. Tampa, Florida
2. Wichita, Kansas
3. Xxxxxxx, Xxx Xxxxxxxxx
00
