EXHIBIT 10.29
SECURITY AGREEMENT
THIS AGREEMENT EXECUTED AT XXXXX XXXXX, OCTOBER 3, 1996 BY RESEARCH ENGINEERS,
INC.
(HEREIN CALLED "DEBTOR").
AS SECURITY FOR THE PAYMENT AND PERFORMANCE OF ALL OF DEBTOR'S OBLIGATIONS TO
UNION BANK OF CALIFORNIA. N.A.. (HEREIN CALLED "BANK"), IRRESPECTIVE OF THE
MANNER IN WHICH OR THE TIME AT WHICH SUCH OBLIGATIONS AROSE OR SHALL ARISE, AND
WHETHER DIRECT OR INDIRECT, ALONE OR WITH OTHERS, ABSOLUTE OR CONTINGENT. DEBTOR
DOES HEREBY GRANT A CONTINUING SECURITY INTEREST TO BANK IN ALL PERSONAL
PROPERTY (HEREIN CALLED "COLLATERAL"), WHETHER NOW OR HEREAFTER OWNED OR IN
EXISTENCE DESCRIBED AS
A. MOTOR VEHICLES:
B. OTHER:
ALL ACOUNTS, DEPOSIT ACCOUNTS, INSTRUMENTS, CHATTEL PAPER, DOCUMENTS, GENERAL
INTANGIBLES, INVENTORY, EQUIPMENT, FURHITURE, AND FIXTURES, NOU OR HEREAFTER
OWNED OR ACPUIRED BY DEBTOR, ALL PROCEEDS AND INSURANCE PROCEEDS OF THE
FORECOING, ALL GUARANTEES AND OTHER SECURITIES THEREFOR, AND ALL OF DEBTOR'S
PRESENT AND FUTURE BOOKS AND RECORDS RELATING THERETO (INCLUDING COMPUTER-
STORED INFORMATION AND ALL SOFTWARE RELATING THERETO) AND ALL CONTRACT RIGHTS
WITH THIRD PARTIES RELATING TO THE MAINTENANCE OF ANY SUCH BOOKS, RECORDS AND
INFORMATION.
THE COLLATERAL DESCRIBED ABOVE WILL BE MAINTAINED AT 00000 XXXX XXXXX XXXXXXX
XXXXX XXXXX. XX 00000*
* and any other locations
C. ALL PERSONAL PROPERTY OF ANY KIND WHICH IS DELIVERED TO OR IN THE POSSESSION
OR CONTROL OF BANK OR ITS AGENTS;
D. PROCEEDS OF ANY OF THE ABOVE-DESCRIBED PROPERTY. THE GRANT OF A SECURITY
INTEREST IN PROCEEDS DOES NOT IMPLY THE RIGHT OF DEBTOR TO SELL OR DISPOSE OF
ANY COLLATERAL DESCRIBED HEREIN WITHOUT THE EXPRESS CONSENT IN WRITING BY
BANK. THE MAXIMUM AMOUNT OF INDEBTEDNESS TO BE SECURED AT ANY ONE TIME IS
UNLIMITED UNLESS AN AMOUNT IS INSERTED N/A (TO BE COMPLETED ONLY IF AN
ACCOMMODATION) N/A IS EXECUTING THIS AGREEMENT AS AN ACCOMMODATION DEBTOR
ONLY AND HIS LIABILITY IS LIMITED TO THE SECURITY INTEREST CREATED IN
COLLATERAL DESCRIBED HEREIN. THE DEBTOR BEING ACCOMMODATED IS N/A
ALL TERMS AND CONDITIONS ON THE REVERSE SIDE HEREOF ARE INCORPORATED HEREIN AS
THOUGH SET FORTH IN FULL.
RESEARCH ENDINEERS, INC.
BY: /S/ XXXXX XXXX TITLE: CFO
AGREEMENT
1. The term credit is used throughout this Agreement in its broadest and most
comprehensive sense. Credit may be granted at the request of any one Debtor
without further authorization or notice to any other Debtor, including an
Accommodation Debtor. Collateral shall be security for all obligations of
Debtor to Bank in accordance with the terms and conditions herein.
2. Debtor will: (a) execute such Financing Statement and other documents and do
such other acts and things, all as Bank may from time to time require, to
establish and maintain a valid security interest in Collateral, including
payment of all costs and fees in connection with any of the foregoing when
deemed necessary by
Bank; (b) pay promptly when due all indebtedness to Bank; (c) furnish Bank
such information concerning Debtor and Collateral as Bank may from time to
time request, including but not limited to current financial statements; (d)
keep Collateral separate and identifiable and at the location described
herein and permit Bank and its representatives to inspect Collateral and/or
records pertaining thereto from time to time during normal business hours;
(e) not sell. assign or create or permit to exist any lien on or security
interest in Collateral in favor of anyone other than the Bank unless Bank
consents thereto in writing and at Debtor's expense upon Bank's request
remove any unauthorized lien or security interest and defend any claim
affecting the Collateral; (f) pay all charges against Collateral prior to
delinquency including but not limited to taxes, assessments, encumbrances,
insurance and diverse claims, and upon Debtor's failure to do so Bank may pay
any such charge as it deems necessary and add the amount paid to the
indebtedness of Debtor hereunder; (g) reimburse Bank for any expenses
including but not limited to reasonable attorneys' fees and legal expenses
incurred by Bank in seeking to protect, collect or enforce any rights in
Collateral; (h) when required, provide insurance in form and amounts and with
companies acceptable to Bank and when required assign the policies or the
rights thereunder to Bank: (i) maintain Collateral in good condition and not
use Collateral for any unlawful purpose; (j) at its own expense, upon request
of Bank, notify any parties obligated to Debtor on any Collateral to make
payment to Bank and Debtor hereby irrevocably grants Bank power of attorney
to make said notifications and collections; (k) and does hereby authorize
Bank to perform any and all acts which Bank in good xxxxx xxxxx necessary for
the protection and preservation of Collateral or its value or Bank's security
interest therein, including transferring any Collateral into its own name and
receiving the income thereon as additional security hereunder. Bank may not
exercise any right under any corporate security, which might constitute the
exercise of control by Bank so as to make any such corporation an affiliate
of Bank within the meaning of the banking laws until after default.
3. The term default shall mean the occurrence of any of the following events:
(a) non-payment of any indebtedness when due or non-performance of any
obligation when due, whether required hereunder or otherwise; (b)
deterioration or impairment of the value of Collateral; (c) non-performance
by Debtor under this Agreement, default by Debtor of any other agreements
with Bank dealing with the extension of credit or with debt owing Bank or any
misrepresentation of Debtor or its representative to Bank whether or not
contained herein; (d) a change in the composition of any Debtor which is a
business entity; or (e) belief by Bank in good faith that there exists, or
the actual existence of, any deterioration or impairment in the ability of
Debtor to meet its obligations to Bank.
4. Whenever a default exists, Bank, at its option may: (a) without notice
accelerate the maturity of any part or all of the secured obligations end
terminate any agreement for the granting of further credit to Debtor; (b)
sell, lease or otherwise dispose of Collateral at public or private sale;
unless Collateral is perishable and threatens to decline speedily in value or
is a type customarily sold on a recognized market, Bank will give Debtor at
least five (5) days prior written notice of the time and place of any public
sale or of the time after which any private sale or any other intended
disposition may be made; (c) transfer any Collateral into its own name or
that of its nominee; (d) retain Collateral in satisfaction of obligations
secured hereby, with notice of such retention sent to Debtor as required by
law; (e) notify any parties obligated on any Collateral consisting of
accounts, instruments, chattel paper, chooses in action or the like to make
payment to Bank and enforce collection of any Collateral herein; (f) require
Debtor to assemble and deliver any Collateral to Bank at a reasonable
convenient place designated by Bank; (g) apply all sums received or collected
from or on account of Collateral including the proceeds of any sales thereof
to the payment of the costs and expenses incurred in preserving and enforcing
rights of Bank including but not limited to reasonable attorneys' fees, and
indebtedness secured hereby in such order and manner as Bank in its sole
discretion determines; Bank shall account to Debtor for any surplus remaining
thereafter, and shall pay such surplus to the party entitled thereto,
including any second secured party who has made a proper demand upon Bank and
has furnished proof to Bank as requested in the manner provided by law; in
like manner, Debtor, unless an Accommodation Debtor only, agrees to pay to
Bank without demand any deficiency after any Collateral has been disposed of
and proceeds applied as aforesaid; and (h) exercise its banker's lien or
right of setoff in the same manner as though the credit were unsecured. Bank
shall have all the rights and remedies of a secured party under the Uniform
Commercial Code of California in any jurisdiction where enforcement is
sought, whether in California or elsewhere. All rights, powers and remedies
of Bank hereunder shall be cumulative and not alternative. No delay on the
part of Bank in the exercise of any right or remedy shall constitute a waiver
thereof and no exercise by Bank of any right or remedy shall preclude the
exercise of any other right or remedy or further exercise of the same remedy.
5. Debtor waives: (a) all right to require Bank to proceed against any other
person including any other Debtor hereunder or to apply any Collateral Bank
may hold at any time or to pursue any other remedy; Collateral, endorsers or
guarantors may be released, substituted or added without affecting the
liability of Debtor hereunder (b) the defense of the Statute of Limitations
in any action upon any obligations of Debtor secured hereby; (C) if he is an
Accommodation Debtor, all rights under Uniform Commercial Code Section 9112;
and (d) any right of subrogation and any right to participate in Collateral
until all obligations hereby secured have been paid in full.
6. Debtor warrants: (a) that it is or will be the lawful owner of all
Collateral free of all claims, liens or encumbrances whatsoever, other than
the security interest granted pursuant hereto; (b) all information,
including but not limited to financial statements furnished by Debtor to
Bank heretofore or hereafter, whether oral or written, is and will be
correct and true as of the date given; and (c) if Debtor is a business
entity, the execution, delivery and performance hereof are within its powers
and have been duly authorized.
7. The right of Bank to have recourse against Collateral shall not be affected
in any way by the fact that the credit is secured by a mortgage, deed of
trust or other lien upon real property.
8. Debtor may terminate this Agreement at any time upon written notice to Bank
of such termination; provided however, that such termination shall not
affect his obligations then outstanding, any extensions or renewals thereof,
nor the security interest granted herein which shall continue until such
outstanding obligations are satisfied in full. Such termination shall not
affect the obligations of other Debtors if more than one executes this
Agreement.
9. If more than one Debtor executes this Agreement. the obligations hereunder
are joint and several. All words used herein in the singular shall be deemed
to have been used in the plural when the context and construction so
require. Any married persons who sign this Agreement expressly agree that
recourse may be had against his/her separate property for all of his/her
obligations to Bank.
10. This Agreement shall inure to the benefit of and bind Bank, its successors
and assigns and each of the undersigned, their respective heirs, executors,
administrators and successors in interest. Upon transfer by Bank of any part
of the obligations secured hereby. Bank shall be fully discharged from all
liability with respect to Collateral transferred therewith.
11. Whenever possible each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but, if any
provision of this Agreement shall be prohibited or invalid under applicable
law, such provisions shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such or the remaining
provisions of this Agreement.
