EXHIBIT 10.31
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Inventory, Accounts Receivable
and Intangibles Security Agreement
(SHORT FORM)
FLEET BANK
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September 6, 1996
To secure the due payment and performance of all of the liabilities and
obligations hereunder of the undersigned, herein called "Borrower," to Fleet
National Bank hereinafter called "Bank," and all other liabilities and
obligations of Borrower to Bank of every name and nature whatsoever, direct or
indirect, absolute or contingent, now existing or hereafter arising or acquired,
including, without limitation, the due payment and performance of all
liabilities and obligations under any and all notes, all hereinafter called
"Obligations," the Borrower hereby grants to Bank a continuing security interest
in:
(a) All accounts, contracts, contract rights, notes, bills, drafts,
acceptances, general intangibles, choses in action, and all other debts,
obligations and liabilities, in whatever form, owing to Borrower from any
person, firm or corporation, or any other legal entity, whether now existing or
hereafter arising, now or hereafter received by or belonging or owing to
Borrower, for goods sold by it or for services rendered by it or however
otherwise same may have been established or created, all guarantees and
securities therefor, all right, title and interest of Borrower in the
merchandise or services which gave rise thereto, including the rights of
reclamation and stoppage in transit, all rights of an unpaid seller of
merchandise or services, and in the proceeds thereof, including, without
limitation, all proceeds of credit, fire or other insurance, and any tax
refunds.
(b) All goods, merchandise, raw materials, goods and work in process,
finished goods and other tangible personal property, now owned or hereafter
acquired and held for sale or lease, or furnished or to be furnished under
contract of service, or used or consumed in Borrower's business and in the
products and proceeds thereof, including, without limitation, all proceeds of
fire or other insurance. This portion of the collateral being sometimes referred
to as "Inventory."
All of the accounts and other property as set forth in (a) above and
Inventory as set forth in (b) above and the other property described in the
Rider attached hereto are hereinafter referred to collectively as "Collateral."
The Collateral and all proceeds and products thereof shall be security for
all Obligations. Until all Obligations have been fully satisfied, Bank's
security interest in the Collateral and all proceeds and products thereof, shall
continue in full force and effect and Bank will at all times after the
occurrence and during the continuance of an Event of Default (as defined in the
Letter Agreement of even date between Bank and Borrower) have the right to take
physical possession of the Inventory and to
maintain such possession on Borrower's premises or to remove the Inventory or
any part thereof to such other places as Bank may desire. If Bank exercises
Bank's right to take possession of the Inventory, Borrower shall, upon Bank's
demand, assemble the Inventory and make it available to Bank at a place
reasonably convenient to Bank.
If Borrower shall fail to pay, when due, any of the Obligations or shall
fail to observe or perform any of the provisions of this Agreement or any other
agreement now or hereafter entered into between Bank and Borrower, Borrower
shall be in default hereunder. In the event of such default all Obligations of
Borrower to Bank shall, at the option of the Bank, and without notice to or
demand upon Borrower become and be immediately due and payable and thereupon
Bank may exercise any and all rights and remedies of a secured party available
under the Uniform Commercial Code and all other applicable law.
Borrower represents, warrants and covenants that all Inventory is and will
be owned by Borrower, free of all other liens and encumbrances, and shall be
kept by Borrower at 000 Xxxxxxx Xxxx, Xxxxxxxxx, XX 00000* and that Borrower
shall not (without Bank's prior written approval) remove the Inventory therefrom
except for the purposes of sale in the ordinary course of business.
Except for sales made in the ordinary course of business, Borrower shall
not sell, encumber, grant a security interest in or dispose of or permit the
sale, encumbrance or disposal of any Collateral without Bank's prior written
consent. A sale in the ordinary course of business shall not include a transfer
in total or partial satisfaction of a debt.
Borrower shall perform any and all steps requested by Bank to perfect
Bank's security interest in the Collateral, such as leasing warehouses to Bank
or its designee, placing and maintaining signs, appointing custodians, executing
and filing financing or continuation statements in form and substance
satisfactory to Bank. If any Inventory is in the possession or control of any of
Borrower's agents or processors, Borrower shall notify such agents or processors
of Bank's interest therein, and upon request instruct them to hold all such
Inventory for Bank's account and subject to Bank's instructions. A physical
listing of all Inventory, wherever located, shall be taken by Borrower whenever
requested by Bank, and a copy of each such physical listing shall be supplied to
Bank. Bank may examine and inspect the Inventory at any time.
Borrower agrees to keep all the Inventory insured with coverage and amounts
not less than that usually carried by one engaged in a like business and in any
event not less than that required by Bank with loss payable to the Bank and
Borrower, as their interests may appear, hereby appointing Bank as attorney for
Borrower in obtaining, adjusting, settling and cancelling such insurance and
endorsing any drafts. All premiums on such insurance shall be paid by Borrower
and the policies delivered to Bank. If Borrower fails to do so, Bank may procure
such insurance and charge the cost to Borrower's loan account. As further
assurance for the payment and
performance of the Obligations, Borrower hereby assigns to Bank all sums
including returned or unearned premiums, which may become payable under any
policy of insurance on the Collateral and Borrower hereby directs each insurance
company issuing any such policy to make payment of such sums directly to Bank.
If in the event of the sale of the Collateral the proceeds thereof are
insufficient to pay all amounts to which Bank is legally entitled, Borrower will
be liable for the deficiency, together with interest thereon and the reasonable
fees of any attorney employed by Bank to collect such deficiency.
Bank shall have the right to enforce any remedies hereunder alternatively,
successively or concurrently. A waiver of any default of Borrower shall not be a
waiver of any subsequent, similar or other default. No delay in the exercise of
any of Bank's rights or remedies hereunder shall constitute a waiver of such
right or remedy or of any other right or remedy.
This Agreement shall not be construed to be in limitation of or in
substitution for any other grant of security interest from Borrower to Bank made
prior to or contemporaneously herewith, and no other such grant of a security
interest made subsequent to or contemporaneously herewith shall be construed to
be in limitation of or in substitution for this Agreement unless expressly and
specifically provided therein.
This Agreement shall take effect as a sealed instrument, shall be governed
by and construed according to the laws of the Commonwealth of Massachusetts,
shall be binding upon the heirs, executors, administrators, successors and
assigns of Borrower and shall inure to the benefit of the successors and assigns
of Bank.
*See attached Rider.
Witnessed by: PERITUS SOFTWARE SERVICES, INC.
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BORROWER
/s/ illegible By: /s/ Xxxxx X. Xxxxx
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FLEET NATIONAL BANK Its TITLE
By: /s/ Xxxxxx Xxxxxx Address: 000 Xxxxxxx Xxxx
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Its XXXXXX XXX XXXXXX
Xxxxxxxxx, XX 00000
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CITY, COUNTY AND STATE
RIDER TO INVENTORY, ACCOUNTS RECEIVABLE
AND INTANGIBLES SECURITY AGREEMENT
FROM PERITUS SOFTWARE SERVICES, INC.
TO FLEET NATIONAL BANK
For the purposes of the foregoing Inventory, Accounts Receivable and
Intangibles Security Agreement (the "Security Agreement"), the "Collateral" will
be deemed to include all of the following (collectively, the "Intangibles"), all
whether now existing and owned by the Borrower or hereafter arising or acquired:
all of the Borrower's know-how, trade secrets, copyrights, patents, trade names,
trademarks, service marks and licenses and the goodwill of the business
associated with the foregoing, including, without limitation, the patents and
trademarks described on Exhibit A hereto and the goodwill of the business
associated therewith. The Borrower hereby grants to the Bank a security interest
in the Intangibles to secure payment and performance of the Obligations. Except
as shown on Exhibit A hereto, none of the Intangibles owned by the Borrower is
the subject of any state or federal registration. The Borrower agrees that it
will not dispose of any of the Intangibles or any interest therein or grant a
security interest in any of the Intangibles (other than to the Bank) nor suffer
or permit to exist any other encumbrance thereon without , in each instance, the
prior written consent of the Bank. The Borrower warrants that it has
unencumbered title to or right to use the Intangibles and full right and
authority to grant to the Bank the within security interest in the Intangibles.
The Borrower agrees to defend its title to the Intangibles and to take all steps
reasonably necessary to preserve its title to the Intangibles and ability to use
same, including defense of any claims of infringement and action against any
infringers. Upon the occurrence of any Event of Default (as defined in the
Letter Agreement of even date herewith between the Bank and the Borrower), the
Borrower will assemble and make available to the Bank all books, records and
data, whether in written form or electronically recorded representing any of the
Intangibles (including, without limitation, all source codes for the Borrower's
software).
Notwithstanding the provisions of the fifth grammatical paragraph of the
Security Agreement, the Borrower may keep Inventory at the locations described
in Item 2.1(j) of the Disclosure Schedule attached to the aforesaid Letter
Agreement in addition to its above-described Billerica, Massachusetts location.
EXHIBIT A
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TRADEMARKS, PATENTS AND COPYRIGHTS
PATENTS
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Registered Patents
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None.
Patent Applications
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Title Application Serial No. Filing Date
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Process and Tool for 08/550,869 October 31, 1995
Scalable Automated
Data Field Replacement
Code Analyzer 60/007,134 October 31, 1995
(Provisional)
Code Analyzer 08/555,932 November 13, 1995
TRADEMARKS
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Marks with Federal Registration
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Marks Registration No./Date
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PERITUS (SKILLED) 1,968,718/April 16, 1996
Marks with Pending Applications
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Marks Serial No./Filing Date
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AUTOENHANCER/2000 75-021,443/November 17, 1995
AUTOMATE:2000 75-017,923/November 13, 1995
COPYRIGHTS
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Registration
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Work Author Owner Number Registered
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None.
