1
EXHIBIT 10.10
SECURITY AGREEMENT
This SECURITY AGREEMENT is entered into as of February 23, 1996, among
Nextron, Inc., a California corporation with an address at 0000 Xxx Xxx Xxx,
Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx 00000 (the "Debtor"), and Safeguard Scientifics
(Delaware), Inc., a Delaware corporation with an address at 800 The Safeguard
Building, 000 Xxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxxxxxxx 00000 (the "Secured Party").
BACKGROUND
The Debtor has executed and delivered, and may in the future execute and
deliver, to the Secured Party certain demand notes (collectively, the "Notes")
representing funds borrowed by the Debtor from the Secured Party, which Notes
are intended to be secured by the Collateral (as defined herein).
The Debtor desires to grant to the Secured Party a security interest in
the Collateral to secure the full payment and performance of the Debtor's
obligations under the Notes and any other obligations Debtor may now or
hereafter have to the Secured Party.
NOW, THEREFORE, for and in consideration of all past, present and future
advances made by the Secured Party to the Debtor pursuant to the Notes or
otherwise and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the Debtor and the Secured Party, intending to be legally
bound, hereby covenant and agree as follows:
Section 1. Grant of Security Interest. (a) Debtor hereby grants,
pledges, assigns and conveys to the Secured Party as security for payment of
Debtor's obligations under the Notes, whether such Notes are currently
outstanding or are to be issued in the future, or for any other obligations
Debtor may now or hereafter have to the Secured Party a continuing security
interest in and lien upon the Collateral (as defined herein), whether now owned
or hereafter acquired. Debtor hereby specifically acknowledges that the security
interest and liens created hereby are intended to secure all of Debtor's
obligations to Secured Party, whether or not represented by Notes or whether now
existing or hereafter incurred.
(b) For the purposes of this Agreement, the term "Collateral"
shall mean all Accounts, Chattel Paper, Contracts, Documents, Farm Products,
Fixtures, General Intangibles, Goods and Instruments (as all such terms are
defined under the Uniform Commercial Code of the jurisdiction specified in the
final section hereof), whether now owned or hereafter acquired, and all products
and proceeds therefrom.
Section 2. Financing Statements. The Debtor shall join with the
Secured Party in executing such financing statements and continuation statements
(in form satisfactory to the Secured Party) under the Uniform Commercial Code as
the Secured Party shall from time to time require.
2
Section 3. Representations and Warranties. Debtor represents and warrants
to the Secured Party that:
(a) This Agreement and each Note between Debtor and the Secured
Party has been duly authorized, executed and delivered by it and constitutes
its valid, binding and enforceable obligations;
(b) The execution, delivery and performance by Debtor of this
Agreement and each Note will not violate or contravene any applicable law or
regulation, any provision of Debtor's Certificate of Incorporation, or any
applicable decree, order or rule, and will not constitute a breach of any
contract or other instrument to which it is a party or by which it or any of its
assets is bound, or result in any lien or encumbrance being placed on or
foreclosed on any of the Collateral;
(c) Its chief executive office and the place where it will hereafter
keep the Collateral is at the address set forth in the preamble hereto;
(d) There is no litigation, arbitration or other proceedings
currently pending or, to Debtor's knowledge, threatened against Debtor or the
Collateral;
(e) Debtor is the owner of the Collateral free and clear of all
licenses, liens, encumbrances or security interests except the security
interests created hereby and Debtor has full right, power and authority to grant
the security interest granted hereby; and
(f) No copyright or patent has been registered, issued or applied
for under any state, federal or foreign copyright or patent laws for any
materials or any part thereof constituting the Collateral.
Section 4. Survival. All of the representations and warranties of the
Debtor set forth in this Agreement shall survive until all obligations of
Borrower to Secured Party are paid in full.
Section 5. Affirmative Covenants. Debtor covenants that so long as any
Note remains outstanding, it will:
(a) keep the Collateral free of encumbrances or security interests
except those in favor of the Secured Party;
(b) notify the Secured Party prior to any change in the location of
its place of business, or of the establishment of any new, or the
discontinuance of any existing, place of business; and
(c) indemnify and hold the Secured Party harmless from all debts,
liabilities and obligations incurred by such Debtor in its business which may
result in liability to a secured party including, without limitation, liability
arising pursuant to the Internal Revenue Code.
2
3
relating to withholding taxes and withheld social security payments and the
penalty for failure to pay over withholding taxes and social security payments.
Section 6. Negative Covenants. Debtor covenants that so long as any Note
remains outstanding, such Debtor will not, without the prior written consent of
the Secured Party:
(a) permit any of the Collateral to be levied upon under any legal
process;
(b) permit the creation of any lien, security interest, charge,
mortgage or other encumbrance on any of the Collateral; or
(c) permit anything to be done that may impair the value of any of
the Collateral or the security intended to be afforded by this Agreement.
Section 7. Default; Remedies. (a) Each of the following is an event of
default ("Event of Default") hereunder:
(i) Any event of default under any Note;
(ii) If any representation or warranty made herein by Debtor is
materially false or misleading;
(iii) If Debtor is in material breach of any of its covenants or
agreements made herein, and such breach remains uncured 15 days after written
notice of such breach is given by the Secured Party to Debtor;
(iv) If any suit or suits are commenced or pending or any judgment
is obtained against Debtor for amounts, individually or in the aggregate, in
excess of $100,000; or
(v) The commencement of any process or proceeding to foreclose
upon, levy upon or execute upon any of the Collateral.
(b) Upon the occurrence of any Event of Default, the Secured Party
may:
(i) Immediately declare the Note to be due and payable in full,
without notice, presentment, demand or further action of any kind; and
(ii) Exercise all the rights of a secured party under the Uniform
Commercial Code or under any other applicable law or agreement with respect to
the Collateral, all of which rights shall, to the full extent permitted by law,
be cumulative.
Section 8. Notices. If notice of sale, disposition or other intended
action by the Secured Party with respect to the Collateral is required by the
Uniform Commercial Code or other applicable law, any notice thereof sent to the
Debtor at least 10 days prior to such action, shall constitute reasonable
notice to Debtor. Notices required or permitted under this Agreement
3
4
shall be deemed to have been given (i) when delivered by hand or successful
facsimile transmission, (ii) one business day after sent, charges paid by
sender, by guaranteed overnight courier, or (iii) three business days after
mailed, postage prepaid, by certified mail, return receipt requested;
If to Debtor, to: Nextron, Inc.
0000 Xxx Xxx Xxx
Xxxxx 000
Xxx Xxxx, Xxxxxxxxxx 00000
If to Secured Party, to: Safeguard Scientifics (Delaware), Inc.
800 The Safeguard Building
000 Xxxxx Xxxx Xxxxx
Xxxxx, Xxxxxxxxxxxx 00000
Section 9. Assignment. This Agreement shall be binding upon and inure
to the benefit of the Debtor and the Secured Party and their respective heirs,
executors, administrators, personal representatives, successors and assigns.
Section 10. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the internal laws of the State of Delaware.
IN WITNESS WHEREOF, The Debtor and the Secured Party have each caused this
Security Agreement to be executed, as of the day and year first-above written,
by its authorized officers.
SAFEGUARD SCIENTIFICS
(DELAWARE), INC.
By:
-------------------------
Name:
Title:
NEXTRON, INC.
By: /s/ XXXX XXXXXX
-------------------------
Name: Xxxx Xxxxxx
Title: CEO
4
5
STATE OF CALIFORNIA
UNIFORM COMMERCIAL CODE - FINANCING STATEMENT - FORM UCC-1 (REV. 1/1/91)
IMPORTANT -- READ INSTRUCTIONS ON BACK BEFORE FILLING OUT FORM
This FINANCING STATEMENT is presented for filing and will remain
effective with certain exceptions for a period of five years from the
date of filing pursuant to section 9403 of the California Uniform
Commercial Code.
----------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR (LAST NAME FIRST -- IF AN INDIVIDUAL) 1A. SOCIAL SECURITY OR FEDERAL TAX NO.
Nextron, Inc. 00-0000000
----------------------------------------------------------------------------------------------------------------------------------
1B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
0000 Xxx Xxx Xxx, Xxxxx 000 Xxx Xxxx, XX 00000
----------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST -- IF AN INDIVIDUAL) 2A. SOCIAL SECURITY OR FEDERAL TAX NO.
----------------------------------------------------------------------------------------------------------------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
----------------------------------------------------------------------------------------------------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER
==================================================================================================================================
4. SECURED PARTY 4A. SOCIAL SECURITY NO., FEDERAL TAX NO.
OR BANK TRANSIT AND A.D.A. NO.
NAME Safeguard Scientifics (Delaware), Inc.
MAILING ADDRESS 000 Xxx Xxxxxxxxx Xxxxxxxx, 000 Xxxxx Xxxx Drive 00-0000000
CITY Wayne STATE PA ZIP CODE 19087
----------------------------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO., FEDERAL TAX NO.
OR BANK TRANSIT AND A.D.A. NO.
NAME
MAILING ADDRESS
CITY STATE ZIP CODE
----------------------------------------------------------------------------------------------------------------------------------
Secretary of State - California
6. This FINANCING STATEMENT covers the following types or items of property (INCLUDE DESCRIPTION OF REAL PROPERTY ON WHICH LOCATED
AND OWNER OF RECORD WHEN REQUIRED BY INSTRUCTION 4).
All Accounts, Chattel Paper, Contracts, Documents, Farm Products, Fixtures,
General Intangibles, Goods and Instruments (as such terms are defined under the
applicable Uniform Commercial Code), whether now owned or hereafter acquired,
and all products and proceeds therefrom.
----------------------------------------------------------------------------------------------------------------------------------
7. CHECK [X] 7A. [X] PRODUCTS OF COLLATERAL 7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH
IF APPLICABLE ARE ALSO COVERED INSTRUCTION ?(?) ITEM:
[ ] (1) [ ] (2) [ ] (3) [ ] (4)
----------------------------------------------------------------------------------------------------------------------------------
8. CHECK [X] [ ] DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC ??? (?)(?)
IF APPLICABLE
----------------------------------------------------------------------------------------------------------------------------------
SIGN HERE C 10. (??? FOR USE OF FILING OFFICER
9. DATE: O ??? FILE NUMBER
-> /s/ XXXXXXX X. XXXXXX 3-8-96 D ??? OFFICER)
SIGNATURE(S) OF DEBTOR(S) E
-----------------------------------------------------------------------------------------
Xxxxxxx Xxxxxx Chief Executive Officer 1
TYPE OR PRINT NAME(S) OF DEBTOR(S) Nextron, Inc.
--------------------------------------------------------------------------------------- 2
->
SIGNATURE(S) OF SECURED PARTY(IES) 3
---------------------------------------------------------------------------------------
4
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
======================================================================================= 5
11. RETURN COPY TO:
6
NAME [ Xxxxxxx Xxxxxxx
7
ADDRESS 800 The Safeguard Building
8
CITY 000 Xxxxx Xxxx Xxxxx
0
XXXXX Xxxxx, XX 00000 ]
(1) FILING OFFICER COPY
