[Logo Omitted]
SECURITY AGREEMENT
April 30, 2002
Bio-imaging Technologies, Inc.
000 Xxxxxxx-Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
(Individually and collectively "Debtor")
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
(Hereinafter referred to as "Bank")
For value received and to secure payment and performance of any and all
obligations of Debtor (also referred to herein as "Borrower") to Bank however
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now existing or hereafter arising or acquired, and whether or not
evidenced by a Loan Document, including swap agreements (as defined in 11 U.S.C.
ss.101), future advances, and all costs and expenses incurred by Bank to obtain,
preserve, perfect and enforce the security interest granted herein and to
maintain, preserve and collect the property subject to the security interest
(collectively, "Obligations"), Debtor hereby grants to Bank a continuing
security interest in and lien upon the following described property, whether now
owned or hereafter acquired, and any additions, replacements, accessions, or
substitutions thereof and all cash and non-cash proceeds and products thereof
(collectively, "Collateral"):
All of the personal property of Debtor of every kind and nature including,
without limitation, all accounts, equipment, accessions, inventory, chattel
paper, instruments, documents, rights to proceeds under letters of credit,
letter-of-credit rights, deposit accounts, and general intangibles, wherever
located.
Debtor hereby represents and agrees that:
OWNERSHIP. Debtor owns the Collateral or Debtor will purchase and acquire rights
in the Collateral within ten days of the date advances are made under the Loan
Documents. If Collateral is being acquired with the proceeds of an advance under
the Loan Documents, Debtor authorizes Bank to disburse proceeds directly to the
seller of the Collateral. The Collateral is free and clear of all liens,
security interests, and claims except those previously reported in writing to
and approved by Bank, and Debtor will keep the Collateral free and clear from
all liens, security interests and claims, other than those granted to or
approved by Bank.
NAME AND OFFICES; JURISDICTION OF ORGANIZATION. The name and address of Debtor
appearing at the beginning of this Agreement are Debtor's exact legal name and
the address of its chief executive office. There has been no change in the name
of Debtor, or the name under which Debtor conducts business, within the five
years preceding the date hereof except as previously reported in writing to
Bank. Debtor has not moved its chief executive office within the five years
preceding the date hereof except as previously reported in writing to Bank.
Debtor is organized under the laws of the State of Delaware and has not changed
the jurisdiction of its organization within the five years preceding the date
hereof except as previously reported in writing to Bank.
TITLE/TAXES. Debtor has good and marketable title to Collateral and will warrant
and defend same against all claims. Debtor will not transfer, sell, or lease
Collateral (except as permitted herein). Debtor agrees to pay promptly all taxes
and assessments upon or for the use of Collateral and on this Security
Agreement. At its option, Bank may discharge taxes, liens, security interests or
other encumbrances at any time levied or placed on Collateral. Debtor agrees to
reimburse Bank, on demand, for any such payment made by Bank. Any amounts so
paid shall be added to the Obligations.
WAIVERS. Debtor agrees not to assert against Bank as a defense (legal or
equitable), as a set-off, as a counterclaim, or otherwise, any claims Debtor may
have against any seller or lessor that provided personal property or services
relating to any part of the Collateral. Debtor waives all exemptions and
homestead rights with regard to the Collateral. Debtor waives any and all rights
to any bond or security which might be required by applicable law prior to the
exercise of any of Bank's remedies against any Collateral. All rights of Bank
and security interests hereunder, and all obligations of Debtor hereunder, shall
be absolute and unconditional, not discharged or impaired irrespective of (and
regardless of whether Debtor receives any notice of): (i) any lack of validity
or enforceability of any Loan Document; (ii) any change in the time, manner or
place of payment or performance, or in any term, of all or any of the
Obligations or the Loan Documents or any other amendment or waiver of or any
consent to any departure from any Loan Document; (iii) any exchange, release or
non-perfection of any collateral, or any release of or modifications of the
obligations of any guarantor or other obligor; (iv) any amendment or waiver of
or consent to departure from any Loan Document or other agreement. To the extent
permitted by law, Debtor hereby waives any rights under any valuation, stay,
appraisement, extension or redemption laws now existing or which may hereafter
exist and which, but for this provision, might be applicable to any sale or
disposition of the Collateral by Bank; and any other circumstance which might
otherwise constitute a defense available to, or a discharge of any party with
respect to the Obligations.
NOTIFICATIONS; LOCATION OF COLLATERAL. Debtor will notify Bank in writing at
least 30 days prior to any change in: (i) Debtor's chief place of business
and/or residence; (ii) Debtor's name or identity; (iii) Debtor's
corporate/organizational structure; or (iv) the jurisdiction in which Debtor is
organized. In addition, Debtor shall promptly notify Bank of any claims or
alleged claims of any other person or entity to the Collateral or the
institution of any litigation, arbitration, governmental investigation or
administrative proceedings against or affecting the Collateral. Debtor will keep
Collateral at the location(s) previously provided to Bank until such time as
Bank provides written advance consent to a change of location. Debtor will bear
the cost of preparing and filing any documents necessary to protect Bank's
liens.
COLLATERAL CONDITION AND LAWFUL USE. Debtor represents that the Collateral is in
good repair and condition and that Debtor shall use reasonable care to prevent
Collateral from being damaged or depreciating, normal wear and tear excepted.
Debtor shall immediately notify Bank of any material loss or damage to
Collateral. Debtor shall not permit any item of Collateral to become a fixture
to real estate or an accession to other personal property unless such property
is also Collateral hereunder. Debtor represents it is in compliance in all
respects with all laws, rules and regulations applicable to the Collateral and
its properties, operations, business, and finances.
RISK OF LOSS AND INSURANCE. Debtor shall bear all risk of loss with respect to
the Collateral. The injury to or loss of Collateral, either partial or total,
shall not release Debtor from payment or other performance hereof. Debtor agrees
to obtain and keep in force casualty and hazard insurance on Collateral naming
Bank as loss payee. Such insurance is to be in form and amounts and issued by
such companies as are satisfactory to Bank. All such policies shall provide to
Bank a minimum of 30 days written notice of cancellation. Debtor shall furnish
to Bank such policies, or other evidence of such policies satisfactory to Bank.
If Debtor fails to obtain or maintain in force such insurance or fails to
furnish such evidence, Bank is authorized, but not obligated, to purchase any or
all insurance or "Single Interest Insurance" protecting such interest as Bank
deems appropriate against such risks and for such coverage and for such amounts,
including either the loan amount or value of the Collateral, all at its
discretion, and at Debtor's expense. In such event, Debtor agrees to reimburse
Bank for the cost of such insurance and Bank may add such cost to the
Obligations. Debtor shall bear the risk of loss to the extent of any deficiency
in the effective insurance coverage with respect to loss or damage to any of the
Collateral. Debtor hereby assigns to Bank the proceeds of all such insurance and
directs any insurer to make payments directly to Bank. Debtor hereby appoints
Bank its attorney-in-fact, which appointment shall be irrevocable and coupled
with an interest for so long as Obligations are unpaid, to file proof of loss
and/or any other forms required to collect from any insurer any amount due from
any damage or destruction of Collateral, to agree to and bind Debtor as to the
amount of said recovery, to designate payee(s) of such recovery, to grant
releases to insurer, to grant subrogation rights to any insurer, and to endorse
any settlement check or draft. Debtor agrees not to exercise any of the
foregoing powers granted to Bank without Bank's prior written consent.
Page 2
FINANCING STATEMENTS, POWER OF ATTORNEY. No financing statement (other than any
filed or approved by Bank) covering any Collateral is on file in any public
filing office. On request of Bank, Debtor will execute one or more financing
statements in form satisfactory to Bank and will pay all costs and expenses of
filing the same or of filing this Security Agreement in all public filing
offices, where filing is deemed by Bank to be desirable. Bank is authorized to
file financing statements relating to Collateral without Debtor's signature
where authorized by law. Debtor hereby constitutes and appoints Bank the true
and lawful attorney of Debtor with full power of substitution to take any and
all appropriate action and to execute any and all documents or instruments that
may be necessary or desirable to accomplish the purpose and carry out the terms
of this Security Agreement, including, without limitation, to complete, execute,
and deliver any Control Agreement(s) by Bank, Debtor and Third Party(ies) that
may be or become required in connection herewith (individually and collectively
the "Control Agreement"), and any instructions to Third Party(ies) regarding,
among other things, control and disposition of any Collateral which is the
subject of such Control Agreement(s). The foregoing power of attorney is coupled
with an interest and shall be irrevocable until all of the Obligations have been
paid in full. Neither Bank nor anyone acting on its behalf shall be liable for
acts, omissions, errors in judgment, or mistakes in fact in such capacity as
attorney-in-fact. Debtor ratifies all acts of Bank as attorney-in-fact. Debtor
agrees to take such other actions, at Debtor's expense, as might be requested
for the perfection, continuation and assignment, in whole or in part, of the
security interests granted herein and to assure Bank's intended priority
position. If certificates, passbooks, or other documentation or evidence is/are
issued or outstanding as to any of the Collateral, Debtor will cause the
security interests of Bank to be properly protected, including perfection by
notation thereon or delivery thereof to Bank.
LANDLORD/MORTGAGEE WAIVERS. Debtor shall cause each mortgagee of real property
owned by Debtor and each landlord of real property leased by Debtor to execute
and deliver instruments satisfactory in form and substance to Bank by which such
mortgagee or landlord subordinates its rights, if any, in the Collateral.
CONTROL. Debtor will cooperate with Bank in obtaining control with respect to
Collateral consisting of electronic chattel paper. Debtor authorizes and directs
Third Party to comply with the terms of this Security Agreement, to enter into a
Control Agreement, to xxxx its records to show the security interest of and/or
the transfer to Bank of the property pledged hereunder.
CHATTEL PAPER, ACCOUNTS, GENERAL INTANGIBLES. Debtor warrants that Collateral
consisting of chattel paper, accounts, or general intangibles is (i) genuine and
enforceable in accordance with its terms; (ii) not subject to any defense,
set-off, claim or counterclaim of a material nature against Debtor except as to
which Debtor has notified Bank in writing; and (iii) not subject to any other
circumstances that would impair the validity, enforceability, value, or amount
of such Collateral except as to which Debtor has notified Bank in writing.
Debtor shall not amend, modify or supplement any lease, contract or agreement
contained in Collateral or waive any provision therein, without prior written
consent of Bank. Debtor will not create any tangible chattel paper without
placing a legend on the chattel paper acceptable to Bank indicating that Bank
has a security interest in the chattel paper. Debtor will not create any
electronic chattel paper without taking all steps deemed necessary by Bank to
confer control of the electronic chattel paper upon Bank in accordance with the
UCC.
ACCOUNT INFORMATION. From time to time, at Bank's request, Debtor shall provide
Bank with schedules describing all accounts, including customers' addresses,
created or acquired by Debtor and at Bank's request shall execute and deliver
written assignments of contracts and other documents evidencing such accounts to
Bank. Together with each schedule, Debtor shall, if requested by Bank, furnish
Bank with copies of Debtor's sales journals, invoices, customer purchase orders
or the equivalent, and original shipping or delivery receipts for all goods
sold, and Debtor warrants the genuineness thereof.
ACCOUNT DEBTORS. If a Default should occur, Bank shall have the right to notify
the account debtors obligated on any or all of the Collateral to make payment
thereof directly to Bank and Bank may take control of all proceeds of any such
Collateral, which rights Bank may exercise at any time. The cost of such
collection and enforcement, including attorneys' fees and expenses, shall be
borne solely by Debtor
Page 3
whether the same is incurred by Bank or Debtor. If a Default should occur or
upon demand of Bank, Debtor will, upon receipt of all checks, drafts, cash and
other remittances in payment on Collateral, deposit the same in a special bank
account maintained with Bank, over which Bank also has the power of withdrawal.
If a Default should occur, no discount, credit, or allowance shall be granted by
Debtor to any account debtor and no return of merchandise shall be accepted by
Debtor without Bank's consent. Bank may, after Default, settle or adjust
disputes and claims directly with account debtors for amounts and upon terms
that Bank considers advisable, and in such cases Bank will credit the
Obligations with the net amounts received by Bank, after deducting all of the
expenses incurred by Bank. Debtor agrees to indemnify and defend Bank and hold
it harmless with respect to any claim or proceeding arising out of any matter
related to collection of Collateral.
GOVERNMENT CONTRACTS. If any Collateral covered hereby arises from obligations
due to Debtor from any governmental unit or organization, Debtor shall
immediately notify Bank in writing and execute all documents and take all
actions deemed necessary by Bank to ensure recognition by such governmental unit
or organization of the rights of Bank in the Collateral.
INVENTORY. So long as no Default has occurred, Debtor shall have the right in
the regular course of business, to process and sell Debtor's inventory. If a
Default should occur or upon demand of Bank, Debtor will, upon receipt of all
checks, drafts, cash and other remittances, in payment of Collateral sold,
deposit the same in a special bank account maintained with Bank, over which Bank
also has the power of withdrawal. Debtor shall comply in all respects with all
laws, regulations, rulings, and orders applicable to Debtor or its assets or
business including, without limitation, the Federal Fair labor Standards Act in
the conduct of its business and the production of inventory. Debtor shall notify
Bank immediately of any violation by Debtor of the Fair Labor Standards Act, and
a failure of Debtor to so notify Bank shall constitute a continuing
representation that all inventory then existing has been produced in compliance
with the Fair Labor Standards Act.
INSTRUMENTS, CHATTEL PAPER, DOCUMENTS. Any Collateral that is instruments,
chattel paper and negotiable documents will be properly assigned to, the
originals of any such Collateral in tangible form deposited with and held by
Bank, unless Bank shall hereafter otherwise direct or consent in writing. Bank
may, without notice, before or after maturity of the Obligations, exercise any
or all rights of collection, conversion, or exchange and other similar rights,
privileges and options pertaining to Collateral, but shall have no duty to do
so.
COLLATERAL DUTIES. Bank shall have no custodial or ministerial duties to perform
with respect to Collateral pledged except as set forth herein; and by way of
explanation and not by way of limitation, Bank shall incur no liability for any
of the following: (i) loss or depreciation of Collateral (unless caused by its
willful misconduct or gross negligence), (ii) failure to present any paper for
payment or protest, to protest or give notice of nonpayment, or any other notice
with respect to any paper or Collateral.
TRANSFER OF COLLATERAL. Bank may assign its rights in Collateral or any part
thereof to any assignee who shall thereupon become vested with all the powers
and rights herein given to Bank with respect to the property so transferred and
delivered, and Bank shall thereafter be forever relieved and fully discharged
from any liability with respect to such property so transferred, but with
respect to any property not so transferred, Bank shall retain all rights and
powers hereby given.
INSPECTION, BOOKS AND RECORDS. Debtor will at all times keep accurate and
complete records covering each item of Collateral, including the proceeds
therefrom. Bank, or any of its agents, shall have the right, at intervals to be
determined by Bank and without hindrance or delay, at Debtor's expense, to
inspect, audit, and examine the Collateral and to make copies of and extracts
from the books, records, journals, orders, receipts, correspondence and other
data relating to Collateral, Debtor's business or any other transaction between
the parties hereto. Debtor will at its expense furnish Bank copies thereof upon
request.
Page 4
CROSS COLLATERALIZATION LIMITATION. As to any other existing or future consumer
purpose loan made by Bank to Debtor, within the meaning of the Federal Consumer
Credit Protection Act, Bank expressly waives any security interest granted
herein in Collateral that Debtor uses as a principal dwelling and household
goods.
ATTORNEYS' FEES AND OTHER COSTS OF COLLECTION. Debtor shall pay all of Bank's
reasonable expenses incurred in enforcing this Security Agreement and in
preserving and liquidating Collateral, including but not limited to, reasonable
arbitration, paralegals', attorneys' and experts' fees and expenses, whether
incurred with or without the commencement of a suit, trial, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.
DEFAULT. If any of the following occurs, a default ("Default") under this
Security Agreement shall exist: LOAN DOCUMENT DEFAULT. A default under any Loan
Document. COLLATERAL LOSS OR DESTRUCTION. Any loss, theft, substantial damage,
or destruction of Collateral not fully covered by insurance, or as to which
insurance proceeds are not remitted to Bank within 30 days of the loss.
COLLATERAL SALE, LEASE OR ENCUMBRANCE. Any sale, lease, or encumbrance of any
Collateral not specifically permitted herein without prior written consent of
Bank. LEVY, SEIZURE OR ATTACHMENT. The making of any levy, seizure, or
attachment on or of Collateral which is not removed within 10 days. UNAUTHORIZED
COLLECTION OF COLLATERAL. Any attempt to collect, cash in or otherwise recover
deposits that are Collateral. THIRD PARTY BREACH. Any default or breach by a
Third Party of any provision contained in any Control Agreement executed in
connection with any of the Collateral. UNAUTHORIZED TERMINATION. Any attempt to
terminate, revoke, rescind, modify, or violate the terms of this Security
Agreement or any Control Agreement without the prior written consent of Bank.
REMEDIES ON DEFAULT (INCLUDING POWER OF SALE). If a Default occurs, all of the
Obligations shall be immediately due and payable, without notice and Bank shall
have all the rights and remedies of a secured party under the Uniform Commercial
Code. Without limitation thereto, Bank shall have the following rights and
remedies: (i) to take immediate possession of Collateral, without notice or
resort to legal process, and for such purpose, to enter upon any premises on
which Collateral or any part thereof may be situated and to remove the same
therefrom, or, at its option, to render Collateral unusable or dispose of said
Collateral on Debtor's premises; (ii) to require Debtor to assemble the
Collateral and make it available to Bank at a place to be designated by Bank;
(iii) to exercise its right of set-off or bank lien as to any monies of Debtor
deposited in accounts of any nature maintained by Debtor with Bank or affiliates
of Bank, without advance notice, regardless of whether such accounts are general
or special; (iv) to dispose of Collateral, as a unit or in parcels, separately
or with any real property interests also securing the Obligations, in any county
or place to be selected by Bank, at either private or public sale (at which
public sale Bank may be the purchaser) with or without having the Collateral
physically present at said sale.
Any notice of sale, disposition or other action by Bank required by law and sent
to Debtor at Debtor's address shown above, or at such other address of Debtor as
may from time to time be shown on the records of Bank, at least 5 days prior to
such action, shall constitute reasonable notice to Debtor. Notice shall be
deemed given or sent when mailed postage prepaid to Debtor's address as provided
herein. Bank shall be entitled to apply the proceeds of any sale or other
disposition of the Collateral, and the payments received by Bank with respect to
any of the Collateral, to Obligations in such order and manner as Bank may
determine. Collateral that is subject to rapid declines in value and is
customarily sold in recognized markets may be disposed of by Bank in a
recognized market for such collateral without providing notice of sale. Debtor
waives any and all requirements that the Bank sell or dispose of all or any part
of the Collateral at any particular time, regardless of whether Debtor has
requested such sale or disposition.
REMEDIES ARE CUMULATIVE. No failure on the part of Bank to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Bank or any right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any remedies provided by law, in equity, or
in other Loan Documents.
Page 5
MISCELLANEOUS. (i) AMENDMENTS AND WAIVERS. No waiver, amendment or modification
of any provision of this Security Agreement shall be valid unless in writing and
signed by Debtor and an officer of Bank. No waiver by Bank of any Default shall
operate as a waiver of any other Default or of the same Default on a future
occasion. (ii) ASSIGNMENT. All rights of Bank hereunder are freely assignable,
in whole or in part, and shall inure to the benefit of and be enforceable by
Bank, its successors, assigns and affiliates. Debtor shall not assign its rights
and interest hereunder without the prior written consent of Bank, and any
attempt by Debtor to assign without Bank's prior written consent is null and
void. Any assignment shall not release Debtor from the Obligations. This
Security Agreement shall be binding upon Debtor, and the heirs, personal
representatives, successors, and assigns of Debtor. (iii) APPLICABLE LAW;
CONFLICT BETWEEN DOCUMENTS. This Security Agreement shall be governed by and
construed under the law of the jurisdiction named in the address of the Bank
first shown above (the "Jurisdiction") without regard to that Jurisdiction's
conflict of laws principles, except to the extent that the UCC requires the
application of the law of a different jurisdiction. If any terms of this
Security Agreement conflict with the terms of any commitment letter or loan
proposal, the terms of this Security Agreement shall control. (iv) JURISDICTION.
Debtor irrevocably agrees to non-exclusive personal jurisdiction in the
Jurisdiction in which the office of Bank as stated above is located. (v)
SEVERABILITY. If any provision of this Security Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective but only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Security Agreement. (vi)
NOTICES. Any notices to Debtor shall be sufficiently given, if in writing and
mailed or delivered to the address of Debtor shown above or such other address
as provided hereunder; and to Bank, if in writing and mailed or delivered to
Bank's office address shown above or such other address as Bank may specify in
writing from time to time. In the event that Debtor changes Debtor's mailing
address at any time prior to the date the Obligations are paid in full, Debtor
agrees to promptly give written notice of said change of address by registered
or certified mail, return receipt requested, all charges prepaid. (vii)
CAPTIONS. The captions contained herein are inserted for convenience only and
shall not affect the meaning or interpretation of this Security Agreement or any
provision hereof. The use of the plural shall also mean the singular, and vice
versa. (viii) JOINT AND SEVERAL LIABILITY. If more than one party has signed
this Security Agreement, such parties are jointly and severally obligated
hereunder. (ix) BINDING CONTRACT. Debtor by execution and Bank by acceptance of
this Security Agreement, agree that each party is bound by all terms and
provisions of this Security Agreement.
DEFINITIONS. LOAN DOCUMENTS. The term "Loan Documents" refers to all documents,
including this Agreement, whether now or hereafter existing, executed in
connection with or related to the Obligations, and may include, without
limitation and whether executed by Debtor or others, commitment letters that
survive closing, loan agreements, promissory notes, guaranty agreements, deposit
or other similar agreements, other security agreements, letters of credit and
applications for letters of credit, security instruments, financing statements,
mortgage instruments, any renewals or modifications, whenever any of the
foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C. ss. 101). THIRD PARTY. The term "Third Party" means any Broker,
Collateral Agent, Securities Intermediary and/or bank which from time to time
maintains a securities account, and is acting in such capacity, for Debtor or
maintains a deposit account for Debtor with respect to any part of the
Collateral. UCC. "UCC" means the Uniform Commercial Code as presently and
hereafter enacted in the Jurisdiction. TERMS DEFINED IN THE UCC. Any term used
in this Agreement and in any financing statement filed in connection herewith
which is defined in the UCC and not otherwise defined in this Agreement or any
other Loan Document has the meaning given to the term in the UCC. Debtor
acknowledges and understands that any such term relating to the description of
Collateral may be defined in one or both of (i) the version of Article 9 of the
UCC as enacted and in force in the Jurisdiction on the date this Agreement is
signed by Debtor or (ii) a revised version of Article 9 of the UCC
(substantially in the form of Revised Article 9 (2000 Revision) version thereof
promulgated by the National Conference of Commissioners on Uniform State Laws
and the American Law Institute) ("Revised Article 9") enacted and in force in
the Jurisdiction at any relevant future time. In light of the foregoing, Debtor
agrees that, if terms defining items or classes of Collateral change or are
added as a result of the enactment of Revised Article 9 in the Jurisdiction, the
meaning to be ascribed to any such term with respect to any particular item or
class of Collateral hereunder and the interpretation thereof after the date of
such enactment shall be (a) if such term is defined in both versions
Page 6
of Article 9 and such definitions differ, the broader or more encompassing of
the two definitions, regardless of duplication, and (b) if such term is defined
under only one of the versions of Article 9, the definition in that version.
IN WITNESS WHEREOF, Debtor, on the day and year first written above, has caused
this Security Agreement to be executed under seal.
Bio-Imaging Technologies, Inc.
Taxpayer Identification Number: 00-0000000
By:/s/Xxxx X. Xxxxxxxxx-(seal)
--------------------------------
Page 7
