Exhibit 10.3
INNOSERV TECHNOLOGIES, INC. XXXXXXX BANK AND TRUST, N.A.
0000 XXXXXXX, XXXXX 000
XXXXXXXXX, XX 00000 SOUTH ARLINGTON
XX XXX 000000
TAXPAYER I.D. NUMBER: 00-0000000 XXXXXXXXX, XX 00000
DEBTOR'S NAME, ADDRESS AND SSN
OR TIN SECURED PARTY'S NAME AND
("I" MEANS EACH DEBTOR WHO SIGNS.) ADDRESS
("YOU" MEANS THE SECURED PARTY,
ITS SUCCESSORS AND ASSIGNS.)
I am entering into this security agreement with you on JANUARY 12, 1996 (date).
SECURED DEBTS. I agree that this security agreement will secure the payment and
performance of the debts, liabilities or obligations described below that
(Check one) ___ I XX (name) INNOSERV TECHNOLOGIES, INC. owe(s) to you now or in
the future:
(Check one below):
___ Specific Debt(s). The debt(s), liability or obligations evidenced by
(describe):____________________________and all extensions, renewals,
refinancing, modifications and replacement of the debt, liability or
obligation.
XX All Debt(s). Except in those cases listed in the "LIMITATIONS"
paragraph on page 2, each and every debt, liability and obligation of
every type and description (whether such debt, liability or obligation now
exists or is incurred in the future and whether it is or may be direct or
indirect, due or to become due, absolute or contingent, primary or
secondary, liquidated or unliquidated, or joint, several or joint and
several).
SECURITY INTEREST. To secure the payment and performance of the above described
Secured Debts, liabilities and obligations, I give you a security interest
in all of the property described below that I now own and that I may own in
the future (including, but not limited to, all parts, accessories, repairs,
improvements, and accessions to the property), wherever the property is or
may be located, and all proceeds and products from the property.
/XX/ INVENTORY: All inventory which I hold for ultimate sale or lease, or
which has been or will be supplied under contracts of service, or
which are raw materials, work in process, or materials used or
consumed in my business.
/XX/ EQUIPMENT: All equipment including, but not limited to, all
machinery, vehicles, furniture, fixtures, manufacturing equipment,
farm machinery and equipment, shop equipment, office and
recordkeeping equipment, and parts and tools. All equipment described
in a list or schedule which I give to you will also be included in the
secured property, but such a list is not necessary for a valid
security interest in my equipment.
31
/ / FARM PRODUCTS: All farm products including, but not limited to:
(a) all poultry and livestock and their young, along with their
products, produce and replacements;
(b) all crops, annual or perennial, and all products of the crops; and
(c) all feed, seed, fertilizer, medicines, and other supplies used or
produced in my farming operations.
/XX/ ACCOUNTS, INSTRUMENTS, DOCUMENTS, CHATTEL PAPER AND OTHER RIGHTS TO
PAYMENT: All right I have now and that I may have in the future to
the payment of money including, but not limited to:
(a) payment for goods and other property sold or leased or for
services rendered, whether or not I have earned such payment
by performance; and
(b) rights to payment arising out of all present and future debt
instruments, chattel paper and loans and obligations receivable.
The above include any right and interests (including all liens and
security interests) which I may have by law or agreement against any
account debtor or obligor of mine.
/ / GENERAL INTANGIBLES: All general intangibles including, but not
limited to, tax refunds, applications for patents, patents,
copyrights, trademarks, trade secrets, good will, trade names,
customer lists, permits and franchises, and the right to use my name.
/ / GOVERNMENT PAYMENTS AND PROGRAMS: All payments, accounts, general
intangibles, or other benefits (including, but not limited to,
payments in kind, deficiency payments, letters of entitlement,
warehouse receipts, storage payments, emergency assistance payments,
diversion payments, and conservation reserve payments) in which I now
have and in the future may have any rights or interest and which arise
under or as a result of any preexisting, current or future Federal or
state governmental program (including, but not limited to, all
programs administered by the Commodity Credit Corporation and the
ASCS.
/ / The secured property includes, but is not limited by, the following:
If this agreement covers timber to be cut, minerals (including oil and gas),
fixtures or crops growing or to be grown, the legal description is:
_______________________________________________________________________________
32
I am a (n)/ / individual / / partnership I AGREE TO THE TERMS SET OUT
/XX/ corporation ON BOTH PAGE 1 AND PAGE 2
OF THIS AGREEMENT. I HAVE
/ / If checked, file this agreement in RECEIVED A COPY OF THIS
the real estate record. DOCUMENT ON TODAY'S DATE.
Record Owner (if not me): ____________
The property will be used for / / personal
/XX/ business / / agricultural
___________reasons.
INNOSERV TECHNOLOGIES, INC.
---------------------------
(Debtor's Name)
By: /s/ Xxxxxxx X. Xxxx
---------------------------
XXXXXXX XXXX
XXXXXXX BANK AND TRUST, N.A.
-----------------------------
SOUTH ARLINGTON Title: PRESIDENT
----------------------------- ---------------------
(secured party's name)
By: /s/ XXXXXX VON DER AHE
--------------------------
XXXXXX VON DER AHE, PRESIDENT
33
GENERALLY - "You" means the Secured Party identified on page 1 of this
agreement. "I", "me" and "my" means each person who signs this security
agreement as Debtor and who agrees to give the property described in this
agreement as security for the Secured Debts. All terms and duties under this
agreement are joint and individual. No modification of this security agreement
is effective unless made in writing and signed by you and me. This security
agreement remains in effect, even if the note is paid and I owe no other debt
to you, until discharged in writing. Time is of the essence in this agreement.
APPLICABLE LAW - I agree that this security agreement will be governed by the
law of the state in which you are located. If property described in this
agreement is located in another state, this agreement may also, in some
circumstances, be governed by the law of the state in which the property is
located.
To the extent permitted by law, the terms of this agreement may vary
applicable law. If any provision of applicable law may not be varied by
agreement, any provision of this agreement that does not comply with the law
will not be effective. If any provision of this agreement cannot be enforced
according to its terms, this fact will not affect the enforceability of the
remainder of this agreement.
OWNERSHIP AND DUTIES TOWARD PROPERTY - I represent that I own all of the
property, or to the extend this is a purchase money security interest I will
acquire ownership of the property with the proceeds of the loan. I will defend
it against any other claim. Your claim to the property is ahead of the claims
of any other creditor. I agree to do whatever you require to protect your
security interest and to keep your claim in the property ahead of the claims of
other creditors. I will not do anything to harm your position.
I will keep books, records and accounts about the property and my business
in general. I will let you examine these records at any reasonable time. I
will prepare any report or accounting you request, which deals with the
property.
I will keep the property in my possession and will keep it in good repair and
use it only for the purpose(s) described on page 1 of this agreement. I will
not change this specified use without your express written permission. I
represent that I am the original owner of the property and, if I am not, that I
have provided you with a list of prior owners of the property.
I will keep the property at my address listed on page 1 of this agreement,
unless we agree I may keep it at another location. If the property is to be
used in another state, I will give you a list of those states. I will not try
to sell the property unless it is inventory or I receive your written permission
to do so. If I sell the property I will have the payment made payable to the
order of you and me.
You may demand immediate payment of the debt(s) if the debtor is not a
natural person and without your prior written consent (1) a beneficial interest
in the debtor is sold or transferred or (2) there is a change in either the
identity or number of members of a partnership or (3) there is a change in
ownership of more than 25 percent of the voting stock of a corporation.
I will pay all taxes and charges on the property as they become due. You
have the right of reasonable access in order to inspect the
34
property. I will immediately inform you of any loss or damage to the property.
LIMITATIONS - This agreement will not secure a debt described in the section
entitled "Secured Debts" on page 1:
1) if you fail to make any disclosure of the existence of this security
interest required by law for such other debt;
2) if this security interest is in my principal dwelling and you fail to
provide (to all persons entitled) any notice of right of rescission
required by law for such other debt;
3) to the extent that this security interest is in "household goods" and
the other debt to be secured is a "consumer" loan (as those terms are
defined in applicable federal regulations governing unfair and
deceptive credit practices);
4) if this security interest is in margin stock subject to the
requirements of 12 C.F.R. Section 207 or 221 and you do not obtain a
statement of purpose if required under these regulations with respect
to that debt; or
5) if this security interest is unenforceable by law with respect to that
debt.
PURCHASE MONEY SECURITY INTEREST - For the sole purpose of determining the
extent of a purchase money security interest arising under this security
agreement: (a) payments on any non-purchase money loan also secured by this
agreement will not be deemed to apply to the purchase money loan, and (b)
payments on the purchase money loan will be deemed to apply first to the non-
purchase money portion of the loan, if any, and then to the purchase money
obligations in the order in which the items of collateral were acquired or if
acquired at the same time, in the order selected by you. No security interest
will be terminated by application of this formula. "Purchase money loan" means
any loan the proceeds of which, in whole or in part, are used to acquire any
collateral securing the loan and all extensions, renewals, consolidations and
refinancings of such loans.
AUTHORITY OF SECURED PARTY TO MAKE ADVANCES AND PERFORM FOR DEBTOR - I agree to
pay you on demand any sums you advanced on my behalf including, but not limited
to, expenses incurred in collecting, insuring, conserving, or protecting the
property or in any inventories, audits, inspections or other examinations by you
in respect to the property. If I fail to pay such sums, you may do so for me,
adding the amount paid to the other amounts secured by this agreement. All such
sums will be due on demand and will bear interest at the highest rate provided
in any agreement, note or other instrument evidencing the Secured Debt(s) and
permitted by law at the time of the advance.
If I fail to perform any of my duties under this security agreement, or any
mortgage, deed of trust, lien or other security interest, you may without
notice to me perform the duties or cause them to be performed. I understand
that this authorization includes, but is not limited to, permission to: (1)
prepare, file, and sign my name to any necessary reports or accountings; (2)
notify any account debtor of your interest in this property and tell the account
debtor to make the payments to you or someone else you name, rather than me; (3)
place on any chattel paper a note indicating your interest in the property; (4)
in my name, demand, collect, receive and give a receipt for compromise,
35
settle, and handle any suits or other proceedings involving the collateral; (5)
take any action you feel is necessary in order to realize on the collateral,
including performing any part of a contract or endorsing it in my name; and (6)
make an entry on my books and records showing the existence of the security
agreement. Your right to perform for me shall not create an obligation to
perform and your failure to perform will not preclude you from exercising any of
your rights under the law of this security agreement.
THESE SAME PARTIES WILL CONTROL THE INSURANCE.
INSURANCE
WARRANTIES AND REPRESENTATIONS - If this agreement includes accounts, I will
not settle any account for less than its full value without your written
permission. I will collect all accounts until you tell me otherwise. I will
keep the proceeds from all the accounts and any goods which are returned tome or
which I take back in trust for you, I will not mix them with any other property
of mine. I will deliver them to you at your request. If you ask me to pay you
the full price on any returned items or items retaken by myself, I will do so.
If this agreement covers inventory, I will not dispose of it except in my
ordinary course of business at the fair market value for the property, or at a
minimum price established between you and me.
If this agreement covers farm products I will provide you, at your request,
a written list of the buyers, commission merchants or selling agents to or
through whom I may sell my farm products. In addition to those parties named
on this written list, I authorize you to notify at your sole discretion any
additional parties regarding your security interest in my farm products. I
remain subject to all applicable penalties for selling my farm products in
violation of my agreement with you and the Food Security Act. In this paragraph
the terms farm products, buyers, commission merchants and selling agents have
the meanings given to them in the Federal Food Security Act of 1985.
DEFAULT - I will be in default if any one or more of the following occur: (1) I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required; (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I owe him through court proceedings; (5) I die, am declared
incompetent, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) I change my name or assume an
additional name without first notifying you before making such a change; (9)
failure to plant, cultivate and harvest crops in due season; (10) if any loan
proceeds are used for a purpose that will contribute to excessive erosion of
highly erodible land or to the conversion of wetlands to produce an agricultural
commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.
36
REMEDIES - If I am in default on this agreement, you have the following
remedies:
1) You may demand immediate payment of all I owe you under any obligation
secured by this agreement.
2) You may set off any obligation I have to you against any right I have to
the payment of money from you.
3) You may demand more security or new parties obligated to pay any debt I
owe you as a condition of giving up any other remedy.
4) You may make use of any remedy you have under state or federal law.
5) If I default by failing to pay taxes or other charges, you may pay them
(but you are not required to do so). If you do, I will repay to you the
amount you paid plus interest at the highest contract rate.
6) You may require me to gather the property and make it available to you in
a reasonable fashion.
7) You may repossess the property and sell it as provided by law. You may
repossess the property so long as the repossession does not involve a
breach of the peace or an illegal entry onto my property. You may sell
the property as provided by law. You may apply what you receive from the
sale of the property to: your expenses; your reasonable attorney's fees
and legal expenses (where not prohibited by law); any debt I owe you.
If what you receive from the sale of the property does not satisfy the
debts, you may take me to court to recover the difference (where
permitted by law).
I agree that 10 days written notice sent to my address listed on page 1
by first class mail will be reasonable notice to me under the Uniform
Commercial Code.
If any items not otherwise subject to this agreement are contained in the
property when you take possession, you may hold these items for me at my
risk and you will not be liable for taking possession of them.
8) In some cases, you may keep the property to satisfy the debt. You may
enter upon and take possession of all or any part of my property, so long
as you do not breach the peace or illegally enter onto the property,
including lands, plants, buildings, machinery, and equipment as may be
necessary to permit you to manufacture, produce, process, store or sell
or complete the manufacture, production, processing, storing or sale of
any of the property and to use and operate the property for the length of
time you feel is necessary to protect your interest, all without payment
or compensation to me.
By choosing any one or more of these remedies, you do not waive your right
to later use any other remedy. You do not waive a default if you choose not to
use any remedy, and, by electing not to use any remedy, you do not waive your
right to later consider the event a default and to immediately use any remedies
if it continues or occurs again.
FILING - A carbon, photographic or other reproduction of this security agreement
or the financing statement covering the property described in this agreement may
be used as a financing statement where allowed by law. Where permitted by law,
you may file a financing statement which
37
does not contain my signature, covering the property secured by this agreement.
CO-MAKERS - If more than one of us has signed this agreement, we are all
obligated equally under the agreement. You may xxx any of one of us or any of
us together if this agreement is violated. You do not have to tell me if any
term of the agreement has not been carried out. You may release any co-signer
and I will still be obligated under this agreement. You may release any of the
security and I will still be obligated under this agreement. Waiver by you of
any of your rights will not affect my duties under this agreement. Extending
this agreement or new obligations under this agreement, will not affect my duty
under the agreement.
38
INNOSERV TECHNOLOGIES, XXXXXXX BANK AND Loan File Number 78000411
INC. TRUST, N.A. Date JANUARY 12, 1996
4330 BELTWAY SUITE 300 SOUTH ARLINGTON Loan Amount $1,500,000.00
XXXXXXXXX, XX 00000 XX XXX 000000 Maturity Date JANUARY 30,
XXXXXXXXX, XX 00000 1999
Renewal of ______________
BORROWER'S NAME AND LENDER'S NAME AND
ADDRESS ADDRESS
INCLUDES EACH BORROWER INCLUDES THE LENDER,
ABOVE, JOINTLY AND ITS SUCCESSORS AND
SEVERALLY. ASSIGNS.
DISCLAIMER OF ORAL
AGREEMENTS
The Borrower and Lender, hereinafter the Parties, have entered into a
transaction generally described as $1,500,000 LOAN TO PAY OFF BANK OF AMERICA.
In conjunction with this transaction the Parties have executed one or more
promissory notes, assignments, security agreements, mortgages, deeds of trust or
other documents. It is the intention of the Parties that this Disclaimer be
incorporated by reference into each of the documents so executed for this
transaction.
The Parties warrant and represent that the entire agreement made between the
Parties is contained within the executed documents, as amended and supplemented
hereby, and that no agreements or promises exist between the Parties that are
not reflected in the language of the various documents executed in conjunction
with this transaction.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES
INNOSERV TECHNOLOGIES, INC.
BY: /s/ XXXXXXX X. XXXX
----------------------------
XXXXXXX XXXX, PRESIDENT
Borrower /s/ XXXXXX X. VON DER AHE
-----------------------------
Lender
XXXXXX X. VON DER AHE
XXXXXXX BANK AND TRUST, N.A.
SOUTH ARLINGTON
39
