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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required] for the fiscal year ended December 31,
1996
or
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period from
______ to _____________
Commission file number 0-21274
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LIBERTY TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2295708
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
555 North Lane, Lee Park 19428
Conshohocken, Pennsylvania (Zip Code)
(Address of principal executive offices)
(610) 834-0330
(Registrant's telephone number,
including area code)
Securities registered pursuant to Section 12(b) of the
Act: None Securities registered pursuant to Section
12(g) of the Act:
Common Stock, par value $0.01 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of April 7, 1997, the aggregate market value of voting stock held by
non-affiliates of the registrant based on the last sales price as reported by
the NASDAQ National Market was $14,997,348 (4,999,216 shares outstanding at a
closing price of $3.00 per share).
As of April 7, 1997, the registrant had 4,999,216 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
The registrant's Proxy Statement for the Annual Meeting of Shareholders on
June 10, 1997 is incorporated by reference in Part III of this Form 10-K to the
extent stated herein.
NOTE
Conshohocken, Pennsylvania
Dated: October 11, 1996
$2,500,000.00
FOR VALUE RECEIVED AND INTENDING TO BE LEGALLY BOUND, the undersigned
(collectively "Borrowers" and individually a "Borrower"), hereby promise to pay
to the order of FIRST UNION NATIONAL BANK ("Bank"), ON DEMAND after the
occurrence of an Event of Default, or if no demand is made sooner, on March 1,
1997, the principal sum of Two Million Five Hundred Thousand Dollars
($2,500,000.00), or such greater or lesser principal amount as may be
outstanding from time to time under the Increase established by Bank for the
benefit of Borrowers pursuant to the terms of that certain Loan Agreement dated
December 2, 1993 among Borrowers and Bank, as amended, including, without
limitation, by that certain Second Amendment and Modification to Loan Agreement
of even date herewith (such Loan Agreement, as the same has been and may
hereafter be amended, supplemented or restated from time to time, being the
"Loan Agreement"), together with interest thereon, upon the following terms:
1. Increase Note. This Note is the "Increase Note" as defined in the Loan
Agreement and, as such, shall be construed in accordance with all terms and
conditions thereof. Capitalized terms not defined herein shall have such meaning
as provided in the Loan Agreement. This Note is entitled to all the rights and
remedies provided in the Loan Agreement and the Loan Documents and is secured by
all collateral as described therein.
2. Interest Rate. Subject to the provisions of Section 2 of the Loan
Agreement, interest on the unpaid principal balance of this Note will accrue
from the date of advance until final payment thereof at the Base Rate minus
one-half of one percent (1/2%).
3. Default Interest. Interest will accrue on the principal balance of this
Note after the occurrence of an Event of Default or expiration of the Contract
Period at a rate which is two percent (2%) in excess of the non-default rate set
forth above.
4. Post Judgment Interest. Any judgment obtained for sums due hereunder or
under the Loan Documents will accrue interest at the rate provided in Section 3
until paid.
5. Computation. Interest will be computed on the basis of a year of three
hundred sixty (360) days and paid for the actual number of days elapsed.
6. Interest Payments. Borrowers will pay interest on the principal balance
of the Revolving Credit as follows: (a) with respect to advances which bear
interest at the Base Rate minus one half of one percent (1/2%), monthly on the
first day of each calendar month commencing the first day of the first calendar
month following the date hereof; or (b) with respect to interest payments
predicated upon a Eurodollar Rate, at the end of the applicable Rate Period for
such sums.
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<PAGE>
7. Principal Payments on the Revolving Credit. Borrowers will pay the
outstanding principal balance hereof on the first to occur of (i) March 1, 1997,
or (ii) DEMAND for payment made by Bank after the occurrence of an Event of
Default. Principal repayments shall be in multiples of One Hundred Thousand
Dollars ($100,000.00). The outstanding balance of any Eurodollar Loan shall be
repaid at the end of the applicable Rate Period.
8. Place of Payment. Principal and interest hereunder shall be payable as
provided in the Loan Agreement, or at such other place as Bank, from time to
time, may designate in writing.
9. Default; Remedies. Upon the occurrence of an Event of Default or upon
demand or maturity as provided above, Bank, at its option and without notice to
Borrowers, may declare immediately due and payable the entire unpaid balance of
principal and all other sums due by Borrowers hereunder or under the Loan
Documents, together with interest accrued thereon at the applicable rate
specified above. Payment thereof may be enforced and recovered in whole or in
part at any time and from time to time by one or more of the remedies provided
to Bank in this Note or in the Loan Documents or as otherwise provided at law or
in equity, all of which remedies are cumulative and concurrent.
10. Waivers. Borrowers and all endorsers, jointly and severally, waive
presentment for payment, demand, notice of demand, notice of nonpayment or
dishonor, protest and notice of protest of this Note, and all other notices in
connection with the delivery, acceptance, performance, default or enforcement of
the payment of this Note, except for such notices, if any, as are expressly
required to be delivered by Bank to Borrowers under the Loan Agreement.
11. Miscellaneous. If any provisions of this Note shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof. This Note has been delivered in and shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to the law of conflicts. This Note shall be binding upon
Borrowers and upon each Borrower's respective successors and assigns and shall
benefit Bank and its successors and assigns. The prompt and faithful performance
of all of Borrowers' obligations hereunder, including without limitation, time
of payment, is of the essence of this Note.
12. Joint and Several Liability. All agreements, conditions, covenants and
provisions of this Note shall be and are the joint and several obligation of
each Borrower.
13. Confession of Judgment. EACH BORROWER HEREBY AUTHORIZES AND EMPOWERS
ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF
PENNSYLVANIA, OR IN ANY OTHER JURISDICTION WHICH PERMITS THE ENTRY OF JUDGMENT
BY CONFESSION, TO APPEAR FOR
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<PAGE>
BORROWERS, OR ANY OF THEM, AT ANY TIME AFTER THE OCCURRENCE OF AN EVENT OF
DEFAULT UNDER THE LOAN AGREEMENT IN ANY ACTION BROUGHT AGAINST BORROWERS ON THIS
NOTE OR THE LOAN DOCUMENTS AT THE SUIT OF BANK, WITH OR WITHOUT COMPLAINT OR
DECLARATION FILED, WITHOUT STAY OF EXECUTION, AS OF ANY TERM OR TIME, AND
THEREIN TO CONFESS OR ENTER JUDGMENT AGAINST BORROWERS, OR ANY OF THEM, FOR THE
ENTIRE UNPAID OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AND ALL OTHER SUMS TO BE
PAID BY BORROWERS TO OR ON BEHALF OF BANK PURSUANT TO THE TERMS HEREOF OR OF THE
LOAN DOCUMENTS AND ALL ARREARAGES OF INTEREST THEREON, TOGETHER WITH ALL COSTS
AND OTHER EXPENSES AND AN ATTORNEY'S COLLECTION COMMISSION OF FIFTEEN PERCENT
(15%) OF THE AGGREGATE AMOUNT OF THE FOREGOING SUMS, BUT IN NO EVENT LESS THAN
$5,000.00; AND FOR SO DOING THIS NOTE OR A COPY HEREOF VERIFIED BY AFFIDAVIT
SHALL BE A SUFFICIENT WARRANT.
THE AUTHORITY GRANTED HEREIN TO CONFESS JUDGMENT SHALL NOT BE EXHAUSTED BY
ANY EXERCISE THEREOF BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES UNTIL
PAYMENT IN FULL OF ALL THE AMOUNTS DUE HEREUNDER. EACH BORROWER ACKNOWLEDGES
THAT IT HAS BEEN REPRESENTED BY COUNSEL IN CONNECTION WITH THE EXECUTION AND
DELIVERY OF THIS NOTE AND THAT IT KNOWINGLY WAIVES ITS RIGHT TO BE HEARD PRIOR
TO THE ENTRY OF SUCH JUDGMENT AND UNDERSTANDS THAT, UPON SUCH ENTRY, SUCH
JUDGMENT SHALL BECOME A LIEN ON ALL REAL PROPERTY OF SUCH BORROWER IN THE COUNTY
WHERE SUCH JUDGMENT IS ENTERED.
IN WITNESS WHEREOF, Borrowers, intending to be legally bound hereby, have
caused this Note to be duly executed the day and year first above written.
LIBERTY TECHNOLOGIES, INC.
By: /s/ R. Nim Evatt
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R. Nim Evatt, President
Attest: /s/ Daniel G. Clare
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Daniel G. Clare, Vice President
(SIGNATURES CONTINUED ON THE FOLLOWING PAGE)
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<PAGE>
(SIGNATURES CONTINUED FROM THE PRECEDING PAGE)
LTH DELAWARE, INC.
By: /s/ R. Nim Evatt
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R. Nim Evatt, President
Attest: /s/ Daniel G. Clare
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Daniel G. Clare, Secretary
LIBERTY TECHNICAL SERVICES, INC.
(formerly known as
Industrial NDT Company, Inc.)
By: /s/ R. Nim Evatt
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R. Nim Evatt, President
Attest: /s/ Daniel G. Clare
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Daniel G. Clare, Secretary
BETA MONITORS INTERNATIONAL, INC.
By: /s/ R. Nim Evatt
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R. Nim Evatt, Director
Attest: /s/ Daniel G. Clare
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Daniel G. Clare, Secretary
LIBERTY INTERNATIONAL INC.
By: /s/ R. Nim Evatt
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R. Nim Evatt, President
Attest: /s/ Daniel G. Clare
---------------------------
Daniel G. Clare, Secretary
(SIGNATURES CONTINUED ON THE FOLLOWING PAGE)
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<PAGE>
(SIGNATURES CONTINUED FROM THE PRECEDING PAGE)
LIBERTY IMAGING SYSTEMS, INC.
By: /s/ R. Nim Evatt
-------------------------------
R. Nim Evatt, President
Attest: /s/ Daniel G. Clare
---------------------------
Daniel G. Clare, Secretary
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<PAGE>
SECOND AMENDMENT AND MODIFICATION TO LOAN AGREEMENT
THIS SECOND AMENDMENT AND MODIFICATION TO LOAN AGREEMENT (the "Amendment")
is made as of the 11th day of October, 1996, by and among LIBERTY TECHNOLOGIES,
INC. ("LTI"), LTH DELAWARE, INC. ("LTH"), LIBERTY TECHNICAL SERVICES, INC.
(formerly known as "Industrial NDT Company, Inc.") ("NDT"), BETA MONITORS
INTERNATIONAL, INC. ("BMI"), LIBERTY INTERNATIONAL INC. ("LII"), and LIBERTY
IMAGING SYSTEMS, INC. ("LIS") (collectively "Borrowers" and individually a
"Borrower") and FIRST UNION NATIONAL BANK (formerly known as "First Fidelity
Bank, N.A.") ("Bank").
BACKGROUND
A. By a Loan Agreement dated December 2, 1993, as amended by Amendment and
Modification to Loan Agreement dated December 30, 1995 (collectively, the "Loan
Agreement"), by and among Bank and Borrowers, Bank agreed, inter alia, to extend
to Borrowers a revolving credit facility in the principal amount of up to Five
Million Dollars ($5,000,000.00) (the "Revolving Credit"), as further evidenced
by that certain Note dated December 2, 1993 payable to Bank in the original
principal amount of Five Million Dollars ($5,000,000.00) (the "Revolving Credit
Note").
B. Borrowers have requested that Bank extend to them a Two Million Five
Hundred Thousand Dollar ($2,500,000.00) temporary increase in the amount of the
Revolving Credit to be available through March 1, 1997, which Bank is willing to
do on the terms set forth herein.
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:
1. CAPITALIZED TERMS. Capitalized terms not otherwise defined herein will
have the meanings set forth therefor in the Loan Agreement.
2. TEMPORARY INCREASE. The following is hereby added to and made a part of
the Loan Agreement as Section 1.1(a) thereof:
"1.1(a) Temporary Increase in the Revolving Credit.
(a) Notwithstanding the limitation on the aggregate outstanding
amount of the Revolving Credit contained in Section 1.1, effective as
of September 30, 1996 and subject to the other terms and conditions of
this Agreement, the Revolving Credit shall be increased by the
principal amount of Two Million Five Hundred Thousand Dollars
($2,500,000.00) (the "Increase"). The Increase shall be available to
Borrowers under the Revolving Credit commencing on such date and
continuing through March 1, 1997. All sums advanced under the Increase
shall be evidenced by Borrowers' promissory note in the principal
amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00)
(the "Increase Note"), which
<PAGE>
shall be in the form attached hereto as Exhibit "C", with the blanks
appropriately filled in. On March 1, 1997, the Increase shall expire
and the maximum amount available to Borrowers under the Revolving
Credit shall automatically, without further action by or notice to or
consent of Borrowers, reduce to Five Million Dollars ($5,000,000.00).
The entire outstanding principal amount of the Increase Note, and all
accrued but unpaid interest thereon, shall be due and payable in full
upon the first to occur of (i) DEMAND for payment made by Bank at any
time after the occurrence of an Event of Default, or (ii) March 1,
1997. Accrued interest on the Increase Note shall be payable at all
times, at the rates and in the same manner as accrued interest on the
Revolving Credit Note.
All advances to Borrowers by Bank under the Revolving Credit shall be
made under the Revolving Credit Note until the aggregate amount of
outstanding advances thereunder equals Five Million Dollars
($5,000,000.00); thereafter, advances shall be made under the Increase
Note in accordance with the foregoing. All principal payments actually
received by Bank from Borrowers on the Revolving Credit shall be
applied as follows: (i) first, to repayment of all principal advanced
and outstanding under the Increase Note, then (ii) to payment of
principal advanced and outstanding under the Revolving Credit Note.
Principal payments on the Increase Note shall be in multiples of One
Hundred Thousand Dollars ($100,000.00). Except to the extent necessary
to avoid confusion or inconsistency with the terms of this Section
1.1(a), all references in this Agreement and the other Loan Documents
to the "Revolving Credit Note" shall mean the Revolving Credit Note
and the Increase Note, collectively."
3. USAGE FEE. Borrowers and Bank hereby confirm that the usage fee
described in Section 3.5 of the Loan Agreement shall, until the Increase expires
on March 1, 1997, be calculated on the difference between Seven Million Five
Hundred Thousand Dollars ($7,500,000.00) minus the average outstanding principal
balance of all cash advances and outstanding standby letters of credit under the
Revolving Credit for the applicable quarter.
4. ADDITIONAL DOCUMENTS; FURTHER ASSURANCES. Each Borrower covenants and
agrees to execute and deliver to Bank, or to cause to be executed and delivered
to Bank, contemporaneously herewith, at the sole cost and expense of Borrowers,
the Increase Note and any and all other documents, agreements, statements,
resolutions, certificates, consents and information as Bank may require in
connection with the matters or actions described herein. Each Borrower further
covenants and agrees to execute and deliver to Bank or to cause to be executed
and delivered at the sole cost and expense of Borrowers, from time to time, any
and all other documents, agreements, statements, certificates and information as
Bank shall reasonably request to evidence or effect the terms hereof, the Loan
Agreement, as amended, or any of the other Loan Documents.
5. FURTHER AGREEMENTS AND REPRESENTATIONS. Each Borrower does hereby:
2
<PAGE>
(a) ratify, confirm and acknowledge that the Loan Agreement, as amended,
and the other Loan Documents continue to be and are valid, binding and in full
force and effect;
(b) covenant and agree to perform all obligations of Borrowers contained
herein, under the Increase Note, and under the Loan Agreement, as amended, and
the other Loan Documents;
(c) acknowledge and agree that such Borrower has no defense, set-off,
counterclaim or challenge against the payment of any sums owing under Loan
Documents, the enforcement of any of the terms of the Loan Agreement, as
amended, or the other Loan Documents;
(d) acknowledge and agree that except as previously disclosed to and
consented to by Bank in writing, all representations and warranties of Borrowers
contained in the Loan Agreement and/or the other Loan Documents are true,
accurate and correct on and as of the date hereof as if made on and as of the
date hereof;
(e) represent and warrant that no Event of Default (as defined in the
Loan Agreement or any of the other Loan Documents) or event which with the
giving of notice or passage of time or both would constitute such an Event of
Default exists and all information described in the foregoing Background is
true, accurate and complete;
(f) acknowledge and agree that nothing contained herein and no actions
taken pursuant to the terms hereof is intended to constitute a novation of the
Loan Agreement or any of the other Loan Documents, and does not constitute a
release, termination or waiver of any of the rights or remedies granted to the
Bank therein, which rights and remedies are hereby ratified, confirmed, extended
and continued as security for the obligations of Borrowers to Bank under the
Loan Agreement and the other Loan Documents, including, without limitation, this
Amendment; and
(g) acknowledge and agree that a Borrower's failure to comply with or
perform any of its covenants, agreements or obligations contained in this
Amendment or the Increase Note shall constitute an Event of Default under the
Loan Agreement and each of the Loan Documents.
6. BANK FEE, COSTS AND EXPENSES. Upon execution of this Amendment,
Borrowers shall pay to Bank a fee in the amount of Twenty Thousand Dollars
($20,000.00), which fee is payable to Bank in consideration for Bank's agreement
to extend the Increase, is fully earned on the date hereof and is non-refundable
for any reason. Borrowers shall also pay to Bank all costs and expenses incurred
by Bank in connection with the review, preparation and negotiation of this
Amendment and all documents in connection therewith, including, without
limitation, all of Bank's attorneys' fees and costs.
7. INCONSISTENCIES. To the extent of any inconsistency between the terms,
conditions and provisions of this Amendment and the terms, conditions and
provisions of the Loan Agreement or the other Loan Documents, the terms,
conditions and provisions of this Amendment shall prevail. All terms, conditions
and provisions of the Loan Agreement and the other Loan Documents not
inconsistent herewith shall remain in full force and effect and are hereby
ratified and confirmed by Borrowers.
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<PAGE>
8. CONSTRUCTION. All references to the Loan Agreement therein or in any
other Loan Documents shall be deemed to be a reference to the Loan Agreement as
amended hereby.
9. NO WAIVER. Nothing contained herein and no actions taken pursuant to the
terms hereof are intended to nor shall they constitute a waiver by the Bank of
any rights or remedies available to Bank at law or in equity or as provided in
the Loan Agreement or the other Loan Documents. Nothing contained herein
constitutes an agreement or obligation by Bank to grant any further amendments
to any of the Loan Documents.
10. BINDING EFFECT. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
11. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
12. HEADINGS. The headings of the sections of this Amendment are inserted
for convenience only and shall not be deemed to constitute a part of this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
LIBERTY TECHNOLOGIES, INC.
By: /s/ R. Nim Evatt
-------------------------------
R. Nim Evatt, President
Attest: /s/ Daniel G. Clare
---------------------------
Daniel G. Clare, Vice President
LTH DELAWARE, INC.
By: /s/ R. Nim Evatt
-------------------------------
R. Nim Evatt, President
Attest: /s/ Daniel G. Clare
---------------------------
Daniel G. Clare, Secretary
(SIGNATURES CONTINUED ON THE FOLLOWING PAGE)
4
<PAGE>
(SIGNATURES CONTINUED FROM THE PRECEDING PAGE)
LIBERTY TECHNICAL SERVICES, INC.
(formerly known as
Industrial NDT Company, Inc.)
By: /s/ R. Nim Evatt
-------------------------------
R. Nim Evatt, President
Attest: /s/ Daniel G. Clare
---------------------------
Daniel G. Clare, Secretary
BETA MONITORS INTERNATIONAL, INC.
By: /s/ R. Nim Evatt
------------------------------
R. Nim Evatt, Director
Attest: /s/ Daniel G. Clare
---------------------------
Daniel G. Clare, Secretary
LIBERTY INTERNATIONAL INC.
By: /s/ R. Nim Evatt
-------------------------------
R. Nim Evatt, President
Attest: /s/ Daniel G. Clare
---------------------------
Daniel G. Clare, Secretary
LIBERTY IMAGING SYSTEMS, INC.
By: /s/ R. Nim Evatt
-------------------------------
R. Nim Evatt, President
Attest: /s/ Daniel G. Clare
---------------------------
Daniel G. Clare, Secretary
FIRST UNION NATIONAL BANK
By:
-------------------------------
Jack P. Albaugh, Vice President
5
THIRD AMENDMENT AND MODIFICATION TO LOAN AGREEMENT
THIS THIRD AMENDMENT AND MODIFICATION TO LOAN AGREEMENT (the
"Amendment") is made as of the 27th day of February, 1997, by and among LIBERTY
TECHNOLOGIES, INC. ("LTI"), LTH DELAWARE, INC. ("LTH"), LIBERTY TECHNICAL
SERVICES, INC. (formerly known as "Industrial NDT Company, Inc.") ("NDT"), BETA
MONITORS INTERNATIONAL, INC. ("BMI"), LIBERTY INTERNATIONAL INC. ("LII"), and
LIBERTY IMAGING SYSTEMS, INC. ("LIS") (collectively "Borrowers" and individually
a "Borrower") and FIRST UNION NATIONAL BANK ("Bank").
BACKGROUND
A. By a Loan Agreement dated December 2, 1993, as amended by Amendment
and Modification to Loan Agreement dated December 30, 1995 and Second Amendment
and Modification to Loan Agreement (the "Second Amendment") dated October 11,
1996 (collectively, the "Loan Agreement"), by and among Bank and Borrowers, Bank
agreed, inter alia, to extend to Borrowers a revolving credit facility in the
principal amount of up to Five Million Dollars ($5,000,000.00) (the "Revolving
Credit"), with a temporary increase in the amount of Two Million Five Hundred
Thousand Dollars ($2,500,000.00) available through March 1, 1997 (the
"Increase").
B. Borrowers have requested that Bank (i) extend the expiration date
of the Increase through May 1, 1997, and (ii) waive Borrowers' failure to comply
with certain financial covenants contained in the Loan Agreement for the period
ending December 31, 1996 and through April 30, 1997, which Bank is willing to do
on the terms set forth herein.
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
1. CAPITALIZED TERMS. Capitalized terms not otherwise defined herein
will have the meanings set forth therefor in the Loan Agreement.
2. EXTENSION OF EXPIRATION DATE. Each reference to "March 1, 1997"
contained in Section 1.1(a) of the Loan Agreement is hereby deleted and replaced
with "May 1, 1997".
3. USAGE FEE. Borrowers and Bank hereby confirm that the usage fee
described in Section 3.5 of the Loan Agreement shall, until the Increase expires
on May 1, 1997, be calculated on the difference between Seven Million Five
Hundred Thousand Dollars ($7,500,000.00) minus the average outstanding principal
balance of all cash advances and outstanding standby letters of credit under the
Revolving Credit for the applicable quarter.
4. WAIVER. Bank hereby waives Borrowers' failure to comply with the
provisions of Sections 6.1, 6.2, 6.3 and 6.7 of the Loan Agreement for the
period ended December 31, 1996 and for any period thereafter through and
including April 30, 1997. Such waiver applies solely to the Sections and to the
time periods referenced above and does not constitute a release or waiver of
<PAGE>
(i) any other Event of Default that may exist under the Loan Agreement, (ii)
Borrowers' obligation to comply with any other term, condition or covenant
applicable to Borrowers under the Loan Agreement, or (iii) Borrowers' obligation
to comply with the terms of the foregoing Sections for any period after April
30, 1997. Nothing contained herein constitutes an agreement or commitment of
Bank to provide any other waiver to Borrowers.
5. SECURITY INTERESTS. Each Borrower hereby covenants and agrees to
grant to Bank, as security for repayment of all sums advanced and outstanding
under the Revolving Credit and all other Bank Indebtedness, a valid and
perfected security interest in and to all present and future inventory, accounts
and receivables of such Borrower, and in and to all proceeds thereof
(collectively, the "Collateral"), which security interests shall be evidenced by
a Security Agreement executed by each Borrower in favor of Bank (collectively,
the "Security Agreements") and by such UCC-1 financing statements as Bank shall
require, which Security Agreement, financing statements and other documents
required to be executed or delivered under the terms hereof or of the Security
Agreements shall (a) be in form and content approved by Bank, and (b) constitute
"Loan Documents" under the terms of the Loan Agreement.
6. ADDITIONAL DOCUMENTS; FURTHER ASSURANCES. Each Borrower covenants
and agrees to execute and deliver to Bank, or to cause to be executed and
delivered to Bank, contemporaneously herewith, at the sole cost and expense of
Borrowers, an allonge to the Increase Note, the Security Agreements, UCC-1
financing statements and any and all other documents, agreements, including,
without limitation, landlord and warehousemen releases and waivers, statements,
resolutions, evidence of insurance, searches, certificates, consents and
information as Bank may require in connection with the matters or actions
described herein. Each Borrower further covenants and agrees to execute and
deliver to Bank or to cause to be executed and delivered at the sole cost and
expense of Borrowers, from time to time, any and all other documents,
agreements, statements, certificates and information as Bank shall reasonably
request to evidence or effect the terms hereof, the Loan Agreement, as amended,
or any of the other Loan Documents, or to protect or enforce Bank's interest in
the Collateral.
7. FURTHER AGREEMENTS AND REPRESENTATIONS. Each Borrower does hereby:
(a) ratify, confirm and acknowledge that the Loan Agreement, as
amended, and the other Loan Documents continue to be and are valid, binding and
in full force and effect;
(b) covenant and agree to perform all obligations of Borrowers
contained herein, under the Increase Note, as amended, the original Revolving
Credit Note, and under the Loan Agreement, as amended, and the other Loan
Documents;
(c) acknowledge and agree that such Borrower has no defense,
set-off, counterclaim or challenge against the payment of any sums owing under
Loan Documents, the enforcement of any of the terms of the Loan Agreement, as
amended, or the other Loan Documents;
(d) acknowledge and agree that except as previously disclosed to
and consented to by Bank in writing, all representations and warranties of
Borrowers contained in the Loan
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<PAGE>
Agreement and/or the other Loan Documents are true, accurate and correct on and
as of the date hereof as if made on and as of the date hereof;
(e) represent and warrant that, upon execution of this Amendment,
no Event of Default (as defined in the Loan Agreement or any of the other Loan
Documents) or event which with the giving of notice or passage of time or both
would constitute such an Event of Default exists and all information described
in the foregoing Background is true, accurate and complete;
(f) acknowledge and agree that nothing contained herein and no
actions taken pursuant to the terms hereof is intended to constitute a novation
of the Loan Agreement or any of the other Loan Documents, and, except for the
waiver provided in Paragraph 4 hereof, does not constitute a release,
termination or waiver of any of the rights or remedies granted to the Bank
therein, which rights and remedies are hereby ratified, confirmed, extended and
continued as security for the obligations of Borrowers to Bank under the Loan
Agreement and the other Loan Documents, including, without limitation, this
Amendment; and
(g) acknowledge and agree that a Borrower's failure to comply
with or perform any of its covenants, agreements or obligations contained in
this Amendment, the Increase Note, as amended, any of the Security Agreements or
under any other agreement or instrument executed in connection herewith, shall
constitute an Event of Default under the Loan Agreement and each of the Loan
Documents.
8. Remaining Fee. Contemporaneously with the execution hereof,
Borrowers shall pay to Bank the $5,000.00 fee remaining to be paid under the
Second Amendment.
9. COSTS AND EXPENSES. Upon execution of this Amendment, Borrowers
shall, expressly in addition to the fee described in Paragraph 8 above, pay to
Bank all costs and expenses incurred by Bank in connection with the review,
preparation and negotiation of this Amendment and all documents in connection
therewith, including, without limitation, all of Bank's attorneys' fees and
costs, search costs and filing fees.
10. INCONSISTENCIES. To the extent of any inconsistency between the
terms, conditions and provisions of this Amendment and the terms, conditions and
provisions of the Loan Agreement or the other Loan Documents, the terms,
conditions and provisions of this Amendment shall prevail. All terms, conditions
and provisions of the Loan Agreement and the other Loan Documents not
inconsistent herewith shall remain in full force and effect and are hereby
ratified and confirmed by Borrowers.
11. CONSTRUCTION. All references to the Loan Agreement therein or in
any other Loan Documents shall be deemed to be a reference to the Loan Agreement
as amended hereby.
3
<PAGE>
12. NO WAIVER. Except as expressly provided in Paragraph 4 above,
nothing contained herein and no actions taken pursuant to the terms hereof are
intended to nor shall they constitute a waiver by the Bank of any rights or
remedies available to Bank at law or in equity or as provided in the Loan
Agreement or the other Loan Documents. Nothing contained herein constitutes an
agreement or obligation by Bank to grant any further amendments to any of the
Loan Documents.
13. BINDING EFFECT. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
14. GOVERNING LAW. This Amendment shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania.
15. HEADINGS. The headings of the sections of this Amendment are
inserted for convenience only and shall not be deemed to constitute a part of
this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
LIBERTY TECHNOLOGIES, INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
LTH DELAWARE, INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
LIBERTY TECHNICAL SERVICES, INC.
(formerly known as
Industrial NDT Company, Inc.)
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
4
(SIGNATURES CONTINUED ON THE FOLLOWING PAGE)
<PAGE>
(SIGNATURES CONTINUED FROM THE PRECEDING PAGE)
BETA MONITORS INTERNATIONAL, INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
LIBERTY INTERNATIONAL INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
LIBERTY IMAGING SYSTEMS, INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
---------------------------------------------
Suzanne S. Storm, Senior Vice President
5
<PAGE>
ALLONGE TO NOTE DATED OCTOBER 11, 1996 FROM LIBERTY TECHNOLOGIES, INC., LTH
DELAWARE, INC., LIBERTY TECHNICAL SERVICES, INC. (formerly known as "INDUSTRIAL
NDT COMPANY, INC."), BETA MONITORS INTERNATIONAL, INC., LIBERTY INTERNATIONAL,
INC. AND LIBERTY IMAGING SYSTEMS, INC. TO FIRST UNION NATIONAL BANK
THIS ALLONGE ("Allonge") is made this 27th day of February, 1997 by
and between LIBERTY TECHNOLOGIES, INC., LTH DELAWARE, INC., LIBERTY TECHNICAL
SERVICES, INC. (formerly known as "Industrial NDT Company, Inc."), BETA MONITORS
INTERNATIONAL, INC., LIBERTY INTERNATIONAL, INC., and LIBERTY IMAGING SYSTEMS,
INC. (collectively the "Makers"), and FIRST UNION NATIONAL BANK ("Bank").
BACKGROUND
A. Makers executed and delivered to Bank that certain Note dated
October 11, 1996, payable to the order of Bank in the original principal amount
of Two Million Five Hundred Thousand Dollars ($2,500,000.00) (the "Note"), which
Note is the "Increase Note" under that certain Loan Agreement dated December 2,
1993 between Bank and Borrowers, as amended (such Loan Agreement, as amended,
being referred to herein as the "Loan Agreement").
B. Pursuant to that certain Third Amendment and Modification to Loan
Agreement (the "Amendment") of even date herewith among Bank and Makers, Bank
and Borrowers agreed to extend the final maturity date of the Note to May 1,
1997.
C. Bank and Makers desire to amend the Note to evidence such
extension.
NOW, THEREFORE, in consideration of the mutual benefits inuring to
Makers and Bank, and intending to be legally bound hereby, the Note is hereby
modified as follows:
1. Extension. Each reference to "March 1, 1997" contained in the Note
is hereby deleted and replaced with "May 1, 1997".
2. Agreements and Representations of Makers. Each Maker does hereby:
(a) ratify, confirm and acknowledge that, as amended hereby, the
Note and all other documents executed in connection therewith are valid, binding
and in full force and effect;
(b) acknowledge and agree that nothing contained herein and no
actions taken pursuant to the terms hereof is intended to constitute a novation
of the Note or any of the other documents executed in connection therewith, or
of any sums advanced and outstanding thereunder, and does not constitute a
release, termination or waiver of any of the liens, security interests, rights
or remedies granted to Bank therein, which rights and remedies are hereby
ratified, confirmed, extended and continued as security for the Note, as
amended;
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<PAGE>
(c) acknowledge and agree that this Allonge shall not be
construed as a waiver of any of Bank's rights under the Note as heretofore
existing or as hereafter modified by this Allonge; and
(d) authorize and direct that this Allonge be attached to and
become a part of the Note.
3. Construction. Any capitalized terms used in this Allonge not
otherwise defined herein shall have the meaning as set forth in the Loan
Agreement, as amended.
4. Single Instrument. Bank and Makers have executed this Allonge under
seal on the date first above written.
MAKER:
LIBERTY TECHNOLOGIES, INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
LTH DELAWARE, INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
LIBERTY TECHNICAL SERVICES, INC.
(formerly known as
Industrial NDT Company, Inc.)
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
BETA MONITORS INTERNATIONAL, INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
LIBERTY INTERNATIONAL INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
(SIGNATURES CONTINUED ON THE FOLLOWING PAGE)
-2-
<PAGE>
(SIGNATURES CONTINUED FROM THE PRECEDING PAGE)
LIBERTY IMAGING SYSTEMS, INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
---------------------------------------------
Suzanne S. Storm, Senior Vice President
-3-
<PAGE>
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by LIBERTY TECHNOLOGIES, INC., a Pennsylvania corporation (the
"Obligor"), in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 555 North Lane, Conshohocken, Pennsylvania 19428.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited
to goods held for sale or lease or furnished or to be furnished under contracts
for service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
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<PAGE>
consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
-2-
<PAGE>
devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
-3-
<PAGE>
books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition; (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer of employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, or sale on approval basis; (k)
to Borrower's knowledge, except as disclosed to Bank in writing, the amounts
shown on the applicable certificates, statements, on Obligor's books and records
and all invoices and statements which may be delivered to Bank with respect to
such accounts are actually and absolutely owing to Obligor and are not in any
way contingent; and (l) the accounts have not been sold, assigned or transferred
to any other Person and no Person except Obligor has any claim thereto or (with
the exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank Indebtedness
have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts as
-4-
<PAGE>
may be required by Bank in its reasonable discretion. In the case of insurance
on any of the Collateral Obligor shall carry insurance in the full insurable
value thereof and cause Bank to be named as loss payee (with a lender's loss
payable endorsement) with respect to all personal property, and additional
insured with respect to all liability insurance, as its interests may appear
with thirty (30) days' notice to be given Bank by the insurance carrier prior to
cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply
all or any part of the insurance proceeds to reduce, in such order and amounts
as Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of
such insurance proceeds to or for the benefit of Obligor for the purpose of
repairing or replacing Collateral after receiving proof satisfactory to Bank of
such repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional instruments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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<PAGE>
expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other documents and notices as Bank may deem advisable in
its reasonable discretion to protect the Collateral and its interests therein
and its rights hereunder. Such power being coupled with an interest is
irrevocable. Obligor irrevocably authorizes the filing of a carbon, photographic
or other copy of this Agreement, or of a financing statement, as a financing
statement and agrees that such filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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<PAGE>
hereto is discovered to be untrue in any material respect as of the date as of
which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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<PAGE>
Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter
relating to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all
account debtors that Obligor's accounts have been assigned to Bank and that Bank
has a security interest therein;
(c) Upon the occurrence of an Event of Default, direct all
account debtors to make payment of all Obligor's accounts directly to Bank and
forward invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or non-cash items of payment or proceeds of such
accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to
any lockbox or postal boxes into which Obligor's mail is deposited and receive,
open and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment
of and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
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(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with
respect to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such
amount and at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts
and notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
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or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise liened or
levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay on
demand all reasonable costs and expenses of Bank, including without limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's
performance of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
Liberty Technologies, Inc.
555 North Lane, Suite _____
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
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With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, 10th Floor
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
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13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER THIS AGREEMENT OR ANY OTHER
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DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
OBLIGOR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT
REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF OBLIGOR AND
BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security
Agreement on the date first above written.
LIBERTY TECHNOLOGIES, INC.
By: /s/ Daniel G. Clare
-----------------------------------
Daniel G. Clare, Vice President
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
-----------------------------------
Suzanne S. Storm, Senior Vice President
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NAMES AND ADDRESSES OF OBLIGOR
555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by LIBERTY TECHNICAL SERVICES, INC., a Pennsylvania corporation
(the "Obligor"), in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 8550 Dorchester Road, N. Charleston, SC 29420.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited
to goods held for sale or lease or furnished or to be furnished under contracts
for service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
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consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
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devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
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books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition; (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer of employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, or sale on approval basis; (k)
to Borrower's knowledge, except as disclosed to Bank in writing, the amounts
shown on the applicable certificates, statements, on Obligor's books and records
and all invoices and statements which may be delivered to Bank with respect to
such accounts are actually and absolutely owing to Obligor and are not in any
way contingent; and (l) the accounts have not been sold, assigned or transferred
to any other Person and no Person except Obligor has any claim thereto or (with
the exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank Indebtedness
have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts
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as may be required by Bank in its reasonable discretion. In the case of
insurance on any of the Collateral Obligor shall carry insurance in the full
insurable value thereof and cause Bank to be named as loss payee (with a
lender's loss payable endorsement) with respect to all personal property, and
additional insured with respect to all liability insurance, as its interests may
appear with thirty (30) days' notice to be given Bank by the insurance carrier
prior to cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional instruments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other documents and notices as Bank may deem advisable in
its reasonable discretion to protect the Collateral and its interests therein
and its rights hereunder. Such power being coupled with an interest is
irrevocable. Obligor irrevocably authorizes the filing of a carbon, photographic
or other copy of this Agreement, or of a financing statement, as a financing
statement and agrees that such filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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hereto is discovered to be untrue in any material respect as of the date as of
which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or
at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter
relating to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all
account debtors that Obligor's accounts have been assigned to Bank and that Bank
has a security interest therein;
(c) Upon the occurrence of an Event of Default, direct all
account debtors to make payment of all Obligor's accounts directly to Bank and
forward invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or non-cash items of payment or proceeds of such
accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to
any lockbox or postal boxes into which Obligor's mail is deposited and receive,
open and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment
of and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
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(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with
respect to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such
amount and at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts
and notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
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or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise liened or
levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay on
demand all reasonable costs and expenses of Bank, including without limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's
performance of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
Liberty Technical Services, Inc.
555 North Lane, Suite _____
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
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With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, PA1310
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
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13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER THIS AGREEMENT OR ANY OTHER
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DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
OBLIGOR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT
REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF OBLIGOR AND
BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security
Agreement on the date first above written.
LIBERTY TECHNICAL SERVICES, INC.
By: /s/ Daniel G. Clare
-----------------------------------
Daniel G. Clare, Vice President and Secretary
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
----------------------------------
Suzanne S. Storm, Senior Vice President
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<PAGE>
NAMES AND ADDRESSES OF OBLIGOR
a) 8550 Dorchester Road, N. Charleston, SC 29420
b) 555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by LIBERTY INTERNATIONAL INC., a Nevada corporation (the
"Obligor"), in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 555 North Lane, Conshohocken, Pennsylvania 19428.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited
to goods held for sale or lease or furnished or to be furnished under contracts
for service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
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consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
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devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
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books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition; (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer of employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, or sale on approval basis; (k)
to Borrower's knowledge, except as disclosed to Bank in writing, the amounts
shown on the applicable certificates, statements, on Obligor's books and records
and all invoices and statements which may be delivered to Bank with respect to
such accounts are actually and absolutely owing to Obligor and are not in any
way contingent; and (l) the accounts have not been sold, assigned or transferred
to any other Person and no Person except Obligor has any claim thereto or (with
the exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank Indebtedness
have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts as
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may be required by Bank in its reasonable discretion. In the case of insurance
on any of the Collateral Obligor shall carry insurance in the full insurable
value thereof and cause Bank to be named as loss payee (with a lender's loss
payable endorsement) with respect to all personal property, and additional
insured with respect to all liability insurance, as its interests may appear
with thirty (30) days' notice to be given Bank by the insurance carrier prior to
cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional instruments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other documents and notices as Bank may deem advisable in
its reasonable discretion to protect the Collateral and its interests therein
and its rights hereunder. Such power being coupled with an interest is
irrevocable. Obligor irrevocably authorizes the filing of a carbon, photographic
or other copy of this Agreement, or of a financing statement, as a financing
statement and agrees that such filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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hereto is discovered to be untrue in any
material respect as of the date as of which the facts therein set forth are
stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter
relating to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all
account debtors that Obligor's accounts have been assigned to Bank and that Bank
has a security interest therein;
(c) Upon the occurrence of an Event of Default, direct all
account debtors to make payment of all Obligor's accounts directly to Bank and
forward invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or non-cash items of payment or proceeds of such
accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to
any lockbox or postal boxes into which Obligor's mail is deposited and receive,
open and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment
of and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
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(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with
respect to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such
amount and at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts
and notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
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or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise liened or
levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay on
demand all reasonable costs and expenses of Bank, including without limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's performance
of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
Liberty International Inc.
555 North Lane, Suite _____
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
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With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, PA1310
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part
constituting willful misconduct or gross negligence. In the event that Bank
breaches its required standard of conduct, Obligor agrees that its liability
shall be only for direct damages suffered and shall not extend to consequential
or incidental damages. In the event Obligor brings suit against Bank in
connection with the transactions contemplated hereunder and Bank is found not to
be liable, Obligor will indemnify and hold Bank harmless from all costs and
expenses, including attorney's fees, incurred by Bank in connection with such
suit. Nothing contained herein, however, relieves Bank from any obligation, if
any, imposed on a secured creditor under the Code with respect to safekeeping of
collateral.
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13. WAIVERS. In connection with any proceedings hereunder or in
connection with any of the Bank Indebtedness, including without limitation any
action by Bank in replevin, foreclosure or other court process or in connection
with any other action related to the Bank Indebtedness or the transactions
contemplated hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO
HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER
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DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
OBLIGOR AND BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security
Agreement on the date first above written.
LIBERTY INTERNATIONAL INC.
By: /s/ Daniel G. Clare
---------------------------------
Daniel G. Clare, Vice President and Secretary
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
---------------------------------
Suzanne S. Storm, Senior Vice President
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NAMES AND ADDRESSES OF OBLIGOR
555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by BETA MONITORS INTERNATIONAL, INC., a Nevada corporation (the
"Obligor"), in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 8885 Monroe Road, Houston, TX 77061.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited
to goods held for sale or lease or furnished or to be furnished under contracts
for service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
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consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
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devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
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books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition; (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer of employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, or sale on approval basis; (k)
to Borrower's knowledge, except as disclosed to Bank in writing, the amounts
shown on the applicable certificates, statements, on Obligor's books and records
and all invoices and statements which may be delivered to Bank with respect to
such accounts are actually and absolutely owing to Obligor and are not in any
way contingent; and (l) the accounts have not been sold, assigned or transferred
to any other Person and no Person except Obligor has any claim thereto or (with
the exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank Indebtedness
have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts as
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may be required by Bank in its reasonable discretion. In the case of insurance
on any of the Collateral Obligor shall carry insurance in the full insurable
value thereof and cause Bank to be named as loss payee (with a lender's loss
payable endorsement) with respect to all personal property, and additional
insured with respect to all liability insurance, as its interests may appear
with thirty (30) days' notice to be given Bank by the insurance carrier prior to
cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional instruments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other documents and notices as Bank may deem advisable in
its reasonable discretion to protect the Collateral and its interests therein
and its rights hereunder. Such power being coupled with an interest is
irrevocable. Obligor irrevocably authorizes the filing of a carbon, photographic
or other copy of this Agreement, or of a financing statement, as a financing
statement and agrees that such filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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hereto is discovered to be untrue in any material respect as of the date as of
which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter
relating to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all
account debtors that Obligor's accounts have been assigned to Bank and that Bank
has a security interest therein;
(c) Upon the occurrence of an Event of Default, direct all
account debtors to make payment of all Obligor's accounts directly to Bank and
forward invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or non-cash items of payment or proceeds of such
accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to
any lockbox or postal boxes into which Obligor's mail is deposited and receive,
open and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment
of and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
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(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with
respect to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such
amount and at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts
and notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
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or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise liened or
levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay on
demand all reasonable costs and expenses of Bank, including without limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's performance
of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
Beta Monitors International, Inc.
555 North Lane, Suite _____
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
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With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, PA1310
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
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13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO
HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER
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DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
OBLIGOR AND BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security Agreement on
the date first above written.
BETA MONITORS INTERNATIONAL, INC.
By: /s/ Daniel G. Clare
---------------------------------
Daniel G. Clare, Vice President and Secretary
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
---------------------------------
Suzanne S. Storm, Senior Vice President
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<PAGE>
NAMES AND ADDRESSES OF OBLIGOR
a) 8885 Monroe Road, Houston, TX 77061
b) 555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by LTH DELAWARE, INC., a Delaware corporation (the "Obligor"),
in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor, intending to be
legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 555 North Lane, Conshohocken, Pennsylvania 19428.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited
to goods held for sale or lease or furnished or to be furnished under contracts
for service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
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consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
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devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
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books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition; (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer of employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, or sale on approval basis; (k)
to Borrower's knowledge, except as disclosed to Bank in writing, the amounts
shown on the applicable certificates, statements, on Obligor's books and records
and all invoices and statements which may be delivered to Bank with respect to
such accounts are actually and absolutely owing to Obligor and are not in any
way contingent; and (l) the accounts have not been sold, assigned or transferred
to any other Person and no Person except Obligor has any claim thereto or (with
the exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank Indebtedness
have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts
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as may be required by Bank in its reasonable discretion. In the case of
insurance on any of the Collateral Obligor shall carry insurance in the full
insurable value thereof and cause Bank to be named as loss payee (with a
lender's loss payable endorsement) with respect to all personal property, and
additional insured with respect to all liability insurance, as its interests may
appear with thirty (30) days' notice to be given Bank by the insurance carrier
prior to cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional instruments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other documents and notices as Bank may deem advisable in
its reasonable discretion to protect the Collateral and its interests therein
and its rights hereunder. Such power being coupled with an interest is
irrevocable. Obligor irrevocably authorizes the filing of a carbon, photographic
or other copy of this Agreement, or of a financing statement, as a financing
statement and agrees that such filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine a(either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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hereto is discovered to be untrue in any material respect as of the date as of
which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter
relating to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all
account debtors that Obligor's accounts have been assigned to Bank and that Bank
has a security interest therein;
(c) Upon the occurrence of an Event of Default, direct all
account debtors to make payment of all Obligor's accounts directly to Bank and
forward invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or non-cash items of payment or proceeds of such
accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to
any lockbox or postal boxes into which Obligor's mail is deposited and receive,
open and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment
of and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
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(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with
respect to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such
amount and at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts
and notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
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or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise
liened or levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay on
demand all reasonable costs and expenses of Bank, including without limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments,
costs or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's performance
of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
LTH Delaware, Inc.
555 North Lane, Suite _____
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
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With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, PA1310
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
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13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO
HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER
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DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN
CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. OBLIGOR AND BANK AGREE AND
CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF OBLIGOR AND BANK TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security
Agreement on the date first above written.
LTH DELAWARE, INC.
By: /s/ Daniel G. Clare
--------------------------------
Daniel G. Clare, Vice President and Secretary
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
----------------------------------
Suzanne S. Storm, Senior Vice President
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<PAGE>
NAMES AND ADDRESSES OF OBLIGOR
555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by LIBERTY IMAGING SYSTEMS, INC., a Pennsylvania corporation
(the "Obligor"), in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 555 North Lane, Conshohocken, Pennsylvania 19428.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited
to goods held for sale or lease or furnished or to be furnished under contracts
for service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
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consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
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devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all
accounts receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's books and records
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and all invoices and statements delivered to Bank with respect thereto; (e) to
the best of Obligor's knowledge, all account debtors have the capacity to
contract and are solvent; (f) the goods sold giving rise thereto are not subject
to any lien, claim, encumbrance or security interest except that of Bank and
except for liens expressly permitted under the Loan Agreement; (g) to the best
of Obligor's knowledge, there are no proceedings or actions which are threatened
or pending against any account debtor which might result in any material adverse
change in such account debtor's financial condition; (h) the account is not an
account with respect to which the account debtor is an affiliate of Obligor or a
director, officer of employee of Obligor or its affiliates; (i) the account does
not arise with respect to goods which have not been shipped or arise with
respect to services which have not been fully performed and accepted as
satisfactory by the account debtor; (j) the account is not an account with
respect to which the account debtor's obligation to pay the account is
conditional upon the account debtor's approval or is otherwise subject to any
repurchase obligation or return right, as with sales made on a bill-and-hold,
guaranteed sale, sale-and-return, or sale on approval basis; (k) to Borrower's
knowledge, except as disclosed to Bank in writing, the amounts shown on the
applicable certificates, statements, on Obligor's books and records and all
invoices and statements which may be delivered to Bank with respect to such
accounts are actually and absolutely owing to Obligor and are not in any way
contingent; and (l) the accounts have not been sold, assigned or transferred to
any other Person and no Person except Obligor has any claim thereto or (with the
exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank Indebtedness
have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts as
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may be required by Bank in its reasonable discretion. In the case of insurance
on any of the Collateral Obligor shall carry insurance in the full insurable
value thereof and cause Bank to be named as loss payee (with a lender's loss
payable endorsement) with respect to all personal property, and additional
insured with respect to all liability insurance, as its interests may appear
with thirty (30) days' notice to be given Bank by the insurance carrier prior to
cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional instruments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other documents and notices as Bank may deem advisable in
its reasonable discretion to protect the Collateral and its interests therein
and its rights hereunder. Such power being coupled with an interest is
irrevocable. Obligor irrevocably authorizes the filing of a carbon, photographic
or other copy of this Agreement, or of a financing statement, as a financing
statement and agrees that such filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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hereto is discovered to be untrue in any material respect as of the date as of
which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter
relating to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all
account debtors that Obligor's accounts have been assigned to Bank and that Bank
has a security interest therein;
(c) Upon the occurrence of an Event of Default, direct all
account debtors to make payment of all Obligor's accounts directly to Bank and
forward invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or non-cash items of payment or proceeds of such
accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to
any lockbox or postal boxes into which Obligor's mail is deposited and receive,
open and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment
of and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
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(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with
respect to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such
amount and at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts
and notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
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or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise liened or
levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay on
demand all reasonable costs and expenses of Bank, including without limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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<PAGE>
9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's performance
of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
Liberty Imaging Systems, Inc.
555 North Lane, Suite _____
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
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With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, PA1310
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
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<PAGE>
13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO
HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER
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DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
OBLIGOR AND BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security Agreement on
the date first above written.
LIBERTY IMAGING SYSTEMS, INC.
By: /s/ Daniel G. Clare
----------------------------------------
Daniel G. Clare, Vice President and Secretary
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
----------------------------------------
Suzanne S. Storm, Senior Vice President
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NAMES AND ADDRESSES OF OBLIGOR
555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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FOURTH AMENDMENT AND MODIFICATION TO
LOAN AGREEMENT
among
LIBERTY TECHNOLOGIES, INC. ("LTI")
LTH DELAWARE, INC. ("LTH")
LIBERTY TECHNICAL SERVICES, INC. ("LTS")
BETA MONITORS INTERNATIONAL, INC. ("BMI")
LIBERTY INTERNATIONAL INC. ("LII")
LIBERTY IMAGING SYSTEMS, INC. ("LIS")
(collectively, the "Borrowers")
and
FIRST UNION NATIONAL BANK
(the "Bank")
Closing Agenda
Closing as of April 1, 1997
I. RESPONSIBLE PARTY CODE:
First Union National Bank = Bank
Duane, Morris & Heckscher = DM&H
Liberty Technologies, Inc. = Borrowers
LTH Delaware, Inc.
Liberty Technical Services, Inc.
Beta Monitors International, Inc.
Liberty International Inc.
Liberty Imaging Systems, Inc.
Pepper, Hamilton & Scheetz = PH&S
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II. CLOSING DATE:
April 3, 1997
III. LOCATION:
Law Offices of DM&H (Philadelphia Office)
IV. REPRESENTATIVES IN ATTENDANCE:
Bank - Suzanne Storm and Stephanie Micua
Bank Counsel - David Smith, Esquire
Borrowers - Daniel Clare
Borrowers Counsel - Cuyler Walker (by telephone)
Responsible
V. DOCUMENTS: Party
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1. Fourth Amendment and Modification to Loan Agreement DM&H
2. Consolidated Amended and Restated Note DM&H
3. Reaffirmation and Amendment of DM&H
Security Agreement (LTI)
4. Reaffirmation and Amendment of DM&H
Security Agreement (LTH)
5. Reaffirmation and Amendment of DM&H
Security Agreement (LTS)
6. Reaffirmation and Amendment of DM&H
Security Agreement (BMI)
7. Reaffirmation and Amendment of DM&H
Security Agreement (LII)
8. Reaffirmation and Amendment of DM&H
Security Agreement (LIS)
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9. Mortgage (South Carolina) DM&H
-Legal Description
-Title Insurance
10. Secretary's Certification - (Each Borrower) Borrowers
- Resolutions Borrowers
- Good Standing, recently certified Borrowers
by the Secretary of State of the
jurisdiction of incorporation
11. Opinion of Borrowers' Counsel PH&S
12. UCC-l Financing Statements DM&H
13. Evidence of Insurance Borrowers
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FOURTH AMENDMENT AND MODIFICATION TO LOAN AGREEMENT
FOURTH AMENDMENT AND MODIFICATION TO LOAN AGREEMENT ("Fourth Amendment"),
dated April 1, 1997, by and among FIRST UNION NATIONAL BANK (successor by merger
to First Fidelity Bank, N.A.) (the "Bank"), LIBERTY TECHNOLOGIES, INC. ("LTI"),
LTH DELAWARE, INC. ("LTH"), LIBERTY TECHNICAL SERVICES, INC. (formerly known as
Industrial NDT Company, Inc.) ("LTS"), BETA MONITORS INTERNATIONAL, INC.
("BMI"), LIBERTY INTERNATIONAL INC. ("LII") and LIBERTY IMAGING SYSTEMS, INC.
("LIS"; together with LTI, LTH, LTS, BMI, and LII collectively, the "Borrowers"
and individually, a "Borrower").
BACKGROUND
A. The Borrowers and the Bank are parties to a Loan Agreement dated as of
December 2, 1993, as amended by an Amendment and Modification to Loan Agreement
dated December 30, 1995, a Second Amendment and Modification to Loan Agreement
dated October 11, 1996, and a Third Amendment and Modification to Loan Agreement
dated February 27, 1997 (as amended, modified and/or extended; the "Loan
Agreement"), pursuant to which the Bank has made certain loans to the Borrowers.
B. The Borrowers have requested the Bank to amend certain provisions of the
Loan Agreement, and the Bank has agreed to do so, subject to the terms and
conditions hereinafter set forth.
C. Capitalized terms used but not defined herein shall have the meanings
given to them in the Loan Agreement.
NOW, THEREFORE, incorporating the Background herein, the Bank and the
Borrowers, each intending to be legally bound hereby and for good and valuable
consideration, agree as follows:
1. AMENDMENTS.
1.1 New Definitions. The following defined terms are hereby added to
Section 13 of the Loan Agreement as Sections 13.40 through 13.54, and shall read
in their entirety as follows:
13.40. "Account" shall have the meaning given to that term in the
Uniform Commercial Code and, in addition, shall include any right to
payment for goods sold or leased or services rendered which is
evidenced by an instrument or chattel paper.
13.41. "Adjusted Base Rate" shall mean, at any time, the interest rate
equal to (i) the sum of the Base Rate plus one percent (1.0%), if the
Borrowers' Debt to
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Capitalization Ratio was greater than or equal to 0.30 to 1.00 at the
end of the previous fiscal quarter, or (ii) the Base Rate, if the
Borrowers' Debt to Capitalization Ratio was less than 0.30 to 1.00 at
the end of the previous fiscal quarter.
13.42. "Adjusted Eurodollar Rate" shall mean, at any time, the interest
rate equal to the sum of the Eurodollar Rate plus (i) one and three
quarters of one percent (1.75%), if the Borrowers' Debt to
Capitalization Ratio was greater than or equal to 0.20 to 1.00 but less
than 0.25 to 1.00 at the end of the previous fiscal quarter, or (ii)
one and one half of one percent (1.50%), if the Borrowers' Debt to
Capitalization Ratio was less than 0.20 to 1.00 at the end of the
previous fiscal quarter.
13.43. "Amended Note" shall mean the Consolidated Amended and Restated
Note dated the Fourth Amendment Closing Date in the maximum principal
amount of $9,000,000, made by the Borrowers in favor of the Bank.
13.44. "Borrowing Base" shall mean, at any time, a dollar amount equal
to the sum of the following amounts as they exist at that time:
(a) eighty five percent (85%) of all qualified Accounts; and
(b) twenty five percent (25%) of all qualified Inventory valued
in accordance with GAAP, provided that from and after October 1, 1997,
the Borrowing Base shall not include any amount of Qualified
Inventory.
13.45 "Debt" shall mean the aggregate sum of all borrowed Indebtedness,
together with the Bank Indebtedness of the Borrowers, on a consolidated
basis, calculated in accordance with GAAP.
13.46 "Debt to Capitalization Ratio" shall mean, at any time, the ratio
of (A) the Debt to (B) the sum of (i) the Debt, plus (ii) the
shareholders' equity of the Borrowers, on a consolidated basis,
calculated in accordance with GAAP.
13.47. "Encumbrance" shall mean, as to any Person, any mortgage, lien,
pledge, adverse claim, charge, security interest or other encumbrance
in or on, or any interest or title of any vendor, lessor, lender to, or
other secured party of the Person under any conditional sale or other
title retention agreement or Capitalized Lease with respect to, any
property or asset of the Person.
13.48. "Fourth Amendment" shall mean the Fourth Amendment and
Modification to Loan Agreement dated the Fourth Amendment Closing Date
by and among the Borrowers and the Bank.
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13.49. "Fourth Amendment Closing Date" shall mean April 1, 1997.
13.50. "Fourth Amendment Loan Documents" shall mean the Fourth
Amendment, the Amended Note, the South Carolina Mortgage, the Security
Agreement Reaffirmations and all other documents or instruments
executed and delivered in connection therewith.
13.51. "Qualified Accounts" shall mean each Account of each Borrower
not more than ninety days from the date of the original invoice that
arises in the ordinary course of Borrower's business and meets the
following eligibility requirements: (a) the sale of goods or services
reflected in such account is final and such goods and services have
been delivered or provided and accepted by the account debtor and
payment for such is owing; (b) the invoices comprising an account are
not subject to any claims, returns or disputes of any kind; (c) the
account debtor is not insolvent; (d) the account debtor has its
principal place of business in the United States or, if not, the
account is supported by a letter of credit or credit insurance issued
by a third party acceptable to the Bank in its sole discretion; (e) the
account debtor is not an affiliate of any Borrower and is not a
supplier to Borrower and the account is not otherwise exposed to risk
of set-off unless the account is supported by a letter of credit or
credit insurance issued by a third party acceptable to the Bank in its
sole discretion; (f) not more than fifty percent (50%) of the original
invoices owing Borrower by the account debtor are more than ninety days
from the date of the original invoice; (g) satisfactory to the Bank in
its sole discretion.
13.52. "Qualified Inventory" shall mean inventory of raw material in
any Borrower's possession that is held for use or sale in the ordinary
course of any Borrower's business, is not unmerchantable or obsolete,
is subject to a first priority perfected security interest in favor of
the Bank and is not otherwise unsatisfactory to the Bank in its sole
discretion.
13.53. "Security Agreement Reaffirmations" shall mean the Reaffirmation
and Amendment to Security Agreement dated the Fourth Amendment Closing
Date, made by each Borrower in favor of the Bank pursuant to which such
Borrower has reaffirmed and amended the Security Agreement dated
February 27, 1997 made by such Borrower in favor of the Bank.
13.54. "South Carolina Mortgage" shall mean a Mortgage, in form and
substance satisfactory to the Bank, by which LTS shall grant to the
Bank, a lien on real property and improvements located at 8550
Dorchester Road, North Charleston, South Carolina, together with all
amendments, modifications, exhibits and schedules thereto as may be in
effect from time to time.
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1.2 Existing: Defined Terms. The following terms set forth in Section 13 of
the Loan Agreement are hereby amended as follows:
(a) The term "Eurodollar Rate" shall mean, with respect to each day
during each Rate Period pertaining to a Eurodollar Loan, the rate determined in
accordance with the following formula:
Eurodollar Base Rate
(1.00 - Eurocurrency Reserve Requirements)
(b) The term "Loan Documents" contained in Section 13.28 of the Loan
Agreement is hereby amended to include as additional documents thereunder, each
of the Fourth Amendment Loan Documents.
1.3 The Revolving Credit.
(a) Section 1.1 of the Loan Agreement is hereby amended and restated
to read in its entirety as follows:
"1.1 The Revolving Credit. Subject to the terms and conditions hereof,
the Bank shall make available to the Borrowers, commencing on the
Fourth Amendment Closing Date and until April 1, 1998 (the "Contract
Period"), a revolving credit facility (the "Revolving Credit") in the
maximum principal amount of (i) $9,000,000 for the period from the
Fourth Amendment Closing Date through June 30, 1997, (ii) $7,500,000
for the period from July 1, 1997 through September 30, 1997, (iii)
$6,500,000 for the period from October 1, 1997 through December 31,
1997, and (iv) $5,500,000 for the period from January 1, 1998 through
the end of the Contract Period (the "Revolving Credit Commitment"). At
any time and from time to time during Contract Period, upon the
request of the Borrowers, the Bank shall provide to the Borrowers a
loan or loans in multiples of One Thousand Dollars ($1,000), which
shall be used by the Borrowers for working capital. The Borrowers may
use the Revolving Credit during the period referred to in the
preceding sentence by borrowing, repaying and reborrowing in
accordance with the terms of this Agreement. From the Fourth Amendment
Closing Date through June 30, 1997, the aggregate outstanding
principal under the Revolving Credit at any time shall not exceed the
Revolving Credit Commitment. From and after July 1, 1997, the
aggregate outstanding principal under the Revolving Credit at any time
shall not exceed the lesser of (i) the Revolving Credit Commitment or
(ii) the Borrowing Base as at that time. If, at any time, the
aggregate outstanding principal under the Revolving Credit exceeds the
lesser of the Borrowing Base or the Revolving Credit Commitment, then,
without any requirement of demand or notice from the Bank, the
Borrowers shall immediately pay to the Bank the amount of such excess.
At the end of the Contract Period, unless the same has been extended
by written agreement between the Bank and the Borrowers, the
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Bank's commitment to make loans pursuant to the Revolving Credit shall
terminate, all loans under the Revolving Credit shall immediately
mature and all Bank Indebtedness shall be immediately due and payable
in full."
(b) New Section 1.7 is hereby added to Section 1 of the Loan Agreement
to read in its entirety as follows:
"1.7 Lockbox/Cash Collateral Account. At the request of the Bank, each
Borrower shall establish a lockbox with the Bank for the receipt of
all remittances from its account debtors, and shall immediately direct
all of its account debtors to remit payments directly to such lockbox;
and shall sign all agreements reasonably necessary to establish a
lockbox and pay all reasonable charges of the Bank associated
therewith. Thereafter, (i) no Borrower shall have any right of access
to, or withdrawal from such lockbox or the cash collateral account
described below, (ii) all collections of Accounts or remittances
representing proceeds of other collateral received at any time by the
Borrowers shall be held in trust for the Bank and promptly delivered,
in specie, to the Bank, and (iii) all collections delivered to the
Bank or received from the lockbox shall be deposited the same Business
Day delivered to the Bank or the lockbox by the Bank to a cash
collateral account at the Bank and shall be applied to reduce the
outstanding balance of the loans under the Revolving Credit on the
Business Day when such collections are deemed to be treated as
collected funds in accordance with the lockbox agreement. The Bank
shall not, however, be required to credit the cash collateral account
for the amount of any item of payment which is unsatisfactory to the
Bank and the Bank may charge any Borrower's account for the amount of
any payment which is returned to the Bank unpaid."
1.4 Interest. Section 2 of the Loan Agreement is hereby amended and
modified as follows:
(a) Sections 2.l(a) through 2.1(c) of the Loan Agreement are hereby
amended and restated as follows:
"(a) Interest on the unpaid principal balance of the Revolving Credit
will accrue from the date of advance until final payment thereof at
the Adjusted Base Rate, provided, however, that, subject to the terms
of this Section 2.1, by giving a Eurodollar Rate Notification,
Borrowers may request to have all or a portion of the outstanding
principal of the Revolving Credit as hereinafter permitted accrue
interest, instead, at the Adjusted Eurodollar Rate as follows: (i)
with respect to the principal amount of any new advance under the
Revolving Credit, from the date of such advance until the end of the
Rate Period specified in the Eurodollar Rate Notification; and/or (ii)
with respect to the principal amount of any portion of the Revolving
Credit earning interest at the Eurodollar Rate at the time of delivery
of the Eurodollar Rate Notification, from the expiration of the then
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current Rate Period related to such principal amount until the end of
the Rate Period specified in the Eurodollar Rate Notification; and/or
(iii) with respect to all or any portion of the outstanding principal
amount of the Revolving Credit earning interest at the Adjusted Base
Rate at the time of delivery of the Eurodollar Rate Notification, from
the date set forth in the Eurodollar Rate Notification until the end of
the Rate Period specified in the Eurodollar Rate Notification.
Notwithstanding anything set forth herein to the contrary, during any
period that the Borrowers' Debt to Capitalization Ratio is greater than
or equal to .25 to 1.00, as measured at the end of each prior fiscal
quarter, the Bank shall not be obligated to, and the Borrowers shall
not be permitted to request that the Bank, (i) make loans under the
Revolving Credit based upon the Adjusted Eurodollar Rate, (ii) convert
any loans accruing interest at the Adjusted Base Rate to loans accruing
interest at the Adjusted Eurodollar Rate, or (iii) continue to apply
the Adjusted Eurodollar Rate to any loans accruing interest at the
Adjusted Eurodollar Rate which are subject to an expiring Rate Period,
and, all loans accruing interest at the Adjusted Eurodollar Rate which
are subject to an expiring Rate Period shall automatically be converted
into loans accruing interest at the Adjusted Base Rate.
(b) Borrowers understand and agree: (i) that subject to the provisions
of this Agreement, the Adjusted Base Rate and the Adjusted Eurodollar
Rate may apply simultaneously to different parts of the outstanding
principal of the Revolving Credit, (ii) that the Adjusted Eurodollar
Rate applicable to any portion of outstanding principal may be
different from the Eurodollar Rate applicable to any other portion of
the outstanding principal, and (iii) an Adjusted Eurodollar Rate may be
selected only with respect to an advance under the Revolving Credit or
for existing advances in multiples of One Hundred Thousand Dollars
($100,000.00) or more.
(c) After expiration of any Rate Period any principal portion accruing
interest at the Adjusted Eurodollar Rate corresponding to such Rate
Period which has not been converted or renewed in accordance with this
Section 2.1 shall accrue interest automatically at the Adjusted Base
Rate from the date of the expiration of such Rate Period until paid in
full, unless and until the Borrowers request and Bank approves a
conversion to an Adjusted Eurodollar Rate in accordance with this
Section 2.1. With respect to any principal amount (whether an advance
of new funds or an already outstanding amount), if Borrowers fail to
request an Adjusted Eurodollar Rate option by giving Bank the
Eurodollar Rate Notification, or if Bank fails to approve such request
when made, such principal amount shall be deemed to accrue interest at
the Adjusted Base Rate."
(b) Section 2. l(e) of the Loan Agreement is hereby amended and
modified by deleting the phrase "Base Rate minus one-half of one percent (1/2%)"
and inserting in its place the phrase "Adjusted Base Rate".
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(c) Section 2.2 of the Loan Agreement is hereby amended and modified by
deleting the phrase "minus one-half of one percent (1/2%)" and inserting in its
place the phrase "plus one percent (1%)".
1.5 Payments and Fees. Section 3 of the Loan Agreement is hereby amended
and modified as follows:
(a) Section 3.1 of the Loan Agreement is hereby amended and modified
by deleting the phrase "Base Rate minus one-half of one percent (1/2%)" and
inserting in its place the phrase "Adjusted Base Rate".
(b) Section 3.4 of the Loan Agreement is hereby amended and modified
by deleting the phrase "Eurodollar Rate" and inserting in its place the phrase
"Adjusted Eurodollar Rate".
1.6 Financial Covenants. Section 6 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:
"6. FINANCIAL COVENANTS. Except with the prior written consent of
Bank, Borrowers will maintain a ratio of not less than 1.50 of (Net
Income plus Interest Expense plus income and franchise taxes) to
Interest Expense measured for the six-month period beginning January
1, 1997 through June 30, 1997, nine-month period beginning January 1,
1997 through September 30, 1997, twelve-month period beginning January
1, 1997 through December 31, 1997 and twelve-month period beginning
April 1, 1997 through March 31, 1998."
1.7 Accounting Records. Reports and Financial Statements. New Section
7.10 is hereby added to Section 7 of the Loan Agreement to read in its entirety
as follows:
"7.10 Agings and Borrowing Base Certificates. Within ten (10) days
after the end of each month, or at such other intervals as the Bank
may request from time to time, the Borrowers shall deliver to the
Bank a borrowing base certificate, in form and substance satisfactory
to the Bank, including a summary of amounts of Qualified Accounts,
Qualified Inventory, Borrowing Base, outstanding principal under the
Revolving Credit, availability under the Revolving Credit, accounts
receivable aging and accounts payable aging as of the end of that
month, or other applicable period."
2. ACKNOWLEDGMENTS.
2.1 Acknowledgment. The Borrowers acknowledge that: (a) the Loan
Documents are valid and enforceable against the Borrowers in every respect, and
all of the terms and conditions thereof are binding upon the Borrowers
including, without limitation, the confession of judgment
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remedy; and (b) to the extent that any defenses, set-offs or counterclaims
exist, the Borrowers hereby waive any and all defenses, set-offs, and
counterclaims which they, or any of them, have or may have to the enforcement by
the Bank of the Loan Documents and to the exercise by the Bank of the Bank's
rights and remedies under the Loan Documents as amended hereby, and/or
applicable law.
2.2 Acknowledgment of Liens and Priority. Upon proper recordation of the
South Carolina Mortgage and the proper filing of the UCC-l financing statements
executed in connection herewith, the Borrowers acknowledge that the Bank holds
perfected security interests in and liens upon all of each Borrower's personal
property, real estate and fixtures wherever located, now or hereafter acquired.
Such liens and security interests granted to the Bank secure all of the Bank
Indebtedness, including, without limitation, all amounts owed by the Borrowers
to the Bank under the Loan Agreement, the Amended Note and the other Loan
Documents.
2.3 Acknowledgment of Usage Fee. Borrowers and Bank hereby confirm that the
usage fee described in Section 3.5 of the Loan Agreement shall, until the
Revolving Credit expires on April 1, 1998, be calculated on the difference
between Five Million Dollars ($5,000,000.00) minus the average outstanding
principal balance of all cash advances and outstanding standby letters of credit
under the Revolving Credit for the applicable quarter.
3. CROSS-COLLATERALIZATION: REAFFIRMATION. All of the property, both real
and personal, of the Borrowers pledged to the Bank pursuant to any Loan Document
(collectively, the "Collateral") shall constitute collateral security for all of
the Bank Indebtedness. Each Borrower, to the extent not previously granted,
hereby grants to the Bank and also reaffirms its prior conveyance to the Bank of
a continuing security interest in and lien on all such Collateral as well as any
and all funds, certificates of deposit, securities and other property of such
Borrower located at the Bank, or at any of the Bank's affiliates and all other
property of such Borrower, whether real or personal, whether presently existing
or hereafter acquired and wherever situated, which Collateral shall secure the
Bank Indebtedness. Each Borrower agrees to execute and deliver to the Bank such
additional documentation deemed necessary or appropriate by the Bank, in its
sole and absolute discretion, to achieve the purpose of this Section of the
Fourth Amendment.
4. REPRESENTATIONS AND WARRANTIES. The Borrowers represent and warrant to
the Bank as follows:
(a) Each Borrower has the power and authority to execute and deliver
each of the Fourth Amendment Loan Documents and all other documents and
instruments executed and delivered in connection therewith, and has taken all
necessary action to authorize the execution, delivery and performance thereof,
and the Fourth Amendment Loan Documents constitute the legal, valid and binding
obligations of the Borrowers enforceable in accordance with their respective
terms subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforceability of rights of creditors
generally, and subject to the application of equitable principles;
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(b) The by-laws and articles of incorporation last provided by the
Borrowers to the Bank have not been amended, changed or modified in any way and
are in full force and effect as of the Fourth Amendment Closing Date;
(c) The security interests granted by the Borrowers in connection with
the Security Agreement Reaffirmations and the mortgage lien granted by LTS in
connection with the South Carolina Mortgage constitute first priority interests
in favor of the Bank subject only to those encumbrances created consensually by
any of the Borrowers as set forth on Exhibit "A" hereto or as otherwise agreed
to by the Bank in writing;
(d) All the representations and warranties made by the Borrowers in
Section 4 of the Loan Agreement are true and correct as of the date of this
Fourth Amendment as if such representations and warranties had been made on the
date hereof; and
(e) No default or Event of Default has occurred which remains uncured
and no event has occurred which, with the passage of time, the giving of notice
or both would result in a default or an Event of Default under the Loan
Agreement or any other documents executed in connection therewith.
5. CONDITIONS PRECEDENT. The Bank's obligations hereunder are expressly
conditional upon delivery by the Borrowers to the Bank of the following in form
and substance satisfactory to the Bank and its counsel:
(a) the Fourth Amendment and the Amended Note, duly executed by each
Borrower, and all such other documents and instruments as the Bank may
reasonably require;
(b) each of the Security Agreement Reaffirmations, duly executed by
the applicable Borrower;
(c) the South Carolina Mortgage duly executed by LTS, in form suitable
for recording, together with a policy of title insurance issued by a title
company satisfactory to the Bank insuring the South Carolina Mortgage, as a
valid lien, subject only to exceptions approved by the Bank;
(d) a certificate of the Secretary or an Assistant Secretary of each
Borrower dated the Fourth Amendment Closing Date including (i) resolutions duly
adopted by such Borrower authorizing the transactions under the Fourth Amendment
Loan Documents; (ii) evidence of the incumbency and signature of the officers
executing on its behalf any of the Loan Documents and any other document to be
delivered pursuant to any such documents, together with evidence of the
incumbency of such Secretary or Assistant Secretary; and (iii) certificates of
authority or good standing for such Borrower from its jurisdiction of
incorporation and any other jurisdiction where such Borrower is qualified to do
business; and
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(e) UCC-l financing statements as shall be necessary in the Bank's
sole discretion to perfect the Bank's liens upon the Collateral.
6. RATIFICATION AND CONFIRMATION. Except as amended hereby, all of the
terms and provisions of the Loan Agreement and the other Loan Documents, and all
documents and instruments executed in connection therewith shall remain in full
force and effect and, except as expressly amended hereby, are hereby ratified
and confirmed. The Borrowers hereby ratify and confirm that the loans made by
the Bank pursuant to the Loan Agreement are the valid and binding obligations of
the Borrowers payable to the Bank in accordance with the terms and conditions of
the Loan Agreement, as modified by this Fourth Amendment. All Bank Indebtedness
presently or hereafter outstanding under the Loan Agreement, as amended by this
Fourth Amendment shall be secured by the Collateral provided for in the Loan
Agreement, as amended by this Fourth Amendment.
7. RELEASE. The Borrowers, on behalf of itself and themselves and any
person or entity claiming by, through or under it or them (collectively referred
to as the "Releasor"), hereby unconditionally remises, releases and forever
discharges the Bank, its past and present officers, directors, employees,
shareholders, agents, parent corporation, subsidiaries, affiliates, trustees,
administrators, attorneys, representatives, predecessors, successors and assigns
and the heirs, executors, administrators, successors and assigns of any such
person or entity, as releasees (collectively referred to as the "Releasees"), of
and from any and all manner of actions, causes of action, suits, debts, dues,
accounts, bonds, covenants, contracts, agreements, promises, warranties,
guaranties, representations, liens, mechanics' liens, judgments, claims,
counterclaims, crossclaims, defenses and/or demands whatsoever, including claims
for contribution and/or indemnity, whether now known or unknown, past or
present, asserted or unasserted, contingent or liquidated, at law or in equity,
or resulting from any assignment, if any (collectively referred to as "Claims"),
which any of Releasors has ever had, have and/or hereafter can, shall or may
claim to have against any of the Releasees, for or by reason of any cause,
matter or thing whatsoever, or arising from the beginning of time to the date of
execution of this Fourth Amendment, including, but not limited to, any and all
Claims relating to or arising from the lending relationship between the Bank and
the Borrowers and the exercise of any of the Bank's rights or remedies under the
Loan Documents. The Borrowers warrant and represent that it or they, as the case
may be, have not assigned, pledged, hypothecated and/or otherwise divested
itself or themselves and/or encumbered all or any part of the Claims being
released hereby and agree to indemnify and hold harmless any and all of
Releasees against whom any Claim so assigned, pledged, hypothecated, divested
and/or encumbered is asserted.
8. PAYMENT OF EXPENSES AND EXTENSION FEE. The Borrowers shall pay the Bank
an extension fee equal to $47,500 and pay or reimburse the Bank promptly for all
counsel fees, costs and other expenses incurred by the Bank in connection with
the preparation, negotiation, recordation, execution and enforcement of this
Fourth Amendment and all documents and instruments executed in connection
herewith, including, without limitation, any expenses incurred by the Bank in
order to obtain a perfected security interest in or lien on the
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assets of the Borrowers and UCC Searches satisfactory to the Bank confirming the
perfection and priority of the Bank's liens upon the Collateral.
9. MISCELLANEOUS.
(a) All references to the "Loan Agreement" in any documents and
instruments executed by the Borrower in connection with the Loan Agreement,
shall be deemed to refer to the Loan Agreement as the same has been amended
through the date hereof, and as the same may be amended in the future.
(b) The Bank and the Borrowers agree to do such further acts and to
execute and deliver to each other such additional agreements, instruments and
documents as may be reasonably required to carry out the purpose of this Fourth
Amendment.
(c) This Fourth Amendment may be executed in any number of
counterparts and each such counterpart shall be deemed an original, but all such
counterparts shall constitute but one and the same agreement.
(d) The Loan Agreement may be modified or amended by the Borrowers and
the Bank only by written agreement executed by the Bank and the party against
whom a change is to be enforced.
(e) This Fourth Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
10. CONFESSION OF JUDGMENT. The Borrowers reaffirm and restate the
following CONFESSION OF JUDGMENT remedy of the Bank:
EACH BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS THE BANK, BY ITS
ATTORNEY, OR THE PROTHONOTARY OR THE CLERK OF ANY COURT OF RECORD IN THE
COMMONWEALTH OF PENNSYLVANIA OR IN ANY JURISDICTION WHERE PERMITTED BY LAW, UPON
THE OCCURRENCE OF AN EVENT OF DEFAULT AS DEFINED IN THE LOAN AGREEMENT OR AT ANY
TIME THEREAFTER, TO APPEAR FOR SUCH BORROWER AND CONFESS AND ENTER JUDGMENT
AGAINST IT IN FAVOR OF THE BANK IN ANY JURISDICTION IN WHICH SUCH BORROWER OR
ANY OF ITS PROPERTY IS LOCATED FOR THE AMOUNT OF ALL OBLIGATIONS, TOGETHER WITH
COSTS OF SUIT AND WITH ACTUAL COLLECTION COSTS (INCLUDING REASONABLE ATTORNEYS'
FEES), WITH OR WITHOUT DECLARATION, AND WITHOUT STAY OF EXECUTION, AND) WITH
RELEASE OF ERRORS AND THE RIGHT TO ISSUE EXECUTION FORTHWITH, AND FOR DOING SO
THIS FOURTH AMENDMENT OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT
WARRANT. EACH BORROWER HEREBY WAIVES AND RELEASES ALL RELIEF FROM ANY AND ALL
APPRAISEMENT, STAY OR EXEMPTION LAW OF ANY
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STATE NOW IN FORCE OR HEREAFTER ENACTED. THIS AUTHORITY AND POWER SHALL NOT BE
EXHAUSTED BY THE EXERCISE THEREOF AND SHALL CONTINUE UNTIL THE OBLIGATIONS ARE
FULLY PAID, PERFORMED, DISCHARGED AND SATISFIED.
BEING FULLY AWARE OF ITS RIGHTS TO PRIOR NOTICE AND HEARING ON THE VALIDITY
OF ANY CLAIMS THAT MAY BE ASSERTED AGAINST IT BY THE BANK UNDER THIS FOURTH
AMENDMENT BEFORE JUDGMENT CAN BE ENTERED AND BEFORE ASSETS OF THE BORROWER CAN
BE GARNISHED AND ATTACHED, EACH BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO THE BANK,
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, OR AT ANY TIME THEREAFTER, ENTERING
JUDGMENT AGAINST SUCH BORROWER BY CONFESSION AND ATTACHING AND GARNISHING THE
BANK ACCOUNTS AND OTHER ASSETS OP SUCH BORROWER, WITHOUT PRIOR NOTICE OR
OPPORTUNITY FOR A HEARING. EACH BORROWER ACKNOWLEDGES THAT IT HAS HAD THE
ASSISTANCE OF COUNSEL IN THE REVIEW AND EXECUTION OF THIS FOURTH AMENDMENT AND
FURTHER ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE FOREGOING PROVISIONS
CONCERNING CONFESSION OF JUDGMENT HAVE BEEN FULLY EXPLAINED TO SUCH BORROWER BY
SUCH COUNSEL.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Fourth Amendment to be
executed by their duly authorized officers on the date first above written.
LIBERTY TECHNOLOGIES, INC.
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare, Asst. Secretary
---------------------------------
Attest:_________________
Name/Title:____________
LTH DELAWARE, INC.
By: /s/ Daniel G. Clare
-------------------
Title: Daniel G. Clare, Secretary
--------------------------
Attest:__________________
Name/Title:______________
LIBERTY TECHNICAL SERVICES, INC.
(formerly known as Industrial NDT Company, Inc.)
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare, Secretary
--------------------------
Attest:__________________
Name/Title:______________
[Signatures Continued on Following Page]
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<PAGE>
BETA MONITORS INTERNATIONAL, INC.
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare/Secretary
-------------------------
Attest:________________
Name/Title:____________
LIBERTY INTERNATIONAL INC.
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare/Secretary
-------------------------
Attest:__________________
Name/Title:______________
LIBERTY IMAGING SYSTEMS, INC.
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare/Secretary
-------------------------
Attest:___________________
Name/Title:_______________
FIRST UNION NATIONAL BANK
By: /s/ Suzanne Storm
-----------------
Name/Title: Suzanne Storm/SVP
-----------------
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<PAGE>
EXHIBIT "A" - Permitted Encumbrances
Those certain liens and encumbrances expressly permitted under Section
5.9 of the Loan Agreement.
Any liens and encumbrances in connection with equipment and vehicles
leased by a Borrower in the ordinary course of business.
<PAGE>
CONSOLIDATED AMENDED AND RESTATED NOTE
$9,000,000 Philadelphia, Pennsylvania
April 1, 1997
FOR VALUE RECEIVED, LIBERTY TECHNOLOGIES, INC., LTH DELAWARE, INC.,
LIBERTY TECHNICAL SERVICES, INC. (formerly known as Industrial NDT Company,
Inc.), BETA MONITORS INTERNATIONAL, INC., LIBERTY INTERNATIONAL INC., and
LIBERTY IMAGING SYSTEMS, INC. (collectively the "Borrowers"), hereby jointly and
severally promise to pay to the order of FIRST UNIO'N NATIONAL BANK (the "Bank")
on April 1, 1998 the principal amount of NINE MILLION DOLLARS ($9,000,000) or,
if less, the aggregate outstanding principal under the Revolving Credit extended
under the Loan Agreement dated as of December 2, 1993, as amended by an
Amendment and Modification to Loan Agreement dated December 30, 1995, a Second
Amendment and Modification to Loan Agreement dated October 11, 1996, a Third
Amendment and Modification to Loan Agreement dated February 27, 1997, and a
Fourth Amendment and Modification to Loan Agreement dated the date hereof by and
among the Borrowers and the Bank (as amended, the "Loan Agreement"). Terms
capitalized but not defined herein shall have the meanings given to them
respectively in the Loan Agreement. Reference is made to the Loan Agreement for
a statement of the terms and conditions under which the loans evidenced hereby
have been made, shall be paid, are secured, and may be prepaid or accelerated.
This Note amends and restates and replaces (but does not discharge) the
obligations of the Borrowers under the Note dated December 2, 1993 and under the
Note dated October 11, 1996, as such notes have been amended, modified and/or
extended.
Until maturity (whether by acceleration or otherwise) interest shall
accrue on the outstanding principal balance hereof at the rate or rates set
forth in the Loan Agreement. Interest shall be calculated on the basis of a
360-day year, counting the actual number of days elapsed. Subsequent to maturity
or the occurrence of any Event of Default, and continuing after entry of any
judgment against the Borrowers with respect to the obligations evidenced by this
Note, interest shall accrue at an annual rate which shall be two percent (2%)
above the rate of interest otherwise payable hereunder. Accrued interest shall
be payable monthly on the first day of each month commencing with the month
immediately following date hereof and if not paid when due, shall be added to
the principal.
The Borrowers hereby waive the requirements of demand, presentment,
protest, notice of protest and dishonor and all other demands or notices of any
kind in connection with the delivery, acceptance, performance, default, dishonor
or enforcement of this Note.
The construction, interpretation and enforcement of this Note shall be
governed by the internal laws of the Commonwealth of Pennsylvania.
EACH BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS THE BANK, BY ITS
ATTORNEY, OR THE PROTHONOTARY OR THE
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<PAGE>
CLERK OF ANY COURT OF RECORD IN THE COMMONWEALTH OF PENNSYLVANIA OR IN ANY
JURISDICTION WHERE PERMITTED BY LAW, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT
AS DEFINED IN THE LOAN AGREEMENT OR AT ANY TIME THEREAFTER, TO APPEAR FOR SUCH
BORROWER AND CONFESS AND ENTER JUDGMENT AGAINST IT IN FAVOR OF THE BANK IN ANY
JURISDICTION IN WHICH SUCH BORROWER OR ANY OF ITS PROPERTY IS LOCATED FOR THE
AMOUNT OF ALL OBLIGATIONS, TOGETHER WITH COSTS OF SUIT AND WITH ACTUAL
COLLECTION COSTS (INCLUDING REASONABLE ATTORNEYS' FEES), WITH OR WITHOUT
DECLARATION, AND WITHOUT STAY OF EXECUTION, AND WITH RELEASE OF ERRORS AND THE
RIGHT TO ISSUE EXECUTION FORTHWITH, AND FOR DOING SO THIS CONSOLIDATED AMENDED
AND RESTATED NOTE OR A COPY VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT.
EACH BORROWER HEREBY WAIVES AND RELEASES ALL RELIEF FROM ANY AND ALL
APPRAISEMENT, STAY OR EXEMPTION LAW OF ANY STATE NOW IN FORCE OR HEREAFTER
ENACTED. THIS AUTHORITY AND POWER SHALL NOT BE EXHAUSTED BY THE EXERCISE THEREOF
AND SHALL CONTINUE UNTIL THE OBLIGATIONS ARE FULLY PAID), PERFORMED, DISCHARGED
AND SATISFIED.
BEING FULLY AWARE OF ITS RIGHTS TO PRIOR NOTICE AND HEARING ON THE
VALIDITY OF ANY CLAIMS THAT MAY BE ASSERTED AGAINST IT BY THE BANK UNDER THIS
CONSOLIDATED AMENDED AND RESTATED NOTE BEFORE JUDGMENT CAN BE ENTERED AND BEFORE
ASSETS OF THE BORROWER CAN BE GARNISHED AND ATTACHED, EACH BORROWER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THESE RIGHTS AND EXPRESSLY
AGREES AND CONSENTS TO THE BANK, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, OR
AT ANY TIME THEREAFTER, ENTERING JUDGMENT AGAINST SUCH BORROWER BY CONFESSION
AND ATTACHING AND GARNISHING THE BANK ACCOUNTS AND OTHER ASSETS OF SUCH
BORROWER, WITHOUT PRIOR NOTICE OR OPPORTUNITY FOR A HEARING. EACH BORROWER
ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF COUNSEL IN THE REVIEW AND
EXECUTION OF THIS CONSOLIDATED AMENDED AND RESTATED NOTE AND FURTHER
ACKNOWLEDGES THAT THE MEANING AND EFFECT OF THE FOREGOING PROVISIONS CONCERNING
CONFESSION OF JUDGMENT HAVE BEEN FULLY EXPLAINED TO SUCH BORROWER BY SUCH
COUNSEL.
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<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
Borrowers have caused this Consolidated Amended and Restated Note to be executed
by its duly authorized officer as of the day and year first above written.
LIBERTY TECKNOLOGIES, INC.
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare, Asst. Secretary
--------------------------------
Attest:__________________
Name/Title:_____________
LTH DELAWARE, INC.
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare, Secretary
--------------------------
Attest:__________________
Name/Title:______________
LIBERTY TECHNICAL SERVICES, INC.
(formerly known as Industrial NDT Company, Inc.)
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare, Secretary
--------------------------
Attest:____________________
Name/Title:________________
[Signatures Continued on Following Page]
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<PAGE>
BETA MONITORS INTERNATIONAL, INC.
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare, Secretary
--------------------------
Attest:__________________
Name/Title:______________
LIBERTY INTERNATIONAL INC.
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare, Secretary
--------------------------
Attest:__________________
Name/Title:______________
LIBERTY IMAGING SYSTEMS, INC.
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare, Secretary
--------------------------
Attest:____________________
Name/Title:________________
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<PAGE>
REAFFIRMATION AND AMENDMENT OF
SECURITY AGREEMENT
This REAFFIRMATION AND AMENDMENT OF SECURITY AGREEMENT dated April 1, 1997
(this "Reaffirmation") to the Security Agreement dated February 27, 1997 and
attached hereto as Exhibit "A" (the "Security Agreement") is between LIBERTY
TECHNOLOGIES, INC. ("Obligor") and FIRST UNION NATIONAL BANK (the "Bank").
BACKGROUND
A. Obligor, LTH Delaware, Inc., Liberty Technical Services, Inc., Beta
Monitors International, Inc., Liberty International Inc. and Liberty Imaging
Systems, Inc. (collectively, the "Borrowers") and the Bank are parties to a Loan
Agreement dated as of December 2, 1993, as amended by an Amendment and
Modification to Loan Agreement dated December 30, 1995, a Second Amendment and
Modification to Loan Agreement dated October 11, 1996, a Third Amendment and
Modification to Loan Agreement dated February 27, 1997, and a Fourth Amendment
and Modification to Loan Agreement dated the date hereof (as amended, modified
and/or extended, the "Loan Agreement").
B. Capitalized terms used, but not defined herein shall have the meaning
given such terms in the Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. Amendment. The definition of "Collateral" set forth in Section 1.5 of
the Security Agreement is hereby amended and restated to read in its entirety as
follows:
1.5 "Collateral" shall mean all tangible and intangible personal
property of the Obligor, including but not limited to:
(a) all accounts, accounts receivable, rights under contracts,
chattel paper, instruments, and all obligations due the Obligor
for goods sold or to be sold, consigned or leased or to be leased,
or services rendered or to be rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process,
finished goods, parts or supplies or otherwise; all goods,
merchandise and other property held for sale or lease or to be
furnished under any contract of service; all documents of title
covering any goods which are or are to become inventory and any
such goods which are leased or consigned to others and all
returned, reclaimed or repossessed goods sold, consigned, leased
or otherwise furnished by the Obligor to others ("Inventory");
<PAGE>
(c) all leases and rental agreements for personal property between
the Obligor as lessor (whether by origination or derivation) and
any and all persons or parties as lessee(s), and all rentals,
purchase option amounts, and other sums due thereunder; and all
inventory, equipment, goods and property subject to such leases
and rental agreements and all accessions, parts and tools attached
thereto or used therewith and all of the Obligor's residual or
reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor
vehicles, and all accessories, parts and equipment now or
hereafter attached thereto or used in connection therewith,
whether or not the same shall be deemed affixed to real property,
and all other tangible personal property ("Equipment");
(e) all general intangibles, which term shall have the meaning
given to it in the Uniform Commercial Code and shall additionally
include but not be limited to all tax refunds, patents,
trademarks, service marks, tradenames, copyrights and other
intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached
to this Security Agreement and any other such schedule hereafter
made a schedule to this Agreement;
(g) all additions, replacements, attachments, accretions,
accessions, components and substitutions to or for any Inventory
or Equipment;
(h) all property of the Obligor, including without limitation,
monies, securities, instruments, chattel paper and documents,
which at any time the Bank shall have or have the right to have in
its possession, or which is in transit to it (pursuant to the
terms of a letter of credit or otherwise) and, independent of and
in addition to the Bank's rights of setoff (which the Obligor
acknowledges), the balance of any account or any amount which may
be owing from time to time by the Bank to the Obligor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media,
software and related material, including computer programs,
computer tapes, cards, disks and printouts, and including any of
the foregoing which are in the possession of any affiliate or any
computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in
the Uniform Commercial Code and shall additionally include but not
be limited to, whatever is received upon the use, lease, sale,
exchange,
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<PAGE>
collection or other utilization or any disposition of any of the
collateral described in subparagraphs (a) through (i) above,
whether cash or noncash, and including without limitation, rental
or lease payments, accounts, chattel paper, instruments,
documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the
foregoing ("Proceeds").
2. Security Interest. The Obligor grants to the Bank a security interest in
and lien on the Collateral as security for the following obligations of the
Borrowers to the Bank ("Obligations"):
(a) To pay the principal, interest, commitment fees and any other
liabilities of the Borrowers to the Bank under the Loan Agreement and the other
Loan Documents in accordance with the terms thereof;
(b) To satisfy all of the other liabilities of the Borrowers to the
Bank, whether hereunder or otherwise, whether now existing or hereafter
incurred, whether or not evidenced by any note or other instrument, matured or
unmatured, direct, absolute or contingent, joint or several, including any
extensions, modifications, renewals thereof and substitutions therefor;
(c) To repay the Bank all amounts advanced by the Bank under the Loan
Agreement or otherwise on behalf of the Borrowers, including, but without
limitation, advances for principal or interest payments to prior secured
parties, mortgagors or lienors, or for taxes, levies, insurance, rent, wages,
repairs to or maintenance or storage of any Collateral; and
(d) To reimburse the Bank, on demand, for all of the Bank's expenses
and costs, including the reasonable fees and expenses of counsel, in connection
with the negotiation, preparation, administration, amendment, modification, or
enforcement of the Loan Agreement and the other Loan Documents.
3. Continuation of Security Interest. The Obligor hereby affirms and
reaffirms the security interests granted to the Bank in Section 2 of the
Security Agreement and acknowledges that such security interests secure the
Obligations of the Borrowers under the Loan Agreement, as it may be amended from
time to time, and under all notes executed pursuant thereto, in addition to any
and all other obligations of the Borrowers to the Bank which are secured
thereby.
4. Continuation of Security Agreement. Except as expressly amended hereby,
all of the terms and provisions of the Security Agreement shall remain in full
force and effect and are hereby ratified and confirmed. The Obligor hereby
confirms that all representations and warranties set forth in the Security
Agreement are true and correct as of the date hereof, and there are no defaults
thereunder.
5. Locations. The locations of the offices where the Obligor maintains (i)
its books and records concerning the Collateral, (ii) its chief executive
offices, and (iii) any Inventory or Equipment are as set forth in Exhibit B
hereof.
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<PAGE>
6. Additional Documents. The Obligor hereby agrees to do such further acts
and to execute and/or deliver to and for the benefit of the Bank any and all
additional documents that may be required to perfect the Bank's interests
hereunder.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Obligor
has executed this Reaffirmation as of the date first written above.
LIBERTY TECHNOLOGIES, INC.
By: /s/ Daniel G. Clare
-------------------
Name/Title: Daniel G. Clare, VP & Asst. Secretary
-------------------------------------
Attest:_________________
Name/Title:_____________
FIRST UNION NATIONAL BANK
By: /s/ Suzanne Storm
-----------------
Name/Title: Suzanne S. Storm, SVP
---------------------
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<PAGE>
EXHIBIT A
Security Agreement
- 5 -
<PAGE>
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by LIBERTY TECHNOLOGIES, INC., a Pennsylvania corporation (the
"Obligor"), in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 555 North Lane, Conshohocken, Pennsylvania 19428.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited
to goods held for sale or lease or furnished or to be furnished under contracts
for service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
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<PAGE>
consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alias, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
-2-
<PAGE>
devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
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<PAGE>
books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition: (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer or employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, approval basis; (k) to
Borrower's knowledge, except as disclosed to Bank in writing the amounts shown
on the applicable certificates, statements, on Obligor's books and records and
all invoices and statements which may be delivered to Bank with respect so such
accounts are actually and absolutely owing to Obligor and are not in any way
contingent; and (1) the accounts have not been sold, assigned or transferred to
any other Person and no Person except Obligor has any claim thereto or (with
exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein: or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank Indebtedness
have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts as
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may be required by Bank in its reasonable discretion. In the case of insurance
on any of the Collateral Obligor shall carry insurance in the full insurable
value thereof and cause Bank to be named as loss payee (with a lender's loss
payable endorsement) with respect to all personal property, and additional
insured with respect to all liability insurance, as its interests may appear
with thirty (30) days' notice to be given Bank by the insurance carrier prior to
cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional investments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other documents and notices as Bank may deem advisable in
its reasonable discretion to protect the Collateral and its interests therein
and its rights hereunder. Such power being coupled with an interest is
irrevocable. Obligor irrevocably authorizes the filing of a carbon, photographic
or other copy of this Agreement, or of a financing statement, as a financing
statement and agrees that such filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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hereto is discovered to be untrue in any material respect as of the date as of
which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter
relating to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all
account debtors that Obligor's accounts have been assigned to Bank and that Bank
has a security interest therein:
(c) Upon the occurrence of an Event of Default, direct all
account debtors to make payment of all Obligor's accounts directly to Bank and
forward invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or noncash items of payment or proceeds of such accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to
any lockbox or postal boxes into which Obligor's mail is deposited and receive,
open and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment
of and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
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<PAGE>
(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with
respect to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such
amount and at such times as Bank deems advisable:
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts
and notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
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<PAGE>
or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise liened or
levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay on
demand all reasonable costs and expenses of Bank, including without limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's performance
of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
Liberty Technologies, Inc.
555 North Lane, Suite _____
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
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With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, 10th Floor
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
3SO Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
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<PAGE>
13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(a) ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO
HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER
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DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
OBLIGOR AND BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security Agreement on
the date first above written.
LIBERTY TECHNOLOGIES, INC.
By: /s/ Daniel G. Clare
-----------------------------------
Daniel G. Clare, Vice President
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne Storm
---------------------------------------
Suzanne S. Storm, Senior Vice President
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NAMES AND ADDRESSES OF OBLIGOR
555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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EXHIBIT B
Liberty Technologies, Inc.
Location of books and records:
555 North Lane
Conshohocken, PA 19428-2208
Location of chief executive offices:
555 North Lane
Conshohocken, PA 19428-2208
Location of inventory and equipment:
555 North Lane
Conshohocken, PA 19428-2208
8885 Monroe Road
Houston, TX 77061
<PAGE>
REAFFIRMATION AND AMENDMENT OF
SECURITY AGREEMENT
This REAFFIRMATION AND AMENDMENT OF SECURITY AGREEMENT dated April 1, 1997
(this "Reaffirmation") to the Security Agreement dated February 27, 1997 and
attached hereto as Exhibit "A" (the "Security Agreement") is between LTH
DELAWARE, INC. "Obligor") and FIRST UNION NATIONAL BANK (the "Bank").
BACKGROUND
A. Obligor, Liberty Technologies, Inc., Liberty Technical Services, Inc.,
Beta Monitors International, Inc., Liberty International Inc. and Liberty
Imaging Systems, Inc. (collectively, the "Borrowers") and the Bank are parties
to a Loan Agreement dated as of December 2, 1993, as amended by an Amendment and
Modification to Loan Agreement dated December 30, 1995, a Second Amendment and
Modification to Loan Agreement dated October 11, 1996, a Third Amendment and
Modification to Loan Agreement dated February 27, 1997, and a Fourth Amendment
and Modification to Loan Agreement dated the date hereof (as amended, modified
and/or extended, the "Loan Agreement").
B. Capitalized terms used, but not defined herein shall have the meaning
given such terms in the Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. Amendment. The definition of "Collateral" set forth in Section 1.5 of
the Security Agreement is hereby amended and restated to read in its entirety as
follows:
1.5 "Collateral" shall mean all tangible and intangible personal
property of the Obligor, including but not limited to:
(a) all accounts, accounts receivable, rights under contracts,
chattel paper, instruments, and all obligations due the Obligor
for goods sold or to be sold, consigned or leased or to be
leased, or services rendered or to be rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process,
finished goods, parts or supplies or otherwise; all goods,
merchandise and other property held for sale or lease or to be
furnished under any contract of service; all documents of title
covering any goods which are or are to become inventory and any
such goods which are leased or consigned to others and all
returned, reclaimed or repossessed goods sold, consigned, leased
or otherwise furnished by the Obligor to others ("Inventory");
<PAGE>
(c) all leases and rental agreements for personal property
between the Obligor as lessor (whether by origination or
derivation) and any and all persons or parties as lessee(s), and
all rentals, purchase option amounts, and other sums due
thereunder; and all inventory, equipment, goods and property
subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the
Obligor's residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor
vehicles, and all accessories, parts and equipment now or
hereafter attached thereto or used in connection therewith,
whether or not the same shall be deemed affixed to real property,
and all other tangible personal property ("Equipment");
(e) all general intangibles, which term shall have the meaning
given to it in the Uniform Commercial Code and shall additionally
include but not be limited to all tax refunds, patents,
trademarks, service marks, tradenames, copyrights and other
intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral
attached to this Security Agreement and any other such schedule
hereafter made a schedule to this Agreement;
(g) all additions, replacements, attachments, accretions,
accessions, components and substitutions to or for any Inventory
or Equipment;
(h) all property of the Obligor, including without limitation,
monies, securities, instruments, chattel paper and documents,
which at any time the Bank shall have or have the right to have
in its possession, or which is in transit to it (pursuant to the
terms of a letter of credit or otherwise) and, independent of and
in addition to the Bank's rights of setoff (which the Obligor
acknowledges), the balance of any account or any amount which may
be owing from time to time by the Bank to the Obligor;
(i) all books and records evidencing or relating to the
foregoing, including, without limitation, billing records of
every kind and description, customer lists, data storage and
processing media, software and related material, including
computer programs, computer tapes, cards, disks and printouts,
and including any of the foregoing which are in the possession of
any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but
not be limited to, whatever is received upon the use, lease,
sale, exchange,
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collection or other utilization or any disposition of any of the
collateral described in subparagraphs (a) through (i) above,
whether cash or noncash, and including without limitation, rental
or lease payments, accounts, chattel paper, instruments,
documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the
foregoing ("Proceeds").
2. Security Interest. The Obligor grants to the Bank a security interest in
and lien on the Collateral as security for the following obligations of the
Borrowers to the Bank ("Obligations"):
(a) To pay the principal, interest, commitment fees and any other
liabilities of the Borrowers to the Bank under the Loan Agreement and the other
Loan Documents in accordance with the terms thereof;
(b) To satisfy all of the other liabilities of the Borrowers to the
Bank, whether hereunder or otherwise, whether now existing or hereafter
incurred, whether or not evidenced by any note or other instrument, matured or
unmatured, direct, absolute or contingent, joint or several, including any
extensions, modifications, renewals thereof and substitutions therefor;
(c) To repay the Bank all amounts advanced by the Bank under the Loan
Agreement or otherwise on behalf of the Borrowers, including, but without
limitation, advances for principal or interest payments to prior secured
parties, mortgagors or lienors, or for taxes, levies, insurance, rent, wages,
repairs to or maintenance or storage of any Collateral; and
(d) To reimburse the Bank, on demand, for all of the Bank's expenses
and costs, including the reasonable fees and expenses of counsel, in connection
with the negotiation, preparation, administration, amendment, modification, or
enforcement of the Loan Agreement and the other Loan Documents.
3. Continuation of Security Interest. The Obligor hereby affirms and
reaffirms the security interests granted to the Bank in Section 2 of the
Security Agreement and acknowledges that such security interests secure the
Obligations of the Borrowers under the Loan Agreement, as it may be amended from
time to time, and under all notes executed pursuant thereto, in addition to any
and all other obligations of the Borrowers to the Bank which are secured
thereby.
4. Continuation of Security Agreement. Except as expressly amended hereby,
all of the terms and provisions of the Security Agreement shall remain in full
force and effect and are hereby ratified and confirmed. The Obligor hereby
confirms that all representations and warranties set forth in the Security
Agreement are true and correct as of the date hereof, and there are no defaults
thereunder.
5. Locations. The locations of the offices where the Obligor maintains (i)
its books and records concerning the Collateral, (ii) its chief executive
offices, and (iii) any Inventory or Equipment are as set forth in Exhibit B
hereof.
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6. Additional Documents. The Obligor hereby agrees to do such further acts
and to execute and/or deliver to and for the benefit of the Bank any and all
additional documents that may be required to perfect the Bank's interests
hereunder.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Obligor
has executed this Reaffirmation as of the date first written above.
LTH DELAWARE, INC.
By: /s/ Daniel G. Clare
-------------------------------------------
Name/Title: Daniel G. Clare, V.P. and Secretary
-----------------------------------
Attest:
---------------------------------------
Name/Title:
-----------------------------------
FIRST UNION NATIONAL BANK
By: /s/ Suzanne Storm
------------------------------------------
Name/Title: Suzanne S. Storm, SVP
---------------------
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EXHIBIT A
Security Agreement
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SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by LTH DELAWARE, INC., a Delaware corporation (the "Obligor"),
in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor, intending to be
legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 555 North Lane, Conshohocken, Pennsylvania 19428.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited
to goods held for sale or lease or furnished or to be furnished under contracts
for service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
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consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
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devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
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books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition; (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer of employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, or sale on approval basis; (k)
to Borrower's knowledge, except as disclosed to Bank in writing, the amounts
shown on the applicable certificates, statements, on Obligor's books and records
and all invoices and statements which may be delivered to Bank with respect to
such accounts are actually and absolutely owing to Obligor and are not in any
way contingent; and (l) the accounts have not been sold, assigned or transferred
to any other Person and no Person except Obligor has any claim thereto or (with
the exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank Indebtedness
have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts as
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may be required by Bank in its reasonable discretion. In the case of insurance
on any of the Collateral Obligor shall carry insurance in the full insurable
value thereof and cause Bank to be named as loss payee (with a lender's loss
payable endorsement) with respect to all personal property, and additional
insured with respect to all liability insurance, as its interests may appear
with thirty (30) days' notice to be given Bank by the insurance carrier prior to
cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional instruments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other
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documents and notices as Bank may deem advisable in its reasonable discretion to
protect the Collateral and its interests therein and its rights hereunder. Such
power being coupled with an interest is irrevocable. Obligor irrevocably
authorizes the filing of a carbon, photographic or other copy of this Agreement,
or of a financing statement, as a financing statement and agrees that such
filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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hereto is discovered to be untrue in any material respect as of the date as of
which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter
relating to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all
account debtors that Obligor's accounts have been assigned to Bank and that Bank
has a security interest therein;
(c) Upon the occurrence of an Event of Default, direct all
account debtors to make payment of all Obligor's accounts directly to Bank and
forward invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or non-cash items of payment or proceeds of such
accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to
any lockbox or postal boxes into which Obligor's mail is deposited and receive,
open and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment
of and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
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(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with
respect to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such
amount and at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts and
notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
-9-
<PAGE>
or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise liened or
levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative: Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay on
demand all reasonable costs and expenses of Bank, including without limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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<PAGE>
9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to Pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's performance
of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
LTH Delaware, Inc.
555 North Lane, Suite ______
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
-11-
<PAGE>
With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, PA1310
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMTATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
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<PAGE>
13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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<PAGE>
15. MISCELLANEOUS PROVISIONS
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, 11676/6 DEMAND, ACTION OR CAUSE OF ACTION
(a) ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO
HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER
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<PAGE>
DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
OBLIGOR AND BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security Agreement on
the date first above written.
LTH DELAWARE, INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne Storm
-----------------------------------------
Suzanne S. Storm, Senior Vice President
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<PAGE>
NAMES AND ADDRESSES OF OBLIGOR
555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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<PAGE>
EXHIBIT B
LTH Delaware, Inc.
Location of books and records:
555 North Lane
Conshohocken, PA 19428-2208
Location of chief executive offices:
555 North Lane
Conshohocken, PA 19428-2208
Location of inventory and equipment:
555 North Lane
Conshohocken, PA 19428-2208
<PAGE>
REAFFIRMATION AND AMENDMENT OF
SECURITY AGREEMENT
This REAFFIRMATION AND AMENDMENT OF SECURITY AGREEMENT dated April 1, 1997
(this "Reaffirmation") to the Security Agreement dated February 27, 1997 and
attached hereto as Exhibit "A" (the "Security Agreement") is between LIBERTY
TECHNICAL SERVICES, INC. ("Obligor") and FIRST UNION NATIONAL BANK (the "Bank").
BACKGROUND
A. Obligor, Liberty Technologies, Inc., LTH Delaware, Inc., Beta Monitors
International, Inc., Liberty International Inc. and Liberty Imaging Systems,
Inc. (collectively, the "Borrowers") and the Bank are parties to a Loan
Agreement dated as of December 2, 1993, as amended by an Amendment and
Modification to Loan Agreement dated December 30, 1995, a Second Amendment and
Modification to Loan Agreement dated October 11, 1996, a Third Amendment and
Modification to Loan Agreement dated February 27, 1997, and a Fourth Amendment
and Modification to Loan Agreement dated the date hereof (as amended, modified
and/or extended, the "Loan Agreement").
B. Capitalized terms used, but not defined herein shall have the meaning
given such terms in the Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. Amendment. The definition of "Collateral" set forth in Section 1.5 of
the Security Agreement is hereby amended and restated to read in its entirety as
follows:
1.5 "Collateral" shall mean all tangible and intangible personal
property of the Obligor, including but not limited to:
(a) all accounts, accounts receivable, rights under contracts,
chattel paper, instruments, and all obligations due the Obligor
for goods sold or to be sold, consigned or leased or to be
leased, or services rendered or to be rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process,
finished goods, parts or supplies or otherwise; all goods,
merchandise and other property held for sale or lease or to be
furnished under any contract of service; all documents of title
covering any goods which are or are to become inventory and any
such goods which are leased or consigned to others and all
returned, reclaimed or repossessed goods sold, consigned, leased
or otherwise furnished by the Obligor to others ("Inventory");
<PAGE>
(c) all leases and rental agreements for personal property
between the Obligor as lessor (whether by origination or
derivation) and any and all persons or parties as lessee(s), and
all rentals, purchase option amounts, and other sums due
thereunder; and all inventory, equipment, goods and property
subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the
Obligor's residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor
vehicles, and all accessories, parts and equipment now or
hereafter attached thereto or used in connection therewith,
whether or not the same shall be deemed affixed to real property,
and all other tangible personal property ("Equipment");
(e) all general intangibles, which term shall have the meaning
given to it in the Uniform Commercial Code and shall additionally
include but not be limited to all tax refunds, patents,
trademarks, service marks, tradenames, copyrights and other
intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral
attached to this Security Agreement and any other such schedule
hereafter made a schedule to this Agreement;
(g) all additions, replacements, attachments, accretions,
accessions, components and substitutions to or for any Inventory
or Equipment;
(h) all property of the Obligor, including without limitation,
monies, securities, instruments, chattel paper and documents,
which at any time the Bank shall have or have the right to have
in its possession, or which is in transit to it (pursuant to the
terms of a letter of credit or otherwise) and, independent of
and in addition to the Bank's rights of setoff (which the Obligor
acknowledges), the balance of any account or any amount which may
be owing from time to time by the Bank to the Obligor;
(i) all books and records evidencing or relating to the
foregoing, including, without limitation, billing records of
every kind and description, customer lists, data storage and
processing media, software and related material, including
computer programs, computer tapes, cards, disks and printouts,
and including any of the foregoing which are in the possession of
any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but
not be limited to, whatever is received upon the use, lease,
sale, exchange,
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<PAGE>
collection or other utilization or any disposition of any of the
collateral described in subparagraphs (a) through (i) above,
whether cash or noncash, and including without limitation, rental
or lease payments, accounts, chattel paper, instruments,
documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the
foregoing ("Proceeds").
2. Security Interest. The Obligor grants to the Bank a security interest in
and lien on the Collateral as security for the following obligations of the
Borrowers to the Bank ("Obligations"):
(a) To pay the principal, interest, commitment fees and any other
liabilities of the Borrowers to the Bank under the Loan Agreement and
the other Loan Documents in accordance with the terms thereof;
(b) To satisfy all of the other liabilities of the Borrowers to the
Bank, whether hereunder or otherwise, whether now existing or
hereafter incurred, whether or not evidenced by any note or other
instrument, matured or unmatured, direct, absolute or contingent,
joint or several, including any extensions, modifications, renewals
thereof and substitutions therefor;
(c) To repay the Bank all amounts advanced by the Bank under the Loan
Agreement or otherwise on behalf of the Borrowers, including, but
without limitation, advances for principal or interest payments to
prior secured parties, mortgagors or lienors, or for taxes, levies,
insurance, rent, wages, repairs to or maintenance or storage of any
Collateral; and
(d) To reimburse the Bank, on demand, for all of the Bank's expenses
and costs, including the reasonable fees and expenses of counsel, in
connection with the negotiation, preparation, administration,
amendment, modification, or enforcement of the Loan Agreement and the
other Loan Documents.
3. Continuation of Security Interest. The Obligor hereby affirms and
reaffirms the security interests granted to the Bank in Section 2 of the
Security Agreement and acknowledges that such security interests secure the
Obligations of the Borrowers under the Loan Agreement, as it may be amended from
time to time, and under all notes executed pursuant thereto, in addition to any
and all other obligations of the Borrowers to the Bank which are secured
thereby.
4. Continuation of Security Agreement. Except as expressly amended hereby,
all of the terms and provisions of the Security Agreement shall remain in full
force and effect and are hereby ratified and confirmed. The Obligor hereby
confirms that all representations and warranties set forth in the Security
Agreement are true and correct as of the date hereof, and there are no defaults
thereunder.
5. Locations. The locations of the offices where the Obligor maintains (i)
its books and records concerning the Collateral, (ii) its chief executive
offices, and (iii) any Inventory or Equipment are as set forth in Exhibit B
hereof.
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<PAGE>
6. Additional Documents. The Obligor hereby agrees to do such further acts
and to execute and/or deliver to and for the benefit of the Bank any and all
additional documents that may be required to perfect the Bank's interests
hereunder.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Obligor
has executed this Reaffirmation as of the date first written above.
LIBERTY TECHNICAL SERVICES, INC.
By: /s/ Daniel G. Clare
-----------------------------------------
Name/Title: Daniel G. Clare, VP and Secretary
---------------------------------
Attest:
-------------------------------------
Name/Title:
---------------------------------
FIRST UNION NATIONAL BANK
By: /s/ Suzanne Storm
-----------------------------------------
Name/Title: Suzanne S. Storm, SVP
---------------------------------
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<PAGE>
EXHIBIT A
Security Agreement
-5-
<PAGE>
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by LIBERTY TECHNICAL SERVICES, INC., a Pennsylvania corporation
(the "Obligor"), in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 8550 Dorchester Road, N. Charleston, SC 29420.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor;
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited to
goods held for sale or lease or furnished or to be furnished under contracts for
service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
-1-
<PAGE>
consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the
Collateral granted to Bank by Obligor hereunder shall not be rendered void by
the fact that no Bank Indebtedness exists as of a particular date, but shall
continue in full force and effect until all Bank Indebtedness has been paid in
full, Bank has no agreement or commitment outstanding pursuant to which Bank may
extend credit to or on behalf of Obligor and Bank has executed and delivered
termination statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
-2-
<PAGE>
devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
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books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition; (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer of employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, or sale on approval basis; (k)
to Borrower's knowledge, except as disclosed to Bank in writing, the amounts
shown on the applicable certificates, statements, on Obligor's books and records
and all invoices and statements which may be delivered to Bank with respect to
such accounts are actually and absolutely owing to Obligor and are not in any
way contingent; and (1) the accounts have not been sold, assigned or transferred
to any other Person and no Person except Obligor has any claim thereto or (with
the exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank
Indebtedness have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts as
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may be required by Bank in its reasonable discretion. In the case of insurance
on any of the Collateral Obligor shall carry insurance in the full insurable
value thereof and cause Bank to be named as loss payee (with a lender's loss
payable endorsement) with respect to all personal property, and additional
insured with respect to all liability insurance, as its interests may appear
with thirty (30) days' notice to be given Bank by the insurance carrier prior to
cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional instruments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other documents and notices as Bank may deem advisable in
its reasonable discretion to protect the Collateral and its interests therein
and its rights hereunder. Such power being coupled with an interest is
irrevocable. Obligor irrevocably authorizes the filing of a carbon, photographic
or other copy of this Agreement, or of a financing statement, as a financing
statement and agrees that such filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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hereto is discovered to be untrue in any material respect as of the date as of
which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter relating
to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all
account debtors that Obligor's accounts have been assigned to Bank and that Bank
has a security interest therein;
(c) Upon the occurrence of an Event of Default, direct all account
debtors to make payment of all Obligor's accounts directly to Bank and forward
invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or non-cash items of payment or proceeds of such
accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to any
lockbox or postal boxes into which Obligor's mail is deposited and receive, open
and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment
of and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
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(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with
respect to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such
amount and at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice Of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts
and notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
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or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise liened or
levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay
on demand all reasonable costs and expenses of Bank, including without
limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's
performance of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
Liberty Technical Services, Inc.
555 North Lane, Suite
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
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With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, PA1310
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
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13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISINS UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO
HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER
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<PAGE>
DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECLINED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF OBLIGOR AND BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security Agreement on
the date first above written.
LIBERTY TECHNICAL SERVICES, INC.
By: /s/ Daniel G. Clare
-------------------------------
Daniel G. Clare, Vice President and Secretary
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
-------------------------
Suzanne S. Storm, Senior Vice President
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<PAGE>
NAMES AND ADDRESSES OF OBLIGOR
a) 8550 Dorchester Road, N. Charleston, SC Z9420
b) 555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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<PAGE>
EXHIBIT B
Liberty Technical Services, Inc.
Location of books and records:
8550 Dorchester Road
North Charleston, SC 29420
Location of chief executive offices:
555 North Lane
Conshohocken, PA 19428-2208
Location of inventory and equipment:
8550 Dorchester Road
North Charleston, SC 29420
Division locations:
1980 Atomic Road 4930 Tufts Road
North Augusta, SC 29841 Mobile, Al 36619
5859 Stuart Avenue 8885 Monroe Road
Jacksonville, FL 32254 Houston, TX 77061
5578-C Export Blvd. 5430 Greenwood Road
Garden City (Savannah), GA 31408 Shreveport, LA 71109
1421 Highway 93
Fall Branch, TN 37656
2410 Charles City Road
Richmond, VA 23231
HC 2, BOX 1080
Florence, WI 54121
3994 North Point Road
Baltimore, MD 21222
<PAGE>
REAFFIRMATION AND AMENDMENT OF
SECURITY AGREEMENT
This REAFFIRMATION AND AMENDMENT OF SECURITY AGREEMENT dated
April 1, 1997 (this "Reaffirmation") to the Security Agreement dated February
27, 1997 and attached hereto as Exhibit "A" (the "Security Agreement") is
between BETA MONITORS INTERNATIONAL, INC. ("Obligor") and FIRST UNION NATIONAL
BANK (the "Bank").
BACKGROUND
A. Obligor, Liberty Technologies, Inc., LTH Delaware, Inc., Liberty
Technical Services, Inc., Liberty International Inc. and Liberty Imaging
Systems, Inc. (collectively, the "Borrowers") and the Bank are parties to a Loan
Agreement dated as of December 2, 1993, as amended by an Amendment and
Modification to Loan Agreement dated December 30, 1995, a Second Amendment and
Modification to Loan Agreement dated October 11, 1996, a Third Amendment and
Modification to Loan Agreement dated February 27, 1997, and a Fourth Amendment
and Modification to Loan Agreement dated the date hereof (as amended, modified
and/or extended, the "Loan Agreement").
B. Capitalized terms used, but not defined herein shall have the meaning
given such terms in the Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. Amendment. The definition of "Collateral" set forth in Section 1.5 of
the Security Agreement is hereby amended and restated to read in its entirety as
follows:
1.5 "Collateral" shall mean all tangible and intangible personal
property of the Obligor, including but not limited to:
(a) all accounts, accounts receivable, rights under contracts,
chattel paper, instruments, and all obligations due the Obligor
for goods sold or to be sold, consigned or leased or to be
leased, or services rendered or to be rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process,
finished goods, parts or supplies or otherwise; all goods,
merchandise and other property held for sale or lease or to be
furnished under any contract of service; all documents of title
covering any goods which are or are to become inventory and any
such goods which are leased or consigned to others and all
returned, reclaimed or repossessed goods sold, consigned, leased
or otherwise furnished by the Obligor to others ("Inventory");
<PAGE>
(c) all leases and rental agreements for personal property
between the Obligor as lessor (whether by origination or
derivation) and any and all persons or parties as lessee(s), and
all rentals, purchase option amounts, and other sums due
thereunder; and all inventory, equipment, goods and property
subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the
Obligor's residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor
vehicles, and all accessories, parts and equipment now or
hereafter attached thereto or used in connection therewith,
whether or not the same shall be deemed affixed to real property,
and all other tangible personal property ("Equipment");
(e) all general intangibles, which term shall have the meaning
given to it in the Uniform Commercial Code and shall additionally
include but not be limited to all tax refunds, patents,
trademarks, service marks, tradenames, copyrights and other
intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral
attached to this Security Agreement and any other such schedule
hereafter made a schedule to this Agreement;
(g) all additions, replacements, attachments, accretions,
accessions, components and substitutions to or for any Inventory
or Equipment;
(h) all property of the Obligor, including without limitation,
monies, securities, instruments, chattel paper and documents,
which at any time the Bank shall have or have the right to have
in its possession, or which is in transit to it (pursuant to the
terms of a letter of credit or otherwise) and, independent of and
in addition to the Bank's rights of setoff (which the Obligor
acknowledges), the balance of any account or any amount which may
be owing from time to time by the Bank to the Obligor;
(i) all books and records evidencing or relating to the
foregoing, including, without limitation, billing records of
every kind and description, customer lists, data storage and
processing media, software and related material, including
computer programs, computer tapes, cards, disks and printouts,
and including any of the foregoing which are in the possession of
any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but
not be limited to, whatever is received upon the use, lease,
sale, exchange,
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<PAGE>
collection or other utilization or any disposition of any of the
collateral described in subparagraphs (a) through (i) above,
whether cash or noncash, and including without limitation, rental
or lease payments, accounts, chattel paper, instruments,
documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the
foregoing ("Proceeds").
2. Security Interest. The Obligor grants to the Bank a security interest
in and lien on the Collateral as security for the following obligations of the
Borrowers to the Bank ("Obligations") :
(a) To pay the principal, interest, commitment fees and any other
liabilities of the Borrowers to the Bank under the Loan Agreement and the other
Loan Documents in accordance with the terms thereof;
(b) To satisfy all of the other liabilities of the Borrowers to the
Bank, whether hereunder or otherwise, whether now existing or hereafter
incurred, whether or not evidenced by any note or other instrument, matured or
unmatured, direct, absolute or contingent, joint or several, including any
extensions, modifications, renewals thereof and substitutions therefor;
(c) To repay the Bank all amounts advanced by the Bank under the Loan
Agreement or otherwise on behalf of the Borrowers, including, but without
limitation, advances for principal or interest payments to prior secured
parties, mortgagors or lienors, or for taxes, levies, insurance, rent, wages,
repairs to or maintenance or storage of any Collateral; and
(d) To reimburse the Bank, on demand, for all of the Bank's expenses
and costs, including the reasonable fees and expenses of counsel, in connection
with the negotiation, preparation, administration, amendment, modification, or
enforcement of the Loan Agreement and the other Loan Documents.
3. Continuation of Security Interest. The Obligor hereby affirms and
reaffirms the security interests granted to the Bank in Section 2 of the
Security Agreement and acknowledges that such security interests secure the
Obligations of the Borrowers under the Loan Agreement, as it may be amended from
time to time, and under all notes executed pursuant thereto, in addition to any
and all other obligations of the Borrowers to the Bank which are secured
thereby.
4. Continuation of Security Agreement. Except as expressly amended
hereby, all of the terms and provisions of the Security Agreement shall remain
in full force and effect and are hereby ratified and confirmed. The Obligor
hereby confirms that all representations and warranties set forth in the
Security Agreement are true and correct as of the date hereof, and there are no
defaults thereunder.
5. Locations. The locations of the offices where the Obligor maintains (i)
its books and records concerning the Collateral, (ii) its chief executive
offices, and (iii) any Inventory or Equipment are as set forth in Exhibit B
hereof.
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<PAGE>
6. Additional Documents. The Obligor hereby agrees to do such further
acts and to execute and/or deliver to and for the benefit of the Bank any and
all additional documents that may be required to perfect the Bank's interests
hereunder.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Obligor
has executed this Reaffirmation as of the date first written above.
BETA MONITORS INTERNATIONAL, INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
Attest:
------------------------------------------
Name/Title:
-------------------------------------
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
--------------------------------
Suzanne S. Storm, Senior Vice President
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<PAGE>
EXHIBIT A
Security Agreement
-5-
<PAGE>
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by BETA MONITORS INTERNATIONAL, INC., a Nevada corporation (the
"Obligor"), in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 8885 Monroe Road, Houston, TX 77061.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited to
goods held for sale or lease or furnished or to be furnished under contracts for
service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
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<PAGE>
consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
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<PAGE>
devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank any liens expressly permitted under
Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except as
disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and; and (e) the completion of the manufacture and sale or
other disposition of such inventory by Bank following an Event of Default shall
not require the consent of any person and shall not constitute a breach or
default under any contract or agreement to which the Obligor is a party or to
which the inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
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<PAGE>
books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition; (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer or employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; 0-) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, approval basis; (k) to
Borrower's knowledge, except as disclosed to Bank in writing, the amount shown
on the applicable certificates, statements, on Obligor's books and records and
all invoices and statements which may be delivered to Bank with respect to such
accounts are actually and absolutely owing to Obligor and are not in any way
contingent; and (l) the accounts have not been sold, assigned or transferred to
any other Person and no Person except Obligor has any claim thereto or (with the
exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank
Indebtedness have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts as
-4-
<PAGE>
may be required by Bank in its reasonable discretion. In the case of insurance
on any of the Collateral Obligor shall carry insurance in the full insurable
value thereof and cause Bank to be named as loss payee (with a lender's loss
payable endorsement) with respect to all personal Property, and additional
insured with respect to all liability insurance, as its interests may appear
with thirty (30) days' notice to be given Bank by the insurance carrier prior to
cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional instruments. documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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<PAGE>
expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other documents and notices as Bank may deem advisable in
its reasonable discretion to protect the Collateral and its interests therein
and its rights hereunder. Such power being coupled with an interest is
irrevocable. Obligor irrevocably authorizes the filing of a carbon, photographic
or other copy of this Agreement, or of a financing statement, as a financing
statement and agrees that such filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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hereto is discovered to be untrue in any material respect as of the date as of
which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
-7-
<PAGE>
Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter relating
to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all account
debtors that Obligor's accounts have been assigned to Bank and that Bank has a
security interest therein;
(c) Upon the occurrence of an Event of Default, direct all account
debtors to make payment of all Obligor's accounts directly to Bank and forward
invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or non-cash items of payment or proceeds of such
accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to any
lockbox or postal boxes into which Obligor's mail is deposited and receive, open
and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment of
and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
-8-
<PAGE>
(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with respect
to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such amount
and at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession:
(9) Sign the name of Obligor to verifications of accounts and
notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law, Bank
has and may exercise a right of set-off, a lien against and a security interest
in all property of Obligor now or at any time in Bank's possession in any
capacity whatsoever, including but not limited to any balance of any deposit,
trust or agency account, or any other bank account with Bank, but expressly
including any separate segregated account containing contributions to an
employee retirement plan
-9-
<PAGE>
or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise liened or
levied upon by any third party, Bank need not await the ru~ning of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES. COSTS. EXPENSES AND EXPENDITURES. Obligor agrees to pay
on demand all reasonable costs and expenses of Bank, including without
limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
-10-
<PAGE>
9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's
performance of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
Beta Monitors International, Inc.
555 North Lane, Suite
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
-11-
<PAGE>
With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street,
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
-12-
<PAGE>
13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings.
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
-13-
<PAGE>
15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, ail of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAMD, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO
HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER
-14-
<PAGE>
DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
OBLIGOR AND BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security Agreement on
the date first above written.
BETA MONITORS INTERNATIONAL, INC.
By: /s/ Daniel G. Clare
-----------------------------------
Daniel G. Clare, Vice President and Secretary
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne S. Storm
-----------------------------------
Suzanne S. Storm, Senior Vice President
-15-
<PAGE>
NAMES AND ADDRESSES 0F OBLIGOR
a) 8885 Monroe Road, Houston, TX 77061
b) 555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
-16-
<PAGE>
EXHIBIT B
---------
Beta Monitors International, Inc.
Location of books and records:
555 North Lane
Conshohocken, PA 19428-2208
Location of chief executive offices:
555 North Lane
Conshohocken, PA 19428-2208
Location of inventory and equipment:
555 North Lane
Conshohocken, PA 19428-2208
8885 Monroe Road
Houston, TX 77061
<PAGE>
REAFFIRMATION AND AMENDMENT OF
SECURITY AGREEMENT
This REAFFIRMATION AND AMENDMENT OF SECURITY AGREEMENT dated April 1, 1997
(this "Reaffirmation") to the Security Agreement dated February 27, 1997 and
attached hereto as Exhibit "A" (the "Security Agreement") is between LIBERTY
INTERNATIONAL INC. ("Obligor") and FIRST UNION NATIONAL BANK (the "Bank").
BACKGROUND
A. Obligor, Liberty Technologies, Inc., LTH Delaware, Inc., Liberty
Technical Services, Inc., Beta Monitors International, Inc. and Liberty Imaging
Systems, Inc. (collectively, the "Borrowers") and the Bank are parties to a Loan
Agreement dated as of December 2, 1993, as amended by an Amendment and
Modification to Loan Agreement dated December 30, 1995, a Second Amendment and
Modification to Loan Agreement dated October 11, 1996, a Third Amendment and
Modification to Loan Agreement dated February 27, 1997, and a Fourth Amendment
and Modification to Loan Agreement dated the date hereof (as amended, modified
and/or extended, the "Loan Agreement").
B. Capitalized terms used, but not defined herein shall have the meaning
given such terms in the Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. Amendment. The definition of "Collateral" set forth in Section 1.5 of
the Security Agreement is hereby amended and restated to read in its entirety as
follows:
1.5 "Collateral" shall mean all tangible and intangible personal
property of the Obligor, including but not limited to:
(a) all accounts, accounts receivable, rights under contracts,
chattel paper, instruments, and all obligations due the Obligor
for goods sold or to be sold, consigned or leased or to be leased,
or services rendered or to be rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process,
finished goods, parts or supplies or otherwise; all goods,
merchandise and other property held for sale or lease or to be
furnished under any contract of service; all documents of title
covering any goods which are or are to become inventory and any
such goods which are leased or consigned to others and all
returned, reclaimed or repossessed goods sold, consigned, leased
or otherwise furnished by the Obligor to others ("Inventory");
<PAGE>
(c) all leases and rental agreements for personal property between
the Obligor as lessor (whether by origination or derivation) and
any and all persons or parties as lessee(s), and all rentals,
purchase option amounts, and other sums due thereunder; and all
inventory, equipment, goods and property subject to such leases
and rental agreements and all accessions, parts and tools attached
thereto or used therewith and all of the Obligor's residual or
reversionary rights therein; (d) all machinery, equipment,
furniture, fixtures, tools, motor vehicles, and all accessories,
parts and equipment now or hereafter attached thereto or used in
connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning
given to it in the Uniform Commercial Code and shall additionally
include but not be limited to all tax refunds, patents,
trademarks, service marks, tradenames, copyrights and other
intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached
to this Security Agreement and any other such schedule hereafter
made a schedule to this Agreement;
(g) all additions, replacements, attachments, accretions,
accessions, components and substitutions to or for any Inventory
or Equipment;
(h) all property of the Obligor, including without limitation,
monies, securities, instruments, chattel paper and documents,
which at any time the Bank shall have or have the right to have in
its possession, or which is in transit to it (pursuant to the
terms of a letter of credit or otherwise) and, independent of and
in addition to the Bank's rights of setoff (which the Obligor
acknowledges), the balance of any account or any amount which may
be owing from time to time by the Bank to the Obligor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media,
software and related material, including computer programs,
computer tapes, cards, disks and printouts, and including any of
the foregoing which are in the possession of any affiliate or any
computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in
the Uniform Commercial Code and shall additionally include but not
be limited to, whatever is received upon the use, lease, sale,
exchange,
-2-
<PAGE>
collection or other utilization or any disposition of any of the
collateral described in subparagraphs (a) through (i) above,
whether cash or noncash, and including without limitation, rental
or lease payments, accounts, chattel paper, instruments,
documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the
foregoing ("Proceeds").
2. Security Interest. The Obligor grants to the Bank a security interest
in and lien on the Collateral as security for the following obligations of the
Borrowers to the Bank ("Obligations"):
(a) To pay the principal, interest, commitment fees and any other
liabilities of the Borrowers to the Bank under the Loan Agreement and the other
Loan Documents in accordance with the terms thereof;
(b) To satisfy all of the other liabilities of the Borrowers to the
Bank, whether hereunder or otherwise, whether now existing or hereafter
incurred, whether or not evidenced by any note or other instrument, matured or
unmatured, direct, absolute or contingent, joint or several, including any
extensions, modifications, renewals thereof and substitutions therefor;
(c) To repay the Bank all amounts advanced by the Bank under the Loan
Agreement or otherwise on behalf of the Borrowers, including, but without
limitation, advances for principal or interest payments to prior secured
parties, mortgagors or lienors, or for taxes, levies, insurance, rent, wages,
repairs to or maintenance or storage of any Collateral; and
(d) To reimburse the Bank, on demand, for all of the Bank's expenses
and costs, including the reasonable fees and expenses of counsel, in connection
with the negotiation, preparation, administration, amendment, modification, or
enforcement of the Loan Agreement and the other Loan Documents.
3. Continuation of Security Interest. The Obligor hereby affirms and
reaffirms the security interests granted to the Bank in Section 2 of the
Security Agreement and acknowledges that such security interests secure the
Obligations of the Borrowers under the Loan Agreement, as it may be amended from
time to time, and under all notes executed pursuant thereto, in addition to any
and all other obligations of the Borrowers to the Bank which are secured
thereby.
4. Continuation of Security Agreement. Except as expressly amended
hereby, all of the terms and provisions of the Security Agreement shall remain
in full force and effect and are hereby ratified and confirmed. The Obligor
hereby confirms that all representations and warranties set forth in the
Security Agreement are true and correct as of the date hereof, and there are no
defaults thereunder.
5. Locations. The locations of the offices where the Obligor
maintains (i) its books and records concerning the Collateral, (ii) its chief
executive offices, and (iii) any Inventory or Equipment are as set forth in
Exhibit B hereof.
-3-
6. Additional Documents. The Obligor hereby agrees to do such further
acts and to execute and/or deliver to and for the benefit of the Bank any and
all additional documents that may be required to perfect the Bank's interests
hereunder.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Obligor
has executed this Reaffirmation as of the date first written above.
LIBERTY INTERNATIONAL INC.
By: /s/ Daniel G. Clare
--------------------------
Name/Title: Daniel G. Clare, Vice President and Secretary
-----------------------------------------------------
Attest:
-------------------
Name/Title:
--------------
FIRST UNION NATIONAL BANK
By:/s/ Suzanne S. Storm
----------------------
Name/Title: Suzanne S. Storm/Senior Vice President
-------------------------------------
-4-
<PAGE>
EXHIBIT A
Security Agreement
-5-
<PAGE>
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by LIBERTY INTERNATIONAL INC., a Nevada corporation (the
"Obligor"), in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"Proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor
in the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 555 North Lane, Conshohocken, Pennsylvania 19428.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts
and inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited to
goods held for sale or lease or furnished or to be furnished under contracts for
service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
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consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by
Obligor free and clear of all liens and other encumbrances of any kind
(including liens or other encumbrances upon properties acquired or to be
acquired under conditional sales agreements or other title retention
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devices), excepting only liens in favor of the Bank and those certain liens and
encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
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books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition: (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer of employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, approval basis; (k) to
Borrower's knowledge, except as disclosed to Bank in writing the amounts shown
on the applicable certificates, statements, on Obligor's books and records and
all invoices and statements which may be delivered to Bank with respect so such
accounts are actually and absolutely owing to Obligor and are not in any way
contingent; and (1) the accounts have not been sold, assigned or transferred to
any other Persona and no Person except Obligor has any claim thereto or (with
exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank
Indebtedness have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the Collateral,
except for sales of inventory in the ordinary course for fair consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts as
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may be required by Bank in its reasonable discretion. In the case of insurance
on any of the Collateral Obligor shall carry insurance in the full insurable
value thereof and cause Bank to be named as loss payee (with a lender's loss
payable endorsement) with respect to all personal property, and additional
insured with respect to all liability insurance, as its interests may appear
with thirty (30) days' notice to be given Bank by the insurance carrier prior to
cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take
such actions and provide Bank from time to time with such agreements, financing
statements and additional investments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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expense financing statements, and amendments thereto, in those public offices
deemed necessary or appropriate by Bank to establish, maintain and protect a
continuously perfected security interest in the Collateral, and to execute on
Obligor's behalf such other documents and notices as Bank may deem advisable in
its reasonable discretion to protect the Collateral and its interests therein
and its rights hereunder. Such power being coupled with an interest is
irrevocable. Obligor irrevocably authorizes the filing of a carbon, photographic
or other copy of this Agreement, or of a financing statement, as a financing
statement and agrees that such filing is sufficient as a financing statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or instrumentality
of the United States or any State, Commonwealth or municipality and execute any
instruments and take any steps required by Bank in order that all moneys due and
to become due under any such contracts shall be assigned to Bank and notice
thereof given to the United States under the Federal Assignment of Claims Act or
any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of
them may designate, to visit and inspect any of the properties of Obligor,
examine (either by Bank's employees or by independent accountants) any of the
Collateral or other assets of Obligor, including the books of account of
Obligor, and discuss the affairs, finances and accounts of Obligor with its
officers and with its independent accountants, at such times as Bank may desire.
Prior to the occurrence of an Event of Default, Bank shall conduct such visits
and inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and affairs of
Obligor and the Collateral as Bank may reasonably request from time to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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hereto is discovered to be untrue in any material respect as of the date as of
which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction
of, any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter relating
to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all account
debtors that Obligor's accounts have been assigned to Bank and that Bank has a
security interest therein;
(c) Upon the occurrence of an Event of Default, direct all account
debtors to make payment of all Obligor's accounts directly to Bank and forward
invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in
any manner of any cash or non-cash items of payment or proceeds of such
accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to any
lockbox or postal boxes into which Obligor's mail is deposited and receive, open
and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment of
and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
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(1) Demand payment of any accounts or direct any account
debtors to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with respect
to the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such amount
and at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts and
notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
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or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise
liened or levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXENDITURES. Obligor agrees to pay
on demand all reasonable costs and expenses of Bank, including without
limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan Documents, and
all liabilities to which Bank may become subject as the result of delay in
paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's
performance of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
Liberty Technologies, Inc.
555 North Lane, Suite
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
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With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, PA1310
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
35O Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMITATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
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<PAGE>
13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or enforce a
judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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<PAGE>
15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO
HEREIN OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER
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<PAGE>
DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
OBLIGOR AND BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security Agreement on
the date first above written.
LIBERTY INTERNATIONAL INC.
By: /s/ Daniel G. Clare
---------------------------------------------
Daniel G. Clare, Vice President and Secretary
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne Storm
-------------------------------------------
Suzanne S. Storm, Senior Vice President
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<PAGE>
NAMES AND ADDRESSES OF OBLIGOR
------------------------------
555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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<PAGE>
EXHIBIT B
Liberty Imaging Systems, Inc.
--------------------------
Location of books and records:
555 North Lane
Conshohocken, PA 19428-2208
Location of chief executive offices:
555 North Lane
Conshohocken, PA 19428-2208
Location of inventory and equipment:
555 North Lane
Conshohocken, PA 19428-2208
<PAGE>
REAFFIRMATION AND AMENDMENT OF
SECURITY AGREEMENT
This REAFFIRMATION AND AMENDMENT OF SECURITY AGREEMENT dated April 1, 1997
(this "Reaffirmation") to the Security Agreement dated February 27, 1997 and
attached hereto as Exhibit "A" (the "Security Agreement") is between LIBERTY
IMAGING SYSTEMS, INC. ("Obligor") and FIRST UNION NATIONAL BANK (the "Bank").
BACKGROUND
A. Obligor, Liberty Technologies, Inc., LTH Delaware, Inc., Liberty
Technical Services, Inc., Beta Monitors International, Inc. and Liberty
International Inc. (collectively, the "Borrowers") and the Bank are parties to a
Loan Agreement dated as of December 2, 1993, as amended by an Amendment and
Modification to Loan Agreement dated December 30, 1995, a Second Amendment and
Modification to Loan Agreement dated October 11, 1996, a Third Amendment and
Modification to Loan Agreement dated February 27, 1997, and a Fourth Amendment
and Modification to Loan Agreement dated the date hereof (as amended, modified
and/or extended, the "Loan Agreement").
B. Capitalized terms used, but not defined herein shall have the meaning
given such terms in the Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
1. Amendment. The definition of "Collateral" set forth in Section 1.5 of
the Security Agreement is hereby amended and restated to read in its entirety as
follows:
1.5 "Collateral" shall mean all tangible and intangible personal
property of the Obligor, including but not limited to:
(a) all accounts, accounts receivable, rights under contracts,
chattel paper, instruments, and all obligations due the Obligor
for goods sold or to be sold, consigned or leased or to be
leased, or services rendered or to be rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process,
finished goods, parts or supplies or otherwise; all goods,
merchandise and other property held for sale or lease or to be
furnished under any contract of service; all documents of title
covering any goods which are or are to become inventory and any
such goods which are leased or consigned to others and all
returned, reclaimed or repossessed goods sold, consigned, leased
or otherwise furnished by the Obligor to others ("Inventory");
<PAGE>
(c) all leases and rental agreements for personal property
between the Obligor as lessor (whether by origination or
derivation) and any and all persons or parties as lessee(s), and
all rentals, purchase option amounts, and other sums due
thereunder; and all inventory, equipment, goods and property
subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of
the Obligor's residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor
vehicles, and all accessories, parts and equipment now or
hereafter attached thereto or used in connection therewith,
whether or not the same shall be deemed affixed to real
property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning
given to it in the Uniform Commercial Code and shall
additionally include but not be limited to all tax refunds,
patents, trademarks, service marks, tradenames, copyrights and
other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral
attached to this Security Agreement and any other such schedule
hereafter made a schedule to this Agreement;
(g) all additions, replacements, attachments, accretions,
accessions, components and substitutions to or for any Inventory
or Equipment;
(h) all property of the Obligor, including without limitation,
monies, securities, instruments, chattel paper and documents,
which at any time the Bank shall have or have the right to have
in its possession, or which is in transit to it (pursuant to the
terms of a letter of credit or otherwise) and, independent of
and in addition to the Bank's rights of setoff (which the
Obligor acknowledges), the balance of any account or any amount
which may be owing from time to time by the Bank to the Obligor;
(i) all books and records evidencing or relating to the
foregoing, including, without limitation, billing records of
every kind and description, customer lists, data storage and
processing media, software and related material, including
computer programs, computer tapes, cards, disks and printouts,
and including any of the foregoing which are in the possession
of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include
but not be limited to, whatever is received upon the use, lease,
sale, exchange,
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<PAGE>
collection or other utilization or any disposition of any of the
collateral described in subparagraphs (a) through (i) above,
whether cash or noncash, and including without limitation,
rental or lease payments, accounts, chattel paper, instruments,
documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the
foregoing ("Proceeds").
2. Security Interest. The Obligor grants to the Bank a security interest
in and lien on the Collateral as security for the following obligations of the
Borrowers to the Bank ("Obligations"):
(a) To pay the principal, interest, commitment fees and any other
liabilities of the Borrowers to the Bank under the Loan Agreement and the other
Loan Documents in accordance with the terms thereof;
(b) To satisfy all of the other liabilities of the Borrowers to the
Bank, whether hereunder or otherwise, whether now existing or hereafter
incurred, whether or not evidenced by any note or other instrument, matured or
unmatured, direct, absolute or contingent, joint or several, including any
extensions, modifications, renewals thereof and substitutions therefor;
(c) To repay the Bank all amounts advanced by the Bank under the Loan
Agreement or otherwise on behalf of the Borrowers, including, but without
limitation, advances for principal or interest payments to prior secured
parties, mortgagors or lienors, or for taxes, levies, insurance, rent, wages,
repairs to or maintenance or storage of any Collateral; and
(d) To reimburse the Bank, on demand, for all of the Bank's expenses
and costs, including the reasonable fees and expenses of counsel, in connection
with the negotiation, preparation, administration, amendment, modification, or
enforcement of the Loan Agreement and the other Loan Documents.
3. Continuation of Security Interest. The Obligor hereby affirms and
reaffirms the security interests granted to the Bank in Section 2 of the
Security Agreement and acknowledges that such security interests secure the
Obligations of the Borrowers under the Loan Agreement, as it may be amended from
time to time, and under all notes executed pursuant thereto, in addition to any
and all other obligations of the Borrowers to the Bank which are secured
thereby.
4. Continuation of Security Agreement. Except as expressly amended
hereby, all of the terms and provisions of the Security Agreement shall remain
in full force and effect and are hereby ratified and confirmed. The Obligor
hereby confirms that all representations and warranties set forth in the
Security Agreement are true and correct as of the date hereof, and there are no
defaults thereunder.
5. Locations. The locations of the offices where the Obligor maintains
(i) its books and records concerning the Collateral, (ii) its chief executive
offices, and (iii) any Inventory or Equipment are as set forth in Exhibit B
hereof.
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<PAGE>
6. Additional Documents. The Obligor hereby agrees to do such further
acts and to execute and/or deliver to and for the benefit of the Bank any and
all additional documents that may be required to perfect the Bank's interests
hereunder.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Obligor
has executed this Reaffirmation as of the date first written above.
LIBERTY IMAGING SYSTEMS, INC.
By: /s/ Daniel G. Clare
-------------------------------
Name/Title: Daniel G. Clare, Vice President and Secretary
---------------------------------------------
Attest:
---------------------------
Name/Title:
-----------------------
FIRST UNION NATIONAL BANK
By: /s/ Suzanne Storm
-------------------------------
Name/Title: Suzanne S. Storm, Senior Vice President
---------------------------------------
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<PAGE>
EXHIBIT A
Security Agreement
- 5 -
<PAGE>
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is executed this 27th day of
February, 1997, by LIBERTY IMAGING SYSTEMS, INC., a Pennsylvania corporation
(the "Obligor"), in favor of FIRST UNION NATIONAL BANK (the "Bank"). Obligor,
intending to be legally bound, hereby agrees as follows:
1. DEFINITIONS. For purposes of this Agreement,
1.1 "account", "account debtor", "chattel paper", "documents",
"equipment", "general intangibles", "goods", "instrument", "inventory" and
"proceeds" shall have the meanings given such terms in the Code.
1.2 "Bank Indebtedness" shall have such meaning as provided therefor in
the Loan Agreement.
1.3 "Chief Executive Office" shall mean the place from which the main
part of the business operations of Obligor are managed. Obligor's current Chief
Executive Office is 555 North Lane, Conshohocken, Pennsylvania 19428.
1.4 "Code" shall mean the Uniform Commercial Code as adopted by the
Commonwealth of Pennsylvania, as the same may be amended from time to time.
1.5 "Collateral" shall mean all existing and after-acquired accounts and
inventory of Obligor and all proceeds thereof, including without limitation:
(a) All present and future accounts and all other rights to the
payment of money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by Obligor or otherwise, together with (i) all
goods (including any returned, rejected, repossessed or consigned goods), the
sale, consignment, lease or other furnishings of which shall have given or may
give rise to any of the foregoing, (ii) all of Obligor's rights as a consignor,
consignee, unpaid vendor or other lienor in connection therewith, including
stoppage in transit, set-off, detinue, replevin and reclamation, (iii) all
general intangibles, contract rights, instruments and documents related to any
accounts, (iv) all guaranties, mortgages, security interests, assignments, and
other encumbrances on real or personal property, leases and other agreements or
property securing or relating to any accounts, (v) choses-in-action, claims and
judgments related to any accounts, and (vi) all products and proceeds of any of
the foregoing.
(b) All present and future inventory (including but not limited to
goods held for sale or lease or furnished or to be furnished under contracts for
service, raw materials, work-in-process, finished goods and goods used or
consumed in Obligor's business) whether owned, consigned or held on consignment,
together with all merchandise, component materials, supplies, packing, packaging
and shipping materials, and all returned, rejected or repossessed goods sold,
-1-
<PAGE>
consigned, leased or otherwise furnished by Obligor and all products and
proceeds of any of the foregoing.
(c) All present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership, bills
of sale, business papers, correspondence, credit files, tapes, cards, computer
runs and all other data and data storage systems whether in the possession of
Obligor or any service bureau relating to, generated in connection with, or
evidencing any of the items referenced in (a) or (b) above.
1.6 "Event of Default" shall include any and all events described in
Section 7 below.
1.7 "Loan Agreement" shall mean that certain Loan Agreement dated
December 2, 1993 among, inter alios, Bank and Obligor, as amended, including,
without limitation, by Third Amendment and Modification to Loan Agreement of
even date and as the same may hereafter be amended from time to time.
1.8 "Loan Documents" shall mean all agreements, documents and
instruments evidencing the Bank Indebtedness and all agreements, documents and
instruments collateral thereto, together with all amendments, replacements,
increases, renewals and modifications thereof or thereto, including without
limitation this Agreement and the Loan Agreement.
2. SECURITY INTEREST. Obligor grants to Bank a security interest in and
lien on the Collateral.
3. EFFECT OF GRANT. The security interests in and liens on the Collateral
granted to Bank by Obligor hereunder shall not be rendered void by the fact that
no Bank Indebtedness exists as of a particular date, but shall continue in full
force and effect until all Bank Indebtedness has been paid in full, Bank has no
agreement or commitment outstanding pursuant to which Bank may extend credit to
or on behalf of Obligor and Bank has executed and delivered termination
statements and/or releases of Bank with respect to the Collateral.
4. OBLIGATIONS SECURED. The Collateral and the continuing security
interests granted therein shall secure the Bank Indebtedness. IT IS THE EXPRESS
INTENTION OF OBLIGOR THAT THE COLLATERAL SHALL SECURE ALL EXISTING AND FUTURE
BANK INDEBTEDNESS.
5. REPRESENTATIONS. Obligor hereby represents and warrants as follows,
which representations and warranties shall be true and correct as of the date
hereof and, unless disclosed to and approved by Bank, at the time of the
creation of any Bank Indebtedness and until all Bank Indebtedness has been paid
in full:
5.1 Title to Collateral. The Collateral is and will be owned by Obligor
free and clear of all liens and other encumbrances of any kind (including liens
or other encumbrances upon properties acquired or to be acquired under
conditional sales agreements or other title retention
-2-
<PAGE>
devices), excepting only liens in favor of the Bank and those certain liens
and encumbrances expressly permitted under Section 5.9 of the Loan Agreement.
Obligor will defend the Collateral against any claims of all persons or entities
other than the Bank or a permitted lienholder.
5.2 Governmental Consents. Except as described in Section 4.10 of the
Loan Agreement, no consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of Obligor is
required in connection with the execution, delivery or performance by Obligor of
this Agreement or the consummation of the transactions contemplated hereby.
5.3 Addresses. The portions of the Collateral which are tangible
(corporeal) property and Obligor's books and records pertaining thereto will at
all times be located at the addresses set forth on Schedule 5.3 attached hereto;
or such other location determined by Obligor after prior notice to Bank and
delivery to Bank of any items requested by Bank in its reasonable discretion to
maintain perfection and priority of Bank's security interests and liens and
access to Obligor's books and records.
5.4 Inventory Warranties. With respect to inventory from time to time
scheduled, listed or referred to in any certificate, statement or report
prepared by or for Obligor and delivered to Bank, Obligor warrants and
represents that (a) such inventory is located at the address or addresses listed
on Schedule 5.3 attached hereto and is not in transit; (b) Obligor has good,
indefeasible and merchantable title to such inventory and such inventory is not
subject to any lien or security interest whatsoever except for the prior,
perfected security interest granted to Bank and any liens expressly permitted
under Section 5.9 of the Loan Agreement; (c) to Obligor's knowledge and except
as disclosed to Bank in writing, such inventory is of good and merchantable
quality, free from any defects; (d) such inventory is not subject to any
licensing, patent, royalty, trademark, trade name or copyright agreements with
any third parties; and (e) the completion of the manufacture and sale or other
disposition of such inventory by Bank following an Event of Default shall not
require the consent of any person and shall not constitute a breach or default
under any contract or agreement to which the Obligor is a party or to which the
inventory is subject.
5.5 Accounts Receivable Warranties. With respect to all accounts
receivable from time to time scheduled, listed or referred to in any
certificate, statement or report prepared by or for Obligor and delivered to
Bank, Obligor warrants and represents that (a) the accounts are genuine, are in
all material respects what they purport to be, and are not, except as disclosed
and assigned to Bank in writing, evidenced by any chattel paper, note,
instrument or judgment; (b) Obligor has good and marketable title to such
accounts, except for liens expressly permitted under the Loan Agreement and,
except as disclosed to Bank in writing, the accounts represent undisputed, bona
fide transactions completed in accordance with the terms thereof and as
represented to Bank; (c) to Borrower's knowledge, except as disclosed to Bank in
writing, there are no setoffs, counterclaims or disputes existing or asserted
with respect thereto and Obligor has not made any agreement with any account
debtor for any deduction therefrom; (d) to Borrower's knowledge, except as
disclosed to Bank in writing, there are no facts, events or occurrences which
impair the validity or enforcement thereof or may reduce the amount payable
thereunder as shown on any certificates, statements or reports prepared by or
for Obligor and delivered to Bank, or on Obligor's
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<PAGE>
books and records and all invoices and statements delivered to Bank with respect
thereto; (e) to the best of Obligor's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the goods sold giving rise thereto are
not subject to any lien, claim, encumbrance or security interest except that of
Bank and except for liens expressly permitted under the Loan Agreement; (g) to
the best of Obligor's knowledge, there are no proceedings or actions which are
threatened or pending against any account debtor which might result in any
material adverse change in such account debtor's financial condition; (h) the
account is not an account with respect to which the account debtor is an
affiliate of Obligor or a director, officer of employee of Obligor or its
affiliates; (i) the account does not arise with respect to goods which have not
been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
bill-and-hold, guaranteed sale, sale-and-return, or sale on approval basis; (k)
to Borrower's knowledge, except as disclosed to Bank in writing, the amounts
shown on the applicable certificates, statements, on Obligor's books and records
and all invoices and statements which may be delivered to Bank with respect to
such accounts are actually and absolutely owing to Obligor and are not in any
way contingent; and (1) the accounts have not been sold, assigned or transferred
to any other Person and no Person except Obligor has any claim thereto or (with
the exception of the applicable account debtor) any claims to the goods sold.
5.6 Accuracy of Representations and Warranties. No representation or
warranty by Obligor contained herein or in any certificate or other document
furnished by Obligor pursuant hereto or in connection herewith fails to contain
any statement of material fact necessary to make such representation or warranty
not misleading in light of the circumstances under which it was made. There is
no fact which Obligor knows or should know and has not disclosed to Bank, which
does or may materially and adversely affect Obligor, or any of its operations.
6. COVENANTS. Obligor covenants and agrees that until the Bank Indebtedness
have been paid in full, Obligor shall:
6.1 Disposition of Assets. Not sell, lease, transfer or otherwise
dispose of all, substantially all, or any material portion of the
Collateral, except for sales of inventory in the ordinary course for fair
consideration.
6.2 Liens. Not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge of any kind (including liens or
charges upon properties acquired or to be acquired under conditional sales
agreements or other title retention devices) on any of the Collateral, whether
now owned or hereafter acquired, or upon any income or profits therefrom, except
as permitted hereunder or under the Loan Documents.
6.3 Insurance. Carry adequate insurance issued by responsible and
financially sound insurers acceptable to Bank, in amounts acceptable to Bank (at
least adequate to comply with any co-insurance provisions) and against all such
liability and hazards as are usually carried by entities engaged in the same or
a similar business similarly situated or as may be required by Bank in its
reasonable discretion. Obligor will carry business interruption insurance in
such amounts as
-4-
<PAGE>
may be required by Bank in its reasonable discretion. In the case of insurance
on any of the Collateral Obligor shall carry insurance in the full insurable
value thereof and cause Bank to be named as loss payee (with a lender's loss
payable endorsement) with respect to all personal property, and additional
insured with respect to all liability insurance, as its interests may appear
with thirty (30) days' notice to be given Bank by the insurance carrier prior to
cancellation or material modification of such insurance coverage.
Obligor shall cause to be delivered to Bank the insurance policies therefor
or in the alternative, evidence of insurance and at least thirty (30) business
days prior to the expiration of any such insurance, additional policies or
duplicates thereof or in the alternative, evidence of insurance evidencing the
renewal of such insurance and payment of the premiums therefor. Obligor shall
direct all insurers that in the event of any loss thereunder or the cancellation
of any insurance policy, the insurers shall make payments for such loss and pay
all returned or unearned premiums directly to Bank and not to Obligor and Bank
jointly.
In the event of any loss, Obligor will give Bank immediate notice thereof
and Bank may make proof of loss whether the same is done by Obligor. Bank is
granted a power of attorney by Obligor with full power of substitution to file
any proof of loss in Obligor's or Bank's name, to endorse Obligor's name on any
check, draft or other instrument evidencing insurance proceeds, and to take any
action or sign any document to pursue any insurance loss claim. Such power being
coupled with an interest is irrevocable.
In the event of any loss, Bank, at its option, may (i) retain and apply all
or any part of the insurance proceeds to reduce, in such order and amounts as
Bank may elect the Bank Indebtedness, or (ii) disburse all or any part of such
insurance proceeds to or for the benefit of Obligor for the purpose of repairing
or replacing Collateral after receiving proof satisfactory to Bank of such
repair or replacement, in either case without waiving or impairing the Bank
Indebtedness or any provision of this Agreement. Any deficiency thereon shall be
paid by Obligor to Bank upon demand. Obligor shall not take out any insurance
without having Bank named as loss payee or additional insured thereon. Obligor
shall bear the full risk of loss from any loss of any nature whatsoever with
respect to the Collateral. Notwithstanding the foregoing, if no Event of Default
has occurred and no event or circumstance exists which, upon the passage of
time, delivery of notice or both would constitute any such Event of Default,
Bank shall make insurance proceeds on the Collateral actually received by Bank
available to Obligor if, as a result of Obligor's use of such proceeds, Bank
receives replacement Collateral of the same type and value as those giving rise
to the insurance proceeds or as Bank shall otherwise approve.
6.4 Additional Documents and Future Actions. At its sole cost, take such
actions and provide Bank from time to time with such agreements, financing
statements and additional instruments, documents or information as the Bank may
in its reasonable discretion deem necessary or advisable to perfect, protect and
maintain the security interests in the Collateral, to permit Bank to protect its
interest in the Collateral, or to carry out the terms of the Loan Documents.
Obligor hereby authorizes and appoints Bank as its attorney-in-fact, with full
power of substitution, to take such actions as Bank may deem advisable in its
reasonable discretion to protect the Collateral and its interests thereon and
its rights hereunder, to execute on Obligor's behalf and file at Obligor's
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expense financing statements, and amendments thereto, in those public
offices deemed necessary or appropriate by Bank to establish, maintain and
protect a continuously perfected security interest in the Collateral, and to
execute on Obligor's behalf such other documents and notices as Bank may deem
advisable in its reasonable discretion to protect the Collateral and its
interests therein and its rights hereunder. Such power being coupled with an
interest is irrevocable. Obligor irrevocably authorizes the filing of a carbon,
photographic or other copy of this Agreement, or of a financing statement, as a
financing statement and agrees that such filing is sufficient as a financing
statement.
6.5 Government Contracts. Promptly notify Bank if any of Obligor's
accounts arise out of contracts with any department, agency or
instrumentality of the United States or any State, Commonwealth or municipality
and execute any instruments and take any steps required by Bank in order that
all moneys due and to become due under any such contracts shall be assigned to
Bank and notice thereof given to the United States under the Federal Assignment
of Claims Act or any other applicable law, statute or regulation.
6.6 Name or Address Change. Not change its name or address except upon
thirty (30) days prior written notice to Bank and delivery to Bank of any items
requested by Bank to maintain perfection and priority of Bank's security
interests and access to Obligor's books and records.
6.7 Inspections. Permit officers of Bank, or such persons as any of them
may designate, to visit and inspect any of the properties of Obligor, examine
(either by Bank's employees or by independent accountants) any of the Collateral
or other assets of Obligor, including the books of account of Obligor, and
discuss the affairs, finances and accounts of Obligor with its officers and with
its independent accountants, at such times as Bank may desire. Prior to the
occurrence of an Event of Default, Bank shall conduct such visits and
inspections during normal business hours and after prior notice to Obligor.
6.8 Requested Information. With reasonable promptness, deliver to Bank
all financial information in respect of the condition, operation and
affairs of Obligor and the Collateral as Bank may reasonably request from time
to time.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default hereunder:
7.1 The occurrence of any Event of Default under the Loan Agreement or
any of the other Loan Documents;
7.2 The failure of Obligor to duly perform or observe any obligation,
covenant or agreement on its part contained herein which is not cured within any
applicable grace or cure period under the Loan Agreement;
7.3 Any representation or warranty of Obligor contained herein is
discovered to be untrue in any material respect or any statement, certificate or
data furnished by Obligor pursuant
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<PAGE>
hereto is discovered to be untrue in any material respect as of the date as
of which the facts therein set forth are stated or certified; and/or
7.4 Any material uninsured damage to, or loss, theft, or destruction of,
any of the Collateral occurs.
8. REMEDIES OF BANK.
8.1 Remedies. At the option of the Bank, upon the occurrence of an
Event of Default, or at any time thereafter:
(a) The entire unpaid principal of the Bank Indebtedness, or any
part thereof, all interest accrued thereon, all fees due hereunder and all other
obligations of Obligor to Bank hereunder or under any other agreement, note or
otherwise arising will become immediately due and payable without any further
demand or notice;
(b) Bank may enter the premises occupied by Obligor and take
possession of the Collateral and any records relating thereto; and/or
(c) Bank may exercise each and every right and remedy granted to
it under the Loan Documents, under the Code and under any other applicable law
or at equity.
8.2 Sale or Other Disposition of Collateral. The sale, lease or other
disposition of the Collateral, or any part thereof, by Bank after an Event of
Default may be for cash, credit or any combination thereof, and Bank may
purchase all or any part of the Collateral at public or, if permitted by law,
private sale, and in lieu of actual payment of such purchase price, may set-off
the amount of such purchase price against the Bank Indebtedness then owing. Any
sales of the Collateral may be adjourned from time to time with or without
notice. The Bank may cause the Collateral to remain on Obligor's premises or
otherwise or to be removed and stored at premises owned by other persons, at
Obligor's expense, pending sale or other disposition of the Collateral. Obligor,
at Bank's request, shall assemble the Collateral consisting of inventory and
tangible assets and make such assets available to Bank at a place to be
designated by Bank. Bank shall have the right to conduct such sales on Obligor's
premises, at Obligor's expense, or elsewhere, on such occasion or occasions as
Bank may see fit. Any notice required to be given by Bank of a sale, lease or
other disposition or other intended action by Bank with respect to any of the
Collateral which is deposited in the United States mail, postage prepaid and
duly addressed to Obligor at the address specified in Section 11 below, at least
five (5) business days prior to such proposed action, shall constitute fair and
reasonable notice to Obligor of any such action. The net proceeds realized by
Bank upon any such sale or other disposition, after deduction for the expenses
of retaking, holding, storing, transporting, preparing for sale, selling or
otherwise disposing of the Collateral incurred by Bank in connection therewith
and all other reasonable costs and expenses related thereto including reasonable
attorney fees, shall be applied in such order as Bank, in its sole discretion,
elects, toward satisfaction of the Bank Indebtedness. Bank shall account to
Obligor for any surplus realized upon such sale or other disposition, and
Obligor shall remain liable for any deficiency. The commencement of any action,
legal or equitable, or the rendering of any judgment or decree for any
deficiency shall not affect
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Bank's security interest in the Collateral. Obligor agrees that Bank has no
obligation to preserve rights to the Collateral against any other parties. Bank
is hereby granted a license or other right to use, after an Event of Default,
without charge, Obligor's labels, general intangibles, intellectual property,
equipment, real estate, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale and selling any inventory or other
Collateral and Obligor's rights under all contracts, licenses, leases and
franchise agreements shall inure to Bank's benefit. Bank shall be under no
obligation to marshall any assets in favor of Obligor or any other party or
against or in payment of any or all of the Bank Indebtedness.
8.3 Actions with Respect to Accounts. Obligor hereby irrevocably
makes, constitutes and appoints Bank (and any of Bank's designated officers,
employees or agents) as Obligor's true and lawful attorney-in-fact, with full
power of substitution, with power to sign Obligor's name and to take any of the
following actions, in Obligor's name or the name of Bank, as Bank may determine
in its reasonable discretion, without notice to Obligor and at Obligor's
expense:
(a) Verify the validity and amount of or any other matter relating
to the Collateral by mail, telephone, telecopy or otherwise;
(b) Upon the occurrence of an Event of Default, notify all account
debtors that Obligor's accounts have been assigned to Bank and that Bank has a
security interest therein;
(c) Upon the occurrence of an Event of Default, direct all account
debtors to make payment of all Obligor's accounts directly to Bank and forward
invoices directly to such account debtors;
(d) Upon the occurrence of an Event of Default, take control in any
manner of any cash or non-cash items of payment or proceeds of such accounts;
(e) Upon the occurrence of an Event of Default, notify the United
States Postal Service to change the address for delivery of mail addressed to
Obligor to such address as Bank may designate;
(f) Upon the occurrence of an Event of Default, have access to
any lockbox or postal boxes into which Obligor's mail is deposited and receive,
open and dispose of all mail addressed to Obligor;
(g) Upon the occurrence of an Event of Default, take control in
any manner of any rejected, returned, stopped in transit or repossessed goods
relating to any accounts;
(h) Upon the occurrence of an Event of Default, enforce payment
of and collect any accounts, by legal proceedings or otherwise, and for such
purpose Bank may:
-8-
<PAGE>
(1) Demand payment of any accounts or direct any account debtors
to make payment of accounts directly to Bank;
(2) Receive and collect all monies due or to become due to
Obligor;
(3) Exercise all of Obligor's rights and remedies with respect to
the collection of accounts;
(4) Settle, adjust, compromise, extend, renew, discharge or
release the accounts;
(5) Sell or assign the accounts on such terms, for such amount and
at such times as Bank deems advisable;
(6) Prepare, file and sign Obligor's name or names on any
Proof of Claim or similar document in any proceeding filed under federal or
state bankruptcy, insolvency, reorganization or other similar law as to any
account debtor;
(7) Prepare, file and sign Obligor's name or names on any
Notice of Lien, Claim of Mechanic's Lien, Assignment or Satisfaction of Lien or
Mechanic's Lien or similar document in connection with the Collateral;
(8) Endorse the name of Obligor upon any chattel papers,
documents, instruments, invoices, freight bills, bills of lading or similar
documents or agreements relating to the accounts or goods pertaining thereto or
upon any checks or other media of payment or evidences of a security interest
that may come into Bank's possession;
(9) Sign the name of Obligor to verifications of accounts and
notices thereof sent by account debtors to Obligor; or
(10) Take all other actions necessary or desirable, as
determined by Bank in its reasonable discretion, to protect Obligor's or Bank's
interest in the accounts.
Obligor ratifies and approves all acts of said attorneys and agrees that said
attorneys shall not be liable for any acts of commission or omission, nor for
any error of judgment or mistake of fact or law, except willful misconduct or
gross negligence. This power, being coupled with an interest, is irrevocable.
Obligor agrees to assist the Bank in the collection and enforcement of its
accounts and not to hinder, delay or impede the Bank on its collection or
enforcement of said accounts.
8.4 Set-Off. Without limiting the rights of Bank under applicable law,
Bank has and may exercise a right of set-off, a lien against and a security
interest in all property of Obligor now or at any time in Bank's possession in
any capacity whatsoever, including but not limited to any balance of any
deposit, trust or agency account, or any other bank account with Bank, but
expressly including any separate segregated account containing contributions to
an employee retirement plan
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<PAGE>
or payments for federal withholding taxes, as security for all obligations of
Obligor to Bank under the Loan Documents or otherwise. At any time and from time
to time following the occurrence of an Event of Default, Bank may without notice
or demand, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by Bank to or for the credit of Obligor against any or all of the
Bank Indebtedness and the Obligor's obligations under the Loan Documents.
If any bank account of Obligor with Bank is attached or otherwise liened or
levied upon by any third party, Bank need not await the running of any
applicable grace period hereunder, but Bank shall have and be deemed to have the
immediate right of set-off and may apply the funds or amount thus set-off
against Obligor's obligations to the Bank.
8.5 Delay or Omission Not Waiver. Neither the failure nor any delay on
the part of Bank to exercise any right, remedy, power or privilege under the
Loan Documents upon the occurrence of any Event of Default or otherwise shall
operate as a waiver thereof or impair any such right, remedy, power or
privilege. No waiver of any Event of Default shall affect any later Event of
Default or shall impair any rights of Bank. No single, partial or full exercise
of any rights, remedies, powers and privileges by the Bank shall preclude
further or other exercise thereof. No course of dealing between Bank and Obligor
shall operate as or be deemed to constitute a waiver of Bank's rights under the
Loan Documents or affect the duties or obligations of Obligor.
8.6 Remedies Cumulative; Consents. The rights, remedies, powers and
privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the sole
and absolute discretion of Bank.
9. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Obligor agrees to pay on
demand all reasonable costs and expenses of Bank, including without limitation:
9.1 All costs and expenses in connection with the preparation, review,
negotiation, execution, delivery and administration of the Loan Documents, and
the other documents to be delivered in connection therewith, or any amendments,
extensions and increases to any of the foregoing (including, without limitation,
reasonable attorney's fees and expenses, and the cost of appraisals and
reappraisals of Collateral), and the cost of periodic lien searches and tax
clearance certificates, as Bank deems advisable;
9.2 All losses, costs and expenses in connection with the enforcement,
protection and preservation of the Bank's rights or remedies under the Loan
Documents, or any other agreement relating to any Obligations, or in connection
with legal advice relating to the rights or responsibilities of Bank (including
without limitation court costs, reasonable attorney's fees and expenses of
accountants and appraisers); and
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9.3 Any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of the Loan
Documents, and all liabilities to which Bank may become subject as the result of
delay in paying or omission to pay such taxes.
In the event Obligor shall fail to pay taxes, insurance, assessments, costs
or expenses which it is required to pay hereunder, or fails to keep the
Collateral free from security interests or lien (except as expressly permitted
herein), or fails to maintain or repair the Collateral as required hereby, or
otherwise breaches any obligations under the Loan Documents, Bank in its
reasonable discretion, may make expenditures for such purposes and the amount so
expended (including reasonable attorney's fees and expenses, filing fees and
other charges) shall be payable by Obligor on demand and shall constitute part
of the Bank Indebtedness.
In the event any action at law or in equity in connection with the Loan
Documents, the Bank Indebtedness or matters collateral thereto is terminated
adverse to Obligor, Obligor will pay all attorneys' fees and legal costs
incurred by Bank in connection with such actions.
With respect to any amount required to be paid by Obligor under this
Section, in the event Obligor fails to pay such amount on demand, Obligor shall
also pay to Bank interest thereon at the default rate set forth in Section 2.2
of the Loan Agreement. Obligor's obligations under this Section shall survive
termination of this Agreement.
10. TIME IS OF THE ESSENCE. Time is of the essence in Obligor's performance
of its obligations under the Loan Documents.
11. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Agreement shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division or
department to whose attention notices to a party are to be addressed, or by
private carrier, telecopy (with original forwarded by first class mail), or
registered or certified mail, return receipt requested, in all cases with
postage prepaid, addressed as follows, until some other address (or individual
or division or department for attention) shall have been designated by notice
given by one party to the other:
To Obligor:
Liberty Imaging Systems, Inc.
555 North Lane, Suite ______
Conshohocken, PA 19428
Attention: Daniel G. Clare, Vice President-Finance
and Chief Financial Officer
Telecopy Number: (610) 834-0346
-11-
With a copy to:
Pepper, Hamilton & Scheetz
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
Attention: James D. Rosener, Esquire
Telecopier: (610) 640-7835
To Bank:
First Union National Bank
123 South Broad Street, PA1310
Philadelphia, PA 19109
Attention: Suzanne S. Storm, Senior Vice President
Telecopier: (215) 985-3555
With a copy to:
Wolf, Block, Schorr and Solis-Cohen
350 Sentry Parkway, Building 640
P.O. Box 3038
Blue Bell, Pennsylvania 19422
Attention: Katherine F. Bastian, Esquire
Telecopier: (610) 238-0305 or 238-0374
12. LIMTATION ON LIABILITY. Obligor shall be responsible for and Bank is
hereby released from any claim or liability in connection with:
12.1 Safekeeping any Collateral;
12.2 Any loss or damage to any Collateral;
12.3 Any diminution in value of the Collateral; or
12.4 Any act or default of another person or entity.
Bank shall only be liable for any act or omission on its part constituting
willful misconduct or gross negligence. In the event that Bank breaches its
required standard of conduct, Obligor agrees that its liability shall be only
for direct damages suffered and shall not extend to consequential or incidental
damages. In the event Obligor brings suit against Bank in connection with the
transactions contemplated hereunder and Bank is found not to be liable, Obligor
will indemnify and hold Bank harmless from all costs and expenses, including
attorney's fees, incurred by Bank in connection with such suit. Nothing
contained herein, however, relieves Bank from any obligation, if any, imposed on
a secured creditor under the Code with respect to safekeeping of collateral.
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13. WAIVERS. In connection with any proceedings hereunder or in connection
with any of the Bank Indebtedness, including without limitation any action by
Bank in replevin, foreclosure or other court process or in connection with any
other action related to the Bank Indebtedness or the transactions contemplated
hereunder, Obligor waives:
13.1 all errors, defects and imperfections in such proceedings;
13.2 all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof from attachment,
levy or sale under execution, or providing for any stay of execution to be
issued on any judgment recovered in connection with the Bank Indebtedness or in
any replevin or foreclosure proceeding, or otherwise providing for any
valuation, appraisal or exemption;
13.3 all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained in connection with any of the
Bank Indebtedness and sold upon any writ of execution issued thereon in whole or
in part, in any order desired by Bank;
13.4 presentment for payment, demand, notice of demand, notice of
non-payment, protest and notice of protest of any of the Bank Indebtedness;
13.5 any requirement for bonds, security or sureties required by
statute, court rule or otherwise;
13.6 any demand for possession of Collateral prior to commencement of
any suit; and
13.7 all rights to claim or recover attorney's fees and costs in the
event that Obligor is successful in any action to remove, suspend or
enforce a judgment entered by confession.
14. EXCLUSIVE JURISDICTION. Obligor hereby consents to the exclusive
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agrees that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts, and Obligor waives any
objection which it may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court and waives personal service of
any and all process upon it, and consents that all such service of process be
made by mail or messenger directed to it at the address set forth in Section 11.
Nothing contained in this Section 14 shall affect the right of Bank to serve
legal process in any other manner permitted by law or affect the right of Bank
to bring any action or proceeding against Obligor or its property in the courts
of any other jurisdiction.
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15. MISCELLANEOUS PROVISIONS.
15.1 Severability. The provisions of this Agreement and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
15.2 Headings. The headings of the Articles, Sections, paragraphs and
clauses of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Agreement.
15.3 Binding Effect. This Agreement and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
15.4 Amendment. No modification of this Agreement or any of the Loan
Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
15.5 Governing Law. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.
15.6 No Third Party Beneficiaries. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.
15.7 Exhibits and Schedules. All exhibits and schedules attached hereto
are hereby made a part of this Agreement.
15.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15.9 No Joint Venture. Nothing contained herein is intended to permit
or authorize Obligor to make any contract on behalf of Bank, nor shall this
Agreement be construed as creating a partnership, joint venture or making Bank
an investor in Obligor.
15.10 Filing of Financing Statements. Copies or reproductions of this
document or of any financing statement may be filed as a financing statement.
15.11 Waiver of Right to Trial by Jury. OBLIGOR AND BANK WAIVE ANY RIGHT
TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING
UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR
DELIVERED IN CONNECTION HEREWITH, OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF OBLIGOR WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER
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DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. OBLIGOR AND BANK AGREE AND CONSENT THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
OBLIGOR AND BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned has executed this Security Agreement on
the date first above written.
LIBERTY IMAGING SYSTEMS, INC.
By: /s/ Daniel G. Clare
-----------------------------------------------
Daniel G. Clare, Vice President and Secretary
Bank hereby joins in this Agreement for the sole purpose of ratifying and
confirming its consent to the provisions contained in Section 5.11 above.
FIRST UNION NATIONAL BANK
By: /s/ Suzanne Storm
------------------------------------------------
Suzanne S. Storm, Senior Vice President
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NAMES AND ADDRESSES OF OBLIGOR
555 North Lane, Conshohocken, PA 19428
SCHEDULE 5.3
TO
SECURITY AGREEMENT
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<PAGE>
EXHIBIT B
Liberty International Inc.
Location of books and records:
555 North Lane
Conshohocken, PA 19428-2208
Location of chief executive offices:
555 North Lane
Conshohocken, PA 19428-2208
Location of inventory and equipment:
555 North Lane
Conshohocken, PA 19428-2208
<PAGE>
STATE OF SOUTH CAROLINA MORTGAGE AND SECURITY AGREEMENT
COUNTY OF DORCHESTER
THIS MORTGAGE AND SECURITY AGREEMENT (hereinafter referred to as the "Mortgage")
made and entered into as of the 1st day of April, 1997, by and between, LIBERTY
TECHNICAL SERVICES, INC. (formerly known as Industrial NDT Company, Inc., a
Pennsylvania corporation, having a mailing address of 555 North Lane,
Conshohocken, PA 19428 (hereinafter referred to as "Mortgagor"), and FIRST UNION
NATIONAL BANK, a national banking association having as a mailing address of 123
South Broad Street, Philadelphia, PA 19lO6 (hereinafter referred to as
"Mortgagee").
WITNESSETH:
That for and in consideration of the sum of Ten and No/l00 Dollars ($10.00) and
other valuable consideration, the receipt and sufficiency whereof are hereby
acknowledged, and in order to secure the indebtedness and other obligations of
Mortgagor hereinafter set forth, Mortgagor does hereby mortgage, grant, bargain,
sell, convey, assign, transfer and set over unto Mortgagee and the successors
and assigns of Mortgagee all of the following described land and interests in
land, estates, easements, rights, improvements, property, fixtures, equipment,
furniture, furnishings, appliances and appurtenances (hereinafter collectively
referred to as the "Mortgaged Property"):
THE MORTGAGED PROPERTY
(A) THE LAND. All the land located in the County of Dorchester, State of South
Carolina (the "Land"), described in Exhibit "A" attached hereto and made a
part hereof;
(B) THE IMPROVEMENTS. TOGETHER WITH all buildings, structures and
improvements of every nature whatsoever now or hereafter situated on
the Land, and all fixtures, machinery, appliances, equipment, furniture,
and personal property of every nature whatsoever now or hereafter owned
by Mortgagor and located in or on, or attached to or used or intended
to be used in connection with or with the operation of, the Land,
buildings, structures or other improvements, including all extensions,
additions, improvements, betterments, renewals and replacements to any
of the foregoing and all of the right, title and interest of Mortgagor
in and to any such personal property or fixtures subject to any lien,
security interest or claim together with the benefit of any deposit or
payments now or hereafter made by Mortgagor or on its behalf (the
"Improvements").
(C) EASEMENTS OR OTHER INTERESTS. TOGETHER WITH all easements, rights-of-way,
gores of land, streets, ways, alley passages, sewer rights, waters, water
courses, water rights and liberties, tenements, hereditaments and.
appurtenances; whatsoever, in any way, belonging, relating or appertaining
to any of the property hereinabove described, or which hereafter shall in
any way belong, relate or be appurtenant thereto, whether now owned or
hereafter acquired by Mortgagor, and the reversion and reversions,
remainder and remainders, rents, issues and profits thereof, and all the
estate, right, title, interest, property, possession, claim and demand
whatsoever, at law as well as in equity, of Mortgagor of, in and to the
same, including but not limited to all judgments, awards of damages and
settlements hereafter made resulting from condemnation proceedings or the
taking of the property described in Paragraph (A), (B), and (C) hereof or
any part thereof under the power of eminent domain, or for any damage
(whether caused by such taking or otherwise) to the property described in
Paragraphs (A), (B), and (C) hereof or any part thereof, or to any rights
appurtenant thereto, and
<PAGE>
all proceeds of any sales or other dispositions of the property described
in paragraphs (A), (B), and (C) hereof or any part thereof.
(D) FIXTURES AND PERSONAL PROPERTY. TOGETHER WITH a security interest in (i)
all property and fixtures now or hereafter acquired and affixed to or
located on the property described in Paragraphs (A), (B), and (C) hereof
which, to the fullest extent permitted by law, shall be deemed fixtures and
a part of the real property, (ii) all articles of personal property now or
hereafter acquired and all materials delivered to the property described in
Paragraphs (A), (B), and (C) hereof for use in any construction being
conducted thereon, and owned by Mortgagor; (iii) and all contract rights,
general intangibles, actions and rights in action now or hereafter acquired
pertaining to the Mortgaged Property, including all rights to insurance
proceeds, and (iv) all proceeds, products, replacements, additions,
substitutions, renewals and accessions of any of the foregoing. Mortgagor
(Debtor) hereby grants to Mortgagee (Secured Party) a security interest in
all fixtures, rights in action and personal property described herein.
TO HAVE AND TO HOLD the Mortgaged Property and all parts thereof unto Mortgagee,
its successors and assigns, to its own proper use and benefit forever.
This Mortgage and Security Agreement is given to secure the following described
indebtedness:
(a) The debt evidenced by that certain Consolidated Amended and
Restated Note in the face amount of Nine Million Dollars
($9,000,000) dated April 1, 1997 of Mortgagor, LTH Delaware, Inc.;
Liberty Technologies, Inc.; Beta Monitors International, Inc.;
Liberty International Inc.; and Liberty Imaging Systems, Inc. to
Mortgagee (hereinafter referred to as the "Note"), as well as that
certain Loan Agreement dated as of December 2, 1996, as amended by
an Amendment and Modification to Loan Agreement dated December 30,
1995, a Second Amendment and Modification to Loan Agreement dated
October 11, 1995, a Third Amendment and Modification to Loan
Agreement dated February 27, 1997 and a Fourth Amendment and
Modification to Loan Agreement dated April 1, 1997 (hereinafter
collectively referred to as the "Loan Agreement") together with
any and all modifications, renewals and/or extensions of the Note
or the Loan Agreement;
(b) Any and all additional future advances and readvances pursuant to
the provisions of Section 29-3-50 of the Code of Laws of South
Carolina, 1976, as amended, made by Mortgagee under the Note or to
protect or preserve the Mortgaged Property or the lien hereof with
respect to the Mortgaged Property, or for taxes, assessments or
insurance premiums as hereinafter provided (whether or not the
original Mortgagor remains the owner of the Mortgaged Property at
the time of such advances);
(c) Any and all other indebtedness, liabilities, or obligations of
Mortgagor to Mortgagee, of any nature whatsoever whether now existing
or hereafter created, whether direct, indirect, or secondary, and any
and all modifications, extensions and/or renewals thereof, including
without limitation;
All of the indebtedness referred to above in (a), (b), and (c) is
hereinafter referred to collectively as the "Indebtedness". The Note,
this Mortgage, the Loan Agreement, and any and all documents or
agreements executed in connection with any of the foregoing,
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together with all renewals, extensions and modifications thereof, are
collectively referred to herein as the "Loan Documents".
PROVIDED, ROWEVER, that the maximum amount of the Indebtedness outstanding at
any one time secured hereby shall not exceed twice the face amount of the Note
plus interest thereon, and all charges and expenses of collection incurred by
Mortgagee, including court costs and reasonable attorney's fees.
PROVIDED, HOWEVER, that if Mortgagor shall promptly pay or cause to be paid to
Mortgagee all the principal and interest payable under the Loan Documents at the
times and in the manner stipulated therein and herein, all without any deduction
or credit for taxes or other similar charges paid by Mortgagor, and shall keep,
perform and observe all the covenants and promises in the Loan Documents to be
kept, performed or observed by Mortgagor, then this Mortgage, and all the
properties, interest and rights hereby granted, conveyed and assigned shall
cease and be void.
Mortgagor further covenants and agrees with Mortgagee as follows:
ARTICLE ONE
COVENANTS OF MORTGAGOR
1.01 Performance of Loan Documents. Mortgagor shall perform, observe, and comply
with all provisions hereof and of the Loan Documents, and will promptly pay
to Mortgagee the principal with interest thereon and all other sums
required to be paid by Mortgagor under the Loan Documents when payment
shall become due, all without deduction or credit for taxes or other
similar charges paid by Mortgagor.
1.02 Warranty of Title. Mortgagor covenants and warrants that it is seized of an
indefeasible estate in fee simple in the Land and real property hereby
mortgaged, has good and absolute title to all existing personal property
hereby mortgaged or made subject to the security interest hereby created
and has good right, full power and lawful authority to convey, mortgage and
encumber the same as provided herein; that Mortgagor may at all times
peaceably and quietly enter upon, hold, occupy and enjoy the land and real
property hereby mortgaged and every part thereof; that the land, real
property and all existing personal property hereby mortgaged or made
subject to the security interest hereby created is free and clear of all
liens, security interests, charges and encumbrances whatsoever, except the
lien for property taxes not yet due and payable and those permitted
encumbrances, if any, described in the Loan Agreement. Mortgagor shall and
will make such further assurances to perfect Mortgagee's fee simple title
to the Land and the real property hereby mortgaged, and the title to the
personal property hereby mortgaged or made subject to the security interest
hereby created as may reasonably be required. Mortgagor fully warrants the
title to the Mortgaged Property hereby mortgaged or made subject to the
security interest hereby created and every part thereof, and will forever
defend the same against the claims of all persons whomsoever.
1.03 Zoning. Mortgagor covenants and warrants that all applicable zoning laws,
ordinances and regulations affecting the Land permit the use and occupancy
of the Improvements.
1.04 Taxes and Liens.
(a) Mortgagor shall pay or bond promptly, when and as due, and shall
promptly exhibit to Mortgagee receipts for the payment of, all taxes,
assessments, rates, dues, charges, fees, levies, fines, impositions,
liabilities, obligations and encumbrances of every
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kind whatsoever now or hereafter imposed, levied or assessed upon or
against the Mortgaged property or any part thereof, or upon or against
the Mortgagor or the indebtedness or other sums secured hereby, or
upon or against the interest of Mortgagee in the Mortgaged Property,
as well as all income taxes, assessments and other governmental
charges levied and imposed by the United States of America or any
state, county, municipality, borough or other taxing authority upon
or against Mortgagor or in respect of the Mortgaged Property or any
part thereof, and any charge which, if unpaid, would become a lien or
charge upon the Mortgaged Property prior to or equal to the lien of
this Mortgage before they become delinquent and before any interest
attaches or any penalty is incurred.
(b) Mortgagor shall not permit or suffer for more than ten (10) days any
unbonded mechanics', laborers', materialmen's statutory or other lien
upon any of the Mortgaged Property.
(c) Mortgagor shall not claim, demand or be entitled to receive any credit
or credits on the principal or interest payable under the terms of the
Loan Documents or on any other sums secured hereby, for so much of the
taxes, assessments or similar impositions assessed against the
Mortgaged Property or any part thereof as are applicable to the
indebtedness secured hereby or to Mortgagee's interest in the
Mortgaged property. No deduction shall be claimed from the taxable
value of the Mortgaged Property or any part thereof by reason of the
Loan Documents.
(d) In the event of passage, after the date of this Mortgage, of any law
of the State of South Carolina, deducting from the value of real
property for the purpose of taxation, any lien thereon or changing in
any way the laws for the taxation of Mortgages or debts secured by
mortgages for state or local purposes or the manner of the collection
of any such taxes, and imposing a tax, either directly or indirectly,
on this Mortgage or the indebtedness secured hereby, the holder of
such indebtedness shall have the right to require the Mortgagor to pay
the Mortgagee within ten (10) days of notice thereof by Mortgagee to
Mortgagor any cost to be borne by the Mortgagee attributable to the
change in such law or laws, and in the event same is not paid, then
Mortgagee may declare the principal sum and the interest due on a date
to be specified by not less than thirty (30) days written notice to be
given to Mortgagor by Mortgagee.
1.05 Insurance.
(a) Mortgagor shall at its sole expense obtain for, deliver to and
maintain for the benefit of Mortgagee, during the life of this
Mortgage, insurance policies in such amounts as Mortgagee may require
but in no event exceeding the replacement cost of the Improvements
insuring the Mortgaged Property against fire, extended coverage and
such other insurable hazards, casualties and contingencies as
Mortgagee may at any time during the life of this loan require
(including flood damage, if deemed necessary by Mortgagee in its sole
discretion), and shall pay promptly, when due, all premiums on such
insurance policies and any renewals thereof. The form of such policies
and the companies issuing them shall be acceptable to Mortgagee. All
such policies and renewals thereof shall be held by Mortgagee and
shall contain a noncontributory mortgagee endorsement making losses
payable to Mortgagee. The coverage under such policies shall be
limited to the improvements now or hereafter located on the Mortgaged
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<PAGE>
Property. At least thirty (30) days prior to the expiration date of
all such policies, renewals thereof satisfactory to Mortgagee shall be
delivered to Mortgagee. Mortgagor shall deliver to Mortgagee receipts
evidencing the payment of all premiums on such insurance policies and
renewals. Delivery of the insurance policies and renewals thereof
shall constitute an assignment to Mortgagee, as further security, of
all unearned premiums. In the event of loss, Mortgagor will give
immediate written notice to Mortgagee and Mortgagee may make proof of
loss if not made promptly by Mortgagor. In the event of the
foreclosure of this Mortgage or any other transfer of title to the
Mortgaged property in extinguishment of the indebtedness and other
sums secured hereby, all right, title, and interest of Mortgagor in
and to all insurance policies and renewals thereof then in force shall
pass to the purchaser or grantee. Mortgagee may at any time at its own
discretion procure and substitute for any and all of the insurance so
held as aforesaid, such other policy or policies of insurance, in like
amount, as it may determine without prejudice to its right to
foreclose hereunder should Mortgagor fail or refuse to keep said
premises so insured.
(b) Mortgagor hereby assigns to Mortgagee all proceeds from any insurance
policies, and Mortgagee is hereby authorized and empowered in its
reasonable discretion, to adjust or compromise any loss under any
insurance policies on the Mortgaged Property with the consent of the
Mortgagor, which consent shall not be unreasonably withheld, and to
collect and receive the proceeds from any such policy or policies.
Each insurance company is hereby authorized and directed to make
payment for all such losses to Mortgagor and Mortgagee jointly. Any
balance of such monies after restoration shall either be applied
toward the reduction of indebtedness and other sums secured hereby or
shall be paid to Mortgagor. Mortgagee shall not be responsible for any
failure to collect any insurance proceeds due under the terms of any
policy regardless of the cause of such failure.
1.06 Condemnation. If all or any part of the Mortgaged Property shall be
damaged or taken through condemnation (which term when used herein
shall include any damage or taking by any governmental authority to so
damage or take, and any transfer by private sale in lieu thereof),
either temporarily or permanently, the entire indebtedness and other
sum secured hereby shall, at the option of Mortgagee, become
immediately due and payable, Mortgagee shall be entitled to all
compensation awards, damages, claims, rights of action and proceeds
of, or on account of damage of taking through condemnation and is
hereby authorized, at its option, to commence, appear in and
prosecute, in its own or Mortgagor's name, any action or proceeding
relating to any condemnation, and to settle or compromise any claim in
connection there with. All such compensation awards, damages, claims,
rights of action and proceeds, and any other payments or relief, and
the right thereto are hereby assigned by Mortgagor to Mortgagee, who,
after deducting therefrom all its expenses including attorney's fees,
may release any monies so received by it without affecting the lien of
this Mortgage or may apply the same, in such manner as Mortgagee shall
determine, to the reduction of the sums secured hereby and to any
prepayment charge provided in the Note, this Mortgage or other
instruments securing the Note. Any balance of such monies then
remaining shall be paid to Mortgagor. Mortgagor agrees to execute such
further assignments of any compensations, awards, damages, claims,
rights of action and proceeds as Mortgagee may require.
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<PAGE>
1.07 Care of Property.
(a) Mortgagor shall preserve and maintain the Mortgaged Property in good
condition and repair. Mortgagor shall not remove, demolish, materially
alter or materially change the use of any building, structure or other
improvement presently or hereafter on the Land without the prior
written consent of Mortgagee. Mortgagor shall not permit, commit or
suffer any waste, impairment or deterioration of the Mortgaged
Property or of any part thereof, and will not take any action which
will increase the risk of fire or other hazard to the Mortgaged
Property or to any part thereof.
(b) Except as otherwise provided in this Mortgage no fixture, personal
property or other part of the Mortgaged Property shall be removed,
demolished or altered without the prior written consent of Mortgagee,
which consent shall not be unreasonably withheld. Mortgagor may sell
or otherwise dispose of, free from the lien of this Mortgage,
furniture, furnishings, equipment, tools, appliances, or machinery
which are not fixtures but which are subject to the lien hereof, which
may become worn out, undesirable or obsolete only if they are replaced
immediately with similar items of at least equal value. Such items
shall, without further action, become subject to the lien of this
Mortgage, except as otherwise provided in this Mortgage.
(c) Mortgagee and Mortgagee's agents and independent contractors may enter
upon and inspect the Mortgaged Property at reasonable times during the
term of this Mortgage. Without limiting the scope of said right of
inspection, Mortgagee and Mortgagee's agents and experts shall have
the right at reasonable times during the term of this Mortgage to
conduct environmental reviews of the Property (including any sampling
as may be deemed appropriate by Mortgagee).
(d) Mortgagor will promptly comply with all present and future laws,
ordinances, rules and regulations of any governmental authority
affecting the Mortgaged Property or any part thereof.
(e) If all or any part of the Mortgaged Property shall be lost, damaged or
destroyed by fire or any other cause, Mortgagor will give immediate
written notice thereof to Mortgagee and shall promptly restore the
Mortgaged Property to the equivalent of its original condition
regardless of whether or not there shall be any insurance proceeds
therefor, and provided that Mortgagee assigns to Mortgagor available
insurance proceeds, if any, for the purpose of restoration. If a part
of the Mortgaged Property shall be lost, physically damaged or
destroyed through condemnation, Mortgagor will promptly restore,
repair or alter the remaining property in a manner satisfactory to
Mortgagee.
l.08 Transfer of Property. Mortgagor shall not sell, convey, transfer,
lease or further encumber any interest in or any part of the Mortgaged
Property (whether voluntarily or by operation of law), without the
prior written consent of Mortgagee, which shall not be unreasonably
withheld. If any person should obtain any interest in all or any part
of the Mortgaged Property pursuant to the execution or enforcement of
any lien, security interest or other right, whether superior, equal or
subordinate to this Mortgage or the lien hereof, such event shall be
deemed to be a transfer by the Mortgagor. Mortgagor shall not, without
the prior written consent of Mortgagee, further assign the rents from
the Mortgaged Property, nor enter into any agreement or do any act to
amend,
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modify, extend, terminate or cancel, accept the surrender,
subordinate, accelerate the payment of rent.
l.09 Further Assurance. At any time and from time to time, upon Mortgagee's
request, Mortgagor shall make, execute and deliver or cause to be
made, executed and delivered to Mortgagee and, where appropriate,
shall cause to be recorded or filed and from time to time thereafter
to be re-recorded or refiled at such time and in such offices and
places as shall be deemed desirable by Mortgagee any and all such
further mortgages, instruments of further assurance, certificates or
other documents as Mortgagee may consider necessary or desirable in
order to effectuate, complete, or to continue and preserve the
obligations of Mortgagor under the Loan Documents. Upon any failure by
Mortgagor to do so, Mortgagee may make, execute, record, file,
re-record or refile any and all such mortgages, instruments, financing
statements, certificates and documents for and in the name of
Mortgagor, and Mortgagor hereby irrevocably appoints Mortgagee the
agent and attorney-in-fact of Mortgagor to do so. It is expressly
intended that this power of attorney is coupled with an interest.
1.10 After Acquired Property. The lien of this Mortgage will automatically
attach, without further act, to all after acquired property located in
or on, or attached to, or used or intended to be used in connection
with or with the operation of, the Mortgaged property or any part
thereof.
1.11 Leases Affecting Mortgaged Property. Mortgagor shall comply with and
observe its obligations as Landlord under all leases affecting the
Mortgaged property or any part thereof. Mortgagor, if required by
Mortgagee, shall furnish promptly to Mortgagee executed copies of all
such leases now existing or hereafter created, all of which shall be
in forms and substance subject to the approval of Mortgagee.
1.12 Expenses. Mortgagor shall pay or reimburse Mortgagee for all costs
charges, and expenses (including any expenses arising out of any
bankruptcy proceeding which may affect any security covered by this
Mortgage, including reasonable attorney's fees and disbursements, and
costs incurred or paid by Mortgagee in any action which is threatened,
pending or completed or proceeding or dispute in which Mortgagee is or
might be made a party or appears as a party plaintiff or party
defendant and which affects or might affect the Loan Documents, this
Mortgage, or the Mortgaged property or any part thereof, or the
interests of Mortgagor or Mortgagee therein, including but not limited
to the foreclosure of this Mortgage, condemnation involving all or
part of the Mortgaged Property or any action to protect the security
hereof. All costs, charges, and expenses except where Mortgagor and
Mortgagee are adverse parties unless awarded by the Court so incurred
or paid by Mortgagee shall become due and payable immediately,
whether or not there by notice, demand, attempt to collect or suit
pending. The amounts so incurred or paid by Mortgagee, together with
interest thereon at the default Rate as hereinafter defined from the
date incurred until paid by Mortgagor, shall be added to the
indebtedness and secured by the lien of this Mortgage.
1.13 Mortgagee's Performance of Defaults. If Mortgagor defaults in the
payment of any tax, assessment, encumbrance or other imposition, or
its obligation to furnish insurance hereunder or in the performance
or observance of any other covenant, condition or term of this
Mortgage or of any of the Loan Documents, Mortgagee may at its option
perform or observe the same, and all payments made (whether such
payments are regular or accelerated payments) and costs and expenses
incurred or paid by Mortgagee in connection therewith shall become due
and payable immediately by Mortgagor. The amounts so incurred or paid
by Mortgagee,
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together with interest thereon at the Default Rate as hereinafter
defined from the date incurred until paid by Mortgagor, shall be added
to the indebtedness secured by the lien of this Mortgage. Nothing
contained herein shall be construed as requiring Mortgagee to advance
or expend monies for any purposes mentioned in this Paragraph, or for
any other purpose. Mortgagee is hereby empowered to enter and to
authorize others to enter upon the Mortgaged Property or any part
thereof for the purpose of performing or observing any such defaulted
covenant, condition or terms, without thereby becoming liable to
Mortgagor or any person in possession holding under Mortgagor.
1.14 Books and Records. Mortgagor shall keep and maintain at all times
complete, true and accurate books of accounts and records reflecting
the results of the operation of the Mortgaged Property. Mortgagor
shall furnish to Mortgagee a certified financial statement certified
by a certified public accountant of income and expenses on the
Mortgaged property within ninety (90) days following the end of each
fiscal year or calendar year. Mortgagor shall permit Mortgagee to
inspect said books and records upon request by Mortgagee.
1.15 Estoppel Affidavits. Mortgagor, within ten (10) days after written
request from Mortgagee, shall furnish a written statement, duly
acknowledged, setting forth the unpaid principal of, and interest on
the Loan Documents, and any other unpaid sums secured hereby, and
whether or not any offsets or defenses exist against such principal
and interest or other sums.
ARTICLE TWO
DEFAULTS
2.01 Events of Default. The term Event of Default, wherever used in this
Mortgage, shall mean any one or more of the following events:
(a) A breach by Mortgagor of any of the covenants, agreements and
conditions of Article One hereof.
(b) The occurrence of an Event or Events of Default under the Loan
Agreement or any other Loan Documents.
(c) Default by Mortgagor or if foreclosure is instituted against
Mortgagor under any agreement or obligation of Mortgagor
affecting any portion of the. Mortgaged Property, or any other
documents or instruments securing any other indebtedness of
Mortgagor to Mortgagee, if such default is not cured within any
grace period permitted therein and if such default permits the
holder to cause such obligation to become due prior to its stated
maturity. Mortgagor shall notify Mortgagee in writing of the
occurrence of such default, specifying the nature of such
default.
(d) Material breach of any warranty or material untruth of any
representation of Mort9a9or contained in the Loan Documents.
2.02 Acceleration of Maturity. If an Event of Default shall have occurred,
Mortgagee may declare the Indebtedness to be due and payable
immediately, and upon such declaration the Indebtedness shall
immediately become due and payable without demand or notice.
2.03 Mortgagee's Power of Enforcement. If an Event of Default shall have
occurred, Mortgagee may, either with or without entry or taking
possession as hereinabove provided or otherwise, proceed by suit or
suits at law or in equity or by any other appropriate proceeding or
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<PAGE>
remedy: (a) to enforce payment of the Loan Documents or the
performance of any term hereof or any other right; (b) to foreclose
this Mortgage and to sell, as an entirety or in separate lots or
parcels, the Mortgaged property, under the judgment or decree of a
court or courts of competent jurisdiction; and (c) to pursue any other
remedy available to it. Mortgagee shall take action either by such
proceedings or by the exercise of its powers with respect to entry or
taking possession or both, as the Mortgagee may determine.
2.04 Mortgagee's Right to Enter and Take Possession, Operate and Apply
Income.
(a) If an Event of Default shall have occurred, Mortgagor, upon
demand of Mortgagee, shall forthwith surrender to Mortgagee the
actual possession, and if and to the extent permitted by law,
Mortgagee itself, or by such officers or agents as it may
appoint, may enter and take possession of all the Mortgaged
Property, and may exclude Mortgagor and its agents and employees
wholly therefrom, and may have joint access with Mortgagor to the
books, papers, and accounts of Mortgagor.
(b) If Mortgagor shall for any reason fail to surrender or deliver
the Mortgaged Property or any part thereof after Mortgagee's
demand, Mortgagee may obtain a judgment or decree conferring on
Mortgagee the right to immediate possession or requiring
Mortgagor to deliver immediate possession of all or part of the
Mortgaged Property to Mortgagee along with all books, papers. and
accounts of Mortgagor, to entry of which judgment or decree
Mortgagor hereby specifically consents.
(c) Mortgagor shall pay to Mortgagee, upon demand, all reasonable
costs and expenses of obtaining such judgment or decree and
reasonable compensation to Mortgagee, its attorneys and agents,
and all such costs, expenses, and compensation shall, until paid,
be secured by the lien of this Mortgage.
(d) Upon every such entering upon or taking of possession, Mortgagee
may hold, store, use, operate, manage, and control the Mortgaged
Property and conduct the business thereof, and, from time to
time:
(i) make all necessary and proper maintenance, repair,
renewals, replacements, additions, betterments, and
improvements, thereto and thereon and purchase or
otherwise acquire additional fixtures, personally and
other property;
(ii) insure or keep the Mortgaged property insured;
(iii) manage and operate the Mortgaged Property and exercise all
the rights and powers of Mortgagor in its name or
otherwise, with respect to the same;
(iv) enter into agreements with others to exercise the powers
herein granted Mortgagee;
all as Mortgagee in its reasonable judgment from time to time may
determine; and Mortgagee may collect and receive all the income, revenues,
rents, issues, and profits of the same including those past due as well as
those accruing thereafter; and shall apply the monies so received by
Mortgagee in such priority as Mortgagee may determine to (1) the reasonable
compensation, expenses and disbursement of the agents and attorneys; (2)
the cost of insurance, taxes, assessments and other proper charges upon the
Mortgaged Property or any part thereof; (3) the
9
deposits for taxes and assessments and insurance premiums due; and (4) the
payment of the Indebtedness.
Mortgagee shall surrender possession of the Mortgaged Property to Mortgagor
only when all that is due upon such interest, tax and insurance deposits
and principal installments, and under any of the terms of this Mortgage,
shall have been paid and all defaults made good. The same right to taking
possession, however, shall exist if any subsequent Event of Default shall
occur and be continuing.
2.05 Purchase by Mortgagee. Upon any such foreclosure sale, Mortgagee may bid
for and purchase the Mortgaged Property and, upon compliance with the terms
of sale, may hold, retain and possess and dispose of such property in its
own absolute right without further accountability.
2.06 Application of Indebtedness Toward Purchase Price. Upon any such
foreclosure sale, Mortgagee may, if permitted by law, after allowing for
the proportion of the total purchase price required to be paid in cash and
for the costs and expenses of the sale, compensation and other charges, in
paying the purchase price apply any portion of or all sums due to Mortgagee
under the Loan Documents in lieu of cash, to the amount which shall, upon
distribution of the net proceeds of such sale, be payable thereon.
2.07 Receiver. If an Event of Default shall have occurred, Mortgagee shall be
entitled as a matter of right if it so elects to the appointment of a
receiver to enter upon and take possession of the Mortgaged Property and to
collect all rents, revenues, issues, income, products and profits thereof
and apply the same as the court may direct. The receiver shall have all
rights and powers permitted under the laws of the State of South Carolina
and such other powers as the court making such appointment shall confer.
The expenses, including receiver's fees, attorney's fees, costs and agents
compensation, incurred pursuant to the powers herein contained shall be
secured by this Mortgage. The right to enter and take possession of and to
manage and operate the Mortgaged Property, and to collect the rents, issues
and profits thereof, whether by a receiver or otherwise, shall be
cumulative to any other right or remedy hereunder or afforded by law, and
may be exercised concurrently therewith or independently thereof. Mortgagee
shall be liable to account only for such rents, issues and profits actually
received by Mortgagee. Notwithstanding the appointment of any receiver or
other custodian, Mortgagee shall be entitled as secured party hereunder to
the possession and control of any cash, deposits, or instruments at the
time held by, or payable or deliverable under the terms of this Mortgage
to, Mortgagee.
2.08 Suits to Protect the Mortgaged Property. Mortgagee shall have the power and
authority to institute and maintain any suits and proceedings as Mortgagee
may deem advisable (a) to prevent any impairment of the Mortgaged Property
by any acts which may be unlawful or any violation of this Mortgage, (b) to
preserve or protect its interest in the Mortgaged Property, and (c) to
restrain the enforcement of or compliance with any legislation or other
governmental enactment, rule or order that may be unconstitutional or
otherwise invalid, if the enforcement of or compliance with such enactment,
rule or order might impair the security hereunder or be prejudicial to
Mortgagee's interest.
2.09 Proofs of Claim. In the case of any receivership, insolvency, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceedings affecting Mortgagor, any person, partnership or corporation
guaranteeing or endorsing any of Mortgagor's obligations, its creditors or
its property, Mortgagee, to the extent permitted by
10
law, shall be entitled to file such proofs of claim and other documents as
may be necessary or advisable in order to have its claims allowed in such
proceedings for the entire amount due and payable by Mortgagor under the
Loan Documents or this Mortgage and any other instrument securing the Note,
at the date of the institution of such proceedings, and for any additional
amounts which may become due and payable by Mortgagor after such date.
2.10 Mortgagor to Pay All Sums Due Under the Loan Documents on Any Default in
Payment; Application of Monies by Mortgagee.
(a) If default shall be made in the payment of any amount due under the
Loan Documents, then, upon Mortgagee's demand, Mortgagor will pay to
Mortgagee the whole amount due and payable thereunder and all other
sums secured hereby; and if Mortgagor shall fail to pay the same
forthwith upon such demand, Mortgagee shall be entitled to sue for and
recover judgment for the whole amount so due and unpaid together with
costs and expenses, including the reasonable compensation, expenses
and disbursements of Mortgagee's agents and attorneys incurred in
connection with such suit and any appeal in connection therewith,
Mortgagee shall be entitled to sue and recover judgment as aforesaid
either before, after or during the pending of any proceedings for the
enforcement of this Mortgage; and the right of Mortgagee to recover
such judgment shall not be affected by any taking, possession or
foreclosure sale hereunder, or by the exercise of any other right,
power or remedy for the enforcement of the terms of this Mortgage, or
the foreclosure of the lien hereof.
(b) In case of a foreclosure sale of all or any part of the Mortgaged
Property and of the application of the proceeds of sale to the payment
of the sums secured hereby, Mortgagee shall be entitled to enforce
payment of and to receive all amounts then remaining due and unpaid
and to recover judgment for any portion thereof remaining unpaid, with
interest.
(c) Mortgagor hereby agrees, to the extent permitted by law, that no
recovery of any such judgment by Mortgagee and no attachment or levy
of any execution upon any of the Mortgaged Property or any other
property shall in any way affect the lien of this Mortgage upon the
Mortgaged Property or any part thereof or any lien, rights, powers or
remedies of Mortgagee hereunder, but such lien, rights, powers and
remedies shall continue unimpaired as before.
(d) Any monies collected or received by Mortgagee under this Paragraph
2.11 shall be applied as follows:
(i) First, to the payment of all reasonable compensation, expenses
and disbursements of the agents and attorneys; and
(ii) Second, to payment of amounts due and unpaid under the Loan
Documents; and
(iii) Third, as otherwise may be provided by law.
2.11 Delay or Omission No waiver. No delay or omission of Mortgagee or of any
holder of the Note to exercise any right, power or remedy accruing upon any
Event of Default shall exhaust or impair any such right, power or remedy or
shall be construed to waive any such Event of Default or to constitute
acquiescence therein. Every right, power and remedy given to Mortgagee may
be exercised from time to time as often as may be deemed expedient by
Mortgagee.
11
2.12 No waiver of One Default to Affect Another. No waiver of any Event of
Default hereunder shall extend to or affect any subsequent or any other
Event of Default then existing, or impair any rights, powers or remedies
consequent thereon. If Mortgagee (a) grants forbearance or an extension of
time for the payment of any sums secured hereby; (b) takes other or
additional security for the payment thereof; (c) waives or does not
exercise any right granted in the Loan Documents or this Mortgage; (d)
releases any part of the instrument securing the Note; (e) consents to the
filing of any map, plat or replat of the Land; (f) consents to the granting
of any easement on the Land; or (g) makes or consents to any agreement
changing the terms of this Mortgage or subordinating the lien or any change
hereof, no such act or omission shall release, discharge, modify, change or
affect the original Mortgagor, or any subsequent purchaser of the Mortgaged
Property or any part thereof or any maker, co-signer, endorser, surety or
guarantor. No such act or omission shall preclude Mortgagee from exercising
any right, power or privilege herein granted or intended to be granted in
case of any Event of Default then existing or of any subsequent Event of
Default nor, except as otherwise expressly provided in an instrument or
instruments executed by Mortgagee, shall the lien of this Mortgage be
altered thereby. In the event of the sale or transfer by operation of law
or otherwise of all or any part of the Mortgaged Property, Mortgagee,
without notice to any person, firm or corporation, is hereby authorized and
empowered to deal with any such vendee or transferee with reference to the
Mortgaged Property or the indebtedness secured hereby, or with reference to
any of the terms or conditions hereof, as fully and to the same extent as
it might deal with the original parties hereto and without in any way
releasing or discharging any of the liabilities or under takings hereunder.
2.13 Discontinuance of Proceedings; Position of Parties Restored. If Mortgagee
shall have proceeded to enforce any right or remedy under this Mortgage by
foreclosure, entry or otherwise, any such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to Mortgagee, then and in every such case Mortgagor and Mortgagee
shall be restored to their former positions and rights hereunder, and all
rights, powers and remedies of Mortgagee shall continue as if no such
proceeding had occurred or had been taken.
2.14 Waiver of Rights to Appraisal, Stay, Extension, Exemption and Redemption.
Mortgagor agrees to the full extent permitted by law, that in case of a
default on the part of Mortgagor hereunder, neither Mortgagor nor anyone
claiming through or under it shall or will set up, claim or seek to take
advantage of any appraisement, valuation, stay, extension, homestead,
exemption or redemption laws now or hereafter in force, in order to prevent
or hinder the enforcement or foreclosure of this Mortgage, or the absolute
sale of the mortgaged property, or the final and absolute putting into
possession thereof, immediately after such sale, of the purchasers thereof,
and Mortgagor, for itself and all who may at any time claim through or
under it, hereby waives to the full extent that it may lawfully so do, the
benefit of all such laws, and any and all right to have the assets
comprised in the security intended to be created hereby marshalled upon any
foreclosure of the lien hereof. Mortgagor specifically waives its right to
demand an appraisal pursuant to Section 29-3-580 of the Code of Laws of
South Carolina, 1976, as amended.
2.15 Remedies Cumulative. No right, power or remedy conferred upon or reserved
to Mortgagee by the Loan Documents or this Mortgage are exclusive of any
other right, power or remedy, but each and every such right, power and
remedy shall be cumulative and concurrent and shall be in addition to any
other right, power and remedy given hereunder or
12
<PAGE>
under the Loan Documents, or now or hereafter existing at law, in equity or
by statute.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
3.01 Heirs, Successors and Assigns Included in Parties. Whenever one of the
Parties hereto is named or referred to herein, the heirs, successors and
assigns, of such party shall be included and all covenants and agreements
contained in this Mortgage, by or on behalf of Mortgagor or Mortgagee,
shall bind and inure to the benefit of their respective heirs, successors
and assigns, whether so expressed or not.
3.02 Addresses for Notices, Etc. Any notice, report, demand or other instrument
authorized or required to be given or furnished under this Mortgage to
Mortgagor or Mortgagee shall be deposited in the U. S. Mail, registered or
certified, postage prepaid, or hand delivered, or forwarded by overnight
delivery service to the addressee as follows:
If to Mortgagor; LIBERTY TECHNICAL SERVICES, INC.
555 North Lane
Conshohocken, PA 19428
If to Mortgagee: FIRST UNION NATIONAL BANK
123 South Broad Street
Philadelphia, PA 19l09
Notices shall be deemed effective when delivered or forty-eight (48) hours
following mailing, whichever is earlier.
3.03 Headings. The headings of the articles, sections paragraphs and
subdivisions of this Mortgage are for convenience of reference only, are
not to be considered a part hereof, and shall not limit or expand or
otherwise affect any of the terms hereof.
3.04 Invalid Provisions to Affect No Others. In the event that any of the
covenants, agreements, terms or provisions contained in the Loan Documents
or this Mortgage shall be invalid, illegal or unenforceable in any respect,
the validity of the remaining covenants, agreements, terms or provisions
contained herein and in the Loan Documents shall be in no way affected,
prejudiced or disturbed thereby.
3.05 Changes, etc. Neither this Mortgage nor any term hereof may be changed,
waived, discharged or terminated orally, or by any action or inaction, but
only by an instrument in writing signed by the Party against which
enforcement of the change, waiver, discharge or termination is sought. Any
agreement hereafter made by Mortgagor and Mortgagee relating to this
Mortgage shall be superior to the rights of the holder of any intervening
lien or encumbrance.
3.05 Governing Law. This Mortgage is made by Mortgagor and accepted by Mortgagee
in the State of South Carolina, with reference to the laws of such State,
and shall be construed, interpreted, enforced and governed by and in
accordance with such laws.
3.07 Default Rate. The Default Rate shall be as provided in the Loan Documents.
13
<PAGE>
ARTICLE FOUR
SECURITY AGREEMENT
4.01 Grant of Security Interest. With respect to the fixtures and personal
property herein above described, this Mortgage shall constitute a security
agreement between Mortgagor, as debtor, and Mortgagee, as secured party,
and, cumulative of all other rights of Mortgagee hereunder, Mortgagee shall
have all of the rights conferred upon secured parties by the South Carolina
Uniform Commercial Code. Further, Mortgagor and Mortgagee agree that this
Mortgage, when recorded, shall be effective as a financing statement
perfecting Mortgagee's security interest in the fixtures described in this
Mortgage. The address of Mortgagor set forth above in Paragraph 3.02 is the
mailing address for Mortgagor, as debtor, for purposes of the South
Carolina Uniform Commercial Code, and the address of Mortgagee set forth
above in Paragraph 3.02 is the address of Mortgagee, as secured party, from
which information concerning Mortgagee's security interest granted herein
can be obtained, as required under the South Carolina Uniform Commercial
Code. Mortgagor agrees to pay Mortgagee's charge to the maximum amount
permitted by law, for any statement by Mortgagee regarding the obligations
secured by this Mortgage requested by Mortgagor or on behalf of Mortgagor.
On demand, Mortgagor will promptly pay all costs and expenses of filing
statements, continuation statements, partial releases, and termination
statements deemed necessary or appropriate by Mortgagee to establish and
maintain the validity and priority of the security interest of Mortgagee,
or any modification thereof, and all costs and expenses of any searches
reasonably required by Mortgagee. Mortgagee may exercise any of all the
remedies of a secured party available to it under the South Carolina
Uniform Commercial Code with respect to such property, and it is expressly
agreed in accordance with the provisions of the South Carolina Uniform
Commercial Code, five (5) days notice by Mortgagee to Mortgagor shall be
deemed to be reasonable requiring such notice; provided, however, that
Mortgagee may at its option dispose of the collateral in accordance with
the Mortgagee's rights and remedies in respect to the real property
pursuant to the provisions of the Mortgage, in lieu of proceeding under the
South Carolina Uniform Commercial Code.
IN WITNESS WHEREOF, the undersigned has executed this instrument the day
and year first above written.
WITNESSES: LIBERTY TECHNICAL SERVICES, INC._
??? By:/s/ Daniel G. Clare
- ----------------------- -----------------------------
??? Title: Daniel G. Clare
- ----------------------- --------------------------
VP & Secretary
14
<PAGE>
STATE OF Penna
-----------------------
COUNTY OF Phila PROBATE
-----------------------
PERSONALLY appeared before me the undersigned witness and made oath that
(s)he saw the within named LIBERTY TECHNICAL SERVICES, INC. by its duly
authorized officer, sign, seal and as their act, deliver the within written
instrument, and that (s)he, with the other witness subscribed above, witnessed
the execution thereof.
Sworn to before me this 3rd
day of April, 1997.
/s/ Lynn T. Meyer
- ---------------------------------
Notary Public for
My commission expires : [Notary Seal]
-----------
15
<PAGE>
EXHIBIT A
Description of the Land
ALL that tract or parcel of land containing 1.70 acres, situated, lying and
being in Dorchester County, South Carolina, on the northeast side of Dorchester
Road (S.C. Highway 642) approximately .8 miles northwest of the intersection of
Dorchester Road and Ashley Phosphate Road, shown and designated as "1.70 Acres"
on the March 2, 1984 plat by Trico Surveying, Inc., entitled "PLAT SHOWING TRACT
'A', A PORTION OF A 50.00 ACRE TRACT OF LAND PROPERTY OF C. KENNETH WILLARD
LOCATED ON DORCHESTER ROAD, DORCHESTER COUNTY, SOUTH CAROLINA"; including an
eighty (80) foot wide nonexclusive access easement running perpendicular from
Dorchester Road to the northwest boundary of the tract and alongside that
boundary for a distance of approximately eighty-four and forty-five
one-hundredths (84.45) feet. The plat is recorded in Plat Cabinet D at Slide 397
in the office of the Clerk of Court of Dorchester County and the 1.70 acre tract
and the nonexclusive access easement have the location, dimensions and butts and
bounds as shown on the aforesaid plat.
BEING the same property conveyed to Mortgagor herein by deed of Coosaw Creek I,
a partnership, dated November 26, 1991 and recorded in the office of the Clerk
of Court for Dorchester County in Book 923 at page 254.
TMS #172-13-01-002
Grantee(s) Address:
16
<PAGE>
SECRETARY'S CERTIFICATE
FOR
LIBERTY TECHNOLOGIES, INC.
The undersigned hereby certifies that he is the duly authorized Secretary
of the above corporation (the "Corporation") and is charged with keeping the
records of the Corporation and its seal, and that (i) attached hereto as Exhibit
"A" is a true and correct copy of the resolutions duly adopted by the unanimous
written consent of the Corporation's Board of Directors, which resolutions are
now in full force and effect and have not been amended or modified in any
respect; and (ii) attached hereto as Exhibit "B" is a true and correct copy of a
certificate of good standing issued by the Department of State for the
Commonwealth of Pennsylvania stating that the Corporation is in good standing as
of the date specified thereon.
The undersigned also certifies that the following persons are duly
constituted officers of the Corporation presently serving in the capacities
indicated, their true and correct signatures appearing below:
Name Title Signature
- ---- ----- ---------
R. Nim Evatt President /s/ R. Nim Evatt
---------------------------
Daniel G. Clare Vice President, Treasurer, /s/ Daniel G. Clare
Assistant Secretary ---------------------------
The undersigned has executed this certificate as Secretary and impressed
the seal of the Corporation hereon this 2 day of April, 1997.
LIBERBY TECHNOLOGIES, INC.
/s/ Daniel G. Clare
---------------------------------------
Daniel G. Clare, Assistant Secretary
(SEAL)
<PAGE>
LIBERTY TECHNOLOGIES, INC.
CONSENT OF BOARD OF DIRECTORS
IN LIEU OF SPECIAL MEETING
THE UNDERSIGNED, being all of the members of Board of Directors of LIBERTY
TECHNOLOGIES, INC., a Pennsylvania corporation (the "Corporation"), in
accordance with the authority contained in Section1727(b) of the Pennsylvania
Business Corporation Law of 1988, do hereby unanimously consent in writing to
the adoption of the following resolutions, which resolutions shall have the same
effect as if duly adopted at a meeting of the Board of Directors of the
Corporation (the "Board") duly called and held in accordance with law and the
Bylaws of the Corporation.
WHEREAS, the Corporation is a party to that certain Loan Agreement dated
December 2, 1993, as amended by (i) Amendment and Modification to Loan Agreement
dated December 30, 1995, (ii) Second Amendment and Modification to Loan
Agreement dated October 11, 1996 and (iii) Third Amendment and Modification to
Loan Agreement dated February 27, 1997 (in each case, together with all
exhibits, schedules, addenda and other items attached thereto, and all
documents, instruments or certificates executed or delivered in connection
therewith, collectively the "Loan Agreement"), by and among the Corporation, LTH
Delaware, Inc., Liberty Technical Services, Inc., Beta Monitors International
Inc., Liberty International Inc., Liberty Imaging Systems, Inc. (collectively,
the "Borrowers"), and First Union National Bank (formerly known as First
Fidelity Bank, N.A., and hereinafter referred to as the "Bank") pursuant to
which the Bank has extended to the Borrowers a revolving credit facility in the
principal amount of up to $5,000,000, the outstanding principal amount of which
is evidenced by a note dated December 2, 1993 and one or more allonges thereto;
and
WHEREAS, the Borrowers desire that certain amendments be made to the Loan
Agreement, the terms and conditions of which are set forth on that certain
Fourth Amendment and Modification to Loan Agreement, substantially in the form
presented to the undersigned (the "Amendment"); and
NOW, THEREFORE, IT IS HEREBY
RESOLVED, that the Amendment and each of the Allonge, Security Agreement
and Financing Statements, and any other Loan Documents (as defined in the Loan
Agreement) executed in connection therewith (collectively, the "Loan Amendment
Documents") be, and they hereby are, approved and adopted; and it is
<PAGE>
FURTHER RESOLVED, that the Corporation be, and it hereby is, authorized,
empowered and directed to execute and deliver the Loan Amendment Documents and
to perform all of the transactions contemplated by the Loan Amendment Documents;
and it is
FURTHER RESOLVED, that the President or any Vice President of the
Corporation (each a "Proper Officer") be, and each of them hereby is, authorized
and directed on behalf of and in the name of the Corporation to execute, deliver
and cause the performance of, and the Secretary or any Assistant Secretary of
the Corporation be, and each of them hereby is, authorized and directed on
behalf of the Corporation to attest the signature of any Proper Officer on, each
Loan Amendment Document, with such modifications as any Proper Officer may deem
necessary, desirable or appropriate, which modifications are hereby approved and
adopted in all respects and shall be conclusively evidenced by the execution and
delivery by any Proper Officer of each Loan Amendment Document; and it is
FURTHER RESOLVED, that any Proper Officer be, and each of them hereby is,
authorized and directed on behalf of and in the name of the Corporation to take
all actions which they, or any of them, in the exercise of their sole
discretion, deem necessary, advisable or appropriate to effectuate the foregoing
resolutions including, without limitation, the execution and delivery of such
certificates, instruments or documents and the paying of such fees and expenses,
as he or she may deem necessary, advisable or appropriate, such determination to
be conclusively evidenced by the performance of such acts and the execution and
delivery of such certificates, instruments or document; and it is
FURTHER RESOLVED, that any actions previously taken by any Proper Officer
in connection with any of the foregoing resolutions are hereby adopted, ratified
and approved in all respects as acts and deeds of the Corporation.
[SIGNATURE PAGE FOLLOWS]
2
<PAGE>
This Consent of the Directors in Lieu of a Special Meeting may be executed
in counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one and the same instrument, and shall be deemed
effective on the latest date written below, with the last of such counterparts,
and all such counterparts shall be filed with the minutes of the Corporation.
DIRECTORS: DATE:
- ---------- -----
/s/ R. Nim Evatt April 2, 1997
- ------------------------------ --------------
R. Nim Evatt
- ------------------------------ --------------, 1997
John A. Hinds
- ------------------------------ --------------, 1997
Robert L. Leon
- ------------------------------ --------------, 1997
James D. Rosener
- ------------------------------ --------------, 1997
Richard J. Defieux
3
<PAGE>
This Consent of the Directors in Lieu of a Special Meeting may be executed
in counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one and the same instrument, and shall be deemed
effective on the latest date written below, with the last of such counterparts,
and all such counterparts shall be filed with the minutes of the Corporation.
DIRECTORS: DATE:
- ---------- -----
- ------------------------------ ---------------, 1997
R. Nim Evatt
/s/ John A. Hinds March 30, 1997
- ------------------------------ ---------------
John A. Hinds
- ------------------------------ ---------------, 1997
Robert L. Leon
- ------------------------------ ---------------, 1997
James D. Rosener
- ------------------------------ ---------------, 1997
Richard J. Defieux
3
<PAGE>
This Consent of the Directors In Lieu of a Special Meeting may be executed
in counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one and the same instrument, and shall be deemed
effective on the latest date written below, with the last of such counterparts,
and all such counterparts shall be filed with the minutes of the Corporation.
DIRECTORS: DATE:
- ---------- -----
- ------------------------------ ---------------, 1997
R. Nim Evatt
- ------------------------------ ---------------, 1997
John A. Hinds
/s/ Robert L. Leon March 28, 1997
- ------------------------------ ---------------
Robert L. Leon
- ------------------------------ ---------------, 1997
James D. Rosener
- ------------------------------ ---------------, 1997
Richard J. Defieux
3
<PAGE>
This Consent of the Directors In Lieu of a Special Meeting may be executed
in counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one and the same instrument, and shall be deemed
effective on the latest date written below, with the last of such counterparts,
and all such counterparts shall be filed with the minutes of the Corporation.
DIRECTORS: DATE:
- ---------- -----
- ------------------------------ ---------------, 1997
R. Nim Evatt
- ------------------------------ ---------------, 1997
John A. Hinds
- ------------------------------ ---------------, 1997
Robert L. Leon
/s/ James D. Rosener
- ------------------------------ ---------------, 1997
James D. Rosener
- ------------------------------ ---------------, 1997
Richard J. Defieux
3
<PAGE>
This Consent of the Directors In Lieu of a Special Meeting may be executed
in counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one and the same instrument, and shall be deemed
effective on the latest date written below, with the last of such counterparts,
and all such counterparts shall be filed with the minutes of the Corporation.
DIRECTORS: DATE:
- ---------- -----
- ------------------------------ ---------------, 1997
R. Nim Evatt
- ------------------------------ ---------------, 1997
John A. Hinds
- ------------------------------ ---------------, 1997
Robert L. Leon
- ------------------------------ ---------------, 1997
James D. Rosener
/s/ Richard J. Defieux April 2, 1997
- ------------------------------ ---------------
Richard J. Defieux
3
<PAGE>
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
MARCH 28, 1997
TO ALL WHOM THESE PRESENTS SHALL COME, GREETING:
I DO HEREBY CERTIFY THAT,
LIBERTY TECHNOLOGIES, INC.
is duly incorporated under the laws of the Commonwealth of Pennsylvania and
remains a subsisting corporation so far as the records of this office show, as
of the date herein.
IN TESTIMONY WHEREOF, I have hereunto set my hand
and caused the Seal of the Secretary's Office to
be affixed, the day and year above written.
/s/ ???
-----------------------------
Secretary of the Commonwealth
<PAGE>
SECRETARY'S CERTIFTCATE
FOR
LIBERTY TECHNICAL SERVICES, INC.
The undersigned hereby certifies that he is the duly authorized Secretary
of the above corporation (the "Corporation") and is charged with keeping the
records of the Corporation and its seal, and that (i) attached hereto as Exhibit
"A" is a true and correct copy of the resolutions duly adopted by the written
consent of the sole member of the Corporation's Board of Directors, which
resolutions are now in full force and effect and have not been amended or
modified in any respect; and (ii) attached hereto as Exhibit "B" is a true and
correct copy of a certificate of good standing issued by the Department of State
for the Commonwealth of Pennsylvania stating that the Corporation is in good
standing as of the date specified thereon.
The undersigned also certifies that the following persons are duly
constituted officers of the Corporation presently serving in the capacities
indicated, their true and correct signatures appearing below:
Name Title Signature
- ---- ----- ---------
R. Nim Evatt President /s/ R. Nim Evatt
-----------------------
Daniel G. Clare Vice President, Treasurer, /s/ Daniel G. Clare
Assistant Secretary -----------------------
The undersigned has executed this certificate as Secretary and impressed
the seal of the Corporation hereon this 2nd day of April, 1997.
LIBERBY TECHNOLOGIES, INC.
/s/ Daniel G. Clare
---------------------------------------
Daniel G. Clare, Secretary
(SEAL)
<PAGE>
LIBERTY TECHNICAL SERVICES. INC.
CONSENT OF SOLE DIRECTOR
IN LIEU OF SPECIAL MEETING
THE UNDERSIGNED, being the sole member of the Board of Directors of LIBERTY
TECHNICAL SERVICES, INC., a Pennsylvania corporation (the "Corporation"), in
accordance with the authority contained in Section 1727(b) of the Pennsylvania
Business Corporation Law of 1988, as amended, does hereby consent in writing to
the adoption of the following resolutions, which resolutions shall have the same
effect as if duly adopted at a meeting of the Board of Directors of the
Corporation (the "Board") duly called and held in accordance with law and the
Bylaws of the Corporation.
WHEREAS, the Corporation is a party to that certain Loan Agreement dated
December 2, 1993, as amended by (i) Amendment and Modification to Loan Agreement
dated December 30, 1995, and (ii) Second Amendment and Modification to Loan
Agreement dated October 11, 1996 and (iii) Third Amendment and Modification to
Loan Agreement dated February 27, 1997 (in each case, together with all
exhibits, schedules, addenda and other items attached thereto, and all
documents, instruments or certificates executed or delivered in connection
therewith, the "Loan Agreement"), by and among the Corporation, Liberty
Technologies, Inc., LTH Delaware, Inc., Beta Monitors International Inc.,
Liberty International Inc., Liberty Imaging Systems, Inc. (collectively, the
"Borrowers"), and First Union National Bank (formerly known as First Fidelity
Bank, N.A., and hereinafter referred to as the "Bank") pursuant to which the
Bank has extended to the Borrowers a revolving credit facility in the principal
amount of up to $5,000,000, the outstanding principal amount of which is
evidenced by a note dated December 2, 1993 and one or more allonges thereto; and
WHEREAS, the Borrowers desire that certain amendments be made to the Loan
Agreement, the terms and conditions of which are set forth on that certain
Fourth Amendment and Modification to Loan Agreement, substantially in the form
presented to the undersigned (the "Amendment"); and
NOW, THEREFORE, IT IS HEREBY
RESOLVED, the Amendment and each of the Allonge, Security Agreement and
Financing Statements, and any other Loan Documents (as defined in the Loan
Agreement) executed in connection therewith (collectively, the "Loan Amendment
Documents") be, and they hereby are, approved and adopted; and it is
<PAGE>
FURTHER RESOLVED, that the Corporation be, and it hereby is, authorized,
empowered and deliver to execute and deliver the Loan Amendment Documents and to
perform all of the transactions contemplated by the Loan Amendment Documents;
and it is
FURTHER RESOLVED, that the President or any Vice President of the
Corporation (each a "Proper Officer") be, and each of them hereby is, authorized
and directed on behalf of and in the name of the Corporation to execute, deliver
and cause the performance of, and the Secretary or any Assistant Secretary of
the Corporation be, and each of them hereby is, authorized and directed on
behalf of the Corporation to attest the signature of any Proper Officer on, each
Loan Amendment Document, with such modifications as any Proper Officer may deem
necessary, desirable or appropriate, which modifications are hereby approved and
adopted in all respects and shall be conclusively evidenced by the execution and
delivery by any Proper Officer of the Loan Amendment Document; and it is
FURTHER RESOLVED, that any Proper Officer be, and each of them hereby is,
authorized and directed on behalf of and in the name of the Corporation to take
all actions which they, or any of them, in the exercise of their sole
discretion, deem necessary, advisable or appropriate to effectuate the foregoing
resolutions including, without limitation, the execution and delivery of such
certificates, instruments or documents and the paying of such fees and expenses,
as he or she may deem necessary, advisable or appropriate, such determination to
be conclusively evidenced by the performance of such acts and the execution and
delivery of such certificates, instruments or document; and it is
FURTHER RESOLVED, that any actions previously taken by any Proper Officer
in connection with any of the foregoing resolutions are hereby adopted, ratified
and approved in all respects as acts and deeds of the Corporation.
The undersigned sole member of the Corporation's Board has caused this
Consent in Lieu of Special Meeting to be executed on this 2nd day of April,
1997.
/s/ R. Nim Evatt
---------------------------------
R. Nim Evatt
2
<PAGE>
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
MARCH 28, 1997
TO ALL WHOM THESE PRESENTS SHALL COME, GREETING:
I DO HEREBY CERTIFY THAT,
LIBERTY TECHNICAL SERVICES, INC.
is duly incorporated under the laws of the Commonwealth of Pennsylvania and
remains a subsisting corporation so far as the records of this office show, as
of the date herein.
IN TESTIMONY WHEREOF, I have hereunto set my hand
and caused the Seal of the Secretary's Office to
be affixed. the day and year above written.
(SEAL) /s/ ???
-----------------------------
Secretary of the Commonwealth
<PAGE>
SECRETARY'S CERTIFICATE
FOR
LTH DELAWARE, INC.
The undersigned hereby certifies that he is the duly authorized Secretary
of the above corporation (the "Corporation") and is charged with keeping the
records of the Corporation and its seal, and that (i) attached hereto as Exhibit
"A" is a true and correct copy of the resolutions duly adopted by the written
consent of the sole member of the Corporation's Board of Directors, which
resolutions are now in full force and effect and have not been amended or
modified in any respect; and (ii) attached hereto as Exhibit "B" is a true and
correct copy of a certificate of good standing issued by the Secretary of State
for the State of Delaware stating that the Corporation is in good standing as of
the date specified thereon.
The undersigned also certifies that the following persons are duly
constituted officers of the Corporation presently serving in the capacities
indicated, their true and correct signatures appearing below:
Name Title Signature
- ---- ----- ---------
R. Nim Evatt President /s/ R. Nim Evatt
-----------------------
Daniel G. Clare Vice President, Treasurer, /s/ Daniel G. Clare
Assistant Secretary -----------------------
The undersigned has executed this certificate as Secretary and impressed
the seal of the Corporation hereon this 2nd day of April, 1997.
LTH DELAWARE, INC.
/s/ Daniel G. Clare
--------------------------
Daniel G. Clare, Secretary
(SEAL)
<PAGE>
LTH DELAWARE, INC.
CONSENT OF SOLE DIRECTOR
IN LIEU OF SPECIAL MEETING
THE UNDERSIGNED, being the sole member of the Board of Directors of LTH
DELAWARE, INC., a Delaware corporation (the "Corporation"), in accordance with
the authority contained in Section14l(f) of the Delaware Corporation Law, as
amended, does hereby consent in writing to the adoption of the following
resolutions, which resolutions shall have the same effect as if duly adopted at
a meeting of the Board of Directors of the Corporation (the "Board") duly called
and held in accordance with law and the Bylaws of the Corporation.
WHEREAS, the Corporation is a party to that certain Loan Agreement dated
December 2, 1993, as amended by (i) Amendment and Modification to Loan Agreement
dated December 30, 1995, (ii) Second Amendment and Modification to Loan
Agreement dated October 1 1, 1996 and (iii) Third Amendment and Modification to
Loan Agreement dated February 27, 1997 (in each case, together with all
exhibits, schedules, addenda and other items attached thereto, and all
documents, instruments or certificates executed or delivered in connection
therewith, the "Loan Agreement"), by and among the Corporation, Liberty
Technologies, Inc., Liberty Technical Services, Inc., Beta Monitors
International Inc., Liberty International Inc., Liberty Imaging Systems, Inc.
(collectively, the "Borrowers"), and First Union National Bank (formerly known
as First Fidelity Bank, N.A., and hereinafter referred to as the "Bank")
pursuant to which the Bank has extended to the Borrowers a revolving credit
facility in the principal amount of up to $5,000,000, the outstanding principal
amount of which is evidenced by a note dated December 2, 1993 and one or more
allonges thereto; and
WHEREAS, the Borrowers desire that certain amendments be made to the Loan
Agreement, the terms and conditions of which are set forth on that certain
Fourth Amendment and Modification to Loan Agreement, substantially in the form
presented to the undersigned (the "Amendment"); and
NOW, THEREFORE, IT IS HEREBY
RESOLVED, that the Amendment and each of the Allonge, Security Agreement
and Financing Statements, and any other Loan Documents (as defined in the Loan
Agreement) executed in connection therewith (collectively, the "Loan Amendment
Documents") be, and they hereby are, approved and adopted; and it is
<PAGE>
FURTHER RESOLVED, that the Corporation be, and it hereby is, authorized,
empowered and directed to execute and deliver the Loan Amendment Documents and
to perform all of the transactions contemplated by the Loan Amendment Documents;
and it is
FURTHER RESOLVED, that the President or any Vice President of the
Corporation (each a "Proper Officer") be, and each of them hereby is, authorized
and directed on behalf of and in the name of the Corporation to execute, deliver
and cause the performance of, and the Secretary or any Assistant Secretary of
the Corporation be, and each of them hereby is, authorized and directed on
behalf of the Corporation to attest the signature of any Proper Officer on, each
Loan Amendment Document, with such modifications as any Proper Officer may deem
necessary, desirable or appropriate, which modifications are hereby approved and
adopted in all respects and shall be conclusively evidenced by the execution and
delivery by any Proper Officer of each Loan Amendment Document; and it is
FURTHER RESOLVED, that any Proper Officer be, and each of them hereby is,
authorized and directed on behalf of and in the name of the Corporation to take
all actions which they, or any of them, in the exercise of their sole
discretion, deem necessary, advisable or appropriate to effectuate the foregoing
resolutions including, without limitation, the execution and delivery of such
certificates, instruments or documents and the paying of such fees and expenses,
as he or she may deem necessary, advisable or appropriate, such determination to
be conclusively evidenced by the performance of such acts and the execution and
delivery of such certificates, instruments or document; and it is
FURTHER RESOLVED, that any actions previously taken by any Proper Officer
in connection with any of the foregoing resolutions are hereby adopted, ratified
and approved in all respects as acts and deeds of the Corporation.
The undersigned sole member of the Corporation's Board has caused this
Consent in Lieu of Special Meeting to be executed on this 2nd day of April,
1997.
/s/ R. Nim Evatt
-----------------
R. Nim Evatt
<PAGE>
SECRETARY'S CERTIFICATE
FOR
LIBERTY INTERNATIONAL INC.
The undersigned hereby certifies that he is the duly authorized Secretary
of the above corporation (the "Corporation") and is charged with keeping the
records of the Corporation and its seal, and that (i) attached hereto as Exhibit
"A" is a true and correct copy of the resolutions duly adopted by the written
consent of the sole member of the Corporation's Board of Directors, which
resolutions are now in full force and effect and have not been amended or
modified in any respect; and (ii) attached hereto as Exhibit "B" is a true and
correct copy of a certificate of good standing issued by the Secretary of State
for the State of Nevada stating that the Corporation is in good standing as of
the date specified thereon.
The undersigned also certifies that the following persons are duly
constituted officers of the Corporation presently serving in the capacities
indicated, their true and correct signatures appearing below:
Name Title Signature
- ---- ----- ---------
R. Nim Evatt President /s/ R. Nim Evatt
----------------------
Daniel G. Clare Vice President, Treasurer, /s/ Daniel G. Clare
Secretary ----------------------
The undersigned has executed this certificate as Secretary and impressed
the seal of the Corporation hereon this 2nd day of April, 1997.
LIBERTY INTERNATIONAL INC.
/s/ Daniel G. Clare
---------------------------------
Daniel G. Clare, Secretary
(SEAL)
<PAGE>
State of Delaware PAGE 1
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY "LTH DELAWARE, INC." IS DULY INCORPORATED UNDER THE LAWS OF THE STATE OF
DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL CORPORATE EXISTENCE SO FAR AS
THE RECORDS OF THIS OFFICE SHOW, AS OF THE TWENTY-EIGHTH DAY OF MARCH, A.D.
1997.
(SEAL) /s/ Edward J. Freel
--------------------------------------
Edward J. Freel, Secretary of State
2261567 8300 AUTHENTICATION: 8395479
DATE: 03-28-97
971101560
<PAGE>
SECRETARY'S CERTIFICATE
FOR
LIBERTY IMAGING SYSTEMS, INC.
The undersigned hereby certifies that he is the duly authorized Secretary
of the above corporation (the "Corporation") and is charged with keeping the
records of the Corporation and its seal, and that (i) attached hereto as Exhibit
"A" is a true and correct copy of the resolutions duly adopted by the written
consent of the sole member of the Corporation's Board of Directors, which
resolutions are now in full force and effect and have not been amended or
modified in any respect; and (ii) attached hereto as Exhibit "B" is a true and
correct copy of a certificate of good standing issued by the Department of State
for the Commonwealth of Pennsylvania stating that the Corporation is in good
standing as of the date specified thereon.
The undersigned also certifies that the following persons are duly
constituted officers of the Corporation presently serving in the capacities
indicated, their true and correct signatures appearing below:
Name Title Signature
- ---- ----- ---------
R. Nim Evatt President /s/ R. Nim Evatt
-----------------------
Daniel G. Clare Vice President, Treasurer, /s/ Daniel G. Clare
Secretary -----------------------
The undersigned has executed this certificate as Secretary and impressed
the seal of the Corporation hereon this 2nd day of April, 1997
LIBERTY IMAGING SYSTEMS, INC.
/s/ Daniel G. Clare
-------------------------
Daniel G. Clare, Secretary
(SEAL)
<PAGE>
LIBERTY IMAGING SYSTEMS, INC.
UNANIMOUS CONSENT OF DIRECTORS
IN LIEU OF SPECIAL MEETING
THE UNDERSIGNED, being all of the Directors of LIBERTY IMAGING SYSTEMS,
INC., a Pennsylvania corporation (the "Corporation"), in accordance with the
authority contained in Section1727(b) of the Pennsylvania Business Corporation
Law of 1988, as amended, does hereby consent in writing to the adoption of the
following resolution, which resolution shall have the same effect as if duly
adopted at a meeting of the Board of Directors of the Corporation, duly called
and held in accordance with law and the Bylaws of the Corporation:
WHEREAS, the Corporation is a party to that certain Loan Agreement dated
December 2, 1993, as amended by (i) Amendment and Modification to Loan Agreement
dated December 30, 1995, (ii) Second Amendment and Modification to Loan
Agreement dated October 11, 1996 and (iii) Third Amendment and Modification to
Loan Agreement dated February 27, 1997 (in each case, together with all
exhibits, schedules, addenda and other items attached thereto, and all
documents, instruments or certificates executed or delivered in connection
therewith, collectively the "Loan Agreement"), by and among the Corporation,
Liberty Technologies, Inc., LTH Delaware, Inc., Liberty Technical Services,
Inc., Beta Monitors International Inc., Liberty International Inc.
(collectively, the "Borrowers"), and First Union National Bank (formerly known
as First Fidelity Bank, N.A., and hereinafter referred to as the "Bank")
pursuant to which the Bank has extended to the Borrowers a revolving credit
facility in the principal amount of up to $5,000,000, the outstanding principal
amount of which is evidenced by a note dated December 2, 1993 and one or more
allonges thereto; and
WHEREAS, the Borrowers desire that certain amendments be made to the Loan
Agreement, the terms and conditions of which are set forth on that certain
Fourth Amendment and Modification to Loan Agreement, substantially in the form
presented to the undersigned (the "Amendment"); and
NOW, THEREFORE, IT IS HEREBY
RESOLVED, that the Amendment and each of the Allonge, Security Agreement
and Financing Statements, and any other Loan Documents (as defined in the Loan
Agreement) executed in connection therewith (collectively, the "Loan Amendment
Documents") be, and they hereby are, approved and adopted; and it is
FURTHER RESOLVED, that the Corporation be, and it hereby is, authorized,
empowered and directed to execute and deliver the Loan Amendment Documents and
to perform all of the transactions contemplated by the Loan Amendment Documents;
and it is
FURTHER RESOLVED, that the President or any Vice President of the
Corporation (each a "Proper Officer") be, and each of them hereby is, authorized
and directed on behalf of and in the name of the Corporation to execute, deliver
and cause the performance of, and the Secretary or any Assistant Secretary of
the Corporation be, and each of them hereby is, authorized and directed on
behalf of the Corporation to attest the signature of any Proper Officer on, each
Loan Amendment Document, with such modifications as any Proper Officer may deem
necessary, desirable or appropriate, which modifications are hereby approved and
adopted in all respects and shall be conclusively evidenced by the execution and
delivery by any Proper Officer of each Loan Amendment Document; and it is
<PAGE>
FURTHER RESOLVED, that any Proper Officer be, and each of them hereby is,
authorized and directed on behalf of and in the name of the Corporation to take
all actions which they, or any of them, in the exercise of their sole
discretion, deem necessary, advisable or appropriate to effectuate the foregoing
resolutions including, without limitation, the execution and delivery of such
certificates, instruments or documents and the paying of such fees and expenses,
as he or she may deem necessary, advisable or appropriate, such determination to
be conclusively evidenced by the performance of such acts and the execution and
delivery of such certificates, instruments or document; and it is
FURTHER RESOLVED, that any actions previously taken by any Proper Officer
in connection with any of the foregoing resolutions are hereby adopted, ratified
and approved in all respects as acts and deeds of the Corporation.
IN WITNESS WHEREOF, the undersigned have executed this Unanimous Consent of
Directors in Lieu of Special Meeting on this 2nd day of April, 1997.
/s/ R. Nim Evatt
----------------------
R. Nim Evatt
<PAGE>
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
MARCH 28, 1997
TO ALL WHOM THESE PRESENTS SHALL COME, GREETING:
I DO HEREBY CERTIFY THAT.
LIBERTY IMAGING SYSTEMS, INC.
is duly incorporated under the laws of the Commonwealth of Pennsylvania
and remains a subsisting corporation so far as the records of this office
show. as of the date herein.
IN TESTIMONY WHEREOF, I have
hereunto set my hand and caused
the Seal of the Secretary's
Office to be affixed. the day
and year above written.
(SEAL) /s/ ???
----------------------------------
Secretary of the Commonwealth CFEN
<PAGE>
SECRETARY OF STATE
STATE OF NEVADA
CERTIFICATE OF EXISTANCE
WITH STATUS IN GOOD STANDING
I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that I am, by the laws of said State, the custodian of the
records relating to filings by corporations, limited-liability companies,
limited partnerships, and limited-liability partnerships pursuant to Title 7
of the Nevada Revised Statutes which are either presently in a status of good
standing or were in good standing for a time period subsequent of 1976 and
am the proper officer to execute this certificate.
I further certify that the records of the Nevada Secretary of State, at the
date of this certificate, evidence, BETA MONITORS INTERNATIONAL INC., as a
corporation duly organized under the laws of Nevada and existing under and by
virtue of the laws of the State of Nevada since April 27, 1993, and is in
good standing in this state.
IN WITNESS WHEREOF, I have hereunto set my hand
and affixed the Great Seal of State, at my office, in
Carson City, Nevada, on March 28, 1997.
/s/ Dean Heller
------------------------------------
Secretary of State
(SEAL) By /s/ ???
-------------------------------------
Certification Clerk
<PAGE>
BETA MONITORS INTERNATIONAL, INC.
CONSENT OF SOLE DIRECTOR
IN LIEU OF SPECIAL MEETING
THE UNDERSIGNED, being the sole member of the Board of Directors of BETA
MONITORS INTERNATIONAL, INC., a Nevada corporation (the "Corporation"), in
accordance with the authority contained in Section 78.315(2) of the Nevada
General Corporation Law, as amended, does hereby consent in writing to the
adoption of the following resolutions, which resolutions shall have the same
effect as if duly adopted at a meeting of the Board of Directors of the
Corporation (the "Board") duly called and held in accordance with law and the
Bylaws of the Corporation.
WHEREAS, the Corporation is a party to that certain Loan Agreement dated
December 2, 1993, as amended by (i) Amendment and Modification to Loan Agreement
dated December 30, 1995, (ii) Second Amendment and Modification to Loan
Agreement dated October 11, 1996 and (iii) Third Amendment and Modification to
Loan Agreement dated February 27, 1997 (in each case, together with all
exhibits, schedules, addenda and other items attached thereto, and all
documents, instruments or certificates executed or delivered in connection
therewith, the "Loan Agreement"), by and among the Corporation, Liberty
Technologies, Inc., LTH Delaware, Inc., Liberty Technical Services, Inc.,
Liberty International Inc., Liberty Imaging Systems, Inc. (collectively, the
"Borrowers") and First Union National Bank (formerly known as First Fidelity
Bank, N.A., and hereinafter referred to as the "Bank") pursuant to which the
Bank has extended to the Borrowers a revolving credit facility in the principal
amount of up to $5,000,000, the outstanding principal amount of which is
evidenced by a note dated December 2, 1993 and one or more allonges thereto; and
WHEREAS, the Borrowers desire that certain amendments be made to the Loan
Agreement, the terms and conditions of which are set forth on that certain
Fourth Amendment and Modification to Loan Agreement, substantially in the form
presented to the undersigned (the "Amendment"); and
NOW, THEREFORE, IT IS HEREBY
RESOLVED, that the Amendment and each of the Allonge, Security Agreement
and Financing Statements, and any other Loan Documents (as defined in the Loan
Agreement) executed in connection therewith (collectively, the "Loan Amendment
Documents") be, and they hereby are, approved and adopted; and it is
FURTHER RESOLVED, that the Corporation be, and it hereby is, authorized,
empowered and directed to execute and deliver the Loan Amendment Documents and
to perform all of the transactions contemplated by the Loan Amendment Documents;
and it is
<PAGE>
FURTHER RESOLVED, that the President or any Vice President of the
Corporation (each a "Proper Officer") be, and each of them hereby is, authorized
and directed on behalf of and in the name of the Corporation to execute, deliver
and cause the performance of, and the Secretary or any Assistant Secretary of
the Corporation be, and each of them hereby is, authorized and directed on
behalf of the Corporation to attest the signature of any Proper Officer on, each
Loan Amendment Document, with such modifications as any Proper Officer may deem
necessary, desirable or appropriate, which modifications are hereby approved and
adopted in all respects and shall be conclusively evidenced by the execution and
delivery by any Proper Officer of each Loan Amendment Document; and it is
FURTHER RESOLVED, that any Proper Officer be, and each of them hereby is,
authorized and directed on behalf of and in the name of the Corporation to take
all actions which they, or any of them, in the exercise of their sole
discretion, deem necessary, advisable or appropriate to effectuate the foregoing
resolutions including, without limitation, the execution and delivery of such
certificates, instruments or documents and the paying of such fees and expenses,
as he or she may deem necessary, advisable or appropriate, such determination to
be conclusively evidenced by the performance of such acts and the execution and
delivery of such certificates, instruments or document; and it is
FURTHER RESOLVED, that any actions previously taken by any Proper Officer
in connection with any of the foregoing resolutions are hereby adopted, ratified
and approved in all respects as acts and deeds of the Corporation.
The undersigned sole member of the Corporation's Board has caused this
Consent in Lieu of Special Meeting to be executed on this 2nd day of April,
1997.
/s/ R. Nim Evatt
---------------------------------
R. Nim Evatt
<PAGE>
BETA MONITORS INTERNATIONAL, INC.
The undersigned hereby certifies that he is the duly authorized Secretary
of the above corporation (the "Corporation") and is charged with keeping the
records of the Corporation and its seal, and that (i) attached hereto as Exhibit
"A" is a true and correct copy of the resolutions duly adopted by the written
consent of the sole member of the Corporation's Board of Directors, which
resolutions are now in full force and effect and have not been amended or
modified in any respect; and (ii) attached hereto as Exhibit "B" is a true and
correct copy of a certificate of good standing issued by the Secretary of State
for the State of Nevada stating that the Corporation is in good standing as of
the date specified thereon.
The undersigned also certifies that the following persons are duly
constituted officers of the Corporation presently serving in the capacities
indicated, their true and correct signatures appearing below:
Name Title Signature
- ---- ----- ---------
R. Nim Evatt President /s/ R. Nim Evatt
-------------------------
Daniel G. Clare Vice President, Treasurer, /s/ Daniel G. Clare
Secretary -------------------------
The undersigned has executed this certificate as Secretary and impressed
the seal of the Corporation hereon this 2nd day of April, 1997.
BETA MONITORS INTERNATIONAL, INC.
/s/ Daniel G. Clare
------------------------
Daniel G. Clare, Secretary
(SEAL)
<PAGE>
SECRETARY OF STATE
CERTIFICATE OF EXISTENCE
WITH STATUS IN GOOD STANDING
I, DEAN HELLER, the duly elected and qualified Nevada Secretary of State,
do hereby certify that I am, by the laws of said State, the custodian of the
records relating to filings by corporations, limited-liability companies,
limited partnerships, and limited-liability partnerships pursuant to Title 7 of
the Nevada Revised Statutes which are either presently in a status of good
standing or were in good standing for a time period subsequent of 1976 and am
the proper officer to execute this certificate.
I further certify that the records of the Nevada Secretary of State, at the
date of this certificate, evidence, LIBERTY INTERNATIONAL, INC., as a
corporation duly organized under the laws of Nevada and existing under and by
virtue of the laws of the State of Nevada since December 15, 1994, and is in
good standing in this state.
IN WITNESS WHEREOF, I have hereunto set my
hand and affixed the Great Seal of State, at
my office, in Carson City, Nevada, on March
28, 1997.
/s/ Dean Heller
----------------------------
Secretary of State
(SEAL) By /s/ ???
-----------------------------
Certification Clerk
<PAGE>
LIBERTY INTERNATIONAL, INC.
CONSENT OF SOLE DIRECTOR
IN LIEU OF SPECIAL MEETING
THE UNDERSIGNED, being the sole member of the Board of Directors of LIBERTY
INTERNATIONAL, INC., a Nevada corporation (the "Corporation"), in accordance
with the authority contained in Section 78.315(2) of the Nevada General
Corporation Law, as amended, does hereby consent in writing to the adoption of
the following resolutions, which resolutions shall have the same effect as if
duly adopted at a meeting of the Board of Directors of the Corporation (the
"Board") duly called and held in accordance with law and the Bylaws of the
Corporation.
WHEREAS, the Corporation is a party to that certain Loan Agreement dated
December 2, 1993, as amended by (i) Amendment and Modification to Loan Agreement
dated December 30, 1995, (ii) Second Amendment and Modification to Loan
Agreement dated October 11, 1996 and (iii) Third Amendment and Modification to
Loan Agreement dated February 27, 1997 (in each case, together with all
exhibits, schedules, addenda and other items attached thereto, and all
documents, instruments or certificates executed or delivered in connection
therewith, the "Loan Agreement"), by and among the Corporation, Liberty
Technologies, Inc., LTH Delaware, Inc., Liberty Technical Services, Inc., Beta
Monitors International Inc., Liberty Imaging Systems, Inc. (collectively, the
"Borrowers"), and First Union National Bank (formerly known as First Fidelity
Bank, N.A., and hereinafter referred to as the "Bank") pursuant to which the
Bank has extended to the Borrowers a revolving credit facility in the principal
amount of up to $5,000,000, the outstanding principal amount of which is
evidenced by a note dated December 2, 1993 and one or more allonges thereto; and
WHEREAS, the Borrowers desire that certain amendments be made to the Loan
Agreement, the terms and conditions of which are set forth on that certain
Fourth Amendment and Modification to Loan Agreement, substantially in the form
presented to the undersigned (the "Amendment"); and
NOW, THEREPORE, IT IS HEREBY
RESOLVED, that the Amendment and each of the Allonge, Security Agreement
and Financing Statements, and any other Loan Documents (as defined in the Loan
Agreement) executed in connection therewith (collectively, the "Loan Amendment
Documents") be, and they hereby are, approved and adopted; and it is
FURTHER RESOLVED, that the Corporation be, and it hereby is, authorized,
empowered and directed to execute and deliver the Loan Amendment Documents and
to perform all of the transactions contemplated by the Loan Amendment Documents;
and it is
FURTHER RESOLVED, that the President or any Vice President of the
Corporation (each a "Proper Officer") be, and each of them hereby is, authorized
and directed on behalf of and in the name of the Corporation to execute, deliver
and cause the performance of, and the Secretary or any Assistant Secretary of
the Corporation be, and each of them hereby is, authorized and directed on
behalf of the Corporation to attest the signature of any Proper Officer on, each
Loan Amendment Document, with such modifications as any Proper Officer may deem
necessary, desirable or appropriate, which modifications are hereby approved and
adopted in all respects and shall be conclusively evidenced by the execution and
delivery by any Proper Officer of each Loan Amendment Document; and it is
<PAGE>
FURTHER RESOLVED, that any Proper Officer be, and each of them hereby is,
authorized and directed on behalf of and in the name of the Corporation to take
all actions which they, or any of them, in the exercise of their sole
discretion, deem necessary, advisable or appropriate to effectuate the foregoing
resolutions including, without limitation, the execution and delivery of such
certificates, instruments or documents and the paying of such fees and expenses,
as he or she may deem necessary, advisable or appropriate, such determination to
be conclusively evidenced by the performance of such acts and the execution and
delivery of such certificates, instruments or document; and it is
FURTHER RESOLVED, that any actions previously taken by any Proper Officer
in connection with any of the foregoing resolutions are hereby adopted, ratified
and approved in all respects as acts and deeds of the Corporation.
The undersigned sole member of the Corporation's Board has caused this
Consent in Lieu of Special Meeting to be executed on this 2nd day of April,
1997.
/s/ R. Nim Evatt
---------------------------------
R. Nim Evatt
<PAGE>
PEPPER, HAMILTON &. SCHEETZ
ATTORNEYS AT LAW
As of April 1, 1997
First Union National Bank
123 S. Broad Street
Philadelphia, PA 19109
Attention: Suzanne S. Storm
Gentlemen:
We have acted as counsel to Liberty Technologies, Inc., a Pennsylvania
corporation (the "Company"), Liberty Technical Services, Inc., a Pennsylvania
corporation ("LTS"), LTH Delaware, Inc., a Delaware corporation ("LTH"), Beta
Monitors International, Inc., a Nevada corporation ("BMI"), Liberty
International, Inc., a Nevada corporation ("LII"), and Liberty Imaging Systems,
Inc., a Pennsylvania corporation ("LIS") (each a "Borrower" and together the
"Borrowers"), in connection with the Fourth Amendment to Loan Agreement dated of
even date herewith (the "Loan Agreement") between the Borrowers and First Union
National Bank (the "Lender"), pursuant to which the Lender has agreed to lend to
the Borrowers an aggregate amount up to Nine Million Dollars ($9,000,000) (the
"Loan"), and which Loan is evidenced by the issuance by the Borrowers of the
Consolidated Amended and Restated Note dated of even date herewith in favor of
the Lender (the "Note") and secured by the six (6) separate Reaffirmation and
Amendment of Security Agreements of even date herewith, each between a Borrower
and the Lender (the "Security Agreements").
In connection with the rendering of this opinion, we have examined executed
counterparts of the Loan Agreement, the Note and the Security Agreements (the
Loan Agreement, the Note and the Security Agreements are together referred to
herein as the "Loan Documents"). We have also examined and relied on original or
reproduced or certified copies of the Articles or Certificate of Incorporation
and the By-Laws of each of the Borrowers, resolutions or consents of the Board
of Directors of each Borrower and such other corporate records, certificates of
public officials, instruments and documents, and have made such examinations of
law, as we have
<PAGE>
PEPPEER HAMILTON & SCHEETZ
First Union National Bank
As of April 1, 1997
Page 2
deemed necessary to form the basis of our opinions hereinafter expressed.
In such examinations we have assumed the genuineness of all signatures, the
accuracy, completeness and authenticity of all records and documents submitted
to us as originals, the conformity with originals of all records and documents
submitted to us as copies thereof and the completeness of all minute books
furnished to us.
As to matters of fact relevant to the opinions herein expressed, we have
relied upon the representations and warranties contained in the Loan Agreement
and upon certificates of officers of the Borrowers. To the extent that our
opinion is based on matters known to us or of which we have knowledge, except as
otherwise expressly set forth herein, we have relied solely on a review of such
representations and warranties. We have not undertaken any independent
investigation to verify any such matters, and our opinion is, therefore, as to
such factual matters, based solely thereon. However, as a result of our
representation of the Borrowers, no fact has come to the attention of James D.
Rosener or Cuyler H. Walker, of this firm, who have performed legal services in
connection with the Loan, that leads us to believe that the representations set
forth in the Loan Agreement that were relied upon in making the knowledge
qualifications in the opinions set forth below were not accurate in any material
respect. In connection with the opinion set forth in paragraph 1 below, we have
relied solely upon a certificate of public officials.
This opinion is limited exclusively to the laws of the Commonwealth of
Pennsylvania, the federal laws of the United States of America in effect in the
Commonwealth of Pennsylvania and the statutory provisions of the General
Corporation Law of the State of Delaware.
Based on the foregoing and subject to the assumptions and qualifications
hereinafter set forth, we are of the opinion that:
1. Each of the Borrowers is a corporation duly organized, validly existing
and in good standing under the laws of their respective state of incorporation
and, to our knowledge, is duly qualified to do business in all states where the
laws of such state requires each of the Borrowers, as the case may be, to be so
qualified and the failure to so qualify would have a material adverse effect on
its operations or ability to perform its obligations under the Loan Documents;
and each of the Borrowers has the corporate power and authority to execute,
deliver and perform under the Loan Documents.
2. The execution, delivery and performance by each of the Borrowers of the
Loan Documents have been duly authorized by all requisite corporate action, and
the Loan Documents have been duly executed and delivered by the each of the
Borrowers, as applicable, and constitute the valid and binding obligations of
the respective Borrowers, as applicable, enforceable in accordance with their
respective terms.
<PAGE>
PEPPER, HAMILTON & SCHEETZ
First Union National Bank
As of April 1, 1997
Page 3
3. The execution, delivery and performance by each of the Borrowers of the
Loan Documents will not violate any provision of their respective Articles or
Certificate of Incorporation or By-Laws, any law, rule or regulation, or any
order of any court or other agency of government applicable to any Borrower of
which we have knowledge, or any provision of any indenture, agreement or other
instrument known to us to which any of the Borrowers is a party.
4. To our knowledge, there is no action, suit, proceeding, inquiry or
investigation at law or in equity (including under the United States Bankruptcy
Code) or before or by any public board or body pending or threatened against or
affecting any of the Borrowers wherein an unfavorable decision, ruling or
finding would have a material adverse effect.
The foregoing opinions are subject to the following limitations and
qualifications and are based on the following assumptions:
(i) The rights of the Lender under the Loan Documents may be subject to
the requirement that the Lender act reasonably and in good faith and, in
connection with the enforcement of the Loan, in a commercially reasonably
manner.
(ii) No opinion is given as to the right to exercise remedies upon the
happening of a non-material breach of the Loan Documents (including material
breaches of non-material provisions thereof).
(iii) We have assumed that, with respect to the borrowings under the
Loan Documents, the Lender shall not charge, accrue or collect interest at
a rate in excess of that permitted by applicable law.
(iv) We have assumed that the Loan Documents have been properly
authorized and executed by the Lender and are the valid, binding and
enforceable obligations of the Lender.
(v) Limitations may be imposed by applicable bankruptcy, insolvency,
moratorium or similar laws affecting the rights of creditors generally and by
generally applicable equitable principles. No opinion is given with respect to
the availability of the remedy of specific performance or other equitable
remedies.
(vi) The opinions set forth herein are subject to any federal, state and
local fraudulent conveyance law, and laws of similar import, and of any
corporate or contract laws or bodies of such laws restricting the transfer of
property or incurring of an obligation by a corporation to or for the benefit of
its shareholders or affiliates.
<PAGE>
PEPPER, HAMILTON & SCHEETZ
First Union National Bank
As of April 1, 1997
Page 4
(vii) The enforcement of the rights and remedies granted to the Lender
under the Loan Documents, and amounts available to the Lender after exercise of
its rights and remedies under the Loan Documents may be limited by laws
restricting or setting forth the manner and order in which the Lender seeks to
exercise their rights under the Loan Documents.
(viii) We express no opinion as to (A) the waiver of certain rights and
defenses by the Borrowers, (B) the imposition of penalties for late payment, (C)
the charging and collection of compound interest, (D) the perfection or priority
of liens, (E) the ownership of assets, (F) confessions of judgment, (G) waiver
of right to trial by jury, and (H) the reasonableness of the Lender's actions in
connection with the Loan Documents.
(ix) We express no opinion with respect to the Mortgage and Security
Agreement of even date herewith in favor of the Lender with respect to real
property of LTS (formerly known as Industrial NDT Company, Inc.) located in the
County of Dorchester, State of South Carolina, which Mortgage and Security
Agreement is governed by the laws of the State of South Carolina.
This opinion is given as of the date hereof and is based upon present laws
and court decisions as they exist and are construed as of this date. We assume
no obligation to update or supplement this opinion to reflect any facts or
circumstances which may hereafter come to our attention, or any changes in laws
which may hereafter occur.
The opinions set forth herein are intended only for the benefit of the
Lender and its successors and assigns, and it is our understanding and intention
that without our written permission this letter will not be delivered to or
relied upon by any other person or entity.
Very truly yours,
PEPPER, HAMILTON & SCHEETZ LLP
By: /s/ ????
---------------------------------
A Partner
<PAGE>
1 FINANCING STATEMENT -- FORM UCC-l
STATE OF SOUTH CAROLINA
OFFICE OF SECRETARY OF STATE JIM MILES
Debtor #1 (Last Name, First, Middle, Mailing Address)
Liberty Technical Services, Inc.
8550 Dorchester Road
North Charleston, SC 29420
Tax ID/Social Security Number (optional):
Debtor #2 (Last Name, First, Middle, Mailing Address)
Tax ID/Social Security Number (optional):
Debtor #3 (Last Name, First, Middle, Mailing Address)
Tax ID/Social Security Number (optional):
Debtor's signature, or in cases below, Secured Party signature:
Liberty Technical Services, Inc.
By: /s/ Daniel G. Clare
------------------------------
Daniel G. Clare, Vice President
SC Secretary of State
Is the debtor a transmitting utility as defined by Section 36-9-105(n)?
Signature of Secured Party instead of Debtor is permissible when:
/ / Collatral was subject to a security interest perfected by filing a
financing statement in another state when brought into South Carolina.
/ / Debtor's location has been changed to South Carolina.
/ / Additional filing is necessary to obtain a security interest in certain
types of proceeds (See Section 36-903-6 (3))
/ / The filing as to the collateral has lapsed
/ / The debtor's name, identity or corporate structure has changed (See
Section 36-9-402(3))
Description of Collateral: /X/ Check if products of collateral are
also covered.
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory and
accessions to and proceeds of any of the foregoing including insurance proceeds
as more fully described in Exhibit "A"
Return Acknowledgment Copy to:
David B. Smith, Esquire
DUANE, MORRIS & HECKSCHER
4200 One Liberty Place
Philadelphia, PA 19103-7396
FORM REQUIREMENTS
1. Except for pre-paid account users, enclose filing fee of $8.00.
2. Each additional debtor name is $2.00. Additional pages $2.00. Indexing in
Real Estate records is an additional $2.00.
3. For Pre-Paid Sec. of State Accounts:
Acct. #: Client #:
Amount: $
4. UCC-1s must be typed.
5. Signatures in black ink only.
6. Form must be accompanied by a self-addressed stamped envelope.
Name and Address of Secured Party
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
Assignee and Address:
If applicable, describe real estate and, unless the collateral is crops, name
the record owner if the debtor does not have an interest of record in the real
estate, and this statement shall be filed in the real estate records. The below
described collateral includes:
/ / crops / / fixtures / / standing timber
/ / minerals or accounts arising from minerals
Description of the real estate:
TERMINATION STATEMENT: This Statement of Termination of Financing is presented
to a Filing Officer for filing pursuant to the Uniform Commercial Code. The
Secured Party certifies that the Secured Party no longer claims a security
interest under the financing statement bearing the file number shown below.
Name and Title of Secured Party
Signature of Secured Party/Assignee of Record Date
FOR OFFICE USE ONLY
<PAGE>
DEBTOR: LIBERTY TECHNICAL SERVICES, INC.
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
1 FINANCING STATEMENT -- FORM UCC-l
STATE OF SOUTH CAROLINA
OFFICE OF SECRETARY OF STATE JIM MILES
Debtor #1 (Last Name, First, Middle, Mailing Address)
Liberty Technical Services, Inc.
8550 Dorchester Road
North Charleston, SC 29420
Tax ID/Social Security Number (optional):
Debtor #2 (Last Name, First, Middle, Mailing Address)
Tax ID/Social Security Number (optional):
Debtor #3 (Last Name, First, Middle, Mailing Address)
Tax ID/Social Security Number (optional):
Debtor's signature, or in cases below, Secured Party signature:
Liberty Technical Services, Inc.
By: /s/ Daniel G. Clare
------------------------------
Daniel G. Clare, Vice President
Charleston County
Is the debtor a transmitting utility as defined by Section 36-9-105(n)?
Signature of Secured Party instead of Debtor is permissible when:
/ / Collatral was subject to a security interest perfected by filing a
financing statement in another state when brought into South Carolina.
/ / Debtor's location has been changed to South Carolina.
/ / Additional filing is necessary to obtain a security interest in certain
types of proceeds (See Section 36-9-306 (3))
/ / The filing as to the collateral has lapsed
/ / The debtor's name, identity or corporate structure has changed (See
Section 36-9-402(3))
Description of Collateral: /X/ Check if products of collateral are
also covered.
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory and
accessions to and proceeds of any of the foregoing including insurance proceeds
as more fully described in Exhibit "A"
Return Acknowledgment Copy to:
David B. Smith, Esquire
DUANE, MORRIS & HECKSCHER
4200 One Liberty Place
Philadelphia, PA 19103-7396
FORM REQUIREMENTS
1. Except for pre-paid account users, enclose filing fee of $8.00.
2. Each additional debtor name is $2.00. Additional pages $2.00. Indexing in
Real Estate records is an additional $2.00.
3. For Pre-Paid Sec. of State Accounts:
Acct. #: Client #:
Amount: $
4. UCC-1s must be typed.
5. Signatures in black ink only.
6. Form must be accompanied by a self-addressed stamped envelope.
Name and Address of Secured Party
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
Assignee and Address:
If applicable, describe real estate and, unless the collateral is crops, name
the record owner if the debtor does not have an interest of record in the real
estate, and this statement shall be filed in the real estate records. The below
described collateral includes:
/ / crops / / fixtures / / standing timber
/ / minerals or accounts arising from minerals
Description of the real estate:
TERMINATION STATEMENT: This Statement of Termination of Financing is presented
to a Filing Officer for filing pursuant to the Uniform Commercial Code. The
Secured Party certifies that the Secured Party no longer claims a security
interest under the financing statement bearing the file number shown below.
Name and Title of Secured Party
Signature of Secured Party/Assignee of Record Date
FOR OFFICE USE ONLY
<PAGE>
DEBTOR: LIBERTY TECHNICAL SERVICES, INC.
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
FINANCING STATEMENT - FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code and will remain effective, with certain exceptions, for 5 years
from date of filing.
A. NAME & TEL. # OF CONTACT AT FILER (optional)
B. FILING OFFICE ACCT. # (optional)
C. RETURN COPY TO:
David B. Smith, Esquire
DUANE, MORRIS & HECKSCHER
4200 One Liberty Place
Philadelphia, PA 19103-7396
D. OPTIONAL DESIGNATION [if applicable]:
/ / LESSOR/LESSEE / / CONSIGNOR/CONSIGNEE / / NON-UCC FILING
1. DEBTOR'S EXACT FULL LEGAL NAME -insert only one debtor name (1a or 1b)
1a. ENTITY'S NAME
Beta Monitors International, Inc.
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
8885 Monroe Road Houston TX 77061
1d. S.S. OR TAX I.D.# OPTIONAL 1e. TYPE OF ENTITY
ADD'NL INFO RE
ENTITY DEBTOR
1f. ENTITY'S STATE 1g. ENTITY'S ORGANIZATIONAL I.D.#, if any
OR COUNTRY OF
ORGANIZATION / / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name
(2a or 2b)
2a. ENTITY'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
2d. S.S. OR TAX I.D.# OPTIONAL 2e. TYPE OF ENTITY
ADD'NL INFO RE
ENTITY DEBTOR
2f. ENTITY'S STATE 2g. ENTITY'S ORGANIZATIONAL I.D.#, if any
OR COUNTRY OF
ORGANIZATION / / NONE
3. SECURED PARTY'S (ORIGINAL S/P OR ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME -
insert only one secured party name (3a or 3 b)
3a. ENTITY'S NAME
First Union National Bank
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
123 S. Broad Street, 10th Floor Philadelphia PA 19109
4. This FINANCING STATEMENT covers the following types or items of property:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A"
TX Secretary of State
5. CHECK BOX [if applicable] / / This FINANCING STATEMENT is signed by the
Secured Party instead of the Debtor to perfect a security interest (a) in
collateral already subject to a security interest in another jurisdiction
when it was brought into this state, or when the debtor's location was
changed to this state, or (b) in accordance with other statutory provisions
[additional data may be required]
6. REQUIRED SIGNATURE(S)
Beta Monitors International, Inc.
/s/ Daniel G. Clare
- -----------------------------------
By: Daniel G. Clare, Vice President
7. If filed in Florida (check one)
/ / Documentary stamp tax paid / / Documentary stamp tax not applicable
8. / / This FINANCING STATEMENT is to be filed [for record] (or recorded) in the
REAL ESTATE RECORDS
Attach Addendum [if applicable]
9. Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s)
[ADDITIONAL FEE]
(optional) / / All Debtors / / Debtor 1 / / Debtor 2
<PAGE>
DEBTOR: BETA MONITORS INTERNATIONAL, INC.
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
<TABLE>
<S> <C>
- ---------------------------------------------------- THIS SPACE FOR USE OF FILING OFFICER
FINANCING STATEMENT -- FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the
Uniform Commercial Code and will remain effective, with certain exceptions,
for 5 years from date of filing.
- ---------------------------------------------------------------------------------------------------------------------------------
A. NAME & TEL # OF CONTACT AT FILER (optional) B. FILING OFFICE ACCT. # (optional)
- ---------------------------------------------------------------------------------------------------------------------------------
C. RETURN COPY TO: (Name and Mailing Address)
David B. Smith, Esquire
DUANE, MORRIS & HECKSCHER
4200 One Liberty Place
Philadelphia, PA 19103-7396
- ---------------------------------------------------------------------------------------------------------------------------------
D. OPTIONAL DESIGNATION [if applicable]: / / LESSOR/LESSEE / / CONSIGNOR/CONSIGNEE / /NON-UCC FILING
- ---------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b)
- ---------------------------------------------------------------------------------------------------------------------------------
1a. ENTITY'S NAME
Beta Monitors International, Inc.
OR ------------------------------------------------------------------------------------------------------------------------------
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
1c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
8885 Monroe Road HOUSTON TX 77061
- ---------------------------------------------------------------------------------------------------------------------------------
1d. S.S. OR TAX I.D.# OPTIONAL 1e. TYPE OF ENTITY 1f. ENTITY'S STATE 1g. ENTITY'S ORGANIZATIONAL I.D., if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION / / NONE
- ---------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b)
- ---------------------------------------------------------------------------------------------------------------------------------
2a. ENTITY'S NAME
OR ------------------------------------------------------------------------------------------------------------------------------
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
2c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
- ---------------------------------------------------------------------------------------------------------------------------------
2d. S.S. OR TAX I.D.# OPTIONAL 2e. TYPE OF ENTITY 2f. ENTITY'S STATE 2g. ENTITY'S ORGANIZATIONAL I.D., if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION / / NONE
- ---------------------------------------------------------------------------------------------------------------------------------
3. SECURED PARTY'S (ORIGINAL S/P OR ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME - insert only one secured party name (3a or 3b)
- ---------------------------------------------------------------------------------------------------------------------------------
3a. ENTITY'S NAME
First Union National Bank
OR ------------------------------------------------------------------------------------------------------------------------------
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
3c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
123 S. Broad Street, 10th Floor Philadelphia PA 19109
- ---------------------------------------------------------------------------------------------------------------------------------
4. This FINANCING STATEMENT covers the following types or items of property:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory and
accessions to and proceeds of any of the foregoing including insurance proceeds
as more fully described in Exhibit "A"
Houston County Clerk
- ---------------------------------------------------------------------------------------------------------------------------------
5. CHECK / / This FINANCING STATEMENT is signed by the Secured Party instead of the 7. If filed in Florida (check one)
BOX Debtor to perfect a security interest (a) in collateral already subject / / Documentary / / Documentary stamp
[if applicable] to a security interest in another jurisdiction when it was brought into stamp tax paid tax not applicable
this state, or when the debtor's location was changed to this state, or
(b) in accordance with other statutory provisions [additional data may
be required]
- ---------------------------------------------------------------------------------------------------------------------------------
6. REQUIRED SIGNATURE(S) 8. / / This FINANCING STATEMENT is to be filed [for record]
Beta Monitors International, Inc. (or recorded) in the REAL ESTATE RECORDS
/s/ Daniel G. Clare Attach Addendum [if applicable]
- ---------------------------------------------------------------------------------------------------------------------------------
By: Daniel G. Clare, Vice President 9. Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s)
[ADDITIONAL FEE]
(optional) / / All Debtors / / Debtor 1 / / Debtor 2
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DEBTOR: BETA MONITORS INTERNATIONAL, INC.
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
<TABLE>
<S> <C>
- ---------------------------------------------------- THIS SPACE FOR USE OF FILING OFFICER
FINANCING STATEMENT -- FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the
Uniform Commercial Code and will remain effective, with certain exceptions,
for 5 years from date of filing.
- ---------------------------------------------------------------------------------------------------------------------------------
A. NAME & TEL # OF CONTACT AT FILER (optional) B. FILING OFFICE ACCT. # (optional)
- ---------------------------------------------------------------------------------------------------------------------------------
C. RETURN COPY TO: (Name and Mailing Address)
David B. Smith, Esquire
DUANE, MORRIS & HECKSCHER
4200 One Liberty Place
Philadelphia, PA 19103-7396
- ---------------------------------------------------------------------------------------------------------------------------------
D. OPTIONAL DESIGNATION [if applicable]: / / LESSOR/LESSEE / / CONSIGNOR/CONSIGNEE / /NON-UCC FILING
- ---------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b)
- ---------------------------------------------------------------------------------------------------------------------------------
1a. ENTITY'S NAME
Beta Monitors International, Inc.
OR ------------------------------------------------------------------------------------------------------------------------------
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
1c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
8885 Monroe Road HOUSTON TX 77061
- ---------------------------------------------------------------------------------------------------------------------------------
1d. S.S. OR TAX I.D.# OPTIONAL 1e. TYPE OF ENTITY 1f. ENTITY'S STATE 1g. ENTITY'S ORGANIZATIONAL I.D., if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION / / NONE
- ---------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b)
- ---------------------------------------------------------------------------------------------------------------------------------
2a. ENTITY'S NAME
OR ------------------------------------------------------------------------------------------------------------------------------
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
2c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
- ---------------------------------------------------------------------------------------------------------------------------------
2d. S.S. OR TAX I.D.# OPTIONAL 2e. TYPE OF ENTITY 2f. ENTITY'S STATE 2g. ENTITY'S ORGANIZATIONAL I.D., if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION / / NONE
- ---------------------------------------------------------------------------------------------------------------------------------
3. SECURED PARTY'S (ORIGINAL S/P OR ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME - insert only one secured party name (3a or 3b)
- ---------------------------------------------------------------------------------------------------------------------------------
3a. ENTITY'S NAME
First Union National Bank
OR ------------------------------------------------------------------------------------------------------------------------------
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
3c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
123 S. Broad Street, 10th Floor Philadelphia PA 19109
- ---------------------------------------------------------------------------------------------------------------------------------
4. This FINANCING STATEMENT covers the following types or items of property:
All of Debtor's present and future fixtures as more fully described in
Exhibit "A"
Houston County Clerk/Real Estate Records
- ---------------------------------------------------------------------------------------------------------------------------------
5. CHECK / / This FINANCING STATEMENT is signed by the Secured Party instead of the 7. If filed in Florida (check one)
BOX Debtor to perfect a security interest (a) in collateral already subject / / Documentary / / Documentary stamp
[if applicable] to a security interest in another jurisdiction when it was brought into stamp tax paid tax not applicable
this state, or when the debtor's location was changed to this state, or
(b) in accordance with other statutory provisions [additional data may
be required]
- ---------------------------------------------------------------------------------------------------------------------------------
6. REQUIRED SIGNATURE(S) 8. /X/ This FINANCING STATEMENT is to be filed [for record]
Beta Monitors International, Inc. (or recorded) in the REAL ESTATE RECORDS
/s/ Daniel G. Clare Attach Addendum [if applicable]
- ---------------------------------------------------------------------------------------------------------------------------------
By: Daniel G. Clare, Vice President 9. Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s)
[ADDITIONAL FEE]
(optional) / / All Debtors / / Debtor 1 / / Debtor 2
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DEBTOR: BETA MONITORS INTERNATIONAL INC.
Exhibit A
This financing statement is a fixture filing and covers equipment and
fixtures of any nature whatsoever now owned or hereafter acquired by Debtor
which are affixed to or may be affixed to real property at the location(s) set
forth below or any buildings and improvements now or hereafter erected thereon
or used or intended to be used in connection with such real property, including
without limitation, heating and air conditioning equipment, pipes and plumbing
fixtures, wiring and electrical fixtures, and all related improvements and any
proceeds of any of the foregoing. This financing statement is to be
cross-indexed in the real estate records.
Description of property and record owner:
1. Record Owner:
2. Description:
<PAGE>
<TABLE>
<S> <C>
- ---------------------------------------------------- THIS SPACE FOR USE OF FILING OFFICER
FINANCING STATEMENT -- FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the
Uniform Commercial Code and will remain effective, with certain exceptions,
for 5 years from date of filing.
- ---------------------------------------------------------------------------------------------------------------------------------
A. NAME & TEL # OF CONTACT AT FILER (optional) B. FILING OFFICE ACCT. # (optional)
- ---------------------------------------------------------------------------------------------------------------------------------
C. RETURN COPY TO: (Name and Mailing Address)
David B. Smith, Esquire
DUANE, MORRIS & HECKSCHER
4200 One Liberty Place
Philadelphia, PA 19103-7396
- ---------------------------------------------------------------------------------------------------------------------------------
D. OPTIONAL DESIGNATION [if applicable]: / / LESSOR/LESSEE / / CONSIGNOR/CONSIGNEE / /NON-UCC FILING
- ---------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b)
- ---------------------------------------------------------------------------------------------------------------------------------
1a. ENTITY'S NAME
Liberty Technologies, Inc.
OR ------------------------------------------------------------------------------------------------------------------------------
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
1c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
8885 Monroe Road HOUSTON TX 77061
- ---------------------------------------------------------------------------------------------------------------------------------
1d. S.S. OR TAX I.D.# OPTIONAL 1e. TYPE OF ENTITY 1f. ENTITY'S STATE 1g. ENTITY'S ORGANIZATIONAL I.D., if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION / / NONE
- ---------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b)
- ---------------------------------------------------------------------------------------------------------------------------------
2a. ENTITY'S NAME
OR ------------------------------------------------------------------------------------------------------------------------------
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
2c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
- ---------------------------------------------------------------------------------------------------------------------------------
2d. S.S. OR TAX I.D.# OPTIONAL 2e. TYPE OF ENTITY 2f. ENTITY'S STATE 2g. ENTITY'S ORGANIZATIONAL I.D., if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION / / NONE
- ---------------------------------------------------------------------------------------------------------------------------------
3. SECURED PARTY'S (ORIGINAL S/P OR ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME - insert only one secured party name (3a or 3b)
- ---------------------------------------------------------------------------------------------------------------------------------
3a. ENTITY'S NAME
First Union National Bank
OR ------------------------------------------------------------------------------------------------------------------------------
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
3c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
123 S. Broad Street, 10th Floor Philadelphia PA 19109
- ---------------------------------------------------------------------------------------------------------------------------------
4. This FINANCING STATEMENT covers the following types or items of property:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory and
accessions to and proceeds of any of the foregoing including insurance proceeds
as more fully described in Exhibit "A"
TX Secretary of State
- ---------------------------------------------------------------------------------------------------------------------------------
5. CHECK / / This FINANCING STATEMENT is signed by the Secured Party instead of the 7. If filed in Florida (check one)
BOX Debtor to perfect a security interest (a) in collateral already subject / / Documentary / / Documentary stamp
[if applicable] to a security interest in another jurisdiction when it was brought into stamp tax paid tax not applicable
this state, or when the debtor's location was changed to this state, or
(b) in accordance with other statutory provisions [additional data may
be required]
- ---------------------------------------------------------------------------------------------------------------------------------
6. REQUIRED SIGNATURE(S) 8. / / This FINANCING STATEMENT is to be filed [for record]
Liberty Technologies, Inc. (or recorded) in the REAL ESTATE RECORDS
/s/ Daniel G. Clare Attach Addendum [if applicable]
- ---------------------------------------------------------------------------------------------------------------------------------
By: Daniel G. Clare, Vice President 9. Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s)
[ADDITIONAL FEE]
(optional) / / All Debtors / / Debtor 1 / / Debtor 2
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DEBTOR: LIBERTY TECHNOLOGIES, INC.
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
DEBTOR: LIBERTY IMAGING SYSTEMS, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty Imaging Systems, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/X/ Prothonotary of Montgomery County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty Imaging Systems, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
<TABLE>
<S> <C>
- ---------------------------------------------------- THIS SPACE FOR USE OF FILING OFFICER
FINANCING STATEMENT -- FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the
Uniform Commercial Code and will remain effective, with certain exceptions,
for 5 years from date of filing.
- ---------------------------------------------------------------------------------------------------------------------------------
A. NAME & TEL # OF CONTACT AT FILER (optional) B. FILING OFFICE ACCT. # (optional)
- ---------------------------------------------------------------------------------------------------------------------------------
C. RETURN COPY TO: (Name and Mailing Address)
David B. Smith, Esquire
DUANE, MORRIS & HECKSCHER
4200 One Liberty Place
Philadelphia, PA 19103-7396
- ---------------------------------------------------------------------------------------------------------------------------------
D. OPTIONAL DESIGNATION [if applicable]: / / LESSOR/LESSEE / / CONSIGNOR/CONSIGNEE / /NON-UCC FILING
- ---------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b)
- ---------------------------------------------------------------------------------------------------------------------------------
1a. ENTITY'S NAME
Liberty Technologies, Inc.
OR ------------------------------------------------------------------------------------------------------------------------------
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
1c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
8885 Monroe Road HOUSTON TX 77061
- ---------------------------------------------------------------------------------------------------------------------------------
1d. S.S. OR TAX I.D.# OPTIONAL 1e. TYPE OF ENTITY 1f. ENTITY'S STATE 1g. ENTITY'S ORGANIZATIONAL I.D., if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION / / NONE
- ---------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b)
- ---------------------------------------------------------------------------------------------------------------------------------
2a. ENTITY'S NAME
OR ------------------------------------------------------------------------------------------------------------------------------
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
2c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
- ---------------------------------------------------------------------------------------------------------------------------------
2d. S.S. OR TAX I.D.# OPTIONAL 2e. TYPE OF ENTITY 2f. ENTITY'S STATE 2g. ENTITY'S ORGANIZATIONAL I.D., if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION / / NONE
- ---------------------------------------------------------------------------------------------------------------------------------
3. SECURED PARTY'S (ORIGINAL S/P OR ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME - insert only one secured party name (3a or 3b)
- ---------------------------------------------------------------------------------------------------------------------------------
3a. ENTITY'S NAME
First Union National Bank
OR ------------------------------------------------------------------------------------------------------------------------------
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
3c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
123 S. Broad Street, 10th Floor Philadelphia PA 19109
- ---------------------------------------------------------------------------------------------------------------------------------
4. This FINANCING STATEMENT covers the following types or items of property:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory and
accessions to and proceeds of any of the foregoing including insurance proceeds
as more fully described in Exhibit "A"
Houston County Clerk
- ---------------------------------------------------------------------------------------------------------------------------------
5. CHECK / / This FINANCING STATEMENT is signed by the Secured Party instead of the 7. If filed in Florida (check one)
BOX Debtor to perfect a security interest (a) in collateral already subject / / Documentary / / Documentary stamp
[if applicable] to a security interest in another jurisdiction when it was brought into stamp tax paid tax not applicable
this state, or when the debtor's location was changed to this state, or
(b) in accordance with other statutory provisions [additional data may
be required]
- ---------------------------------------------------------------------------------------------------------------------------------
6. REQUIRED SIGNATURE(S) 8. / / This FINANCING STATEMENT is to be filed [for record]
Liberty Technologies, Inc. (or recorded) in the REAL ESTATE RECORDS
/s/ Daniel G. Clare Attach Addendum [if applicable]
- ---------------------------------------------------------------------------------------------------------------------------------
By: Daniel G. Clare, Vice President 9. Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s)
[ADDITIONAL FEE]
(optional) / / All Debtors / / Debtor 1 / / Debtor 2
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DEBTOR: LIBERTY TECHNOLOGIES, INC.
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms ofa letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
DEBTOR: LIBERTY TECHNOLOGIES, INC.
EXHIBIT A
This financing statement is a fixture filing and covers equipment and
fixtures of any nature whatsoever now owned or hereafter acquired by Debtor
which are affixed to or may be affixed to real property at the location(s) set
forth below or any buildings and improvements now or hereafter erected thereon
or used or intended to be used in connection with such real property, including
without limitation, heating and air conditioning equipment, pipes and plumbing
fixtures, wiring and electrical fixtures, and all related improvements and any
proceeds of any of the foregoing. This financing statement is to be
cross-indexed in the real estate records.
Description of property and record owner:
1. Record Owner:
2. Description:
<PAGE>
<TABLE>
<S> <C>
- ---------------------------------------------------- THIS SPACE FOR USE OF FILING OFFICER
FINANCING STATEMENT -- FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the
Uniform Commercial Code and will remain effective, with certain exceptions,
for 5 years from date of filing.
- ---------------------------------------------------------------------------------------------------------------------------------
A. NAME & TEL # OF CONTACT AT FILER (optional) B. FILING OFFICE ACCT. # (optional)
- ---------------------------------------------------------------------------------------------------------------------------------
C. RETURN COPY TO: (Name and Mailing Address)
David B. Smith, Esquire
DUANE, MORRIS & HECKSCHER
4200 One Liberty Place
Philadelphia, PA 19103-7396
- ---------------------------------------------------------------------------------------------------------------------------------
D. OPTIONAL DESIGNATION [if applicable]: / / LESSOR/LESSEE / / CONSIGNOR/CONSIGNEE / /NON-UCC FILING
- ---------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b)
- ---------------------------------------------------------------------------------------------------------------------------------
1a. ENTITY'S NAME
Liberty Technologies, Inc.
OR ------------------------------------------------------------------------------------------------------------------------------
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
1c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
8885 Monroe Road HOUSTON TX 77061
- ---------------------------------------------------------------------------------------------------------------------------------
1d. S.S. OR TAX I.D.# OPTIONAL 1e. TYPE OF ENTITY 1f. ENTITY'S STATE 1g. ENTITY'S ORGANIZATIONAL I.D., if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION / / NONE
- ---------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b)
- ---------------------------------------------------------------------------------------------------------------------------------
2a. ENTITY'S NAME
OR ------------------------------------------------------------------------------------------------------------------------------
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
2c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
- ---------------------------------------------------------------------------------------------------------------------------------
2d. S.S. OR TAX I.D.# OPTIONAL 2e. TYPE OF ENTITY 2f. ENTITY'S STATE 2g. ENTITY'S ORGANIZATIONAL I.D., if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION / / NONE
- ---------------------------------------------------------------------------------------------------------------------------------
3. SECURED PARTY'S (ORIGINAL S/P OR ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME - insert only one secured party name (3a or 3b)
- ---------------------------------------------------------------------------------------------------------------------------------
3a. ENTITY'S NAME
First Union National Bank
OR ------------------------------------------------------------------------------------------------------------------------------
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
- ---------------------------------------------------------------------------------------------------------------------------------
3c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
123 S. Broad Street, 10th Floor Philadelphia PA 19109
- ---------------------------------------------------------------------------------------------------------------------------------
4. This FINANCING STATEMENT covers the following types or items of property:
All of Debtor's present and future fixtures as more fully described in
Exhibit "A"
Houston County Clerk/Real Estate Records
- ---------------------------------------------------------------------------------------------------------------------------------
5. CHECK / / This FINANCING STATEMENT is signed by the Secured Party instead of the 7. If filed in Florida (check one)
BOX Debtor to perfect a security interest (a) in collateral already subject / / Documentary / / Documentary stamp
[if applicable] to a security interest in another jurisdiction when it was brought into stamp tax paid tax not applicable
this state, or when the debtor's location was changed to this state, or
(b) in accordance with other statutory provisions [additional data may
be required]
- ---------------------------------------------------------------------------------------------------------------------------------
6. REQUIRED SIGNATURE(S) 8. /X/ This FINANCING STATEMENT is to be filed [for record]
Liberty Technologies, Inc. (or recorded) in the REAL ESTATE RECORDS
/s/ Daniel G. Clare Attach Addendum [if applicable]
- ---------------------------------------------------------------------------------------------------------------------------------
By: Daniel G. Clare, Vice President 9. Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s)
[ADDITIONAL FEE]
(optional) / / All Debtors / / Debtor 1 / / Debtor 2
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Beta Monitors International, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/X/ Secretary of the Commonwealth.
/ / Prothonotary of County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Beta Monitors International, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: BETA MONITORS INTERNATIONAL, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Beta Monitors International, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/X/ Prothonotary of Montgomery County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Beta Monitors International, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: BETA MONITORS INTERNATIONAL, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
lirnited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Beta Monitors International, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/ / Prothonotary of County.
/X/ real estate Records of Montgomery County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 3 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/ / (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. /X/ goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/X/ Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Beta Monitors International, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: BETA MONITORS INTERNATIONAL, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
DEBTOR: BETA MONITORS INTERNATIONAL, INC.
Item 10, Continued
EXHIBIT "B"
This financing statement is a fixture filing and covers equipment and
fixtures of any nature whatsoever now owned or hereafter acquired by Debtor
which are affixed to or may be or hereafter erected thereon or used or intended
to be used in connection with such real property, including without limitation,
heating and air conditioning equipment, pipes and plumbing fixtures, wiring and
electrical fixtures, and all related improvements and any proceeds of any of the
foregoing. This financing statement is to be cross-indexed in the real estate
records.
Description of property and record owner:
1. Record Owner: Lee Park Investors, L.P.
2. Description: Deed Book 4942, Page 2042
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty International, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/X/ Secretary of the Commonwealth.
/ / Prothonotary of County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/ / (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty International, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY INTERNATIONAL, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks,
tradenames, copyrights and other intellectual property and proprietary
rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule
to this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty International, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/X/ Prothonotary of Montgomery County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty International, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY INTERNATIONAL, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessions, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty International, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/ / Prothonotary of County.
/X/ real estate Records of Montgomery County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 3 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/ / (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. /X/ goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/X/ Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty International, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY INTERNATIONAL, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessions, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
DEBTOR: LIBERTY INTERNATIONAL INC.
Item 10, continued
EXHIBIT B
This financing statement is a fixture filing and covers equipment and
fixtures of any nature whatsoever now owned or hereafter acquired by Debtor
which are afFlxed to or may be affixed to real property at the location(s) set
forth below or any buildings and improvements now or hereafter erected thereon
or used or intended to be used in connection with such real property, including
without limitation, heating and air conditioning equipment, pipes and plumbing
fixtures, wiring and electrical fixtures, and all related improvements and any
proceeds of any of the foregoing. This financing statement is to be
cross-indexed in the real estate records.
Description of property and record owner:
1. Record Owner: Lee Park Investors, L.P.
2. Description: Deed Book 4942, Page 2042
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty Imaging Systems, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/X/ Secretary of the Commonwealth.
/ / Prothonotary of County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty Imaging Systems, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY IMAGING SYSTEMS, MC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by on3gination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
properly subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual
property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowled8es), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty Imaging Systems, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/ / Prothonotary of County.
/X/ real estate Records of Montgomery County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 3 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. /X/ goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/X/ Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty Imaging Systems, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY IMAGING SYSTEMS, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affiliated to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing. or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
DEBTOR: LIBERTY IMAGING SYSTEMS, INC.
Item 10, continued
EXHIBIT B
This financing statement is a fixture filing and covers equipment and
fixtures of any nature whatsoever now owned or hereafter acquired by Debtor
which are affixed to or may be affixed to real property at the location(s) set
forth below or any buildings and improvements now or hereafter erected thereon
or used or intended to be used in connection with such real property, including
without limitation, heating and air conditioning equipment, pipes and plumbing
fixtures, wiring and electrical fixtures, and all related improvements and any
proceeds of any of the foregoing. This financing statement is to be
cross-indexed in the real estate records.
Description of property and record owner:
1. Record Owner: Lee Park Investors, L.P.
2. Description: Deed Book 4942, Page 2042
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty Technologies, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/X/ Secretary of the Commonwealth.
/ / Prothonotary of County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty Technologies, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY TECHNOLOGIES, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty Technologies, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/X/ Prothonotary of Montgomery County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty Technologies, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY TECHNOLOGIES, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule
to this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty Technologies, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/ / Prothonotary of County.
/X/ real estate Records of Montgomery County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 3 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/ / (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. /X/ goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/X/ Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty Technologies, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY TECHNOLOGIES, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
DEBTOR: LIBERTY TECHNOLOGIES, INC.
Item 10, continued
EXHIBIT B
This financing statement is a fixture filing and covers equipment and
fixtures of any nature whatsoever now owned or hereafter acquired by Debtor
which are affixed to or may be affixed to real property at the location(s) set
forth below or any buildings and improvements now or hereafter erected thereon
or used or intended to be used in connection with such real property, including
without limitation, heating and air conditioning equipment, pipes and plumbing
fixtures, wiring and electrical fixtures, and all related improvements and any
proceeds of any of the foregoing. This financing statement is to be
cross-indexed in the real estate records.
Description of property and record owner:
1. Record Owner: Lee Park Investors, L.P.
2. Description: Deed Book 4942, Page 2042
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty Technical Services, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/X/ Secretary of the Commonwealth.
/ / Prothonotary of County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty Technical Services, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY TECHNICAL SERVICES, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise, all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and
including. without limitation, rental or lease payments, accounts, chattel
paper, instruments, documents, contract rights, general intangibles,
equipment, inventory and insurance proceeds; and all such proceeds of the
foregoing ("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty Technical Services, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/X/ Prothonotary of Montgomery County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty Technical Services, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY TECHNICAL SERVICES, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the I-right to have in its possession, or which is
in transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which then shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Liberty Technical Services, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/ / Prothonotary of County.
/X/ real estate Records of Montgomery County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 3 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/ / (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. /X/ goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/X/ Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
Liberty Technical Services, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LIBERTY TECHNICAL SERVICES, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other
tangible personal property ("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
DEBTOR: LIBERTY TECHNICAL SERVICES, INC.
Item 10, continued
EXHIBIT B
This financing statement is a fixture filing and covers equipment and
fixtures of any nature whatsoever now owned or hereafter acquired by Debtor
which are affixed to or may be affixed to real property at the location(s) set
forth below or any buildings and improvements now or hereafter erected thereon
or used or intended to be used in connection with such real property, including
without limitation, heating and air conditioning equipment, pipes and plumbing
fixtures, wiring and electrical fixtures, and all related improvements and any
proceeds of any of the foregoing. This financing statement is to be
cross-indexed in the real estate records.
Description of property and record owner:
1. Record Owner: Lee Park Investors, L.P.
2. Description: Deed Book 4942, Page 2042
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
LTH Delaware, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/X/ Secretary of the Commonwealth.
/ / Prothonotary of County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
LTH Delaware, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LTH DELAWARE, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
LTH Delaware, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/X/ Prothonotary of Montgomery County.
/ / real estate Records of County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 2 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/X/ (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. / / goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/ / Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
LTH Delaware, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LTH DELAWARE, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Uniform Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
- --------------------------------------------------------------------------------
PARTIES
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
LTH Delaware, Inc.
555 North Lane
Conshohocken, PA 19428
1
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
- --------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
- --------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
First Union National Bank
123 S. Broad Street, 10th Floor
Philadelphia, PA 19109
2
- --------------------------------------------------------------------------------
Assignee(s) of Secured Party name(s) (last name first if individual) and address
for security interest information:
2a
- --------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
/ / The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor,"
respectively.
/ / The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
/ / Debtor is a Transmitting Utility.
3
- --------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
- --------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. / / acquired after a change of name, identity or corporate structure of the
Debtor.
b. / / as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
/ / when the collateral was moved to this county.
/ / when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
/ / when the collateral was moved to Pennsylvania.
/ / when the Debtor's location was moved to Pennsylvania.
e. / / which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s):
(required only if box(es) is checked above):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT -- Please read instructions on
reverse side of page 4 before completing
- --------------------------------------------------------------------------------
Filing No. (stamped by filing officer):
Date, Time, Filing Office (stamped by filing officer)
5
- --------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
/ / Secretary of the Commonwealth.
/ / Prothonotary of County.
/X/ real estate Records of Montgomery County.
6
- --------------------------------------------------------------------------------
Number of Additional Sheets (if any): 3 7
- --------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): FIR166-123029 8
- --------------------------------------------------------------------------------
COLLATERAL
- --------------------------------------------------------------------------------
Identify collateral by item and/or type:
All of Debtor's present and future accounts, chattel paper, contracts,
documents, equipment, fixtures, general intangibles, instruments, inventory
and accessions to and proceeds of any of the foregoing including insurance
proceeds as more fully described in Exhibit "A".
/ / (check only if desired) Products of the collateral are also covered. 9
- --------------------------------------------------------------------------------
Identify related real estate, if applicable. The collateral is, or includes
(check appropriate box(es))-
a. / / crops growing or to be grown on-
b. /X/ goods which are or are to become fixtures on-
c. / / minerals or the like (including oil and gas) as extracted on-
d. / / accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on-
the following real estate:
Street Address:
Describe at: Book of (check one) / / Deeds / / Mortgages, at
Page(s) , for County.
Uniform Parcel Identifier .
/X/ Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
- --------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
- --------------------------------------------------------------------------------
Debtor Signature(s):
LTH Delaware, Inc.
1 By: /s/ Daniel G. Clare
- --------------------------------------------------------------------------------
Daniel G. Clare, Vice President
1a
- --------------------------------------------------------------------------------
1b
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
RETURN RECEIPT TO:
DAVID B. SMITH, ESQUIRE
DUANE, MORRIS & HECKSCHER
4200 ONE LIBERTY PLACE
PHILADELPHIA, PA 19103-7396
12
<PAGE>
DEBTOR: LTH DELAWARE, INC.
Item 9, continued
EXHIBIT A
All tangible and intangible personal property of the Debtor, including but not
limited to the property hereinafter described, whether now owned or hereafter
acquired or arising and wherever located:
(a) all accounts, accounts receivable, rights under contracts, chattel
paper, instruments, and all obligations due the Debtor for goods sold or to
be sold, consigned or leased or to be leased, or services rendered or to be
rendered ("Accounts");
(b) all inventory, whether raw materials, work-in-process, finished goods,
parts or supplies or otherwise; all goods, merchandise and other property
held for sale or lease or to be furnished under any contract of service;
all documents of title covering any goods which are or are to become
inventory and any such goods which are leased or consigned to others and
all returned, reclaimed or repossessed goods sold, consigned, leased or
otherwise furnished by the Debtor to others ("Inventory");
(c) all leases and rental agreements for personal property between the
Debtor as lessor (whether by origination or derivation) and any and all
persons or parties as lessee(s), and all rentals, purchase option amounts,
and other sums due thereunder; and all inventory, equipment, goods and
property subject to such leases and rental agreements and all accessions,
parts and tools attached thereto or used therewith and all of the Debtor's
residual or reversionary rights therein;
(d) all machinery, equipment, furniture, fixtures, tools, motor vehicles,
and all accessories, parts and equipment now or hereafter attached thereto
or used in connection therewith, whether or not the same shall be deemed
affixed to real property, and all other tangible personal property
("Equipment");
(e) all general intangibles, which term shall have the meaning given to it
in the Uniform Commercial Code and shall additionally include but not be
limited to all tax refunds, patents, trademarks, service marks, tradenames,
copyrights and other intellectual property and proprietary rights;
(f) all the property listed on any Schedule of Collateral attached to this
Security Agreement and any other such schedule hereafter made a schedule to
this Agreement;
(g) all additions, replacements, attachments, accretions, accessions,
components and substitutions to or for any Inventory or Equipment;
<PAGE>
(h) all property of the Debtor, including without limitation, monies,
securities, instruments, chattel paper and documents, which at any time the
Bank shall have or have the right to have in its possession, or which is in
transit to it (pursuant to the terms of a letter of credit or otherwise)
and, independent of and in addition to the Bank's rights of setoff (which
the Debtor acknowledges), the balance of any account or any amount which
may be owing from time to time by the Bank to the Debtor;
(i) all books and records evidencing or relating to the foregoing,
including, without limitation, billing records of every kind and
description, customer lists, data storage and processing media, software
and related material, including computer programs, computer tapes, cards,
disks and printouts, and including any of the foregoing which are in the
possession of any affiliate or any computer service bureau;
(j) all proceeds, which term shall have the meaning given to it in the
Unifrm Commercial Code and shall additionally include but not be limited
to, whatever is received upon the use, lease, sale, exchange, collection or
other utilization or any disposition of any of the collateral described in
subparagraphs (a) through (i) above, whether cash or noncash, and including
without limitation, rental or lease payments, accounts, chattel paper,
instruments, documents, contract rights, general intangibles, equipment,
inventory and insurance proceeds; and all such proceeds of the foregoing
("Proceeds").
<PAGE>
DEBTOR: LTH DELAWARE, INC.
Item 10, continued
EXHIBIT B
This financing statement is a fixture filing and covers equipment and
fixtures of any nature whatsoever now owned or hereafter acquired by Debtor
which are affixed to or may be affixed to real property at the location(s) set
forth below or any buildings and improvements now
or hereafter erected thereon or used or intended to be used in connection with
such real property, including without limitation, heating and air conditioning
equipment, pipes and plumbing fixtures, wiring and electrical fixtures, and all
related improvements and any proceeds of any of the foregoing. This financing
statement is to be cross-indexed in the real estate records.
Description of property and record owner:
1. Record Owner: Lee Park Investors, LP
2. Description: Deed Book 4942, Page 2042
<PAGE>
EVIDENCE OF PROPERTY INSURANCE
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN
FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY.
DATE (MM/DD/YY)
4/02/97
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
PRODUCER PHONE COMPANY
(A/C No. Ext): 704-553-0419
Palmer & Cay of North Carolina, Inc. AIG
6100 Fairview Road, Suite 1400 PO Box 10642
Charlotte, NC 28210 Newark, NJ 07193-0642
</TABLE>
- --------------------------------------------------------------------------------
CODE: SUB CODE:
- --------------------------------------------------------------------------------
AGENCY
CUSTOMER ID#: LIB35930
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
INSURED LOAN NUMBER POLICY NUMBER
CPP51225479602
------------------------------------------------------------
Liberty Technologies, Inc.
555 North Lane EFFECTIVE DATE EXPIRATION DATE CONTINUED UNTIL
Conshohocken, PA 19428 11/01/96 11/01/97 TERMINATED
/ / IF CHECKED.
------------------------------------------------------------
THIS REPLACES PRIOR EVIDENCE DATED:
2/26/97
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
Location/Description
555 North Lane, Conshohocken, PA 19428;
8885 Monroe Road, Houston, TX 77061;
8550 Dorchester Road, N. Charleston, SC 29420
- --------------------------------------------------------------------------------
COVERAGE INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE
- -----------------------------------------------------------------------------------------------------------------------------------
Blanket Building/Contents $14,807,500 $2500
Special Form
First Union National Bank is listed
as Loss Payee & Mortgagee in regards to
Property Insurance
First Union National Bank is listed as $1,000,000
Additional Insured in regards to General
Liability as to the extent required by
written contract.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
REMARKS (Including Special Conditions)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CANCELLATION
- --------------------------------------------------------------------------------
THE POLICY IS SUBJECT TO THE PREMUIMS, FORMS, AND RULES IN EFFECT FOR EACH
POLICY PERIOD. SHOULD THE POLICY BE TERMINATED, THE COMPANY WILL GIVE THE
ADDITIONAL INTEREST IDENTIFIED BELOW 30 DAYS WRITTEN NOTICE, AND WILL SEND
NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN
ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
- --------------------------------------------------------------------------------
ADDITIONAL INTEREST
- --------------------------------------------------------------------------------
NAME AND ADDRESS
First Union National Bank /X/ - MORTGAGEE
Attn: Suzanne S. Storm /X/ - LOSS PAYEE
123 South Broad Street PA1310 /X/ - ADDITIONAL INSURED
Philadelphia, PA 19109
LOAN#
AUTHORIZED REPRESENTATIVE
/s/ ________________________________
Cecil R. Cooke
- --------------------------------------------------------------------------------
ACORD 27 (3/93)
- --------------------------------------------------------------------------------
<PAGE>
EVIDENCE OF PROPERTY INSURANCE
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN
FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY.
DATE (MM/DD/YY)
4/02/97
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
PRODUCER PHONE COMPANY
(A/C No. Ext): 704-553-0419
Palmer & Cay of North Carolina, Inc. AIG
6100 Fairview Road, Suite 1400 PO Box 10642
Charlotte, NC 28210 Newark, NJ 07193-0642
</TABLE>
- --------------------------------------------------------------------------------
CODE: SUB CODE:
- --------------------------------------------------------------------------------
AGENCY
CUSTOMER ID#: LIB35930
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
INSURED LOAN NUMBER POLICY NUMBER
CPP51225479602
------------------------------------------------------------
Liberty Technologies, Inc.
555 North Lane EFFECTIVE DATE EXPIRATION DATE CONTINUED UNTIL
Conshohocken, PA 19428 11/01/96 11/01/97 TERMINATED
/ / IF CHECKED.
------------------------------------------------------------
THIS REPLACES PRIOR EVIDENCE DATED:
2/26/97
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
Location/Description
555 North Lane, Conshohocken, PA 19428;
8885 Monroe Road, Houston, TX 77061;
8550 Dorchester Road, N. Charleston, SC 29420
- --------------------------------------------------------------------------------
COVERAGE INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE
- -----------------------------------------------------------------------------------------------------------------------------------
Blanket Building/Contents $14,807,500 $2500
Special Form
First Union National Bank is listed
as Loss Payee & Mortgagee in regards to
Property Insurance
First Union National Bank is listed as $1,000,000
Additional Insured in regards to General
Liability as to the extent required by
written contract.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
REMARKS (Including Special Conditions)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CANCELLATION
- --------------------------------------------------------------------------------
THE POLICY IS SUBJECT TO THE PREMUIMS, FORMS, AND RULES IN EFFECT FOR EACH
POLICY PERIOD. SHOULD THE POLICY BE TERMINATED, THE COMPANY WILL GIVE THE
ADDITIONAL INTEREST IDENTIFIED BELOW 30 DAYS WRITTEN NOTICE, AND WILL SEND
NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN
ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
- --------------------------------------------------------------------------------
ADDITIONAL INTEREST
- --------------------------------------------------------------------------------
NAME AND ADDRESS
First Union National Bank /X/ - MORTGAGEE
Attn: Suzanne S. Storm /X/ - LOSS PAYEE
123 South Broad Street PA1310 /X/ - ADDITIONAL INSURED
Philadelphia, PA 19109
LOAN#
AUTHORIZED REPRESENTATIVE
/s/ ________________________________
Cecil R. Cooke
- --------------------------------------------------------------------------------
ACORD 27 (3/93)
- --------------------------------------------------------------------------------
Exhibit 21.1
Liberty Technologies, Inc.
Subsidiaries
The following are subsidiaries of the Company:
Liberty Technical Services, Inc.
LTH (Delaware), Inc.
Beta Monitors & Controls Ltd.
Beta Monitors International
Liberty International, Inc.
Liberty International Sales, Inc.
Liberty Imaging Systems, Inc.
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in Liberty Technologies, Inc.'s Form 10-K, into the Company's
previously filed Form S-8 Registration Statement (File No. 33-73070) filed with
the Securities and Exchange Commission on December 20, 1993, Form S-8
Registration Statement (File No. 33-68744) filed with the Securities and
Exchange Commission on September 13, 1993, and Form S-8 Registration Statements
(file No. 33-67032) filed with the Securities and Exchange Commission on August
12, 1993.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
April 15, 1997
