THE CHASE MANHATTAN BANK
SECURITY AGREEMENT
(General Purpose)
This Agreement, made this day of, 31, day of March, 1999 between THE CHASE
MANHATTAN BANK (herein called the "Bank ") and P.C. Workstation Rentals, Inc.
(herein called the "Borrower "), (the "Agreement ").
1. DEFINITIONS OF TERMS USED HEREIN. (a) "Borrower" includes all
individuals executing this agreement as parties hereto and all members of a
partnership when the Borrower is a partnership, each of whom shall be jointly
and severally liable individually and as partners hereunder. (b) "Liability" or
"Liabilities" includes all liabilities (primary, secondary, direct, contingent,
sole, joint or several) due or to become due, or that may be hereafter
contracted or acquired, of the Borrower (including the Borrower and any other
person) to the Bank, including without limitation all liabilities arising under
or from any note, loan or credit agreement, letter of credit, guaranty, draft,
acceptance, interest rate or foreign exchange agreement or any other instrument
or agreement of (or the responsibility of) the Borrower or any loan, advance or
other extension of credit or financial accommodation to the Borrower by the
Bank. (c) "Proceeds" means whatever is received when Collateral is sold,
exchanged, leased, collected or otherwise disposed of and includes the account
arising when the right to payment is earned under a contract. (d) "Security
Interest" means a lien or other interest in Collateral which secures payment of
a liability or performance of an obligation. (e) "Collateral" means the property
described in Section 2 hereof and the following described property of the
Borrower:
All personal property, whether now or hereafter existing or now ownded or
hereafter acquired and wherever located, including but not limited to: (i) all
goods, inventory, equipment, accounts, furniture, fixtures, instruments,
documents, chattel paper and general intangibles and all additions and
accessions thereto; (ii) all products and proceeds of the foregoing, in any form
(including, without limitation, all claims against third parties for loss or
damage to or destruction on any or all of the foregoing); and (iii) all books,
records and other property relating to any of the foregoing.
All terms used herein which are also defined in the New York or any other
applicable Uniform Commercial Code shall also have at least the meanings herein
as therein defined.
2. SECURITY INTEREST. As security for the payment of all loans and other
extensions of credit or other financial accommodations now or in the future made
by the Bank to the Borrower and all other liabilities of the Borrower to the
Bank, the Borrower hereby grants to the Bank a Security Interest in the
above-described Collateral and all and any Proceeds arising therefrom and all
and any products of the Collateral.
<PAGE>
[The Proceeds of the loan hereby obtained by the Borrower
[DELETE IF will be used to purchase the Collateral.
NOT
APPLICABLE]
The Borrower represents and warrants that it is the sole lawful owner of
the Collateral, free and clear of any liens and encumbrances, and has the right
and power to pledge, sell, assign and transfer absolute title thereto to the
Bank and that no financing statement covering the Collateral, other than the
Bank's, is on file in any public office.
To further secure the Liabilities, the Borrower hereby grants, pledges and
assigns to the Bank a continuing lien, Security Interest and right of set-off in
and to all money, securities and all other property of the Borrower, and the
Proceeds thereof, now or hereafter actually or constructively held or received
by or for the Bank, Chase Securities Inc. or any other affiliate of the Bank for
any purpose, including safekeeping, custody, pledge, transmission and
collection, and in and to all of the Borrower's deposits (general and special)
and credits with the Bank, Chase Securities Inc. or any other affiliate of the
Bank. The Borrower authorizes the Bank to deliver to others a copy of this
Agreement as written notification of the Borrower's transfer of a Security
Interest in the foregoing property. The Bank is hereby authorized at any time
and from time to time, without notice, to apply all or part of such money,
securities, property, proceeds, deposits or credits to any of the Liabilities in
such amounts as the Bank may elect in its sole and absolute discretion, although
the Liabilities may then be contingent or unmatured and whether or not the
Collateral security may be deemed adequate.
3. USE OF COLLATERAL. Until default, the Borrower may use the Collateral in
any lawful manner. If the Collateral is or is about to become affixed to realty,
the Borrower will, at the Bank's request, furnish the Bank a writing executed by
the mortgagee of the realty whereby the mortgagee subordinates its rights and
priorities to the Bank's Security Interest in the Collateral. If the Collateral
is or may become subject to a landlord's lien, the Borrower will at the Bank
request, furnish the Bank with a landlord's waiver satisfactory in form to the
Bank.
4. INSURANCE. The Borrower will have and maintain insurance on the
Collateral until this Agreement is terminated against all expected risks to
which it is exposed, including fire, theft and collision, and those which the
Bank may designate, such insurance to be payable to the Bank and the Borrower as
their interest may appear; all policies shall provide for thirty (30) days'
written minimum cancellation notice to the Bank. The Bank may act as attorney
for the Borrower in obtaining, adjusting, settling and cancelling such
insurance.
5. DEFAULT. Default shall exist hereunder: (1) if the Borrower shall fail
to pay any amount of the Liabilities when due or if the Borrower shall fail to
keep, observe or perform any provision of this Agreement or of any note, or
other instrument or agreement between the Borrower and the Bank relating to any
Liabilities or if any default or Event of Default specified or defined in any
such note, instrument or agreement shall occur; or (2) if the Borrower shall or
shall attempt to: (a) remove or allow removal of the Collateral from the county
where the Borrower now resides or change the location of its chief executive
office or principal place of business; (b) sell, encumber or otherwise dispose
of the Collateral or any interest therein or permit any lien or Security
Interest (other than the Bank's) to exist thereon or therein, (c) conceal, hire
out or let the Collateral, (d) misuse or abuse the Collateral, or (e) use or
allow the use of the Collateral in connection with any undertaking prohibited by
law; or (3) if bankruptcy or insolvency proceedings shall be instituted by or
against the Borrower; or (4) if the Collateral shall be attached, levied upon,
seized in any legal proceedings, or held by virtue of any lien or distress; or
(5) if the Borrower shall make any assignment for the benefit of creditors; or
(6) if the Borrower shall fail to pay promptly all taxes and assessments upon
the Collateral or the use thereof; or (7) if the Borrower shall die; or (8) if
the Bank with reasonable cause determines that its interest in the Collateral is
in jeopardy; or (9) if the Borrower should fail to keep the Collateral suitably
insured . In the Event of Default or the breach of any undertaking of or
conditions to be performed by the Borrower: (1) all Liabilities shall become
immediately due and payable; and (2) the Borrower agrees upon demand to deliver
the Collateral to the Bank, or the Bank may, with or without legal process, and
with or without previous notice or demand for performance, enter any premises
wherein the Collateral may be, and take possession of the same, together with
anything therein, and the Bank may make disposition of the Collateral subject to
any and all applicable provisions of the law. If the Collateral is sold at
public sale, the Bank may purchase the Collateral at such sale. The Bank,
provided it has sent the statutory notice of default, may retain from the
proceeds of such sale all reasonable costs incurred in the said taking and sale
and also, all sums then owing by the Borrower, and any surplus of any such sale
shall be paid to the Borrower.
<PAGE>
6. GENERAL AGREEMENTS. (a) The Borrower agrees to pay the costs of filing
financing statements and of conducting searches in connection with this
Agreement. (b) The Borrower agrees to allow the Bank through any of its officers
or agents, at all reasonable times, to examine or inspect any of the Collateral
and to examine, inspect and make extracts from the Borrower's books and records
relating to the Collateral. (c) The Borrower will promptly pay when due all
taxes and assessments upon the Collateral or for its use of operation or upon
the proceeds thereof or upon this Agreement or upon any note or other instrument
or agreement evidencing any of the Liabilities. (d) At its option, the Bank may
discharge taxes, liens or Security Interests or other encumbrances at any time
levied or placed on the Collateral, and may pay for the maintenance and
preservation of the Collateral, and the Borrower agrees to reimburse the Bank on
demand for any payment made or any expense incurred by the Bank pursuant to the
foregoing authorization, including outside or in-house counsel fees and
disbursements incurred or expended by the Bank in connection with this
Agreement. (e) The Borrower hereby authorizes the Bank to file financing
statements and any amendments thereto without the signature of the Borrower.
Such authorization is limited to the Security Interest granted by this
Agreement. (f) The Borrower agrees that the Bank has the right to notify (on
invoices or otherwise) account debtors and other obligors or payors on any
Collateral of its assignment to the Bank, and that all payments thereon should
be made directly to the Bank, and that the Bank has full power and authority to
collect, compromise, endorse, sell or otherwise deal with the Collateral on its
own name or that of the Borrower at any time. (g) The Borrower agrees to pay or
reimburse the Bank on demand for all costs and expenses incurred by it in
connection with the administration and enforcement of this Agreement and the
administration, preservation, protection, collection or realization of any
Collateral (including outside or in-house attorneys' fees and expenses). (h) The
Bank shall not be deemed to have waived any of its rights hereunder or under any
other agreement, instrument or paper signed by the Borrower unless such waiver
is in writing and signed by the Bank. No delay or omission on the part of the
Bank in exercising any right shall operate as a waiver thereof or of any other
right. A waiver upon any one occasion shall not be construed as a bar or a
waiver of any right or remedy on any future occasion. All of the rights and
remedies of the Bank, whether evidenced hereby or by any other Agreement,
instrument or paper, shall be cumulative and may be exercised singly or
concurrently. (i) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. (j) This Agreement, and the
Security Interests, obligations, rights and remedies created hereby, shall inure
to the benefit of the Bank and its successors and assigns and be binding upon
the Borrower and its heirs, executors, administrators, legal representatives,
successors and assigns.
<PAGE>
7. EXECUTION BY THE BANK. This Agreement shall take effect immediately upon
execution by the Borrower, and the execution hereof by the Bank shall not be
required as a condition to the effectiveness of this Agreement. The provision
for execution of this Agreement by the Bank is only for purposes of filing this
Agreement as a security agreement under the Uniform Commercial Code, if
execution hereof by the Bank is required for purposes of such filing.
P.C. Workstation Rentals, Inc.
(Borrower)
By: /s/ David N. Salav
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3512 Veterans Memorial Highway
(Number and Street)
Bohemia, Suffolk, New York 11716
(City, County, State)
Places of business in counties other than above:
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THE CHASE MANHATTAN BANK
By: Scott M. Creaven, Vice President
(Name and Title)
Address: 395 N. Service Rd, Melville, NY
(Number, Street, City)
