Worldwide Wireless Inc. Contracts
Sample Business Contracts
Security Agreement - New England Wireless Systems Inc. and Alan R. Ackerman
SECURITY AGREEMENT
This Security Agreement (the "Security Agreement"), is by and between
NEW ENGLAND WIRELESS SYSTEMS, INC., a Vermont corporation with its principal
place of business in Ascutney, Vermont (the "Borrower"), and ALAN R. ACKERMAN,
an individual residing in New York, New York (the "Lender").
Background
1. The Lender made a number of cash advances and loans to the
Borrower's parent company, Worldwide Wireless Systems, Inc. (the "Company").
As of September 30, 1997, the total principal amount due to the Lender was
$1,616,057. This amount plus interest thereon has been reflected in a
promissory note from the Company dated as of _______, 1997 (the "Note").
2. The loans made to the Company by Lender have been used to fund the
Borrower.
3. In consideration of the loans made by Lender and the Lender's
agreement to the terms of the Note, the Borrower has agreed to grant to the
Lender a security interest in its assets as described below.
N O W , T H E R E F O R E ,
In consideration of the premises and the mutual covenants and
agreements herein set forth, the parties hereby agree as follows:
ARTICLE 1
Security Interest
Section 1.1. Grant of Security Interest. The Borrower hereby grants
to the Lender, on the terms and conditions hereinafter set forth, a continuing
security interest in all of the Borrower's right, title and interest in and to
all tangible and intangible assets of the Borrower, including, without
limitation, all equipment, machinery, furnishings, supplies, inventory, books,
records, customer lists, goods, agreements, documents, contracts, instruments,
goodwill, general intangibles, accounts, accounts receivable, cash, chattel
paper, computer hardware and software, contracts, contract rights, vehicles,
and the proceeds and products thereof, whether now owned or hereafter acquired
and wherever located (the "Collateral"), and payments under insurance (whether
or not the Lender is the loss payee) payable by reason of loss or damage to
any of the foregoing Collateral.
Section 1.2. Security for Obligations. This Security Agreement
secures the payment and performance of all obligations of the Borrower now or
hereafter existing under the Note, whether for principal, interest, costs,
fees, expenses or otherwise and all obligations of the Borrower under this
Agreement (the "Obligations").
Section 1.3. Continuing Security Interest. This Security Agreement
shall create a continuing security interest in the Collateral and shall (i)
remain in full force and effect until payment in full of all
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Obligations, (ii) be binding upon the Borrower, its successors, transferees
and assigns, and (iii) inure, together with the rights and remedies of the
Lender hereunder, to the benefit of the Lender and its transferees and
assigns.
Section 1.4. The Borrower Remains Liable. Anything herein to the
contrary notwithstanding:
(a) The Borrower shall remain liable under the contracts and
agreements included in the Collateral to the extent set
forth therein, and shall perform all of its duties and
obligations under such contracts and agreements to the same
extent as if this Security Agreement had not been executed;
(b) The exercise by the Lender of any of its rights hereunder
shall not release the Borrower from any of its duties or
obligations under any such contracts or agreements included
in the Collateral; and
(c) The Lender shall not have any obligation or liability under
any such contracts or agreements included in the Collateral
by reason of this Security Agreement, nor shall the Lender
be obligated to perform any of the obligations or duties of
the Borrower thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
Section 1.5. Security Interest Absolute. All rights of the Lender and
the security interests granted to the Lender hereunder shall be absolute and
unconditional, irrespective of:
(a) Any lack of validity or enforceability of the Note, or any
other document or instrument relating to any of them;
(b) Any change in the time, manner or place of payment of, or in
any other term of, all or any part of the Obligations or any
other amendment to or waiver of or any consent to any
departure from the Note, this Agreement or any other
document or instrument relating to any of them;
(c) Any exchange, release or non-perfection of any collateral
(including the Collateral) or any release of or amendment to
or waiver of or consent to or departure from any guaranty,
for all or any of the Obligations; or
(d) Any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower or a
third party grantor of a security interest.
Section 1.6. Release of Security The security interest granted to the
Lender hereunder shall be released by the Lender upon the Lender's receipt of
payment in the amount of One Million Two Hundred Thousand Dollars ($1,200,000)
toward payment of the total indebtedness described in the Note.
ARTICLE 2
Representations and Warranties
The Borrower hereby represents and warrants to the Lender as follows:
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Section 2.1. Truthfulness and Completeness. All information with
respect to the Collateral and all other written information hereafter
furnished by the Borrower to the Lender, is or will be true and correct as of
the date furnished.
Section 2.2. Validity, etc. This Agreement creates a valid security
interest in the Collateral, securing the payment of the Obligations, and all
filings and other actions necessary or desirable to perfect and protect such
security interest have been duly taken.
Section 2.3. Subordination. The security interest of the Lender
created by this Agreement shall be subject and subordinate in all respects to
the terms and conditions of any security interest that may be granted by the
Borrower in connection with any future financing or extension of credit by a
bank or institutional lender. The Lender agrees to promptly execute and
deliver such instruments and documents, and take all further actions that may
be necessary or desirable to evidence the continued subordination of the
Lender's interest to the security interest of any bank or institutional lender
pursuant to a future financing or extension of credit as described above.
ARTICLE 3
Covenants
The Borrower covenants and agrees, so long as any portion of the
Obligations shall remain unpaid, unless the Lender shall otherwise consent in
writing, to perform the obligations set forth below:
Section 3.1. Maintenance of Collateral. The Borrower will keep the
Collateral in good order and repair, ordinary wear and tear excepted, and will
not waste or destroy the same or any portion thereof.
Section 3.2. Payment of Taxes, etc. The Borrower will pay when due
all existing or future charges, liens or encumbrances on the Collateral and
all taxes and assessments now or hereafter imposed on or affecting it, except
to the extent the validity thereof is being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
generally accepted accounting principles have been set aside.
Section 3.3. Location of Books and Records. The Borrower will keep
its records concerning the Collateral at the address of the Borrower set forth
in the preamble. Such records will be of such character as to enable the
Lender or its representatives to determine at any time the status thereof, and
the Borrower will not maintain or keep a copy of any such record at any other
address or location; provided, however, that the Borrower may keep a duplicate
copy of any such records at the business office of its professional advisors,
or in a safety deposit box at a local banking institution.
Section 3.4. Reports. The Borrower will furnish the Lender such
information concerning the Borrower, the Collateral and any of the Borrower's
account debtors as the Lender may at any time reasonably request.
Section 3.5. Transfers and Other Liens. The Borrower shall not (i)
sell, assign (by operation of law or otherwise) or otherwise dispose of all or
any of the Collateral, except in the ordinary course of business, or (ii)
create or suffer to exist any lien, charge or encumbrance upon or with respect
to any of the Collateral to secure indebtedness of any person or entity,
except for the security interest created by this Security Agreement.
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ARTICLE 4
The Lender
Section 4.1. The Lender May Perform. If the Borrower fails to perform
any agreement contained herein, at the Lender's option, the Lender may itself
perform, or cause performance of, such agreement. The Borrower agrees to
reimburse the Lender on demand for any payment made or any expense incurred by
the Lender pursuant to the foregoing authorization. Until default under the
Loan Agreement or under this S ecurity Agreement, the Borrower may have
possession of the Collateral and use it in any lawful manner not inconsistent
with this Security Agreement and not inconsistent with any policy of insurance
thereon.
Section 4.2. The Lender has No Duty. The powers conferred on the
Lender hereunder are solely to protect its interest in the Collateral and
shall not impose any duty on the Lender to exercise any such powers. Except
for the safe custody of any Collateral in its possession and the accounting of
monies actually received by it hereunder and any other duties imposed by the
Uniform Commercial Code as in effect in the State of Vermont (the "UCC"), the
Lender shall have no duty as to the Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to the Collateral.
ARTICLE 5
Remedies
Section 5.1. Certain Remedies.
(a) In the event of any default by the Borrower under this
Security Agreement, the Note, or any document or instrument
relating to any of them, the Lender may declare the
Obligations immediately due and payable and shall have the
remedies of a Lender under the UCC. The Lender may require
the Borrower to assemble the Collateral and make it
available to the Lender at a place to be designated by the
Lender which is reasonably convenient to the parties. Unless
the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a
recognized market, the Lender will give the Borrower
reasonable notice of the time and place of any public sale
thereof or of the time after which any private sale or any
other intended disposition thereof is to be made. The
requirements of reasonable notice shall be met if such
notice is mailed to the Borrower via registered or certified
mail, postage prepaid, at least ten (10) days before the
time of sale or disposition. Expenses of retaking, holding,
preparing for sale, selling or the like shall include the
Lender's reasonable attorneys' fees and legal expenses.
(b) All cash proceeds received by the Lender in respect of any
sale of, collection from or other realization upon all or
any part of the Collateral may, in the discretion of the
Lender, be held by the Lender as collateral for, and/or then
or at any time thereafter applied (after payment of any
amounts payable to the Lender pursuant to Section 5.3) in
whole or in part by the Lender against, all or any
Obligations in such order as the Lender shall elect. Any
surplus of such cash or cash proceeds held by the Lender and
remaining after payment in full of all the Obligations shall
be paid over to the Borrower or to whomsoever may be
lawfully entitled to receive such surplus.
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(c) Lender's remedies shall be subject and subordinate to the
terms and conditions of any future security interest that
may be granted by the Borrower in connection with any future
financing or extension of credit by a bank or institutional
lender.
Section 5.2. Further Assurances. The Borrower agrees that, from time
to time at its own expense, the Borrower will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable or that the Lender may request, in order to perfect,
preserve and protect the Collateral and any security interest granted or
purported to be granted hereby or to enable the Lender to exercise and enforce
its rights and remedies hereunder with respect to the Collateral.
Section 5.3. Indemnity and Expenses.
(a) The Borrower agrees to indemnify the Lender from and against
any and all claims, losses and liabilities arising out of or
resulting from the failure by the Borrower to perform or
observe any of the provisions of this Security Agreement
(including, without limitation, enforcement of this Security
Agreement), except claims, losses or liabilities resulting
from the Lender's gross negligence or wilful misconduct.
(b) Except as set forth in subsection (a) above, if either party
resorts to suit or other legal proceedings to enforce any
right or remedy hereunder, the non-prevailing party agrees
to pay the prevailing party's costs of suit and enforcement,
including reasonable attorneys' fees.
Section 5.4. Records Accessibility by the Borrower. In the event the
Lender takes possession of the Collateral in accordance with this Agreement,
the Lender shall provide the Borrower and the Borrower's professional
advisers, with reasonable access to such records as may be the basis of any
claim, action, suit or proceeding, at the Borrower's sole cost and expense.
ARTICLE 6
Miscellaneous
Section 6.1. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Vermont.
Section 6.2. Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 6.3. Notices. Any notice or other communication to be given
hereunder shall be in writing and mailed to such party at its principal
business address.
Section 6.4. Remedies Cumulative. The rights and remedies herein are
cumulative, and not exclusive of other rights and remedies which may be
granted or provided by law.
Section 6.5. Entire Agreement; Amendment. This Security Agreement
embodies the entire agreement and understanding between the parties relating
to the subject matter hereof and there are no covenants, promises, agreements,
conditions or understandings, oral or written, except as herein set forth.
This Security Agreement may not be amended, waived or discharged except by an
instrument in writing executed by the party against whom such amendment,
waiver or discharge is to be enforced.
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IN WITNESS WHEREOF, the parties have executed this Security Agreement
as of the ___ day of ____________, 1997.
IN PRESENCE OF: NEW ENGLAND WIRELESS, INC.
____________________________ By:___________________________________
Witness Duly Authorized Agent
____________________________ ______________________________________
Witness Alan R. Ackerman
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