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Exhibit 10.2
CAMBRIDGE TRUST COMPANY
INVENTORY AND ACCOUNTS RECEIVABLE SECURITY AGREEMENT
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(Date)
Cambridge Energy Research Associates, Limited Partnership, the debtor
hereunder (hereinafter called the "Borrower") for valuable consideration,
receipt whereof is hereby acknowledged, hereby grants to The Cambridge Trust
Company, 1336 Massachusetts Avenue, Cambridge, Massachusetts, the secured party
hereunder (hereinafter called the "Bank"), a continuing security interest in
Borrower's inventory, including all goods, merchandise, raw materials, goods and
work in process, finished goods, and other tangible personal property now owned
or hereafter acquired and held for sale or lease or furnished or to be furnished
under contracts of service or used or consumed in Borrower's business (all
hereinafter called the "Inventory"), and in all accounts, contracts, notes,
bills, drafts, acceptances, general intangibles, instruments and documents
(whether negotiable or non-negotiable), chattel paper, choses in action, and all
other debts, obligations and liabilities in whatever form, owing to Borrower
from any person, firm or corporation or any other legal entity, whether now
existing or hereafter arising, now or hereafter received by or belonging or
owing to Borrower, for goods sold by it or for services rendered by it, or
however otherwise the same may have been established or created, all guarantees
and securities therefor, all right, title and interest of Borrower in the
merchandise or services which gave rise thereto, including the rights of
reclamation and stoppage in transit, all rights of an unpaid seller of
merchandise or services and in the products and proceeds thereof, including,
without limitation, all proceeds of credit, fire or other insurance, and any tax
refunds (which, with Inventory, is all hereinafter called "Collateral").
The security interest granted hereby is to secure payment and performance
of all debts, liabilities and obligations of Borrower to the Bank hereunder and
also any and all other debts, liabilities and obligations of Borrower to Bank of
every kind and description, direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, including without limiting the
generality of the foregoing, any debt, liability or obligation of Borrower to
others, which Bank may have obtained by assignment or otherwise, and further,
including, without litigation, all interest, fees, charges and expenses (all
hereinafter called "Obligations").
BORROWER'S PLACES OF BUSINESS. Borrower warrants that Borrower has no
places of business other than that shown at the end of this Agreement, unless
other places of business are listed immediately below, in which event Borrower
represents that it has additional places of business at the following locations
and none other:
14 rue Duphot, 75001 Paris France
1999 Harrison St., Oakland, CA 94612
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Gml. Drammensvei 45, P.O. 72, N-1321, Stabekk, Norway and if Borrower has
an office in more than one state, the Borrower's chief executive office and the
office where Borrower keeps its records concerning its accounts and other
property, is 20 University Road, Charles Square, Cambridge, MA 02138 or if left
blank, is that shown at the end of this Agreement. All Inventory presently owned
by Borrower is stored at the following locations: N/A
Borrower will promptly notify Bank in writing of any change in the location of
any place of business or the location of any Inventory or the establishment of
any new place of business or location of Inventory or office where its aforesaid
records are kept which would be shown in this Agreement if it were executed
after such change.
BORROWER'S ADDITIONAL REPRESENTATIONS AND WARRANTIES. Borrower represents
and warrants that:
(a) Borrower is a Limited Partnership duly organized and existing under
the laws of the State of Delaware and is duly qualified and in good standing in
every other state in which it is doing business.
(b) the execution, delivery and performance hereof are within the
Borrower's corporate powers, have been duly authorized, are not in contravention
of law or the terms of the Borrower's charter, by-laws or other incorporation
papers, or of any indenture, agreement or undertaking to which the Borrower is a
party or by which it is bound.
(c) The most recent financial statements relating to the Borrower
heretofore delivered to the Bank are complete and correct and present fairly,
subject, in the case of interim statements, to year-end audit and adjustments,
the financial condition of the Borrower and of its subsidiaries, if any, as of
the dates thereof and for the periods included therein, all in accordance with
generally accepted accounting principles and practices consistently applied
throughout the periods involved, and since the date of such financial statements
there has been no material adverse change in such condition.
(d) No approval or authorization or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery or performance by the Borrower of this Agreement or the
consummation of the transactions contemplated hereby.
(e) The extent that the Borrower has an employee benefit plan or other
plan maintained for employees of Borrower or any subsidiary which is covered by
Title IV
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of the Employee Retirement Income Security Act of 1974, no reportable event, as
defined in such Act, has occurred and is continuing with respect to any such
employee benefit plan.
(f) No litigation is either threatened, contemplated or pending which will
materially and adversely affect the Borrower's financial condition.
(g) The Borrower is and will be the lawful owner of all Collateral free
and clear of all liens, encumbrances and security interests (other than the
security interest hereby granted to the Bank or other security interests
approved in writing by the Bank), with full power and authority to grant the
Bank a security interest therein, and the Borrower will defend the same against
the claims and demands of all persons.
COLLECTIONS; NOTICE OF ASSIGNMENT; EXPENSES. Except as hereinafter
provided, the Borrower is authorized to collect all accounts of the Borrower as
the Bank's collection agent. The Borrower agrees that, upon the request of Bank,
it will hold all such collections in trust for the Bank without commingling the
same with other funds of the Borrower and will promptly, on the day of receipt
thereof, transmit such collections to the Bank in the identical form in which
they were received by the Borrower, with such endorsements as may be
appropriate, accompanied by a report, in form approved by the Bank, showing the
amount of such collections and the cash discounts applicable thereto. At such
intervals as the Bank may request, such reports shall also set forth the amount
of allowances, adjustments, discounts and other credits not previously reported
to the Bank and the amount owing on accounts which the Borrower deems should be
charged off.
All collections in the form of cash, checks or other demands remittances
so transmitted to the Bank shall upon receipt by the Bank be credited to an
account on the Bank's books in which will be recorded all collections of
Collateral and all amounts paid from such account against the Obligations (the
"Trust Account"). Each such credit shall be conditioned upon final payment to
the Bank at its office referred to at the beginning of this agreement of all
items giving rise to such credit. If any items is not so paid, the credit for
such item shall be reversed whether or not the item has been returned. All
collections in the form of notes, drafts, acceptances or other instruments not
payable on demand shall be delivered by the Borrower to the collection
department of the Bank. When such items are collected, the amount thereof shall
be credited by the Bank to the Trust Account, with appropriate advice to the
Borrower. Until such items are collected, the Borrower will not, without the
consent of the Bank, make any entry on its books or records indicating that the
same were received in payment of the account giving rise thereto.
At such times as the Bank shall determine, the Bank, by charging the Trust
Account, shall apply the full amount on deposit in the Trust Account in
reduction or payment of Obligations then outstanding such application to be
subject to final
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payment in cash of all items theretofore credited to the Trust Account. In lieu
of applying the funds in the Trust Account in reduction or payment of
outstanding Obligations, the Bank may at such intervals and on such conditions
as may be permitted by the Bank upon receiving a current certificate of
Collateral, release to the Borrower funds in the Trust Account in consideration
of the acquisition by the Bank of a security interest in additional Collateral
acquired by the Borrower since the immediately previous certificate.
Any and all deposits or other sums at any time credited by or due from
Bank to Borrower shall at all times constitute additional security for
Obligations and may be set-off against any Obligations at any time whether or
not they are then due or other security held by Bank is considered by Bank to be
adequate. Any and all instruments, documents, policies and certificates of
insurance, securities, goods, accounts, choses in action, general intangibles,
chattel paper, cash, property and the proceeds thereof (whether or not the same
are Collateral) owned by Borrower or in which Borrower has an interest, which
now or hereafter are at any time in the possession or control of Bank or in
transit by mail or carrier to or from Bank or in the possession of any third
party acting in Bank's behalf, without regard to whether Bank received the same
in pledge, for safekeeping, as agent for collection or transmission or otherwise
or whether Bank had conditionally released the same, shall constitute additional
security for Obligations and may be applied at any time to Obligations which are
then owing, whether due or not due.
The Bank may upon the occurrence of an Event of Default or at any time
thereafter notify account debtors that Collateral has been assigned to Bank and
that payments shall be made directly to Bank. Upon request of Bank at any time,
Borrower will so notify such account debtors and will indicate on all billings
to such account debtors that their accounts must be paid to Bank. The Bank shall
have full power to collect, compromise, endorse, sell or otherwise deal with the
Collateral in its own name or in the name of the Borrower. Borrower shall pay to
Bank on demand any and all reasonable counsel fees and other expenses incurred
by the Bank in connection with the preparation of this Agreement, documents
relating thereto or modifications thereof, and any and all expenses, including,
but not limited, to a collection charge on all accounts collected, all
attorneys' fees and expenses, and all other expenses of like or unlike nature
which may be expended by the Bank to obtain or enforce payment of any account
either as against the account debtor, Borrower or any guarantor or surety of
Borrower or in the prosecution or defense of any action or concerning any matter
growing out of or connected with the subject matter of this Agreement, the
Obligations or the Collateral or any of Bank's rights or interests therein or
thereto, including, without limiting the generality of the foregoing, any
counsel fees or expenses incurred in any bankruptcy or insolvency proceedings.
Borrower does hereby make, constitute and appoint any officer or agent of
Bank as Borrower's true and lawful attorney-in-fact, with power to endorse the
name
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of Borrower or any of Borrower's officers or agents upon any notes, checks,
drafts, money orders, or other instruments of payment (including payments
payable under any policy of insurance on the Collateral) or Collateral that may
come into possession of the Bank in full or part payment of any amounts owing to
Bank; to sign and endorse the name of Borrower or any of Borrower's officers or
agents upon any invoice, freight or express bill, bill of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications and
notices in connection with accounts, and any instrument or document relating
thereto or to Borrower's rights therein and to give written notice to such
office and officials of the United States Post Office to effect such change or
changes of address so that all mail addressed to Borrower may be delivered
directly to Bank. The Borrower grants to said attorney full power to do any and
all things necessary to be done in and about the premises as fully and
effectually as Borrower might or could do, and hereby ratifying all that said
attorney shall lawfully do or cause to be done by virtue hereof. This power of
attorney shall be irrevocable for the term of this Agreement and all
transactions hereunder and thereafter as long as Borrower may be indebted to
Bank.
FINANCING STATEMENTS. At the request of Bank, Borrower will join with Bank
in executing one or more Financing Statements pursuant to the Uniform Commercial
Code or other notices appropriate under applicable law in form satisfactory to
Bank and will pay the cost of filing the same in all public offices wherever
filing is deemed by Bank to be necessary or desirable. The Borrower will not
change its name, identify or corporate structure without giving the bank prior
written notice thereof and in connection with any such change execute and
deliver, or cause to be executed and delivered, to the Bank all such additional
security agreements, financing statements and other documents as the Bank shall
reasonably require. This provision shall not be deemed to constitute consent to
any change of identity or corporate structure otherwise prohibited in any
agreement between the Borrower and the Bank. The Bank may file, as financing
statement, a carbon, photographic or other reproduction of a financing statement
or of this Agreement.
BORROWER'S REPORTS. Borrower will furnish Bank within sixty days after the
close of each quarterly period of Borrower's fiscal year a balance sheet and
statement of profit and loss reflecting the financial condition of Borrower at
the end of such period and the results of its operation during such period, such
balance sheet and statement of profit and loss to be certified by Borrower's
President or Treasurer to fairly present the financial condition at the end of
such period and the results of its operations during such period in accordance
with generally accepted accounting principles consistently applied.
Borrower will furnish Bank annually, within ninety days after the close of
each fiscal year, a full and complete signed copy of a report or reports, by
certified public accountants acceptable to Bank, which report or reports shall
include balance sheets of Borrower as at the end of such year and a statement of
profit and loss of Borrower
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reflecting its operations during such year, such report or reports bearing the
certificate of such certified public accountants.
The Borrower shall from time to time deliver to Bank such other
information and such reports as to the Collateral as the Bank shall request and
in form required by the Bank.
GENERAL AGREEMENTS OF BORROWER. Borrower agrees to keep all the Inventory
insured with coverage and amounts not less than that usually carried by one
engaged in a like business and in any event not less than that required by Bank
with loss payable to the Bank and Borrower, as their interests may appear,
hereby appoint Bank as attorney for Borrower in obtaining, adjusting, settling
and canceling such insurance and endorsing any drafts. As further assurance for
the payment and performance of the Obligations, Borrower hereby assigns to Bank
all sums, including returns or unearned premiums, which may become payable under
any policy of insurance on the Collateral and Borrower hereby directs each
insurance company issuing any such policy to make payment of such sums directly
to Bank. The Bank or its agents have the right to inspect the Inventory and all
records pertaining thereto at intervals to be determined by Bank and without
hindrance or delay.
Borrower will at all times keep accurate and complete records of
Borrower's Inventory, accounts and other Collateral, and Bank, or any of its
agents, shall have the right to call at Borrower's place or places of business
at intervals to be determined by Bank, and without hindrance or delay, to
inspect, audit, check and make extracts from any copies of the books, records,
journals, orders, receipts or correspondence which relate to Borrower's
accounts, and other Collateral or other transactions, between the parties
thereto and the general financial condition of Borrower and Bank may remove any
of such records temporarily for the purpose of having copies made thereof.
Borrower, during the term of this Agreement, will not assign any accounts
or other Collateral to any other party, nor create or permit to exist any lien,
encumbrance or security interest of any kind covering any of the Collateral,
other than for the benefit of the Bank.
Borrower will maintain its corporate existence in good standing and comply
with all laws and regulations of the United States or of any state or states
thereof or of any political subdivision thereof, or of any governmental
authority which may be applicable to it or to its business.
Borrower will not sell or dispose of any of its assets except in the
ordinary and usual course of its business.
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The Bank may in its own name or in the name of others communicate with
account debtors in order to verify with them to Bank's satisfaction the
existence, amount and terms of any accounts.
This Agreement may but need not be supplemented by separate assignment of
accounts and if such assignments are given the rights and security interests
given thereby shall be in addition to and not in limitation of the rights and
security interests given by this Agreement.
If any of Borrower's accounts arise out of contracts with the United
States or any department, agency, or instrumentality thereof, Borrower will
immediately notify Bank thereof in writing and execute any instruments and take
any steps required by Bank in order that all monies due and to become due under
such contracts shall be assigned to Bank and notice thereof given to the
Government under the Federal Assignment of Claims Act.
If any of Borrower's accounts should be evidenced by promissory notes,
trade acceptances, or other instruments for the payment of money, Borrower will
immediately deliver same to Bank, appropriately endorsed to Bank's order and,
regardless of the form of such endorsement, Borrower hereby waives presentment,
demand, notice of dishonor, protest and notice of protest and all other notices
with respect thereto.
At the option of the Bank, Borrower will furnish to Bank, from time to
time, within five (5) days after the accrual in accordance with applicable law
of Borrower's obligation to make deposits for F.I.C.A. and withholding taxes,
proof satisfactory to Bank that such deposits have been made as required.
Borrower hereby grants to Bank for a term to commence on the date of this
Agreement and continuing thereafter until all debts and Obligations of any kind
or character owing from Borrower to Bank are fully paid and discharged, the
right to use of all premises or places of business which Borrower presently has
or may hereafter have and where any of said Collateral may be located, at a
total rental for the entire period of $1.00. Bank agrees not to exercise the
rights granted in this paragraph unless and until Bank determines to exercise
its rights against the Collateral herein.
Borrower will promptly pay when due all taxes and assessments upon the
Collateral or for its use or operation or upon this Security Agreement, or upon
any note or notes evidencing the Obligations, and will, at the request of Bank,
promptly furnish Bank the receipted bills therefor. At its option, Bank may
discharge taxes, liens or security interests or other encumbrances at any time
levied or placed on the Collateral, may pay for insurance on the Collateral and
may pay for the maintenance and preservation of the Collateral. Borrower agrees
to reimburse Bank on demand
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for any payments made, or any expenses incurred by Bank pursuant to the
foregoing authorization, and upon failure of the Borrower so to reimburse Bank,
any such sums paid or advanced by Bank shall be deemed secured by the Collateral
and constitute part of the Obligations.
EVENTS OF DEFAULT; CERTAIN RIGHTS OF THE BANK. In addition to and not in
limitation of any and all other rights of the Bank hereunder or under applicable
law, the Borrower shall be in default hereunder upon the occurrence of any of
the following events (i) default in the payment or performance of any
Obligation; (ii) default in the performance of any covenant or agreement
contained herein; (iii) default by any guarantor of any of the Obligations in
respect of any liability of such guarantor to the Bank; (iv) any representation,
warranty or statement contained herein or in any certificate, report or document
furnished by the Borrower to the Bank proves not to have been true and complete
as of the time it was made or furnished; (v) any event which results in the
acceleration of the maturity of indebtedness of the Borrower to others under any
indenture, agreement or undertaking; (vi) the assertion of any adverse claim
with respect to any of the Collateral; or (vii) the Borrower or any such
guarantor shall have become Insolvent. The Borrower, any guarantor or any other
person shall be considered to be "Insolvent" when any of the following events
shall have occurred in respect of the Borrower or any guarantor: admission in
writing of its inability, or be generally unable, to pay its debts as they
become due, death, dissolution, termination of existence, cessation of normal
business operations, insolvency, appointment of a receiver of any part of the
property of, legal or equitable assignment, conveyance or transfer of property
for the benefit of creditors by, or the commencement of any proceedings under
any bankruptcy or insolvency laws by or against, such person. Upon the
occurrence of any of such events of default, any or all Obligations shall, at
the option of the Bank and notwithstanding any time allowed by any instrument
evidencing of an Obligation, become immediately due and payable, without notice
or demand, provided, that in the event the Borrower shall become Insolvent, all
Obligations shall become immediately due and payable, without notice or demand.
Upon the occurrence of any of such events of default, and at any time or
times thereafter, the Bank shall have power and authority to sell or otherwise
dispose of any or all Collateral. Such sale or other disposition, subject to any
requirements of applicable law, may be by public or private proceedings and may
be by way of one or more contracts, as a unit or in parcels, at such time and
place, by such method, in such manner and on such terms as the Bank may
determine. Except as required by applicable law, such sale or other disposition
may be made without advertisement or any notice to the Borrower or to any other
person. Where reasonable notification of the time or place of such sale or other
disposition is so required, such requirement shall be met if such notice is
mailed, postage prepaid, at least seven days before the time of such sale or
other disposition to each person entitled thereto at each such person's last
address known to the Bank. The Bank may at any time require the
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Borrower to assemble any tangible personal property constituting Collateral and
make it available to the Bank at a place to be designated by the Bank which is
reasonably convenient to both parties. The Bank may buy at any public sale and
if the Collateral is of a type customarily sold on a recognized market or the
subject of widely distributed standard price quotations the Bank may buy at
private sale. After deducting all costs and expenses of collection, storage,
custody, sale or other disposition and delivery (including legal costs and
reasonable attorneys' fees) and all other charges against the Collateral, the
residue of the proceeds of any such sale or disposition shall be applied to the
payment of any and all Obligations, in such order of preference as the Bank may
determine, proper allowance for interest on Obligations not then due being made,
and, unless otherwise provided by law, any surplus shall be returned to the
Borrower. The Borrower shall remain liable for any deficiency.
PROCESSING AND SALES OF INVENTORY. So long as Borrower is not in default
hereunder, Borrower shall have the right, in the regular course of business, to
process and sell Borrower's Inventory. A sale in the ordinary course of business
shall not include transfer in total or partial satisfaction of a debt.
TERM OF AGREEMENT. The term of this Agreement shall commence with the date
hereof and continue in full force and effect and be binding upon the Borrower
until all Obligations of Borrower to Bank shall have been fully paid and
satisfied, and until so paid and satisfied, Borrower shall continue to assign
accounts to Bank and turn over all collections to Bank, as herein provided, and
Bank shall be entitled to retain its security interest in all existing and
future accounts, Inventory and other Collateral.
No delay or omission on the part of Bank in exercising any rights shall
operate as a waiver of such right or any other right. Waiver on any one occasion
shall not be construed as a bar to or waiver of any right or remedy on any
future occasion. All Bank's rights and remedies, whether evidenced hereby or by
any other agreement, instrument or paper, shall be cumulative and may be
exercised singularly or concurrently.
The laws of Massachusetts shall govern the construction of this Agreement
and the rights and duties of the parties hereto. Signed, sealed and delivered on
the day and year first above written.
CAMBRIDGE ENERGY RESEARCH
ASSOCIATES, LIMITED PARTNERSHIP
Witnessed by: --------------------------------
(Borrower)
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/s/ Eileen P. Jordan By: /s/ Daniel H. Lucking Jr.
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(Title)
Address: 20 University Road-Charles Square
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(Number and Street)
Cambridge, MA 02138
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(City, County and State)
Accepted:
The Cambridge Trust Company
By:
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Levin L. Waters V, Sr. V.P.
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