Exhibit 10.6
SECURITY AGREEMENT
DATE: March 30, 1999
DM Management Company, of 25 Recreation Park Drive, Hingham,
Massachusetts (hereinafter called the DEBTOR), for valuable consideration,
receipt whereof is hereby acknowledged, hereby grants to Belknap County Economic
Development Council, Inc. , a non-profit corporation, organized and existing
under the laws of the State of New Hampshire and having a principal place of
business at 64 Court Street, Laconia, New Hampshire (hereinafter called the
SECURED Party), a security interest in the following property (including any
hereafter delivered to DEBTOR) and any and all additions, accessions, and
substitutions thereto or therefor and any or all proceeds thereof, viz: Specific
business assets located at: its Tilton, New Hampshire facility (the premises),
as set forth in SCHEDULE A attached and made a part hereof; to secure Debtors
obligations under the Loan Agreement between DEBTOR and SECURED PARTY of even
date herewith (the "Loan Agreement").
DEBTOR hereby warrants and covenants:
1. That except for the security interest granted hereby DEBTOR is, or to the
extent that this agreement states that the Collateral is to be acquired
after the date hereof, will be, the owner of the Collateral free from any
adverse lien, security interest or other encumbrance; and that DEBTOR will
defend the Collateral against all claims and demands of all persons, at any
time claiming the same or any interest;
2. That the Collateral is not used or bought primarily for personal, family or
household purposes;
3. That the Collateral will be kept at DEBTOR's place of business at 100 Birch
Pond Drive, Tilton, New Hampshire; that DEBTOR will promptly notify SECURED
PARTY of any change in the location of the Collateral within said State;
and that DEBTOR will not remove the Collateral from said State without the
written consent of SECURED PARTY;
4. That no Financing Statement covering any Collateral or any proceeds hereof
is on file in any public office, and at the request of SECURED PARTY,
DEBTOR will join with SECURED PARTY in executing one or more Financing
Statements pursuant to the Uniform Commercial Code in form satisfactory to
SECURED PARTY and will pay the cost of filing the same in all public
offices wherever filing is deemed by SECURED PARTY to be necessary or
desirable;
5. That DEBTOR will not sell or offer to sell or otherwise transfer the
Collateral or any interest therein without the written consent of SECURED
PARTY, except within the normal course of its business;
6. That DEBTOR will have and maintain insurance at all times with respect to
all Collateral against risks of fire (including so-called extended
coverage), theft, and other risks as SECURED PARTY may require, containing
such terms, in such form, for such periods and written by such companies as
may be satisfactory to SECURED PARTY, such insurance to be payable to
SECURED PARTY and DEBTOR as their interests may appear; that all policies
of insurance shall provide for ten days' written minimum
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cancellation notice to SECURED PARTY and at request of SECURED PARTY
copies of such policies shall be delivered to and held by it.
7. That DEBTOR will keep the Collateral free from any adverse lien, security
interest or encumbrance except those set forth on Exhibit A hereto
("permitted Encumbrances") and in good order and repair and will not waste
or destroy the Collateral or any part thereof; that DEBTOR will not use the
Collateral in violation of any statute or ordinance; that SECURED PARTY may
examine and inspect the Collateral at any time, wherever located; and that
the security interest set forth in this Security Agreement does not violate
the provisions of any prior security agreements;
8. That DEBTOR will pay promptly when due all taxes and assessments upon the
Collateral or for its use or operation or upon this agreement or upon any
note or notes evidencing the Obligations;
9. At all reasonable times, and with reasonable notice, the DEBTOR will permit
the SECURED PARTY, its accountants, auditors, or attorneys to make such
examination and inspection of the DEBTOR's books, accounts, orders,
correspondence and other records, relating to the collateral including the
making of copies thereof or extracts therefrom, as the SECURED PARTY may
request;
10. At the request of the SECURED PARTY, the DEBTOR will execute and deliver to
the SECURED PARTY such further documents and instruments of assurance and
will do such further acts as the SECURED PARTY may deem necessary or
advisable to assure to the SECURED PARTY all rights given or intended to be
given to the SECURED PARTY hereby or hereunder;
At its option, and upon five (5) days prior written notice to Debtor,
except for Permitted Encumbrances, SECURED PARTY may discharge taxes, liens or
security interests or other encumbrances at any time levied or placed on the
Collateral, and may pay for insurance on the Collateral and may pay for the
maintenance and preservation of the Collateral. DEBTOR agrees to reimburse
SECURED PARTY on demand for any payment made or any expense incurred by SECURED
PARTY pursuant to the foregoing authorization.
Until an event of default under the Loan Agreement shall occur and be
continuing, DEBTOR may have possession of the Collateral and use it in any
lawful manner not inconsistent with this agreement and not inconsistent with any
policy of insurance thereon.
DEBTOR shall be in default under this agreement upon the occurrence of
any event of default specified in the Loan Agreement.
Upon the occurrence and continuance of such an event of default SECURED
PARTY may declare all obligations secured hereby immediately due and payable and
shall have the remedies of a secured party under the Uniform Commercial Code.
SECURED PARTY may require DEBTOR to assemble the Collateral and make it
available to SECURED PARTY at a place to be designated by SECURED PARTY which is
reasonably convenient to both parties. Whenever notification with respect to the
sale or other disposition of the Collateral is required by law, such
notification of the time and place of public sale, or of the date after which a
private sale or other intended disposition is to be made, shall be deemed
reasonable if mailed, postage prepaid, addressed to DEBTOR at the mailing
address hereinabove given at least ten (10) days before the time of such public
sale or the date after which any such private sale or other intended disposition
is to be made, as
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the case may be. Expenses of retaking, holding, preparing for sale, selling or
the like shall include SECURED PARTY's reasonable attorneys' fees and legal
expenses.
No waiver by SECURED PARTY of any default shall operate as a waiver of
any other default or of the same default on a future occasion.
All rights of SECURED PARTY hereunder shall inure to the benefit of its
successors and assigns; and all obligations of the DEBTOR shall bind its
successors or assigns.
Schedule A may be amended hereafter by the submission from DEBTOR to
SECURED PARTY of a list of additional equipment purchased with proceeds of the
funds borrowed under the Loan Agreement.
This agreement shall become effective when it is signed by DEBTOR. This
agreement and all rights and obligations hereunder, including matters of
construction, validity and performance, shall be governed by the law of New
Hampshire.
Executed on the day and year first above written.
DEBTOR: DM Management Company
Steven D. Epstein /s/ Peter J. Tulp
- ------------------------ ---------------------------------------
witness Peter J. Tulp, VP Finance, Corporate
Controller
SECURED PARTY: Belknap County
Economic Development Council, Inc.
Steven D. Epstein /s/ Eliza Leadbeater
- ------------------------ ---------------------------------------
witness By: Eliza Leadbeater
Its: Executive Director
Hereunto Duly Authorized
DM MANAGEMENT
BELKNAP CLY LOAN:
ASSETS SPECIFICALLY IDENTIFIED THRU 3/2/99
SCHEDULE A
Asset Purchased From Invoice # Amount Total
----- -------------- --------- ------ -----
[ILLEGIBLE]
ergonomic workstations ergogenic technology quote 9807-03, invoice 4345,4348
26 PR 770 CD-2 workstations @ $1,197 each 4355 $ 31,122.00
14 (of 44 ttl) PR 770 CD-2 workstations @ $1,197 each quote 9807-00 add $ 16,758.00 [ILLEGIBLE]
delivery on above roberts white glove services 102058051 $ 1,406.00
-----------
$ 49,286.00 $ 49,288.00
-----------
-----------
$ 80,886.00
Exhibit A
i) Liens for taxes not yet due or liens for taxes being contested in
good faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of DEBTOR in accordance with generally
accepted accounting principles;
ii) Liens on property or assets of DEBTOR that were incurred in the
ordinary course of business, such as landlords' and mechanics' liens and
other similar liens arising in the ordinary course of business and that (x)
do not in the aggregate materially detract from the value of the property or
assets subject thereto or materially impair the use thereof in the operation
of the business of DEBTOR or (y) that are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to such lien; and
iii) Subordinated liens of Citizens Bank of Massachusetts
UNIFORM COMMERCIAL CODE -- FINANCING STATEMENT -- FORM UCC-1
IMPORTANT -- READ INSTRUCTIONS ON BACK BEFORE FILLING OUT FORM.
This FINANCING STATEMENT is presented to a filing officer for filing pursuant
to the Uniform Commerical Code.
- -------------------------------------------------------------------------------------------------------------------------------
1. Debtor(s) (Last Name First) and 2. Secured Party(ies) Name(s) 3. For Filing Officer: Date, Time,
Address(es). and Address(es). No. Filing Office
DM Management Company Belknap County Economic
25 Recreation Park Drive Development Council
Hingham, MA 02043 64 Court Street
Laconia, NH 03246
/ / The Debtor is a Transmitting Utility
- -------------------------------------------------------------------------------------------------------------------------------
4. This Financing Statement covers the following types (or items) of property:
Equipment more particularly described in Schedule A attached and
located at:
100 Birch Pond Drive
Tilton, NH 03276
-------------------------------------------------------------------------------
/ / Products of the Collateral are 5. Name of a Record Owner: Birch Pond Realty Corporation
also covered.
- -------------------------------------------------------------------------------------------------------------------------------
6. (a) / / The described crops are 7. Describe Real Estate Here: 8. / / This Statement is to be indexed
growing or are to be grown on: - in the Real Estate Records
(b) / / The described goods are or are to
be fixtures on: -
(c) / / The lumber to be cut or minerals
or the like (including oil and gas)
is on: -
* Describe Real Estate in Box 7.
- -------------------------------------------------------------------------------------------------------------------------------
9. This Statement is filed without the debtor's signature to perfect a security interest in collateral (see instruction No. 9)
- -------------------------------------------------------------------------------------------------------------------------------
10. Filed with: NH Secretary of State 11. No. of Additional Sheets Presented: 1
- -------------------------------------------------------------------------------------------------------------------------------
DM Management Company Belknap County Economic Development Council
------------------------------------------- ------------------------------------------------------
By: /s/ Peter J. Tulp By: /s/ Eliza Leadbeder
---------------------------------------- ---------------------------------------------------
Signature(s) of Debtor(s) or Assignor(s) Signature(s) of Secured Party(ies) or Assignee(s)
STATE OF NEW HAMPSHIRE
(1) FILING OFFICER COPY -- ALPHABETICAL
DM Management Company Belknap County Economic
25 Recreation Park Drive Development Council
Hingham, MA 02043 64 Court Street
Laconia, NH 03246
/ / The Debtor is a Transmitting Utility
- -------------------------------------------------------------------------------------------------------------------------------
4. This Financing Statement covers the following types (or items) of property:
Equipment more particularly described in Schedule A attached and located at:
100 Birch Pond Drive
Tilton, NH 03276
-------------------------------------------------------------------------------
/ / Products of the Collateral are 5. Name of a Record Owner: Birch Pond Realty Corporation
also covered.
- -------------------------------------------------------------------------------------------------------------------------------
6. (a) / / The described crops are 7. Describe Real Estate Here: 8. / / This Statement is to be indexed
growing or are to be grown on: - in the Real Estate Records
(b) / / The described goods are or are to
be fixtures on: -
(c) / / The lumber to be cut or minerals
or the like (including oil and gas)
is on: -
* Describe Real Estate in Box 7.
- -------------------------------------------------------------------------------------------------------------------------------
9. This Statement is filed without the debtor's signature to perfect a security interest in collateral (see instruction No. 9)
- -------------------------------------------------------------------------------------------------------------------------------
10. Filed with: Belknap County Registry of Deeds 11. No. of Additional Sheets Presented: 1
- -------------------------------------------------------------------------------------------------------------------------------
DM Management Company Belknap County Economic Development Council
------------------------------------------- ------------------------------------------------------
By: /s/ Peter J. Tulp By: /s/ Eliza Leadbeder
---------------------------------------- ---------------------------------------------------
Signature(s) of Debtor(s) or Assignor(s) Signature(s) of Secured Party(ies) or Assignee(s)
STATE OF NEW HAMPSHIRE
UNIFORM COMMERCIAL CODE -- FINANCING STATEMENT -- FORM UCC-1
IMPORTANT -- READ INSTRUCTIONS ON BACK BEFORE FILLING OUT FORM.
This FINANCING STATEMENT is presented to a filing officer for filing pursuant
to the Uniform Commerical Code.
- -------------------------------------------------------------------------------------------------------------------------------
1. Debtor(s) (Last Name First) and 2. Secured Party(ies) Name(s) 3. For Filing Officer: Date, Time,
Address(es). and Address(es). No. Filing Office
DM Management Company Belknap County Economic
25 Recreation Park Drive Development Council
Hingham, MA 02043 64 Court Street
Laconia, NH 03246
/ / The Debtor is a Transmitting Utility
- -------------------------------------------------------------------------------------------------------------------------------
4. This Financing Statement covers the following types (or items) of property:
Equipment more particularly described in Schedule A attached and
located at:
100 Birch Pond Drive
Tilton, NH 03276
-------------------------------------------------------------------------------
/ / Products of the Collateral are 5. Name of a Record Owner: Birch Pond Realty Corporation
also covered.
- -------------------------------------------------------------------------------------------------------------------------------
6. (a) / / The described crops are 7. Describe Real Estate Here: 8. / / This Statement is to be indexed
growing or are to be grown on: - in the Real Estate Records
(b) / / The described goods are or are to
be fixtures on: -
(c) / / The lumber to be cut or minerals
or the like (including oil and gas)
is on: -
* Describe Real Estate in Box 7.
- -------------------------------------------------------------------------------------------------------------------------------
9. This Statement is filed without the debtor's signature to perfect a security interest in collateral (see instruction No. 9)
- -------------------------------------------------------------------------------------------------------------------------------
10. Filed with: Town of Tilton 11. No. of Additional Sheets Presented: 1
- -------------------------------------------------------------------------------------------------------------------------------
DM Management Company Belknap County Economic Development Council
------------------------------------------- ------------------------------------------------------
By: /s/ Peter J. Tulp By: /s/ Eliza Leadbeder
---------------------------------------- ---------------------------------------------------
Signature(s) of Debtor(s) or Assignor(s) Signature(s) of Secured Party(ies) or Assignee(s)
STATE OF NEW HAMPSHIRE
(1) FILING OFFICER COPY -- ALPHABETICAL