Sample Business Contracts

General Security Agreement - Imperial Bank and Research Engineers Inc.

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                             IMPERIAL BANK
                              Member FDIC

                       GENERAL SECURITY AGREEMENT
              (Tangible and Intangible Personal Property)

This Agreement is executed on February 26, 1999, by RESEARCH ENGINEERS,  INC., A
DELAWARE CORPORATION (hereinafter called "Obligor").

In  consideration of financial  accommodations  given, to be given or continued,
the  Obligor  grants to IMPERIAL  BANK  (hereinafter  called  'Bank") a security
interest in (a) all property (i) delivered to Bank by Obligor,  (ii) which shall
be in Bank's  possession  or  control in any  matter or for any  purpose,  (iii)
described below, (iv) now owned or hereafter  acquired by Obligor of the type or
class described below and/or in any  supplementary  schedule  hereto,  or in any
financing  statement filed by Bank and executed by or on behalf of Obligor;  (b)
all  deposits  accounts of Obligor at Bank and (c) the  proceeds,  increase  and
products of such  property,  all  accessions  thereto,  and all  property  which
Obligor may receive on account of such collateral which Obligor will immediately
deliver to Bank (collectively referred to as "Collateral") to secure payment and
performance of all of Obligor's  present or future debts or obligations to Bank,
whether  absolute  or  contingent  (hereafter  referred  to as  "Debt").  Unless
otherwise  defined,  words  used  herein  have the  meanings  given  them in the
California Uniform Commercial Code.


                                    Identification    License or
Year   Make/Manufacturer    Model   and Serial No.  Registration No. New or Used
<S>    <C>                  <C>     <C>             <C>              <C>


Engine or other equipment:
(For aircraft - original ink signature on copy to FAA)

Type                    Account Number                         Amount $
    -------------------                -----------------------         --------
In name of
Depository                               AND ALL EXTENSIONS OR RENEWALS THEREOF.


All personal property of every kind including furniture, fixtures, equipment and
inventory, including building materials and leasehold improvements of every kind
and nature, all engineering reports, land planning maps, plans,  specifications,
and other  exhibits  prepared in the planning of the real  property now owned or
hereafter  acquired  by Obligor,  and all  proceeds  thereof,  intended to be or
actually  located at, upon or about or attached or related to the real  property
located at
                22700 Savi Ranch Parkway, Yorba Linda, CA 92687
and legally  described as shown on Exhibit "A" attached hereto together with the
proceeds of insurance policies issued with respect to said property.

The collateral not in Bank's possession will be located at:

|_| If checked,  the Obligor is executing  this  Agreement  as an  Accommodation
Debtor only and the  Obligor's  liability  is limited to the  security  interest
granted in the Collateral  described  herein.  The party being  accommodated  is
("Borrower").  All the terms and  provisions  on page 2 hereof are  incorporated
herein as though set forth in full, and constitute a part of this Agreement.
     Name              (indicate title, if applicable)          Address
RESEARCH ENGINEERS, INC.,   By: /S/ JYOTI CHATTERJEE    22700 Savi Ranch Parkway
A DELAWARE CORPORATION          --------------------    Yorba Linda, CA 92687
                            Jyoti Chatterjee, EVP/COO    

                              By: /S/ WAYNE BLAIR 
                           Wayne L. Blair, CFO/Secretary

RE 213 E (Rev 9/97)       Distribution: Bank/Customer/File           Page 1 of 2



Obligor represents, warrants and agrees:
1.  Obligor  will  immediately  pay (a) any Debt when due,  (b) Bank's  costs of
collecting the Debt, of protecting, insuring or realizing on Collateral, and any
expenditure of Bank pursuant  hereto,  including  attorneys'  fees and expenses,
with interest at the rate of 24% per year,  or the rate  applicable to the Debt,
whichever is less,  from the date of expenditure,  and (c) any deficiency  after
realization of Collateral.

2. Obligor will use the proceeds of any loan that becomes Debt hereunder for the
purpose  indicated on the application  therefore,  and will promptly contract to
purchase and pay the purchase  price of any property  which  becomes  Collateral
hereunder  from the  proceeds  of any loan made for that  purpose. 

3. As to all Collateral in Obligor's possession (unless  specifically  otherwise
agreed to by Bank in writing), Obligor will: 
     (a)  Have, or has,  possession of the Collateral at the location  disclosed
          to Bank and will not remove the Collateral from the location.
     (b)  Keep the Collateral separate and identifiable.   
     (c)  Maintain the Collateral in good and saleable  condition,  repair it if
          necessary,   clean,  feed,  shelter,   water,   medicate,   fertilize,
          cultivate,  irrigate,  prune and otherwise deal with the Collateral in
          all such  ways as are  considered  good  practice  by  owners  of like
          property, use it lawfully and only as permitted by insurance policies,
          and permit Bank to inspect the Collateral at any reasonable time.  
     (d)  Not sell, contract to sell, lease, encumber or transfer the Collateral
          (other than inventory  Collateral)  until the Debt has been paid, even
          though Bank has a security interest in proceeds of such Collateral.

4.   As to Collateral which is inventory and accounts,  Obligor: 
     (a)  May,  until  notice from Bank,  sell,  lease or  otherwise  dispose of
          inventory  Collateral  in the ordinary  course of business  only,  and
          collect the cash proceeds thereof.
     (b)  Will, upon notice from Bank,  deposit all cash proceeds as received in
          a demand deposit account with Bank,  containing only such proceeds and
          deliver  statements   identifying  units  of  inventory  disposed  of,
          accounts which gave rise to proceeds, and all acquisitions and returns
          of inventory as required by Bank.
     (c)  Will receive in trust,  schedule on forms satisfactory to the Bank and
          deliver to Bank all non-cash proceeds other than inventory received in
     (d)  If not in default, may obtain release of Bank's interest in individual
          units of inventory  upon  request,  therefore,  payment to Bank of the
          release  price  of  such  units  shown  on  any  Collateral   schedule
          supplementary hereto, and compliance herewith as to proceeds thereof.

5. As to Collateral which are accounts,  chattel paper,  general intangibles and
   proceeds described in 4(c) above, Obligor warrants, represents and agrees:
     (a)  All such  Collateral is genuine,  enforceable  in accordance  with its
          terms, free from default, prepayment, defense and conditions precedent
          (except as  disclosed  to and  accepted  by Bank in  writing),  and is
          supported by  consecutively  numbered  invoices to, or rights against,
          the debtors thereon.  obligor will supply Bank with duplicate invoices
          or other evidence of Obligor's rights on Bank's request;
     (b)  All  persons  appearing  to  be  obligated  on  such  Collateral  have
          authority and capacity to contract;
     (c)  All chattel  paper is in compliance  with law as to form,  content and
          manner of preparation and execution and has been properly  registered,
          recorded, and/or filed to protect Obligor's interest thereunder;
     (d)  If an  account  debtor  shall also be  indebted  to Obligor on another
          obligation,  any payment made by him not specifically designated to be
          applied  on any  particular  obligation  shall be  considered  to be a
          payment on the account in which Bank has a security  interest.  Should
          any  remittance  include  a  payment  not on an  account,  it shall be
          delivered to Bank and, if no event of default has occurred, Bank shall
          pay Obligor the amount of such payment;
     (e)  Obligor  agrees not to  compromise,  settle or adjust  any  account or
          renew or extend  the time of  payment  thereof  without  Bank's  prior
          written consent.

6. Obligor owns all Collateral absolutely, and no other person has or claims any
   interest in any  Collateral,  except as  disclosed to and accepted by Bank in
   writing.  Obligor  will defend any  proceeding  which may affect  title to or
   Bank's security interest in any Collateral,  and will indemnify and hold Bank
   free and harmless from all costs and expenses of Bank's defense.

7. Obligor  will  pay  when  due  all  existing  or  future  charges,  liens  or
   encumbrances on and all taxes and assessments now or hereafter  imposed on or
   affecting the Collateral  and, if the Collateral is in Obligor's  possession,
   the realty on which the Collateral is located.

8. Obligor  will  insure  the  Collateral  with  Bank as loss  payee in form and
   amounts with companies, and against risks and liability satisfactory to Bank,
   and hereby  assigns such policies to Bank,  agrees to deliver them to Bank at
   Bank's request,  and authorizes Bank to make any claim thereunder,  to cancel
   the insurance on Obligor's default, and to receive payment of and endorse any
   instrument in payment of any loss or return  premium.  If Obligor should fail
   to  deliver  the  required  policy  or  policies  to the Bank,  Bank may,  at
   Obligor's  cost  and  expense,  without  any  duty to do so,  get and pay for
   insurance  naming as the insured,  at Bank's option,  either both Obligor and
   Bank,  or only Bank,  and the cost thereof  shall be secured by this Security
   Agreement, and shall be repayable as provided in Paragraph 1 above.

9. Obligor will give Bank any  information it requires.  All  information at any
   time  supplied to Bank by Obligor  (including,  but not limited to, the value
   and condition of Collateral,  financial statements, financing statements, and
   statements  made in  documentary  Collateral)  is correct and  complete,  and
   Obligor will notify Bank of any adverse change in such  information.  Obligor
   will  promptly  notify  Bank of any  change  of  Obligor's  residence.  chief
   executive office or mailing address.

10.Bank is irrevocably appointed Obligor's  attorney-in-fact to do any act which
   Obligor is  obligated  hereby to do, to  exercise  such rights as Obligor may
   exercise,  to use such  equipment  as Obligor  might use, to enter  Obligor's
   premises  to  give  notice  of  Bank's  security  interest,  and  to  collect
   Collateral  and  proceeds  and to  execute  and  file in  Obligor's  name any
   financing  statements  and  amendments  thereto  required  to perfect  Bank's
   security interest  hereunder,  all to protect and preserve the Collateral and
   Bank's rights hereunder. Bank may:
     (a)  Endorse,  collect and receive  delivery or payment of instruments  and
          documents constituting Collateral;
     (b)  Make  extension  agreements  with respect to or affecting  Collateral,
          exchange it for other  Collateral,  release  persons liable thereon or
          take  security for the payment  thereof,  and  compromise  disputes in
          connection therewith;
     (c)  Use or operate Collateral for the purpose of preserving  Collateral or
          its value and for preserving or liquidating Collateral.

11.If more than one Obligor signs this  Agreement,  their liability is joint and
   several.  Any Obligor who is married  agrees that recourse may be had against
   separate  property  for the Debt.  Discharge  of any Obligor  except for full
   payment,  or any  extension,  forbearance,  change  of rate of  interest,  or
   acceptance,  release or  substitution  of  Collateral  or any  impairment  or
   suspension  of Bank's  rights  against  an  Obligor,  or any  transfer  of an
   Obligor's  interest to another  shall not affect the  liability  of any other
   Obligor.  Until the Debt shall have been paid or  performed  in full,  Bank's
   rights shall continue even if the Debt is outlawed.  All Obligors waive:  (a)
   any right to require Bank to proceed against any Obligor before any other, or
   to pursue any other remedy;  (b) presentment,  protest and notice of protest,
   demand and notice of nonpayment,  demand or performance,  notice of sale, and
   advertisement  of sale;  (c) any right to the  benefit  of or to  direct  the
   application  of any  Collateral  until the Debt shall have been paid; (d) and
   any right of subrogation to Bank until Debt shall have been paid or performed
   in full.

12.Upon default, at Bank's option,  without demand or notice, all or any part of
   the Debt shall  immediately  become due.  Bank shall have all rights given by
   law, and may sell, in one or more sales,  Collateral in any county where Bank
   has an office. Bank may purchase at such sale. Sales for cash or on credit to
   a  wholesaler,  retailer or user of the  Collateral,  or at public or private
   auction, are all to be considered commercially  reasonable.  Bank may require
   Obligor to  assemble  the  Collateral  and make it  available  to Bank at the
   entrance to the location of the Collateral, or a place designated by Bank.

    Defaults shall include:
     (a)  Obligor's failure to pay or perform this or any agreement with Bank or
          breach of any warranty herein, or Borrower's failure to pay or perform
          any agreement with Bank.
     (b)  Any change in Obligor's or  Borrower's  financial  condition  which in
          Bank's  judgment  impairs  the  prospect  of  Borrower's   payment  or
     (c)  Any actual or reasonably  anticipated  deterioration of the Collateral
          or in the market price thereof which causes it, in Bank's judgment, to
          become unsatisfactory as security.
     (d)  Any levy or seizure against Borrower or any of the Collateral.
     (e)  Death, termination of business, assignment for creditors,  insolvency,
          appointment  of  receiver,   or  the  filing  of  any  petition  under
          bankruptcy  or  debtor's  relief  laws of, by or  against  Obligor  or
          Borrower or any guarantor of the Debt.
     (f)  Any warranty or  representation  which is false or is believed in good
          faith by Bank to be false.

13.Bank's  acceptance of partial or  delinquent  payments or the failure of Bank
   to exercise any right or remedy shall not waive any  obligation of Obligor or
   Borrower  or right of Bank to  modify  this  Agreement,  or waive  any  other
   similar default.

14.On  transfer  of all or any part of the Debt,  Bank may  transfer  all or any
   part of the Collateral. Bank may deliver all or any part of the Collateral to
   any Obligor at any time. Any such transfer or delivery  shall  discharge Bank
   from  all  liability  and  responsibility  with  respect  to such  Collateral
   transferred  or delivered.  This  Agreement  benefits  Bank's  successors and
   assigns  and  binds  Obligor's  heirs,  legatees,  personal  representatives,
   successors and assigns.  obligor agrees not to assert against any assignee of
   Bank any  claim  or  defense  that may  exist  against  Bank.  Time is of the
   essence. This Agreement and supplementary schedules hereto contain the entire
   security  agreement  between  Bank and  Obligor.  Obligor  will  execute  any
   additional  agreements,  assignments or documents reasonably required by Bank
   to carry this Agreement into effect.

15.This  Agreement  shall be governed by and  construed in  accordance  with the
   laws of the State of  California,  to the  jurisdiction  of whose  courts the
   Obligor  hereby agrees to submit.  Obligor agrees that service of process may
   be  accomplished  by any means  authorized by California  law. All words used
   herein in the singular  shall be  considered  to have been used in the plural
   where the context and construction so require.

16.To the extent that Obligor  acquires any  trademarks,  service  marks,  trade
   names and service names and/or the goodwill associated therewith, copyrights,
   patents and/or patent  applications  (collectively  'Intellectual  Property),
   Obligor shall give prompt  notice  thereof to Bank and shall take any and all
   actions requested from time to time by Bank to perfect Obligor's  interest in
   such  Intellectual  Property and to perfect  Bank's first  priority  interest
   therein. Without limiting the generality of the foregoing, the Obligor agrees
   as follows:  Upon Obligor  creating,  writing,  producing  or  acquiring  any
   software, computer source codes or other computer programs (collectively, the
   'Software'),  Obligor  shall  promptly  register  such Software with the U.S.
   Copyright Office and to the extent Obligor's rights therein are acquired from
   any third party,  Obligor shall promptly upon such  acquisition file with the
   U.S.  Copyright Office any and all documents  necessary to perfect  Obligor's
   rights  therein.  Upon  Obligor  creating,  writing,  producing  or otherwise
   acquiring  any Software,  Obligor  shall give prompt notice  thereof to Bank.
   Obligor shall  execute and deliver to Bank any and all  copyright  mortgages,
   UCC financing  statements and other documents and instruments  which Bank may
   request in connection  with the Bank  perfecting its first priority  security
   interest in such Software.

RE 213 E (Rev9/97)                                                   Page 2 of 2


                              EXHIBIT "A"


  This Exhibit is made a part of that General  Security  Agreement dated 2/26/99
  executed by Research Engineers, Inc., a Delaware corporation