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SECURITY AGREEMENT
This
Security Agreement (the “
Agreement ”),
dated this 30th day of November, 2007 is by and between National
Investment Managers Inc., a Florida corporation having an address
of 545 Metro Place South, Suite 100, Dublin, OH 43017 (the
“
Debtor ”),
and RBS Citizens, National Association,
a
national bank having a lending office at 28 State Street, Boston,
MA 02109 (the “
Secured Party ”).
WITNESSETH
THAT:
WHEREAS,
the
Debtor has duly authorized, executed and delivered to the
Secured Party (a) a certain Term Promissory Note of even date
herewith from the Debtor to the Secured Party in the maximum
principal amount of up to $13,000,000.00 and (b) a certain
Revolving Line of Credit Note of even date herewith from the
Debtor to the Secured Party in the maximum principal amount of
$2,000,000.00 (together, the “
Notes ”)
and any amendments, extensions or renewals of such
Notes;
WHEREAS,
the obligation of the Secured Party to make the loans
evidenced by the Notes (the “Loans”) is subject to
the condition, among others, that the Debtor grant to and
create in favor of the Secured Party a security interest in
and lien upon all business assets and rights of the Debtor as
hereinafter provided; and
WHEREAS,
in order to induce the Secured Party to make the Loans, the
Debtor has agreed to join with the Secured Party in this
Agreement.
NOW,
THEREFORE, in consideration of and as an inducement to the
Secured Party to make the Loans, the parties hereto, intending
to be legally bound, covenant and agree as
follows:
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(a)
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Certain Definitions .
In addition to the words and terms defined elsewhere in this
Agreement, the following words and terms shall have the following
meanings, respectively, unless the context hereof otherwise clearly
requires:
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(i) |
“
Collateral ”
shall mean all personal property of Debtor including, without
limitation, all of the following items, whether now owned or now
due, or in which the Debtor has an interest or hereafter, at
anytime in the future, acquired, arising or to become due, or in
which the Debtor obtains an interest, and all products, proceeds,
replacements, substitutions and accessions of or to any of the
following, which to the extent not defined below, shall have the
meanings given to them under the Uniform Commercial Code as enacted
in the Commonwealth of Massachusetts or as enacted in the state in
which such Collateral is located:
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Security Agreement –National Investment Managers,
Inc.
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Page 1 of 11
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A. |
all
accounts and accounts receivable;
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B.
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all
inventory (including raw materials, work-in-process, finished goods
and supplies);
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D.
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all
general intangibles (including, without limitation, payment
intangibles, software, trademarks, patents, copyrights or other
intellectual property rights of Debtor);
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E. |
all
equipment (including all machinery, furniture and
fixtures);
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H. |
all
chattel paper (whether tangible or electronic);
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J.
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all
investment property (including, without limitation, all financial
assets, certificated and uncertificated securities, securities
accounts and security entitlements);
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K. |
all
letter-of-credit rights;
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L.
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all
rights under judgments, all commercial tort claims and choses in
action;
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M.
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all
books, records and information relating to the Collateral and/or to
the operation of the Debtor’s business and all rights of
access to such books, records and information and all property in
which such books, records and information are stored, recorded and
maintained;
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N.
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all
instruments, promissory notes, documents of title, documents,
policies and certificates of insurance, securities, deposits,
deposit accounts, money, cash or other property;
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O.
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all
federal, state and local tax refunds and/or abatements to which the
Debtor is or becomes entitled no matter how or when arising,
including, but not limited to, any loss carryback tax
refunds;
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Security Agreement –National Investment Managers,
Inc.
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Page 2 of 11
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P.
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all
insurance proceeds, refunds and premium rebates, including without
limitation proceeds of fire and credit insurance, whether any of
such proceeds, refunds and premium rebates arise out of any of the
foregoing (A-O) or otherwise;
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Q.
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all
liens, guaranties, rights, remedies and privileges pertaining to
any of the foregoing (A-O) including the right of stoppage in
transit.
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(ii)
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“
Event(s) of Default ”
shall mean any default or breach of the terms, conditions or
covenants of this Agreement that remains uncured for thirty (30)
days after written notice of such default from Lender to Borrower,
or any Event of Default under and as defined in the Loan Agreement,
the Notes, or the other Loan Documents (as defined in the Loan
Agreement).
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(iii)
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“
Loan Agreement ”
shall mean a certain Revolving
Line of Credit and Term Loan Agreement of even date herewith by and
between the Debtor and the Secured Party.
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(iv)
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“
Obligations ”
shall mean the
payment and performance of all obligations of Debtor under the
Guaranty.
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(b)
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Construction .
Unless the context of this Agreement otherwise clearly requires,
references to the plural include the singular, the singular the
plural and the part the whole, and “or” has the
inclusive meaning represented by the phrase “and/or”.
The words “hereof”, “herein”,
“hereunder” and similar terms in this Agreement refer
to this Agreement as a whole and not to any particular provision of
this Agreement. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or
affect the construction of this Agreement or the interpretation
hereof in any respect. Section, subsection and exhibit references
are to this Agreement unless otherwise specified.
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2. |
Security Interest .
Debtor, on the terms set forth in this Agreement and as security
for the full and timely payment of the Obligations in accordance
with the terms thereof and of the instruments now or hereafter
evidencing the Obligations, hereby grants to the Secured Party a
continuing security interest, under the Uniform Commercial Code (as
in effect on the date hereof and as amended from time to time
hereafter) of each state having jurisdiction from time to time with
respect to all or any portion of the Collateral (the “
Code ”),
in and a lien on the Collateral. In addition to all the rights
given to the Secured Party by the Loan Agreement, the Notes, the
other Loan Documents, and this Agreement, the Secured Party shall
have all the rights and remedies of a secured party under the Code.
In connection with the grant of security interest made hereby,
Debtor hereby authorizes Secured Party to file or cause to be filed
one or more financing statements, amendments to financing
statements and/or in lieu financing statements with any filing
office for the purpose of perfecting or continuing the perfection
of the security interest in the Collateral.
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Security Agreement –National Investment Managers,
Inc.
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Page 3 of 11
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3. |
Principles Applicable to the Collateral .
The parties agree that, at all times during the term of this
Agreement, the following provisions shall be applicable to the
Collateral:
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(a)
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The
Debtor covenants and agrees that it will keep accurate and complete
books and records concerning the Collateral owned by it in
accordance with generally accepted accounting principles,
consistently applied.
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(b)
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The
Secured Party shall have the right to review the books and records
of the Debtor pertaining to the Collateral and to copy and make
excerpts therefrom, all at such times and as often as the Secured
Party may reasonably request upon three (3) business days’
written notice.
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(c)
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The
Debtor shall maintain and keep (i) its principal place of business
and its chief executive office, (ii) its records concerning the
Collateral and (iii) its Collateral at the address set forth on the
first page of this Agreement and at no other location, without the
prior written consent of the Secured Party.
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(d)
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Notwithstanding
the security interest in the Collateral granted to and created in
favor of the Secured Party under this Agreement, the Debtor shall
have the right, until one or more Events of Default shall occur, to
sell, lease or otherwise dispose of the Collateral in the ordinary
course of the Debtor’s business.
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(e)
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Notwithstanding
the security interest in the Collateral granted to and created in
favor of the Secured Party under this Agreement, the Debtor shall
have the right, until such time as the Secured Party shall have
notified the Debtor that it has revoked such right based upon an
Event of Default at its own cost and expense to collect any and all
accounts of the Debtor comprising the Collateral (the
“
Accounts ”).
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(f)
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The
Secured Party shall have the right after an Event of Default has
occurred (i) to revoke the right of the Debtor granted under
subsection (e) of this Section 3 by written notice to the Debtor to
such effect, (ii) to take over and direct collection of any and all
Accounts of the Debtor, (iii) to give notice of the Secured
Party’s security interest in such Accounts to any or all
persons obligated to the Debtor thereon, (iv) to direct such
persons to make payment of such Accounts directly to the Secured
Party and (v) to take control of such Accounts and any proceeds
thereof.
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Security Agreement –National Investment Managers,
Inc.
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Page 4 of 11
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(g)
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The
Secured Party shall have the right after an Event of Default to
cause a non-interest bearing bank account entitled “Cash
Collateral Account” (the “
Collateral Account ”)
to be opened and maintained for the Debtor at the principal office
of the Secured Party. All cash proceeds received by the Secured
Party from the Debtor pursuant to subsection (h) of this Section 3
or directly from persons obligated on Accounts pursuant to
subsection (f) of this Section 3 shall be deposited in the
Collat
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