Collateral Security Agreement between Actrade Capital, Inc. and Xetel Corporation (November 1, 2001)
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Summary
This agreement is between Actrade Capital, Inc. and Xetel Corporation. Xetel, having defaulted on certain payment obligations, agrees to provide Actrade with office equipment and furniture as collateral to secure restructured payment terms for outstanding debts. Xetel must pay an initial sum by November 26, 2001, and the remaining balance by January 23, 2002. If Xetel defaults, Actrade can enforce its rights to the collateral. The agreement is governed by New York law and outlines both parties' rights and obligations regarding the collateral and repayment.
EX-10.20 3 d92300ex10-20.txt COLLATERAL SECURITY AGREEMENT EXHIBIT 10.20 COLLATERAL SECURITY AGREEMENT AGREEMENT, made this 1st day of November, 2001 by and between: ACTRADE CAPITAL, INC. a Delaware corporation with offices at 200 Cottontail Lane, Vantage Court South, Somerset, NJ 08873 ("Actrade"); and XETEL CORPORATION, a Delaware corporation with offices at 2105 Gracy Farms Lane, Austin TX 78758 ("Maker"); who are sometime herein referred to as the "parties." WITNESSETH WHEREAS, in connection with the purchase of goods and/or services from a supplier who is a participant in Actrade's TAD Program ("Seller"), Maker has issued a series of TADs identified as follows: #119898 for $433,356.80, #119896 for $433,356.00, #119897 for $433,356.00 and #119895 for $433,356.00, totaling the sum of $1,733,424.80, all of which were due on October 23, 2001, and WHEREAS, Maker has defaulted in payment of the aforesaid TADs and wishes to restructure the aforesaid TADs, and WHEREAS Actrade has agreed to restructure the aforesaid TADs with new maturity dates extending through January 23, 2002 ("Restructured TADs" hereafter), provided that Maker (i) posts the additional collateral security as set forth in this Agreement which shall be supplemental to the existing TAD Program acknowledgements and agreements (collectively the "Program Agreements") between Maker and Actrade, and (ii) makes payment to Actrade in the sum of $52,000.00 on or before November 26, 2001 ("Initial Sum"), the provisions of which are incorporated herein by reference. NOW, THEREFORE, in consideration of the mutual promises contained herein and in the Program Agreements, as well as other good and valuable consideration receipt of which is hereby acknowledged, the parties agree as follows: 1. COLLATERAL SECURITY. Maker confirms that it intends to make payment of the Initial Sum on or before November 26, 2001 and pay the Restructured TADs on or before January 23, 2002 as herein before described and that in consideration of Actrade's agreement to restructure said TADs, it shall agree to provide to Actrade the following described securities as collateral security for the due payment of the Initial Sum and the Restructured TADs: ALL OFFICE EQUIPMENT AND FURNITURE, INCLUDING BUT NOT LIMITED TO, COMPUTERS, PRINTERS, DESKS, TABLES, WORKSTATIONS, CUBICLES, WORKBENCHES, CHAIRS, CABINETS, LETTER FILES, AND OTHER COLLATERAL DESCRIBED IN ATTACHMENT "SCHEDULE A" 1 2. UCC -1 FINANCING STATEMENT. Maker agrees to provide and execute all documentation necessary to enforce the UCC-1 Financing Statement in connection herewith. 3. GENERAL TERMS OF THIS SECURITY AGREEMENT. The parties agree that the following terms and conditions shall govern this Security Agreement: (i) The security period shall commence on the date of the execution of this Agreement by all parties. (ii) The security period shall continue thereafter until all conditions set forth herein are met and satisfied including the payment in full for all TADs issued by Maker and purchased by Actrade from Seller including the Restructured TADs. (iii) Upon receipt from Actrade of a notice of default in payment of the Initial Sum on or before November 26, 2001, and/or payment of the Restructured TADs on or before January 23, 2002, or any facts otherwise constituting a default under this Agreement, Actrade shall immediately notify Maker in writing that a default has been declared. Maker shall have two (2) business days to cure the default. If not cured within such period then, without further notice to Maker, upon the written request of Actrade, Actrade shall take all steps necessary to effect enforcement and collection of collateral security described herein. (iv) Upon payment in full of the aforesaid TADs, and payment in full to Actrade of all TADs and amount due thereunder, Actrade shall file a UCC-3, Termination Statement. 4. GOVERNING LAW. This Agreement is governed by the laws of the State of New York. Any legal action or proceeding arising out of or relating to this Agreement may be instituted only in the Courts of the state of New York, within the City and County of New York, or of the United States of America for the Southern District of New York, and the parties hereto hereby irrevocably submit to the jurisdiction of each such court in any such action or proceeding. Further, in connection with any such proceeding, the parties hereto waive their right to a trial by jury and further consent to the service of process by means of certified or registered mail, addressed to the addresses set forth herein or as may be changed in writing by any of the parties hereto from time to time. 5. WARRANTIES, REPRESENTATIONS AND COVENANTS: To induce Actrade to enter into this Agreement and with full knowledge that the warranties, representations and covenants herein are being relied upon by Actrade, Maker warrants, represents and covenants that: (a) The execution of this Agreement, and the performance by Maker of its covenants and undertakings hereunder have been duly authorized by all requisite corporate action, and approved by the Board of Directors of Maker, and Maker has the corporate power and authority to enter into this Agreement and perform the covenants and undertakings to be performed by it hereunder, and is under no other impediment which would adversely affect its ability to consummate or prohibit it from consummating the transactions contemplated hereby. 2 (b) This Agreement has been duly authorized, executed and delivered by Maker and constitutes a valid and legally binding obligation thereof enforceable in accordance with its terms. (c) Maker acknowledges that Actrade is not a bank or lending institution and confirms its understanding that this Agreement is an accommodation as part of its relationship with Actrade under the TAD Program; 6. SAVING CLAUSE. In case any one or more of the provisions contained in this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or un-enforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If, moreover, any one or more provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration or geographic scope, activity or subject matter, including but not limited to any rate of interest being deemed to be excessive or beyond the highest such rate permitted by applicable law, then, in such event, it shall be construed by limiting and reducing it so as to be enforceable to the extent compatible with the applicable law as it shall then appear. 7. CHANGES IN WRITING. This Agreement may be changed only in writing and only if the writing is signed by each of the parties hereto. 8. ASSIGNMENT. The parties hereto understand and agree that this Agreement and the obligations and entitlements hereunder may be assigned, either in whole or in part by Actrade to any third party without otherwise affecting the terms or conditions hereof. However, it is also understood and agreed that this Agreement and its rights, obligations and entitlements may not be assigned or otherwise transferred by Maker without the express written consent of Actrade. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. ACTRADE CAPITAL, INC. XETEL CORPORATION By: By: ----------------------------- --------------------------------- Richard Couzzi AUTHORIZED SIGNATURE Vice President, Credit & Collections ------------------------------------ PRINT NAME AND TITLE 3 1 (SCHEDULE A)
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"SCHEDULE A" APPROVED BY XETEL CORPORATION By: ------------------------------ NAME: TITLE: