COLLATERAL ASSIGNMENT OF PROCEEDS
COLLATERAL ASSIGNMENT OF PROCEEDS (this "Assignment"), dated as of December
20th,1996, by and among ENVIROMETRICS, INC. (Envirometrics, Inc. or any other
person or entity succeeding to the rights of Envirometrics, Inc. with respect to
any of the Collateral, as hereinafter defined, being the "Debtor"), a Delaware
corporation; and SHAKESPEARE PARTNERS, L.P. ("Shakespeare"), a South Carolina
limited partnership; THE UNITED STATES COMPANY ("USC"), a Virginia corporation;
XXXXXXX X. XXXXXXX ("Xxxxxxx"), an individual resident of South Carolina;
XXXXXXX X. XXXXXXX ("Xxxxxxx"), an individual resident of South Carolina; and
PRECISION SOUTHEAST, INC. ("PSI"). Shakespeare, USC, Xxxxxxx, Xxxxxxx and PSI
are hereinafter referred to collectively as the "Secured Parties" and each
individually as a "Secured Party"; and Xxxxxxx and Xxxxxxx are sometimes
hereinafter referred to collectively as the "Lease Guarantors" and each
individually as a "Lease Guarantor".
Preliminary Statement
Debtor is indebted to Shakespeare in the principal amount of $50,000,
evidenced (together with other indebtedness of Debtor to Shakespeare) by a
promissory note or duty executed by Debtor and delivered to Shakespeare (such
amount, together with interest thereon at the rate or rates specified in such
note and together with any costs, expenses, fees or other charges specified in
such notes, being the "Shakespeare Debt").
Debtor is indebted to USC in the principal amount of $35,000, evidenced by
a promissory note dated the date hereof (such amount, together with interest
thereon at the rate or rates specified in such note and together with any costs,
expenses, fees or other charges specified in such note, being the "USC Debt").
Debtor is indebted to PSI in the aggregate amount of $40,000 (the "PSI
Debt"), representing part of the unpaid portion of the purchase price of certain
goods sold and delivered by PSI to Debtor.
Debtor has entered into a Lease with Xxxxx X. Xxxxxx, M.D., as landlord
("Xxxxxx"), dated the date hereof (the "Lease"), of certain real property in
which Debtor's main offices are located (the "Office Property"). Xxxxxx has
required as a condition to his execution of the Lease that Debtor's performance
thereunder be unconditionally guaranteed by the Lease Guarantors, and the Lease
Guarantors have accordingly executed the required guaranties on the Lease
instrument. Therefore, Debtor now has a contingent liability to each Lease
Guarantor in the amount of any payment or payments that such Lease Guarantor may
make in the future pursuant to the relevant Lease guaranty (such liability being
in each case a "Lease Liability"). The total amount of the Lease Liability of
both Lease Guarantors shall not exceed $66,271 in the aggregate.
Xxxxxx has, on the date hereof, purchased from Debtor the Office Property
and certain other real property (collectively, the "Real Property"), and has
delivered to Debtor his promissory note in the face amount of $230,000 (the
"Collateral Note") in payment of a portion of the aggregate purchase price of
the Real Property.
The Collateral Note is secured by a Mortgage and Security Agreement
("Xxxxxx Mortgage") covering the Office Property and related personalty and
fixtures, and by an Assignment of Leases and Guaranties ("Xxxxxx Assignment of
Leases") covering the Lease and certain other collateral, each dated the date
hereof, and each executed and delivered by Xxxxxx to Debtor (collectively, the
"Xxxxxx Security Documents"). Each of the Xxxxxx Security Documents is
subordinate to certain other security documents executed and delivered by Xxxxxx
on the date hereof in favor of Xxxxx Development Corporation ("BDC"), by virtue
of a Subordination Agreement (Including Subordination of Mortgages) of even date
herewith between Debtor and BDC. The Xxxxxx Mortgage is recorded in the office
of the Register of Mesne Conveyances for Charleston County, South Carolina ("RMC
Office") in Book at Page and the Xxxxxx Assignment is recorded in the RMC Office
in Book - at Page _.
NOW, THEREFORE, the parties agree as follows:
Section I - Acknowledgment of Other Debt; Effect of Payment. The parties
acknowledge that Debtor is or may be indebted to one or more Secured Parties in
amounts and by instruments not described in this Assignment, and agree that any
such other indebtedness is entirely outside the scope of this Assignment, does
not affect any rights of the parties to this Assignment, and is not secured by
this Assignment.
The receipt of payments of Proceeds (as hereinafter defined) hereunder
shall not affect the right of any Secured Party to timely payment in full of the
debt owed to such Secured Party and secured hereby.
This Assignment shall terminate and become void when all Proceeds have been
received by Debtor and paid over in accordance with the terms hereof; except
that the provisions of Section 4 shall survive such termination.
Section 2. Assignment and Grant of Security Interest. For the purposes of
this Assignment: (a) "Proceeds" shall mean all payments received by Debtor and
made under the Collateral Note, in whatever form received, and all payments, in
whatever form received, made under either or both the Xxxxxx Security Documents
or received by Debtor upon the sale or other disposition of any collateral under
either of the Xxxxxx Security Documents (after payment of costs of disposition
of collateral), including without limitation payments of principal, interest,
penalty and late charges and other fees and charges to the extent required by
the Collateral Note or either Xxxxxx Security Document; and (b) "Collateral"
shall mean (i) all Proceeds, and (ii) all of Debtor's right, title and interest
in and to the Xxxxxx Security Documents.
Debtor hereby assigns the Collateral to the several Secured Parties to the
following extent and in the following priorities: (1) to the extent of the
Shakespeare Debt, to Shakespeare; (2) to the extent of the USC Debt, to USC; (3)
to the extent of the Lease following extent and in the following priorities: (1)
to the extent of the Shakespeare Debt, to Shakespeare; (2) to the extent of the
USC Debt, to USC; (3) to the extent of the Lease Liabilities, if any, to the
respective Lease Guarantors, as their interests may appear; and (4) all
remaining Proceeds, to the extent of the PSI Debt, to PSI. It is the intention
of the assignment made in the preceding sentence that Proceeds, when, as and if
received by Debtor, shall immediately be paid over by Debtor to the various
Secured Parties in the order set forth in the preceding sentence; i.e., Proceeds
shall first be paid over to Shakespeare, before any payment of Proceeds is made
to any other Secured Party, and when and if the Shakespeare Debt has been
satisfied in full, then Proceeds shall be paid to USC until the USC Debt has
been satisfied in full, and so forth in the order of priority set forth in the
preceding sentence. No Proceeds shall be paid to PSI, however, until both the
Lease Guarantors shall have been completely discharged from their respective
Guaranties, and payment over of Proceeds has been made in respect of any
payments made by either or both of the Lease Guarantors under their Guaranties.
Debtor is authorized to hold all Proceeds remaining after payments of Proceeds
to Shakespeare and to USC have been made in full, until such discharge of the
Lease Guarantors. The interests of the two Lease Guarantors rank pari passu, and
any payment of Proceeds to the Lease Guarantors shall be effected by dividing
the amount of applicable Proceeds into two parts in proportion to the aggregate
amount of Lease payments made by each, and then paying such parts simultaneously
to the Lease Guarantors.
All Proceeds paid over to a Secured Party hereunder shall be deemed applied
to interest on the debt owed to such Secured Party, then to accrued interest
thereon, and finally to fees, charges and costs owed by Debtor in connection
therewith.
Section 3. Intercreditor Provisions. Each Secured Party covenants with each
other Secured Party that until all Proceeds shall have been received and paid
over as required by this Assignment (a) such Secured Party shall not extend, and
Debtor covenants with each Secured Party that it shall not accept, any further
credit from any Secured Party, directly or indirectly, whether as loan or
forbearance or any other form of credit; (b) such Secured Party shall not ask
for or accept, and Debtor covenants with each Secured Party that it shall not
grant, any further security in any form for any indebtedness of Debtor to any
Secured Party, directly or indirectly; and (3) such Secured Party shall not ask
for, demand, xxx for, take or accept from Debtor any monies now owing by Debtor
to such Secured Party except pursuant to this Assignment or with the written
consent of all other Secured Parties. Notwithstanding the foregoing provisions
of this Section 3, all parties acknowledge that Debtor may grant security
interests to one or more Secured Parties in a promissory note and related
security documents delivered to Debtor by Trico Engineering Consultants, Inc.
without the consent of any other Secured Party, and may pay over the proceeds of
such promissory note to any Secured Party.
Section 4. Debtor's Warranties, Disclaimers. Debtor warrants to each
Secured Party that (1) Debtor is the sole owner of the Collateral, free from any
adverse claim, security interest, lien or other encumbrance whatever; and (2)
Debtor has full legal authority to enter into this Assignment and make the
assignment of Collateral effected hereby.
Debtor has made no investigation and accordingly makes no representation or
warranty whatever as to the quality or condition of the Collateral, such quality
including, without limitation, the creditworthiness of Xxxxxx, the existence or
priority of any lien created by the Xxxxxx Security Documents, and any
representation or warranty made by Xxxxxx in any Security Document or the
Collateral Note. Each Secured party acknowledges familiarity with the terms and
conditions of the Collateral Note, the Xxxxxx Security Documents and the
Subordination Agreement.
Section 5. Debtor to Hold Collateral, Perfection and Notice Fillings. The
Secured Parties hereby authorize Debtor to hold the Collateral Note and the
Collateral, subject to the Debtor's duty to apply all Proceeds only as provided
herein. Debtor shall hold the Collateral only at its principal place of
business, which is on the date hereof 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000. Debtor shall not change its principal place of
business without the prior written consent of all Secured Parties. Debtor shall
not transfer, sell or otherwise alienate or allow any transfer of the Collateral
Note or any Collateral or any interest therein. Debtor warrants that it will
not, without the prior written approval of the Secured Parties, release,
terminate, cancel, modify or amend the Collateral Note or the Xxxxxx Security
Documents in any material respect, it being understood that such approval will
not be unreasonably withheld by any Secured Party, and any such action by Debtor
without such approval by all Secured Parties shall be invalid and without legal
operation or effect.
As soon as practicable after the execution and delivery of this Assignment,
Debtor shall execute and deliver to the designated agent of the Secured Parties
for filing or recording all such financing statements and memoranda of
assignment as the Secured Parties or any of them may reasonably request, and
thereafter shall execute and deliver any further documents or instruments
reasonably requested by any Secured Party in order to confirm, protect or
continue the security interest or assignments effected hereby or any rights of
any Secured Party hereunder.
Section 6. Liability of Secured Parties with Respect to Assigned Note.
Neither this Assignment nor anything contained herein shall be construed to
impose any liability or obligation on any Secured Party on or with respect to
the Collateral Note or the Xxxxxx Security Documents. Debtor shall indemnify and
hold each Secured Party harmless against all costs, claims and other liabilities
that such Secured Party may incur to the extent that such costs, claims or other
liabilities are the result of such Secured Party's being a party to this
Assignment.
Section 7. Miscellaneous. (a) This Assignment represents the entire
agreement of the parties with respect to the subject matter hereof, and no
written or oral representation or statement of any kind, made by any person for
any purpose, is part of the agreement represented hereby unless set forth
herein; (b) no modification of the terms of this Assignment, nor any consent to
any departure from the terms hereof, shall be valid for any purpose unless in
writing and signed by the party or parties against whom enforcement is sought;
(c) this Assignment shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns; and (d) this Assignment shall be
governed by the law of South Carolina.
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date first above written.
ENVIROMETRICS, INC.
By:
Xxxxxx X. Xxxxxxx, III, President
THE UNITED STATES COMPANY
By:
President
PRECISION SOUTHEAST, INC.
By
Title:
SHAKESPEARE PARTNERS, L.P.
By:
H.E.Xxxx, Jr., General Partner
XXXXXXX X. XXXXXXX
XXXXXXX X. XXXXXXX
IN WITNESS WHEREOF, the parties have executed this Assignment as of the date
first above written.
ENVIROMETRICS, INC.
By:
Waiter X. Xxxxxxx, III, President
THE UNITED STATES COMPANY
By:
President
PRECISION SOUTHEAST,INC.
By:
President
SHAKESPEARE PARTNERS, L.P.
By:_
H.E.. Xxxx, Jr.. (General Partner)
XXXXXXX X. XXXXXXX
XXXXXXX X. XXXXXXX
IN WITNESS WHEREOF, the parties have executed this Assignment as of the date
first above written
ENVIROMETRICS, INC.
By:
Xxxxxx X. Xxxxxxx, President
THE UNITED STATES COMPANY
By:
President
PRECISION SOUTHEAST INC.
By.
Title:
SHAKESPEARE PARTNERS, L.P.
By:
H.E. Xxxx, Jr., General Partner
XXXXXXX X. XXXXXXX
XXXXXXX X. XXXXXXX
