EXHIBIT 10(d)
SECURITY AGREEMENT
[COMERICA BANK LOGO] (All Assets)
As of October 30, 2003, for value received, the undersigned ("Debtor") pledges,
assigns and grants to Comerica Bank ("Bank"), whose address is P. O. Xxx 000000,
Xxxxxx, Xxxxx 00000-0000, Attention: Xxxxxxx X. Xxxxxx, Mail Code 6525, a
continuing security interest and lien (any pledge, assignment, security interest
or other lien arising hereunder is sometimes referred to herein as a "security
interest") in the Collateral (as defined below) to secure payment when due,
whether by stated maturity, demand, acceleration or otherwise, of all existing
and future indebtedness ("Indebtedness") to the Bank of Debtor. Indebtedness
includes without limit any and all obligations or liabilities of the Debtor to
the Bank, whether absolute or contingent, direct or indirect, voluntary or
involuntary, liquidated or unliquidated, joint or several, known or unknown,
originally payable to the Bank or to a third party and subsequently acquired by
the Bank including, without limitation, any late charges, loan fees or charges,
and overdraft indebtedness, any and all obligations or liabilities for which the
Debtor would otherwise be liable to the Bank were it not for the invalidity or
unenforceability of them by reason of any bankruptcy, insolvency or other law,
or for any other reason; any and all amendments, modifications, renewals and/or
extensions of any of the above; all reasonable costs incurred by Bank in
establishing, determining, continuing, or defending the validity or priority of
any security interest, or in pursuing its rights and remedies under this
Agreement or under any other agreement between Bank and Debtor or in connection
with any proceeding involving Bank as a result of any financial accommodation to
Debtor; and all other costs of collecting Indebtedness, including without limit
attorneys' fees. Debtor agrees to pay Bank all such costs incurred by the Bank,
immediately upon demand in writing, accompanied by reasonable detail and
explanation, and, following such written demand and reasonable explanation,
until paid all costs shall bear interest at the highest per annum rate
applicable to any of the Indebtedness, but not in excess of the maximum rate
permitted by law. Any reference in this Agreement to attorneys' fees shall be
deemed a reference to reasonable fees, costs, and expenses of both in-house and
outside counsel and paralegals, whether inside or outside counsel is used,
whether or not a suit or action is instituted, and to court costs if a suit or
action is instituted, and whether attorneys' fees or court costs are incurred at
the trial court level, on appeal, in a bankruptcy, administrative or probate
proceeding or otherwise.
Debtor further covenanats, agrees, represents and warrants as follows:
1. COLLATERAL shall mean all personal property of Debtor including,
without limitation, all of the following property Debtor now or later
owns or has an interest in, wherever located :
(a) all Accounts Receivable (for purposes of this Agreement,
"Accounts Receivable" consists of all accounts, general
intangibles, chattel paper (including without limit electronic
chattel paper and tangible chattel paper), contract rights,
deposit accounts, documents, instruments and rights to payment
evidenced by chattel paper, documents or instruments, health
care insurance receivables, commercial tort claims, letters of
credit, letter of credit rights, supporting obligations, and
rights to payment for money or funds advanced or sold),
(b) all Inventory,
(c) all Equipment and Fixtures,
(d) all Software (for purposes of this Agreement "Software"
consists of all (i) computer programs and supporting
information provided in connection with a transaction relating
to the program, and (ii) computer programs embedded in goods
and any supporting information provided in connection with a
transaction relating to the program whether or not the program
is associated with the goods in such a manner that it
customarily is considered part of the goods, and whether or
not, by becoming the owner of the goods, a person acquires a
right to use the program in connection with the goods, and
whether or not the program is embedded in goods that consist
solely of the medium in which the program is embedded),
(e) all investment property (including, without limitation,
securities, securities entitlements and financial assets);
(f) specific items listed below and/or on attached Schedule A, if
any, is/are also included in Collateral:
______________________________________________________________
______________________________________________________________
______________________________________________________________
(g) all goods, instruments (including, without limit, promissory
notes), documents (including, without limit, negotiable
documents), policies and certificates of insurance, deposit
accounts, and money or other property (except real property
which is not a fixture) which are now or later in possession
or control of Bank, or as to which Bank now or later controls
possession by documents or otherwise, and
(h) all additions, attachments, accessions, parts, replacements,
substitutions, renewals, interest, dividends, distributions,
rights of any kind (including but not limited to stock splits,
stock rights, voting and preferential rights), products, and
proceeds of or pertaining to the above including, without
limit, cash or other property which were proceeds and are
recovered by a bankruptcy trustee or otherwise as a
preferential transfer by Debtor.
In the definition of Collateral, a reference to a type of collateral
shall not be limited by a separate reference to a more specific or
narrower type of that collateral.
2. WARRANTIES, COVENANTS AND AGREEMENTS. Debtor warrants, covenants and
agrees as follows:
2.1 Debtor shall furnish to Bank such information and reports as
are required to be delivered under that certain Credit
Agreement of even date herewith (the "Credit Agreement") by
and between Debtor and Bank, and shall allow Bank to examine,
inspect, and copy any of Debtor's books and records as
provided in the Credit Agreement. Debtor shall, at the request
of Bank, xxxx its records and the Collateral clearly to
indicate the security interest of Bank under this Agreement.
2.2 At the time any Collateral becomes, or is represented to be,
subject to a security interest in favor of Bank, Debtor shall
be deemed to have warranted that (a) Debtor is the lawful
owner of the Collateral and has the right and authority to
subject it to a security interest granted to Bank; (b) none of
the Collateral is subject to any security interest, except for
a Permitted Encumbrance (as defined in the Credit Agreement),
other than that in favor of Bank; (c) there are no financing
statements on file, except with respect
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to Permitted Encumbrances, other than in favor of Bank; (d) no
person, other than Bank, has possession or control (as defined
in the Uniform Commercial Code) of any Collateral, except with
respect to Permitted Encumbrances, of such nature that
perfection of a security interest may be accomplished by
control; and (e) Debtor acquired its rights in the Collateral
in the ordinary course of its business.
2.3 Debtor will keep the Collateral free at all times from all
claims, liens, security interests and encumbrances other than
those in favor of Bank and Permitted Encumbrances. Debtor will
not, without the prior written consent of Bank, sell,
transfer, lease or grant control to any person other than Bank
over, or permit to be sold, transferred, leased or controlled
(by a person other than Bank), any or all of the Collateral,
except for Inventory in the ordinary course of its business
and will not return any Inventory to its supplier. Bank or its
representatives may inspect the Collateral as provided in the
Credit Agreement, and, in connection with such inspections,
may enter upon all premises where the Collateral is kept or
might be located.
2.4 Debtor will do all acts and will execute or cause to be
executed all writings requested by Bank to establish, maintain
and continue an exclusive, perfected and first security
interest of Bank in the Collateral. Debtor agrees that Bank
has no obligation to acquire or perfect any lien on or
security interest in any asset(s), whether realty or
personalty, to secure payment of the Indebtedness, and Debtor
is not relying upon assets in which the Bank may have a lien
or security interest for payment of the Indebtedness.
2.5 Debtor will pay within the time that they can be paid without
interest or penalty all taxes, assessments and similar charges
which at any time are or may become a lien, charge, or
encumbrance upon any Collateral, except to the extent
contested in good faith and bonded in a manner satisfactory to
Bank. If Debtor fails to pay any of these taxes, assessments,
or other charges in the time provided above, Bank has the
option (but not the obligation) to do so, and Debtor agrees to
repay all amounts so expended by Bank immediately upon demand
in writing, accompanied by reasonable detail and explanation,
together with interest at the highest lawful default rate
which could be charged by Bank on any Indebtedness.
2.6 Debtor will keep the Collateral in operating condition, and
will protect it from loss, damage, or deterioration from any
cause. Debtor has and will maintain at all times (a) with
respect to the Collateral, insurance under an "all risk"
policy against fire and other risks customarily insured
against, and (b) public liability insurance and other
insurance as may be required by law or reasonably required by
Bank, all of which insurance shall be in amount, form and
content, and written by companies as may be satisfactory to
Bank, containing a lender's loss payable endorsement
acceptable to Bank. Debtor will deliver to Bank immediately
upon demand evidence satisfactory to Bank that the required
insurance has been procured. If Debtor fails to maintain
satisfactory insurance, Bank has the option (but not the
obligation) to do so and Debtor agrees to repay all amounts so
expended by Bank immediately upon demand in writing,
accompanied by reasonable detail and explanation, together
with interest at the Maximum Legal Rate (as defined in the
Credit Agreement).
2.7 On each occasion on which Debtor evidences to Bank the account
balances on and the nature and extent of the Accounts
Receivable, Debtor shall be deemed to have warranted that
except as otherwise indicated (a) each of those Accounts
Receivable is valid and enforceable without performance by
Debtor of any act; (b) each of those account balances are in
fact owing, (c) there are no setoffs, recoupments, credits,
contra accounts, counterclaims or defenses against any of
those Accounts Receivable, (d) as to any Accounts Receivable
represented by a note, trade acceptance, draft or other
instrument or by any chattel paper or document, the same have
been endorsed and/or delivered by Debtor to Bank, (e) Debtor
has not received with respect to any Account Receivable, any
notice of the death of the related account debtor, or of the
dissolution, liquidation, termination of existence,
insolvency, business failure, appointment of a receiver for,
assignment for the benefit of creditors by, or filing of a
petition in bankruptcy by or against, the account debtor, and
(f) as to each Account Receivable, except as may be expressly
permitted by Bank to the contrary in another document, the
account debtor is not an affiliate of Debtor, the United
States of America or any department, agency or instrumentality
of it, or a citizen or resident of any jurisdiction outside of
the United States. Debtor will do all acts and will execute
all writings requested by Bank to perform, enforce performance
of, and collect all Accounts Receivable. Debtor shall neither
make nor permit any modification, compromise or substitution
for any Account Receivable without the prior written consent
of Bank. Debtor shall, at Bank's request, arrange for
verification of Accounts Receivable directly with account
debtors or by other methods acceptable to Bank.
2.8 Debtor at all times shall be in material compliance with all
applicable laws, including without limit any laws, ordinances,
directives, orders, statutes, or regulations an object of
which is to regulate or improve health, safety, or the
environment ("Environmental Laws").
2.9 If Bank, acting in its sole discretion, redelivers Collateral
to Debtor or Debtor's designee for the purpose of (a) the
ultimate sale or exchange thereof; or (b) presentation,
collection, renewal, or registration of transfer thereof; or
(c) loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing with it
preliminary to sale or exchange; such redelivery shall be in
trust for the benefit of Bank and shall not constitute a
release of Bank's security interest in it or in the proceeds
or products of it unless Bank specifically so agrees in
writing. If Debtor requests any such redelivery, Debtor will
deliver with such request a duly executed financing statement
in form and substance satisfactory to Bank. Any proceeds of
Collateral coming into Debtor's possession as a result of any
such redelivery shall be held in trust for Bank and
immediately delivered to Bank for application on the
Indebtedness. Bank may (in its sole discretion) deliver any or
all of the Collateral to Debtor, and such delivery by Bank
shall discharge Bank from all liability or responsibility for
such Collateral. Bank, at its option, may require delivery of
any Collateral to Bank at any time with such endorsements or
assignments of the Collateral as Bank may request.
2.10 At any time after the occurrence and during the continuance of
an Event of Default and without notice, except as required by
the Credit Agreement or under applicable law, Bank may (a)
cause any or all of the Collateral to be transferred to its
name or to the name of its nominees; (b) receive or collect by
legal proceedings or otherwise all dividends, interest,
principal payments and other sums and all other distributions
at any time payable or receivable on account of the
Collateral, and hold the same as Collateral, or apply the same
to the Indebtedness, the manner and distribution of the
application to be in the sole discretion of Bank; (c) enter
into any extension, subordination, reorganization, deposit,
merger or consolidation agreement or any other agreement
relating to or affecting the Collateral, and deposit or
surrender control of the Collateral, and accept other property
in exchange for the Collateral and hold or apply the property
or money so received pursuant to this Agreement; and (d) take
such actions in its own name or in Debtor's name as Bank, in
its sole discretion, deems necessary or appropriate to
establish exclusive control (as defined in the Uniform
Commercial Code) over any Collateral of such nature that
perfection of the Bank's security interest may be accomplished
by control.
2.11 Bank may assign any of the Indebtedness and deliver any or all
of the Collateral to its assignee, as permitted under the
Credit Agreement, who then shall have with respect to
Collateral so delivered all the rights and powers of Bank
under this Agreement, and after that Bank shall be fully
discharged from all liability and responsibility with respect
to Collateral so delivered.
2.12 [Intentionally Omitted.]
2.13 Debtor shall defend, indemnify and hold harmless Bank, its
employees, agents, shareholders, affiliates, officers, and
directors from and against any and all claims, damages, fines,
expenses, liabilities or causes of action of whatever kind (as
used in this Section,
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collectively, the "Indemnified Matters"), including without
limit consultant fees, legal expenses, and attorneys' fees,
suffered by any of them as a direct or indirect result of any
actual or asserted violation of any law, including, without
limit, Environmental Laws, or of any remediation relating to
any property required by any law, including without limit
Environmental Laws, INCLUDING ANY CLAIMS, DAMAGES, FINES,
EXPENSES, LIABILITIES OR CAUSES OF ACTION OF WHATEVER KIND
RESULTING FROM BANK'S OWN NEGLIGENCE, except and to the extent
(but only to the extent) caused by Bank's gross negligence or
wilful misconduct. Upon Bank's receipt of written notice of
any such Indemnified Matters, Bank will provide to Debtor
notice, in writing accompanied by reasonable detail, of such
Indemnified Matters, but any failure by Bank to provide such
notice to Debtor shall not impair or otherwise affect the
rights of Bank, its employees, agents, shareholders,
affiliates, officers, or directors to be indemnified and held
harmless under this Section.
3. COLLECTION OF PROCEEDS.
3.1 Debtor agrees to collect and enforce payment of all Collateral
until Bank, after the occurrence and during the continuance of
an Event of Default, shall direct Debtor to the contrary.
Immediately upon notice to Debtor by Bank and at all times
after that, Debtor agrees to fully and promptly cooperate and
assist Bank in the collection and enforcement of all
Collateral and to hold in trust for Bank all payments received
in connection with Collateral and from the sale, lease or
other disposition of any Collateral, all rights by way of
suretyship or guaranty and all rights in the nature of a lien
or security interest which Debtor now or later has regarding
Collateral. Immediately upon and after such notice, Debtor
agrees to (a) endorse to Bank and immediately deliver to Bank
all payments received on Collateral or from the sale, lease or
other disposition of any Collateral or arising from any other
rights or interests of Debtor in the Collateral, in the form
received by Debtor without commingling with any other funds,
and (b) immediately deliver to Bank all property in Debtor's
possession or later coming into Debtor's possession through
enforcement of Debtor's rights or interests in the Collateral.
Debtor irrevocably authorizes Bank or any Bank employee or
agent to endorse the name of Debtor upon any checks or other
items which are received in payment for any Collateral, and to
do any and all things necessary in order to reduce these items
to money. Bank shall have no duty as to the collection or
protection of Collateral or the proceeds of it, or as to the
preservation of any related rights, beyond the use of
reasonable care in the custody and preservation of Collateral
in the possession of Bank. Debtor agrees to take all steps
necessary to preserve rights against prior parties with
respect to the Collateral. Nothing in this Section 3.1 shall
be deemed a consent by Bank to any sale, lease or other
disposition of any Collateral.
3.2 Debtor agrees that immediately upon Bank's request (if and for
so long as an Event of Default exists) the Indebtedness shall
be on a "remittance basis" as follows: Debtor shall at its
sole expense establish and maintain (and Bank, at Bank's
option may establish and maintain at Debtor's expense): (a) an
United States Post Office lock box (the "Lock Box"), to which
Bank shall have exclusive access and control. Debtor expressly
authorizes Bank, from time to time, to remove contents from
the Lock Box, for disposition in accordance with this
Agreement. Debtor agrees to notify all account debtors and
other parties obligated to Debtor that all payments made to
Debtor (other than payments by electronic funds transfer)
shall be remitted, for the credit of Debtor, to the Lock Box,
and Debtor shall include a like statement on all invoices; and
(b) a non-interest bearing deposit account with Bank which
shall be titled as designated by Bank (the "Cash Collateral
Account") to which Bank shall have exclusive access and
control. Debtor agrees to notify all account debtors and other
parties obligated to Debtor that all payments made to Debtor
by electronic funds transfer shall be remitted to the Cash
Collateral Account, and Debtor, at Bank's request, shall
include a like statement on all invoices. Debtor shall execute
all documents and authorizations as required by Bank to
establish and maintain the Lock Box and the Cash Collateral
Account.
3.3 All items or amounts which are remitted to the Lock Box, to
the Cash Collateral Account, or otherwise delivered by or for
the benefit of Debtor to Bank on account of partial or full
payment of, or with respect to, any Collateral shall, at
Bank's option, (a) be applied to the payment of the
Indebtedness, whether then due or not, in such order or at
such time of application as Bank may determine in its sole
discretion, or, (b) be deposited to the Cash Collateral
Account. Debtor agrees that Bank shall not be liable for any
loss or damage which Debtor may suffer as a result of Bank's
processing of items or its exercise of any other rights or
remedies under this Agreement, including without limitation
indirect, special or consequential damages, loss of revenues
or profits, or any claim, demand or action by any third party
arising out of or in connection with the processing of items
or the exercise of any other rights or remedies under this
Agreement. Debtor agrees to indemnify and hold Bank harmless
from and against all such third party claims, demands or
actions, and all related expenses or liabilities (as used in
this Section, collectively, the "Indemnified Matters"),
including, without limitation, attorneys' fees and INCLUDING
CLAIMS, DAMAGES, FINES, EXPENSES, LIABILITIES OR CAUSES OF
ACTION OF WHATEVER KIND RESULTING FROM BANK'S OWN NEGLIGENCE
except to the extent (but only to the extent) caused by Bank's
gross negligence or willful misconduct. Upon Bank's receipt of
written notice of any such Indemnified Matters, Bank will
provide to Debtor notice, in writing accompanied by reasonable
detail, of such Indemnified Matter, but any failure by Bank to
provide such notice to Debtor shall not impair or otherwise
affect the rights of Bank to be indemnified and held harmless
under this Section.
4. DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS.
4.1 Upon the occurrence of any "Event of Default" (as defined in
the Credit Agreement and used with the same meaning herein),
Debtor shall be in default under this Agreement.
4.2 Upon the occurrence of any Event of Default, Bank may at its
discretion and without prior notice to Debtor declare any or
all of the Indebtedness to be immediately due and payable, and
shall have and may exercise any right or remedy available to
it including, without limitation, any one or more of the
following rights and remedies:
(a) Exercise all the rights and remedies upon default, in
foreclosure and otherwise, available to secured
parties under the provisions of the Uniform
Commercial Code and other applicable law;
(b) Institute legal proceedings to foreclose upon the
lien and security interest granted by this Agreement,
to recover judgment for all amounts then due and
owing as Indebtedness, and to collect the same out of
any Collateral or the proceeds of any sale of it;
(c) Institute legal proceedings for the sale, under the
judgment or decree of any court of competent
jurisdiction, of any or all Collateral; and/or
(d) Personally or by agents, attorneys, or appointment of
a receiver, enter upon any premises where Collateral
may then be located, and take possession of all or
any of it and/or render it unusable; and without
being responsible for loss or damage to such
Collateral, hold, operate, sell, lease, or dispose of
all or any Collateral at one or more public or
private sales, leasings or other dispositions, at
places and times and on terms and conditions as Bank
may deem fit, without any previous demand or
advertisement; and except as provided in this
Agreement, all notice of sale, lease or other
disposition, and advertisement, and other notice or
demand, any right or equity of redemption, and any
obligation of a prospective purchaser or lessee to
inquire as to the power and authority of Bank to
sell, lease, or otherwise dispose of the Collateral
or as to the application by Bank of the proceeds of
sale or otherwise, which would otherwise be required
by, or available to Debtor under, applicable law are
expressly waived by Debtor to the fullest extent
permitted.
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At any sale pursuant to this Section 4.2, whether under the
power of sale, by virtue of judicial proceedings or otherwise,
it shall not be necessary for Bank or a public officer under
order of a court to have present physical or constructive
possession of Collateral to be sold. The recitals contained in
any conveyances and receipts made and given by Bank or the
public officer to any purchaser at any sale made pursuant to
this Agreement shall, to the extent permitted by applicable
law, conclusively establish the truth and accuracy of the
matters stated (including, without limit, as to the amounts of
the principal of and interest on the Indebtedness, the accrual
and nonpayment of it and advertisement and conduct of the
sale); and all prerequisites to the sale shall be presumed to
have been satisfied and performed. Upon any sale of any
Collateral, the receipt of the officer making the sale under
judicial proceedings or of Bank shall be sufficient discharge
to the purchaser for the purchase money, and the purchaser
shall not be obligated to see to the application of the money.
Any sale of any Collateral under this Agreement shall be a
perpetual bar against Debtor with respect to that Collateral.
At any sale or other disposition of the Collateral pursuant to
this Section 4.2, Bank disclaims all warranties which would
otherwise be given under the Uniform Commercial Code,
including without limit a disclaimer of any warranty relating
to title, possession, quiet enjoyment or the like, and Bank
may communicate these disclaimers to a purchaser at such
disposition. This disclaimer of warranties will not render the
sale commercially unreasonable.
4.3 Debtor shall at the request of Bank, after the occurrence and
during the continuance of an Event of Default, notify the
account debtors or obligors of Bank's security interest in the
Collateral and direct payment of it to Bank. Bank may, itself,
upon the occurrence of any Event of Default so notify and
direct any account debtor or obligor. At the request of Bank,
after an Event of Default shall have occurred, Debtor shall
immediately take such actions as the Bank shall request to
establish exclusive control (as defined in the Uniform
Commercial Code) by Bank over any Collateral which is of such
a nature that perfection of a security interest may be
accomplished by control.
4.4 The proceeds of any sale or other disposition of Collateral
authorized by this Agreement shall be applied by Bank in such
order as the Bank, in its discretion, deems appropriate
including, without limitation, the following order: first upon
all expenses authorized by the Uniform Commercial Code and all
reasonable attorneys' fees and legal expenses incurred by
Bank; the balance of the proceeds of the sale or other
disposition shall be applied in the payment of the
Indebtedness, first to interest, then to principal, then to
remaining Indebtedness and the surplus, if any, shall be paid
over to Debtor or to such other person(s) as may be entitled
to it under applicable law. Debtor shall remain liable for any
deficiency, which it shall pay to Bank immediately upon
demand. Debtor agrees that Secured Party shall be under no
obligation to accept any noncash proceeds in connection with
any sale or disposition of Collateral unless failure to do so
would be commercially unreasonable. If Secured Party agrees in
its sole discretion to accept noncash proceeds (unless the
failure to do so would be commercially unreasonable), Secured
Party may ascribe any commercially reasonable value to such
proceeds. Without limiting the foregoing, Secured Party may
apply any discount factor in determining the present value of
proceeds to be received in the future or may elect to apply
proceeds to be received in the future only as and when such
proceeds are actually received in cash by Secured Party.
4.5 Nothing in this Agreement is intended, nor shall it be
construed, to preclude Bank from pursuing any other remedy
provided by law or in equity for the collection of the
Indebtedness or for the recovery of any other sum to which
Bank may be entitled for the breach of this Agreement by
Debtor. Nothing in this Agreement shall reduce or release in
any way any rights or security interests of Bank contained in
any existing agreement between Debtor or any Guarantor and
Bank.
4.6 No waiver of default or consent to any act by Debtor shall be
effective unless in writing and signed by an authorized
officer of Bank. No waiver of any default or forbearance on
the part of Bank in enforcing any of its rights under this
Agreement shall operate as a waiver of any other default or of
the same default on a future occasion or of any rights.
4.7 Debtor (a) irrevocably appoints Bank or any agent of Bank
(which appointment is coupled with an interest) the true and
lawful attorney of Debtor (with full power of substitution) in
the name, place and stead of, and at the expense of, Debtor
and (b) authorizes Bank or any agent of Bank, in its own name,
at Debtor's expense, to do any of the following, after the
occurrence and during the continuance of an Event of Default,
as Bank, in its sole discretion, deems appropriate:
(i) to demand, receive, xxx for, and give receipts or
acquittances for any moneys due or to become due on
any Collateral (including, without limit, to draft
against Collateral) and to endorse any item
representing any payment on or proceeds of the
Collateral;
(ii) to execute and file in the name of and on behalf of
Debtor all financing statements or other filings or
Collateral control agreements deemed necessary or
desirable by Bank to evidence, perfect, or continue
the security interests granted in this Agreement; and
(iii) to do and perform any act on behalf of Debtor
permitted or required under this Agreement.
4.8 Upon the occurrence of an Event of Default, Debtor also
agrees, upon request of Bank, to assemble the Collateral and
make it available to Bank at any place designated by Bank
which is reasonably convenient to Bank and Debtor.
4.9 The following shall be the basis for any finder of fact's
determination of the value of any Collateral which is the
subject matter of a disposition giving rise to a calculation
of any surplus or deficiency under Section 9.615 (f) of the
Uniform Commercial Code (as in effect on or after July 1,
2001): (a) the Collateral which is the subject matter of the
disposition shall be valued in an "as is" condition as of the
date of the disposition, without any assumption or expectation
that such Collateral will be repaired or improved in any
manner; (b) the valuation shall be based upon an assumption
that the transferee of such Collateral desires a resale of the
Collateral for cash promptly (but no later than 30 days)
following the disposition; (c) all reasonable closing costs
customarily borne by the seller in commercial sales
transactions relating to property similar to such Collateral
shall be deducted including, without limitation, brokerage
commissions, tax prorations, attorneys' fees, whether inside
or outside counsel is used, and marketing costs; (d) the value
of the Collateral which is the subject matter of the
disposition shall be further discounted to account for any
estimated holding costs associated with maintaining such
Collateral pending sale (to the extent not accounted for in
(c) above), and other maintenance, operational and ownership
expenses; and (e) any expert opinion testimony given or
considered in connection with a determination of the value of
such Collateral must be given by persons having at least 5
years experience in appraising property similar to the
Collateral and who have conducted and prepared a complete
written appraisal of such Collateral taking into consideration
the factors set forth above. The "value" of any such
Collateral shall be a factor in determining the amount of
proceeds which would have been realized in a disposition to a
transferee other than a secured party, a person related to a
secured party or a secondary obligor under Section 9-615(f) of
the Uniform Commercial Code.
5. MISCELLANEOUS.
5.1 Until Bank is advised in writing by Debtor to the contrary,
all notices, requests and demands required under this
Agreement or by law shall be given to, or made upon, Debtor at
the following address: 0000 Xxxxxx Xxxx Xxxx, Xxxxxx, Xxxxx
00000.
5.2 Debtor will give Bank not less than 90 days prior written
notice of all contemplated changes in Debtor's name, location,
chief executive office, principal place of business , and/or
location of any Collateral, but the giving of this notice
shall not cure any Event of Default caused by this change.
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5.3 Bank assumes no duty of performance or other responsibility
under any contracts contained within the Collateral.
5.4 Bank has the right to sell, assign, transfer, negotiate or
grant participations or any interest in, any or all of the
Indebtedness and any related obligations, including without
limit this Agreement, as provided in the Credit Agreement. In
connection with the above, but without limiting its ability to
make other disclosures to the full extent allowable, Bank may
disclose all documents and information which Bank now or later
has relating to Debtor, the Indebtedness or this Agreement,
however obtained. Debtor further agrees that Bank may provide
information relating to this Agreement or relating to Debtor
or the Indebtedness to the Bank's parent, affiliates,
subsidiaries, and service providers.
5.5 In addition to Bank's other rights, any indebtedness owing
from Bank to Debtor can be set off and applied by Bank on any
Indebtedness at any time(s) either before or after maturity or
demand without notice to anyone. Any such action shall not
constitute acceptance of collateral in discharge of any
portion of the Indebtedness.
5.6 Debtor, to the extent not expressly prohibited by applicable
law, waives any right to require the Bank to: (a) proceed
against any person or property; (b) give notice or
notification of the terms, time and place of, or of any other
information relating to, any public or private sale or
disposition of personal property security held from Debtor or
any other person, or otherwise comply with the provisions of
Sections 9.611 or 9.621 of the Uniform Commercial Code; or (c)
pursue any other remedy in the Bank's power. Debtor waives
notice of acceptance of this Agreement and presentment,
demand, protest, notice of protest, dishonor, notice of
dishonor, notice of default, notice of intent to accelerate or
demand payment or notice of acceleration of any Indebtedness,
any and all other notices to which the undersigned might
otherwise be entitled, and diligence in collecting any
Indebtedness, and agree(s) that the Bank may, once or any
number of times, modify the terms of any Indebtedness,
compromise, extend, increase, accelerate, renew or forbear to
enforce payment of any or all Indebtedness, all without notice
to Debtor and without affecting in any manner the
unconditional obligation of Debtor under this Agreement.
Debtor unconditionally and irrevocably waives each and every
defense and setoff of any nature which, under principles of
guaranty or otherwise, would operate to impair or diminish in
any way the obligation of Debtor under this Agreement, and
acknowledges that such waiver is by this reference
incorporated into each security agreement, collateral
assignment, pledge and/or other document from Debtor now or
later securing the Indebtedness, and acknowledges that as of
the date of this Agreement no such defense or setoff exists.
5.7 [Intentionally Omitted.]
5.8 In the event that applicable law shall obligate Bank to give
prior notice to Debtor of any action to be taken under this
Agreement, Debtor agrees that a written notice given to Debtor
at least ten days before the date of the act shall be
reasonable notice of the act and, specifically, reasonable
notification of the time and place of any public sale or of
the time after which any private sale, lease, or other
disposition is to be made, unless a shorter notice period is
reasonable under the circumstances. A notice shall be deemed
to be given under this Agreement when delivered to Debtor or
when placed in an envelope addressed to Debtor and deposited,
with postage prepaid, in a post office or official depository
under the exclusive care and custody of the United States
Postal Service or delivered to an overnight courier. The
mailing shall be by overnight courier, certified, or first
class mail.
5.9 Notwithstanding any prior revocation, termination, surrender,
or discharge of this Agreement in whole or in part, the
effectiveness of this Agreement shall automatically continue
or be reinstated in the event that any payment received or
credit given by Bank in respect of the Indebtedness is
returned, disgorged, or rescinded under any applicable law,
including, without limitation, bankruptcy or insolvency laws,
in which case this Agreement, shall be enforceable against
Debtor as if the returned, disgorged, or rescinded payment or
credit had not been received or given by Bank, and whether or
not Bank relied upon this payment or credit or changed its
position as a consequence of it. In the event of continuation
or reinstatement of this Agreement, Debtor agrees upon demand
by Bank in writing, accompanied by reasonable detail and
explanation, to execute and deliver to Bank those documents
which Bank determines are appropriate to further evidence (in
the public records or otherwise) this continuation or
reinstatement, although the failure of Debtor to do so shall
not affect in any way the reinstatement or continuation.
5.10 This Agreement and all the rights and remedies of Bank under
this Agreement shall inure to the benefit of Bank's permitted
successors and assigns and to any other holder who derives
from Bank title to or an interest in the Indebtedness or any
portion of it, and shall bind Debtor and the heirs, legal
representatives, successors, and assigns of Debtor. Nothing in
this Section 5.10 is deemed a consent by Bank to any
assignment by Debtor.
5.11 If there is more than one Debtor, all undertakings, warranties
and covenants made by Debtor and all rights, powers and
authorities given to or conferred upon Bank are made or given
jointly and severally.
5.12 Except as otherwise expressly provided in this Agreement, all
terms in this Agreement which are defined in the Uniform
Commercial Code shall have the meanings assigned to them in
Article 9 (or, absent definition in Article 9, in any other
Article) of the Uniform Commercial Code, as those meanings may
be amended, revised or replaced from time to time. "Uniform
Commercial Code" means the Texas Business and Commerce Code as
amended, revised or replaced from time to time.
Notwithstanding the foregoing, the parties intend that the
terms used herein which are defined in the Uniform Commercial
Code have, at all times, the broadest and most inclusive
meanings possible. Accordingly, if the Uniform Commercial Code
shall in the future be amended or held by a court to define
any term used herein more broadly or inclusively than the
Uniform Commercial Code in effect on the date of this
Agreement, then such term, as used herein, shall be given such
broadened meaning. If the Uniform Commercial Code shall in the
future be amended or held by a court to define any term used
herein more narrowly, or less inclusively, than the Uniform
Commercial Code in effect on the date of this Agreement, such
amendment or holding shall be disregarded in defining terms
used in this Agreement.
5.13 No single or partial exercise, or delay in the exercise, of
any right or power under this Agreement, shall preclude other
or further exercise of the rights and powers under this
Agreement. The unenforceability of any provision of this
Agreement shall not affect the enforceability of the remainder
of this Agreement. This Agreement constitutes the entire
agreement of Debtor and Bank with respect to the subject
matter of this Agreement. No amendment or modification of this
Agreement shall be effective unless the same shall be in
writing and signed by Debtor and an authorized officer of
Bank. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
5.14 [Intentionally Omitted.]
5.15 Debtor represents and warrants that Debtor's exact name is the
name set forth in this Agreement. Debtor further represents
and warrants the following and agrees that Debtor is, and at
all times shall be, located in the following place :
Debtor is a registered organization which is organized under
the laws of one of the states comprising the United States
(e.g. corporation, limited partnership, registered limited
liability partnership or limited liability company), and
Debtor is located (as determined pursuant to the Uniform
Commercial Code) in the state under the laws of which it was
organized, which is: 0000 Xxxxxx Xxxx Xxxx, Xxxxxx, Xxxxx
00000.
5
The Collateral is located and shall be maintained at the
following location(s):
0000 Xxxxxx Xxxx Xxxx, Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
0000 Xxxxxx, Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
0000 Xxxx Xxxxxxx 00, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
Collateral shall be maintained only at the locations
identified in this Section 5.15.
5.16 A carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement under the Uniform
Commercial Code and may be filed by Bank in any filing office.
5.17 This Agreement shall be terminated only by the filing of a
termination statement in accordance with the applicable
provisions of the Uniform Commercial Code, but the obligations
contained in Section 2.13 of this Agreement shall survive
termination.
5.18 Debtor agrees to reimburse the Bank upon demand in writing,
accompanied by reasonable detail and explanation, for any and
all costs and expenses (including, without limit, court costs,
legal expenses and reasonable attorneys' fees, whether inside
or outside counsel is used, whether or not suit is instituted
and, if suit is instituted, whether at the trial court level,
appellate level, in a bankruptcy, probate or administrative
proceeding or otherwise) incurred in enforcing or attempting
to enforce this Agreement or in exercising or attempting to
exercise any right or remedy under this Agreement or incurred
in any other matter or proceeding relating to this Security
Agreement.
6. DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF
THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT
WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING
THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
AGREEMENT OR THE INDEBTEDNESS.
7. THIS IS A TEXAS SPECIFIC PROVISION: THIS WRITTEN LOAN AGREEMENT (AS
DEFINED BY SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE)
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
8. SPECIAL PROVISIONS APPLICABLE TO THIS AGREEMENT. (*NONE, IF LEFT BLANK)
DEBTOR: BANK:
PEERLESS MFG. CO. COMERICA BANK
By: /s/ Xxxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------- ------------------------------
Xxxxxxx X. Xxxxxx, Xx. Xxxxxxx X. Xxxxxx
Chief Financial Officer Vice President
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