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EXHIBIT 10(KK)
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Agreement") is executed as of March 22, 2000
(the "Effective Date") by XXXXXX INDUSTRIES, INC., a Delaware corporation which
is the successor by merger to Xxxxxx Industries, Inc., an Alabama corporation
(the "Borrower"), in favor of AMSOUTH BANK, an Alabama banking corporation,
formerly doing business as AmSouth Bank, N.A., a national banking association
and AmSouth Bank of Alabama, an Alabama banking corporation, as secured party
(the "Lender").
Preliminary Statements
A. The Borrower and the Lender are parties to that certain Loan
Agreement dated as of January 7, 1993, as amended by letter dated April 5, 1994,
and as assumed and modified by an Assumption and Modification Agreement dated
February 17, 1995 and as further modified and amended by that certain First
Amendment to Loan Agreement and Other Loan Documents dated as of March 15, 1995,
and as further modified and amended by that certain Second Amendment to Loan
Agreement and Other Loan Documents dated as of March 28, 1996, and as further
modified and amended by that certain Third Amendment to Loan Agreement and Other
Loan Documents dated as of August 28, 1997, and as further modified and amended
by that certain Fourth Amendment to Loan Agreement and Other Loan Documents
dated as of the Effective Date (the "Loan Agreement").
B. Pursuant to the Loan Agreement, Lender has (i) loaned to the
Borrower the original principal amount of $11,934,000.00 (the "Term Loan"), as
evidenced by the Term Note; (ii) extended to the Borrower a revolving line of
credit (the "Line of Credit") not to exceed $10,000,000.00 in principal amount
at any one time outstanding, as evidenced by the Modified, Amended and Restated
Line of Credit Note of even date; and (iii) loaned to the Borrower the original
principal amount of $5,000,000.00 (the $5,000,000 Term Loan"), as evidenced by
the $5,000,000 Term Note.
C. The Line of Credit, the Term Loan and the $5,000,000 Term Loan are
collectively referred to herein as the "Loans" and the Modified, Amended and
Restated Line of Credit Note, the Term Note and the $5,000,000 Term Note are
collectively referred to herein as the "Notes".
D. The Borrower is executing this Agreement as additional security for
the Loans and Notes and in order to induce the Lender to enter into the Fourth
Amendment to Loan Agreement and Other Loan Documents. This Agreement is one of
the "Security Documents" described in the Loan Agreement.
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NOW, THEREFORE, in consideration of the foregoing and to induce the
Lender to enter into the Fourth Amendment to Loan Agreement and Other Loan
Documents and to secure the payment of the Obligations (as hereinafter defined),
the Borrower hereby agrees with the Lender as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
SECTION 1.01. GENERAL RULES OF CONSTRUCTION. This Agreement shall be
construed in accordance with each of the general rules of construction contained
in Section 1.01 of the Loan Agreement, all as though each of the provisions of
said Section 1.01 were included herein.
SECTION 1.02. DEFINITIONS. As used in this Agreement, capitalized terms
that are not otherwise defined herein shall have the respective meanings
assigned thereto in the Loan Agreement and the following terms shall have the
respective meanings assigned to them as follows:
Accounts shall mean all Accounts Receivable.
Accounts Receivable shall mean any right of the Borrower to the payment
of money, whether or not evidenced by an Instrument or Chattel Paper, including
a right to payment for goods sold or leased or for services rendered by the
Borrower and a right to payment that has been earned under a Contract Right or
that is payable under any of the Assigned Agreements.
Assigned Agreements shall have the meaning set forth in Section 2.01(m).
Chattel Paper shall have the meaning assigned to that term under the Code.
Code shall mean the Alabama Uniform Commercial Code, as amended from
time to time.
Contract Right shall mean any right to payment under a contract or
agreement not yet earned by performance, whether or not evidenced by an
instrument or Chattel Paper.
Deposit Accounts shall mean all bank accounts and other deposit
accounts and lock boxes included in the Property or established for the benefit
of the Lender pursuant to any of the Loan Documents.
Documents shall have the meaning assigned to that term under the Code.
Instruments shall have the meaning assigned to that term under the Code.
Inventory shall mean goods, merchandise and other tangible personal
property now or hereafter held by the Borrower for sale or lease or furnished or
to be furnished under contracts of
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service or otherwise, raw materials, parts, finished goods, work-in-process and
supplies and materials used or consumed, or to be used or consumed, in the
Borrower's present or any future business, and all such property the sale, lease
or other disposition of which has given rise to Accounts and which has been
returned to or repossessed or stopped in transit by the Borrower. The term
"Inventory" includes any such property that is on consignment, held in a
warehouse, or otherwise in the hands of a bailee or any other person.
Liabilities shall mean (a) all amounts of principal becoming due and
payable under the Notes in accordance with the terms thereof, whether on demand,
at stated maturity, or an installment, by declaration of acceleration or
otherwise; (b) all amounts of interest becoming due and payable under the Notes
in accordance with the terms thereof, including interest on any overdue
principal and (to the extent permitted by applicable law) on any overdue
interest; (c) all other amounts payable by the Borrower with respect to the Loan
Documents; and (d) all renewals, extensions and modifications of any and all of
the obligations referred to in (a) through (c) above, whether or not any
renewal, extension or modification agreement is executed in connection
therewith.
Loan Documents shall have the same meaning as set forth in the Loan
Agreement.
Notes shall have the meaning set forth in Preliminary Statement "C".
Obligations shall mean (a) the Liabilities, (b) all sums becoming due
and payable by the Borrower under the terms of this Agreement, including sums
advanced by the Lender pursuant to the terms and conditions of this Agreement,
and (c) the compliance by the Borrower with and performance by the Borrower of
each and every obligation, covenant, duty, condition and agreement in this
Agreement and the other Loan Documents imposed on or agreed to by the Borrower.
Permitted Encumbrances shall mean the matters, if any, affecting the
Property that are described on Exhibit D.
Property shall have the meaning set forth in Section 2.01.
Purchaser shall include any customer for whom services have been
rendered or materials furnished by the Borrower, any buyer or lessee of
Inventory or other Property from the Borrower, and any other person that is now
or may become obligated to the Borrower on an Account.
Tangible Property shall mean all Inventory, materials, supplies, goods,
leasehold improvements and other tangible personal property that are part of the
Property.
ARTICLE II
SECURITY AGREEMENT
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SECTION 2.01. GRANTING CLAUSE. To secure all of the Obligations,
including the compliance by the Borrower with the Borrower's obligations under
this Agreement, the Borrower grants to the Lender security title to and a
continuing security interest in, and assigns, transfers, conveys, pledges and
sets over to the Lender as collateral security, all of the Borrower's right,
title and interest in, to and under the following described property
(collectively referred to as the "Property"):
(a) all Inventory of the Borrower;
(b) any and all accessions and additions now or hereafter made
or added to any of the property described in paragraph (a), any
substitutions and replacements therefor, and all attachments and
improvements now or hereafter placed upon or used in connection
therewith, or any part thereof;
(c) all Accounts of the Borrower;
(d) all interest, dividends, proceeds, products, rents,
royalties, issues and profits of any of the property described in
paragraphs (a) through (c) above and all notes, certificates of
deposit, checks and other instruments from time to time delivered to or
otherwise possessed by the Lender for or on behalf of the Borrower in
substitution for or in addition to any or all of said property;
(e) all books, documents and records (whether on computer or
otherwise) related to any of the items described in paragraphs (a)
through (d) above; and
(f) all leases, contracts, agreements, Documents, Instruments
and Chattel Paper included in paragraphs (a) through (c) above, or
related to any of the property described in those paragraphs, or in
connection with which Accounts now exist or may hereafter be created,
including those described in Part 1 of Exhibit B hereto (collectively,
the "Assigned Agreements").
No submission by the Borrower to the Lender of a schedule or other particular
identification of Property shall be necessary to vest in the Lender security
title to and a security interest in each and every item of Property of the
Borrower now existing or hereafter created and acquired, but rather such title
and security interest shall vest in the Lender immediately upon the creation or
acquisition of any item of Property hereafter created or acquired, without the
necessity for any other or further action by the Borrower or by the Lender. The
Borrower shall take such steps and observe such formalities as the Lender may
request from time to time to create and maintain in favor of the Lender a valid
and first lien upon, security interest in and pledge of all of the Property and
all other security that the Borrower may grant to the Lender, whether now
existing or created or acquired from time to time hereafter.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. GENERAL REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants as follows:
(a) The Borrower is the owner of the Property and has all
necessary power and good right to transfer, sell, assign, convey, and
grant a security interest in the same under this Agreement, except for
any non-transferable licenses and permits and any documents which the
Borrower has produced for examination by the Lender or its counsel and
which by their terms prohibit assignment without the consent of another
party and which consent has not been obtained; the Property is free and
clear of all Liens other than Permitted Encumbrances; and the Borrower
does hereby warrant and will forever defend the title to the Property
unto the Lender, its successors and assigns, against the claims of all
persons whomsoever, whether lawful or unlawful, subject to Permitted
Encumbrances.
(b) No financing statement covering any of the Property is on
file at any public office except those in favor of the Lender and
Permitted Encumbrances.
(c) The addresses of (i) Borrower's places of business, (ii)
the Borrower's chief executive office, (iii) office where the Borrower
keeps its records concerning Accounts, and (iv) locations where the
Borrower keeps all of its Inventory, equipment and other Tangible
Property, are correctly and completely set forth on Exhibit C hereto.
No change has occurred in such addresses in six months immediately
preceding the execution of this Agreement.
(d) All Tangible Property is kept at the addresses listed
therefor on Exhibit C hereto.
SECTION 3.02. ACCOUNT REPRESENTATIONS AND WARRANTIES. The Borrower
makes the following warranties and representations to the Lender as to each and
every Account now or hereafter identified as an Eligible Account on any Schedule
of Accounts, Assignment Summary or other writing furnished to the Lender,
whether now existing or acquired, created or arising from time to time
hereafter:
(a) The Account is an original, genuine, bona fide and legally
binding obligation, enforceable in accordance with its terms.
(b) Except as disclosed in writing, the Account is not subject
to any current claim of reduction, counterclaim, set-off, recoupment,
or any claim for credits, allowances or adjustments by the Purchaser
because of returned, inferior or damaged goods or unsatisfactory
services, or for any other reason, and the same has not been disputed
or dishonored by the Purchaser.
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(c) The aggregate amount shown as the balance due on the
Account on the Borrower's books and in any Borrowing Base certificate,
Schedule of Accounts, invoices, control balance or other statements
delivered to the Lender with respect to the Account is validly and
legally owing under the Account and is not contingent for any reason,
and there are no facts, events or occurrences that in any way impair
the validity or collectibility thereof or tend to reduce the amount
payable thereunder from said amount.
(d) No agreement under which any deduction or discount may be
claimed by the Purchaser has been made other than any customary
discounts for prompt payment under practices previously disclosed in
writing to the Lender.
(e) All statements made in any Borrowing Base certificate,
Schedule of Accounts or other documents executed or delivered to the
Lender in connection with the Account are true and correct, and all
laws and regulations applicable to the transaction giving rise to the
Account have been fully complied with in all material respects.
(f) The Account does not arise out of a contract with, or
order from, a Purchaser that by its terms forbids the assignment of the
Account to the Lender or makes such assignment void or unenforceable.
(g) The Account arose in the ordinary course of the Borrower's
business from a bona fide outright sale of goods, or from the
performance of services, by the Borrower under an enforceable contract,
and if representing a sale, the goods have been shipped or delivered
(or the contract has otherwise been consummated) in accordance with the
contract of sale and, if produced by the Borrower, produced in
accordance with the provisions of the Fair Labor Standards Act and any
other law or regulation applicable to the production thereof, and if
representing services, the services have been performed for the
Purchaser in accordance with the contract for services.
(h) Any merchandise sold or services rendered giving rise to
the Account are substantially as represented to the Purchaser thereof,
and no express warranties have been made with respect to any
merchandise or services covered by the Account except such as appear on
the face of any written document executed and delivered in connection
with said Account.
(i) The Purchaser has not returned or refused to retain any
goods giving rise to the Account.
(j) The goods, if any, giving rise to the Account are not, and
were not at the time of the sale thereof, subject to any Lien except
those of the Lender, those removed or terminated prior to the date
hereof and Permitted Encumbrances.
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(k) All Purchasers thereunder had the capacity to contract at
the time any contract or other document giving rise to the Account was
executed.
(l) No notice of any of the following has been received with
respect to any Purchaser: (i) the death of the Purchaser or of any
partner thereof, if a partnership; (ii) the dissolution, termination of
existence or business failure of the Purchaser; (iii) the ceasing or
suspension of the Purchaser's general existing business; (iv) the
filing of any petition by or against the Purchaser for any relief under
any provision of the Bankruptcy Code; (v) the making of an assignment
for the benefit of creditors by the Purchaser; (vi) the calling of a
meeting by any of the creditors of the Purchaser to consider any
distressed or threatened distressed financial condition; (vii) the
Purchaser's becoming insolvent or attempting to secure a general
extension from the Purchaser's creditors; (viii) the Purchaser's making
a bulk sale of the Purchaser's assets or sending notice of an intended
bulk sale; (ix) the appointment of a receiver, trustee, liquidator or
custodian of all or any part of the Purchaser's assets or affairs; (x)
any proceedings or actions that are threatened or pending against the
Purchaser that might result in any material adverse change in the
Purchaser's financial condition; or (xi) any fact that reflects
adversely on the general creditworthiness and financial condition of
the Purchaser.
(m) The Account is not evidenced by a judgment and is not
evidenced or secured by an Instrument, Document or Chattel Paper unless
the original thereof (or each of them if more than one) has been
endorsed and/or assigned and delivered to the Lender in accordance with
Section 5.11.
Each of the foregoing representations and warranties must be true and
correct with respect to each Account for it to be entitled to be considered an
Eligible Account. If the Borrower should disclose to the Lender that the
Borrower does make any such representation or warranty with respect to any
Account, or if any such representation or warranty is not true and correct with
respect to any Account, the Lender may, in its sole discretion, exclude such
Account from Eligible Accounts.
SECTION 3.03. INVENTORY REPRESENTATIONS AND WARRANTIES. The Borrower
makes the following warranties and representations to the Lender as to each and
every item of Inventory identified as Eligible Inventory on any Schedule of
Inventory, Assignment Summary or other writing furnished to the Lender, whether
now existing or hereafter created or acquired, to the best of Borrower's
knowledge:
(a) All statements or representations made by the Borrower on
or with respect to any Borrowing Base Certificate, Schedule of
Inventory or other documents furnished to the Lender by the Borrower
with respect to such Inventory are true and correct in all material
respects, and the Lender may rely on such statements and
representations in determining the eligibility and collateral value of
the Inventory.
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(b) All Inventory is located on premises identified on Exhibit
"C" hereto or is Inventory that is in transit to Purchasers in the
ordinary course of business and is so identified on the relevant
Schedule of Inventory.
Each of the foregoing representations and warranties must be true and
correct with respect to each Inventory for it to be entitled to be considered
Eligible Inventory. If the Borrower should disclose to the Lender that the
Borrower does make any such representation or warranty with respect to any
Inventory, or if any such representation or warranty is not true and correct
with respect to any Inventory, the Lender may, in its sole discretion, exclude
such Inventory from Eligible Inventory.
ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
CONCERNING ACCOUNTS AND INVENTORY
SECTION 4.01. GENERAL.
(a) The Borrower will diligently perform all of the Borrower's
obligations under each and every contract or purchase order in
connection with which Accounts are created or exist strictly in
accordance with the terms thereof and will not commit or permit any
breach on the Borrower's part in connection with any such contract or
purchase order.
(b) If any material allowance or credit on any Account be
given by the Borrower, the Borrower will promptly give written notice
thereof to the Lender and the amount of such allowance or credit shall
be deducted from Eligible Accounts.
(c) If any material amount of merchandise giving rise to an
Account should be returned to the Borrower, the Borrower will promptly
give written notice thereof to the Lender and the amount of such
merchandise shall be deducted from Eligible Accounts.
(d) Promptly after the Borrower's learning thereof, the
Borrower will inform the Lender in writing of any material delay or
default in the Borrower's performance of any of its material
obligations to any Purchaser, any assertion of any material claims,
offsets or counterclaims by any Purchaser, any material allowances,
credits or other monies granted by the Borrower to any Purchaser, any
material adverse information relating to the financial condition of any
Purchaser, or any other material adverse change in any of the
Borrower's representations and warranties regarding Accounts under this
Agreement.
(e) If any Account arises out of a contract with the United
States of America, or any department, agency, subdivision or
instrumentality thereof, the Borrower will promptly notify the Lender
thereof in writing and execute any instruments and take any other
action required or requested by the Lender to perfect the Lender's
security interest in such Account
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under the provisions of the Federal Assignment of Claims Act, or shall
exclude such Account from Eligible Accounts.
(f) The Borrower will provide the Lender with copies of all
agreements between the Borrower and any warehouse at which any
Inventory may, from time to time, be kept and all leases or similar
agreements between the Borrower and any other person, whether the
Borrower is lessor or lessee thereunder.
(g) No Inventory shall be stored with a bailee, warehouseman
or similar party other than those described on Exhibit C without the
Lender's written consent. The Borrower shall notify the Lender within
30 days after the storage of any Inventory with any such person, and if
the Lender so requires, the Borrower will concurrently therewith cause
any such bailee, warehouseman or similar party to issue and deliver to
the Lender, in form and substance acceptable to the Lender, warehouse
receipts therefor in the Lender's name.
SECTION 4.02. COLLECTION OF ACCOUNTS; SEGREGATION OF PROCEEDS: ETC.
(a) Until the occurrence of an Event of Default hereunder, or
until such earlier time as the Lender shall exercise any of its rights
under Section 4.03, the Borrower will, at the Borrower's sole expense,
collect from the Purchaser on each Account all amounts due thereon as
and when the same shall become due; and in the event of any default by
any Purchaser justifying such action, the Borrower will have the
authority, at the Borrower's sole expense, to repossess any merchandise
covered by any such Account in accordance with the terms thereof and
any applicable law and to take such other action with respect to any
such Account or the merchandise covered thereby as the Borrower, in the
absence of instructions from the Lender, may deem advisable.
(b) Commencing the date hereof, the Borrower shall at all
times until this Agreement is terminated as set forth in Section 8.09,
open and maintain at the Borrower's expense a lock box with the Lender
for the receipt of all remittances with respect to Property. The
Borrower shall execute an agreement with the Lender in form and
substance satisfactory to the Lender governing such lock box and shall
notify the Purchasers to make payments on the Accounts directly to said
lock box. Commencing the date hereof, the Borrower shall turn over all
items that are received from Purchasers in payment of Accounts (but
that are not paid to the lock box once the lock box is established)
directly to the Lender for deposit to a depository ZBA account (the
"Depository ZBA"). All amounts received by the Lender from the lock box
shall also be deposited to the Depository ZBA. All deposits made to the
Depository ZBA will be transferred daily to the Commercial Finance
Clearing Account, which is an account in the name of the Lender's
Commercial Finance Department used to clear the funds collected. Funds
will be held in that account for two Business Days. After the two-day
period elapses, such funds shall be credited by the Lender to the
Obligations in accordance with Section 5.10. The flow of funds
resulting from the collection of Accounts shall be governed by the
Lender's rules and regulations from time to time in effect for cash
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management accounts of this type. Upon request by the Lender, all
checks and other forms of remittance received by the Borrower as
proceeds of Property shall be (a) held in trust for the Lender separate
and apart from and not commingled with any property of the Borrower,
(b) kept capable of identification as the property of the Lender, and
(c) delivered not less often than daily to the Lender in the identical
form received, with appropriate endorsements, and accompanied by a
report prepared by the Borrower in such form as the Lender shall
require.
SECTION 4.03. ATTORNEY-IN-FACT. The Borrower hereby constitutes and
appoints the Lender, or any other person whom the Lender may designate, as the
Borrower's attorney-in-fact, at the Borrower's sole cost and expense, to
exercise at any time after the occurrence of an Event of Default hereunder, all
of the following powers and all of the powers set forth in Section 7.05, all of
which powers, being coupled with an interest, shall be irrevocable until the
Lender's security interest shall have been terminated in writing as set forth in
Section 8.09: (a) to transmit to any Purchasers notice of the Lender's interest
in the Accounts and to demand and receive from such Purchasers at any time, in
the name of the Lender or of the Borrower or of the designee of the Lender,
information concerning the Accounts and the amounts owing thereon; (b) to notify
Purchasers to make payments on the Accounts directly to the Lender or to a lock
box designated by Lender; (c) to take or to bring, in the name of the Lender or
in the name of the Borrower, all steps, action, suits or proceedings deemed by
the Lender necessary or desirable to effect collection of the Accounts; (d) to
receive, open and dispose of all mail addressed to the Borrower and to notify
postal authorities to change the address for the delivery thereof to such
address as the Lender may designate; and (e) to receive, take, endorse, assign
and deliver in the Lender's name or in the name of the Borrower any and all
checks, notes, drafts and other instruments relating to Accounts. All acts of
such attorney-in-fact or designee taken pursuant to this Section or Section 7.05
are hereby ratified and approved by the Borrower, and said attorney or designee
shall not be liable for any acts or omissions nor for any error of judgment or
mistake of fact or law.
SECTION 4.04. COLLECTION METHODS. It is distinctly understood and
agreed that the Borrower will not institute any court action or other legal
proceedings for garnishment, attachment, repossession of property, detinue or
make any attempt to repossess any merchandise covered by any Account otherwise
than through legal proceedings by or under the direction of competent legal
counsel. The Borrower agrees to indemnify and hold the Lender harmless from any
loss or liability of any kind that may be asserted or sought to be asserted
against the Lender by virtue of any suit filed, process issued or any
repossession or attempted repossession done or attempted by the Borrower or at
the Borrower's direction or any endeavors that the Borrower may make to collect
or enforce any Accounts or repossess any goods covered by any Account.
SECTION 4.05. SCHEDULE OF INVENTORY AND ACCOUNTS RECEIVABLE. The
Borrower shall deliver to the Lender not later than the 25th day after the end
of each calendar month a schedule of Inventory and outstanding Accounts
Receivable, listing the type, locations, customer, aging and such other
information with respect to said Inventory and Accounts Receivable as the Lender
may request.
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SECTION 4.06. VERIFICATION OF ACCOUNTS. Any of the Lender's officers,
employees or agents shall have the right, at any time or times hereafter, to
verify with any Purchaser the validity or amount of, or any other matter
relating to, any Accounts by mail, telephone, telegraph or otherwise.
ARTICLE V
OTHER COVENANTS AND AGREEMENTS
SECTION 5.01. GENERAL. The Borrower covenants and agrees with the
Lender as follows:
(a) The Borrower will keep all Tangible Property at the
locations set forth on Exhibit C, and the Borrower will not change such
locations, the locations of the Borrower's places of business, chief
executive office or the location at which the Borrower's records are
kept without the prior written consent of the Lender (which consent
shall not unreasonably be withheld), although the Borrower may transfer
Inventory as set forth in Section 4.01(g) and may transfer other
Tangible Property among those locations without the need for such
consent if such transfer will not adversely affect the perfection or
priority of the Lender's security interest in such Tangible Property.
The Borrower will not remove any material portion of the Tangible
Property from the locations specified therefor in Exhibit C without the
prior written consent of the Lender, except that Inventory may be
shipped, transported and removed upon its sale in the ordinary course
of business.
(b) Except as set forth in Section 4.01(g), the Borrower will
notify the Lender in writing of any proposed change in any of the
locations described in paragraph (a) above at least 30 days prior to
the date of the proposed change (which proposed location must be in the
continental United States of America), and shall furnish the Lender
with any information that the Lender may request in considering whether
to consent to the proposed change. In connection with any change in any
of such locations, the Borrower will execute and file any financing
statements the Lender deems necessary or desirable to perfect, preserve
and protect the Liens of the Lender in the Property. The Borrower will
give the Lender at least 30 days' prior written notice of the
Borrower's opening of any new place of business or of the closing of
any existing place of business, and any such new place of business
shall be within the continental United States of America.
(c) The Borrower is and shall remain the owner of all real
estate on which any of the locations described in paragraph (a) above
are located, except as described in Exhibit C. The Borrower has
heretofore obtained from the owner of each parcel of real estate not
owned by the Borrower as shown on Exhibit C a written waiver or
subordination (in form
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and substance satisfactory to the Lender) of any landlord's Lien or
other Lien the owner might have with respect to the Property, and the
Borrower has delivered the same to the Lender.
(d) The Borrower will not allow any of the Property that is
not a fixture to become affixed to any real estate other than the real
estate described in Exhibit A in such manner as to become a fixture or
a part thereof without the prior written consent of the Lender.
However, if at any time any of the Tangible Property should be affixed
to any other real estate, the security interest of the Lender under
this Agreement shall nevertheless attach to and include said Tangible
Property. The Borrower will promptly furnish to the Lender a
description of any such real estate and the names of the record owners
thereof, execute such additional financing statements and other
documents as the Lender may require, obtain from the owners of such
real estate and the holders of any Liens thereon such subordination
agreements and other documents as the Lender may request, and take such
other actions as the Lender may deem necessary or desirable to preserve
and perfect the Lender's security interest therein as a first priority
perfected security interest, subject only to Permitted Encumbrances.
(e) The Borrower will not, without the prior consent of the
Lender, sell, lease, transfer, convey or otherwise dispose of any
material portion of the Property, or pledge or grant any security
interest in, any of the Property, to any person other than the Lender
(except that Inventory may be sold, leased or otherwise disposed of on
normal terms and at normal prices in the ordinary course of the
Borrower's business), or permit any Lien to attach to any of the
Property or any levy to be made thereon or any other financing
statement (other than those of the Lender or those that may be filed
with respect to Permitted Encumbrances) to be on file with respect to
any of the Property.
(f) At the request of the Lender, the Borrower will join with
the Lender in executing one or more financing statements pursuant to
the Code in form and substance satisfactory to the Lender covering the
Property and will pay the costs of filing the same in all public
offices wherever filing is deemed necessary or prudent by the Lender.
If the Borrower fails or refuses to execute any such financing
statement, the Lender may file an executed copy or photocopy of an
executed copy of this Agreement as a financing statement in any such
offices to the extent permitted by applicable law.
(g) The Lender may correct any and all patent errors in this
Agreement or any financing statements or other documents executed in
connection herewith.
(h) The Borrower will inform the Lender in writing of any
material adverse change in any of the representations and warranties of
the Borrower under this Agreement, promptly after the Borrower learns
of such change.
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(i) The Borrower will furnish to the Lender from time to time
statements and schedules further identifying and describing the
Property and such other reports in connection with the Property as the
Lender may reasonably request, all in reasonable detail.
(j) The Borrower will keep and maintain at its own cost and
expense satisfactory and complete records of the Property, including a
record of all payments received and all credits granted with respect to
the Property and all other dealings with the Property. Upon request of
the Lender, the Borrower will make proper entries in such books and
records disclosing the assignment of the Property to the Lender and
shall segregate and xxxx such books and records with the Lender's name
in a manner satisfactory to the Lender. After the occurrence of an
Event of Default the Borrower will deliver and turn over to the Lender
any such books and records at any time on demand of the Lender.
SECTION 5.02. TAXES AND ASSESSMENTS. The Borrower will pay when due all
taxes, assessments and other charges levied or assessed against any of the
Property, or any part thereof, and all other claims that are or may become Liens
against the Property, or any part thereof, except any such taxes, assessments,
charges and claims that are Permitted Encumbrances or which are subject to
Permitted Contests, and should default be made in the payment of same, the
Lender, at its option, may pay them.
SECTION 5.03. INSURANCE. The Borrower will keep the Tangible Property
insured for the benefit of the Lender (to whom loss shall be payable and to whom
30 days' prior written notice of termination of the policy shall be given) in
such amounts, with such companies and against such risks as may be satisfactory
to the Lender, pay the cost of all such insurance, and deliver certificates
evidencing such insurance to the Lender. The Borrower hereby assigns to the
Lender each and every policy of insurance covering the Property, or any part
thereof, including all rights to receive the proceeds and returned premiums of
such insurance. All such policies shall provide that any losses payable
thereunder shall name the Lender as additional insured or loss payee (as
applicable) thereunder. The Borrower will cause duplicate originals of any and
all such insurance policies to be deposited with the Lender. Each of such
policies shall contain an agreement by the insurer that the same shall not be
cancelled without at least 30 days' prior written notice to the Lender. With
respect to all such insurance policies, the Lender is hereby authorized, but not
required, on behalf of the Borrower, to collect for, adjust or compromise any
losses under any such insurance policies and to apply, at its option, the loss
proceeds (less expenses of collection) to the Obligations in accordance with
Section 5.10, or to the repair, replacement or restoration of the Property, or
to remit the same to the Borrower, but any such application or remittance shall
not cure or waive any default by the Borrower and shall not operate to xxxxx,
satisfy or release any of the Obligations remaining unpaid after such
application or remittance. If any proceeds are received by the Borrower under
any such insurance policies, the Borrower will promptly apply such proceeds to
the repair, replacement or restoration of the Property unless the Borrower
receives contrary directions from the Lender. In case of a sale pursuant to the
default provisions hereof, or any conveyance of all or any part of the Property
in extinguishment of the Obligations, complete title to all such insurance
policies and the unearned premiums with respect thereto shall pass to and vest
in the purchaser of the Property.
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SECTION 5.04. CARE OF TANGIBLE PROPERTY: NOTICE OF LOSS, ETC. The
Borrower will: (a) take good care of the Tangible Property, consistent with the
reasonable practices of persons engaged in the same or a similar business; (b)
not commit or permit any material waste thereon; (c) keep all Tangible Property
in good repair; (d) at all times maintain the Tangible Property in good
condition, reasonable wear and tear alone excepted; (e) not use or permit the
use of the Tangible Property in violation of any regulation, order, law or
ordinance of any Governmental Authority; and (f) notify the Lender immediately
in writing of any event causing material loss or depreciation in value of any of
the Property, and of the amount of such loss or depreciation (other than
depreciation in the Tangible Property resulting from ordinary wear and tear).
SECTION 5.05. FILING FEES AND TAXES. The Borrower agrees, to the extent
it may lawfully do so, to pay all recording and filing fees, revenue stamps,
taxes and other expenses and charges payable in connection with the execution
and delivery to the Lender of this Agreement and the Note evidencing the
Obligations, and the recording, filing, satisfaction, continuation and release
of this Agreement and any financing statements or other instruments filed or
recorded in connection herewith.
SECTION 5.06. USE OF TANGIBLE PROPERTY. The Borrower agrees (a) to
comply in all material respects with the terms of any lease covering the
premises wherein the Tangible Property is located and all regulations, orders,
laws or ordinances of any Governmental Authority concerning such premises or the
conduct of business therein; (b) not to conceal or abandon the Tangible
Property; and (c) not to lease or hire any of the Tangible Property to any
Person or permit the same to be leased or used for hire otherwise than pursuant
to any Permitted Encumbrances.
SECTION 5.07. DEPOSIT ACCOUNTS. The Borrower agrees to maintain the
Deposit Accounts on deposit with the Lender. As security for the Obligations,
the Borrower hereby assigns and transfers to the Lender the exclusive dominion
and control of the Deposit Accounts, including the right to withdraw funds
therefrom. All proceeds in the Deposit Accounts shall continue to be collateral
security for all of the Obligations and shall not constitute payment thereof
until applied as hereinafter provided. No checks, drafts or other instruments
that are deposited into any Deposit Account or otherwise received by the Lender
pursuant hereto shall constitute final payment until finally collected.
SECTION 5.08. ASSIGNED AGREEMENTS. The Borrower will diligently perform
all of its obligations under each and every Assigned Agreement in accordance
with its terms and shall not commit or permit any breach on the part of the
Borrower in connection therewith.
SECTION 5.09. NOTICE OF DISPUTES, ETC. The Borrower will notify the
Lender promptly in writing of any matters materially affecting the value,
enforceability or collectibility of any of the Assigned Agreements, including
material disputes, offsets, defenses, counterclaims, returns and rejections and
all reclaimed or repossessed property.
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SECTION 5.10. APPLICATION OF PAYMENTS AND COLLECTIONS. The Borrower
irrevocably waives the right to direct the application of any and all payments
and collections at any time or times hereafter received by the Lender from or on
behalf of Borrower, and the Borrower irrevocably agrees that Lender shall have
the continuing exclusive right to apply and reapply any and all such payments
and collections received at any time or times hereafter by the Lender or its
agent against the Obligations, notwithstanding any entry by the Lender upon any
of its books and records.
SECTION 5.11. INSTRUMENTS, DOCUMENTS AND CHATTEL PAPER. Immediately
upon the Borrower's receipt of any Property which consists of or is evidenced or
secured by an agreement, Instrument, Document or Chattel Paper, the Borrower
will deliver the original thereof (or each executed original counterpart if more
than one) to the Lender, together with appropriate endorsements and assignments
in form and substance acceptable to the Lender.
SECTION 5.12. VISITATION. The Borrower will permit representatives of
the Lender from time to time to visit and inspect the Property, all records
related thereto, the premises upon which any of the Property is located, and any
of the other offices and properties of the Borrower; to inspect and examine the
Property and to inspect, audit, check, copy and make abstracts from the books,
records, journals, orders, receipts, correspondence and other data relating to
the Property or to any other transactions between the Borrower and the Lender;
to examine the assets and books of account of the Borrower; to discuss the
affairs, finances and accounts of the Borrower with and be advised as to the
same by the officers thereof, if a corporation, or if not by other responsible
persons; and to verify the amount, quantity, value and condition of, or any
other matter relating to, the Property, all at such reasonable times and
intervals as the Lender may desire. The Borrower hereby irrevocably authorizes
and instructs any accountants at any time acting for the Borrower during the
term of this Agreement to give the Lender any information the Lender may request
at any time regarding the financial affairs of the Borrower and to furnish the
Lender with copies of any documents in their possession related thereto. The
Borrower acknowledges that in the absence of the occurrence of an Event of
Default the Lender intends to conduct an audit through auditors of the Lender's
choosing at the Lender's expense at least two (2) times per year. After the
occurrence of an Event of Default such audits may be conducted by the Lender at
the Borrower's expense at such intervals as the Lender may require.
SECTION 5.13. FURTHER ASSURANCES. At the Borrower's cost and expense,
upon request of the Lender, the Borrower will duly execute and deliver, or cause
to be duly executed and delivered, to the Lender such further instruments and do
and cause to be done such further acts as may be reasonably necessary or proper
in the opinion of the Lender or its counsel to perfect, preserve and protect the
validity and priority of the Liens of the Lender in the Property and to carry
out more effectively the provisions and purposes of this Agreement.
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ARTICLE VI
EVENTS OF DEFAULT
The occurrence of any of the following events shall constitute an event
of default (an "Event of Default") under this Agreement (whatever the reason for
such event and whether or not it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any Governmental Authority):
(a) the Borrower shall fail to observe or perform any
covenant, condition or agreement on the part of the Borrower to be
observed or performed under this Agreement; or
(b) any representation or warranty made in this Agreement or
in any of the other Loan Documents shall prove to be false or
misleading in any material respect as of the time made; or
(c) any report, certificate, financial statement or other
instrument furnished in connection with this Agreement, or the
borrowings under this Agreement or any of the other Loan Documents,
shall prove to be false or misleading in any material respect as of the
time made; or
(d) any uninsured portion of the Tangible Property having an
aggregate fair market value of $50,000.00 or more shall be lost,
stolen, damaged, sold, destroyed or encumbered, or any levy, seizure or
attachment shall be made thereof or thereon; or
(e) any event of default, as therein defined, shall occur
under any of the other Loan Documents (after taking into account any
applicable notice, grace or cure period .
ARTICLE VII
REMEDIES
SECTION 7.01. ACCELERATION OF OBLIGATIONS. Upon the occurrence of any
Event of Default, the Lender shall have the right, by written notice to the
Borrower, to declare the entire unpaid balance of the Obligations, with accrued
interest thereon, immediately due and payable.
SECTION 7.02. CERTAIN RIGHTS OF LENDER AFTER DEFAULT. Upon the
occurrence of an Event of Default, the Lender shall have, in addition to any
other rights under this Agreement or under applicable law, without notice to the
Borrower (or with notice to the Borrower if notice is required and cannot be
waived under applicable law), to take any or all of the following actions at the
same or different times:
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(a) The Lender may, without notice to the Borrower except as
required by law and at any time or from time to time, charge, set-off
and otherwise apply all or any part of the Obligations against the
Deposit Accounts, or any part thereof.
(b) The Lender may exercise any and all rights and remedies of
the Borrower under or in connection with any Assigned Agreement or
otherwise in respect of the Property, including any and all rights of
the Borrower to demand or otherwise require payment of any amount
under, or performance of any provision of, any Assigned Agreement, and
to modify, amend, terminate, replace, settle or compromise any Assigned
Agreement or any sum payable thereunder.
(c) The Lender may (i) notify Purchasers that Accounts have
been assigned to the Lender, demand and receive information from
Purchasers with respect to Accounts, forward invoices to Purchasers
directing them to make payments to the Lender, collect all Accounts in
the Lender's or the Borrower's name and take control of any cash or
non-cash proceeds of Property; (ii) enforce payment of any Accounts,
prosecute any action or proceeding with respect to Accounts, extend the
time of payment of any and all Accounts, make allowances and
adjustments with respect thereto and issue credits in the name of the
Lender or the Borrower; (iii) settle, compromise, extend, renew,
release, terminate or discharge, in whole or in part, any Account or to
deal with the same as the Lender may deem advisable; and (iv) require
the Borrower to open all mail only in the presence of a representative
of the Lender, who may take therefrom any remittance on Property.
(d) The Lender may (i) enter upon the premises of the Borrower
or any other place or places where the Property is located and kept,
and through self-help and without judicial process, without first
obtaining a final judgment or giving the Borrower notice and
opportunity for a hearing on the validity of the Lender's claim,
without any pre-seizure hearing as a condition to repossession through
court action and without any obligation to pay rent to the Borrower,
remove the Property therefrom to the premises of the Lender or of any
agent of the Lender for such time as Lender may desire to collect or
liquidate the Property; (ii) require the Borrower, upon the request of
the Lender, to assemble the Tangible Property and make it available to
the Lender at places which the Lender shall select, whether at the
Borrower's premises or elsewhere, and to make available to the Lender
all of the Borrower's premises and facilities for the purpose of the
Lender' s taking possession of, removing or putting the Inventory and
such other goods in salable form; and (iii) use, and permit any
purchaser of any of the Property from the Lender to use, without
charge, the Borrower's labels, General Intangibles and advertising
matter or any property of a similar nature, as it pertains to, or is
included in, any of the Property, in advertising for sale, preparing
for sale and selling any Property, and finishing the manufacture,
processing, fabrication, packaging and delivery of the Inventory, and
the Borrower's rights under all licenses and all franchise agreements
shall inure to the Lender's benefit.
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(e) The Lender, without demand of performance or other demand,
advertisement or notice of any kind (except any notice required by law,
which may be given in the manner specified in Section 8.01) to or upon
the Borrower or any other person (all of which demands, advertisements
and notices are hereby expressly waived, to the extent permitted by
applicable law), may forthwith collect, receive, appropriate, repossess
and realize upon the Property, or any part thereof, and may forthwith
sell, lease, assign, give option or options to purchase, or sell or
otherwise dispose of and deliver the Property (or contract to do so),
or any part thereof, in one or more parcels at public or private sale
or sales, at any exchange broker's board or at any of the Lender's
offices or elsewhere at such prices as the Lender may deem best, for
cash or on credit or for future delivery without assumption of any
credit risk. The Lender shall have the right upon any such public sale
or sales, and to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Property so
sold, free of any right or equity of redemption, which equity of
redemption the Borrower hereby releases to the extent permitted by
applicable law. To the extent permitted by applicable law, the Borrower
waives all claims, damages, and demands against the Lender arising out
of the repossession, retention or sale of the Property.
SECTION 7.03. REPOSSESSION OF THE PROPERTY: CARE AND CUSTODY OF THE
PROPERTY: ETC. The Borrower agrees to give the Lender notice in the manner set
forth in Section 8.01 within 48 hours of the date of repossession of the
Property, or any part thereof, by the Lender as to any other property of the
Borrower alleged to have been left on, upon or in the repossessed Property at
the time of repossession; and such notice shall be an express condition
precedent to any action or suit for loss or damages in connection therewith. The
Borrower further agrees that the Lender may hold any such property of the
Borrower without liability for a reasonable time after any such notice is
received, and that the Lender will have a reasonable time to notify the Borrower
as to where the Borrower can collect such property. The Borrower agrees that if
the Lender shall repossess the Property, or any part thereof, at a time when no
Event of Default shall have occurred hereunder, and the repossessed Property is
thereafter returned to the Borrower, the damages therefor, if any, shall not
exceed the fair rental value of the repossessed Property for the time it was in
the Lender's possession. The Borrower hereby expressly and irrevocably consents
to, and to the extent that the Borrower may lawfully do so, invites the Lender
and its agents to come upon any premises on which any of the Property is now or
hereafter located for all purposes related to the Property, including
repossession thereof. To the extent that the Borrower may lawfully do so, the
Borrower further covenants and warrants that (a) any entry by the Lender and its
agents upon such premises for the purpose of repossessing the Property, or any
part thereof, shall not be a trespass upon such premises and (b) any such
repossession shall not constitute conversion of the Property, or any part
thereof. The Borrower further agrees to indemnify and hold the Lender harmless
against, and hereby releases the Lender from any actions, claims, costs,
liabilities or expenses arising directly or indirectly from any attempt to enter
such premises and repossess any of the Property after the occurrence of an Event
of Default. The Lender shall be deemed to have exercised reasonable care in the
custody and presentation of the Property in its possession if it takes such
reasonable actions for that purpose as the Borrower will request in writing, but
the Lender shall have sole power to determine whether such actions are
reasonable. Any omission to do any act not requested by the Borrower will not be
deemed a failure
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to exercise reasonable care. The Lender will not at any time be responsible for
the preservation of the Property and shall not be liable for any failure to
realize upon, or to exercise any right or power with respect to, the Property,
or for any delay in so doing, whether or not the Property is in the Lender's
possession.
SECTION 7.04. APPLICATION OF PROCEEDS. The net cash proceeds resulting
from the exercise of any of the rights and remedies of the Lender under this
Agreement, after deducting all charges, expenses, costs and attorneys' fees
relating thereto, including any and all reasonable costs and expenses incurred
in securing the possession of Property, moving, storing, repairing or finishing
the manufacture of Property, and preparing the same for sale, shall be applied
by the Lender to the payment of the Obligations in accordance with Section 5.10,
and the Borrower will remain liable to the Lender for any deficiency.
SECTION 7.05. ATTORNEY-IN-FACT AFTER DEFAULT. At any time after the
occurrence of an Event of Default, the Lender or any other person serving as the
Borrower's attorney-in-fact under Section 4.03 shall have the following powers:
(a) to sell or assign any of the Property upon such terms, for such amounts and
at such time or times as the Lender deems advisable and to execute any bills of
sale or assignments in the name of the Borrower in relation thereto; (b) to take
control, in any manner, of any item of payment on, or proceeds of the Property;
(c) to use the information recorded on or contained in any data processing
equipment and computer hardware and software relating to the Property to which
the Borrower has access; (d) to exercise all of the Borrower's rights and
remedies with respect to the collection of the Accounts; (e) to settle, adjust,
compromise, extend, renew, discharge, terminate or release the Accounts in whole
or in part; (f) settle, adjust or compromise any legal proceedings brought to
collect the Accounts; (g) to sell or assign the Accounts upon such terms, for
such amounts and at such time or times as the Lender deems advisable; (h) to
take control, in any manner, of any item of payment on, or proceeds of,
Property; (i) to prepare, file and sign the Borrower's name on any proof of
claim in bankruptcy or similar document against any Purchaser; (j) to prepare,
file and sign the Borrower's name on any notice of Lien, assignment or
satisfaction or termination of Lien or similar document in connection with the
Accounts; (k) to do all acts and things necessary, in the Lender's sole
discretion, to fulfill the Borrower's obligations under this Agreement; (l) to
sign or endorse the name of the Borrower upon any Chattel Paper, Document,
Instrument, invoice, freight xxxx, xxxx of lading, warehouse receipt or similar
document or agreement relating to the Accounts or Inventory; (m) to use the
Borrower's stationery and to sign the name of the Borrower to verifications of
the Accounts and notices thereof to Purchasers; (n) to enter into contracts or
agreements for the processing, fabrication, packaging and delivery of Inventory
as said attorney-in-fact or designee or the Lender may from time to time deem
appropriate and charge the Borrower's account for any reasonable costs thereby
incurred; and (o) to do all acts and things necessary, in the Lender's sole
judgment, to carry out the purposes of this Agreement.
SECTION 7.06. REMEDIES CUMULATIVE. The rights and remedies of the
Lender under this Agreement are cumulative and not exclusive of any other
rights or remedies now or hereafter existing at law or in equity.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. NOTICES. Any request, demand, authorization, direction,
notice, consent or other document provided or permitted by this Agreement may be
given in the manner, and shall be effective at the time, provided in Section
10.02 of the Loan Agreement. Five Business Days' written notice to the Borrower
as provided above shall constitute reasonable notification to the Borrower when
notification is required by law; provided, however, that nothing contained in
the foregoing shall be construed as requiring five Business Days' notice if,
under applicable law and the circumstances then existing, a shorter period of
time would constitute reasonable notice.
SECTION 8.02. HEIRS, SUCCESSORS AND ASSIGNS. Whenever in this Agreement
any party hereto is referred to, such reference shall be deemed to include the
heirs, successors and assigns of such party, except that the Borrower may not
assign or transfer this Agreement without the prior written consent of the
Lender; and all covenants, promises and agreements by or on behalf of the
Borrower which are contained in this Agreement shall bind and inure to the
benefit of the Borrower's heirs, successors and permitted assigns and shall bind
and inure to the benefit of the successors and assigns of the Lender.
SECTION 8.03. COSTS. The Borrower will promptly reimburse the Lender
for any and all costs and expenses, including the reasonable fees and
disbursements of counsel to the Lender, that the Lender may incur in connection
with (a) the enforcement of the rights of the Lender in connection with the
Obligations, (b) the protection or perfection of the Lender's rights and
interest hereunder, (c) the exercise by or for the Lender of any of the rights
or powers herein conferred upon the Lender, and (d) the prosecution or defense
of any action or proceeding by or against the Lender, the Borrower, any Obligor,
any Purchaser, or any one or more of them, concerning any matter arising out of,
connected with or related to this Agreement, any of the Property, or any of the
Obligations.
SECTION 8.04. LENDER MAY PERFORM AND PAY CLAIMS.
(a) If the Borrower fails to pay or perform any obligation
contained herein, the Lender may itself pay or perform, or cause to be
paid or performed, such obligation.
(b) The Lender may, at any time or times hereafter, in its
sole discretion and without waiving or releasing any obligation of the
Borrower or any Event of Default, pay, acquire or accept an assignment
of any Lien against the Property, other than Permitted Encumbrances;
provided that the Lender first gives the Borrower written notice of its
intent to do so, and the Borrower does not, within a reasonable time
not to exceed 10 days of such notice, pay such claim or obtain the
release of such Lien.
(c) All reasonable amounts expended by the Lender pursuant to
(a) or (b) above shall become a debt of the Borrower to the Lender
additional to the Obligations hereby
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specially secured, which shall be due and payable on demand, and shall
be secured hereby, and such amounts shall bear interest until paid at
the interest rate provided for in Section 2.03(c) of the Loan Agreement
after the occurrence of an Event of Default (as therein defined), or
the highest rate permitted by law, whichever shall be less.
SECTION 8.05. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of Alabama except as
required by mandatory provisions of law and except to the extent that the
validity, perfection and enforcement of the Liens on the Property are governed
by the laws of any jurisdiction other than the State of Alabama.
SECTION 8.06. NON-WAIVER: MODIFICATION; ETC. Neither any failure nor
any delay on the part of the Lender in exercising any right, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise or the exercise
of any other right, power or privilege. The Lender may permit the Borrower to
remedy any default without waiving the default so remedied, and the Lender may
waive any default without waiving any other subsequent or prior default by the
Borrower. No modification, amendment or waiver of any provision of this
Agreement, and no consent to any departure by the Borrower therefrom, shall be
effective unless the same shall be in writing and signed by the Lender, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in the same,
similar or other circumstances.
SECTION 8.07. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 8.08. BORROWER LIABLE ON ASSIGNED AGREEMENTS. Notwithstanding
anything in this Agreement to the contrary (a) the Borrower will remain liable
under the Assigned Agreements to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b)
the exercise by the Lender of any rights hereunder shall not release the
Borrower from any of its rights or obligations under the Assigned Agreements,
and (c) the Lender shall not have any obligation or liability under the Assigned
Agreements by reason of this Agreement or the receipt by the Lender of any
payment hereunder, nor shall the Lender be obligated to perform any of the
obligations or duties of the Borrower under the Assigned Agreements, to take any
action to collect, file and enforce any claim for payment assigned to the Lender
hereunder, or to make any inquiry as to the nature or sufficiency of any payment
received by it or the sufficiency of any performance by any party hereunder.
SECTION 8.09. TERMINATION OF SECURITY INTEREST. This Agreement and the
Lender's security interest under this Agreement in the Property will not be
terminated until a duly authorized officer of the Lender signs a written
termination agreement. Even if the Borrower should pay all of the Obligations
owing to the Lender at any one time, the Lender's security interest will
continue to
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secure any sum the Borrower should later owe the Lender until the written
termination agreement referred to above has been executed by the Lender. Except
as otherwise expressly provided for in this Agreement, no termination of this
Agreement shall in any way affect or impair the representations, warranties,
agreements, covenants, obligations, duties and liabilities of the Borrower or
the powers, rights and remedies of the Lender under this Agreement with respect
to any transaction or event occurring prior to such termination, all of which
shall survive such termination. The Lender shall be obligated to terminate the
security interest under this Agreement after receipt of the Borrower's written
request therefor, (a) if the Borrower has paid in full all of the Obligations
then outstanding, (b) if the Line of Credit has terminated and the Lender is not
obligated to extend any further credit to the Borrower, and (c) if the Borrower
has no contingent Liabilities to the Lender. The provisions of this Section are
subject to those of Section 8.11.
SECTION 8.10. MORTGAGE. If any of the Property is also subject to a
valid and enforceable Lien under the terms of any mortgage and the terms of such
mortgage are inconsistent with the terms of this Agreement, then, at the option
of the Lender, the terms of such mortgage shall be controlling with respect to
fixtures, leases, licenses, contracts and agreements included in the Property
that relate to the real property described in such mortgage, and the terms of
this Agreement shall be controlling in the case of all other Property.
SECTION 8.11. REINSTATEMENT OF AGREEMENT. This Agreement, the
obligations of the Borrower hereunder, and the Liens, rights and remedies of the
Lender hereunder, shall continue to be effective, or be automatically
reinstated, as the case may be, if at any time any amount applied to the payment
in whole or in part of any of the Obligations is rescinded or must otherwise be
restored or returned to the Borrower or any other person (or paid to the
creditors of the Borrower or any such person, or to any custodian, receiver,
trustee or other officer with similar powers with respect to the Borrower or any
such person, or with respect to any part of the property thereof (collectively,
a "custodian")) upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any such person, or upon or as a result of the
appointment of a custodian with respect to the Borrower or any such person, or
with respect to any part of the property thereof, or otherwise, all as though
such payment had not been made.
22
23
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
executed by a duly authorized officer as of the date and year first above
written.
XXXXXX INDUSTRIES, INC.
By: /S/ XXXXXXXX X. XXXXXXXXX
--------------------------------------
Its: Vice President and CFO
---------------------------
Xxxx Xxxxxx Xxx 000
000 Xxxx Xxxxxxxxx Xxxxxx
Florence, Alabama 35630
STATE OF ALABAMA )
)
COUNTY OF MADISON )
I, the undersigned, a Notary Public in and for said County in
said State, do hereby certify that Xxxxxxxx X. Xxxxxxxxx, whose name as Vice
President and CFO of Xxxxxx Industries, Inc., a Delaware corporation, is signed
to the foregoing instrument, and who is known to me, and known to be such
officer, acknowledged before me on this day that being informed of the contents
of said instrument, (s)he, as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.
Given under my hand and official seal this the 22nd day of March, 2000.
/S/ XXXXX X. XXXXX
--------------------------------------
Notary Public
My Commission expires: 08-20-00
-------------
24
EXHIBIT "A"
NOT APPLICABLE
25
EXHIBIT B
(Material Agreements, General Intangibles, Leases, etc.)
Part 1 (Assigned Agreements):
N/A
Part 2 (General Intangibles):
N/A
Part 3 (Leases in which Borrower is the Lessor):
N/A
Part 4 (Leases in which Borrower is the Lessee):
N/A
26
EXHIBIT C
(Addresses)
1. Address of the Borrower's place(s) of business and chief
executive office (if the Borrower has more than one place of business):
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
(Lauderdale County, Alabama)
2. Address where Borrower keeps its records concerning Accounts:
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
(Lauderdale County, Alabama)
3. Addresses of property owned by the Borrower on which any
Property is or will be located:
Corporate Office
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
(Lauderdale County, Alabama)
Engineering Facility
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
(Lauderdale County, Alabama)
Athens Plant
000 Xxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
(Limestone County, Alabama)
Huntsville Plant
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
(Madison County, Alabama)
Sheffield Plant
0000 00xx Xxxxxx X.X.
Xxxxxxxxx, Xxxxxxx, 00000
(Colbert County, Alabama)
27
Washington Park Plant
0000 Xx. Xxxxx Xxxxxx
Xxxxxxxxxx Xxxx, Xxxxxxxx 00000
(St. Clair County, Illinois)
4. Addresses of property not owned by the Borrower on which any
Property is or will be located (consigned or warehoused Inventory and tools and
dies will be located on these locations; however, only tools and dies having a
value of more than $25,000 are listed):
The Foundry of the Shoals, Inc.
P. X. Xxx 000
Xxxxxxxx, Xxxxxxx 00000
Lincoln Brass
0000 Xxxx Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx, 00000
Music City Metals, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Shook & Xxxxxxxx Company
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
J & J South Central
0000 Xxxxxxxx Xxxx, X. X.
Xxxxxxxxxx, Xxxxxxx 00000
MidSouth Packaging, Inc.
0000 00xx Xxxxxx, X. X.
Xxxxxxx, Xxxxxxx 00000
Xxxxx, Industries, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Southern Porcelain, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Xxxxxxxxx Plastics
000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxxx Xxxxxxx, Xxxxxxx 00000
28
EXHIBIT D
(Permitted Encumbrances)
1. The Lien of ad valorem taxes for taxes that are not yet due
and payable at the time under consideration.
2. The security interests granted to the Lender under this
Agreement and the other Security Documents.
3. Liens permitted under Section 8.03(a), (b) or (c) of the
Loan Agreement.
4. UCC Filings as follows:
File No. Date Filed Secured Party Place File
--------------------------------------------------------------------------------------------------
1997-29327 07/11/1997 Associates Leasing, Inc. Xxxxxxxxx xx Xxxxx - Xxxxxxx
0000-00000 02/21/1995 Associates Leasing, Inc. Xxxxxxxxx xx Xxxxx - Xxxxxxx
0000-00000 02/21/1995 Associates Leasing, Inc. Xxxxxxxxx xx Xxxxx - Xxxxxxx
0000-00000 02/21/1995 Associates Leasing, Inc. Xxxxxxxxx xx Xxxxx - Xxxxxxx
0000-00000 02/21/1995 Associates Leasing, Inc. Xxxxxxxxx xx Xxxxx - Xxxxxxx
0000-00000 03/24/1997 Mellon First United Leasing Xxxxxxxxx xx Xxxxx - Xxxxxxx
0000-00000 04/14/1997 Associates Commercial Corp. Xxxxxxxxx xx Xxxxx - Xxxxxxx
0000-00000 06/27/1997 Associates Leasing, Inc. Secretary of State - Alabama
000-0000-000000 02/06/1997 AmSouth Bank of Alabama Secretary of State - Georgia
5. As to fixtures included in the Property, any Liens permitted
under the title policies issued in favor of the Lender in connection with
the Mortgages.
