Exhibit 10.8
SECURITY AGREEMENT
SECURITY AGREEMENT (this "Security Agreement") dated this 25th day of
November, 1997, between QPI Multipress, Inc., an Ohio corporation
("Multipress"), Quality Products, Inc., a Delaware corporation ("Quality")
(Multipress and Quality are referred to collectively, as the "Debtor") and
Eastlake Securities, Inc., a New York corporation ("Eastlake" or the "Collateral
Agent") for itself and as collateral agent for the holders of beneficial
interests in the Note (as defined) dated the date hereof issued by Debtor as
maker and payable to the order of Eastlake in the principal amount of $1,500,000
(the "Note") (in such capacity, "Collateral Agent") and as "Agent" as such term
is defined in that certain Credit Agreement, dated as of the date hereof,
between Debtor and Eastlake (as may be modified, supplemented or amended from
time to time, the "Credit Agreement").
RECITALS
A. Pursuant to the Note, the Credit Agreement and the
documents, instruments, and agreements executed by Debtor
in connection therewith (as amended, extended, or replaced
from time to time, the "Credit Documents"), the Agent
extended credit to Debtor on the terms and subject to the
conditions set forth more particularly therein
(Capitalized terms not otherwise defined herein are used
with the same meanings as in the Credit Documents).
B. To induce the Collateral Agent to extend such credit,
Debtor has agreed to pledge and to grant to Collateral
Agent, a security interest in and lien upon certain
property of Debtor described more particularly herein.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Appointment
Eastlake has agreed to serve as the secured party
(Collateral Agent) for the benefit of itself and the various holders of
beneficial interests in the Note, and for the convenience of all such persons
and the Borrower, and Borrower accepts and acknowledges Eastlake's
appointment as the secured party (Collateral Agent).
2. Grant of Security Interest
Debtor hereby pledges and grants to Collateral Agent a
security interest in the property described in paragraph 3 (collectively and
severally, the "Collateral") to secure payment and performance of the
obligations described in paragraph 4 (collectively and severally, the
"Obligations").
3. Collateral
The Collateral shall consist of all of the following:
a. Accounts, Etc. All present and future accounts,
and other rights of Debtor to the payment of
money no matter how evidenced, all chattel
paper, instruments, and other writings
evidencing any such right, and all goods
repossessed or returned in connection therewith.
b. Inventory. All inventory of Debtor, now owned or
hereafter acquired, and all raw materials, work
in process, materials used or consumed in
Debtor's business and finished goods, together
with all additions and accessions thereto and
replacements therefor, and products thereof.
c. Equipment. All equipment of Debtor, now owned or
hereafter acquired, including, without
limitation, all machinery, tools, dies,
blueprints, catalogues, computer hardware, and
software, furniture, furnishings, and fixtures.
d. Documents and Instruments. All documents and
instruments of Debtor, now owned or hereafter
acquired.
e. General Intangibles, Etc. All now existing or
hereafter acquired general intangibles of every
nature, all tax refunds, permits, regulatory
approvals, copyrights, patents, trademarks,
service marks, trade names, mask works, good
will, licenses, all other intellectual property
owned by Debtor or used in Debtor's business and
the right to xxx for all past, present and
future infringement of the foregoing.
f. Securities. All securities, now owned or
hereafter acquired, of the corporation(s) listed
on Exhibit D to the Credit Agreement (each an
"Issuer"), and all new substituted and
additional documents, instruments, and general
intangibles issued with respect thereto
(collectively and severally, the "Pledged
Shares") and all now existing and hereafter
arising rights of the holder of the
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Pledged Shares, including, without limitation,
all voting and rights to and interest in all
cash and noncash dividends and all other
property now or hereafter distributable on
account of or receivable with respect to any of
the foregoing.
g. Deposit Accounts. All deposit accounts, now
existing or hereafter arising, maintained in
Debtor's name with any financial institution and
any and all funds at any time held therein.
h. Property in Possession. All other property of
Debtor now or hereafter in the possession,
custody, or control of any Agent, including,
without limitation, all deposit accounts of
Debtor maintained with any Agent, and all
property of Debtor in which Collateral Agent now
has or hereafter acquires a security interest
for the benefit of the Agent.
i. Books and Records. All now existing and
hereafter acquired books and records relating to
the foregoing Collateral and all equipment
containing such books and records (including,
without limitation, computer data, and storage
media).
j. Proceeds. All proceeds (whether cash or
non-cash) of the foregoing Collateral. For
purposes of this Security Agreement, the term
"proceeds" includes whatever is receivable or
received when Collateral or proceeds is sold,
collected, exchanged, or otherwise disposed of,
whether such disposition is voluntary or
involuntary, and includes, without limitation,
all rights to payment, including return
premiums, with respect to any insurance relating
thereto.
4. Obligations
The Obligations secured by this Security Agreement shall consist of any and all
debts,obligations, and liabilities of Debtor to the Collateral Agent arising out
of or related to the Credit Documents (whether principal, interest, fees or
otherwise, whether now existing or hereafter arising, whether voluntary or
involuntary, whether or not jointly owed with others, whether direct or indirec
, absolute or contingent, contractual or tortious, liquidated or unliquidated,
arising by operation of law or otherwise, whether or not from time to time
decreased or extinguished and later increased, created or incurred and
whether or not extended, modified, rearranged, restructured, refinanced, or
replaced, including without limitation, modifications to interest rates or
other payment terms of such debts, obligations, or liabilities).
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5. Representations and Warranties
In addition to any representations and warranties of Debtor set forth in the
Credit Documents, which are incorporated herein by this reference, each Debto
hereby represents and warrants that:
a. Authority. It has authority, and has completed
all proceedings and obtained all approvals and
consents necessary, to execute, deliver, and
perform this Security Agreement and the
transactions contemplated hereby.
b. No Default or Lien. Such execution, delivery,
and performance will not contravene, or
constitute a default under or result in a lien
upon any property of Debtor pursuant to any
applicable law or regulation or any contract,
agreement, judgment, order, decree, or other
instrument binding upon or affecting Debtor.
c. Enforceability. This Security Agreement
constitutes a legal, valid, and binding
obligation of Debtor, enforceable in accordance
with its terms (except as enforceability may be
affected by bankruptcy, insolvency, or other
similar laws affecting the enforcement of
creditor's rights), and this Security Agreement
grants to Collateral Agent a valid,
first-priority perfected, and enforceable lien
on the Collateral.
d. No Litigation. Except as disclosed in Exhibit C
to the Credit Agreement, there is no action,
suit, or proceeding pending or, to the best
knowledge of Debtor after reasonable
investigation, threatened against Debtor which
might adversely affect its property or financial
condition in any material respect.
e. Ownership of Collateral. Debtor is the sole
owner of and has good and marketable title to
the Collateral (or, in the case of
after-acquired Collateral, at the time the
Debtor acquires rights in the Collateral, will
be the sole owner thereof) and is the record and
beneficial owner of any Pledged Shares.
f. Priority. Except for security interests in favor
of Collateral Agent and those reflected on
Exhibit E to the Credit Agreement, no person has
(or, in the case of after-acquired Collateral,
at the time Debtor acquires rights therein, will
have) any right, title, claim, or interest (by
way of security interest or other lien or
charge) in, against or to the Collateral.
g. Accuracy of Information. All information
heretofore, herein or hereafter supplied to
Collateral Agent by or on behalf of Debtor with
respect to the Collateral is true and correct.
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h. Delivery of Documents, Etc. Debtor has delivered
to Collateral Agent all instruments, documents,
chattel paper, and other items of Collateral in
which a security interest is or may be perfected
by possession, the certificate of title with
respect to each motor vehicle, if any, included
in the Collateral, and any certificated Pledged
Shares together with such additional writings,
including, without limitation, assignments and
stock powers, with respect thereto as Collateral
Agent shall request.
i. Enforceability Against Account Debtors. Each
account, contract right, item of chattel paper,
instrument, or any other right to the payment of
money constituting Collateral is genuine and
enforceable in accordance with its terms against
the party obligated to pay the same (an "Account
Debtor"), which terms have not been modified or
waived in any respect or to any extent.
j. Amount Due From Account Debtors. Any amount
represented by Debtor to Collateral Agent as
owning by any Account Debtor is the correct
amount actually and unconditionally owing by
such Account Debtor.
k. No Account Debtor Defense. No Account Debtor has
any defense, setoff, claim, or counterclaim
against Debtor that can be asserted against
Collateral Agent, whether in any proceeding to
enforce Collateral Agent's rights in the
Collateral, or otherwise.
l. Pledged Shares. The Pledged Shares, if any, in
the aggregate constitute all of the issued and
outstanding shares of the Issuer thereof, have
been validly issued and are fully paid and
nonassessable; there are no outstanding options,
warrants or other agreements with respect
thereto.
6. Covenants and Agreements of Debtor
In addition to all covenants and agreements of Debtor set forth in the Credit
Documents, which are incorporated herein by this reference, Debtor hereby
agrees:
a. Preservation of Collateral. To do all acts that
may be necessary to maintain, preserve, and
protect the Collateral.
b. Use of Collateral. Not to use or permit any
Collateral to be used unlawfully or in violation
of any provision of this Security Agreement, any
other agreement with Collateral Agent related
hereto or any applicable statute, regulation, or
ordinance or any policy of insurance covering
the Collateral.
c. Payment of Taxes, Etc. To pay promptly when due
all taxes, assessments, charges, encumbrances,
and liens now or hereafter imposed upon or
affecting any Collateral.
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d. Defense of Litigation. To appear in and defend
any action or proceeding which may affect its
title to or Collateral Agent's interest in the
Collateral.
e. Possession of Collateral. Not to surrender or
lose possession of (other than to Collateral
Agent), sell, encumber, lease, rent,or otherwise
dispose of or transfer any Collateral or right
or interest therein except as hereinafter
provided, and to keep the Collateral free of all
levies and security interests or other liens or
charges except those approved in writing by
Collateral Agent; provided that, unless an Event
of Default shall occur, Debtor may, in the
ordinary course of business, sell, or lease any
Collateral consisting of inventory.
f. Compliance With Law. To comply with all laws,
regulations, and ordinances relating to the
possession, operation, maintenance, and control
of the Collateral.
g. Standard of Care by Secured Party. That such
care as Collateral Agent gives to the
safekeeping of its own property of like kind
shall constitute reasonable care of the
Collateral when in Collateral Agent's
possession.
h. Delivery of After-Acquired Xxxxxxxxxx.Xx account
fully for and promptly deliver to Collateral
Agent, in the form received, all documents,
chattel paper, instruments, and agreements
constituting Collateral hereunder and all
proceeds of the Collateral received, all
endorsed to Collateral Agent or in blank, as
requested by Collateral Agent, and accompanied
by such stock powers as appropriate and until so
delivered all such documents, instruments,
agreements, and proceeds shall be held by Debtor
in trust for the Agent, separate from all other
property of Debtor.
i. Maintenance of Records. To keep separate,
accurate, and complete records of the Collateral
and to provide Collateral Agent with such
records and such other reports and information
relating to the Collateral as Collateral Agent
may request from time to time.
j. Further Assurances. To procure, execute, and
deliver from time to time any edorsements,
notifications, registrations, assignments,
financing statements, certificates of title,
ship mortgages, aircraft mortgages, copyright
mortgages, assignments or mortgages of patents,
mortgages of mask works, mortgages for filing
pursuant to the Interstate Commerce Act, and
other writings deemed necessary or appropriate
by Collateral Agent to perfect, maintain, and
protect its security interest in the Collateral
hereunder and the priority thereof; and to
take such other actions as Collateral Agent may
request to protect the value of the Collateral
and of Collateral Agent's security interest in
the Collateral, including, without limitation,
provision of assurances from third parties
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regarding Collateral Agent's access to, right to
foreclose on or sell, Collateral, and right to
realize the practical benefits of such
foreclosure or sale.
k. Payment of Secured Party's Costs and Expenses.
To reimburse Collateral Agent upon demand for
any costs and expenses, including, without
limitation, attorney fees and disbursements,
Collateral Agent may incur while exercising any
right, power, or remedy provided by this
Security Agreement or by law, all of which costs
and expenses are included in the Obligations.
l. Notification Regarding Certain Types of
Collateral. To promptly notify Collateral Agent
of inclusion in the Collateral after the date
hereof of any aircraft, watercraft or vessels,
railroad cars, railroad equipment, locomotives
or other rolling stock intended for a use
related to interstate commerce, tradenames,
trademarks, service marks, mask works,
copyrights, patents, fixtures, or uncertificated
securities.
m. Notice of Changes. To give Collateral Agent
thirty (30) days prior written notice of any
change in Debtor's residence or chief place of
business or legal name or trade name(s) or
style(s) set forth in the penultimate paragraph
of this Security Agreement.
n. Location of Records. To keep the records
concerning the collateral at the location(s) set
forth in the penultimate paragraph of this
Security Agreement and not to remove such
records from such location(s) without the prior
written consent of the Collateral Agent.
o. Insurance. To insure the Collateral, with
Collateral Agent named as loss payee, in form
and amounts, with companies, and against risks
and liabilities satisfactory to Collateral
Agent, and Debtor hereby assigns the policies to
Collateral Agent, agrees to deliver them to
Collateral Agent at its request, and agrees that
Collateral Agent may make any claim thereunder,
cancel the insurance on default by Debtor,
collect and receive payment of and endorse any
instrument in payment of loss or return premium
or other refund or return, and apply such
amounts received, at Collateral Agent's election
, to replacement of Collateral or to the
Obligations.
p. Dividends on Pledged Shares. To account fully
for and promptly deliver to Collateral Agent, in
the form received, any dividend or any other
distribution on account of the Pledged Shares
whether in securities or property by way of
stock-split, spin-off, split-up, or
reclassification, combination of shares or the
like, or in case of any reorganization,
consolidation, or merger; provided, however,
that until there shall have occurred an Event of
Default, Debtor shall be entitled to retain any
cash dividends paid on account of the Pledged
Shares out of retained earnings of the Issuer.
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q. Care for Collateral by Debtor. To keep the
Collateral in good condition and repair and not
to cause or permit any waste or unusual or
unreasonable depreciation of the Collateral.
r. Inspection by Secured Party. At any reasonable
time, upon demand by Collateral Agent, to
exhibit to and allow inspection by Collateral
Agent of the Collateral.
s. Location of Collateral. To keep the Collateral
at the location(s) set forth below and not to
remove the Collateral from such location(s)
without the prior written consent of Collateral
Agent.
7. Authorized Action by Secured Party
Debtor hereby agrees that from time to time after the occurrence of a Potential
Default or Event of Default, without presentment, notice or demand, and without
affecting or impairing in any way the rights of Collateral Agent with respect to
the Collateral, the obligations of the Debtor hereunder or the Obligations,
Collateral Agent may, but shall not be obligated to and shall incur no liability
to Debtor, or any third party for failure to take any action which Debtor is
obligated by this Security Agreement to do and to exercise such rights and
powers as Debtor might exercise with respect to the Collateral, and Debtor
hereby irrevocably appoints Collateral Agent as its attorney-in-fact to exercise
such rights and powers, including without limitation, to (a) collect by legal
proceedings or otherwise and indorse, receive, and receipt for all dividends,
interest, payments, proceeds, and other sums and property now or hereafter
payable on or on account of the Collateral; (b) enter into any extension,
reorganization, deposit, merger, consolidation, or other agreement pertaining
to, or deposit, surrender, accept, hold, or apply other property in exchange for
the Collateral; (c) insure, process, and preserve the Collateral; (d) transfer
the Collateral to its own or its nominee's name; (e) make any compromise or
settlement, and take any action it deems advisable, with respect to the
Collateral; and (f) notify any Account Debtor on any Collateral to make payment
directly to Collateral Agent.
8. Default
A default under this Security Agreement shall be deemed to
exist upon the occurrence
of any of the following (an "Event of Default"):
a. Default in Payment. Any of the Obligations shal
not be paid when due.
b. Default under Credit Documents. Debtor shall
fail to observe any other term or condition of
the Credit Documents or there shall otherwise
occur any event which would permit the Agent to
accelerate amounts outstanding thereunder.
c. Debtor's Bankruptcy. Either a court shall enter
a decree or order for relief in respect of
Debtor in an involuntary case under any
applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or
appointing a
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receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of
Debtor or for any substantial part of its
property, or ordering the winding up or
liquidation of its affairs, and such decree or
order shall remain unstayed and in effect for a
period of sixty (60) consecutive days or Debtor
shall commence a voluntary case under any
applicable bankruptcy, insolvency, or other
similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in
any voluntary case under any such law, or shall
consent to the appointment of or taking
possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or similar
official) of Debtor or for any substantial part
of its property, or shall make any general
assignment for the benefit of creditors, or
shall fail generally to pay its debts as they
become due or shall take any action in
furtherance of the foregoing.
d. Judgment Against Debtor. A final judgment for
the payment of money in excess of $50,000 shall
be rendered against Debtor and Debtor shall not
pay or discharge the same or cause it to be paid
or discharged within ninety (90) calendar days
from the entry thereof, or shall not appeal
therefrom or from the order, decree, or process
upon or pursuant to which said judgment was
granted, based or entered, and secure a stay of
execution pending such appeal.
e. Misrepresentation by Debtor. Any representation
or warranty by Debtor hereunder, under any
Credit Document or otherwise made by Debtor in
connection with the Obligations shall be
inaccurate or incomplete in any material respect
as of the date made.
9. Remedies
Upon the occurrence of any such Event of Default, Collateral Agent may, at its
option, and without notice to or demand on Debtor and in addition to all rights
and remedies available to it under the Credit Documents, at law, in equity or
otherwise, do any one or more of the following:
a. General Enforcement. Foreclose or otherwise
enforce Collateral Agent's security interest in
any manner permitted by law, or provided for in
this Security Agreement.
b. Sale, Etc. Sell, lease, or otherwise dispose of
any Collateral at one or more public or private
sales at Collateral Agent's place of business or
any other place or places, including, without
limitation, any broker's board or securities
exchange, whether or not such Collateral is
present at the place of sale, for cash or credit
or future delivery, on such terms and in such
manner as Collateral Agent may determine.
c. Costs of Remedies. Recover from Debtor all costs
and expenses, including, without limitation,
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Agent in exercising any right, power, or remedy
provided by this Security Agreement.
d. Assembly of Collateral. Require Debtor to
assemble the Collateral and make it available to
Collateral Agent at a place to be designated by
Collateral Agent.
e. Take Possession of Collateral. Enter onto
property where any Collateral is located and
take possession thereof with or without judicial
process.
f. Preparation of Collateral for Sale. Prior to the
disposition of the Collateral, store, process,
repair, or recondition it or otherwise prepare
it for disposition in any manner and to the
extent Collateral Agent deems appropriate and in
connection with such preparation and
disposition, without charge, use any trademark,
tradename, copyright, patent, or technical
process used by Debtor.
g. Vote of Pledged Shares. Vote or consent, and in
connection therewith Debtor grants to Collateral
Agent a proxy to vote or to consent, with
respect to Pledged Shares.
h. Manner of Sale of Pledged Shares. Restrict the
prospective bidders or purchasers of Pledged
Shares to persons or entities who (i) will
represent and agree that they are purchasing for
their own account, for investment, and not with
a view to the distribution or sale of any of the
Pledged Shares; and (ii) satisfy the offeree and
purchaser requirements for a valid private
placement transaction under Section 4(2) of the
Securities Act of 1933, as amended (the "Act"),
and/or under Regulation D promulgated by the
Securities and Exchange Commission under the Act
, or under any similar statute, rule, or
regulation. Debtor agrees that disposition of
the Pledged Shares pursuant to any private sale
made as provided above may be at prices and on
other terms less favorable than if the Pledged
Shares were sold at public sale, and that
Collateral Agent has no obligation to delay the
sale of any Pledged Shares for public sale under
the Act. Debtor agrees that a private sale or
sales made under the foregoing circumstances
shall be deemed to have been made in a
commercially reasonable manner. In the event
that Collateral Agent elects to sell the Pledge
Shares, or part of them, and there is a public
market for the Pledged Shares, in a public sale,
Debtor shall use its best efforts to register
and qualify the Pledged Shares, or applicable
part thereof, under the Act and all state Blue
Sky or securities laws required by the proposed
terms of sale, and all expenses thereof shall be
payable by Debtor, including, but not limited
to, all costs of (i) registration or
qualification of, under the Act or any state
Blue Sky or securities laws or pursuant to any
applicable rule or regulation issued pursuant
thereto, any Pledged Shares, and (ii) sale of
such Pledged Shares, including, but not limited
to, brokers' or underwriters' commissions,
fees or discounts, accounting and legal fees and
disbursements, costs of
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printing and other expenses of transfer and
sale. If any consent, approval, or authorization
of any state, municipal, or other governmental
department, agency, or authority shall be
necessary to effectuate any sale or other
disposition of Pledged Shares, or any part
thereof, Debtor will execute such applications
and other instruments as may be required in
connection with securing any such consent,
approval, or authorization, and will otherwise
use its best efforts to secure the same.
i. Manner of Sale of Collateral Other Than Pledged
Shares. Debtor shall be given ten (10) business
days' prior notice of the time and place of any
public sale or of the time after which any
private sale or other intended disposition of
Collateral other than Pledged Shares is to be
made, which notice Debtor hereby agrees shall be
deemed reasonable notice thereof.
j. Delivery to and Rights of Purchaser. Upon any
sale or other disposition pursuant to this
Security Agreement, Collateral Agent shall have
the right to deliver, assign, and transfer to
the purchaser thereof the Collateral or portion
thereof so sold or disposed of. Each purchaser
at any such sale or other disposition (includin
Collateral Agent) shall hold the Collateral free
from any claim or right of whatever kind,
including any equity or right of redemption of
Debtor and Debtor specifically waives (to the
extent permitted by law) all rights of
redemption, stay, or appraisal which it has or
may have under any rule of law or statute now
existing or hereafter adopted.
10. Financing Statements
Debtor agrees to assign and deliver to Collateral Agent such financing
statements, in form acceptable to Collateral Agent, as Collatera Agent may from
time to time deem reasonably necessary to establish and maintain a valid,
enforceable, first priority security interest in the Collateral as provided
herein and the other rights and security contemplated herein, all in accordance
with the Uniform Commercial Code as enacted in any and all relevantjurisdictions
or any other relevant law.Debtor will pay any applicable filing fees and related
reasonable expenses. Debtor authorizes Collateral Agent to file any such
financing statements without the signature of Debtor.
11. Indemnification
Debtor hereby agrees to indemnify and defend Collateral Agent and its agents,
officers, and employees and to hold Collateral Agent and its agents, officers
and employees harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements, (including, without limitation, attorney fees and special or
consequential damages) of any kind whatsoever which may at any time (including,
without limitation, at any time following the payment of the Obligations) be
imposed on, assessed against or incurred by Collateral Agent or its agents,
officers, and employees (excluding such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, or disbursements resulting
from the gross negligence or willful
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misconduct of Collateral Agent): (i) in any way relating to or arising out of
the Credit Documents or any documents contemplated by or referred to therein or
in the transactions contemplated thereby or any action taken or omitted to be
taken by Collateral Agent or its agents, officers and employees in connection
with the foregoing; or (ii) in any manner resulting from any action taken or
omitted to be taken by the Collateral Agent or its agents, officers and
employees with respect to the Collateral in accordance with the written
instruction of Debtor or the Collateral Agent given consistent with provisions
of the Credit Documents as permitted hereunder. The indemnification obligations
of Debtor under this paragraph 11 shall survive termination of this Security
Agreement and payment in full of the Obligations except to the extent claims for
which indemnification is sought are barred by applicable statutes of limitation.
12. Cumulative Rights
The rights, powers, and remedies of Collateral Agent under this Security
Agreement shall be in addition to all rights, powers, and remedies given to the
Collateral Agent by virtue of any statute or rule of law, the Credit Documents
or any other agreement, all of which rights, powers, and remedies shall be
cumulative and may be exercised successively or concurrently without impairing
Collateral Agent's security interest in the Collateral.
13. Waiver
Any waiver, forbearance, or failure or delay by Collateral Agent in exercising
any right, power, or remedy shall not preclude the further exercise thereof,
and every right, power or remedy of Collateral Agent shall continue in full
force and effect until such right, power, or remedy is specifically waived in a
writing executed by Collateral Agent. Debtor waives any right to require
Collateral Agent to proceed against any person or to exhaust any Collateral or
to pursue any remedy in Collateral Agent's power.
14. Binding Upon Successors
All rights of Collateral Agent under this Security Agreement shall inure to the
benefit of its successors and assigns, and all obligations of Debtor shall bind
its heirs, executors, administrators, successors, and assigns.
15. Entire Agreement; Severability
This Security Agreement and the Trademark Collateral Assignment and Security
Agreement dated the date hereof between Collateral Agent and Debtor, contains
the entire security agreement between Collateral Agent and Debtor. If any of the
provisions of this Security Agreement shall be held invalid or unenforceable,
this Security Agreement shall be construed as if not containing those provisions
and the rights and obligations of the parties hereto shall be construed and
enforced accordingly.
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16. References
The singular includes the plural. If more than one executes this Security
Agreement, the term Debtor shall be deemed to refer to each of the undersigned
Debtors as well as to all of them, and their obligations and agreements
hereunder shall be joint and several.
17. Choice of Law
This Security Agreement shall be construed in accordance with and governed by
the laws of Ohio, without giving effect to choice of law rules, and, where
applicable and except as otherwise defined herein, terms used herein shall have
the meanings given them in the Uniform Commercial Code of such state.
18. Amendment
This Security Agreement may not be amended or modified except by a writing
signed by each of the parties hereto.
19. Residence; Collateral Location Records
Debtor represents that its residence or chief place of business is as set forth
in the Credit Agreement; that "Quality Products" and "Multipress" constitute the
only trade name(s) or style(s) used by Debtor; and that, except as otherwise
disclosed to Collateral Agent in writing prior to the date hereof, the
Collateral and Debtor's records concerning the Collateral are located at its
chief place of business.
20. Notices
All notices and communications hereunder shall be made at the addresses, in the
manner and with the effect provided in paragraph 9(f) of the Credit Agreement.
21. Execution in Counterparts
This Security Agreement may be executed in counterparts each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement.
22. Warranty of Attorney
The undersigned, who if two or more in number, jointly and
severally, hereby irrevocably authorizes any attorney-at-law to appear in any
court of record in the State of Ohio or in any other state or territory of the
United States (other than any court in which utilization of this warrant of
attorney would be contrary to law) at any time after the Note becomes due,
whether by lapse of time, acceleration or otherwise, to waive the issuance and
service of process, to admit maturity and nonpayment of the indebtedness
evidenced by the Note, and to confess judgment against the undersigned (or any
of them) in favor of Collateral Agent for the amount then appearing due,
together with interest, expenses, the costs of suit and reasonable counsel
fees, and thereupon to release and waive all errors, rights of appeal and stays
of execution. The foregoing warrant of attorney shall survive the judgment.
Should any judgment be vacated for any reason, the foregoing warrant of attorney
nevertheless may thereafter be utilized for obtaining additional udgment or
judgments. Such authority shall not be exhausted by one exercise, but
judgment may be confessed from time to time as any sums and/or costs, expenses,
or reasonable counsel fees shall be due, by filing an original or a photostatic
copy of the Note. The undersigned hereby waives all relief from any and all
appraisement or exemption laws now in force or hereafter enacted. The
undersigned agrees that Collateral Agent's attorney may confess judgment
pursuant to the foregoing warranty of attorney. The undersigned further agrees
that the attorney confessing judgment pursuant to the foregoing warrant of
attorney may receive a legal fee or other compensation from the Collateral Agent
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IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be executed as of the day and year first above written.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO
NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED
TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR
WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
DEBTOR: QPI MULTIPRESS, INC.
/s/ Xxxxx X. Xxxxxx
By:-----------------------------
Xxxxx X. Xxxxxx
President
DEBTOR: QUALITY PRODUCTS, INC.
/s/ Xxxxx X. Xxxxxx
By:------------------------------
Xxxxx X. Xxxxxx
President
COLLATERAL AGENT: EASTLAKE SECURITIES, INC.
/s/ Xxxxxx Xxxxxxxxx
By:------------------------------
Xxxxxx Xxxxxxxxx
President
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO
NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED
TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR
WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
14