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EXHIBIT 8
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NON-CASH COLLATERAL SECURITY AGREEMENT
This agreement is made effective January 10, 1997, at Columbus, Ohio,
between Crown NorthCorp, Inc., a Delaware corporation ("Debtor"), having its
principal place of business at 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 and The
Fifth Third Bank of Columbus, an Ohio banking corporation ("Secured Party"),
having its principal place of business at 00 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx
00000, who hereby agree as follows:
Section 1. Grant of Security Interest. To secure the payment of all of
the Obligations (defined in Section 2, below), including without limitation all
of the Notes (defined in Section 2,below), Debtor grants to Secured Party a
security interest in, and pledges, assigns, and transfers to Secured Party, all
of Debtor's rights, title, and interests in and to all of the foregoing
(collectively referred to hereinafter as, the "Collateral"):
(a) All of Debtor's machinery, equipment, tools, furniture,
furnishings and fixtures including, but not limited to, all
manufacturing, fabricating, processing, transporting and packaging
equipment, power systems, heating, cooling and ventilating systems,
lighting and communications systems, electric, gas and water
distribution systems, food service systems, fire prevention, alarm and
security systems, laundry systems and computing and data processing
systems, excepting Debtor's leasehold interest in any of the above
("Equipment"); all of Debtor's inventory, including, but not limited
to, parts, supplies, raw materials, work in process, finished goods,
materials used or consumed in Debtor's business, repossessed and
returned goods (hereinafter the "Inventory"); all of Debtor's accounts,
accounts receivable, contract rights, guaranties of accounts, accounts
receivable and contract rights and security therefor, chattel paper,
income tax refunds, instruments, negotiable documents, notes, drafts,
acceptances and other forms of obligations and receivables arising from
or in connection with the operation of Debtor's business including, but
not limited to, those arising from or in connection with Debtor's sale,
lease or other disposition of the Inventory (hereinafter the
"Receivables"); and all books, records, ledger cards, computer programs
and other documents or property at any time evidencing or relating to
the Receivables; all of Debtor's general intangibles, trade names,
trademarks, trade secrets, goodwill, patents, patent applications,
copyrights, deposit accounts, licenses and franchises; and any and all
deposits or other sums at any time credited by or due from the Secured
Party to the Debtor, any and all policies, certificates of insurance,
securities, goods, accounts receivable, choses in action, cash,
property and the proceeds thereof owned by the Debtor or in which the
Debtor has an interest, which now or hereafter are at any time in the
possession or control of the Secured Party or in transit by mail or
carrier to or from the Secured Party, or in the possession of any third
party acting in the Secured Party's behalf, without regard to whether
the Secured Party received the same in pledge for safekeeping, as agent
for collection or transmission or otherwise, or whether the Secured
Party has conditionally released the same (all of the foregoing items
and types of property hereinafter the "Business Assets"); whether
Debtor's interests in the Business
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Assets as owner, co-owner, lessee, consignee, secured party or
otherwise be now owned or existing, or hereafter arising or acquired,
and wherever located, together with all substitutions, replacements,
additions and accessions therefor or thereto, all replacement and
repair parts therefor, all documents including, but not limited to,
negotiable documents, documents of title, warehouse receipts, storage
receipts, dock receipts, dock warrants, express bills, freight bills,
airbills, bills of lading and other documents relating thereto, all
products thereof and all cash and non-cash proceeds thereof including,
but not limited to, notes, drafts, checks, instruments, insurance
proceeds, indemnity proceeds, warranty and guaranty proceeds and
proceeds arising in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Business
Assets by any governmental body, authority, bureau or agency (or any
person acting under color of governmental authority).
(b) Debtor's rights, title, and interests in and to the
Servicing Rights (as defined in the Intercreditor Agreement (defined in
Section 3, below));
(c) all servicing fees, termination fees, and proceeds from
the sale of servicing rights in the Acquired Portfolios (as defined in
the Intercreditor Agreement) and in any refinanced Acquired Portfolios
now or hereafter acquired by Debtor;
(d) $2,257,387 certificate of deposit no. 94186095 held by
Fifth Third;
(e) $500,000 of Debtor's cash on deposit with Fifth Third in
money market account no. 00000000; and
(f) all payments on and proceeds of any of the foregoing
Collateral, and including all rights to payments under any insurance
policy or any warranty, guaranty, or indemnity, payable with respect to
any of the foregoing Collateral.
Section 2. Obligations Secured. This agreement is being made in
connection with the Loan Agreement dated this same date between Debtor and
Secured Party (the "Loan Agreement") and shall secure all obligations of Debtor
to Secured Party, including without limitation all obligations arising under
(collectively, the "Obligations"): (a) the $500,000 Note, the $1,381,286 Note,
and the LC Note (all as defined in the Loan Agreement and collectively, the
"Notes"); (b) the Loan Agreement; (c) all of Debtor's obligations under the
other Loan Documents (as defined in the Loan Agreement); and (d) any other
indebtedness to Secured Party, whether or not any such obligations are now or
hereafter evidenced by promissory notes or other documents and irrespective of
any guarantees or other security now or hereafter given for any such
obligations.
Section 3. Representations and Warranties. Debtor represents and
warrants to Secured Party that: (a) other than the Huntington Liens (defined
below), Debtor owns all of the Collateral free and clear of all leases, security
interests, liens, encumbrances, charges, liabilities, or claims of any nature,
except the security interest created by this agreement; (b) other than financing
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statements relating to the Huntington Liens, a complete list of which is set
forth in the Exhibit A attached to this agreement, no financing statements
covering all or any part of the Collateral are on file with the Secretary of
State of any state, the recorder of any county, or any other recording office;
(c) this agreement, along with the Intercreditor Agreement among Debtor, Secured
Party, and The Huntington National Bank dated this same date (the "Intercreditor
Agreement"), creates a (i) valid first-priority security interest in the
Servicing Rights, all servicing fees, termination fees, and proceeds from the
sale of servicing rights in the Mortgages and in any refinanced Mortgages now or
hereinafter acquired by Debtor, and (ii) a valid second-priority security
interest in all of the Collateral other than the collateral described in Section
3(c)(i), above, both of which secure the payment of the Obligations; and (d) all
filings or other actions necessary or desirable to perfect and protect such
security interests have been duly made or taken or shall be duly made or taken
immediately upon execution of this agreement. For purposes of this agreement,
the "Huntington Liens" shall mean the first-priority security interests and
liens of The Huntington National Bank in all of the business assets of Debtor,
as modified by the Intercreditor Agreement, which are security for the HNB
Indebtedness (as defined in the Intercreditor Agreement). Debtor warrants
further that it will cause all of the Huntington Liens to be terminated and
released of record, to Secured Party's satisfaction, on or before June 1, 1997.
Section 4. Location of Office and Collateral. Debtor warrants that: (a)
Debtor's principal office and principal place of business in the State of Ohio
is located at the address specified at the beginning of this agreement (the
"Principal Office"); (b) Debtor's principal office and principal place of
business in the States of Georgia, Texas, New Jersey, Virginia, and Missouri are
located at the respective addresses specified on the Exhibit B attached to this
agreement (each, a "State Office"); (c) Debtor will not change the location of
the Principal Office in Ohio or the location of the State Office in each of
those states listed in (b), above, without the giving of written notice to
Secured Party not less than 15 days prior to any such change.
Section 5. Use of Collateral. Except in connection with the ordinary
and usual course of its business, Debtor shall not sell, assign, pledge, or
otherwise transfer or encumber any Collateral.
Section 6. Financing Statements. Debtor hereby irrevocably authorizes
Secured Party or Secured Party's designees to execute on behalf of Debtor such
one or more financing statements, continuation statements, or amendments
thereto, and such other instruments or notices as Secured Party may consider
necessary or desirable to perfect, protect, or preserve the security interest
granted or purported to be granted by this agreement.
Section 7. Execution of Documents. Debtor shall execute any documents
and take any other actions requested by Secured Party from time to time to
perfect or protect the security interest granted or purported to be granted by
this agreement or to enable Secured Party to exercise or enforce its rights or
remedies under this agreement.
Section 8. Event of Default. Upon the occurrence of an Event of Default
(as defined in the Loan Agreement), Secured Party may exercise, subject to the
Intercreditor Agreement, with
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respect to the Collateral all rights and remedies of a secured party upon
default under the Uniform Commercial Code as adopted and set forth in the Ohio
Revised Code (including without limitation Chapter 1309, Ohio Revised Code) and
all other rights and remedies under this agreement or otherwise available to
Secured Party. In any action or proceeding to enforce its rights or remedies
under this agreement, Secured Party shall be entitled forthwith to immediate
exclusive possession and control of the Collateral and to receive directly all
payments due or otherwise being made on any of the Collateral, and, upon ex
parte application by Secured Party to any court of competent jurisdiction
without notice to Debtor, shall be entitled to an order giving such immediate
exclusive possession and control to Secured Party or, if Secured Party so
elects, to an order appointing a receiver for the Collateral and without any
requirement of bond or other security and without any showing that immediate or
irreparable injury, loss, or damage will result if such an order is not issued
by that court. For purposes of this agreement, notice to Debtor prior to the
date of public sale of any Collateral or five days prior to the date after which
private sale or other disposition of any Collateral will be made shall
constitute reasonable notice of any such sale.
All proceeds received by the Secured Party from (A) payments due or
otherwise made on any of the Collateral, including without limitation proceeds
from the collection of Debtor's accounts receivable, and (B) the sale of any of
the Collateral shall be distributed subject to the Intercreditor Agreement to
the Secured Party.
Section 9. Notices. All notices and other communications under this
agreement to be made to either Secured Party or Debtor shall be in writing and
shall be deemed given when delivered personally, telecopied (which is confirmed
electronically), or mailed by certified mail (return receipt requested) or sent
by Federal Express, UPS, or other nationally recognized overnight delivery
service for overnight delivery to that party at the address for that party (or
at such other address for such party as such party shall have specified in
notice to the other party):
(a) If to Secured Party:
The Fifth Third Bank of Columbus
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxx
Telecopy No.: (000) 000-0000
With a copy to Secured Party's Counsel:
Xxxxx & Xxxxxxxxx LLP
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
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(b) If to Debtor:
Crown NorthCorp, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxx
Crown NorthCorp, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Telecopy No.: (000) 000-0000
Section 10. Governing Law. Except as to issues relating to perfection
of the security interests granted by Debtor to Secured Party in states other
than Ohio, which shall be construed and resolved under the laws of such other
state, all questions concerning the validity or meaning of this agreement or
relating to the rights and obligations of the parties with respect to
performance under this agreement shall be construed and resolved under the laws
of Ohio.
Section 11. Severability. The intention of the parties to this
agreement is to comply fully with all laws and public policies, and this
agreement shall be construed consistently with all laws and public policies to
the extent possible. If and to the extent that any court of competent
jurisdiction determines it is impossible to construe any provision of this
agreement consistently with any law or public policy and consequently holds that
provision to be invalid, such holding shall in no way affect the validity of the
other provisions of this agreement, which shall remain in full force and effect.
Section 12. Venue. The parties to this agreement hereby designate the
Court of Common Pleas of Franklin County, Ohio, as a court of proper
jurisdiction and exclusive venue for any actions or proceedings relating to this
agreement; hereby irrevocably consent to such designation, jurisdiction, and
venue; and hereby waive any objections or defenses relating to jurisdiction or
venue with respect to any action or proceeding initiated in the Court of Common
Pleas of Franklin County, Ohio.
Section 13. Nonwaiver. No failure by either party to insist upon
compliance with any term of this agreement or to exercise any option, enforce
any right, or seek any remedy upon any default of either party shall affect or
constitute a waiver of the first party's right to insist upon such strict
compliance, exercise that option, enforce that right, or seek that remedy with
respect to that default or any prior, contemporaneous, or subsequent default;
nor shall any custom or practice of the parties at variance with any provision
of this agreement affect, or constitute a waiver of, either party's right to
demand strict compliance with the provisions of this agreement.
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Section 14. No Third Party Benefit. This agreement is intended for the
exclusive benefit of the parties to this agreement and their respective heirs,
successors, and assigns, and nothing contained in this agreement shall be
construed as creating any rights or benefits in or to any third party.
Section 15. Jury Trial Waiver. Debtor, after consulting or having the
opportunity to consult with legal counsel, knowingly, voluntarily and
intentionally waives any right it may have to a trial by jury in any action or
proceeding based upon or arising out of this agreement or any of the Loan
Documents or any course of conduct, dealings, statements, whether oral or
written, or actions of either party. Debtor shall not seek to consolidate, by
counterclaim or otherwise, any action in which a jury trial has been waived with
any other action in which a jury trial cannot be or has not been waived.
Section 16. Complete Agreement. This agreement (including any exhibits
and any documents incorporated into this agreement by reference) contains the
entire agreement among the parties and supersedes any prior agreements,
negotiations, representations, or discussions among them with respect to the
subject matter of this agreement. No additions or other changes to this
agreement shall be binding upon either party unless made in writing and signed
by both parties.
Section 17. Counterparts. This agreement may be executed in multiple
counterparts, and all such executed counterparts shall constitute one original
agreement, binding on all of the parties, whether or not both of the parties
have executed the same counterparts and whether or not the signature pages from
different counterparts have been combined, and the signature of any party to any
counterpart shall be deemed to be that party's signature to any other
counterpart and may be appended to any other counterpart.
Section 18. Captions. The captions of the various sections of this
agreement are not part of the context of this agreement, but are only labels to
assist in locating those sections, and shall be ignored in construing this
agreement.
Section 19. Survival. All agreements, obligations, warranties, and
representations under this agreement shall survive any modifications made by
either party to this agreement.
Section 20. Genders and Numbers. When permitted by the context, each
pronoun used in this agreement includes the same pronoun in other genders or
numbers and each noun used in this agreement includes the same noun in other
numbers.
Section 21. Successors. This agreement shall be binding upon, inure to
the benefit of, and be enforceable by and against the respective heirs, personal
representatives, successors and assigns of each party to this agreement.
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Section 22. Cumulative Effect. This agreement is intended as additional
security to Secured Party and does not supersede, waive, or otherwise affect any
other security interests, guarantees, or other agreements between Secured Party
and Debtor.
CROWN NORTHCORP, INC. THE FIFTH THIRD BANK OF
COLUMBUS
By: /s/Xxxxxxx X. Xxxxx By: /s/Xxxxxxx X. Xxxx
---------------------------- ------------------------
Print Name: Xxxxxxx X. Xxxxx Xxxxxxx X . Xxxx
Its: Secretary Vice President
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EXHIBIT A
A. Ohio
1. Xxxxxxxxx xx Xxxxx
- Xxxxxxxxx Xxxxxxxxx Xx. XX00000; Dated 6/29/95
2. Franklin County Recorder
- Financing Statement No. 021339; Dated 6/29/95
B. GEORGIA
1. Georgia Statewide UCC Index
- Financing Statement No. 060199513243; Dated 7/17/95
C. New Jersey
1. Xxxxxxxxx xx Xxxxx
- Xxxxxxxxx Xxxxxxxxx Xx. 0000000; Dated 7/10/95
2. Xxxxxx County Clerk
- Financing Statement No. 001124; Dated 7/3/95
D. Texas
1. Xxxxxxxxx xx Xxxxx
- Xxxxxxxxx Xxxxxxxxx Xx. 000000; Dated 7/3/95
2. Xxxxxx Xxxxxx Xxxxx
- Xxxxxxxxx Xxxxxxxxx Xx. 000000; Dated 7/5/95
E. Washington D.C.
1. D.C. Recorder of Deeds
- Financing Statement No. 9500013601; Dated 7/17/95
00
XXXXXXX X
0. Xxxxxxx, Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
2. Austin, Texas Office
Prime TEMPUS
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx,XX 00000
3. Dallas, Texas Office
Park Central VII
00000 Xxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
4. Columbus, Ohio Xxxxxx
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
5. Hoboken, New Jersey Xxxxxx
0 Xxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
6. McLean, Virginia Xxxxxx
x/x Xxxxxxx Xxxxxx
Xxxxx 000
0000 Xxxxxxxxxx Xxxx
XxXxxx, XX 00000
