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EXHIBIT 10.26
SECURITY AGREEMENT
This security agreement ("Agreement") is made and entered into as of
June __, 1996, by NEW WEST EYEWORKS, INC., a Delaware corporation ("Borrower"),
for the benefit of U. S. BANK OF WASHINGTON, NATIONAL ASSOCIATION, a national
banking association ("U. S. Bank").
R E C I T A L S :
A. Concurrently with the execution hereof, U. S. Bank and Borrower
entered into a credit agreement (together with all supplements, exhibits, and
amendments thereto, referred to as the "Credit Agreement"), pursuant to which U.
S. Bank agreed to extend to Borrower credit facilities as more fully described
therein (the "Loan").
B. Borrower wishes to grant to U. S. Bank a security interest in all
its assets (excluding equipment and leasehold improvements) as security for all
the Secured Obligations.
NOW, THEREFORE, in order for U. S. Bank to make the Loan, Borrower
agrees as follows:
ARTICLE I. DEFINITIONS
Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meanings when used herein. For the purposes of this
Agreement, the following terms shall have the following meanings:
"Accounts" means any right to payment for goods sold or leased or for
services rendered that is not evidenced by an Instrument or Chattel Paper,
whether or not it has been earned by performance.
"Account Debtor" means the party who is obligated on or under any
Account, Chattel Paper, or General Intangible.
"Assignee Deposit Account" shall have the meaning set forth in SECTION
5.7 hereof.
"Chattel Paper" means all interest of Borrower in writings that
evidence both a monetary obligation and a security interest in or a lease of
specific goods, including any group of writings consisting of both a security
agreement or a lease and an Instrument or series of Instruments.
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"Collateral" means all property, real, personal, and mixed, tangible
and intangible, wherever located, now owned or hereafter acquired by Borrower,
or in which Borrower has or later obtains an interest, and all products,
profits, rents, and proceeds of such property, including but not limited to
Accounts, Chattel Paper, Deposit Accounts, Documents, Financial Assets, General
Intangibles, Goods, Instruments, Inventory, Investment Property, and Trademarks,
but excluding furniture, fixtures, and equipment.
"Deposit Account" means a demand, time, savings, passbook, or like
account maintained with a bank, savings and loan association, credit union, or
like organization, other than an account evidenced by a certificate of deposit.
"Documents" means all of Borrower's right, title, and interest in or to
any document of title as defined in RCW 62A.1-201 and any receipt of the kind
described in RCW 62A.7-201(2).
"Event of Default" means an occurrence of an Event of Default as
defined in the Credit Agreement.
"Financial Assets" means all of Borrower's right, title, and interest
in and to any financial asset as defined in RCW 62A.8-102.
"General Intangibles" means all personal property (including things in
action) other than Goods, Accounts, Chattel Paper, Documents, Financial Assets,
Instruments, Investment Property, and money, including but not limited to all
Trademarks, insurance proceeds, patents, copyrights, trade names, trade secrets,
goodwill, registration, license rights, licenses, permits, corporate and other
business records, rights to refunds or indemnification, and all other intangible
personal property of Borrower of every kind and nature.
"Goods" means all things that are movable or that are fixtures, not
including money, Documents, Financial Assets, Instruments, Accounts, Chattel
Paper, Investment Property, or General Intangibles.
"Instrument" means any negotiable instrument or other writing that
evidences a right to the payment of money and is not itself a security agreement
or lease and is of a type that is in the ordinary course of business transferred
by delivery with any necessary endorsement or assignment.
"Inventory" means all Goods held by Borrower for sale or lease,
furnished or to be furnished by Borrower under any contract of service, or held
by Borrower as raw materials, work in progress, or materials used or consumed in
Borrower's business.
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"Investment Property" means all of Borrower's right, title, and
interest in and to any investment property as defined in RCW 62A.9-115.
"Secured Obligations" means any past, present, or future Indebtedness
of Borrower to U. S. Bank, and includes but is not limited to (a) any
indebtedness, obligation, or liability of any kind arising in any way of
Borrower to U. S. Bank, now existing or hereafter created, under the Credit
Agreement, the Note, or the other Loan Documents, including any refinancing,
renewal, replacement, extension, amendment, or substitution of such
indebtedness, (b) any liability or obligation of Borrower hereunder, (c) the
obligations of Borrower under any guaranty executed by Borrower and delivered to
U. S. Bank, whereby Borrower guarantees the indebtedness of any Person other
than Borrower to U. S. Bank, and (d) any cost, expense, or liability, including
but not limited to reasonable attorney fees, that may be incurred and advances
that may be made by U. S. Bank in any way in connection with any of the
foregoing or any security therefor.
"Trademark" means (a) any trademark, trade name, corporate name,
company name, business name, fictitious business name, trade style, service
xxxx, logo or other source or business identifier, and the goodwill associated
therewith, now existing or hereafter adopted or acquired, any registration or
recording thereof, and any application in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of
the United States or of any state thereof, or any other country or any political
subdivision thereof, or otherwise, including but not limited to any thereof
referred to in SCHEDULE I hereto, and (b) all renewals thereof.
ARTICLE II. GRANT OF SECURITY INTEREST
As security for the payment and satisfaction of the Secured
Obligations, Borrower hereby grants to U. S. Bank a continuing security interest
in and assigns to U. S. Bank all of Borrower's right, title, and interest in the
Collateral and all products, profits, rents, and proceeds thereof.
ARTICLE III. COVENANTS OF BORROWER
Borrower shall fully perform each of the covenants set forth below.
3.1 OBLIGATIONS TO PAY.
(a) Borrower shall pay to U. S. Bank, in timely fashion and in full,
all amounts payable by Borrower to U. S. Bank, pursuant to the Credit Agreement,
the Note, and the other Loan Documents; and
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(b) Borrower shall pay and reimburse U. S. Bank for all expenditures
including reasonable attorney fees and legal expenses in connection with the
exercise by U. S. Bank of any of its rights or remedies under the Credit
Agreement or the other Loan Documents in accordance with the terms thereof.
3.2 PERFORMANCE. Borrower shall fully perform in a timely fashion every
covenant, agreement, and obligation set forth in the Credit Agreement and the
other Loan Documents.
3.3 FURTHER DOCUMENTATION. At its own expense, Borrower shall execute
and deliver any financing statement, any renewal, substitution, or correction
thereof, or any other document; shall procure any document; and shall take such
further action as U. S. Bank may reasonably require in obtaining the full
benefits of this Agreement.
3.4 FILING FEES. Borrower shall pay all costs of filing any financing,
continuation, or termination statement with respect to the security interests
granted herein.
3.5 PLEDGES. Borrower shall deliver and pledge to U. S. Bank, endorsed
or accompanied by instruments of assignment or transfer satisfactory to U. S.
Bank, any Instruments, Investment Property, Documents, General Intangibles, or
Chattel Paper that it owns and that U. S. Bank may specify from time to time.
3.6 MAINTENANCE OF RECORDS. Borrower shall keep and maintain at its own
cost and expense satisfactory and complete records of the Collateral including
but not limited to a record of all payments received and all credits granted
with respect to the Collateral and all other dealings with the Collateral.
Borrower shall xxxx its books and records pertaining to the Collateral to
evidence this Agreement and the security interests granted herein. Borrower
shall deliver and turn over to U. S. Bank all books and records pertaining to
the Collateral at any time after the occurrence and during the continuation of
an Event of Default, if so demanded by U. S. Bank.
3.7 DISPOSITION OF COLLATERAL. Except as allowed in the Credit
Agreement, Borrower shall not sell or transfer any of the Collateral or release,
compromise, or settle any obligation or receivable due to Borrower.
3.8 INDEMNIFICATION. Borrower agrees to pay, and to indemnify U. S.
Bank and hold U. S. Bank harmless from, all liabilities, costs, and expenses
incurred by U. S. Bank including but not limited to reasonable legal fees and
expenses with respect to or resulting from (a) any delay in paying any excise,
sales, or other taxes that may be payable or determined to be payable with
respect to any of the Collateral, (b) any delay by Borrower in complying with
any requirement of law applicable to any of the Collateral, or (c) any of the
transactions contemplated by this Agreement, notwithstanding that U. S. Bank
shall not be
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indemnified pursuant to this SECTION 3.8 for expenses or loss to the extent such
expenses were caused by the gross negligence or willful misconduct of U. S.
Bank. In any suit, proceeding, or action brought by U. S. Bank under any Account
to enforce payment of any sum owing thereunder or to enforce any provisions of
any Account, Borrower will indemnify U. S. Bank and hold U. S. Bank harmless
from all expense, loss, or damage suffered by reason of any defense, setoff,
counterclaim, recoupment, reduction, or liability whatsoever of the Account
Debtor thereunder arising out of a breach by Borrower of any obligation
thereunder or arising out of any other agreement, indebtedness, or liability at
any time owing to or in favor of such Account Debtor or its successors from
Borrower, notwithstanding that U. S. Bank shall not be indemnified pursuant to
this SECTION 3.8 for expenses or loss to the extent such expenses were caused by
the gross negligence or willful misconduct of U. S. Bank.
3.9 LIMITATIONS ON AMENDMENTS, MODIFICATIONS, TERMINATIONS, WAIVERS,
AND EXTENSIONS OF CONTRACTS AND AGREEMENTS GIVING RISE TO ACCOUNTS. Borrower
will not (a) amend, modify, terminate, waive, or extend any provision of any
agreement giving rise to an Account in any manner that could reasonably be
expected to have a material adverse effect on the value of such Account as
Collateral or (b) fail to exercise promptly and diligently every material right,
when and if commercially reasonable to do so, that it may have under each
agreement giving rise to an Account, other than any right of termination.
3.10 LIMITATIONS ON DISCOUNTS, COMPROMISES, AND EXTENSIONS OF ACCOUNTS.
Unless commercially reasonable to do so, Borrower will not grant any extension
of the time of payment of any of the Accounts; compromise, compound, or settle
the same for less than the full amount thereof; release, wholly or partially,
any Person liable for the payment thereof; or allow any credit or discount
whatsoever thereon.
3.11 FURTHER IDENTIFICATION OF COLLATERAL. Borrower will furnish to U.
S. Bank from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as U. S. Bank may reasonably request, all in reasonable detail.
3.12 NOTICES. Borrower will advise U. S. Bank promptly in reasonable
detail at its address set forth in SECTION 7.9(a) of any lien (other than liens
created hereby or permitted under the Credit Agreement) on or claim asserted
against any of the Collateral and (b) of the occurrence of any other event that
could reasonably be expected to have a material adverse effect on the Collateral
or on the liens created hereunder.
3.13 CHANGES IN LOCATIONS, NAME, ETC. Borrower will not (a) change the
location of its chief executive office/chief place of business from that
specified in SECTION 4.10 or remove its books and records from the location
specified in SECTION 4.7, (b) permit any of the Inventory to be kept at
locations other than those listed on SCHEDULE II hereto, or (c) change its name,
identity, or structure to such an extent that any financing statement filed
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by U. S. Bank in connection with this Agreement would become seriously
misleading, unless it shall have given U. S. Bank at least ten days' prior
written notice thereof.
3.14 TRADEMARKS.
(a) Borrower (either itself or through licensees) will (i) unless it
determines otherwise, continue to use each Trademark on each and every trademark
class of goods applicable to its current line as reflected in its current
catalogs, brochures, and price lists in order to maintain such Trademark in full
force free from any claim of abandonment for nonuse, (ii) maintain as in the
past the quality of products and services offered under such Trademark, (iii)
employ such Trademark with the appropriate notice of registration, (iv) not
adopt or use any xxxx that is confusingly similar to or a colorable imitation of
such Trademark unless U. S. Bank shall obtain a perfected security interest in
such xxxx pursuant to this Agreement, and (v) not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act whereby
any Trademark may become invalidated.
(b) Borrower will notify U. S. Bank promptly if it knows, or has reason
to know, of (i) any application or registration relating to any Trademark
material to its business that may become abandoned or dedicated, or (ii) any
adverse determination or development (including but not limited to the
institution of, or any adverse determination or development in, any proceeding
in the United States Patent and Trademark Office or any court or tribunal in any
country) regarding Borrower's ownership of any material Trademark or its right
to register, keep, or maintain the same.
(c) Whenever Borrower, either by itself or through any agent, employee,
licensee, or designee, shall file an application for the registration of any
material Trademark with the United States Patent and Trademark Office or any
similar office or agency in any other country or any political subdivision
thereof, Borrower shall report such filing to U. S. Bank within five Business
Days after the last day of the calendar month in which such filing occurs.
Borrower shall execute and deliver to U. S. Bank all agreements, instruments,
powers of attorney, documents, and papers that U. S. Bank may request to
evidence U. S. Bank's security interest in any Trademark and in the goodwill and
general intangibles of Borrower relating to or represented by the Trademark.
Borrower hereby constitutes U. S. Bank its attorney-in-fact to execute and file
all such writings for the foregoing purposes, with all acts of such attorney
being hereby ratified and confirmed; and such power, being coupled with an
interest, is irrevocable until all Secured Obligations are paid in full.
(d) Borrower will take all reasonable and necessary steps, including
but not limited to all reasonable and necessary steps in any proceeding before
the United States Patent and Trademark Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain and pursue
each application, to obtain the relevant
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registration, and to maintain each registration of material Trademarks,
including but not limited to filing applications for renewal, affidavits of use,
and affidavits of incontestability.
(e) If any Trademark that is included in the Collateral is infringed,
misappropriated, or diluted by a third party, Borrower shall take such action as
Borrower reasonably deems appropriate under the circumstances to protect such
Trademark.
3.15 INSURANCE. Borrower agrees to insure the Collateral in accordance
with the provisions of the Credit Agreement. If Borrower fails to obtain such
insurance, U. S. Bank shall have the right, but not the obligation, to obtain
either insurance covering both Borrower's and U. S. Bank's interest in the
Collateral, or insurance covering only U. S. Bank's interest in the Collateral.
Borrower agrees to pay any premium charged for such insurance. This amount may
be added to the outstanding balance of the Loan, and interest thereon shall be
charged at the rate specified in any applicable loan document, or U. S. Bank may
demand immediate payment. Any unpaid insurance premium advanced by U. S. Bank
shall be secured under the terms of this Agreement. U. S. Bank will have no
liability whatsoever for any loss which may occur by reason of the omission or
lack of coverage of any such insurance. Borrower hereby assigns to U. S. Bank
the right to receive proceeds of such insurance to the full amount of the
Secured Obligations and hereby directs any insurer to pay all proceeds directly
to U. S. Bank, and authorizes U. S. Bank to endorse any draft. In U. S. Bank's
sole discretion, U. S. Bank may apply any insurance proceeds either toward
repair of the property or reduction of the balance of the Secured Obligations.
3.16 COPY OF FINANCING STATEMENT. Borrower agrees that a carbon,
photographic, or other reproduction of a financing statement or this Agreement
is sufficient as a financing statement.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
Borrower hereby makes the following representations and warranties:
4.1 TITLE TO COLLATERAL. Except as set forth in Exhibit J to the Credit
Agreement or otherwise disclosed therein or herein, Borrower has good and
marketable title to all the Collateral, free and clear of all liens.
4.2 NO IMPAIRMENT OF COLLATERAL. None of the Collateral shall be
impaired or jeopardized because of the security interest herein granted.
4.3 OTHER AGREEMENTS. The execution and delivery of this Agreement, the
consummation of the transactions provided for herein, and of the terms hereof
will not result in the breach of any of the terms, conditions, or provisions of,
or constitute a default under, or conflict with, or cause any acceleration of
any obligation under any (a) agreement or other
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instrument to which Borrower is a party or by which Borrower is bound other than
the Borrower's obligations to Security Mutual or (b) Applicable Law.
4.4 NO APPROVALS. No Governmental Approvals of any nature are required
in connection with the security interests herein granted other than filings or
recordings that may be required under the Uniform Commercial Code or in
connection with the perfection of the security interests of U. S. Bank in the
Trademarks.
4.5 AUTHORITY. Borrower has full power and authority to assign to U. S.
Bank and to grant to U. S. Bank a security interest in the Collateral.
4.6 LOCATION OF RECORDS. The address of the office where the books and
records of Borrower are kept concerning the Collateral is set forth on SCHEDULE
II.
4.7 LOCATION OF COLLATERAL. The locations of all Inventory of Borrower
are described on SCHEDULE II.
4.8 ACCOUNTS. The amount represented by Borrower to U. S. Bank from
time to time as owing by each Account Debtor or by all Account Debtors in
respect of the Accounts will at such time be the correct amount actually owing
by such Account Debtor or Debtors thereunder. No material amount payable to
Borrower under or in connection with any Account is evidenced by any Instrument
(other than checks received in the ordinary course of business) or Chattel Paper
that has not been delivered to U. S. Bank.
4.9 CHIEF EXECUTIVE OFFICE. Borrower's chief executive office and chief
place of business is located at the address set forth on SCHEDULE II.
4.10 TRADEMARKS. SCHEDULE I hereto includes all Trademarks owned by
Borrower in its own name as of the date hereof. To the best of Borrower's
knowledge, each such Trademark is valid, subsisting, unexpired, and enforceable
and has not been abandoned. Except as set forth in SCHEDULE I, none of such
Trademarks is the subject of any licensing or franchise agreement. No holding,
decision, or judgment that would limit, cancel, or question the validity of any
such Trademark has been rendered by any Governmental Body. No action or
proceeding is pending that (a) seeks to limit, cancel, or question the validity
of any such Trademark or (b) would, if adversely determined, have a material
adverse effect on the value of any Trademark.
4.11 GOVERNMENTAL OBLIGORS. No Account Debtor is a Governmental Body.
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ARTICLE V. U. S. BANK'S RIGHTS WITH RESPECT
TO THE COLLATERAL
5.1 NO DUTY ON U. S. BANK'S PART. U. S. Bank shall not be required
(except at its option upon the occurrence and during the continuation of any
Event of Default) to realize upon any Accounts, Financial Assets, Instruments,
Investment Property, Chattel Paper, or General Intangibles; collect the
principal, interest, or payment due thereon, exercise any rights or options of
Borrower pertaining thereto; make presentment, demand, or protest; give notice
of protest, nonacceptance, or nonpayment; or do any other thing for the
protection, enforcement, or collection of such Collateral. The powers conferred
on U. S. Bank hereunder are solely to protect U. S. Bank's interests in the
Collateral and shall not impose any duty upon U. S. Bank to exercise any such
powers. U. S. Bank shall be accountable only for amounts that U. S. Bank
actually receives as a result of the exercise of such powers; and neither U. S.
Bank nor any of its officers, directors, employees, or agents shall be
responsible to Borrower for any act or failure to act hereunder.
5.2 NEGOTIATIONS WITH ACCOUNT DEBTORS. Upon the occurrence and during
the continuation of any Event of Default, U. S. Bank may, in its sole
discretion, extend or consent to the extension of the time of payment or
maturity of any Instruments, Accounts, Chattel Paper, or General Intangibles.
5.3 RIGHT TO ASSIGN. Except as otherwise provided in the Credit
Agreement, U. S. Bank may assign or transfer the whole or any part of the
Secured Obligations and may transfer therewith as collateral security the whole
or any part of the Collateral; and all obligations, rights, powers, and
privileges herein provided shall inure to the benefit of the assignee and shall
bind the successors and assigns of the parties hereto.
5.4 DUTIES REGARDING COLLATERAL. Beyond the safe custody thereof, U. S.
Bank shall not have any duty as to any Collateral in its possession or control,
or as to any preservation of any rights of or against other parties.
5.5 COLLECTION FROM ACCOUNT DEBTORS. Upon the occurrence and during the
continuation of any Event of Default, Borrower shall, upon demand by U. S. Bank
(and without any grace or cure period), notify all Account Debtors to make
payment to U. S. Bank of any amounts due or to become due. Borrower authorizes
U. S. Bank to contact the Account Debtors after an occurrence of any Event of
Default, for the purpose of having all or any of them pay their obligations
directly to U. S. Bank. Upon demand by U. S. Bank, Borrower shall enforce
collection of any indebtedness owed to it by Account Debtors.
5.6 INSPECTION. Upon at least 24 hours' advance written notice to
Borrower, U. S. Bank and its designees, from time to time at reasonable times
and intervals,
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may inspect the Inventory and inspect, audit, and make copies of and extracts
from all records and all other papers in the possession of Borrower.
5.7 ASSIGNEE DEPOSIT ACCOUNT. Upon demand by U. S. Bank, after an
occurrence of any Event of Default, Borrower will transmit and deliver to U. S.
Bank, in the form received, immediately after receipt, all cash, checks, drafts,
Chattel Paper, Instruments, or other writings for the payment of money including
Investment Property (properly endorsed, where required, so that the items may be
collected by U. S. Bank) that may be received by Borrower at any time to the
extent required by the Credit Agreement. All items or amounts that are delivered
by Borrower to U. S. Bank, or collected by U. S. Bank from the Account Debtors,
shall be deposited to the credit of a Deposit Account ("Assignee Deposit
Account") of Borrower with U. S. Bank, as security for the payment of the
Secured Obligations. Borrower shall have no right to withdraw any funds
deposited in the Assignee Deposit Account. U. S. Bank may, from time to time in
its discretion after an occurrence of any Event of Default, and shall, upon the
request of Borrower made not more than twice in any week, apply all or any of
the balance, representing collected funds, in the Assignee Deposit Account, to
payment of the Secured Obligations, whether or not then due, in such order of
application, not inconsistent with the terms of the Credit Agreement and this
Agreement, as U. S. Bank may determine; and U. S. Bank may, from time to time in
its discretion, release all or any of such balance to Borrower.
ARTICLE VI. U. S. BANK'S RIGHTS AND REMEDIES
6.1 GENERAL. Upon the occurrence of any Event of Default, U. S. Bank
may exercise its rights and remedies in the Credit Agreement and in any other
Loan Documents and any other rights and remedies at law and in equity,
simultaneously or consecutively, all of which rights and remedies shall be
cumulative. The choice of one or more rights or remedies shall not be construed
as a waiver or election barring other rights and remedies. Borrower hereby
acknowledges and agrees that U. S. Bank is not required to exercise all rights
and remedies available to it equally with respect to all the Collateral and that
U. S. Bank may select less than all the Collateral with respect to which the
rights and remedies as determined by U. S. Bank may be exercised.
6.2 NOTICE OF SALE; DUTY TO ASSEMBLE COLLATERAL. In addition to or in
conjunction with the rights and remedies referred to in SECTION 6.1 hereof:
(a) Written notice mailed to Borrower at the address designated herein
ten days or more prior to the date of public or private sale of any of the
Collateral shall constitute reasonable notice.
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(b) If U. S. Bank requests, Borrower will assemble the Collateral and
make it available to U. S. Bank at places that U. S. Bank shall reasonably
select, whether on Borrower's premises or elsewhere.
ARTICLE VII. GENERAL PROVISIONS
7.1 ENTIRE AGREEMENT. This Agreement, together with the Credit
Agreement and the other Loan Documents, sets forth all the promises, covenants,
agreements, conditions, and understandings between the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements, or conditions,
express or implied, oral or written, with respect thereto, except as contained
or referred to herein. This Agreement may not be amended, waived, discharged, or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of such amendment, waiver, discharge, or termination is
sought.
7.2 INVALIDITY. If any provision of this Agreement shall for any reason
be held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereunder, but this Agreement shall be
construed as if such invalid or unenforceable provision had never been contained
herein.
7.3 NONWAIVER AND NONEXCLUSIVE RIGHTS AND REMEDIES.
(a) No right or remedy herein conferred upon or reserved to U. S. Bank
is intended to be to the exclusion of any other right or remedy, but each and
every such right or remedy shall be cumulative and shall be in addition to every
other right or remedy given hereunder and now or hereafter existing at law or in
equity.
(b) No delay or omission by U. S. Bank in exercising any right or
remedy accruing upon an Event of Default shall impair any such right or remedy,
or shall be construed to be a waiver of any such Event of Default, or an
acquiescence therein, nor shall it affect any subsequent Event of Default of the
same or of a different nature.
7.4 TERMINATION OF SECURITY INTEREST. When all the Secured Obligations
have been paid in full, the security interest provided herein shall terminate
and U. S. Bank shall return to Borrower all Collateral then held by U. S. Bank,
if any, and upon written request of Borrower, shall execute, in form for filing,
termination statements of the security interests herein granted. Thereafter, no
party hereto shall have any further rights or obligations hereunder.
7.5 SUCCESSORS AND ASSIGNS. All rights of U. S. Bank hereunder shall
inure to the benefit of its successors and assigns, and all obligations of
Borrower shall be binding upon its successors and assigns.
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7.6 U.S. BANK'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) Borrower hereby irrevocably constitutes and appoints U. S. Bank and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of Borrower and in the name of Borrower or in its own name, from time
to time in U. S. Bank's discretion, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action, and to execute any and
all documents and instruments that may be necessary or desirable to accomplish
the purposes of this Agreement; and without limiting the generality of the
foregoing, Borrower hereby gives U. S. Bank the power and right, on behalf of
Borrower, without consent by or notice to Borrower, to do the following, in the
event of an occurrence of and during the continuance of an Event of Default:
(i) to transfer to U. S. Bank or to any other person all or
any of said Collateral, to endorse any Instruments pledged to U. S.
Bank, and to fill in blanks in any transfers of Collateral, powers of
attorney, or other documents delivered to U. S. Bank;
(ii) to pay or discharge taxes and liens levied or placed on
or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Agreement, and to pay all or
any part of the premiums therefor and the costs thereof;
(iii) (A) to take possession of, endorse, and collect any
checks, drafts, notes, acceptances, or other instruments for the
payment of moneys due under any Account, Instrument, or General
Intangible or with respect to any other Collateral and (B) to file any
claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by U. S. Bank for the purpose of
collecting all such moneys due under any Account, Financial Assets,
Instrument, Investment Property, or General Intangible or with respect
to any other Collateral whenever payable; and
(iv) (A) to direct any party liable for any payment under
any of the Collateral to make payment of all moneys due or to become
due thereunder directly to U. S. Bank or as U. S. Bank shall direct;
(B) to ask for, demand, collect, and receive payment of and receipt
for, any and all moneys, claims and other amounts due or to become due
at any time in respect of or arising out of any Collateral; (C) to sign
and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices, and other documents in connection with any of
the Collateral; (D) to commence and prosecute any suits, actions, or
proceedings at law or in equity in any court of competent jurisdiction
to collect
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the Collateral or any thereof and to enforce any other right in respect
of any Collateral; (E) to defend any suit, action, or proceeding
brought against Borrower with respect to any Collateral; (F) to settle,
compromise, or adjust any suit, action, or proceeding described in
clause (E) above and, in connection therewith, to give such discharge
or releases as U. S. Bank may deem appropriate; (G) to assign any
Trademark (along with the goodwill of the business to which any such
Trademark pertains) throughout the world for such terms or terms, on
such conditions, and in such manner as U. S. Bank shall in its sole
discretion determine; and (H) generally, to sell, transfer, pledge, and
make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though U. S. Bank were the
absolute owner thereof for all purposes; and to do, at U. S. Bank's
option and Borrower's expense, at any time or from time to time, all
acts and things that U. S. Bank deems necessary to protect, preserve or
realize upon the Collateral and U. S. Bank's liens thereon and to
effect the intent of this Agreement, all as fully and effectively as
Borrower might do.
(b) Borrower hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
(c) Borrower also authorizes U. S. Bank, at any time and from time to
time, to execute, in connection with the sale provided for in ARTICLE VI hereof,
any endorsements, assignments, or other instruments of conveyance or transfer
with respect to the Collateral.
(d) The powers conferred on U. S. Bank hereunder are solely to protect
U. S. Bank's interests in the Collateral and shall not impose any duty upon U.
S. Bank to exercise any such powers. U. S. Bank shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither it nor any of its officers, directors, employees, or agents shall be
responsible to Borrower for any act or failure to act hereunder.
7.7 PERFORMANCE BY U. S. BANK OF BORROWER'S OBLIGATIONS. If Borrower
fails to perform or comply with any of its agreements contained herein and U. S.
Bank, as provided for by the terms of this Agreement, shall itself perform or
comply, or otherwise cause performance or compliance, with such agreement, the
expense of U. S. Bank incurred in connection with such performance or
compliance, together with interest thereon at the rate provided for in the
Credit Agreement upon the occurrence of an Event of Default, shall be payable by
Borrower to U. S. Bank on demand and shall constitute Secured Obligations.
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7.8 GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder shall be construed and enforced in accordance with and shall
be governed by the laws of the state of Washington, without regard to the choice
of law rules thereof.
7.9 NOTICES. All notices, requests, consents, demands, approvals, and
other communications hereunder shall be deemed to have been duly given, made, or
served if in writing and when delivered personally, or sent via facsimile, or
mailed by first class mail, postage prepaid, to the respective parties to this
Agreement as follows:
(a) If to U. S. Bank:
U.S. Bank of Washington,
National Association
0000 Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxx
Facsimile number: (000) 000-0000
(b) If to Borrower:
New West Eyeworks, Inc.
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Facsimile number (000) 000-0000
The designation of the person to be so notified or the address of such person
for the purposes of such notice may be changed from time to time by similar
notice in writing, except that any communication with respect to a change of
address shall be deemed to be given or made when received by the party to whom
such communication was sent.
7.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original Agreement, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, Borrower and U. S. Bank have caused these presents
to be duly executed by their respective duly authorized signatories as of the
day and year first above written.
NEW WEST EYEWORKS, INC., a
Delaware corporation
By /s/ Xxxxx X. Xxxx
-----------------------------------------
Title President & CEO
--------------------------------------
ACCEPTED BY: U. S. BANK OF WASHINGTON,
NATIONAL ASSOCIATION
By
-----------------------------------------
Title
--------------------------------------
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SCHEDULE I
TRADEMARKS
[To be supplied by Borrower]
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SCHEDULE II
[To be supplied by Borrower]
Address of
chief executive office:
Address of Office where
books and records are kept:
Addresses of locations of
collateral:
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