SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement"), dated as of June 30, 1997,
by and between BFI Tire Recyclers of Minnesota, Inc., a Minnesota corporation
with a principal place of business at 00000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxx
00000 (the "Company"), and Xxxxxxxx-Xxxxxx Industries of Minnesota, Inc., a
Minnesota corporation (the "Secured Party").
RECITALS
A. Pursuant to a Purchase and Sale Agreement dated as of June 30, 1997
(the "Purchase Agreement") by and among XxxxxXxx Technologies, Inc., a Delaware
corporation ("GTI"), XxxxxXxx Acquisition Corp., a Delaware corporation ("GAC"),
Xxxxxxxx Xxxxxx Industries, Inc., a Delaware corporation, the Secured Party and
Xxxxxxxx-Xxxxxx Industries of Georgia, Inc., GAC has purchased all the issued
and outstanding capital stock of the Company.
B. Pursuant to the Purchase Agreement, GAC has delivered to the Secured
Party the Note (as defined in the Purchase Agreement) and is to deliver the
Final Working Capital Note (as defined in the Purchase Agreement and, together
with the Note, the "Notes").
C. The Secured Party has required as a condition to the consummation of
the transactions contemplated by the Purchase Agreement, and in order to secure
the prompt and complete payment, observance and performance all of GAC's
obligations and liabilities under the Notes (all such obligations and
liabilities being hereinafter referred to collectively as the "Obligations"),
that the Company execute and deliver this Agreement and enter into the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises, of the Secured Party
proceeding with the consummation of the transactions contemplated by the
Purchase Agreement, and of other valuable consideration, the receipt and
adequacy whereof are hereby acknowledged, the parties hereto, intending to be
legally bound, do covenant and agree as follows:
1. Definitions. All capitalized terms used herein or in any
certificate, report or other document delivered pursuant hereto shall have the
meanings assigned to them below or in the Purchase Agreement (unless otherwise
defined). Except as otherwise defined, terms defined in the Uniform Commercial
Code shall have the meanings set forth therein.
"Accounts" means all rights of the Company to payment for goods sold or
leased or for services rendered, all sums of money or other proceeds due or
becoming due thereon, all notes, bills, drafts, acceptances, instruments,
documents and other debts, obligations and liabilities, in whatever form, owing
to the Company with respect thereto, all guaranties and security therefor, and
the Company's rights pertaining to and interest in such goods, including the
right of stoppage in transit, replevin or reclamation; all chattel paper; all
amounts due from Affiliates of the Company; all insurance proceeds; all other
rights and claims to the payment of money,
under contracts or otherwise; and all other property constituting "accounts" as
such term is defined in the Uniform Commercial Code.
"Collateral" means all real and personal property of the Company of
every kind and description, tangible and intangible, whether now owned or
existing or hereafter arising or acquired, including without limitation all
Accounts, Equipment, General Intangibles, Inventory and Securities, together
with all goods, instruments, documents of title, policies and certificates of
insurance, securities, chattel paper, deposit accounts, cash or other property
owned by the Company or in which the Company has an interest that are now or may
hereafter be in the possession, custody or control of the Secured Party or its
participants or assigns for any purpose; any and all additions, substitutions,
replacements and accessions thereto; all books and records (including computer
programs, printouts and other computer materials and records) and all Proceeds
and products of any of the foregoing.
"Default" means any default in the payment or performance of
obligations under either of the Notes or this Agreement.
"Encumbrance" means any mortgage, pledge, security interest, lien or
other charge or encumbrance of any kind or nature (including, without
limitation, the lien or retained security title of a conditional vendor) upon or
with respect to any property.
"Equipment" means all machinery, equipment and fixtures, furniture,
furnishings, trade fixtures, specialty tools and parts, motor vehicles and
materials handling equipment of the Company, together with the Company's
interest in, and right to, any and all manuals, computer programs, data bases
and other materials relating to the use, operation or structure of any of the
foregoing; and all other property constituting "equipment" as such term is
defined in the Uniform Commercial Code.
"General Intangibles" means all rights with respect to trademarks,
service marks, trade names, trade styles, patents, copyrights, mask works, trade
secrets information, other proprietary rights and rights to prevent others from
doing acts that constitute unfair competition with the Company or
misappropriation of its property, including without limitation any sums (net of
expenses) that the Company may receive arising out of any claim for infringement
of its rights in any of the foregoing, and all rights of the Company under
contracts to enjoy performance by others or to be entitled to enjoy rights
granted by others, including without limitation any licenses; all obligations
and indebtedness of any kind (other than Accounts) owing to the Company from
whatever source arising; all contract rights; all rights of the Company as a
xxxxxx; all tax refunds; all right, title and interest of the Company in and to
all documents, books, records, files and other information (on whatever medium
recorded, and including without limitation computer programs, tapes, discs,
punch cards, data processing software and related property and rights)
maintained by the Company that reflect the conduct of the Company's business,
such as financial records, marketing and sales records, research and development
records, and design, engineering and manufacturing records; all rights under
service bureau service contracts; all computer data and the concepts and ideas
on which said data
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is based; all developmental ideas and concepts, papers, plans, schematics,
drawings, blueprints, sketches and documents; all data bases; all customer
lists; and all other property constituting "general intangibles" as such term is
defined in the Uniform Commercial Code.
"Inventory" means all goods, merchandise and other personal property
(including warehouse receipts and other negotiable and non-negotiable documents
of title covering any such property) of the Company that are held for sale,
lease or other disposition, or are to be furnished under contracts of service,
or for display or demonstration, or leased or consigned, or that are raw
materials, piece goods, work-in-process, finished goods or supplies or other
materials used or consumed or to be used or consumed in the Company's business,
whether in transit or in the possession of the Company or another, including
without limitation all goods covered by purchase orders and contracts with
suppliers and all goods billed and held by suppliers and goods located on the
premises of any carriers, forwarding agents, truckers, warehousemen, vendors,
selling agents or other third parties; all proprietary rights, patents, plans,
drawings, diagrams, schematics, assembly and display materials relating to any
of the foregoing; and all other property constituting "inventory" as such term
is defined in the Uniform Commercial Code.
"Permitted Encumbrances" means the following:
(i) Encumbrances in favor of the Secured Party to secure
Obligations;
(ii) Encumbrances existing as of the date of this Agreement
and disclosed in Section 2.09 of the Purchase Agreement
and Schedule 2.09 thereto;
(iii) Encumbrances securing indebtedness for the purchase
price of capital assets, provided that (i) each such
Encumbrance is given solely to secure the purchase price
of such property, does not extend to any other property
and is given at the time of acquisition of the property,
and (ii) the indebtedness secured thereby does not
exceed the lesser of the cost of such property or its
fair market value at the time of acquisition;
(iv) liens for taxes, fees, assessments and other
governmental charges to the extent that payment of the
same may be postponed or is not required;
(v) landlords' and lessors' liens in respect of rent not in
default or liens in respect of pledges or deposits under
workmen's compensation, unemployment insurance, social
security laws, or similar legislation or in connection
with appeal and similar bonds incidental to litigation;
mechanics', warehouseman's, laborers' and materialmen's
and similar liens, if the obligations secured by such
liens are not then delinquent; liens securing the
performance of bids, tenders, contracts (other than for
the payment of money); and liens securing statutory
obligations or surety, indemnity, performance, or other
similar bonds incidental to the conduct of the Company's
business in the ordinary course and that do not in the
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aggregate materially detract from the value of the
Collateral or materially impair the use thereof in the
operation of its business;
(vi) judgment liens securing judgments that (i) are not fully
covered by insurance, and (ii) shall not have been in
existence for a period longer than 10 days after the
creation thereof or, if a stay of execution shall have
been obtained, for a period longer than 10 days after
the expiration of such stay;
(vii) rights of lessors under capital leases;
viii) easements, rights of way, restrictions and other similar
charges or Encumbrances relating to real property and
not interfering in a material way with the ordinary
conduct of the Company's business; and
(ix) liens constituting a renewal, extension or replacement
of any Permitted Encumbrance.
"Proceeds" means all proceeds of and all other profits, rentals and
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, any
Collateral, including, without limitation, all claims of the Company against
third parties for loss of, damage to or destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect
of, any Collateral, and any condemnation or requisition payments with respect to
any Collateral, in each case whether now existing or hereafter arising.
"Securities" means all of the securities and instruments of the
Company, including without limitation all stocks, bonds, Treasury bills,
certificates of deposit and mutual or money market fund shares; and all sums due
or to become due on any of the foregoing, and all securities, instruments or
other property purchased or acquired as a result of the investment and
reinvestment thereof as hereinafter provided.
"Security Interest" means the security interest and liens granted
pursuant to Section 2 hereof, as well as all other security interests created or
assigned as additional security for the Obligations pursuant to this Agreement.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect in the State of Minnesota.
2. Security Interest and Collateral.
2.1 Grant. To secure the payment and performance of the Obligations,
the Company hereby assigns and pledges to the Secured Party all of its rights,
title and interest in, and grants to the Secured Party a continuing security
interest in, the Collateral.
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2.2 Continued Priority of Security Interest. The Company represents
that the Security Interest is a valid, perfect security interest, enforceable
against the Company, securing the Obligations, subject to prior security
interests in the Collateral that may have been granted by the Company before the
date of this Agreement. The Company shall ensure that the Security Interest
shall at all times be a valid and (except with respect to the Collateral
consisting of cash or bank deposits and any other Collateral, a security
interest in which may be perfected only by possession) perfected security
interest, enforceable against the Company, securing the Obligations in
accordance with the terms of this Agreement, and the Collateral shall not at any
time be subject to any Liens that are prior to, on a parity with or junior to
the Security Interest other than Permitted Encumbrances.
2.3 Filing; Notification; Refiling, etc.
(a) The Company shall, at its sole cost and expense, take all
action which may be reasonably required by the Secured Party in order to defend
the Security Interests and assure that the Security Interests will at all times
comply with the provisions of Section 2.2 or in order to enable the Secured
Party to exercise or enforce its rights hereunder, including, but not limited
to, (i) delivering to the Secured Party, endorsed or accompanied by such
instruments of assignment or transfer as the Secured Party may reasonably
specify, and stamping and marking in such manner as the Secured Party may
reasonably specify, any and all chattel paper, instruments, letters and advices
of credit and documents evidencing or forming a part of the Collateral, and (ii)
executing and delivering such financing statements, pledges, designations,
mortgages, hypothecations, notices and assignments, in each case in form and
substance reasonably satisfactory to the Secured Party, relating to the
creation, validity, perfection, maintenance or continuation of the Security
Interest under the Uniform Commercial Code or other laws of any jurisdiction in
which the Collateral or any part thereof is located and of such other states as
the Secured Party may from time to time reasonably request. The Company shall
xxxx its books and records as may be necessary or appropriate to evidence,
protect or perfect the Security Interest.
(b) The Company shall, at its sole cost and expense, from time
to time (i) upon the request of the Secured Party, take whatever steps are
reasonably required by the Secured Party in order to perfect the Security
Interest with respect to that portion of the Collateral as to which the Security
Interest was not perfected by the filing of Uniform Commercial Code financing
statements, and (ii) use its diligent best efforts to obtain all necessary
consents to the transfer of any contract, license, franchise, approval or other
agreement which is not transferable without such consents.
(c) In the event that any rerecording or refiling (or the
filing of any statement of continuation or assignment of any financing
statement) or any remortgage, repledge or reassignment, or any confirmatory
assignment, or any other action, is required or desirable at any time to protect
and preserve and maintain the Security Interest, the Company shall, at its sole
cost and expense, cause the same to be done or taken at such time and in such
manner as may be reasonably required by the Secured Party.
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(d) Anything to the contrary herein notwithstanding, the
Secured Party hereby acknowledges that mortgages with respect to the real
property owned by the Company shall not be prepared and filed until the Secured
Party specifically so requests in writing to the Company. Upon receipt of such
written request from the Secured Party, the Company shall promptly prepare and
file such mortgages.
2.4 Appointment as Attorney and Agent for the Company with Respect to
Security Interest. The Company hereby irrevocably appoints the Secured Party as
its lawful attorney and agent, with full power of substitution, to execute and
deliver, on behalf of and in the name of such Company, such financing
statements, assignments, mortgages, notices, pledges and other documents and
agreements, and to take such other action (including any contemplated by Section
2.1, 2.2 or 2.3), as the Secured Party may reasonably deem necessary for the
purpose of the creation, perfection, maintenance or continuation of the Security
Interest, under any applicable law, and the Secured Party is hereby authorized
to file on behalf of and in the name of the Company, at the Company's expense,
such financing statements, assignments, mortgages, notices, pledges and other
documents and agreements in any appropriate governmental office. The right is
expressly granted to the Secured Party in its discretion, in those jurisdictions
where the same is permitted, to file one or more financing statements under the
Uniform Commercial Code signed only by the Secured Party, naming the Company as
debtor and naming the Secured Party as secured party and indicating therein the
types, or describing the items, of the Collateral.
2.5 Disposition of Collateral. So long as any of the Obligations of the
Company is outstanding and unpaid and unless the Secured Party shall have
otherwise consented in writing, the Company shall not sell, assign, transfer or
otherwise dispose of any Collateral to anyone other than the Secured Party,
provided, however, that, notwithstanding the foregoing, so long as no Default
shall have occurred and be continuing, (i) Inventory may be sold in the ordinary
course of business and (ii) Equipment and Inventory that is, in the reasonable
judgment of the Company, obsolete or no longer useful in the conduct of the
Company's business may be sold or disposed of. The inclusion of "proceeds" of
the Collateral under the Security Interest shall not be deemed a consent by the
Secured Party to any sale or other disposition of any part or all of the
Collateral.
2.6 Location of Collateral; Change of Name, etc. The Company
represents, warrants and covenants that:
(a) The Company's chief executive office and principal place
of business, and the books and relating to the Collateral of the Company, are
located at 00000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxx 00000. The Company will
not move its chief executive offices, principal places of business or the books
and records specified in this subsection (a), or change its name or identity,
without giving the Secured Party sixty days' prior notice thereof.
(b) The present corporate name of the Company is as set forth
on the signature page hereto. Following the closing under the Purchase
Agreement, the Company shall change its name to "XxxxxXxx Technologies of
Minnesota, Inc.," and the Company shall not thereafter
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change such name, conduct its business in any name other than such name or take
title to any Collateral in any name other than such name while this Security
Agreement remains in effect until (i) it shall have given to the Secured Party
not less than 60 days' prior written notice of its intention to do so, setting
forth such name or names and providing such other information in connection
therewith as the Secured Party may reasonably request, and (ii) with respect to
such new name or names, it shall have take such action as the Secured Party may
reasonably request (including, without limitation, all action required by
Section 2.3 hereof), to maintain the Security Interest granted hereby in full
force and effect.
(c) The Equipment and Inventory included in the Collateral are
located at the addresses set forth on the schedule attached hereto as Schedule
A. The Equipment and Inventory will be kept solely at the locations referred to
on Schedule A and will not be moved (except to another location listed on the
Schedule A), sold or otherwise disposed of except to the extent expressly
permitted hereunder. None of the Inventory is stored with or in the possession
of any bailee, consignee, warehouseman, or other similar person. The Company
shall not establish any new location until (i) it shall have given to the
Secured Party not less than 60 days' prior written notice of its intention so to
do, clearly describing such new location and providing such other information in
connection therewith as the Secured Party may reasonably request, and (ii) with
respect to such new location, it shall have taken such action, reasonably
satisfactory to the Secured Party (including, without limitation, all action
required by Section 2.3 hereof), to maintain the Security Interest granted
hereby at all times fully perfected and in full force and effect. The Collateral
shall be insured at all times against all expected risks to which such
Collateral may be exposed, including without limitation fire and extended
coverage.
2.7 Notice to Account Debtors; Possession of Collateral. If there shall
occur and be continuing for in excess of ten (10) days without being waived or
cured any Default, the Secured Party may do any or all of the following:
(a) The Secured Party may (i) notify, or request the Company
to notify, in writing any account debtor or other obligor with respect to any of
the Collateral to make payment to the Secured Party, or any agent or designee of
the Secured Party, at such address as may be specified by the Secured Party, or
(ii) direct the Company to hold all payments which it receives with respect to
any of the Collateral in trust for the Secured Party, and the Company shall so
hold such funds without commingling them with other funds of the Company and
shall, in accordance with the directions of the Secured Party, either (A)
deliver the same to the Secured Party, or any agent or designee of the Secured
Party, immediately upon receipt by the Company in the identical form received,
together with any necessary endorsements, or (B) immediately deposit them in a
separate account maintained with or by any agent or designee of the Secured
Party, in which only such payments and other proceeds of Collateral shall be
deposited. When any notice to make payments directly to the Secured Party or any
such agent or designee shall have been given pursuant to clause (i) above, the
Company shall no longer have any right to collect the affected Collateral. If
notwithstanding the giving of any notice, any account debtor or other obligor
shall make payment to the Company the Company shall hold all such payments it
receives in trust for the Secured Party without commingling the same with
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other funds of the Company and shall deliver the same to the Secured Party or
any such agent or designee, immediately upon receipt by the Company in the
identical form received, together with any necessary endorsements. The Company
shall not, without the Secured Party's consent, grant any extension of time for
payment with respect to the Collateral, compromise, compound or settle the same
for less than the full amount thereof, release wholly or partly any person
liable for the payment thereof, or allow any credit or discount whatsoever
thereon. In its own name or in the name of the Company or the Secured Party, the
Secured Party may demand, xxx for, collect or receive any of the Collateral or
any payment in respect thereof. The Secured Party may settle or adjust disputes
and claims directly with account debtors and other obligors of the Company for
amounts and on terms which the Secured Party considers advisable and may endorse
the Company's name on any checks, notes, acceptances, drafts or other forms of
payment or security that may come into the Secured Party's possession. Nothing
herein contained shall be construed as requiring or obligating the Secured Party
or any such agent or designee, to make any demand, or to make an inquiry as to
the nature of sufficiency of any payment received by it or to present or file
any claim or notice or take any action with respect to any Collateral or the
monies due or to become due thereunder or to take any steps necessary to
preserve any rights against prior parties. Neither the Secured Party nor its
agent or designee shall have any liability to the Company for actions taken in
good faith pursuant to this Section.
(b) The Secured Party may, but shall not be obligated to,
deliver any amounts received from, or deposited by, the Company pursuant to
paragraph (a) above to the Company for use by the Company in the ordinary course
of its business, but the security interest in any such proceeds delivered to the
Company shall continue and shall not be affected by such delivery and the
Company shall not commingle any proceeds so delivered with any of its other
funds.
(c) The Secured Party may at any time and from time to time,
with or without judicial process or the aid or assistance of others: enter upon
any premises in which Collateral may be located and, without resistance or
interference by the Company, take physical possession of any items of Collateral
and maintain such possession on the Company's premises or move the same or any
part thereof to such other places as the Secured Party shall choose without
being liable to the Company on account of any losses, damage or depreciation
that may occur as a result thereof so long as the Secured Party shall act
reasonably and in good faith; dispose of all or any part of the Collateral on
any premises of the Company; require the Company to assemble and make available
to the Secured Party at the expense of the Company all or any part of the
Collateral at any place and time designated by the Secured Party; or remove all
or any part of the Collateral from any premises in which any part may be located
for the purpose of effecting sale or other disposition thereof.
2.8 Additional Rights. In addition to all other rights and remedies
granted to the Secured Party hereunder and by operation of law or otherwise and
not in derogation of any such rights, the Secured Party may without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived, exercise all of the remedies of a secured party under the Uniform
Commercial Code of as enacted in any applicable jurisdiction in which any
Collateral may be located. In addition, the Company agrees that without the same
having the
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effect of releasing any or all of the Collateral or otherwise prejudicing any
rights of the Secured Party hereunder, the Secured Party may (a) grant
extensions, renewals or indulgences with respect to the Obligations; (b) take or
release other property as security for the Obligations, and may release any
obligor or other person primarily or secondarily liable for any of the
Obligations; and (c) (i) sell or cause to be sold such of the Collateral as it
may in its sole discretion deem desirable without being required simultaneously
or later similarly to sell or dispose of the balance of the Collateral or any
other property or other security at the time available to it and without being
required to resort to any guaranty or any other security or sources of
reimbursement which may at the time be available to it; and (ii) apply to the
Obligations the proceeds of the Collateral or any portion thereof, or any amount
received on account of the Collateral or any portion thereof, by the exercise of
any right permitted hereunder, without resorting to and without regard to any
guaranty, other security or sources of reimbursement which may at the time be
available to it.
Without limiting the generality of the foregoing or anything else in
this Agreement, the Secured Party may buy any part or all of the Collateral at
any public sale and if any part or all of the Collateral is of a type
customarily sold in a recognized market or is of the type which is the subject
of widely-distributed standard price quotations, the Secured Party may, in its
sole and absolute discretion, buy at private sale and may make payments therefor
by any means including without limitation cancellation of indebtedness secured
thereby. The Company recognizes that the Secured Party may be unable to effect a
public sale of certain of the Collateral by reason of certain prohibitions
contained in federal and state securities laws, or in other applicable laws, to
which such Collateral may be subject but may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers. The Company
agrees that any such private sales may be at prices and other terms less
favorable to the seller than if sold at public sales and that such private sales
shall be deemed to have been made in a commercially reasonable manner. The
Secured Party shall be under no obligation to delay a sale of any of the
Collateral for the period of time necessary to permit the issuer of any
securities constituting a part thereof to register such securities for public
sale under the said federal or state securities laws or other applicable law,
even if the issuer would agree to do so.
2.9 Application of Proceeds. All proceeds from each sale of, or other
realization upon, all or any part of the Collateral of the Company, including
without limiting the foregoing all amounts paid to or deposited with the Secured
Party pursuant to Section 2.7(a), shall be applied or paid over as follows:
(i) first, to the payment of all reasonable costs and
expenses incurred in connection with such sale or other
realization, including reasonable attorneys' fees;
(ii) second, to the payment of the Obligations (with the
Company remaining liable for any deficiency); and
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(iii) third, the balance (if any) of such proceeds from the
sale of, or other realization upon, all or any part of
the Collateral of the Company shall be paid to the
Company, subject to any duty imposed by law or otherwise
to the holder of any subordinate lien in the Collateral
known to the Secured Party or subject to the direction
of a court of competent jurisdiction.
3. Miscellaneous.
3.1 Notices.
Any notice, request or other communication required or desired to be served,
given or delivered under this Pledge shall be in writing and shall be deemed to
have been validly served, given or delivered five (5) days after deposit in the
United States mails, registered or certified mail, with proper postage prepaid
and addressed to the party to be notified as follows:
If to the Company: c/x XxxxxXxx Technologies, Inc.
0 Xxxxxxx Xxxx, Xxxxxxxx X
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to: Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Secured Party: Xxxxxxxx Xxxxxx Industries, Inc.
000 Xxxxx Xxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Secretary
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to: Xxxxxxxx Xxxxxx Industries, Inc.
000 Xxxxx Xxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxx, Xx., Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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or to such other address as either party may hereafter designate for itself by
written notice to the other party in the manner herein prescribed.
3.2 Waivers. The rights and remedies of the Secured Party under this
Agreement shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have, now or hereafter existing at law or in equity or by
statute or otherwise, and no failure or delay by the Secured Party in exercising
any right shall operate as a waiver of such right, nor shall any single or
partial exercise of any power or right preclude its other or further exercise or
the exercise of any other power or right. Any term, covenant, agreement or
condition of this Agreement may be amended with the written consent of the
Company and the Secured Party or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or prospectively)
in writing by the Secured Party, and in any such event the failure to observe,
perform or discharge any such covenant, condition or obligation (whether such
amendment is executed or such consent or waiver is given before or after such
failure) shall not be construed as a breach of such covenant, condition or
obligation or a default hereunder.
3.3 Specific Performance. The Company recognizes that the rights of the
Secured Party hereunder are unique and, accordingly, the Secured Party shall, in
addition to such other remedies as may be available to it at law or in equity,
have the right to enforce its rights hereunder by actions for injunctive relief
and specific performance to the extent permitted by law. The Company hereby
waives any requirement for security or the posting of any bond in connection
with any temporary or permanent award of injunctive, mandatory or other
equitable relief. This agreement is not intended to limit or abridge any rights
of the Secured Party which may exist apart from this agreement.
3.4 Assignment. All the provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Secured Party.
3.5 Defeasance. This Security Agreement shall terminate upon the
payment and performance of the Obligations in full; provided that, if at any
time any payment made in respect of the Obligations shall be recovered or
rescinded by or on behalf of the Company or must be otherwise restored or
returned, whether upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the Company's obligations under this Agreement shall
continue to be effective or be reinstated, as the case may be, and shall
continue as though such payment had not been made.
3.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
3.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws (other than the laws governing conflict of law matters)
of The
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Commonwealth of Massachusetts except to the extent that matters of title, or
creation, perfection and priority of the security interests created hereby, or
procedural issues of foreclosures are required to be governed by the laws of the
state in which the collateral, or part thereof, is located.
3.8 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
3.9 Number. Whenever used herein, the singular number shall include the
plural and the plural shall include the singular.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
BFI TIRE RECYCLERS OF MINNESOTA,
INC.
By: /s/ Xxxxxx X. Xxxxx
Title: President
XXXXXXXX-XXXXXX INDUSTRIES
OF MINNESOTA, INC.
By: /s/ Xxxxxx X. Xxxxxx
Title: Vice President
-12-
Schedule A to Security Agreement
Location of Collateral
