EXHIBIT 4.31
FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SECURITY AGREEMENT, dated as of March 15th, 2004
(the "Amendment") is made by and between Addison York Insurance Brokers, Ltd.
(the "Company") and the Xxxxxxx-Family Trust of July 1998 (the "Creditor").
RECITALS
WHEREAS, the parties are parties to that certain Security Agreement dated
as of October 1, 2003 (the "Security Agreement"); and
WHEREAS, the parties desire to amend the Security Agreement in the manner
set forth herein.
AGREEMENT
NOW, THEREFORE, the Company and the Creditor hereby agree as follows:
ARTICLE I
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DEFINITIONS
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1.1 "APA" shall mean that certain Asset Purchase Agreement effective as of
the 1st day of October 2003, as amended by Amendment to Asset Purchase Agreement
dated as of the 15th day of March, 2004 by and among the Company, the Creditor,
Xxxx X. Xxxxxxx, Xxxxxxx Xxxxxxx and DKWS Enterprises, Inc.
1.2 Other Terms. Unless otherwise specified, all capitalized terms used and
not defined in this Amendment shall have the definitions set forth in the
Security Agreement.
ARTICLE II
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AMENDMENTS
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2.1 Amendment to the Security Agreement. Section 2 is amended in its
entirety to read as follows:
2. Grant of Security Interest. The Company hereby grants to the
Creditor, to secure the payment and performance in full of all of the
Obligations, a security interest in and so pledges and assigns to the
Creditor the following properties, assets and rights of the Company,
wherever located, whether now owned or hereafter acquired or arising, and
all proceeds and products thereof (all of the same being hereinafter called
the "Collateral"): all of the assets, property and rights (other than the
Excluded Assets, as defined in the APA) of any kind and description owned
and used by the Vendor (as defined in the APA), or held by them
for use in, or in respect of the operations of, the Business (as defined in
the APA), including, without limitation, the following assets, properties
and rights:
(a) all rights, title and interest of the Vendor in, to and under all
Assumed Contracts (as defined in the APA), contracts, leases, agreements,
engagements, commitments including unfilled ordered received by the Vendor
in connection with the Business and other right of or pertaining to the
Business as were specifically accepted by the Purchaser (as defined in the
APA) in writing, whether written or unwritten;
(b) all fixed assets, equipment, supplies, inventory of and pertaining
to and used in the Business, including without limited the generality of
the foregoing, all furniture, furnishings, fixtures, leasehold improvements
(whether or not fixtures), and all other materials and accessories, goods,
chattels and effects of all kinds utilized by the Vendor in connection with
the operation of the Business including, without limitation, computer
hardware, credit card verification equipment, computer software and
accounting systems and all of those other assets listed in Schedule B of
the APA;
(c) the right of the Vendor to carry on the Business under the name of
"Vista International Insurance Brokers" and the right to use any words or
tradenames of the Vendor indicating that the Business is so carried on;
(d) the goodwill of the Vendor in the Business (the "Goodwill")
including, without limitation, the rights granted to the Purchaser in
respect of, inter alia, the name "Vista International Insurance Brokers"
for use in the Business, the right of the Vendor to retain and use all of
the Business' present telephone numbers, listings and advertisements as
listed in the current telephone directory for all locations where the
Business is conducted and all licenses, permits and other required
authorizations issued by any governmental body, which are required in the
continued operation of the Business and which are assignable, and the list
of customers and suppliers to the Business, and to the extent they exist
and are capable of being assigned any and all customer profiles and
customer databases and all advertising signs, registered and unregistered
trademarks, trade or brand names, service marks, copyrights, franchises,
technology or other processes pertaining to the Business;
(e) all of the Vendor's Business records necessary to enable the
Purchaser to renew the Purchased Book of Business (as defined below);
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(f) all Intellectual Property (as defined in the APA) related to the
Business;
(g) all of the Business, including, but not limited to, the life,
health, bond and property and casualty insurance business (both personal
and commercial lines) and renewals and expirations thereof, together with
all written or otherwise recorded documentation, data or information
relating to the Business, whether compiled by Vendor or by other agents,
trustees or employees of Vendor, including, but not limited to: (i) lists
of insurance companies and records pertaining thereto; and (ii) customer
lists, prospect lists, policy forms, and/or rating information, expiration
dates, information on risk characteristics, information concerning
insurance markets for large or unusual risks, and all other types of
written or otherwise recorded information customarily used by Vendor or
available to Vendor, including all other records of and pertaining to the
accounts and customers of Vendor, past and present, including, but not
limited to, the active insurance customers of Vendor (collectively, the
"Purchased Book of Business");
(h) all other assets of Vendor relating or pertaining to the Purchased
Book of Business, including (i) computer disks, servers, software,
databases (whether in the form of computer tapes or otherwise), related
object and source codes, and associated manuals, and any other records or
media of storage or programs for retrieval of information pertaining to the
Purchased Book of Business; (ii) all supplies and materials, including
promotional and advertising materials, brochures, plans, supplier lists,
manuals, handbooks, and related written data and information; (iii)
customer and other deposits and prepayments; (iv) transferable approvals,
permits, licenses, orders, registrations, certificates, variances and
similar rights obtained form governments and governmental agencies to own
and operate the Business and Purchased Assets; and (v) the Client Files (as
defined in the APA) and book of the business; and
(i) all rights, title and interest of the Vendor in, to and under all
contracts, leases, agreements, engagements, commitments and all commission
revenue derived by the Vendor from those persons or agencies set forth on
Schedule M attached to the APA.
2.2 Representations, Warranties and No Default. The Company hereby
represents and warrants to the Creditor that:
(a) Security Agreement. All of the representations and warranties made
by the Company in the Security Agreement are true and correct on the date
of this Amendment and no Event of Default under the Security Agreement has
occurred and is continuing as of the date of this Amendment.
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(b) Authorization; Enforceability. The making, execution and delivery
of this Amendment, and performance of and compliance with the terms of the
Security Agreement, as amended, have been duly authorized by all necessary
corporate action by the Company. This Amendment is the valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms.
(c) Absence of Conflicting Obligations. The making, execution and
delivery of this Amendment and performance of and compliance with the terms
of the Security Agreement, as amended, do not violate any presently
existing provision of law or the articles of incorporation or bylaws of the
Company or any agreement to which the Company is a party or by which it is
bound.
2.3 Further Assurances; Authorization. The Company hereby agrees that it
shall execute, deliver and file all such documents, agreements and instruments
as the Creditor reasonably requests in order to more effectively carry out the
intent of this Amendment. The Company hereby irrevocably authorizes the Creditor
at any time and from time to time to file in any Uniform Commercial Code
jurisdiction any initial financing statements and amendments thereto that
identify the Collateral and contain any other information required by the
Uniform Commercial Code in effect in such jurisdiction.
2.4 Full Force and Effect. Except as expressly modified herein, the
Security Agreement shall be and remain in full force and effect and the Company
acknowledges and agrees that all of its obligations under the Security Agreement
continue to be secured by the Collateral, as amended by this Amendment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Amendment to Security
Agreement to be duly executed as of the day and year first above written.
CREDITOR:
THE XXXXXXX FAMILY TRUST OF JULY 1998
By /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, Trustee
And by: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, Trustee
COMPANY:
ADDISON YORK INSURANCE BROKERS, INC.
By: /s/ P. Podorieszach
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Its: CEO
Primo Podorieszach
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