EXHIBIT 2.4
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of the 1st day of July, 1999 (the "Security
Agreement") from DISC GRAPHICS, INC., a Delaware corporation, having its
principal place of business at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx (the
"Disc") to CONTEMPORARY COLOR GRAPHICS, INC., a New York corporation, having an
office at 000-X Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000 ("CCG").
RECITALS
A. Pursuant to the Asset Purchase Agreement, dated as of the date hereof,
by and among Disc, CCG and the Shareholders named therein (the "Agreement") Disc
has executed two promissory notes in favor of CCG each in the amount of One
Million Dollars ($1,000,000), dated as of the date hereof (the "Notes"), and a
$600,000 Debenture (the "Debenture") representing a portion of the purchase
price payable under the Agreement (the Notes and the Debenture, are all
obligations of Disc thereunder, are collectively the "Obligations").
B. To induce CCG to execute and deliver the Agreement, Disc wishes to grant
CCG security and assurance in order to secure the payment and performance of the
Obligations and, to that effect, to grant CCG a second priority perfected
security interest in its certain assets and in connection therewith to execute
and deliver this Security Agreement.
NOW, THEREFORE, in consideration of the premises and to evidence further
the security interest granted to CCG, Disc and CCG hereby agree as follows:
Section 1. Grant of Security. As security for the Obligations, Disc hereby
transfers, assigns and grants to CCG a second lien on and perfected security
interest in the personal property described on Schedule A attached hereto
(collectively, the "Collateral"), subject to the provisions of Section 7 hereof.
Section 2. Disc's Obligations. Disc agrees that it will perform and
discharge and remain liable for all its covenants, duties and obligations
arising in connection with the Collateral. CCG shall have no obligation or
liability in connection with the Collateral, nor shall CCG be required to
perform any covenant, duty or obligation of Disc arising in connection with the
Collateral or to take any other action regarding the Collateral.
Section 3. Use Prior to Default. Unless and until an Event of Default
hereunder shall occur and be continuing, Disc shall retain the legal and
equitable title to the Collateral and shall have the right to use the Collateral
in the ordinary course of its business, subject to the terms and covenants of
this Security Agreement.
Section 4. Events of Default. It shall be an Event of Default hereunder if:
(a) Disc shall default in the performance of any of its obligations, covenants
or agreements hereunder; or (b) there occurs an event of default under the
Obligations. Any Event of Default hereunder shall constitute an event of default
under the Notes and the Debenture.
Section 5. Warranties and Representations. Disc warrants and represents
that it has the right, power and authority to execute and deliver this Security
Agreement, subject only to the limitations of law and of the Agreements.
Section 6. Remedies. Upon the occurrence of any Event of Default, CCG shall
have, in addition to all of its other rights under this Security Agreement and
the Note, by operation of law or otherwise (which rights shall be cumulative),
all of the rights and remedies of a secured party under the Uniform Commercial
Code. Proceeds of any sale, lease or other disposition of the Collateral shall
be applied to the payment of the Obligations in whatever order CCG may elect.
CCG shall return any excess to Disc or to whomever may be fully entitled to
receive the same or as a court of competent jurisdiction may direct. Disc shall
remain liable for any deficiency.
Section 7. SUBORDINATIONS. THIS SECURITY AGREEMENT IS SUBJECT TO THE TERMS
AND CONDITION OF THAT CERTAIN SUBORDINATION AGREEMENT, DATED AS OF THE DATE
HEREOF, BY AND AMONG KEYBANK NATIONAL ASSOCIATION, CCG AND DISC. ALL RIGHTS AND
REMEDIES OF CCG HEREUNDER WITH RESPECT TO THE COLLATERAL ARE SUBORDINATE TO THE
RIGHTS AND REMEDIES OF KEYBANK NATIONAL ASSOCIATION.
Section 8. Termination. This Security Agreement shall remain in full force
and effect until all the Obligations shall have been indefeasibly fully paid and
satisfied and, until such time, CCG shall retain all security in and title to
the Collateral held by it hereunder.
Section 9. Remedies Cumulative. CCG's rights and remedies under this
Security Agreement shall be cumulative and non-exclusive of any other rights or
remedies which it may have under the Agreement or the Notes on the Debenture, by
operation of law or otherwise and may be exercised alternatively, successively
or concurrently as CCG may deem expedient.
Section 10. Binding Effect. This Agreement is entered into for the benefit
of the parties hereto and their successors and assigns. It shall be binding upon
and shall inure to the benefit of the said parties, their successors and
assigns.
Section 11. Notices. Wherever this Agreement provides for notice to either
party (except as expressly provided to the contrary), it shall be given in the
manner specified and shall be addressed as set forth in Section 9.5 of the
Agreement.
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Section 12. Waiver. No delay or failure on the part of CCG in exercising
any right, privilege, remedy or option hereunder shall operate as a waiver of
such or any other right, privilege, remedy or option, and no waiver shall be
valid unless in writing and signed by an officer of CCG and under only to the
extent therein set forth.
Section 13. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 14. Modifications and Amendments. This Agreement and the other
agreements to which it refers constitute the complete agreement between the
parties with respect to the subject matter hereof and may not be changed,
modified, waived, amended or terminated orally, but only by a writing signed by
the party to be charged.
Section 15. Survival of Representations and Warranties. The representations
and warranties of Disc made or deemed made herein shall survive the execution
and delivery of this Agreement and shall terminate when the Obligations are paid
and satisfied in full.
IN WITNESS WHEREOF, the parties hereto have each duly executed this
Security Agreement the day and year first above written.
DISC GRAPHICS, INC.
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: President and Chief Executive
Officer
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SCHEDULE A
EQUIPMENT
Electronic Pre-Press:
1- Hell 399ER Laser Scanner
1- DS757 Digital Color Scanner with CK-100 Preview Station
1- DS Model Sg-688 Digital and Analog Color Scanner with
CK-100 Preview Station
1- Scitex Dolev 200
2- OS-530 Input Stations
2- DS-MTR-1100 Image Setters film output 28 x 40
1- TaigaSpace Workstation
1- Starplexer Mass Storage Device
1- SM510 Scanmount Electronic Scaling
1- Falcon Server, Raid Protected
2- "Tiga" Rips
1- "Adobe" Rip
1- Iris Graphics printer 3024 with color base for calibrated digital proofs
1- PS Link Interface
8- MAC 7100/80 8/700/CD/G3's Computers
T 1 Line
1- WamNet!
Prep:
1- Misomex Step & Repeat Machine
6- Olite Exposure Systems (5K & 7.5K)
2- 3M Matchprint Laminators
2- 3M Matchprint Processors
1- Xxxxxxxx Pin Register System
1- DS Vertical Camera 6500E
1- 37" Fuji Film Processor
1- 37" C Dupont Rapid Access Processor
1- 30" 3M Plate Processor
6- Plate and Proof Frames
Press:
1- Six Color 40" Mitsubishi with console 1- 5-Color 26" with perfecting
Omni-Adast with console
Finishing:
1- 44" Heidelberg Polar Cutter
1- Xxxxx U.S.A. B-20 Folder 20.5" x 33"
1- 36" O&M 16 Page Folder
1- 12" Shrink Wrapping Machine
1- High Speed Three Head Drill
