SECURITY AGREEMENT
Exhibit 10.10
SECURITY XXXXXXXXX
Xxxxx 00, 0000
XXXXXXXX INNOVATIONS, INC.
0000 Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
(Individually and collectively “Debtor”)
0000 Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
(Individually and collectively “Debtor”)
WACHOVIA BANK, NATIONAL ASSOCIATION
000 Xxxxx Xxxxx Xxxxxx
T -28, NC0334
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
(Hereinafter referred to as “Bank”)
000 Xxxxx Xxxxx Xxxxxx
T -28, NC0334
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
(Hereinafter referred to as “Bank”)
This Security Agreement (this “Security Agreement”) is entered into this 19th day of
March, 2009, by Debtor in favor of Bank, and amends, restates and replaces in its entirety that
certain Further Amended and Restated Security Agreement dated October 27, 2008, by Debtor in favor
of Bank.
For value received and to secure payment and performance of any and all obligations of Debtor (also
referred to herein as “Borrower”) to Bank created, arising or evidenced by or under that certain
Loan Agreement dated as of the date hereof, between Debtor and Bank, the “Note” and any of the
related “Loan Documents,” each as defined therein, as any of such documents may be renewed,
extended or otherwise modified from time to time, in each case whether direct or indirect, absolute
or contingent, now existing or hereafter arising or acquired, including swap agreements (as defined
in 11 U.S.C. § 101, as in effect from time to time), future advances, and all costs and expenses
incurred by Bank to obtain, preserve, perfect and enforce the security interest granted herein and
to maintain, preserve and collect the property subject to the security interest (collectively,
“Obligations”), Debtor hereby grants to Bank a continuing security interest in and lien upon the
following described property, whether now owned or hereafter acquired, and any additions,
replacements, accessions, or substitutions thereof and all cash and non-cash proceeds and products
thereof (collectively, “Collateral”):
All of the personal property of Debtor of every kind and nature including, without limitation, all
accounts, equipment, accessions, inventory, chattel paper, instruments, investment property,
documents, letter-of-credit rights, deposit accounts, and general intangibles, wherever located.
Debtor hereby represents and agrees that:
OWNERSHIP. Debtor owns the Collateral. If Collateral is being acquired with the proceeds of an
advance under the Loan Documents, Debtor authorizes Bank to disburse proceeds directly to the
seller of the Collateral. The Collateral is free and clear of all liens, security interests, and
claims except those previously reported in writing to and approved by Bank, and Debtor will keep
the Collateral free and clear from all liens, security interests and claims, other than those
granted to or approved by Bank.
NAME AND OFFICES; JURISDICTION OF ORGANIZATION. The name and address of Debtor appearing at the
beginning of this Agreement are Debtor’s exact legal name and the address of its chief executive
office. There has been no change in the name of Debtor, or the name under which Debtor conducts
business, within the five years preceding the date hereof except as previously reported in writing
to Bank. Debtor has not moved its chief executive office within the five years preceding the date
hereof except as previously reported in writing to Bank. Debtor is organized under the laws of the
State of Delaware and has not changed the jurisdiction of its organization within the five years
preceding the date hereof except as previously reported in writing to Bank.
TITLE/TAXES. Debtor has good and marketable title to the Collateral and will warrant and defend
same against all claims. Debtor will not transfer, sell, or lease Collateral (except as permitted
herein). Debtor agrees to pay promptly all taxes and assessments upon or for the use of Collateral
and on this Security
Agreement unless contested in good faith and diligently pursued and adequate reserves therefor are
maintained by Debtor. At its option, Bank may discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on Collateral. Debtor agrees to reimburse Bank, on
demand, for any such payment made by Bank. Any amounts so paid shall be added to the Obligations.
WAIVERS. Debtor agrees not to assert against Bank as a defense (legal or equitable), as a set-off,
as a counterclaim, or otherwise, any claims Debtor may have against any seller or lessor that
provided personal property or services relating to any part of the Collateral or against any other
party liable to Bank for all or any part of the Obligations. Debtor waives all exemptions and
homestead rights with regard to the Collateral. Debtor waives any and all rights to any bond or
security which might be required by applicable law prior to the exercise of any of Bank’s remedies
against any Collateral. All rights of Bank and security interests hereunder, and all obligations
of Debtor hereunder, shall be absolute and unconditional, not discharged or impaired irrespective
of (and regardless of whether Debtor receives any notice of): (i) any lack of validity or
enforceability of any Loan Document; (ii) any change in the time, manner or place of payment or
performance, or in any term, of all or any of the Obligations or the Loan Documents or any other
amendment or waiver of or any consent to any departure from any Loan Document; or (iii) any
exchange, insufficiency, unenforceability, enforcement, release, impairment or non-perfection of
any collateral, or any release of or modifications to or insufficiency, unenforceability or
enforcement of the obligations of any guarantor or other obligor. To the extent permitted by law,
Debtor hereby waives any rights under any valuation, stay, appraisement, extension or redemption
laws now existing or which may hereafter exist and which, but for this provision, might be
applicable to any sale or disposition of the Collateral by Bank; and any other circumstance which
might otherwise constitute a defense available to, or a discharge of any party with respect to the
Obligations.
NOTIFICATIONS; LOCATION OF COLLATERAL. Debtor will notify Bank in writing at least 30 days prior
to any change in: (i) Debtor’s chief place of business and/or residence; (ii) Debtor’s name or
identity; (iii) Debtor’s corporate/organizational structure; or (iv) the jurisdiction in which
Debtor is organized. In addition, Debtor shall promptly notify Bank of any claims or alleged
claims of any other person or entity to the Collateral or the institution of any litigation,
arbitration, governmental investigation or administrative proceedings against or affecting the
Collateral. Debtor will keep Collateral at the location(s) previously provided to Bank until such
time as Bank provides written advance consent to a change of location. Debtor will bear the cost
of preparing and filing any documents necessary to protect Bank’s liens.
COLLATERAL CONDITION AND LAWFUL USE. Debtor represents that the Collateral is in good repair and
condition and that Debtor shall use reasonable care to prevent Collateral from being damaged or
depreciating, normal wear and tear excepted. Debtor shall immediately notify Bank of any material
loss or damage to Collateral. Debtor shall not permit any item of Collateral to become a fixture
to real estate or an accession to other personal property unless such property is also Collateral
hereunder. Debtor represents it is in compliance in all respects with all laws, rules and
regulations applicable to the Collateral and its properties, operations, business, and finances.
RISK OF LOSS AND INSURANCE. Debtor shall bear all risk of loss with respect to the Collateral.
The injury to or loss of Collateral, either partial or total, shall not release Debtor from payment
or other performance hereof. Debtor agrees to obtain and keep in force property insurance on the
Collateral with a Lender’s Loss Payable Endorsement in favor of Bank and commercial general
liability insurance naming Bank as Additional Insured. Such insurance is to be in form and amounts
satisfactory to Bank and issued by reputable insurance carriers satisfactory to Bank with a Best
Insurance Report Key Rating of at least “A-”. All such policies shall provide to Bank a minimum of
30 days written notice of cancellation. Debtor shall furnish to Bank such policies, or other
evidence of such policies satisfactory to Bank. If Debtor fails to obtain or maintain in force
such insurance or fails to furnish such evidence, Bank is authorized, but not obligated, to
purchase any or all insurance or “Single Interest Insurance” protecting such interest as Bank deems
appropriate against such risks and for such coverage and for such amounts, including either the
loan amount or value of the Collateral, all at its discretion, and at Debtor’s expense. In such
event, Debtor agrees to reimburse Bank for the cost of such insurance and Bank may add such
2
cost to the Obligations. Debtor shall bear the risk of loss to the extent of any deficiency in the
effective insurance coverage with respect to loss or damage to any of the Collateral. Debtor
hereby assigns to Bank the proceeds of all property insurance covering the Collateral up to the
amount of the Obligations and directs any insurer to make payments directly to Bank. Debtor hereby
appoints Bank its attorney-in-fact, which appointment shall be irrevocable and coupled with an
interest for so long as Obligations are unpaid, to file proof of loss and/or any other forms
required to collect from any insurer any amount due from any damage or destruction of Collateral,
to agree to and bind Debtor as to the amount of said recovery, to designate payee(s) of such
recovery, to grant releases to insurer, to grant subrogation rights to any insurer, and to endorse
any settlement check or draft. Debtor agrees not to exercise any of the foregoing powers granted
to Bank without Bank’s prior written consent.
FINANCING STATEMENTS, CERTIFICATES OF TITLE, POWER OF ATTORNEY. No financing statement (other than
any filed or approved by Bank) covering any Collateral is on file in any public filing office.
Debtor authorizes the filing of one or more financing statements covering the Collateral in form
satisfactory to Bank, and without Debtor’s signature where authorized by law, agrees to deliver
certificates of title on which Bank’s lien has been indicated covering any Collateral subject to a
certificate of title statute, and will pay all costs and expenses of filing or applying for the
same or of filing this Security Agreement in all public filing offices, where filing is deemed by
Bank to be desirable. Debtor hereby constitutes and appoints Bank the true and lawful attorney of
Debtor with full power of substitution to take any and all appropriate action and to execute any
and all documents, instruments or applications that may be necessary or desirable to accomplish the
purpose and carry out the terms of this Security Agreement, including, without limitation, to
complete, execute, and deliver any Control Agreement(s) by Bank, Debtor and Third Party(ies) that
may be or become required in connection herewith (individually and collectively the “Control
Agreement”), and any instructions to Third Party(ies) regarding, among other things, control and
disposition of any Collateral which is the subject of such Control Agreement(s). The foregoing
power of attorney is coupled with an interest and shall be irrevocable until all of the Obligations
have been paid in full. Neither Bank nor anyone acting on its behalf shall be liable for acts,
omissions, errors in judgment, or mistakes in fact in such capacity as attorney-in-fact. Debtor
ratifies all acts of Bank as attorney-in-fact. Debtor agrees to take such other actions, at
Debtor’s expense, as might be requested for the perfection, continuation and assignment, in whole
or in part, of the security interests granted herein and to assure and preserve Bank’s intended
priority position. If certificates, passbooks, or other documentation or evidence is/are issued or
outstanding as to any of the Collateral, Debtor will cause the security interests of Bank to be
properly protected, including perfection by notation thereon or delivery thereof to Bank.
CONTROL. Debtor will cooperate with Bank in obtaining control with respect to Collateral
consisting of electronic chattel paper. Debtor authorizes and directs Third Party to comply with
the terms of this Security Agreement, to enter into a Control Agreement, to xxxx its records to
show the security interest of and/or the transfer to Bank of the property pledged hereunder.
CHATTEL PAPER, ACCOUNTS, GENERAL INTANGIBLES. Debtor warrants that Collateral consisting of
chattel paper, accounts, or general intangibles is (i) genuine and enforceable in accordance with
its terms; (ii) not subject to any defense, set-off, claim or counterclaim of a material nature
against Debtor except as to which Debtor has notified Bank in writing; and (iii) not subject to any
other circumstances that would impair the validity, enforceability, value, or amount of such
Collateral except as to which Debtor has notified Bank in writing. Debtor shall not amend, modify
or supplement any material lease, contract or agreement contained in Collateral or waive any
material provision therein, without prior written consent of Bank. Debtor will not create any
tangible chattel paper without placing a legend on the chattel paper acceptable to Bank indicating
that Bank has a security interest in the chattel paper. Debtor will not create any electronic
chattel paper without taking all steps deemed necessary by Bank to confer control of the electronic
chattel paper upon Bank in accordance with the UCC.
ACCOUNT INFORMATION. From time to time, at Bank’s request, Debtor shall provide Bank with
schedules listing all accounts created or acquired by Debtor.
3
ACCOUNT DEBTORS. If a Default should occur and be continuing, Bank shall have the right to notify
the account debtors obligated on any or all of the Collateral to make payment thereof directly to
Bank and Bank may take control of all proceeds of any such Collateral, which rights Bank may
exercise at any time.
The cost of such collection and enforcement, including attorneys’ fees and expenses, shall be borne
solely by Debtor whether the same is incurred by Bank or Debtor. If a Default should occur and be
continuing, Debtor will, upon receipt of all checks, drafts, cash and other remittances in payment
on Collateral, deposit the same in a special bank account maintained with Bank, over which Bank
also has the power of withdrawal.
If a Default should occur and be continuing, no discount, credit, or allowance shall be granted by
Debtor to any account debtor and no return of merchandise shall be accepted by Debtor without
Bank’s consent. Bank may, after Default, settle or adjust disputes and claims directly with
account debtors for amounts and upon terms that Bank considers advisable, and in such cases Bank
will credit the Obligations with the net amounts received by Bank, after deducting all of the
expenses incurred by Bank. Debtor agrees to indemnify and defend Bank and hold it harmless with
respect to any claim or proceeding arising out of any matter related to collection of Collateral.
GOVERNMENT CONTRACTS. If any Collateral covered hereby arises from obligations due to Debtor from
any governmental unit or organization, Debtor shall immediately notify Bank in writing and execute
all documents and take all actions deemed necessary by Bank to ensure recognition by such
governmental unit or organization of the rights of Bank in the Collateral.
INVENTORY. So long as no Default has occurred, Debtor shall have the right in the regular course
of business, to process and sell Debtor’s inventory. If a Default should occur and be continuing,
Debtor will, upon receipt of all checks, drafts, cash and other remittances, in payment of
Collateral sold, deposit the same in a special bank account maintained with Bank, over which Bank
also has the power of withdrawal. Debtor agrees to notify Bank immediately in the event that any
inventory purchased by or delivered to Debtor is evidenced by a xxxx of lading, dock warrant, dock
receipt, warehouse receipt or other document of title and to deliver such document to Bank upon
request.
INSTRUMENTS, CHATTEL PAPER., DOCUMENTS. Any Collateral that is, or is evidenced by, instruments,
chattel paper or negotiable documents will be properly assigned to and the originals of any such
Collateral in tangible form deposited with and held by Bank, unless Bank shall hereafter otherwise
direct or consent in writing. Upon a Default that is continuing, Bank may, without notice, so long
as there are outstanding Obligations, exercise any or all rights of collection, conversion, or
exchange and other similar rights, privileges and options pertaining to such Collateral, but shall
have no duty to do so.
COLLATERAL DUTIES. Bank shall have no custodial or ministerial duties to perform with respect to
Collateral pledged except as set forth herein; and by way of explanation and not by way of
limitation, Bank shall incur no liability for any of the following: (i) loss or depreciation of
Collateral (unless caused by its willful misconduct or gross negligence), (ii) failure to present
any paper for payment or protest, to protest or give notice of nonpayment, or any other notice with
respect to any paper or Collateral.
TRANSFER OF COLLATERAL. Bank may assign its rights in Collateral or any part thereof to any
assignee who shall thereupon become vested with all the powers and rights herein given to Bank with
respect to the property so transferred and delivered, and Bank shall thereafter be forever relieved
and fully discharged from any liability with respect to such property so transferred, but with
respect to any property not so transferred, Bank shall retain all rights and powers hereby given.
INSPECTION, BOOKS AND RECORDS. Debtor will at all times keep accurate and complete records
covering each item of Collateral, including the proceeds therefrom. Bank, or any of its agents,
shall have the right, no more than twice per calendar year (unless a Default has occurred and is
continuing), upon reasonable prior notice and during normal business hours, at Debtor’s expense, to
inspect, audit, and examine the Collateral and to make copies of and extracts from the books,
records, journals, orders,
4
receipts, correspondence and other data relating to Collateral, Debtor’s business or any other
transaction between the parties hereto. Debtor will at its expense furnish Bank copies thereof
upon request. For the further security of Bank, it is agreed that Bank has and is hereby granted a
security interest in all books and records of Debtor pertaining to the Collateral.
COMPLIANCE WITH LAW. Debtor will comply with all federal, state and local laws and regulations,
applicable to it, including without limitation, laws and regulations relating to the environment,
labor or economic sanctions, in the creation, use, operation, manufacture and storage of the
Collateral and the conduct of its business.
REGULATION U. None of the proceeds of the credit secured hereby shall be used directly or
indirectly for the purpose of purchasing or carrying any margin stock in violation of any of the
provisions of Regulation U of the Board of Governors of the Federal Reserve System (“Regulation
U”), or for the purpose of reducing or retiring any indebtedness which was originally incurred to
purchase or carry margin stock or for any other purchase which might render the Loan a “Purpose
Credit” within the meaning of Regulation U.
CROSS COLLATERALIZATION LIMITATION. As to any other existing or future consumer purpose loan made
by Bank to Debtor, within the meaning of the Federal Consumer Credit Protection Act, Bank expressly
waives any security interest granted herein in Collateral that Debtor uses as a principal dwelling
and household goods.
ATTORNEYS’ FEES AND OTHER COSTS OF COLLECTION. Debtor shall pay all of Bank’s reasonable expenses
incurred in enforcing this Security Agreement and in preserving and liquidating Collateral,
including but not limited to, reasonable arbitration, paralegals’, attorneys’ and experts’ fees and
expenses, whether incurred with or without the commencement of a suit, trial, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.
DEFAULT. If any of the following occurs, a default (“Default”) under this Security Agreement shall
exist: Loan Document Default. A default under any loan Document. Collateral Loss or Destruction.
Any loss, theft, substantial damage, or destruction of Collateral not fully covered by insurance,
or as to which insurance proceeds are not remitted to Bank within 30 days of the loss. Collateral
Sale, Lease or Encumbrance. Any sale, lease, or encumbrance of any Collateral not specifically
permitted herein without prior written consent of Bank. Levy, Seizure or Attachment. The making
of any levy, seizure, or attachment on or of Collateral which is not removed within 10 days.
Unauthorized Collection of Collateral. Any attempt to collect, cash in or otherwise recover
deposits that are Collateral. Third Party Breach. Any default or breach by a Third Party of any
provision contained in any Control Agreement executed in connection with any of the Collateral.
Unauthorized Termination. Any attempt to terminate, revoke, rescind, modify, or violate the terms
of this Security Agreement or any Control Agreement without the prior written consent of Bank.
REMEDIES ON DEFAULT (INCLUDING POWER OF SALE). If a Default occurs Bank shall have all the rights
and remedies of a secured party under the Uniform Commercial Code. Without limitation thereto,
Bank shall have the following rights and remedies: (i) to take immediate possession of Collateral,
without notice or resort to legal process, and for such purpose, to enter upon any premises on
which Collateral or any part thereof may be situated and to remove the same therefrom, or, at its
option, to render Collateral unusable or dispose of said Collateral on Debtor’s premises; (ii) to
require Debtor to assemble the Collateral and make it available to Bank at a place to be designated
by Bank; (iii) to exercise its or its affiliate’s right of set-off or Bank lien as to any monies of
Debtor deposited in deposit accounts and investment accounts of any nature maintained by Debtor
with Bank or affiliates of Bank, without advance notice, regardless of whether such accounts are
general or special; (iv) to dispose of Collateral, as a unit or in parcels, separately or with any
real property interests also securing the Obligations, in any county or place to be selected by
Bank, at either private or public sale (at which public sale Bank may be the purchaser) with or
without having the Collateral physically present at said sale.
5
Any notice of sale, disposition or other action by Bank required by law and sent to Debtor at
Debtor’s address shown above, or at such other address of Debtor as may from time to time be shown
on the records of Bank, at least 5 days prior to such action, shall constitute reasonable notice to
Debtor. Notice shall be deemed given or sent when mailed postage prepaid to Debtor’s address as
provided herein. Bank shall be entitled to apply the proceeds of any sale or other disposition of
the Collateral, and the payments received by Bank with respect to any of the Collateral, to
Obligations in such order and manner as Bank may determine. Collateral that is subject to rapid
declines in value and is customarily sold in recognized markets may be disposed of by Bank in a
recognized market for such collateral without providing notice of sale. Debtor waives any and all
requirements that the Bank sell or dispose of all or any part of the Collateral at any particular
time, regardless of whether Debtor has requested such sale or disposition.
REMEDIES ARE CUMULATIVE. No failure on the part of Bank to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by Bank or any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any remedies provided by law, in equity, or in other Loan
Documents.
INDEMNIFICATION. Debtor shall protect, indemnify and save harmless Bank from and against all
losses, liabilities, obligations, claims, damages, penalties, fines, causes of action, costs and
expenses (including, without limitation, reasonable attorneys’ fees and expenses) (collectively,
“Damages”) imposed upon, incurred by or asserted or assessed against Bank on account of or in
connection with (i) the Loan Documents or any failure or alleged failure of Debtor to comply with
any of the terms of, or the inaccuracy or breach of any representation in, the Loan Documents, (ii)
the Collateral or any claim of loss or damage to the Collateral or any injury or claim of injury
to, or death of, any person or property that may be occasioned by any cause whatsoever pertaining
to the Collateral or the use, occupancy or operation thereof, (iii) any failure or alleged failure
of Debtor to comply with any law, rule or regulation applicable to it or to the Collateral or the
use, occupancy or operation of the Collateral (including, without limitation, the failure to pay
any taxes, fees or other charges), (iv) any Damages whatsoever by reason of any alleged action,
obligation or undertaking of Bank relating in any way to or any matter contemplated by the Loan
Documents, or (v) any claim for brokerage fees or such other commissions relating to the Collateral
or any other Obligations; provided that such indemnity shall be effective only to the extent of any
Damages that may be sustained by Bank in excess of any net proceeds received by it from any
insurance of Debtor (other than self-insurance) with respect to such Damages. Nothing contained
herein shall require Debtor to indemnify Bank for any Damages resulting from Bank’s gross
negligence or its willful misconduct. The indemnity provided for herein shall survive payment of
the Obligations and shall extend to the officers, directors, employees and duly authorized agents
of Bank. In the event Bank incurs any Damages arising out of or in any way relating to the
transaction contemplated by the Loan Documents (including any of the matters referred to in this
section), the amounts of such Damages shall be added to the Obligations, shall bear interest, to
the extent permitted by law, at the interest rate borne by the Obligations from the date incurred
until paid and shall be payable on demand.
MISCELLANEOUS. (i) Amendments and Waivers. No waiver, amendment or modification of any provision
of this Security Agreement shall be valid unless in writing and signed by Debtor and an officer of
Bank. No waiver by Bank of any Default shall operate as a waiver of any other Default or of the
same Default on a future occasion. (ii) Assignment. All rights of Bank hereunder are freely
assignable, in whole or in part, and shall inure to the benefit of and be enforceable by Bank, its
successors, assigns and affiliates. Debtor shall not assign its rights and interest hereunder
without the prior written consent of Bank, and any attempt by Debtor to assign without Bank’s prior
written consent is null and void. Any assignment shall not release Debtor from the Obligations.
This Security Agreement shall be binding upon Debtor, and the heirs, personal representatives,
successors, and assigns of Debtor. (iii) Applicable Law; Conflict Between Documents. This
Security Agreement shall be governed by and construed under the law of the jurisdiction named in
the address of the Bank shown on the first page hereof (the “Jurisdiction”) without regard to that
Jurisdiction’s conflict of laws principles, except to the extent that the UCC requires the
application of the law of a different jurisdiction. If any terms of this Security Agreement
conflict with
6
the terms of any commitment letter or loan proposal, the terms of this Security Agreement shall
control. (iv) Jurisdiction. Debtor irrevocably agrees to non-exclusive personal jurisdiction in
the state identified as the Jurisdiction above. (v) Severability. If any provision of this
Security Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective but only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Security Agreement. (vi) Notices.
Any notices to Debtor shall be sufficiently given, if in writing and mailed or delivered to the
address of Debtor shown above or such other address as provided hereunder; and to Bank, if in
writing and mailed or delivered to Wachovia Bank, National Association, Mail Code VA7628, P. O. Xxx
00000, Xxxxxxx, XX 00000 or Wachovia Bank, National Association, Mail Code VA7628, 00 Xxxxx
Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 or such other address as Bank may specify in writing from time
to time. Notices to Bank must include the mail code. In the event that Debtor changes Debtor’s
mailing address at any time prior to the date the Obligations are paid in full, Debtor agrees to
promptly give written notice of said change of address by registered or certified mail, return
receipt requested, all charges prepaid. (vii) Captions. The captions contained herein are
inserted for convenience only and shall not affect the meaning or interpretation of this Security
Agreement or any provision hereof. The use of the plural shall also mean the singular, and vice
versa. (viii) Joint and Several Liability. If more than one party has signed this Security
Agreement, such parties are jointly and severally obligated hereunder. (ix) Binding Contract.
Debtor by execution and Bank by acceptance of this Security Agreement, agree that each party is
bound by all terms and provisions of this Security Agreement. FINAL AGREEMENT. This Agreement and
the other Loan Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties.
DEFINITIONS. Loan Documents. The term “Loan Documents” refers to all documents, including this
Agreement, whether now or hereafter existing, executed in connection with or related to the
Obligations, and may include, without limitation and whether executed by Debtor or others,
commitment letters that survive closing, loan agreements, promissory notes, guaranty agreements,
deposit or other similar agreements, other security agreements, letters of credit and applications
for letters of credit, security instruments, financing statements, mortgage instruments, any
renewals or modifications, whenever any of the foregoing are executed, but does not include swap
agreements (as defined in 11 U.S.C. § 101, as in effect from time to time). Third Party. The term
“Third Party” means any Broker, collateral Agent, Securities Intermediary and/or bank which from
time to time maintains a securities account, and is acting in such capacity, for Debtor or
maintains a deposit account for Debtor with respect to any part of the Collateral. UCC. “UCC”
means the Uniform Commercial Code as presently and hereafter enacted in the Jurisdiction. Terms
defined in the UCC. Any term used in this Agreement and in any financing statement filed in
connection herewith which is defined in the UCC and not otherwise defined in this Agreement or any
other Loan Document has the meaning given to the term in the UCC.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
7
IN WITNESS WHEREOF, Debtor, on the day and year first written above, has caused this Security
Agreement to be executed under seal.
| PORTRAIT INNOVATIONS, INC., a Delaware corporation |
||||
| By: | /s/ Xxxx Xxxxxx | (SEAL) | ||
| Name: | Xxxx Xxxxxx | |||
| Title: | President and Chief Executive Officer |
|||
