1
COMMERCIAL SECURITY AGREEMENT
________________________________________________________________________________________________________________________
Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$500.000.00 09-10-1997 12-31-2001 599 328 0189952980 00582 --
________________________________________________________________________________________________________________________
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item
Borrower: UNIFIED HOLDINGS, INC. Lender: Bank One, Indiana, NA
000 X XXXXXXXXXXXX XXXXXX XXXXX 000 000 Xxxxxxxx Xxxxxx
XXXXXXXXXXXX, XX 00000 Xxxxxxxxxxxx, XX 00000
THIS COMMERCIAL SECURITY AGREEMENT Is entered Into by UNIFIED HOLDINGS, INC.
(referred to below as "Grantor") for the benefit of Bank One, Indiana, NA
(referred to below as "Lender"). For valuable consideration, Grantor grants
to Lender a security interest In the Collateral to secure the Indebtedness
and agrees that Lender shall have the rights stated In this Agreement with
respect to the Collateral, in addition to all other rights which Lender may
have by law.
DEFINITIONS. The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code as
adopted in the State of Indiana ("Code"). All references to dollar amounts
shall mean amounts In lawful money of the United States of America.
Agreement. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Commercial Security Agreement from time to time.
Collateral. The word "Collateral" means the following described
property of Grantor, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located:
All inventory, chattel paper, equipment and general intangibles
In addition, the word "Collateral" includes all the following,
whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:
(a) All attachments, accessions, accessories, tools, parts,
supplies, increases, and additions to and all replacements of
and substitutions for any property described above.
(b) All products and produce of any of the property described
in this Collateral section.
(c) All proceeds (including, without limitation, insurance
proceeds) from the sale, lease, destruction, loss, or other
disposition of any of the property described in this
Collateral section.
(d) All records and data relating to any of the property
described in this Collateral section, whether in the form of a
writing, photograph, microfilm, microfiche, or electronic
media, together with all of Grantor's right, title, and
interest in and to all computer software required to utilize,
create, maintain, and process any such records or data on
electronic media.
Event of Default. The words "Event of Default" mean and include any
of the Events of Default set forth below in the section titled
"Events of Default."
Grantor. The word "Grantor" means UNIFIED HOLDINGS, INC., its
successors and assigns (which is a debtor under the Code)
Guarantor. The word "Guarantor" means and includes without
limitation, each and all of the guarantors, sureties, and
accommodation parties in connection with the indebtedness.
Indebtedness. The word "Indebtedness" means the indebtedness
evidenced by the Note, including all principal and accrued interest
thereon, together with all other liabilities, costs and expenses for
which Grantor is responsible under this Agreement or under any of
the Related Documents. In addition, the word "Indebtedness"
Includes all other obligations, debts and liabilities, plus any
accrued interest thereon, owing by Grantor, or any one or more of
them, to Lender of any kind or character, now existing or hereafter
arising, as well as all present and future claims by Lender against
Grantor, or any one or more of them, and all renewals, extensions,
modifications, substitutions and rearrangements of any of the
foregoing; whether such Indebtedness arises by note, draft,
2
acceptance, guaranty, endorsement, letter of credit, assignment,
overdraft, indemnity agreement or otherwise; whether such
Indebtedness is voluntary or involuntary, due or not due, direct or
indirect, absolute or contingent, liquidated or unliquidated;
whether Grantor may be liable individually or jointly with others;
whether Grantor may be liable primarily or secondarily or as debtor,
maker, comaker, drawer, endorser, guarantor, surety, accommodation
party or otherwise.
Lender. The word "Lender" means Bank One, Indiana, NA, its
successors and assigns (which is a secured party under the Code).
Note. The word "Note" means the promissory note dated September 10,
1997, in the principal amount of $500,000.00 from UNIFIED HOLDINGS,
INC. to Lender, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of and
substitutions for such promissory note.
Related Documents. The words "Related Documents" mean and include
without limitation the Note and all credit agreements, loan
agreements, environmental agreements, guaranties, security
agreements, mortgages, deeds of trust, and all other instruments,
agreements and documents, whether now or hereafter existing,
executed in connection with the Note.
RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Grantor hereby grants Lender a contractual
possessory security interest In and hereby assigns, conveys, delivers,
pledges, and transfers all of Grantor's right, title and interest in and to
Grantor's accounts with Lender (whether checking, savings, or any other
account), including all accounts hold jointly with someone else and all
accounts Grantor may open in the future. Grantor authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all Indebtedness
against any and all such accounts.
OBLIGATIONS OF GRANTOR. Grantor represents, warrants and covenants to Lender
as follows:
Perfection of Security Interest. Grantor agrees to execute such
financing statements and to take whatever other actions are
requested by Lender to perfect and continue Lender's security
interest in the Collateral. Upon request of Lender, Grantor will
deliver to Lender any and all of the documents evidencing or
constituting the Collateral, and Grantor will note Lender's interest
upon any and all chattel paper if not delivered to Lender for
possession by Lender. Grantor hereby Irrevocably appoints Lender as
its attorney-in-fact for the purpose of executing any documents
necessary to perfect or to continue the security interest granted in
this Agreement. Lender may sign and file financing statements
without Grantor's signature. Lender may at any time, and without
further authorization from Grantor, file a carbon, photographic or
other reproduction of any financing statement or of this Agreement
for use as a financing statement. Grantor will reimburse Lender for
all expenses for the perfection and the continuation of the
perfection of Lender's security interest in the Collateral. Grantor
has disclosed to Lender all tradenames and assumed names currently
used by Grantor, all tradenames and assumed names used by Grantor
within the previous six (6) years and all of Grantor's current
business locations. Grantor will notify Lender in writing at least
thirty (30) days prior to the occurrence of any of the following:
(i) any changes in Grantor's names, tradename(s) or assumed name(s),
or (ii) any change in Grantor's business location(s) or the location
of any of the Collateral.
No Violation. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor
is a party, and its certificate or articles of incorporation and
bylaws do not prohibit any term or condition of this Agreement.
Enforceability of Collateral. To the extent the Collateral consists
of accounts, chattel paper, or general intangibles, the Collateral
is enforceable in accordance with its terms, is genuine, and
complies with applicable laws concerning form, content and manner of
preparation and execution, and all persons appearing to be obligated
on the Collateral have authority and capacity to contract and are in
fact obligated as they appear to be on the Collateral.
Location of the Collateral. Grantor, upon request of Lender, will
deliver to Lender in form satisfactory to Lender a schedule of real
properties and Collateral locations relating to Grantor's
operations, including without limitation the following: (a) all
real property owned or being purchased by Grantor; (b) all real
property being rented or leased by Grantor; (c) all storage
facilities owned, rented, leased, or being used by Grantor; and (d)
all other properties where Collateral is or may be located. Except
in the ordinary course of its business, Grantor shall not remove the
Collateral from its existing locations without the prior written
consent of Lender.
Removal of Collateral. Grantor shall keep the Collateral (or to the
extent the Collateral consists of intangible property such as
accounts, the records concerning the Collateral) at Grantor's
address shown above, or at such other locations as are acceptable to
Lender. Except in the ordinary course of its business, including
the sales of inventory, Grantor shall not remove the Collateral from
its existing locations without the prior written consent of Lender.
To the extent that the Collateral consists of vehicles, or other
titled property, Grantor shall not take or permit any action which
would require application for certificates of title for the vehicles
outside the State of Indiana, without the prior written consent of
Lender.
Transactions Involving Collateral. Except for inventory sold or
accounts collected in the ordinary course of Grantor's business,
Grantor shall not sell, offer to sell, or otherwise transfer or
dispose of the Collateral. While Grantor is not in default under
this Agreement, Grantor may sell inventory, but only in the ordinary
course of its business and only to buyers who qualify as a buyer in
the ordinary course of business. A sale in the ordinary course of
Grantor's business does not include a transfer In partial or total
satisfaction of a debt or any bulk sale. Grantor shall not pledge,
mortgage, encumber or otherwise permit the Collateral to be subject
to any lien, security interest, encumbrance, or charge, other than
the security Interest provided for in this Agreement, without the
prior written consent of Lender. This includes security interests
even if junior in right to the security interests granted under this
Agreement. Unless waived by Lender, all proceeds from any
disposition of the Collateral (for whatever reason) shall be held in
trust for Lender and shall not be commingled with any other
3
funds; provided however, this requirement shall not constitute consent
by Lender to any sale or other disposition. Upon receipt, Grantor
shall immediately deliver any such proceeds to Lender.
Title. Grantor represents and warrants to Lender that it is the
owner of the Collateral and holds good and marketable title to the
Collateral, free and clear of all liens and encumbrances except for
the lien of this Agreement. No financing statement covering any of
the Collateral is on file in any public office other than those
which reflect the security interest created by this Agreement or to
which Lender has specifically consented. Grantor shall defend
Lender's rights in the Collateral against the claims and demands of
all other persons.
Collateral Schedules and Locations. As often as Lender shall
require, and insofar as the Collateral consists of general
intangibles, Grantor shall deliver to Lender schedules of such
Collateral, including such information as Lender may require,
including without limitation names and addresses of account debtors
and agings of general intangibles. Insofar as the Collateral
consists of inventory an equipment, Grantor shall deliver to Lender,
as often as Lender shall require, such lists, descriptions, and
designations of such Collateral as Lender may require to identify
the nature, extent, and location of such Collateral. Such
information shall be submitted for Grantor and each of Its
subsidiaries or related companies.
Maintenance and Inspection of Collateral. Grantor shall maintain
all tangible Collateral in good condition and repair. Grantor will
not commit or permit damage to or destruction of the Collateral or
any part of the Collateral. Lender and its designated
representatives and agents shall have the right at all reasonable
times to examine, inspect, and audit the Collateral wherever
located. Grantor shall immediately notify Lender of all cases
involving the return, rejection, repossession, loss or damage of or
to any Collateral; of any request for credit or adjustment or of any
other dispute arising with respect to the Collateral; and generally
of all happenings and events affecting the Collateral or the value
or the amount of the Collateral.
Taxes, Assessments and Liens. Grantor will pay when due all taxes,
assessments and governmental charges or levies upon the Collateral
and provide Lender evidence of such payment upon its request.
Grantor may withhold any such payment or may elect to contest any
lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender's
interest in the Collateral is not jeopardized in Lender's sole
opinion. If the Collateral Is subjected to a lien which is not
discharged within fifteen (15) days, Grantor shall deposit with
Lender cash, a sufficient corporate surety bond or other security
satisfactory to Lender in an amount adequate to provide for the
discharge of the lien plus any interest, costs, attorneys' fees or
other charges that could accrue as a result of foreclosure or sale
of the Collateral. In any contest Grantor shall defend itself and
Lender and shall satisfy any final adverse judgment before
enforcement against the Collateral. Grantor shall name Lender as an
additional obligor under any surety bond furnished in the contest
proceedings.
Compliance With Governmental Requirements. Grantor is conducting
and will continue to conduct Grantor's businesses in material
compliance with all federal, state and local laws, statutes,
ordinances, rules, regulations, orders, determinations and court
decisions applicable to Grantor's businesses and to the production,
disposition or use of the Collateral, including without limitation,
those pertaining to health and environmental matters such as the
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 (collectively, together with any
subsequent amendments, hereinafter called "CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended by the Used Oil
Recycling Act of 1980, the Solid Waste Disposal Act Amendments of
1980, and the Hazardous Substance Waste Amendments of 1984
(collectively, together with any subsequent amendments, hereinafter
called "RCRA"). Grantor represents and warrants that (i) none of
the operations of Grantor is the subject of a federal, state or
local investigation evaluating whether any material remedial action
is needed to respond to a release or disposal of any toxic or
hazardous substance or solid waste into the environment; (ii)
Grantor has not filed any notice under any federal, state or local
law indicating that Grantor is responsible for the release into the
environment, the disposal on any promises in which Grantor is
conducting its businesses or the improper storage, of any material
amount of any toxic or hazardous substance or solid waste or that
any such toxic or hazardous substance or solid waste has been
released, disposed of or is improperly stored, upon any premises on
which Grantor is conducting its businesses; and (iii) Grantor
otherwise does not have any known material contingent liability in
connection with the release into the environment, disposal or the
improper storage, of any such toxic or hazardous substance or solid
waste. The terms "hazardous substance" and "release", as used
herein, shall have the meanings specified in CERCLA, and the terms
"solid waste" and "disposal", as used herein, shall have the
meanings specified in RCRA; provided, however, that to the extent
that the laws of the State of Indiana establish meanings for such
terms which are broader than that specified in either CERCLA or
RCRA, such broader meanings shall apply. The representations and
warranties contained herein are based on Grantor's due diligence in
investigating the Collateral for hazardous wastes and substances.
Grantor hereby (a) releases and waives any future claims against
Lender for indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws, and (b)
agrees to indemnify and hold harmless Lender against any and all
claims and losses resulting from a breach of this provision of this
Agreement. This obligation to indemnify shall survive the payment
of the Indebtedness and the termination of this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and
maintain all risk insurance, including without limitation fire,
theft and liability coverage together with such other Insurance as
Lender may require with respect to the Collateral, in form, amounts,
Coverages and basis reasonably acceptable to Lender and issued by a
company or companies reasonably acceptable to Lender. Grantor, upon
request of Lender, will deliver to Lender from time to time the
policies or certificates of Insurance In form satisfactory to
Lender, including stipulations that coverages will not be cancelled
or diminished without at least thirty (30) days' prior written
notice to Lender and not including any disclaimer of the insurer's
liability for failure to give such a notice. Each insurance policy
also shall include an endorsement providing that coverage in favor
of Lender will not be impaired in any way by any act, omission or
default of Grantor or any other person. In connection with all
policies covering assets in which Lender holds or is offered a
security interest, Grantor will provide Lender with such loss
payable or other endorsements as Lender may require. If Grantor at
any time fails to obtain or maintain any insurance as required under
this Agreement, Lender may (but shall not be obligated to) obtain
such insurance as Lender deems appropriate, including if it so
chooses "single interest insurance," which will cover only Lender's
interest in the Collateral.
4
Application of Insurance Proceeds. Grantor shall promptly notify
Lender of any loss or damage to the Collateral. Lender may make
proof of loss if Grantor fails to do so within fifteen (15) days of
the casualty. All proceeds of any insurance on the Collateral,
including accrued proceeds thereon, shall be held by Lender as part
of the Collateral. If Lender consents to repair or replacement of
the damaged or destroyed Collateral, Lender shall, upon satisfactory
proof of expenditure, pay or reimburse Grantor from the proceeds for
the reasonable cost of repair or restoration. If Lender does not
consent to repair or replacement of the Collateral, Lender shall
retain a sufficient amount of the proceeds to pay all of the
Indebtedness, and shall pay the balance to Grantor. Any proceeds
which have not been disbursed within six (6) months after their
receipt and which Grantor has not committed to the repair or
restoration of the Collateral shall be used to prepay the
Indebtedness. Application of insurance proceeds to the payment of
the Indebtedness will not extend, postpone or waive any payments
otherwise due, or change the amount of such payments to be made and
proceeds may be applied in such order and such amounts as Lender may
elect.
Solvency of Grantor. As of the date hereof, and after giving effect to
this Agreement and the completion of all other transactions contemplated by
Grantor at the time of the execution of this Agreement, (i) Grantor is and
will be solvent, (ii) the fair salable value of Grantor's assets exceeds and
will continue to exceed Grantor's liabilities (both fixed and contingent),
(iii), Grantor is paying and will continue to be able to pay its debts as
they mature, and (iv) if Grantor is not an individual, Grantor has and will
have sufficient capital to carry on Grantor's businesses and all businesses
in which Grantor is about to engage.
Lien Not Released. The lien, security interest and other security
rights of Lender hereunder shall not be impaired by an indulgence, moratorium
or release granted by Lender, including but not limited to, the following:
(a) any renewal, extension, increase or modification of any of the
Indebtedness; (b) any surrender, compromise, release, renewal, extension,
exchange or substitution granted in respect of any of the Collateral; (c) any
release or indulgence granted to any endorser, guarantor or surety of any of
the Indebtedness; (d) any release of any other collateral for any of the
Indebtedness; (e) any acquisition of any additional collateral for any of the
Indebtedness; and (f) any waiver or failure to exercise any right, power or
remedy granted herein, by law or in any of the Related Documents.
Request for Environmental Inspections. Upon Lender's reasonable request
from time to time, Grantor will obtain at Grantor's expense an inspection or
audit report(s) addressed to Lender of Grantor's operations from an
engineering or consulting firm approved by Lender, indicating the presence or
absence of toxic and hazardous substances, underground storage tanks and
solid waste on any premises in which Grantor is conducting a business;
provided, however, Grantor will be obligated to pay for the cost of any such
inspection or audit no more than one time in any twelve (12) month period
unless Lender has reason to believe that toxic or hazardous substance or
solid wastes have been dumped or released on any such promises. If Grantor
fails to order or obtain an inspection or audit within ton (10) days after
Lender's request, Lender may at its option order such inspection or audit,
and Grantor grants to Lender and its agents, employees, contractors and
consultants access to the premises in which it is conducting its business and
a license (which is coupled with an interest and is irrevocable) to obtain
inspections and audits. Grantor agrees to promptly provide Lender with a
copy of the results of any such inspection or audit received by Grantor. The
cost of such inspections and audits by Lender shall be a part of the
Indebtedness, secured by the Collateral and payable by Grantor on demand.
Chattel Paper. To the extent a security interest in the chattel
paper of Grantor is granted hereunder, Grantor represents and
warrants that all such chattel paper have only one original
counterpart and no other party other than Grantor or Lender is in
actual or constructive possession of any such chattel paper. Grantor
agrees that at the option of and on the request by Lender, Grantor
will either deliver to Lender all originals of the chattel paper
which is included in the Collateral or will xxxx all such chattel
paper with a legend indicating that such chattel paper is subject to
the security interest granted hereunder.
Landlord's Waivers. Grantor egress that upon the request of Lender,
Grantor shall cause each landlord of real property leased by Grantor
at which any of the Collateral is located from time to time to
execute and deliver agreements satisfactory in form and substance to
Lender by which such landlord waives or subordinates any rights it
may have in the Collateral.
GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of
the tangible personal property and beneficial use of all the Collateral and
may use it in any lawful manner not inconsistent with this Agreement or the
Related Documents, provided that Grantor's right to possession and beneficial
use shall not apply to any Collateral where possession of the Collateral by
Lender is required by law to perfect Lender's security interest in such
Collateral. If Lender at any time has possession of any Collateral, whether
before or after an Event of Default, Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if Lender
takes such action for that purpose as Grantor shall request or as Lender, in
Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take
any steps necessary to preserve any rights In the Collateral against prior
parties, nor to protect, preserve or maintain any security interest given to
secure the Indebtedness.
EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may (but
shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Lender
for such purposes will then bear interest at the rate charged under the Note
from the date incurred or paid by Lender to the date of repayment by Grantor.
All such expenses shall become a part of the Indebtedness and be payable on
demand by Lender. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon the occurrence of an Event of
Default.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default under this Agreement:
Default on Indebtedness. Failure of Grantor to make any payment when
due on the Indebtedness.
5
Other Defaults. Failure of Grantor to comply with or to perform any
other term, obligation, covenant or condition contained in this
Agreement, the Note, any of the other Related Documents or in any
other agreement now existing or hereafter arising between Lender and
Grantor.
False Statements. Any warranty, representation or statement made or
furnished to Lender under this Agreement, the Note or any of the
other Related Documents is false or misleading in any material
respect.
Default to Third Party. The occurrence of any event which permits
the acceleration of the maturity of any indebtedness owing by Grantor
or any Guarantor to any third party under any agreement or
undertaking.
Bankruptcy or Insolvency. If the Grantor or any Guarantor: (i)
becomes insolvent, or makes a transfer in fraud of creditors, or
makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts as they become due; (ii)
generally is not paying its debts as such debts become due; (iii) has
a receiver, trustee or custodian appointed for, or take possession
of, all or substantially all of the assets of such party or any of
the Collateral, either in a proceeding brought by such party or in a
proceeding brought against such party and such appointment is not
discharged or such possession is not terminated within sixty (60)
days after the effective date thereof or such party consents to or
acquiesces in such appointment or possession; (iv) files a petition
for relief under the United States Bankruptcy Code or any other
present or future federal or state insolvency, bankruptcy or similar
laws (all of the foregoing hereinafter collectively called
"Applicable Bankruptcy Law") or an involuntary petition for relief is
filed against such party under any Applicable Bankruptcy Low and such
involuntary petition is not dismissed within sixty (60) days after
the filing thereof, or an order for relief naming such party is
entered under any Applicable Bankruptcy Law, or any composition,
rearrangement, extension, reorganization or other relief of debtors
now or hereafter existing is requested or consented to by such party;
(v) fails to have discharged within a period of sixty (60) days any
attachment, sequestration or similar writ levied upon any property of
such party; or (vi) fails to pay within thirty (30) days any final
money judgment against such party.
Liquidation, Death and Related Events. If Grantor or any Guarantor
is an entity, the liquidation, dissolution, merger or consolidation
of any such entity or, if any of such parties is an individual, the
death or legal incapacity of any such individual.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by
any governmental agency against the Collateral or any other
collateral securing the Indebtedness.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the Code. In addition and without limitation, Lender may
exercise any one or more of the following rights and remedies:
Accelerate Indebtedness. Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to
pay, immediately due and payable, without notice.
Assemble Collateral. Lender may require Grantor to deliver to Lender
all or any portion of the Collateral and any and all certificates of
title and other documents relating to the Collateral. Lender may
require Grantor to assemble the Collateral and make it available to
Lender at a place to be designated by Lender. Lender also shall have
full power to enter upon the property of Grantor to take possession
of and remove the Collateral. If the Collateral contains other goods
not covered by this Agreement at the time of repossession, Grantor
agrees Lender may take such other goods, provided that Lender makes
reasonable efforts to return them to Grantor after repossession.
Sell the Collateral. Lender shall have full power to sell, lease,
transfer, or otherwise dispose of the Collateral or the proceeds
thereof in its own name or that of Grantor. Lender may sell the
Collateral (as a unit or in parcels) at public auction or private
sale. Lender may buy the Collateral, or any portion thereof, (i) at
any public sale, and (ii) at any private sale if the Collateral is of
a type customarily sold in a recognized market or is of a type which
is the subject of widely distributed standard price quotations.
Lender shall not be obligated to make any sale of Collateral
regardless of a notice of sale having been given. Lender may adjourn
any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
Unless the Collateral is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market,
Lender will give Grantor reasonable notice of the time and place of
any public sale thereof or of the time after which any private sale
or any other intended disposition of the Collateral is to be made.
The requirements of reasonable notice shall be met if such notice is
given at least ten (10) days prior to the date any public sale, or
after which a private sale, of any of such Collateral is to be held.
All expenses relating to the disposition of the Collateral, including
without limitation the expenses of retaking, holding, insuring,
preparing for sale and selling the Collateral, shall become a part of
the Indebtedness secured by this Agreement and shall be payable on
demand, with interest at the Note rate from date of expenditure until
repaid. Under all circumstances, the Indebtedness will be repaid
without relief from any Indiana or other valuation and appraisement
laws.
Appoint Receiver. To the extent permitted by applicable law, Lender
shall have the following rights and remedies regarding the
appointment of a receiver: (a) Lender may have a receiver appointed
as a matter of right, (b) the receiver may be an employee of Lender
and may serve without bond, and (c) all fees of the receiver and his
or her attorney shall become part of the Indebtedness secured by this
Agreement and shall be payable on demand, with interest at the Note
rate from date of expenditure until repaid.
Collect Revenues, Apply Accounts. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from
the Collateral. Lender may transfer any Collateral into its own name
or that of its nominee and receive the payments, rents, income, and
revenues therefrom and hold the same as security for the Indebtedness
or apply it to payment of the Indebtedness in such order of
preference as Lender may determine. Insofar as the Collateral
6
consists of accounts, general intangibles, insurance policies,
instruments, chattel paper, choses in action, or similar property,
Lender may demand, collect, receipt for, settle, compromise, adjust,
xxx for, foreclose, or realize on the Collateral as Lender may
determine. For these purposes, Lender may, on behalf of and in the
name of Grantor, receive, open and dispose of mail addressed to
Grantor; change any address to which mail and payments are to be
sent; and endorse notes, checks, drafts, money orders, documents of
title, instruments and items pertaining to payment, shipment, or
storage of any Collateral. To facilitate collection, Lender may
notify account debtors and obligors on any Collateral to make
payments directly to Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the
Collateral, Lender may obtain a judgment against Grantor for any
deficiency remaining on the Indebtedness due to Lender after
application of all amounts received from the exercise of the rights
provided in this Agreement. Grantor shall be liable for a deficiency
even if the transaction described in this subsection is a sale of
accounts or chattel paper.
Other Rights and Remedies. Lender shall have all the rights and
remedies of a secured creditor under the provisions of the Code, as
may be amended from time to time. In addition, Lender shall have and
may exercise any or all other rights and remedies it may have
available at law, in equity, or otherwise. Grantor waives any right
to require Lender to proceed against any third party, exhaust any
other security for the Indebtedness or pursue any other right or
remedy available to Lender.
Cumulative Remedies. All of Lender's rights and remedies, whether
evidenced by this Agreement or the Related Documents or by any other
writing, shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor
under this Agreement, after Grantor's failure to perform, shall not
affect Lender's right to declare a default and to exercise its
remedies.
MISCELLANEOUS PROVISIONS.
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement and supercedes all prior
written and oral agreements and understandings, it any, regarding
same. No alteration of or amendment to this Agreement shall be
effective unless given in writing and signed by the party or parties
sought to be charged or bound by the alteration or amendment.
Applicable Law. This Agreement has been delivered to Lender and
accepted by Lender in the State of Indiana. Subject to the
provisions on arbitration in any Related Document, this Agreement
shall be governed by and construed in accordance with the laws of the
State of Indiana without regard to any conflict of laws or provisions
thereof.
JURY WAIVER. THE UNDERSIGNED AND LENDER (BY ITS ACCEPTANCE
HEREOF), HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF
OR IN ANY WAY RELATED TO THIS DOCUMENT OR ANY OTHER RELATED DOCUMENT.
THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE
FINANCING DESCRIBED HEREIN OR IN THE OTHER RELATED DOCUMENTS.
Attorneys' Fees; Expenses. Grantor will upon demand pay to Lender
the amount of any and all costs and expenses (including without
limitation, reasonable attorneys' fees and expenses) which Lender may
incur in connection with (i) the perfection and preservation of the
collateral assignment and security interests created under this
Agreement, (ii) the custody, preservation, use or operation of, or
the sale of, collection from, or other realization upon, the
Collateral, (iii) the exercise or enforcement of any of the rights of
Lender under this Agreement, or (iv) the failure by Grantor to
perform or observe any of the provisions hereof.
Termination. Upon (i) the satisfaction in full of the Indebtedness
and all obligations hereunder, (ii) the termination or expiration of
any commitment of Lender to extend credit that would become
Indebtedness hereunder, and (iii) Lender's receipt of a written
request from Grantor for the termination hereof, this Agreement and
the security interests created hereby shall terminate. Upon
termination of this Agreement and Grantor's written request, Lender
will, at Grantor's sole cost and expense, return to Grantor such of
the Collateral as shall not have been sold or otherwise disposed of
or applied pursuant to the terms hereof and execute and deliver to
Grantor such documents as Grantor shall reasonably request to
evidence such termination.
Indemnity. Grantor hereby agrees to indemnify, defend and hold
harmless Lender, and its officers, directors, shareholders,
employees, agents and representatives (each an "Indemnified Person")
from and against any and all liabilities obligations, claims, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature (collectively, the "Claims")
which may be imposed on, incurred by or asserted against, any
Indemnified Person (whether or not caused by any Indemnified Person's
sole, concurrent or contributory negligence) arising in connection
with the Related Documents, the Indebtedness or the Collateral
(including, without limitation, the enforcement of the Related
Documents and the defense of any Indemnified Person's action and/or
inactions in connection with the Related Documents), except to the
limited extent that the Claims against the Indemnified Person are
proximately caused by such Indemnified Person's gross negligence or
willful misconduct. The indemnification provided for in this Section
shall survive the termination of this Agreement and shall extend and
continue to benefit each individual or entity who is or has at any
time been an Indemnified Person hereunder.
Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
7
Notices. All notices required to be given under this Agreement shall
be given in writing, and shall be effective when actually delivered
or when deposited with a nationally recognized overnight courier or
deposited in the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at the
address shown above. Any party may change its address for notices
under this Agreement by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the
party's address. To the extent permitted by applicable law, if there
is more than one Grantor, notice to any Grantor will constitute
notice to all Grantors. For notice purposes, Grantor will keep
Lender informed at all times of Grantor's current address(es).
Power of Attorney. Grantor hereby irrevocably appoints Lender as its
true and lawful attorney-in-fact, such power of attorney being
coupled with an interest, with full power of substitution to do the
following in the place and stead of Grantor and in the name of
Grantor: (a) to demand, collect, receive, receipt for, xxx and
recover all sums of money or other property which may now or
hereafter become due, owing or payable from the Collateral; (b) to
execute, sign and endorse any and all claims, instruments, receipts,
checks, drafts or warrants issued in payment for the Collateral; (c)
to settle or compromise any and all claims arising under the
Collateral, and, in the place and stead of Grantor, to execute and
deliver its release and settlement for the claim; and (d) to file any
claim or claims or to take any action or institute or take part in
any proceedings, either in its own name or in the name of Grantor, or
otherwise, which in the discretion of Lender may seem to be necessary
or advisable. This power is given as security for the Indebtedness,
and the authority hereby conferred is and shall be irrevocable and
shall remain in full force and effect until renounced by Lender.
Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be invalid or unenforceable as to any
person or circumstance, such finding shall not render that provision
invalid or unenforceable as to any other persons or circumstances.
If feasible, any such offending provision shall be deemed to be
modified to be within the limits of enforceability or validity;
however, if the offending provision cannot be so modified, it shall
be stricken and all other provisions of this Agreement in all other
respects shall remain valid and enforceable.
Successor interests. Subject to the limitations set forth above on
transfer of the Collateral, this Agreement shall be binding upon and
inure to the benefit of the parties, their successors and assigns;
provided, however, Grantor's rights and obligations hereunder may not
be assigned or otherwise transferred without the prior written
consent of Lender.
Waiver. Lender shall not be deemed to have waived any rights under
this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right. A
waiver by Lender of a provision of this Agreement shall not prejudice
or constitute a waiver of Lender's right to thereafter demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, nor any course of dealing
between Lender and Grantor, shall constitute a waiver of any of
Lender's rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance
shall not constitute continuing consent to subsequent instances where
such consent is required and in all cases such consent may be granted
or withheld in the sole discretion of Lender.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL
SECURITY AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
SEPTEMBER 10, 1997.
GRANTOR:
UNIFIED HOLDINGS, INC.
By: /s/ Xxxx X. Xxxx
XXXX X. XXXX, PRESIDENT & CEO
