Exhibit 10.59
SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") dated as of
January 1, 1996, is made by Pyrenees Group, Inc., a Nevada Corporation
("Pledgor"), having its principal place of business at 00000 Xxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000 (the "Address") in favor of Polyphase
Corporation, a Nevada corporation, having its principal place of business at
(and the address where information concerning the security interest herein
granted may be obtained is) 00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx Xxxxx 00000
("Secured Party").
WHEREAS, Pledgor has executed and delivered to Secured Party a Guaranty,
dated as of even date herewith (as the same may be modified, amended or
restated, the "Guaranty"); and
WHEREAS, Secured Party has made and is willing to make the loans evidenced
by the Guaranty on the condition, among others, that Pledgor shall have executed
and delivered to Secured Party this Agreement.
NOW, THEREFORE. In consideration of the promises and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, Pledgor and Secured Party hereby agree as follows:
1. Incorporation of Note. The Guaranty, and the terms and provisions
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thereof are hereby incorporated herein in their entirety. Unless
otherwise defined herein, the terms defined in the Guaranty and used
herein shall have the respective meanings set forth in the Note and
the master Loan Agreement.
2. Certain Definitions. As used herein, the following terms have the
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meanings indicated:
"Accounts Receivable" shall mean any "account", as such term is defined in
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the UCC, now owned or hereafter acquired by Pledgor and, in any event, shall
include, without limitation, all accounts, accounts receivable, other
receivables, contract rights, chattel paper, instruments, documents, notes,
purchase orders, receipts and other forms of obligations now owned or hereafter
received or acquired by or belonging or owing to Pledgor (including, without
limitation, under any trade names, styles or divisions thereof) whether arising
out of goods sold or services rendered by Pledgor or from any other transaction,
and all of Pledgor's rights to any goods represented by any of the foregoing,
and all rights to the payment of money, including but not limited to tax refunds
and insurance proceeds.
"Chattel Paper" shall mean any "chattel paper", as such term is defined in
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the UCC, now owned or hereafter acquired by Pledgor.
"Collateral" shall have the meaning assigned to such term in Section 3 of
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this Security Agreement.
"Contracts" shall mean all contracts, licenses, undertakings or other
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agreements in or under which Pledgor may now or hereafter have any right, title
or interest, including, without limitation, (i) with respect to Account
Receivable, any agreement relating to the terms of payment or the terms of
performance thereof, and (ii) all lease agreements relating to Real Property or
personal property, rental contracts, rent-to-own contracts, rent-to-rent
contracts, lease-purchase agreements and any and all related agreements.
"Documents" shall mean any "documents", as such term is defined in the UCC,
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now owned or hereafter acquired by Pledgor, including, but not limited to all
files, records, books, ledger card, computer programs, tapes, disks and related
electronic data processing software.
"Equipment" shall mean any "equipment", as such term is defined is defined
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in the UCC, now owned or hereafter acquired by the Pledgor and, in any event,
shall include, without limitation, all machinery, equipment, furnishings,
fixtures, vehicles, trucks, automobiles, tools, dies, computers and office
equipment now owned or hereafter acquired by Pledgor and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
"Event of Default" shall have the meaning specified in the Guaranty.
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"Intangible Assets" shall mean any "general intangibles". As such term is
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defined in the UCC, now owned or hereafter acquired by Pledgor and, in any
event, shall include without limitation, all right, title and interest which
Pledgor may now or hereafter have in or under all licenses, customer lists,
trade names, assumed names, rights in intellectual property, permits, service
marks, service xxxx applications, patents, patent applications, trademarks,
trademark applications, telephone numbers and listings of Pledgor, copyrights,
trade secrets, proprietary or confidential information, inventions (whether
patented, patentable or not), technical information, procedures, designs,
knowledge, know-how, software, databases, data, skill, expertise, experience,
processes, models, drawings, materials, books, records, tax refunds, prepaid
expenses, rights under capitalized leases, lease agreements relating to Real
property or personal property, rental contracts, lease-purchase agreements and
related agreements, goodwill and rights of indemnification now owned or
hereafter acquired by Pledgor.
"Instruments" shall mean any "instrument", as such term is defined in the
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UCC, now owned or hereafter acquired by Pledgor.
"Proceeds" shall mean "proceeds", as such term is defined in the UCC and,
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in any event, shall include, without limitation, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to Pledgor from time to time
with respect to any of the Collateral, (ii) any and all payments made or due and
payable to Pledgor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental body, authority, bureau or agency (or any person
acting under color of governmental authority), (iii) any and all other amounts
from time to time paid or payable under or in connection with any of the
Collateral, and (iv) any cash, deposits, securities, instruments, documents,
policies and certificates of insurance.
"Real Property" shall mean all right, title and interest now or hereafter
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held by Pledgor (whether in fee, under leasehold or otherwise) to or in any real
property.
"Secured Obligations" shall mean all of Pledgor's liabilities, obligations
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and indebtedness to Secured Party of any and every kind and nature, whether
arising under the Note, the Guaranty, this Security Agreement, or any of the
other documents (including any amendments, restatements, extensions, renewals or
other modifications of any of the foregoing) executed in connection herewith or
therewith by Pledgor (the "transaction Documents") or otherwise, now or
hereafter owing, arising, due or payable from Pledgor or the Company to Secured
Party and howsoever evidenced, created, incurred, acquired or owing, whether
primary, secondary, direct, contingent, fixed or otherwise, including
obligations or performance.
"Transaction Documents" shall have the meaning set forth in the definition
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of "Secured Obligations."
"UCC" shall mean the Uniform Commercial Code as the same may, from time to
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time, be in effect in the State of Texas; provided, however, in the event that,
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by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of Secured Party's security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of Texas, the term "UCC" shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions hereof
relating thereto.
3. Grant of Security Interest. As collateral security for the prompt and
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complete payment and performance when due (whether at stated maturity,
by acceleration or otherwise) of all the Secured Obligations and to
induce Secured Party to make the loans to PLY Stadium Partners, Inc.
(the "Company") contemplated by the Master Loan Agreement or Note,
Pledgor hereby assigns, conveys, mortgages, pledges, hypothecates and
transfers to Secured Party and hereby grants to Secured Party a
continuing security interest in all of Pledgor's right, title and
interests in and to all of the following property and interest in
property of Pledgor, whether now owned or existing, hereafter acquired
or arising, or in which Pledgor now or hereafter has any rights,
wheresoever located: All right, title, interest and ownership in and
to Polyphase Corporation, Pyrenees Group, Inc. and PLY Stadium
Partners, Inc., and to the extent not otherwise included, all Proceeds
of each of the foregoing and all accessions to, substitutions,
additions, products, proceeds and replacements for, and rents,
profits, and products of each of the foregoing (all of the foregoing
being hereinafter collectively referred to as "Collateral"). The
assignments and security interests granted herein are made as security
only and shall not subject Secured Party to, or transfer or in any way
affect or modify, any obligation of Pledgor with respect to any of the
Collateral or any transaction involving or giving rise thereto.
4. Rights of Secured Party; Limitations on Secured Party's Obligations.
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It is expressly agreed by Pledgor that, anything herein to the
contrary notwithstanding, Pledgor shall remain liable under each of
his Contracts, each Transaction Document and other Collateral to
observe and perform all the conditions and obligations to be observed
and performed by him thereunder. Secured Party shall not have any
obligation or liability under any Contract, any Transaction Document
or other Collateral by reason of or arising out of this Security
Agreement or the granting to Secured Party of a security interest
therein or the receipt by Secured Party of any payment relating
thereto, nor shall Secured Party be required or obligated in any
manner to perform or fulfill any of the obligations of Pledgor under
or pursuant thereto, or to make any inquiry as to the nature of the
sufficiency of any payment received by him or the sufficiency of any
performance by any party thereunder, or to present or file any claim,
or to take any action to collect or enforce any performance or the
payment of any amounts which may have been assigned to it or to which
it may be entitled at any time or times.
5. Representations and Warranties. Pledgor represents and warrants to
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Secured Party, as of the date hereof and continuously, all of which
representations and warranties shall survive indefinitely, that:
(a) Pledgor is solvent; and possesses all requisite power and
authority to execute, deliver and comply with the terms of
this Agreement, the Guaranty and all other Transaction
Documents to which Pledgor is party.
(b) The Transaction Documents to which Pledgor is a party, when
executed and delivered by all parties thereto, will
constitute the valid, legal and binding obligations of
Pledgor, enforceable against Pledgor in accordance with
their terms.
(c) Pledgor is the sole owner of each item of the Collateral in
which it purports to grant a security interest hereunder,
having good and marketable title thereto, free and clear of
any and all liens and encumbrances. No material amounts
payable under or in connection with any of its Accounts
Receivable, Contracts or any Transaction Document are
evidenced by Instruments which have not been delivered to
Secured Party.
(d) No effective security agreement, financing statement,
equivalent security or lien instrument or continuation
statement covering all or any part of the Collateral is on
file or of record in any public office, except such as may
have been filed by Pledgor in favor of Secured Party.
(e) Upon the filing of UCC financing statements at the Texas
Secretary of State and in Dallas County, Texas and upon
Secured Party obtaining possession of all instruments,
Chattel Paper and pledged shares of the Pledgor, this
Security Agreement will be effective to create a valid and
continuing lien on and perfected security interest in the
Collateral prior to all other liens and security interests.
All action necessary or desirable to protect and perfect
such security interest in each item of the Collateral has
been duly taken.
(f) Pledgor is not in default under the Transaction Documents
to which Pledgor is a party.
(g) Pledgor's principal residence and location where its
records concerning the Collateral are kept is the Address.
All offices and places of business of Pledgor and all
locations of Collateral are as described on Schedule 5(g)
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hereof (collectively the "Collateral Locations"), which
Schedule sets forth (i) the complete address for each such
Collateral Location, (ii) identifies whether each such
Collateral Location is used by Pledgor as an office,
warehouse or otherwise, and (iii) provides a description of
the lease pertaining to such Collateral Location, including
the term, rental payment obligations and full name and
address of landlord. Pledgor owns no Real Property.
(h) Secured Party will have a valid and perfected first
priority lien and security interest in all Collateral.
6. Certain Covenants. Until the Secured Obligations are paid and
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performed in full, Pledgor covenants and agrees with Secured Party as
follows:
(a) Financing Statements and Further Documentation. Pledgor
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will join with Secured Party in the execution and filing of
such financing statement or statements in form and content
satisfactory to Secured Party. Pledgor will pay all costs
of filing any financing, continuation or termination
statements with respect to the security interest created by
this Agreement, together with costs and expenses of any
lien search required by Secured Party, from time to time so
long as this Agreement is in effect. At any time and from
time to time, upon the written request of Secured Party,
and at the sole expense of Pledgor, Pledgor will promptly
and duly execute and deliver any and all such further
instruments and documents and take such further action as
Secured Party may reasonably deem desirable to obtain the
full benefits of this Security Agreement and of the rights
and powers herein granted.
(b) Certain Collateral. Immediately upon Pledgor's receipt of
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all certificates or instruments representing pledged shares
or any other Collateral which is or becomes evidenced by
any agreement, instrument and/or document including,
without limitation, promissory notes, trade acceptances,
documents of title and warehouse receipts, Pledgor shall
deliver the original thereof to Secured Party, together
with appropriate endorsements, duly executed instruments of
transfer or assignment or other specific evidence (in form
and substance acceptable to Secured Party) of assignment
thereof to Secured Party. After the occurence and during
the continuation of an Event of Default, the Secured Party
shall have the right at any time to exchange certificates
or instruments representing or evidencing any Collateral in
its possession for certificates or instruments of smaller
or larger denominations.
(c) Indemnification. In any suit, proceeding or action brought
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by Secured Party relating to any of the Collateral for any
sum owing thereunder, or to enforce any provision of any of
the Collateral, Pledgor will save, indemnify and keep
Secured Party harmless from and against all expense, loss
or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability
whatsoever of the obligor thereunder, arising out of a
breach by Pledgor of any obligation thereunder or arising
out of any other agreement, indebtedness or liability at
any time owing to, or in favor of, such obligor or its
successors from Pledgor, and all such obligations of
Pledgor shall be and remain enforceable against and only
against Pledgor and shall not be enforceable against
Secured Party.
(d) Compliance with Laws, etc. Pledgor will comply, in all
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material respects, with all laws, acts, rules, regulations,
orders, decrees and directions of any governmental
authority applicable to the Collateral or any part thereof.
(e) Limitation of Liens on Collateral. Pledgor will not create,
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permit or suffer to exist, and will defend the Collateral
against and take such other action as is necessary to
remove, any lien, security interest or encumbrance on the
Collateral except for the security interest of Secured
Party hereunder, and will defend the right, title and
interest of Secured Party in and to any of the Pledgor's
rights under the Collateral against the claims and demands
of all entities and persons whomsoever.
(f) Maintenance of Insurance. Pledgor will maintain, with
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financially sound and reputable companies, insurance
policies insuring its tangible property against loss and
business interruption by fire, explosion, theft and such
other casualties as are usually insured against by
companies in the same or similar businesses, and insuring
Pledgor and Secured Party against liability for personal
injury and property damage relating to the Collateral, such
policies to be in such amounts and against at least such
risks as are usually insured against, in the same general
area by companies in the same or a similar business, and
notify Secured Party promptly of any occurrence causing a
material loss or decline in value of the Collateral and the
estimated or actual amount of such loss or decline. Pledgor
shall deliver to Secured Party the original (or a certified
copy thereof) of each policy of insurance and evidence of
payment of all premiums therefore. Such policies of
insurance shall contain an endorsement, in form and
substance acceptable to Secured party, naming Secured Party
as an additional insured with losses payable to Pledgor and
Secured Party under a standard non-contributory "secured
party" clause. Pledgor hereby directs all insurers under
such policies of insurance to pay all proceeds payable
thereunder directly to Secured Party, as its interest may
appear. All such insurance shall contain a clause which
provides that Secured Party's interest under the policy
will not be invalidated by any act or omission of, or any
breach of warranty by, the insured, or by any change in the
title, ownership or possession of the insured property, or
by the use of the property for purposes more hazardous than
is permitted in the policy, and provide that no
cancellation, reduction in amount or change in coverage
thereof shall be effective until at least thirty (30) days
after the receipt by Secured Party of written notice
thereof.
(g) Limitations on Disposition. Pledgor will not sell, lease,
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transfer or otherwise dispose of any material portion of
the Collateral, or attempt or contract to do so, without
the prior consent of secured Party.
(h) Right of Inspection. During regular business hours (unless
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an Event of Default has occurred and is continuing, in
which case at all times), Secured Party shall have full and
free access to all books and records of Pledgor, and
Secured Party and its
representatives may examine the same and take extracts
therefrom for the purpose of protecting and verifying its
interests in the Collateral hereunder. Secured Party and
its representatives shall also have the right to enter into
and upon any premises where any Collateral is located
during such times for the purposes of inspecting the same
or otherwise protecting interest therein.
(i) Maintenance of Equipment. Pledgor will keep and maintain
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the Equipment in good operating condition on a basis with
past practices, and Pledgor will provide all maintenance
and service and all repairs necessary for such purpose.
(j) Continuous Perfection. Pledgor will not change his name or
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identity in any manner which might make any financing or
continuation statement filed in connection herewith
seriously misleading within the meaning of Section 9-402 of
the UCC (or any other then applicable provision of the UCC)
unless Pledgor shall have given Secured Party at least
twenty (20) days' prior written notice thereof and shall
have taken all action necessary or requested by Secured
Party to amend each financing statement or continuation
statement so that it is not seriously misleading.
(k) Location of Collateral. Pledgor will not maintain any
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office or other place of business of any kind at any
location other then the Collateral Location described on
Schedule 5(e) hereof, unless Pledgor shall have given
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Secured Party at least twenty (20) days' prior written
notice thereof and shall have taken all actions necessary
or requested by Secured Party to perfect its security
interest in the Collateral at such location.
7. Secured Party's Appointment as Attorney-in-Fact.
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(a) Pledgor hereby irrevocably constitutes and appoints Secured
Party and any officers, designees or agents thereof, with
full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority
in the place and stead of Pledgor and in the name of
Pledgor or in its own name, from time to time in Secured
Party's sole discretion, for the purposes of carrying out
the terms of this Security Agreement, without notice to
Pledgor, to take any and all appropriate action and to
execute and deliver any and all documents and instruments
which may be necessary or desirable to accomplish the
purposes of this Security Agreement, including, without
limitation, to ask, demand, collect, receive, settle,
compromise, adjust and give discharges, releases,
acquittances and receipts for any and all moneys due and to
become due under any Collateral, to enter on the premises
of Pledgor to take possession of and endorse and collect
any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due under any Collateral, or any
other Collateral, to pay or discharge taxes, liens,
security interests or other encumbrances levied or placed
on or threatened against the Collateral, to effect any
repairs or any insurance called for by the terms of this
Security Agreement and to pay all or any part of the
premiums therefor and the costs thereof, to receive, open
and dispose of mail addressed to either Pledgor, to sell,
assign, transfer, make any arrangements in respect of, or
otherwise deal with or exercise rights in respect of any
Collateral as though Secured Party were the absolute owner
thereof, to adjust and settle claims under any insurance
policy, to execute financing statements or amendments
thereto or any other document or writing deemed necessary
by Secured Party to evidence or perfect its security
interest in any Collateral and to effect an assignment of
Pledgor's telephone numbers and listings.
(b) Secured Party agrees that, except upon or after the
occurrence of any Event of Default, it will not exercise
the power of attorney or any rights granted to secured
party pursuant to this Section 7, except with respect to
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the power to execute financing statements or amendments
thereto or any document or writing deemed necessary by
Secured Part to evidence or perfect its security interest
in the Collateral. Pledgor hereby ratifies, to the extent
permitted by law, all that said attorneys shall lawfully do
or cause to be done by virtue hereof. The power of attorney
granted herein is a power coupled with an interest and
shall be irrevocable until the Secured Obligations are
indefeasibly paid in full. The powers conferred on Secured
Party hereunder are solely to protect Secured Party's
interests in the Collateral and shall not impose any duty
upon it to exercise any such powers and Secured Party shall
be accountable only for amounts that it actually receives
as a result of the exercise of such powers.
8. Performance by Secured Party of Pledgor's Obligation. If Pledgor fails
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to perform or comply with any of its agreements contained herein and
Secured Party, as provided for by the terms of this Security
Agreement, shall itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the reasonable
expenses of Secured Party incurred in connection with such performance
or compliance, together with interest thereon at the rate of 10% per
annum, shall be payable by Pledgor to Secured Party on demand and
shall constitute Secured Obligations hereunder.
9. Remedies, Rights Upon Default. Upon the occurrence of any Event of
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Default, Secured Party may exercise in addition to all other rights
and remedies granted to it in this Security Agreement and in any other
instrument or agreement securing, evidencing or relating to the
Secured Obligations, all rights and remedies of a secured party under
the UCC, including but not limited to the right to accelerate all of
the Secured Obligations, to take immediate possession of the
Collateral without notice or demand, to enter upon any premises where
the Collateral is located and remove the same or remain on such
premises in possession of the Collateral, to sell, lease or dispose of
the Collateral, to setoff or apply any Collateral held by Secured
Party, or the like. To the maximum extent permitted by applicable law,
Pledgor waives all claims, damages and demands against Secured Party
arising out of the repossession, retention or sale of the Collateral.
Pledgor agrees that Secured Party need not give more than ten (1)
days' notice of the time after which a private or public sale may take
place and that such notice is reasonable notification of such matters.
The requirement of reasonable notice to Pledgor of the time and place
of any public sale or private sale of the Collateral shall be met if
such notice is mailed, postage prepaid, to Pledgor at the address set
forth in the Note. Pledgor shall remain liable for any deficiency if
the proceeds of any sale or disposition of the Collateral are
insufficient to pay all amounts to which Secured Party is entitled,
Pledgor also being liable for all costs of Secured Party, including,
without limitation, reasonable attorneys' fees, incurred in connection
with the enforcement of any of its rights and remedies hereunder.
Pledgor hereby waives presentment, demand, protest or any notice,
including, without limitation, notice of intent to accelerate and
notice of acceleration (to the maximum extent permitted by applicable
law) of any kind in connection with this Security Agreement or any
Collateral. Pledgor shall, upon demand, make the Collateral available
to Secured Party at a place and time designated by Secured Party.
10. Application of Proceeds. The proceeds of any sale, disposition or
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other realization upon all or any part of the Collateral shall be
applied and distributed by Secured Party in the following order of
priorities:
first, to Secured party in an amount sufficient to pay in fill
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the reasonable expenses of Secured party in connection with such sale,
disposition or other realization, including all expenses, liabilities
and advances incurred or made by Secured Party in connection
therewith, including, without limitation, reasonable attorneys' fees;
second, to Secured party in an amount sufficient to discharge
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all of the Secured Obligations; and
finally, upon payment in full of all the Secured Obligations, to
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pay to Pledgor, or its representatives or as a court of competent
jurisdiction may direct, any surplus then remaining from such
proceeds.
11. Indemnification. Pledgor hereby assumes all liability for the
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collateral, and for any use, possession and management of Collateral,
including without limitation, any taxes arising as a result of, or in
connection with, the transactions contemplated herein and agrees to
assume liability for, and to indemnify and hold Secured Party harmless
from and against any and all claims, causes of action, or liability,
howsoever arising from or incident to such use, possession or
management. Pledgor further agrees to exonerate Secured Party from any
liability for any loss, depreciation or other damage to the Collateral
by virtue of any action or inaction by Secured Party.
12. Reinstatement. This Agreement shall remain in full force and effect
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and continue to be effective should any petition be filed by or
against Pledgor for liquidation should Pledgor become insolvent or
make an assignment for the benefit of creditors or should a receiver
or trustee for all or any significant part of Pledgor's assets, and
shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Secured Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced
in amount, or must otherwise be restored or returned by any obligee of
the Secured Obligations, whether as a "voidable preference",
"fraudulent conveyance", or otherwise, all as though such payment, or
any part thereof, is rescinded reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
13. Miscellaneous.
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(a) Waivers. Pledgor hereby waives (I) any right to require
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Secured Party to proceed against any person or entity, to
exhaust its rights in the Collateral, or to pursue any
other right which Secured Party may have; (ii) with respect
to the Secured Obligations, except as expressly required by
the Note, presentment and demand for payment, notice of
protest and non-payment, notice of the intention to demand
or accelerate, notice of acceleration and notice of
dishonor, and diligence in collection, review or sale of
Collateral, grace, notice and protest; and (iii) all rights
of redemption and of marshaling in respect of any and all
of the Collateral.
(b) Severability. Any provision of this Security Agreement
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which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in
any other jurisdiction.
(c) No Waiver; Cumulative Remedies. Secured Party shall not by
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any act, delay omission or otherwise be deemed to have
waived any of its rights or remedies hereunder, and no
waiver shall be valid unless in writing, signed by Secured
Party and then only to the extent therein set forth. A
waiver by Secured party of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any
right or remedy which Secured Party would otherwise have
had on any future occasion. No failure to exercise nor any
delay in exercising on the part of Secured Party, any
right, power or privilege hereunder, shall operate as a
waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder
preclude any other or future exercise thereof or the
exercise of any other right, power or privilege. The rights
and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of
any rights and remedies provided by law.
(d) Notices. All notices, demands, requests, consents and other
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communications hereunder shall be delivered pursuant to the
terms and at the addresses set forth in the notice
provisions of the Guaranty.
(e) Amendments; Assignments. This Agreement may be amended only
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by a writing executed jointly by Pledgor and Secured Party.
This agreement is for the benefit of and binding upon the
parties hereto and their respective successors and assigns.
Secured Party may assign all or a part of its interest in
this Security Agreement and its rights hereunder to any
party.
(f) Counterparts. This Agreement may be executed in any number
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of counterparts which shall, collectively and separately,
constitute one agreement.
(g) Section Titles and Headings. All section titles and
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headings contained in this Agreement are and shall be
without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the
parties hereto.
(h) GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE DEEMED A
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CONTRACT AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF
TEXAS AND ACCEPTED BY PLEDGOR IN SAID STATE, THE LOCATION
OF SECURED PARTY'S PRINCIPAL PLACE OF BUSINESS, AND ANY AND
ALL CLAIMS, DEMANDS OR ACTIONS IN ANY WAY RELATING THERETO
OR INVOLVING ANY DISPUTE BETWEEN ANY OF THE PARTIES HERETO,
WHETHER ARISING IN CONTRACT OR TORT, AT LAW, IN EQUITY OR
STATUTORILY, SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND/OR GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND
THE LAWS OF THE UNITED STATES OF AMERICA. PLEDGOR HEREBY
IRREVOCABLY SUBMITS ITSELF TO THE NON-EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE
OF TEXAS AND AGREES BAND CONSENTS THAT SERVICE OF PROCESS
MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING RELATING TO THE
TRANSACTION DOCUMENTS, THE RELATIONSHIPS CREATED THEREBY OR
THE SECURED OBLIGATIONS BY ANY MEANS ALLOWED UNDER TEXAS OR
FEDERAL LAW. VENUE FOR ANY LEGAL PROCEEDING MAY BE DALLAS
COUNTY, TEXAS; PROVIDED, THAT SECURED PARTY MAY CHOOSE ANY
VENUE IN ANY STATE WHICH IT DEEMS APPROPRIATE IN THE
EXERCISE OF ITS SOLE DISCRETION.
(i) WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY HEREBY
--------------------
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS NOTE,
THE SECURITY AGREEMENT, THE WARRANT PURCHASE AGREEMENT, THE
OTHER TRANSACTION DOCUMENTS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF PAYEE OR MAKER IN CONNECTION HEREWITH,
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE. MAKER AND PAYEE
HEREBY CONSENT AND AGREE THAT ANY SUCH CLAIM, DEMAND
ACTION, CAUSE OF ACTION, SUIT OR PROCEEDING SHALL BE
DECIDED BY A COURT TRIAL, WITHOUT A JURY, AND THAT ANY
PARTY MAY FILE AN ORIGINAL COUNTERPART OR COPY OF THIS
SECURITY AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE OTHER PARTIES' CONSENT TO SUCH.
(j) Severability. If any provision of this Security Agreement
------------
or any payments pursuant to the terms hereof shall be
invalid or unenforceable to any extent, the remainder of
this Security Agreement and any other payments hereunder
shall not be affected thereby and shall be enforceable to
the greatest extent permitted by law.
(k) LEGAL COUNSEL. PLEDGOR AND SECURED PARTY ACKNOWLEDGE THAT
-------------
EACH HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY
INDEPENDENT LEGAL COUNSEL IN CONNECTION WITH ALL MATTERS
CONCERNING THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO,
THE NEGOTIATION, ACCEPTANCE AND EXECUTION OF THIS
AGREEMENT; THAT EACH HAD THE OPPORTUNITY TO RELY UPON THE
ADVICE OF ITS INDEPENDENT LEGAL COUNSEL IN AGREEING TO THE
TERMS AND CONDITIONS HEREIN AND IN EXECUTING THIS SECURITY
AGREEMENT; THAT EACH HAS READ, REVIEWED AND UNDERSTOOD THE
TRANSACTION DOCUMENTS AND THAT THE OBLIGATIONS THEREUNDER
REPRESENT VALID AND BINDING OBLIGATIONS OF PLEDGOR; AND
THAT EACH HAS FREELY AND VOLUNTARILY ENTERED INTO THIS
SECURITY AGREEMENT AS THE PRODUCT OF ARM'S LENGTH
NEGOTIATIONS.
(l) ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH THE OTHER
----------------
TRANSACTION DOCUMENTS, EMBODIES THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND NOT TO BE CONTRADICTED OR VARIED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENT OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
PLEDGOR:
---------------------------------------
Xxxx X. Xxxxxx, President
ACCEPTED BY SECURED PARTY
AT DALLAS, TEXAS:
POLYPHASE CORPORATION
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
