Exhibit (10)(a)(x)
SECURITY AGREEMENT
This Security Agreement (this "Agreement"), dated as of the 30th day
of October, 1996, is made by Allied Digital Technologies Corp., a Delaware
corporation ("Allied"), HMG Digital Technologies Corp., a Delaware corporation
("HMG"), and HRM Holdings Corp., a Delaware corporation ("Holdings"; Allied, HMG
and Holdings are sometimes hereinafter referred to, individually, as a "Debtor"
and, collectively, as the "Debtors"), and American National Bank and Trust
Company of Chicago ("Secured Party").
WHEREAS, Allied owns all of the issued and outstanding capital stock
of HMG; HMG owns all of the issued and outstanding capital stock of Holdings;
and Holdings owns all of the issued and outstanding capital stock of Hauppauge
Record Manufacturing Ltd., a New York corporation ("Borrower");
WHEREAS, Debtors, Allied Film Laboratory, Inc., a Michigan
corporation ("AFL"), and Borrower entered into that certain Tax Allocation
Agreement dated as of January 11, 1995 (as amended or otherwise modified from
time to time, the "Allied Tax Sharing Agreement") to provide, among other
things, for the allocation of certain income tax liabilities and credits among
Debtors, AFL and Borrower and superseding for certain periods that certain Tax
Allocation Agreement dated as of September 20, 1993 among HMG, Holdings and
Borrower (the "HMG Tax Sharing Agreement") and that certain Tax Allocation
Agreement dated as of October 15, 1992 between Holdings and Borrower (the
"Holdings Tax Sharing Agreement"; the Allied Tax Sharing Agreement, the HMG Tax
Sharing Agreement and the Holdings Tax Sharing Agreement are sometimes referred
to herein, individually, as a "Tax Sharing Agreement" and, collectively, as a
"Tax Sharing Agreement");
WHEREAS, AFL has merged with and into Borrower and Borrower has
entered into that certain Amended and Restated Loan and Security Agreement dated
as of the date hereof with Secured Party (as amended or otherwise modiporate and
other relationships between Debtors and Borrower, Debtors will benefit from the
advances and financial accommodations provided by Secured Party to Borrower
pursuant to the Loan Agreement and any distributions, dividends or other
payments permitted to be made, directly or indirectly, by Borrower to any of
Debtors, pursuant to the terms and provisions of the Loan Agreement and the
other "Financing Agreements" (as such term is defined in the Loan Agreement);
NOW THEREFORE, in consideration of the terms and conditions
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS.
1.1 Terms Defined in the Loan Agreement. All capitalized terms used
and not otherwise defined herein shall have the meanings ascribed to such terms
in the Loan Agreement.
1.2 General Terms. When used herein, the following terms shall
have the following meanings:
"Collateral" shall mean, collectively, all property and interests in
property now owned or hereafter acquired by any Debtor in or upon which a
security interest, lien, charge or mortgage is granted to Secured Party by
any Debtor, whether under this Agreement or under any other documents,
instruments or writings executed by any Debtor and delivered to Secured
Party.
"General Intangibles" shall mean, collectively, all general
intangibles, choses in action, causes of action and all other intangible
personal property of each Debtor of every kind and nature (other than
accounts) now owned or hereafter acquired, including without limitation
goodwill, corporate or other business records, computer software, tax
refunds, tax refund claims, rights and claims against any taxing authority
(domestic or foreign) and the like, wheresoever located.
"Obligations" shall mean, collectively, all liabilities, obligations
and indebtedness of Borrower and each of the Debtors to Secured Party, in
each case of any and every kind and nature, whether heretofore, now or
hereafter owing, arising, due or payable and howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed or otherwise (including obligations of performance) and
whether arising or existing under written agreement, oral agreement or
operation of law, including without limitation the Liabilities and all of
Borrower's and each Debtor's respective indebtedness and other obligations
to Secured Party under the Loan Agreement, this Agreement and any of the
other Financing Agreements.
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1.3 Other Terms Defined in Illinois Uniform Commercial Code. All
other terms contained in this Agreement (and which are not otherwise
specifically defined herein) shall have the meanings provided in Article 9 of
the Uniform Commercial Code as in effect in the State of Illinois (the "Code")
to the extent the same are used or defined therein.
2. COLLATERAL.
2.1 Security Interest. To secure payment and performance of the
Obligations, each Debtor hereby grants to Secured Party a right of setoff
against and a continuing security interest in and to all of the following
personal property and interests in property of such Debtor, whether now owned or
hereafter arising or acquired and wheresoever located: (i) all returns, reports,
declarations and other filings made by or with respect to any one or more of
Borrower and Debtors relating to any Tax Accounts (as defined below) or any
income, property, sales, use or other taxes, fees or assessments (collectively,
the "Tax Documents"); (ii) all tax refunds and all other rights and claims
against and all refunds and payments due from any taxing authority (domestic or
foreign) (collectively, the "Tax Accounts"); (iii) all monies or other payments
received by such Debtor with respect to any of the Tax Accounts or the Tax
Documents (or any liability of any one or more of Debtors and Borrower under any
of the Tax Documents) or any payments made by any one or more of Debtors and
Borrower with respect to any of the Tax Documents (or any liability of any one
or more of Debtors and Borrower under any of the Tax Documents), including
without limitation monies or other payments received by such Debtor from
Borrower or any other Debtor intended for use in making any tax payments or
pursuant to any of the Tax Sharing Agreements; (iv) all contract rights, General
Intangibles, chattel paper, instruments, notes, and documents relating to any of
the foregoing; (v) such Debtor's deposit accounts (general or special) with and
credits and other claims against Secured Party and any other financial
institution with which such Debtor maintains deposits; (vi) such Debtor's
monies, and any and all other property and interests in property of such Debtor
now or hereafter coming into the actual possession, custody or control of
Secured Party or any agent or affiliate of Secured Party in any way or for any
purpose (whether for y, pledge, transmission, collection or otherwise); (vii)
all books and records relating to any of the foregoing; and (viii) all
accessions and additions to, substitutions for, and replacements, products and
proceeds, of any of the foregoing.
2.2 Preservation of Collateral and Perfection of Security Interests
Therein. Each Debtor shall execute and deliver to Secured Party, concurrently
with the execution of this Agreement, and at any time or times hereafter at the
request of Secured Party, all financing statements, instruments or other
documents (and pay the
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cost of filing or recording the same in all public offices deemed necessary by
Secured Party), as Secured Party may request, in a form reasonably satisfactory
to Secured Party, to perfect and keep perfected the security interest in the
Collateral granted by such Debtor to Secured Party or to otherwise protect and
preserve the Collateral and Secured Party's security interest therein or to
enforce Secured Party's security interests in the Collateral or to comply with
the federal Assignment of Claims Act or any similar federal or state laws.
Should any Debtor fail to do so, Secured Party is authorized to sign any such
financing statements, instruments or other documents as such Debtor's agent.
Each Debtor further agrees that a carbon, photographic or other reproduction of
this Agreement or of a financing statement is sufficient as a financing
statement.
2.3 Setoff. Each Debtor agrees that Secured Party has all rights of
setoff and banker's lien provided by applicable law and, in addition thereto,
each Debtor agrees that (in addition to Secured Party's rights with respect to
proceeds of Collateral) at any time (a) any amount owing by any Debtor under
this Agreement or by Borrower or any Debtor under any of the Financing
Agreements is then due or (b) any default by any Debtor under this Agreement or
any Default exists, Secured Party may apply to the payment of the obligations of
any one or more of the Debtors under this Agreement and the other Obligations,
any and all balances, credits, deposits, accounts or monies of any Debtor then
or thereafter with Secured Party. Without limitation of the foregoing and in
addition to Secured Party's rights with respect to the proceeds of the
Collateral, each Debtor agrees that upon and after the occurrence and during the
continuance of a default by any Debtor under this Agreement or a Default,
Secured Party and each of its branches and offices is hereby authorized, at any
time and from time to time, without notice, (i) to setoff against, and to
appropriate and apply to the payment of, the obligations of any one or more of
the Debtors under this Agreement and the other Obligations (in each case,
whether matured or unmatured, fixed or contingent or liquidated or unliquidated)
any and all amounts owing by Secured Party or any such office or branch to any
one or more of the Debtors (whether matured or unmatured, and, in the case of
deposits, whether general or special, time or demand and however evidenced) and
(ii) pending any such action, to the extent necessary, to hold such amounts as
collateral to secure such obligations and the other Obligations and to return as
unpaid for insufficient funds any and all checks and other items drawn against
any deposits so held as Secured Party may elect in its sole discretion exercised
in Good Faith.
3. WARRANTIES.
Debtors represent and warrant that as of the date of the execution
of this Agreement, and continuing so long as this Agreement remains in effect:
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3.1 Corporate Existence. Each Debtor is a corporation duly organized
and in good standing under the laws of its state of incorporation identified in
the preamble to this Agreement and is duly qualified as a foreign corporation
and in good standing in each state where the nature and extent of the business
transacted by such Debtor or the ownership of its assets makes such
qualification necessary, except for those jurisdictions in which the failure to
so qualify would not in the aggregate have a material adverse effect on such
Debtor's financial condition, results of operations or business or the ability
of such Debtor to perform its obligations under this Agreement.
3.2 Corporate Authority. The execution and delivery by each Debtor
of this Agreement and the performance of each Debtor's obligations hereunder:
(i) are within such Debtor's corporate powers; (ii) are duly authorized by such
Debtor's Board of Directors and, if necessary, such Debtor's stockholders; (iii)
are not in contravention of the terms of any Debtor's Certificate or Articles of
Incorporation, or By-Laws, or of any indenture, or other agreement or
undertaking to which any Debtor is a party or by which any Debtor or any of its
property is bound or any judgment, decree or order applicable to any Debtor;
(iv) do not, as of the execution hereof, require any governmental consent,
registration or approval; (v) do not contravene any contractual or governmental
restriction binding upon any Debtor; and (vi) will not, except as contemplated
herein, result in the imposition of any lien, charge, security interest or
encumbrance upon any property of any Debtor.
3.3 Binding Effect. This Agreement has been duly executed and
delivered by each Debtor and constitutes the legal, valid and binding obligation
of each Debtor, enforceable against each Debtor in accordance with its terms.
3.4 Collateral. The Collateral is and will continue to be owned by
the Debtors, free and clear of all liens, security interests, claims and other
encumbrances except (i) security interests in favor of Secured Party and (ii)
rights of Borrower and the Debtors under the Tax Sharing Agreements. All
tangible Collateral of each Debtor is and will continue to be located at the
address of the chief executive office of such Debtor as such address may be
changed from time to time pursuant to subsection 5.1 hereof.
3.5 Chief Place of Business. As of the execution hereof, the
principal place of business and chief executive office of each Debtor is located
at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000. If any change in any such
location occurs, Debtors promptly shall notify Secured Party thereof in
accordance with subsection 5.1 hereof. As of the execution hereof (except for
certain of Allied's books and records, records of account and chattel paper
which may continue to be located at
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0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 prior to November 30, 1996), the
books and records of each Debtor, all records of account and all chattel paper
constituting Collateral (to the extent the same have not been delivered to
Secured Party) are located at the principal place of business and chief
executive office of such Debtor, and if any change in such location occurs,
Debtors promptly shall notify Secured Party thereof in accordance with
subsection 5.1 hereof. Allied's tax identification number is 00-0000000, HMG's
tax identification number is 00-0000000 and Holdings' tax identification number
is 11- 3040949.
3.6 Other Corporate Names. No Debtor has used any corporate or
fictitious name other than the corporate name shown on such Debtor's Articles or
Certificate of Incorporation, except that HMG used the name RCL Acquisition
Corp. prior to amending its name to its current name in 1993.
3.7 Patents, Trademarks and Licenses. Each Debtor possesses adequate
licenses, permits, patents, patent applications, copyrights, service marks,
trademarks, trademark applications, trade styles, trade names, governmental
approvals or authorizations and other rights to continue to conduct its business
as heretofore conducted by it or contemplated to be conducted by it.
3.8 Subsidiaries. Allied owns beneficially and of record all of the
issued and outstanding shares of capital stock of HMG; HMG owns beneficially and
of record all of the issued and outstanding shares of capital stock of Holdings;
and Holdings owns beneficially and of record all of the issued and outstanding
shares of capital stock of Borrower.
3.9 Survival of Warranties. All representations and warranties
contained in this Agreement shall survive the execution and delivery of this
Agreement.
4. AFFIRMATIVE COVENANTS.
Debtors covenant and agree that, so long as this Agreement remains
in effect:
4.1 Inspection. Secured Party, or any Person designated by Secured
Party (including without limitation any Participant) in writing, shall have the
right, from time to time hereafter, to call at any Debtor's place or places of
business (or any other place where the Collateral or any information relating
thereto is kept or located) during reasonable business hours, and, without
hindrance or delay, (i) to inspect, audit, check and make copies of and extracts
from each Debtor's books, records, journals,
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orders, receipts and any correspondence and other data relating to any Debtor's
business or to any transactions between any one or more of the Debtors and their
Subsidiaries and Secured Party, (ii) to make such verification concerning the
Collateral as Secured Party may consider reasonable under the circumstances, and
(iii) to discuss the affairs, finances and business of each of Debtors and their
Subsidiaries with any officers, employees, directors or independent accountants
of any of the Debtors and their Subsidiaries and agrees that such discussions or
communications shall be without liability to Secured Party or such independent
accountants. Debtors shall pay on demand all photocopying expenses incurred by
Secured Party under this subsection 4.1.
4.2 Closing Costs and Expenses. Debtors shall reimburse Secured
Party on demand for all reasonable expenses and fees paid or incurred in
connection with the documentation, negotiation and execution of this Agreement,
including without limitation lien search, filing and recording fees and taxes
and the reasonable fees and expenses of Secured Party's attorneys and paralegals
(whether such attorneys and paralegals are employees of Secured Party or are
separately engaged by Secured Party), whether such expenses and fees are
incurred prior to or after the date hereof. All reasonable costs and expenses
incurred by Secured Party with respect to the negotiation, documentation and
execution of this Agreement and the enforcement, collection and protection of
Secured Party's interest in the Collateral shall be payable on demand and
secured by the Collateral.
4.3 Notice. Debtors shall, as soon as possible, and in any event
within five (5) days after any officer of any Debtor learns of any change in the
location of any Collateral from the applicable address set forth in subsection
3.4 or subsection 3.5 hereof or any subsequent location, give written notice
thereof to Secured Party.
4.4 Instruments and Chattel Paper. Immediately upon any Debtor's
receipt thereof, Debtors shall deliver or cause to be delivered to Borrower all
amounts which Borrower is entitled pursuant to any of the Tax Sharing
Agreements. If any default by any Debtor under this Agreement or any Default has
occurred and is continuing, Debtors shall deliver or cause to be delivered to
Secured Party, with appropriate endorsement and assignment to vest title and
possession in Secured Party, with full recourse to Debtors, all chattel paper
and instruments constituting part of the Collateral which any Debtor now owns or
may at any time or times hereafter acquire.
4.5 Appointment of Secured Party as each Debtor's Attorney-in-Fact.
Each Debtor hereby irrevocably designates, makes, constitutes and appoints
Secured Party (and all officers, employees and agents designated by Secured
Party) as such Debtor's true and lawful attorney-in-fact, and authorizes Secured
Party, in such
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Debtor's or Secured Party's name, following the occurrence and during the
continuance of a default by any Debtor under this Agreement or a Default, to:
(i) demand payment of any Tax Account or any other Collateral; (ii) enforce
payment of any Tax Account or any other Collateral by legal proceedings or
otherwise; (iii) exercise all of such Debtor's rights and remedies with respect
to proceedings brought with respect to any Tax Account or any other Collateral;
(iv) settle, adjust, compromise, extend or renew any Tax Account or any other
Collateral; (v) discharge and release any Tax Account or any other Collateral;
(vi) prepare, file and sign such Debtor's name on any Tax Document or other
similar document; (vii) notify the post office authorities to change the address
for delivery of such Debtor's mail to an address designated by Secured Party,
and open and deal with all mail addressed to such Debtor; (viii) take control in
any manner of any item of payment or proceeds with respect to any of the
Collateral; (ix) endorse such Debtor's name upon any items of payment or
proceeds with respect to any of the Collateral and deposit the same in Secured
Party's account on account of the obligations of any one or more of the Debtors
under this Agreement or the other Obligations; (x) endorse such Debtor's name
upon any chattel paper, document, instrument, invoice, or similar document or
agreement relating to any Tax Account or any other Collateral; and (xi) do all
acts and things which are necessary, in Secured Party's sole discretion, to
fulfill each Debtor's obligations under this Agreement. If Secured Party
undertakes to collect the Collateral from any taxing authority, then Secured
Party will proceed in a commercially reasonable manner to the extent required by
law and Secured Party may deduct its reasonable expenses of realization from any
such collections.
4.6 Financial Statements and Other Information. Each Debtor
shall provide Holdings and Borrower with all financial statements and other
information with respect to such Debtor and such Debtor's Subsidiaries and other
Affiliates as may be required by the other Debtors or the Borrower to fulfill
their respective obligations under the Loan Agreement and the other Financing
Agreements.
5. NEGATIVE COVENANTS.
Debtors covenant and agree that so long as this Agreement remains in
effect (unless Secured Party shall give its prior written consent thereto):
5.1 Amendment of Articles of Incorporation or By-Laws; Corporate
Name; Places of Business. No Debtor shall amend its Articles or Certificate of
Incorporation or By-Laws to effect a change in its corporate name unless Debtors
furnish to Secured Party all such executed financing statements and amendments
to financing statements which Secured Party may request prior to the filing of
such
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amendment and furnish to Secured Party a copy of such amendment, certified
by the Secretary of State of such Debtor's state of incorporation, within ten
(10) days of the date such amendment is filed with such Secretary of State. No
Debtor shall make any change to the location of its principal place of business,
chief executive office, books and records, chattel paper or records of account
unless prior to the effective date of such change in location, Debtors deliver
to Secured Party such financing statements and amendments to financing
statements which Secured Party may request to reflect such change in location.
Debtors shall deliver such other documents and instruments as Secured Party may
request in connection with any such change in name or location within ten (10)
days of the effectiveness of such change or Secured Party's request therefor.
5.2 Encumbrances. No Debtor shall create, incur, assume or suffer to
exist any security interest, mortgage, pledge, lien or other encumbrance of any
nature whatsoever on any of the Collateral other than the liens and security
interests granted to the Secured Party under this Agreement or under the other
Financing Agreements.
5.3 Consolidations, Mergers or Changes. No Debtor shall
recapitalize, consolidate with or merge with any other Person, or otherwise
change its identity or corporate structure, unless prior to the effective date
of such event Debtors notify Secured Party and deliver to Secured Party such
financing statements, amendments to financing statements and other documents and
instruments as Secured Party may request to perfect, keep perfected and
otherwise protect and preserve the Secured Party's security interest in the
Collateral and Secured Party's other rights under this Agreement, in each case
in a manner satisfactory to Secured Party.
5.4 Tax Sharing Agreements. No Debtor shall, and no Debtor shall
permit any of its Subsidiaries to, enter into or consent to any modification or
alteration of any of the Tax Sharing Agreements.
6. WAIVERS; OTHER AGREEMENTS.
A. Secured Party is hereby authorized, without notice to or demand
upon any of the Debtors, which notice or demand is expressly waived hereby, and
without discharging or otherwise affecting the obligations of any Debtor
hereunder (which shall remain absolute and unconditional notwithstanding any
such action or omission to act), from time to time, to:
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(i) supplement, renew, extend, accelerate or otherwise change the
time for payment of, or other terms relating to, the Obligations, or any
portion thereof, or otherwise modify, amend or change the terms of any
promissory note or other agreement, document or instrument (including
without limitation the Loan Agreement and the other Financing Agreements)
heretofore, now or hereafter executed by the Borrower or any of the
Debtors and delivered to the Secured Party, including without limitation
any increase or decrease of the principal amount thereof or the rate of
interest thereon;
(ii) waive or otherwise consent to noncompliance with any provision
of any agreement, document or instrument (including without limitation the
Loan Agreement and the other Financing Agreements) evidencing or in
respect of the Obligations, or any part thereof, heretofore, now or
hereafter executed by any of the Borrower and the Debtors and delivered to
the Secured Party;
(iii) accept partial payments on the Obligations;
(iv) receive, take and hold security or collateral for the payment
or performance of the Obligations, or any part thereof, or for the payment
or performance of any guaranties of all or any part of the Obligations,
and exchange, enforce, waive, substitute, liquidate, terminate, abandon,
fail to perfect, subordinate, transfer, otherwise alter and release any
such security or collateral;
(v) apply any and all such security or collateral and direct the
order or manner of sale thereof as Secured Party may determine in its sole
discretion;
(vi) settle, release, compromise, collect or otherwise liquidate the
Obligations, or any part thereof, or accept, substitute, release, exchange
or otherwise alter, affect or impair any security or collateral for the
Obligations, or any part thereof, or any guaranty therefor, in any manner;
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(vii) add, release or substitute any one or more guarantors, makers
or endorsers of all or any part of the Obligations and otherwise deal with
the Borrower, any of the Debtors or any guarantor, maker or endorser as
Secured Party may elect in its sole discretion;
(viii) apply any and all payments or recoveries from the Borrower,
any of the Debtors or any guarantor, maker or endorser of all or any part
of the Obligations to the Obligations in such order as Secured Party in
its sole discretion may determine, whether such Obligations are secured or
unsecured or guaranteed or not guaranteed by others;
(ix) apply any and all payments or recoveries from any of the
Debtors or from any guarantor, maker or endorser of all or any part of the
Obligations or sums realized from security furnished by any of them upon
any of their indebtedness or obligations to Secured Party as Secured Party
in its sole discretion may determine, whether or not such indebtedness or
obligations relate to the Obligations; and
(x) refund at any time, at Secured Party's sole discretion, any
payment received by Secured Party in respect of any Obligations, and
payment to Secured Party of the amount so refunded shall be fully secured
hereby even though prior thereto this Agreement shall have been canceled
or surrendered (or any lien, security interest or other collateral shall
have been released or terminated by virtue thereof) by Secured Party, and
such prior cancellation or surrender (or release or termination) shall not
diminish, release, discharge, impair or otherwise affect the obligations
of any Debtor hereunder in respect of the amount so refunded (and any
lien, security interest or other collateral so released or terminated
shall be reinstated with respect to such obligations).
B. Debtors hereby agree that each of their obligations under this
Agreement are absolute and unconditional and shall not be discharged or
otherwise affected as a result of:
(i) the invalidity or unenforceability of any security for or any
guaranty of all or any part of the Obligations or of any promissory note
or other agreement, document or instrument (including without limitation
the Loan Agreement and the other Financing Agreements) evidencing or in
respect of all or any part of the Obligations, or the lack of perfection
or continuing perfection or failure of priority of any security for all or
any part of the Obligations or any guaranty therefor;
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(ii) the absence of any attempt to collect the Obligations, or any
portion thereof, from the Borrower, any Debtor or any guarantor or other
action to enforce the same;
(iii) any failure by Secured Party to acquire, perfect and maintain
any security interest in, or to preserve any rights to, any security or
collateral for all or any part of the Obligations or any guaranty
therefor;
(iv) any election by Secured Party in any proceeding
instituted under Chapter 11 of Title 11 of the United States Code
(11 U.S.C. ss. 101 et seq.) (the "Bankruptcy Code");
(v) any borrowing or grant of a security interest by the
Borrower or any Debtor, as debtor-in-possession, or extension of
credit, under the Bankruptcy Code;
(vi) the disallowance, under the Bankruptcy Code, of all or
any portion of the Secured Party's claim(s) for repayment of the
Obligations;
(vii) any use of cash collateral under the Bankruptcy Code;
(viii) any agreement or stipulation as to the provision of
adequate protection in any bankruptcy proceeding;
(ix) the avoidance of any lien in favor of Secured Party for
any reason;
(x) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by
or against the Borrower, any Debtor or any guarantor, maker or endorser of
all or any part of the Obligations, including without limitation any
discharge of, or bar or stay against collecting or accelerating, all or
any of the Obligations (or any interest thereon) in or as a result of any
such proceeding;
(xi) any failure by Secured Party to file or enforce a claim against
the Borrower, any Debtor or any estate in any bankruptcy or insolvency
case or proceeding;
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(xii) any action taken by Secured Party that is authorized by
this Agreement;
(xiii) any election by Secured Party under Section 9-501(4) of the
Uniform Commercial Code as enacted in any relevant jurisdiction as to any
security for the Obligations or any guaranty of all or any part of the
Obligations; or
(xiv) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor.
C. Until the Obligations shall have been paid and performed in full
and all of the Financing Agreements shall have been terminated, no Debtor shall
have any right of subrogation and each Debtor hereby waives any right to enforce
any remedy which Secured Party now has or may hereafter have against the
Borrower, or any other Debtor or any guarantor of all or any part of the
Obligations, and each Debtor hereby waives any benefit of, and any right to
participate in, any security or collateral given to Secured Party to secure
payment, or performance of any of the Obligations or any other liability of the
Borrower or any Debtor to Secured Party. Each Debtor further agrees that any and
all claims of such Debtor against the Borrower, any other Debtor or any
guarantor of all or any part of the Obligations, or against any of their
respective properties, arising by reason of this Agreement, including without
limitation by reason of any payment by such Debtor to Secured Party pursuant to
the provisions hereof, shall be subordinate and subject in right of payment to
the prior payment, in full, of all principal and interest, all reasonable costs
of collection (including attorneys' and paralegals' fees) and payment and
performance in full of any other liabilities or obligations of each of the
Debtors and Borrower to Secured Party, including without limitation the
Liabilities, which may arise either with respect to, on or under any Financing
Agreement or any other note, instrument, document, item, agreement or other
writing heretofore, now or hereafter delivered to Secured Party. Each Debtor
further waives:
(i) any requirements of diligence or promptness on the part
of Secured Party;
(ii) presentment, demand for payment or performance and protest and
notice of protest with respect to the Obligations or any guaranty with
respect thereto;
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(iii) notices (a) of nonperformance, (b) of acceptance of this
Agreement, (c) of default in respect of the Obligations, (d) of the
existence, creation or incurrence of new or additional indebtedness,
arising either from additional loans extended to the Borrower or any
Debtor or otherwise, (e) that the principal amount, or any portion
thereof, and/or any interest on any document or instrument evidencing all
or any part of the Obligations is due, (f) of any and all proceedings to
collect from the Borrower, any other Debtor, any guarantor, maker or
endorser of all or any part of the Obligations, or from anyone else, and
(g) of exchange, sale, surrender or other handling of any security or
collateral given to Secured Party to secure payment of the Obligations or
any guaranty therefor;
(iv) any right to require Secured Party to (a) proceed first against
the Borrower, any other Debtor or any other Person whatsoever, (b) proceed
against or exhaust any security given to or held by Secured Party in
connection with the Obligations, or (c) pursue any other remedy in Secured
Party's power whatsoever;
(v) any defense arising by reason of (a) any disability or other
defense of the Borrower or any other Debtor, (b) the cessation from any
cause whatsoever of the liability of the Borrower or any other Debtor, (c)
any act or omission of Secured Party or others which directly or
indirectly, by operation of law or otherwise, results in or aids the
discharge or release of the Borrower or any other Debtor or any security
given to or held by Secured Party in connection with the Obligations;
(vi) any and all other suretyship defenses under applicable
law; and
(vii) the benefit of any statute of limitations affecting the
Obligations or any Debtor's liability hereunder or the enforcement hereof.
In connection with the foregoing, Debtors covenant that this Agreement shall not
be discharged, except by complete performance of the obligations contained
herein and the payment and discharge in full of all of the Obligations and
termination of all Financing Agreements (including without limitation any
commitments with respect to the Liabilities). All waivers granted by each Debtor
hereunder shall be unconditional and
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irrevocable irrespective of whether the Obligations have been paid in full by
any Debtor or any other party.
D. Each Debtor hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrower and the other Debtors, of
any and all endorsers and/or guarantors of all or any part of the Obligations
and of all other circumstances bearing upon the risk of nonpayment and
nonperformance of the Obligations, or any part thereof, and each Debtor hereby
agrees that Secured Party shall not have any duty to advise such Debtor of
information known to Secured Party regarding such condition or any such
circumstances. In the event Secured Party, in its sole discretion, undertakes at
any time or from time to time to provide any such information to any Debtor,
Secured Party shall not have any obligation (i) to undertake any investigation,
whether or not a part of its regular business routine, (ii) to disclose any
information which Secured Party wishes to maintain confidential or (iii) to make
any other or future disclosures of such information or any other information to
any Debtor.
E. No Debtor shall take any action which would, directly or
indirectly, result in an Event of Default or Default under the Loan Agreement.
7. DEFAULT, RIGHTS AND REMEDIES OF SECURED
PARTY.
7.1 Rights and Remedies Generally. In the event of a default by any
Debtor under this Agreement or a Default, Secured Party shall have, in addition
to any other rights and remedies contained in this Agreement, all of the rights
and remedies of a secured party under the Code or other applicable laws, all of
which rights and remedies shall be cumulative, and non-exclusive, to the extent
permitted by law. Without limiting the generality of the foregoing, to the
extent permitted by applicable law, each Debtor hereby agrees that it will not
invoke or utilize any law which might cause delay in or impede the enforcement
of the rights under this Agreement or any of the Financing Agreements. In
addition to all such rights and remedies, the sale, lease or other disposition
of the Collateral, or any part thereof, by Secured Party after a default by any
Debtor under this Agreement or a Default may be for cash, credit or any
combination thereof, and Secured Party may purchase all or any part of the
Collateral at public or, if permitted by law, private sale, and in lieu of
actual payment of such purchase price, may set off the amount of such purchase
price against the obligations of any one or more of the Debtors or the
Obligations then owing. Any sales of the Collateral may be adjourned from time
to time with or without notice. Secured Party may, in its sole discretion, cause
the Collateral to remain on any Debtor's premises, at
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the Debtors' expense, pending sale or other disposition of the Collateral.
Secured Party shall have the right to conduct such sales on any Debtor's
premises, at Debtors' expense, or elsewhere, on such occasion or occasions as
Secured Party may see fit.
7.2 Sale of Other Disposition of Collateral by Secured Party. Any
notice required to be given by Secured Party of a sale, lease or other
disposition or other intended action by Secured Party with respect to any of the
Collateral which is deposited in the United States, registered mail, postage
prepaid and duly addressed to Debtors at the address specified for notices
pursuant to subsection 8.12 hereof, at least ten (10) days prior to such
proposed action shall constitute fair and reasonable notice to Debtors of any
such action. The net proceeds realized by Secured Party upon any such sale or
other dispositions, after deduction for the expense of retaking, holding,
preparing for sale, selling or the like and the reasonable attorneys' fees, and
legal expenses incurred by Secured Party in connection therewith, shall be
applied as provided herein toward satisfaction of obligations of the Debtors
under this Agreement and the Obligations, including without limitation the
obligations of each Debtor described in subsections 4.1, 4.2, 8.2 and 8.3
hereof. Secured Party shall account to the Debtors for any surplus realized upon
such sale or other disposition, and Debtors shall remain liable for any
deficiency. The commencement of any action, legal or equitable, or the rendering
of any judgement of decree for any deficiency shall not affect Secured Party's
security interest in the Collateral until all of the obligations of the Debtors
under this Agreement and the Obligations are fully paid and performed. Each
Debtor agrees that Secured Party has no obligation to preserve rights to the
Collateral against any other parties.
7.3 Waiver of Demand. Demand, presentment, protest and notice of
nonpayment are hereby waived by each Debtor. Each Debtor also waives the benefit
of all valuation, appraisal and exemption laws.
7.4 Waiver of Notice. UPON THE OCCURRENCE AND DURING THE CONTINUANCE
OF A DEFAULT BY ANY DEBTOR UNDER THIS AGREEMENT OR A DEFAULT, EACH DEBTOR
(PURSUANT TO AUTHORITY GRANTED BY ITS BOARD OF DIRECTORS) HEREBY WAIVES ALL
RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY SECURED PARTY
OF ITS RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS OR TO
REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR HEARING.
EACH DEBTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH
RESPECT TO THIS TRANSACTION AND THIS AGREEMENT.
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7.5 Remedies Against Other Persons. The obligations of each Debtor
hereunder are independent of and separate from the Obligations and the
obligations of any other Debtor or guarantor of the Obligations or any other
Person. If any of the Obligations are not paid when due (and the applicable
grace period, if any, under the Loan Agreement has expired), or upon the
occurrence and during the continuance of any Default, Secured Party may, at its
sole election, proceed directly and at once, without notice, against any Debtor
and all or any part of the Collateral without first proceeding against the
Borrower, any other Debtor or any guarantor of all or part of the Obligations or
any other Person, or against any other security for the Obligations or the
obligations of any such guarantor. Each Debtor consents and agrees that Secured
Party shall not be under any obligation to make any demand upon or pursue or
exhaust any of its rights or remedies against the Borrower, any other Debtor or
any guarantor or any other Person with respect to the Obligations, or to pursue
or exhaust any of its rights or remedies with respect to any security therefor,
or any direct or indirect guaranty thereof or any security for any such
guaranty.
8. MISCELLANEOUS.
8.1 Waiver. Secured Party's failure, at any time or times hereafter,
to require strict performance by any Debtor of any provision of this Agreement
shall not waive, affect or diminish any right of Secured Party thereafter to
demand strict compliance and performance therewith. Any suspension or waiver by
Secured Party of a default by any Debtor under this Agreement shall not suspend,
waive or affect any default by any other Debtor or any other default by such
Debtor under this Agreement, whether the same is prior or subsequent thereto and
whether of the same or of a different kind or character. None of the
undertakings, agreements, warranties, covenants and representations of any of
the Debtors contained in this Agreement and no default by any Debtor under this
Agreement or Default shall be deemed to have been suspended or waived by Secured
Party unless such suspension or waiver is in writing signed by an authorized
officer of Secured Party, and directed to such Debtor specifying such suspension
or waiver. All defaults by any Debtor under this Agreement and all Defaults
shall continue until the same are waived by Secured Party in accordance with the
preceding sentence.
8.2 Costs and Attorneys' Fees. If at any time or times hereafter
Secured Party employs counsel in connection with protecting or perfecting
Secured Party's security interest in the Collateral or in connection with any
matters contemplated by or arising out of this Agreement, whether (a) to
prepare, negotiate or execute (i) any amendment to or modification or extension
of this Agreement, or any instrument, document or agreement executed by any
Person in connection with the
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transactions contemplated by this Agreement, or (ii) any instrument, document or
agreement to be executed by any Person in connection with the transactions
contemplated by this Agreement, or (iii) any instrument, document or agreement
in connection with any sale or attempted sale of any interest herein to any
participant, (b) to commence, defend, or intervene in any litigation or to file
a petition, complaint, answer, motion or other pleadings, (c) to take any other
action in or with respect to any suit or proceeding (bankruptcy or otherwise),
(d) to consult with officers of Secured Party to advise Secured Party, (e) to
protect, collect, lease, sell, take possession of, release or liquidate any of
the Collateral, or (f) to attempt to enforce or to enforce any security interest
in any of the Collateral, or to enforce any rights of Secured Party, including
without limitation Secured Party's rights to collect any of obligations of any
of the Debtor under this Agreement or the Obligations, then in any of such
events, all of the reasonable attorneys' fees arising from such services, and
any expenses, costs and charges relating thereto, including without limitation
all reasonable fees of all paralegals and other staff employed by such
attorneys, together with interest following demand for payment thereof at the
from time to time rate applicable to the Liabilities constituting part of the
Revolving Loan, shall be payable by Debtors on demand and secured by the
Collateral.
8.3 Expenditures by Secured Party. In the event any Debtor shall
fail to pay taxes, insurance, assessments, costs or expenses which such Debtor
is, under any of the terms hereof or under the terms of any other Financing
Agreement, required to pay, or fails to keep the Collateral free from security
interests, liens or encumbrances as provided in this Agreement, Secured Party
may, in its sole discretion, make expenditures for any or all of such purposes,
and the amount so expended, together with interest thereon at the from time to
time rate applicable to the Liabilities constituting part of the Revolving Loan,
shall be payable by Debtors on demand and secured by the Collateral.
8.4 Custody and Preservation of Collateral. Secured Party shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral in its possession if it takes such action for that purpose as
any Debtor shall request in writing, but failure by Secured Party to comply with
any such request shall not of itself be deemed a failure to exercise reasonable
care, and no failure by Secured Party to preserve or protect any right with
respect to the preservation of such Collateral not so requested by Debtors shall
of itself be deemed a failure to exercise reasonable care in the custody or
preservation of such Collateral.
8.5 Reliance by Secured Party. All covenants, agreements,
representations and warranties made herein by any Debtor shall, notwithstanding
any
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investigation by Secured Party, be deemed to be material and to have been relied
upon by Secured Party.
8.6 Parties. Whenever in this Agreement there is reference made to
any of the parties hereto, such reference shall be deemed to include, wherever
applicable, a reference to the successors and assigns of such party and the
provisions of this Agreement shall be binding upon and inure to the benefit of
said successors and assigns. Notwithstanding anything herein to the contrary, no
Debtor may assign or otherwise transfer its rights or obligations under this
Agreement without the prior written consent of Secured Party. Without in any way
limiting Secured Party's rights, Secured Party may sell participations in the
Obligations or sell or assign its rights hereunder, in whole or in part, on such
terms as Secured Party may determine.
8.7 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Agreement.
8.8 Application of Payments. Notwithstanding any contrary provision
contained in this Agreement, each Debtor irrevocably waives the right to direct
the application of any and all payments at any time or times hereafter received
by Secured Party from any Debtor or with respect to any of the Collateral, and
each Debtor does hereby irrevocably agree that Secured Party shall have the
continuing exclusive right to apply and reapply any and all payments received at
any time or times hereafter, whether with respect to the Collateral or
otherwise, against the Obligations and the obligations of any Debtor under this
Agreement in such manner as Secured Party may deem advisable, notwithstanding
any entry by Secured Party upon any of its books and records.
8.9 Marshalling; Payments Set Aside. Secured Party shall be under no
obligation to xxxxxxxx any assets in favor of any Debtor or any other Person or
against or in payment of any or all of the obligations of any Debtor under this
Agreement or the Obligations. To the extent that any Debtor makes a payment or
payments to Secured Party or Secured Party enforces its security interests or
exercises its rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause,
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then, to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred.
8.10 Section Titles. The section titles contained in this Agreement
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties.
8.11 Continuing Effect. This Agreement and Secured Party's security
interests in the Collateral, shall continue in full force and effect so long as
any Obligations shall be owed to Secured Party, and (even if there shall be no
Obligations outstanding) until all of the Financing Agreements (as defined in
the Loan Agreement) (including without limitation any commitments with respect
to the Liabilities) have been terminated and all of the Liabilities have been
fully paid and discharged as provided in the Loan Agreement and all obligations
of each Debtor under this Agreement have been fully paid and discharged.
8.12 Notices. Except as otherwise expressly provided herein, any
notice required or desired to be served, given or delivered hereunder shall be
in writing, and shall be deemed to have been validly served, given or delivered
(i) three (3) days after deposit in the United States mails, with proper postage
prepaid, (ii) when sent after receipt of confirmation or answerback if sent by
telecopy, or other similar facsimile transmission, (iii) one (1) Business Day
after deposited with a reputable overnight courier with all charges prepaid, or
(iv) when delivered, if hand-delivered by messenger, all of which shall be
properly addressed to Secured Party or Debtors as the case may be, and sent to
the address or number indicated as follows:
(i) If to Secured Party at:
American National Bank and
Trust Company of Chicago
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy: 312/661-6929
Confirmation: 312/661-5707
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(ii) If to any Debtor to such Debtor at:
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy: 516/234-0346
Confirmation: 516/234-0200
with a copy of such notice to:
Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxxxxxxx X. Xxxxxxxx, Xx., Esq.
Telecopy: 212/972-9150
Confirmation: 212/984-7807
or to such other address or number as Secured Party or the Debtors designate to
the other in the manner herein prescribed.
8.13 Equitable Relief. Each Debtor recognizes that, in the event
such Debtor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy at law may prove to be inadequate
relief to Secured Party; therefore, each Debtor agrees that Secured Party, if
Secured Party so requests, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
8.14 CHOICE OF LAW. THIS AGREEMENT SHALL BE DEEMED TO BE EXECUTED
AND HAS BEEN DELIVERED AND ACCEPTED IN CHICAGO, ILLINOIS. ANY DISPUTE BETWEEN
THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS AND NOT THE CONFLICTS OF LAW PROVISIONS OF THE
STATE OF ILLINOIS.
8.15 CONSENT TO JURISDICTION.
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(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION 8.15(B)
HEREOF, SECURED PARTY AND DEBTORS AGREE THAT ALL DISPUTES BETWEEN THEM ARISING
OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS
LOCATED IN XXXX COUNTY, ILLINOIS, BUT SECURED PARTY AND DEBTORS ACKNOWLEDGE THAT
ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
XXXX COUNTY, ILLINOIS. EACH DEBTOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. EACH DEBTOR AGREES THAT SECURED PARTY SHALL
HAVE THE RIGHT TO PROCEED AGAINST SUCH DEBTOR OR ITS PROPERTY ("PROPERTY") IN A
COURT IN ANY LOCATION TO ENABLE SECURED PARTY TO REALIZE ON THE COLLATERAL OR
ANY OTHER SECURITY FOR THE OBLIGATIONS OR THE OBLIGATIONS OF ANY DEBTOR UNDER
THIS AGREEMENT, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR
OF SECURED PARTY. EACH DEBTOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIM IN ANY PROCEEDING BROUGHT BY SECURED PARTY TO REALIZE ON THE
PROPERTY, THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR THE
OBLIGATIONS OF ANY DEBTOR UNDER THIS AGREEMENT, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF SECURED PARTY. EACH DEBTOR WAIVES ANY OBJECTION
THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SECURED PARTY HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION 8.15(B).
8.16 SERVICE OF PROCESS. EACH DEBTOR HEREBY WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS UPON IT AND IRREVOCABLY APPOINTS CT CORPORATION SYSTEM,
000 XXXXX XXXXXXX XXXXXX, XXXXXXX, XXXXXXXX 00000 AS SUCH DEBTOR'S AGENT FOR THE
PURPOSE OF ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF ILLINOIS. SECURED
PARTY AGREES TO PROMPTLY FORWARD BY REGISTERED MAIL (NO RETURN RECEIPT REQUIRED)
A COPY OF ANY PROCESS SO SERVED UPON SAID AGENT TO DEBTORS AT THEIR ADDRESS FOR
NOTICES PROVIDED PURSUANT TO SUBSECTION 8.12 HEREOF. EACH
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DEBTOR HEREBY CONSENTS TO SERVICE OF PROCESS AS AFORESAID. EACH DEBTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF THE COURTS REFERRED TO IN
SUBSECTION 8.15 HEREOF IN ANY SUCH ACTION OR PROCEEDING BY MAILING COPIES OF
SUCH SERVICE BY REGISTERED MAIL, POSTAGE PREPAID TO SUCH DEBTOR AT SAID ADDRESS.
NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF SECURED PARTY TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW BUT ANY FAILURE TO RECEIVE SUCH
COPY SHALL NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS.
8.17 WAIVER OF JURY TRIAL AND BOND.
(A) WAIVER OF JURY TRIAL. EACH DEBTOR AND SECURED PARTY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, BETWEEN SECURED PARTY AND ANY ONE OR MORE OF THE
DEBTORS ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
THEREWITH OR THE TRANSACTIONS RELATED THERETO. EACH DEBTOR AND SECURED PARTY
HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE OTHERS TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
(B) WAIVER OF BOND. EACH DEBTOR WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF SECURED PARTY IN CONNECTION WITH ANY JUDICIAL PROCESS OR
PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH, OR LEVY UPON ANY COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR THE OBLIGATIONS OF ANY DEBTOR UNDER
THIS AGREEMENT, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
SECURED PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING
ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT, OR ANY OTHER
AGREEMENT OR DOCUMENT BETWEEN SECURED PARTY AND ANY ONE OR MORE OF THE DEBTORS.
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8.18 ADVICE OF COUNSEL. EACH DEBTOR REPRESENTS TO SECURED PARTY THAT
IT HAS DISCUSSED THIS AGREEMENT AND THE TRANSACTION GOVERNED BY THIS AGREEMENT
WITH SUCH DEBTOR'S LAWYERS.
8.19 Indemnification. Each Debtor agrees to defend, protect,
indemnify and hold harmless Secured Party and each of its officers, directors,
employees, attorneys, consultants and agents (collectively, the "Indemnitees")
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including without limitation the reasonable
fees and disbursements of counsel for and consultants of such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), which may
be imposed on, incurred by, or asserted against such Indemnitees (whether
direct, indirect, or consequential and whether based on any federal or state
laws or other statutory regulations, including without limitation securities,
environmental and commercial laws and regulations, under common law or at
equitable cause or on contract or otherwise) in any manner relating to or
arising out of this Agreement, or any act, event or transaction related or
attendant thereto, or the management of the Collateral (including any liability
under federal, state or local environmental laws or regulations) (collectively,
the "Indemnified Matters"); provided that such Debtor shall have no obligation
to any Indemnitee hereunder with respect to Indemnified Matters caused by or
resulting from the willful misconduct or gross negligence of such Indemnitee. To
the extent that the undertaking to indemnify, pay and hold harmless set forth in
this subsection 8.19 may be unenforceable because it is violative of any law or
public policy, each Debtor shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.
8.20 Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be an original with the same effect as if the
signatures thereto and hereto were on the same instrument. The delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this Agreement.
8.21 Effectiveness. This Agreement shall become effective on the
Effective Time.
8.22 Liability of Debtors. Each of the Debtors shall be jointly and
severally liable with respect to each of the representations, warranties and
covenants
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made by any Debtor under this Agreement, each of which are intended and shall be
deemed to have been made individually by each of the Debtors and jointly and
severally by all of the Debtors.
8.23 Amendment and Restatement. The HMG Security Agreement and the
Security Agreement are hereby amended and restated in their entirety in the form
of this Agreement as of the effectiveness of this Agreement; provided, however
that any representations and warranties made by any Debtor to the Secured Party
shall survive the execution and delivery of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
day and year first above written.
ALLIED DIGITAL TECHNOLOGIES CORP.
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Title: Chief Executive Officer
------------------------------
HMG DIGITAL TECHNOLOGIES CORP.
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Title: Chief Executive Officer
------------------------------
Accepted and agreed to in Chicago, Illinois on this 30th day of October, 1996.
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By: /s/ Xxxxxxxxx Xxxxxxx
----------------------------
Title: Vice President
-------------------------
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