1
SECURITY AND PLEDGE AGREEMENT
THIS SECURITY AND PLEDGE AGREEMENT made as of March 28, 1996, by and
between MASADA SECURITY, INC. , a Delaware corporation (the "Debtor"); and
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY, as Administrative Agent
(the "Agent") for CIBC Inc., SunTrust Bank, Central Florida, N.A. and the other
financial institutions who are or who become Lenders under, and as defined in,
the Credit Agreement referred to below and any Affiliates of such financial
institutions with whom the Debtor shall maintain any agreements relating to
protection against interest rate fluctuations, exchange rates or forward rates
or so-called "rate hedging" obligations (collectively, the "Secured Parties").
RECITALS
A. The Debtor, the Secured Parties, the Agent and SunTrust Bank, Central
Florida, N.A., as Co-Agent for the Secured Parties, are entering into a Credit
Agreement of even date herewith (as the same may be amended, restated, renewed,
replaced, supplemented or otherwise modified from time to time, the "Credit
Agreement") pursuant to which the Secured Parties are extending credit to the
Borrowers. Capitalized terms used herein without definition have the meanings
assigned to them in the Credit Agreement.
B. It is a condition to the Secured Parties' willingness to enter into
the Credit Agreement and provide to the Debtor the financing contemplated
thereby that the Debtor shall have granted to the Secured Parties and the
Agent, for the benefit of the Secured Parties, the liens and security interests
contemplated hereby. The Debtor wishes hereby to grant such liens and security
interests.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each of the parties hereto, the
parties hereby agree as follows:
SECTION 1. THE SECURITY INTERESTS.
(A) In order to secure (i) the performance of all obligations of the
Debtor under the Credit Agreement; (ii) the due and punctual payment of the
Notes, as defined in the Credit Agreement and issued pursuant thereto, to any
of the Secured Parties, including, without limitation, all interest payable on
the Notes at the interest rates provided therein and in the Credit Agreement,
regardless of the extent allowed as a claim in any proceeding in respect of the
bankruptcy, reorganization or insolvency of the Debtor (a "Reorganization");
(iii) the due and punctual payment of any of the Debtor's notes or instruments
as may hereafter from time to time be issued in addition to, in place of or in
amendment of the Notes under the Credit Agreement, including, without
limitation, all interest payable on such notes or instruments at the interest
rates provided therein, regardless of the extent allowed as a claim in any
Reorganization; (iv) the payment and performance of all indebtedness,
liabilities and obligations of the Debtor under the other Collateral Documents
contemplated by the Credit Agreement; (v) the payment and performance of all
obligations, indebtedness and liabilities of the Debtor's affiliates to any of
the Agent, the Co-Agent or the Secured Parties under the other Collateral
Documents; (vi) the performance of all of the obligations of the Debtor to the
Agent, the Co-Agent and the Secured Parties contained herein or in any of the
other Transaction Documents contemplated by the Credit Agreement; and (vii) the
payment of all other future advances and other obligations of the Debtor to any
of the Secured Parties, including without limitation any future loans and
advances made to the Debtor by any of the Secured Parties prior to, during or
following any Reorganization, and any and all other indebtedness, liabilities
and obligations of the Debtor to any of the Secured Parties or the Agent or the
Co-Agent of every kind and description, direct, indirect or contingent,
2
now or hereafter existing, due or to become due under the Credit Agreement
and each of the other Transaction Documents (all of the foregoing
hereinafter called the "Obligations"), the Debtor hereby grants to the Agent
and each of the Secured Parties a continuing security interest in the following
described fixtures and personal property (hereinafter collectively called the
"Collateral"):
All fixtures and all tangible and intangible personal property of the
Debtor, whether now owned or hereafter acquired by the Debtor, or in which
the Debtor may now have or hereafter acquire an interest, wherever located,
including without limitation, the following property: (a) all equipment
(including all machinery, tools, furniture, central station monitoring
panels and related equipment), inventory (including all merchandise, raw
materials, work in process, finished goods and supplies) and goods; (b) all
accounts, accounts receivable, other receivables, contract rights, chattel
paper, leases and general intangibles (including without limitation all
rights of the Debtor to any refund of any tax assessed against or paid by
the Debtor, loss carryback tax refunds, insurance premium refunds, unearned
premiums, insurance proceeds, choses in action, goodwill, going concern
value, trademarks, service marks, tradenames, patents, blueprints, designs,
strand maps, make-ready product lines, research and development, and all of
the Debtor's rights as a tenant under any and all leases) of the Debtor,
including, without limitation, all of the Debtor's rights under all present
and future authorizations, permits, licenses and franchises heretofore or
hereafter granted or assigned to the Debtor for the operation and ownership
of its business; (c) all instruments, documents of title, policies and
certificates of insurance, securities, bank deposits, deposit accounts,
checking accounts and cash; (d) all of the Debtor's right under all
subscriber agreements; (e) all books, records and documents relating to all
of the foregoing; (f) all other properties and assets of every type used or
useful in connection with the ownership or operation of commercial,
industrial and residential security, fire protection and other monitoring
systems, the sale of equipment, products and services relating thereto and
related businesses; (g) all accessories, additions or improvements to, all
replacements, substitutions and parts for all of the foregoing; and (h) all
proceeds and products of all of the foregoing.
(B) All Collateral consisting of accounts, contract rights, chattel paper
and general intangibles of the Debtor arising from the sale, delivery or
provision of goods and/or services are sometimes hereinafter collectively
called the "Customer Receivables".
(C) The security interests granted pursuant to this SECTION 1 (the
"Security Interests") are granted as security only and shall not subject the
Agent the Co-Agent or any of the Secured Parties to, or transfer or in any way
affect or modify, any obligation or liability of the Debtor under any of the
Collateral or any transaction which gave rise thereto.
SECTION 2. DELIVERY OF PLEDGED SECURITIES AND CHATTEL PAPER.
(a) All securities owned or held by the Debtor, including without
limitation, all shares of stock, warrants, options, notes and investment
contracts, whether now owned or hereafter acquired by the Debtor, shall be
promptly delivered to the Agent, by the Debtor pursuant hereto (which
securities, together with all other securities and shares of stock which may
hereafter be delivered to the Agent pursuant to the terms hereof, are
hereinafter called the "Pledged Securities"), shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignments in blank, and accompanied in each case by any
required transfer tax stamps, all in form and substance satisfactory to the
Agent. EXHIBIT A hereto and made a part hereof sets forth a complete
description of all securities owned by the Debtor on the date hereof.
2
3
(b) The Agent and the Secured Parties may at any time or from time to
time, at its sole discretion, require the Debtor to cause any chattel paper
included in the Customer Receivables to be delivered to the Agent or any
agent or representative designated by it for the purpose of causing a legend
referring to the Security Interests to be placed on such chattel paper and
upon any ledgers or other records concerning the Customer Receivables.
SECTION 3. FILING; FURTHER ASSURANCES.
The Debtor will, at its expense, execute, deliver, file and record (in
such manner and form as the Agent may require), or permit the Agent to file
and record, any financing statements, any carbon, photographic or other
reproduction of a financing statement or this Security Agreement (which shall
be sufficient as a financing statement hereunder), any specific assignments
or other paper that may be reasonably necessary or desirable, or that the
Agent may reasonably request, in order to create, preserve, perfect or
validate any Security Interest or to enable the Agent to exercise and enforce
its rights and the rights of the Secured Parties hereunder with respect to
any of the Collateral. The Debtor hereby appoints the Agent, which
appointment is irrevocable and coupled with an interest, as the Debtor's
attorney-in-fact to execute and file in the name and behalf of the Debtor
such additional financing statements as the Agent may reasonably request.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF DEBTOR.
The Debtor hereby represents and warrants to the Agent and the Secured
Parties that (a) the Debtor is, or to the extent that certain of the
Collateral is to be acquired after the date hereof, will be, the sole legal
and beneficial owner of the Collateral free from any lien, security interest,
encumbrance or restrictions on transfer except as permitted under the Credit
Agreement; (b) except as specified in and permitted by the Credit Agreement,
no financing statement covering the Collateral is on file in any public
office, other than the financing statements filed pursuant to this Security
Agreement (and other than financing statements on file in favor of State
Street Bank and Trust Company and Citizens Savings Bank, prior lenders to
Debtor who are being paid off with the first Advances under the Credit
Agreement and who will promptly terminate all such financing statements in
connection therewith); (c) all additional information, representations and
warranties contained in EXHIBIT B hereto and made a part hereof are true,
accurate and complete on the date hereof; (d) there are no restrictions upon
the voting rights of any of the Pledged Securities and the Debtor has the
right to vote, pledge, grant a security interest in and otherwise transfer
the Pledged Securities owned by it free of any encumbrances (other than
applicable restrictions imposed by any state or local authorities, or Federal
or state securities laws or regulations); and (e) the Pledged Securities are
duly and validly issued, fully paid and nonassessable, and each certificate
or instrument evidencing the Pledged Securities is issued in the name of the
Debtor as described on EXHIBIT A.
SECTION 5. COVENANTS OF DEBTOR.
The Debtor hereby covenants and agrees with the Agent and the Secured
Parties that the Debtor (a) shall defend the Collateral against all claims
and demands of all persons at any time claiming any interest therein senior
to that of the Agent and the Secured Parties; (b) shall provide the Agent
with prompt written notice of (i) any change in the Debtor's principal office
or the office where the Debtor maintains its books and records pertaining to
the Customer Receivables, and (ii) the movement or location of any Collateral
to or at any address other than as set forth in said EXHIBIT B; (c) shall
promptly pay any and all taxes, assessments and governmental charges upon the
Collateral prior to the date penalties are attached thereto, except to the
extent permitted under the Credit Agreement; (d) shall immediately notify
the Agent of any event causing a substantial loss or diminution in the value
of all or any material part of the Collateral and the amount or an estimate
of the amount of such loss or diminution, except as
3
4
otherwise permitted by the Credit Agreement; (e) shall have and maintain
insurance at all times in accordance with the provisions of the Credit
Agreement; (f) except in accordance with the Credit Agreement, shall not sell
or offer to sell or otherwise assign, transfer or dispose of the Collateral
or any interest therein, without the written consent of the Agent; (g) shall
keep the Collateral free from any adverse lien, security interest or
encumbrance other than liens, security interests or encumbrances contemplated
hereby and permitted under the Credit Agreement; (h) shall keep the
Collateral in good order and repair, reasonable wear and tear excepted, and
shall not waste, destroy or dispose of the Collateral or any part thereof,
except as otherwise permitted by the Credit Agreement; and (i) shall not use
the Collateral in violation of any statute or ordinance, the violation of
which could materially impair the value of the Collateral or the condition of
the Debtor.
SECTION 6. RECORDS RELATING TO COLLATERAL.
The Debtor will keep its records concerning the Collateral, including
the Customer Receivables and all chattel paper included in the Customer
Receivables, at its office or one or more of the other locations designated
in EXHIBIT B or at such other place or places of business of which the Agent
shall have been notified in writing upon no less than thirty (30) days in
advance. The Debtor will hold and preserve such records and chattel paper
and will permit representatives of the Agent and the Secured Parties at any
time during normal business hours to examine and inspect the Collateral and
to make abstracts from such records and chattel paper in accordance with the
terms of the Credit Agreement, and will furnish to the Agent and the Secured
Parties such information and reports regarding the Collateral as the Agent
and the Secured Parties may from time to time reasonably request.
SECTION 7. RECORD OWNERSHIP OF PLEDGED SECURITIES.
Upon the occurrence of an Event of Default (as defined in SECTION 11)
and subject to the requirements of applicable law, the Agent may cause, upon
written notification to the Debtor, any or all of the Pledged Securities to
be transferred of record into the Agent's name. The Debtor shall promptly
give to the Agent copies of any notices or other communications received by
the Debtor with respect to Pledged Securities registered in its name.
SECTION 8. RIGHT TO RECEIVE DISTRIBUTIONS ON PLEDGED SECURITIES.
(a) Unless and until an Event of Default has occurred and is continuing,
and if the Agent shall have notified the Debtor in writing of its election to
exercise the Agent's rights under SECTION 8, the Debtor shall be entitled,
from time to time, to receive for its own use any and all dividends, interest
and other payments and distributions made upon or with respect to the Pledged
Securities (subject to any restrictions thereon set forth in the Credit
Agreement or any other Transaction Document referred to therein), except:
(i) stock dividends,
(ii) dividends payable in securities or other property (except cash
dividends or distributions),
(iii) dividends or distributions on dissolution or on partial or
total liquidation or in connection with a reduction of capital, capital
surplus or paid-in surplus, and
(iv) other securities issued with respect to or in lieu of the
Pledged Securities (whether upon conversion of any convertible securities
included therein or through stock
4
5
split, spin-off, split-off, reclassification, merger, consolidation, sale
of assets, combination of shares or otherwise).
All of the foregoing, together with all new, substituted or additional shares
of capital stock, warrants, options, notes or other rights, or other
securities issued in addition to or in respect of all or any of the Pledged
Securities shall be delivered to the Agent hereunder as required by SECTION 2
hereof, to be held as Collateral pursuant to the terms hereof in the same
manner as the Pledged Securities delivered to the Agent on the date hereof.
(b) Notwithstanding any provision herein to the contrary, if any Event
of Default shall have occurred and be continuing, upon the giving of written
notice referred to in subsection (a) above, then and whether or not any
holder of the Obligations exercises any available option to declare such
Obligations due and payable or seeks or pursues any other relief or remedy
available to such holder under this Agreement or any instrument or agreement
evidencing or securing any Obligations, all dividends, distributions or
interest or principal payments, as the case may be, on the Pledged Securities
shall be paid directly to the Agent on behalf of the Secured Parties, and
retained by it as part of the Pledged Securities, subject to the terms of
this Security and Pledge Agreement, and, if the Agent shall so request in
writing, the Debtor agrees to execute and deliver to the Agent appropriate
additional distributions and other orders and documents to that end.
SECTION 9. RIGHT TO VOTE PLEDGED SECURITIES.
(a) Unless and until an Event of Default has occurred and is continuing,
the Debtor shall have the right, from time to time, to vote and to give
consents, ratifications and waivers with respect to the Pledged Securities
and to exercise conversion rights with respect to any convertible securities
included therein (provided, however, that no vote shall be cast, and no
consent shall be given or shareholder action taken, which would have the
effect of impairing the position or interest of the Agent and the Secured
Parties with respect to the Pledged Securities or which would authorize or
effect any action then prohibited by the Credit Agreement or any other
Transaction Document referred to therein).
(b) Notwithstanding any provision herein to the contrary, if any Event
of Default shall have occurred and be continuing, upon notice to the Debtor
of such election, then and whether or not any holder of the Obligations
exercises any available option to declare such Obligations due and payable or
seeks or pursues any other relief or remedy available to such holder under
this Security and Pledge Agreement or any instrument or agreement evidencing
or securing any Obligations, the Agent, or its nominee, shall forthwith,
without further act on the part of any person, have the sole and exclusive
right to exercise all voting and other powers of ownership pertaining to the
Pledged Securities and shall exercise such powers in such manner as the
Agent, at the Secured Parties' direction, shall determine to be necessary,
appropriate or advisable. The Debtor hereby agrees to execute and deliver to
the Agent such additional powers, authorizations, proxies, dividends and such
other documents as the Agent may reasonably request to secure to the Agent
the rights, powers and authorities intended to be conferred upon the Agent by
this subsection (b).
SECTION 10. GENERAL AUTHORITY.
The Debtor hereby appoints the Agent as the Debtor's lawful attorney, with
full power of substitution, in the name of the Debtor, for the sole use and
benefit of the Agent on behalf of the Secured Parties, but at the Debtors'
expense, to exercise, all or any of the following powers with respect to all or
any of the Collateral during the existence of any Event of Default:
5
6
(i) to demand, xxx for, collect, receive and give acquittance for any
and all monies due or to become due;
(ii) to receive, take, endorse, assign and deliver all checks, notes,
drafts, documents and other negotiable and non-negotiable instruments and
chattel paper taken or received by the Agent;
(iii) to settle, compromise, initiate, prosecute or defend any action
or proceeding with respect thereto;
(iv) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof or the related goods securing the
Customer Receivables, as fully and effectually as if the Agent on behalf of
the Secured Parties were the absolute owner thereof;
(v) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
(vi) to discharge any taxes, liens, security interests or other
encumbrances at any time placed thereon; and
(vii) to execute any document or form, in the name of the Debtor,
which may be necessary or desirable in connection with any sale of Pledged
Securities by the Agent, including without limitation Form 144 (or any
successor form) promulgated by the Securities and Exchange Commission;
provided that the Agent shall give the Debtor not less than ten 10 days' prior
written notice of the time and place of any sale or other intended disposition
of any of the Collateral. Such appointment as attorney is irrevocable and
coupled with an interest.
SECTION 11. EVENTS OF DEFAULT.
The Debtor shall be in default under this Security Agreement upon the
occurrence of any one of the following events (herein referred to as an "Event
of Default"):
(a) default by the Debtor in the due observance or performance of any
covenant or agreement contained herein, which default, if curable, is not cured
within 10 days of the earlier of receipt by the Debtor of notice thereof or the
Debtor's actual knowledge thereof;
(b) breach by the Debtor of any representation or warranty herein
contained; or
(c) the occurrence of any "Event of Default" under and as defined in the
Credit Agreement.
6
7
SECTION 12. REMEDIES UPON EVENT OF DEFAULT.
(a) If an Event of Default shall occur, the Agent, on behalf of the
Secured Parties, may exercise all the rights and remedies of a secured party
under the Uniform Commercial Code. Without limitation of the foregoing, unless
the Obligations shall have been paid in full in cash, the Agent, at the Secured
Parties' direction, may, in the Secured Parties' sole discretion, without
further demand, advertisement or notice, except as expressly provided for in
subsection (i) of this Section, apply the cash, if any, then held by it as
Collateral hereunder, for the purposes and in the manner provided in SECTION
(B) hereof, and if there shall be no such cash or the cash so applied shall be
insufficient to make payment in full of all payments provided in SECTION 14
hereof,
(i) Sell the Collateral, or any part or component thereof, in
one or more sales, at public or private sale, conducted by any
officer or agent of the Agent, at a place of business of the Agent
or elsewhere, for cash, upon credit or future delivery, and at such
price or prices as the Agent shall, in a commercially reasonable
manner, determine, and, to the extent permitted by law, the Agent or
any Secured Party may be the purchaser of any or all of the
Collateral so sold. Upon any such sale, the Agent shall have the
right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser (including the Agent or any
Secured Party) at any such sale shall hold the Collateral so sold,
absolutely free from any claim or right of whatsoever kind,
including, without limitation, any equity or right of redemption of
the Debtor which the Debtor, to the extent it may lawfully do so,
hereby specifically waives. The Agent shall give the Debtor at
least 10 days' written notice of any such public or private sale.
The Agent shall not be obligated to make any sale pursuant to any
such notice. The Agent may, without notice or publication, adjourn
any public or private sale from time to time by announcement at the
time and place fixed for such sale, or any adjournment thereof, and
any such sale may be made at any time or place to which the same may
be so adjourned without further notice or publication. In case of
any sale of all or any part of the Collateral for credit or for
future delivery, the Collateral so sold may be retained by the Agent
until the selling price is paid by the purchaser thereof, but the
Agent shall not incur any liability in case of the failure of such
purchaser to pay for the Collateral so sold, and in case of any such
failure, such Collateral may again be sold under and pursuant to the
provisions hereof; or
(ii) Proceed by a suit or suits at law or in equity to
foreclose upon this Security and Pledge Agreement and sell the
Collateral, or any portion or component thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(b) If at any time when the Agent, at the Secured Parties' direction,
shall determine to exercise its right to sell all or any part of the Pledged
Securities pursuant to subsection (a)(i) of this Section, such Pledged
Securities or the part thereof to be sold shall not, for any reason whatsoever,
be effectively registered under the Securities Act of 1933, as from time to
time in effect (the "Securities Act") or the securities laws of any state, the
Agent, at the Secured Parties' direction, in their sole and absolute
discretion, is hereby expressly authorized to sell such Pledged Securities or
such part thereof by private sale in such manner and under such circumstances
as the Agent and the Secured Parties may deem commercially reasonable in order
that such sale may legally be effected without such registration. The Agent
and the Secured Parties shall sell all or any part of the Pledged Securities at
a price which they deem commercially reasonable under the circumstances.
(c) The Agent as attorney-in-fact pursuant to SECTION 10 hereof may, in
the name and stead of the Debtor, make and execute all conveyances, assignments
and transfers of any
7
8
Collateral sold in accordance with this Agreement. The Debtor shall, if so
reasonably requested by the Agent, ratify and confirm any sale or sales by
executing and delivering to the Agent, or to such purchaser or purchasers, all
such instruments as may, in the reasonable judgment of the Agent, be advisable
for such purpose.
(d) The receipt of the Agent of the purchase money paid at any such
sale made by it shall be a sufficient discharge therefor to any purchaser
(other than the Agent) of the Collateral, or any portion thereof, sold as
aforesaid; and no such purchaser (or his or its representatives or assigns)
(other than the Agent), after paying such purchase money and receiving such
receipt, shall be bound to see to the application of such purchase money or any
part thereof or in any manner whatsoever be answerable for any loss,
misapplication or nonapplication of any such purchase money, or any part
thereof, or be bound to inquire as to the authorization, necessity, expediency
or regularity of any such sale.
SECTION 13. APPLICATION OF COLLATERAL AND PROCEEDS.
The proceeds of any sale of, or other realization upon, all or any part of
the Collateral shall be applied in the following order of priority: (a) first,
to pay the expenses of such sale or other realization, including reasonable
attorneys' fees, and all reasonable expenses, liabilities and advances incurred
or made by the Agent or any of the Secured Parties in connection therewith, and
any other unreimbursed expenses for which the Agent or any of the Secured
Parties are to be reimbursed pursuant to SECTION 14; (b) second, to the payment
of the Obligations in such order of priority as the Secured Parties, in their
sole discretion, shall determine; and (c) finally, to pay to the Debtor, or
their successors and assigns, or as a court of competent jurisdiction may
direct, any surplus then remaining from such proceeds.
SECTION 14. EXPENSES; AGENT'S LIEN.
The Debtor will forthwith upon demand pay to the Agent: (a) the amount
the Agent or any of the Secured Parties have paid (i) in respect of taxes
arising by reason of the Security Interests (including, without limitation, any
applicable transfer, intangible, recordation and personal property taxes but
excluding taxes in respect of the Agent's and the Secured Parties' income and
profits) or (ii) in order to free any of the Collateral from any lien thereon,
and (b) the amount of any and all reasonable costs and expenses (including,
without limitation, the reasonable fees and disbursements of its counsel and of
any agents not regularly in its employ) which the Agent or any of the Secured
Parties may incur in connection with (i) the preparation and interpretation of
this Security Agreement and any amendments hereto or modifications hereof, (ii)
the collection, sale or other disposition of any of the Collateral, (iii) the
exercise by the Agent or any of the Secured Parties of any of the powers
conferred upon any of them hereunder, (iv) any Event of Default on the Debtor's
part hereunder or (v) any Reorganization.
SECTION 15. SURVIVAL OF OBLIGATIONS; TERMINATION OF SECURITY INTERESTS;
RELEASE OF COLLATERAL.
This Agreement and the warranties, representations, agreements and
covenants contained herein and in any certificates or instruments delivered
pursuant hereto shall survive the making of the Loans (as defined in the Credit
Agreement) and the execution and delivery of the Notes, regardless of any
investigation made by the Agent or the Secured Parties or any person on behalf
of the Agent or the Secured Parties, and shall continue for so long as any of
the Obligations shall remain outstanding or any of the Secured Parties shall
have any obligation to advance funds to the Debtor. Upon the repayment and
performance in full of all the Obligations and the expiration or termination of
any obligations of any of the Secured Parties to advance funds to the Debtor,
the Security Interests shall terminate and all rights to the Collateral, except
as set forth below, shall
8
9
revert to the Debtor. Upon such termination of the Security Interests or
release of Collateral, the Agent will, at the Debtor's expense to the extent
permitted by law, promptly execute and deliver to the Debtor such documents as
reasonably necessary or as the Debtor shall reasonably request to evidence the
termination of the Security Interests or the release of such Collateral, as the
case may be.
SECTION 16. NOTICES.
All notices, requests, demands and other communications provided for
hereunder shall be in writing in the manner set forth in the Credit Agreement.
SECTION 17. RIGHT OF SET-OFF.
In furtherance and not in limitation of any provisions herein contained,
the Debtor hereby agrees that any and all deposits or other sums at any time
claimed by or due from the Agent or any of the Secured Parties to the Debtor
shall at all times constitute security for the Obligations and, upon the
occurrence of an Event of Default, the Agent and each of the Secured Parties
may exercise any right of set-off against such deposits or other sums as may
accrue or exist under applicable law, whether or not the Obligations are
otherwise fully secured.
SECTION 19. MISCELLANEOUS.
(a) No failure on the part of the Agent or the Secured Parties to
exercise, and no delay in exercising, and no course of dealing with respect to,
any right, power or remedy under this Security Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Agent or any of
the Secured Parties of any right, power or remedy under this Security Agreement
preclude any other right, power or remedy. The remedies in this Security
Agreement are cumulative and are not exclusive of any other remedies provided
by law. Neither this Security Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally but only by a statement in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
(B) THIS SECURITY AGREEMENT SHALL BE DEEMED A SEALED INSTRUMENT AND
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
(c) This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
Agreement.
SECTION 20. PAYMENT OF EXPENSES.
In the event this Agreement shall be enforced by suit or otherwise, the
Debtor will reimburse the Agent and the holder or holders of the Obligations,
upon demand, for all reasonable expenses incurred in connection therewith,
including, without limitation, reasonable attorneys' fees (including without
limitation all such costs, charges and expenses incurred by the Agent or any of
the Secured Parties in connection with any Reorganization).
SECTION 21. SEVERABILITY.
If any provision hereof is invalid or unenforceable in any jurisdiction,
the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Agent.
9
10
SECTION 22. INCONSISTENCIES.
Any inconsistencies between the provisions of this Agreement and the Credit
Agreement shall be governed by reference to the provisions of the Credit
Agreement.
SECTION 23. CONSENT TO JURISDICTION.
THE DEBTOR, TO THE EXTENT THAT IT MAY LAWFULLY DO SO, HEREBY CONSENTS TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AS WELL AS
TO THE JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH
COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
ANY OF ITS OBLIGATIONS ARISING HEREUNDER OR WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREBY, AND EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE AS
TO VENUE, INCLUDING, WITHOUT LIMITATION, THE INCONVENIENCE OF SUCH FORUM, IN
ANY OF SUCH COURTS. IN ADDITION, TO THE EXTENT THAT IT MAY LAWFULLY DO SO, THE
DEBTOR CONSENTS TO THE SERVICE OF PROCESS BY PERSONAL SERVICE OR U.S. CERTIFIED
OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO THE DEBTOR AT THE
ADDRESS PROVIDED HEREIN. TO THE EXTENT THE DEBTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE DEBTOR
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER
THIS AGREEMENT.
SECTION 24. WAIVER OF JURY TRIAL.
THE DEBTOR HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER AGREEMENTS
EXECUTED IN CONNECTION HEREWITH.
SECTION 25. AGENCY.
The parties hereto, and any person not a party hereto for whose benefit
the Agent holds the Collateral hereunder, acknowledge that the Agent has been
requested to act as agent for the Secured Parties hereunder pursuant to the
terms of the Credit Agreement, and that the Agent, to the extent it may so act
hereunder, shall exercise all of the rights and remedies hereunder on behalf
of, and as agent for the benefit of, the Secured Parties and each of them.
Without limiting the generality of the foregoing, the Agent is authorized to
execute and deliver, from time to time, on behalf of the Secured Parties, any
and all amendments and modifications to this Agreement and any and all waivers
to any conditions herein or any Event of Default hereunder.
10
11
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
by their duly authorized representatives all as of the day and year first above
written.
DEBTOR:
MASADA SECURITY, INC.
By: /s/ Xxxxx X. Xxxxxx, Vice President
------------------------------------
Xxxxx X. Xxxxxx, Vice President
AGENT:
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxxxx, Authorized Signatory
11
