Exhibit 10.12
The Chase Manhattan Bank
SECURITY AGREEMENT
(General Purpose)
This Agreement made this 29 day of July, 1996, between The Chase
Manhattan Bank (herein called "Bank") and First Priority Group, Inc.
(herein called "Borrower").
1. DEFINITIONS OF TERMS USED HEREIN. (a) "Borrower" includes all
individuals executing this agreement as parties hereto and all members
of a partnership when Borrower is a partnership, each of whom shall be
jointly and severally liable individually and as partners hereunder. (b)
"Liability" or "liabilities" includes all liabilities (primary,
secondary, direct, contingent, sole, joint or several) due or to become
due, or that may be hereafter contracted or acquired, of Borrower
(including Borrower and any other person) to Bank, including without
limitation all liabilities arising under or from any note, loan or
credit agreement, letter of credit, guaranty, draft, acceptance,
interest rate or foreign exchange agreement or any other instrument or
agreement of (or the responsibility of) the Borrower or any loan, advance or
other extension of credit or financial accommodation to Borrower by Bank.
(c) "Proceeds" means whatever is received when Collateral is sold, exchanged,
leased, collected or otherwise disposed of and includes the account arising
when the right to payment is earned under a contract. (d) "Security interest"
means a lien or other interest in Collateral which secures payment of a
liability or performance of an obligation. (e) "Collateral" means the property
described in Section 2 hereof and the following described property of
the Borrower:
All present and future accounts, contract rights, general intangibles,
instruments, documents, and chattel paper, all returned and repossessed
goods relating thereto, all proceeds thereof, and all books, records and
other property relating to any of the foregoing.
All terms used herein which are also defined in the New York or any
other applicable Uniform Commercial Code shall also have at least the
meanings herein as therein defined.
2. SECURITY INTEREST. As security for the payment of all loans and
other extensions of credit or other financial accommodations now or in
the future made by Bank to Borrower and all other liabilities of
Borrower to Bank, Borrower hereby grants to Bank a security interest in
the above described Collateral and all and any Proceeds arising
therefrom and all and any products of the Collateral.
The proceeds of the loan hereby obtained by the Borrower will be
used to purchase the Collateral.
Borrower represents and warrants that it is the sole lawful owner
of the Collateral, free and clear of any liens and encumbrances, and has
the right and power to pledge, sell, assign and transfer absolute title
thereto to Bank and that no financing statement covering the
Collateral, other than the Bank's, is on file in any public office.
To further secure the Liabilities, the Borrower hereby grants,
pledges and assigns to the Bank a continuing lien, security interest and
right of set-off in and to all money, securities and all other property
of the Borrower, and the proceeds thereof, now or hereafter actually or
constructively held or received by or for the Bank, Chemical Securities,
Inc. or any other affiliate of the Bank for any purpose, including
safekeeping, custody, pledge, transmission and collection, and in and to
all of the Borrower's deposits (general and special) and credits with
the Bank, Chemical Securities, Inc. or any other affiliate of the Bank.
Borrower authorizes Bank to deliver to others a copy of this Agreement
as written notification of the Borrower's transfer of a security
interest in the foregoing property. The Bank is hereby authorized at any
time and from time to time, without notice, to apply all or part of such
money, securities, property, proceeds, deposits or credits to any of the
Liabilities in such amounts as the Bank may elect in its sole and
absolute discretion, although the Liabilities may then be contingent or
unmatured and whether or not the collateral security may be deemed
adequate.
3. USE OF COLLATERAL. Until default, Borrower may use the
Collateral in any lawful manner. If the Collateral is or is about to
become affixed to realty, Borrower will, at Bank's request, furnish the
Bank a writing executed by the mortgagee of the realty whereby the
mortgagee subordinates its rights and priorities to the Bank's security
interest in the Collateral. If the Collateral is or may become subject
to a landlord's lien, the Borrower will at Bank's request, furnish the Bank
with a landlord's waiver satisfactory in form to the Bank.
If goods, the Collateral will be used primarily as _________________
(Equipment in business, Inventory for sale or
lease, Farming, Personal, Family or Hosuehold.)
4. INSURANCE. Borrower will have and maintain insurance on the
Collateral until this Agreement is terminated against all expected risks
to which it is exposed, including fire, theft and collision, and those
which the Bank may designate, such insurance to be payable to Bank and
Borrower as their interest may appear; all policies shall provide for
thirty (30) days' written minimum cancellation notice to the Bank. Bank
may act as attorney for Borrower in obtaining, adjusting, settling and
cancelling such insurance.
5. DEFAULT. Default shall exist hereunder (1) if the Borrower shall fail to
pay any amount of the Liabilities when due or if the Borrower shall fail to
keep, observe or perform any provision of this Agreement or of any note, or
other instrument or agreement between Borrower and Bank relating to any
Liabilities or if any default or Event of Default specified or defined in any
such note, instrument or agreement shall occur, (2) if the Borrower shall or
shall attempt to (a) remove or allow removal of the Collateral from the county
where the Borrower now resides or change the location of its chief executive
office or principal place of business, (b) sell, encumber or otherwise dispose
of the Collateral or any interest therein or permit any lien or security
interest (other than the Bank's) to exist thereon or therein, (c) conceal, hire
out or let the Collateral, (d) misuse or abuse the Collateral, or (e) use or
allow the use of the Collateral in connection with any undertaking prohibited by
law; (3) if bankruptcy or insolvency proceedings shall be instituted by or
against the Borrower, or (4) if the Collateral shall be attached, levied upon,
seized in any legal proceedings, or held by virtue of any lien or distress, or
(5) if the Borrower shall make any assignment for the benefit of creditors, or
(6) if the Borrower shall fail to pay promptly all taxes and assessments upon
the Collateral or the use thereof, or (7) if the Borrower shall die, or (8) if
the Bank with reasonable cause determines that its interest in the Collateral is
in jeopardy, or (9) if Borrower should fail to keep the Collateral suitably
insured. In the event of default or the breach of any undertaking of or
conditions to be performed by the Borrower (1) all liabilities shall become
immediately due and payable, and (2) the Borrower agrees upon demand to deliver
the Collateral to the Bank, or the Bank may, with or without legal process, and
with or without previous notice or demand for performance, enter any premises
wherein the Collateral may be, and take possession of the same, together with
anything therein; and the Bank may make disposition of the Collateral subject to
any and all applicable provisions of the law. If the Collateral is sold at
public sale, Bank may purchase the Collateral at such sale. The Bank, provided
it has sent the statutory notice of default, may retain from the proceeds of
such sale all reasonable costs incurred in the said taking and sale and also,
all sums then owing by the Borrower, and any surplus of any such sale shall be
paid to the Borrower.
6. GENERAL AGREEMENTS. (a) Borrower agrees to pay the costs of filing
financing statements and of conducting searches in connection with this
Agreement. (b) Borrower agrees to allow the Bank through any of its officers or
agents, at all reasonable times, to examine or inspect any of the Collateral and
to examine, inspect and make extracts from the Borrower's books and records
relating to the Collateral. (c) Borrower will promptly pay when due all taxes
and assessments upon the Collateral or for its use of operation or upon the
proceeds thereof or upon this Agreement or upon any note or other instrument or
agreement evidencing any of the liabilities. (d) At its option, the Bank may
discharge taxes, liens or security interests or other encumbrances at any time
levied or placed on the Collateral, and may pay for the maintenance and
preservation of the Collateral, and the Borrower agrees to reimburse the Bank on
demand for any payment made or any expense incurred by the Bank pursuant to the
foregoing authorization, including outside or in-house counsel fees and
disbursements incurred or expended by the Bank in connection with this
Agreement. (e) Borrower hereby authorizes the Bank to file financing statements
and any amendments thereto without the signature of Borrower. Such authorization
is limited to the security interest granted by this Agreement. (f) Borrower
agrees that the Bank has the right to notify (on invoices or otherwise) account
debtors and other obligors or payors on any Collateral of its assignment to the
Bank and that all payments thereon should be made directly to the Bank and that
the Bank has full power and authority to collect, compromise, endorse, sell or
otherwise deal with the Collateral on its own name or that of the Borrower at
any time. (g) The Borrower agrees to pay or reimburse the Bank on demand for all
costs and expenses incurred by it in connection with the administration and
enforcement of this Agreement and the administration, preservation, protection,
collection or realization of any Collateral (including outside or in-house
attorneys' fees and expenses). (h) The Bank shall not be deemed to have waived
any of its rights hereunder or under any other agreement, instrument or paper
signed by the Borrower unless such waiver is in writing and signed by the Bank.
No delay or omission on the part of the Bank in exercising any right shall
operate as a waiver thereof or of any other right. A waiver upon any one
occasion shall not be construed as a bar or a waiver of any right or remedy on
any future occasion. All of the rights and remedies of the Bank, whether
evidenced hereby or by any other Agreement, instrument or paper, shall be
cumulative and may be exercised singly or concurrently. (i) This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York. (j) This Agreement, and the security interests, obligations, rights
and remedies created hereby, shall inure to the benefit of the Bank and its
successors and assigns and be binding upon the Borrower and its heirs,
executors, administrators, legal representatives, successors and assigns.
7. EXECUTION BY BANK. This Agreement shall take effect immediately upon
execution by the Borrower, and the execution hereof by the Bank shall not be
required as a condition to the effectiveness of this Agreement. The provision
for execution of this Agreement by the Bank is only for purposes of filing this
Agreement as a Security Agreement under the Uniform Commercial Code, if
execution hereof by the Bank is required for purposes of such filing.
First Priority Group, Inc.
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(Borrower)
By /s/ Xxxxx Xxxxxx Co-chairman, Secretary
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000 Xxxxx Xxxxxx
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(Number and Street)
Xxxxxxxxxx, Xxx Xxxx 00000
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(City, County, State)
Places of business in counties other than above.
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The Chase Manhattan Bank______________________
Bank Designation
By /s/ Xxxxxxx X. Xxxxxx, V.P.
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(Name and Title)
Address 00 Xxxxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx, X.X. 00000
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(Number, Street, City)
