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EXHIBIT 6.18
ADDENDUM TO UNIFORM COMMERCIAL CODE - SECURITY AGREEMENT
This Addendum to Uniform Commercial Code - Security Agreement is made by
OPEC Corp. as Debtor for the benefit of Norwest Bank Colorado, National
Association, Trustee of the Xxxxx X. Xxxxxx Rollover XXX, Xxxx X. Xxxxxxxxxxx,
and Xxxxx X. Xxxxxx and Xxxx X. Xxxxxx (collectively) as Secured Party.
1. Obligations of Debtor. Debtor warrants and covenants to Secured
Party as follows:
a. Perfection of Security Interest. Debtor hereby appoints Secured
Party as its irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect or to continue the security interest granted in
this Agreement. Debtor will reimburse Secured Party for all expenses for the
perfection and the continuation of the perfection of Secured Party's security
interest in the Collateral.
b. No Violation. The execution and delivery of this Agreement will
not violate any law or agreement governing Debtor or to which Debtor is a party,
and will not cause Debtor to be in default of any agreement to which it is a
party.
c. Enforceability of Collateral. To the extent the Collateral
consists of accounts, chattel paper, or general intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and complies with
applicable laws concerning form, content and manner of preparation and
execution, and all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated as they appear to
be on the Collateral. At the time any account becomes subject to a security
interest in favor of Secured Party, the account shall be a good and valid
account representing an undisputed, bona fide indebtedness incurred by the
account debtor, for merchandise held subject to delivery instructions and
theretofore shipped or delivered pursuant to a contract of sale, or for services
theretofore performed by Debtor with or for the account debtor; there shall be
no setoffs or counterclaims against any such account; and no agreement under
which any deductions or discounts may be claimed shall have been made with the
account debtor except those disclosed to Secured Party in writing.
d. Transactions Involving Collateral. Except for inventory sold or
accounts collected in the ordinary course of Debtor's business, Debtor shall not
sell, offer to sell, or otherwise transfer or dispose of the Collateral. While
Debtor is not in default under this Agreement, Debtor may sell inventory, but
only in the ordinary course of its business and only to buyers who qualify as a
buyer in the ordinary course of business. A sale in the ordinary course of
Debtor's business does not include a transfer in partial or total satisfaction
of a debt or any bulk sale. Debtor shall not pledge, mortgage, encumber or
otherwise permit the Collateral to be subject to any lien, security interest,
encumbrance, or charge, other than the security interest provided for in this
Agreement, without the prior written consent of Secured Party. This includes
security interests even if junior in right to the security interests granted
under this Agreement. Unless waived by Secured Party, all proceeds from any
disposition of the Collateral (for whatever reason) shall be held in trust for
Secured Party and shall not be
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commingled with any other funds; provided, however, this requirement shall not
constitute consent by Secured Party to any sale or other disposition. Upon
receipt, Debtor shall immediately deliver any such proceeds to Secured Party.
e. Collateral Schedules and Locations. As often as Secured Party
shall require, and insofar as the Collateral consists of accounts and general
intangibles, Debtor shall deliver to Secured Party schedules of such Collateral,
including such information as Secured Party may require, including without
limitation names and address of account debtors and agings of accounts and
general intangibles. Insofar as the Collateral consists of inventory and
equipment, Debtor shall deliver to Secured Party, as often as Lender shall
require, such lists, descriptions, and designations of such Collateral as
Secured Party may require to identify the nature, extent, and location of such
Collateral. Such information shall be submitted for Debtor and each of its
subsidiaries or related companies.
2. Debtor's Right to Possession and to Collect Accounts. Until default and
except as otherwise provided below with respect to accounts, Debtor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Note or Loan Agreement ("Related Documents"), provided that
Debtor's right to possession and beneficial use shall not apply to any
Collateral when possession of the Collateral by Secured Party is required by law
to perfect Secured Party's security interest in such Collateral. Until otherwise
notified by Secured Party, Debtor may collect any of the Collateral consisting
of accounts. At any time and even though no Event of Default exists, Secured
Party may exercise its rights to collect the accounts and to notify account
debtors to make payments directly to Secured Party for application to the
Indebtedness. If Secured Party at any time has possession of any Collateral,
whether before or after an Event of Default, Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
if Secured Party takes such action for that purpose as Debtor shall request or
as Secured Party, in Secured Party's sole discretion, shall deem appropriate
under the circumstances, but failure to honor any request by Debtor shall not of
itself be deemed to be a failure to exercise reasonable care. Secured Party
shall not be required to take any steps necessary to preserve any rights in the
Collateral against prior parties, nor to protect, preserve or maintain any
security interest given to secure the indebtedness.
3. Expenditures by Secured Party. If not discharged or paid when due,
Secured Party may (but shall not be obligated to) discharge or pay any amounts
required to be discharged or paid by Debtor under this Agreement, including
without limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Secured Party also may
(but shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Secured
Party for such purposes will then bear interest at the rate charged under the
Note from the date incurred or paid by Secured Party to the date of repayment by
Debtor. All such expenses shall become a part of the indebtedness and, at
Secured Party's option, will (a) be payable on demand, (b) be added to the
balance of the Note and be apportioned among and be payable with any installment
payments to become due during either [i] the term of any applicable insurance
policy or [ii] the remaining term of the Note, or (c) be treated as a balloon
payment which will be due and payable at the Note's maturity. This Agreement
also will secure payment of these amounts. Such right shall be in addition to
all other rights and remedies to which Secured Party may be entitled upon the
occurrence of an Event of Default.
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4. Appoint Receiver. To the extent permitted by applicable law, Secured
Party shall have the following rights and remedies regarding the appointment of
a receiver: (a) Secured Party may have a receiver appointed as a matter of
right, (b) the receiver may be an employee of Secured Party and may serve
without bond, and (c) all fees of the receiver and his or her attorney shall
become part of the Indebtedness secured by this Agreement and shall be payable
on demand, with interest at the Note rate from date of expenditure until repaid.
The receiver may be appointed by a court of competent jurisdiction upon ex parte
application and without notice, notice being expressly waived.
5. Power of Attorney. Debtor hereby appoints Secured Party as its true and
lawful attorney-in-fact, irrevocably, with full power of substitution to do the
following: (a) to demand, collect, receive, receipt for, xxx and recover all
sums of money or other property which may now or hereafter become due, owing or
payable from the Collateral; (b) to execute, sign and endorse any and all
claims, instruments, receipts, checks, drafts or warrants issued in payment for
the Collateral; (c) to settle or compromise any and all claims arising under the
Collateral, and, in the place and stead of Debtor, to execute and deliver its
release and settlement for the claim; and (d) to file any claim or claims or to
take any action or institute or take part in any proceedings, either in its own
name or in the name of Debtor, or otherwise, which in the discretion of Secured
Party may seem to be necessary or advisable. This power is given as security for
the Indebtedness, and the authority hereby conferred is and shall be irrevocable
and shall remain in full force and effect until renounced by Secured Party.
6. Conflict. If this Addendum conflicts with or varies from the terms of
the Uniform Commercial Code-Security Agreement to which this is attached, the
provisions hereof shall control.
Debtor acknowledges having read all of the provisions of this Addendum and
the Uniform Commercial Code-Security Agreement to which it is attached, and
Debtor agrees to its terms.
DEBTOR:
OPEC Corp., a Colorado corporation
By:________________________________
Xxxxxx X. Xxxxxxxx, President
ATTEST:
________________________________
Xxxxxx X. Xxxxxx, Secretary
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