Exhibit 10.30
FORM OF SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is made as
of the ___ day of December, 1998 by XXXXXXX AMERICAN CORPORATION (the
"Borrower"), XXXXXXX ENTERPRISES, INC. ("Xxxxxxx Enterprises"), XXXXXX-AMERICAN
Companies, INC. ("Xxxxxx-American"), and _____________ ("_________", and
together with Xxxxxxx Enterprises and Xxxxxx-American, the "Guarantors", and
together with the Borrower and the other Guarantors, individually and
collectively, the "Companies") in favor of FIRST UNION NATIONAL BANK, a national
banking association, as agent for the Lenders pursuant to the Credit Agreement
described below ("Agent").
BACKGROUND
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A. Borrower has entered into that certain Credit Agreement dated
of even date herewith (as amended, restated or otherwise modified from time to
time, the "Credit Agreement") with for the lenders identified therein (together
with such additional financial institutions as may become Lenders from time to
time as therein provided, "Lenders").
B. Guarantors have executed a Guaranty in favor of the Lenders
dated of even date herewith (as amended, restated or otherwise modified from
time to time, the "Guaranty").
C. As a condition to Lenders' willingness to enter into the
Credit Agreement, the Companies are willing to execute and deliver to Agent this
Security Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the Companies and Agent hereby agree as follows:
A. Definitions. All capitalized terms used and not defined herein shall
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have the respective meaning ascribed thereto in the Credit Agreement. In
addition, as used herein, the following terms shall have the following meanings:
1. Books and Records. The term "Books and Records" means all of
the Companies' books and records, including without
limitation, all books and records indicating, summarizing, or
evidencing the Collateral, including without limitation,
computer runs, invoices, tapes, processing software,
processing contracts (such as contracts for computer time and
services) and any computer prepared information, tapes, or
data of every kind and description relating to the Collateral,
whether in the possession of any Companies or in the
possession of third parties.
2. Collateral. The term "Collateral" means the all present and
future assets of the Companies, whether now owned or hereafter
acquired, and any proceeds
thereof, including without limitation all accounts, contract
rights, leases, and any other rights of the Companies to
payment for goods sold or leased or for services rendered;
furniture; furnishings; fixtures; equipment; machinery;
accessories; moveable trade fixtures; goods; inventory;
building improvement and construction materials, supplies and
equipment; chattel paper; instruments; documents; funds on
deposit with Lenders and their affiliates; Books and Records,
investment property, securities entitlements, financial assets
and general intangibles; as well as all parts, replacements,
substitutions, profits, products and cash and non-cash
proceeds of the foregoing (including insurance and
condemnation proceeds payable by reason of condemnation of or
loss or damage thereto) in any form and wherever located.
3. Liabilities. The term "Liabilities" means any and all
obligations and indebtedness of every kind and description of
the Companies to the Lenders pursuant to, under, or in
connection with the Loan Documents, whether such debts or
obligations are primary or secondary, direct or indirect,
absolute or contingent, sole, joint or several, secured or
unsecured, due or to become due, contractual or tortious,
arising by operation of law or otherwise, or now or hereafter
existing, whether incurred by any Companies as principal,
surety, endorser, guarantor, accommodation party or otherwise,
including, without limitation, principal, interest and fees,
late fees and expenses (including, attorneys' fees and costs
and/or the allocated fees and costs of Agent's in-house legal
counsel), or that have been or may hereafter be contracted or
incurred, and any obligations of the Companies or any of them
under interest rate protection agreements, swaps, hedging
contracts or similar arrangements with any Lender.
4. Loan Documents. The term "Loan Documents" means this Security
Agreement, the Credit Agreement, the Note, the Guaranty, and
any other documents and agreements executed and delivered in
connection with the Credit Agreement.
5. Security Agreement. The term "Security Agreement" means this
Security Agreement, together with all Schedules and Exhibits
hereto as may be amended, restated or otherwise modified from
time to time.
6. Uniform Commercial Code. The term "Uniform Commercial Code"
means the Uniform Commercial Code, in effect from time to time
in the Commonwealth of Pennsylvania.
Unless the context otherwise requires, all capitalized terms not
specifically defined herein which are defined in the Uniform Commercial
Code shall have the meanings stated therein.
B. Security Interest. In order to secure the due and punctual payment
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and performance of the Liabilities, the Companies hereby grant to
Agent, for the benefit of the Lenders, a
continuing security interest in and general lien upon their right,
title and interest in the Collateral. The security interests granted
herein are granted as security only and shall not subject Agent to, or
in any way affect or modify, any obligation or liability of the
Companies with respect to any of the Collateral or any transaction
which gave rise thereto.
C. Further Assurances; Filing.
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1. Delivery of Documents; Inspection of Collateral. At any time
and from time to time, upon the demand of Agent, the Companies
will, at the Companies' expense: (i) give, execute, deliver,
file, and/or record any notice, statement, instrument,
document, agreement, or other papers that may be necessary or
desirable, or that Agent may request, in order to create,
preserve, perfect, or validate any security interest granted
pursuant hereto or intended to be granted hereunder or to
enable Agent to exercise or enforce its rights hereunder or
with respect to such security interest; (ii) keep, stamp, or
otherwise xxxx any and all documents, instruments, chattel
paper, and their respective Books and Records in such manner
as Agent may require; and/or (iii) permit representatives and
agents of Agent access to their respective premises at any
time requested by Agent to inspect the Collateral and the
Books and Records and to audit and make copies of or abstracts
from the Books and Records.
2. Filing of Financing Statement. At Agent's sole option, and
without the consent of the Companies, Agent may file a carbon,
photographic, or other reproduction of this Security Agreement
or any financing statement executed pursuant hereto as a
financing statement in any jurisdiction so permitting. Without
the prior written consent of Agent, no Companies shall file or
authorize or permit to be filed in any jurisdiction any such
financing or like statement in which First Union National Bank
or its successor as Agent is not named as the sole secured
party as Agent for the Lender.
D. Representations and Warranties. Each Company represents and warrants to
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Agent, which representations and warranties shall be continuing
representations and warranties until all of the Liabilities are
satisfied in full, as follows:
1. Security Agreement Questionnaire. All information provided by
such Companies to Agent and set forth on the Security
Agreement Questionnaire attached hereto as Schedule "A" and
made a part hereof, is complete, true and correct (subject to
subsequent disclosure pursuant to Paragraph E.2. hereof). If,
for any reason, the Security Agreement Questionnaire is not
attached to this Security Agreement at the time of execution,
such failure shall in no way alter Agent's right to rely upon
the representations and warranties contained in the Security
Agreement Questionnaire and the other representations and
warranties contained in this Section D. The Companies agrees
that Agent may attach the Security Agreement Questionnaire to
this Security Agreement at any time
subsequent to the execution of this Security Agreement.
2. Deposit Accounts. Set forth on Schedule B is a complete, true
and correct listing of all deposit accounts maintained by any
of the Companies including the name of the depository
institution, how the account is titled, and the account number
(subject to subsequent disclosure pursuant to Paragraph E.2.
hereof), and a description of any agreements relating to the
deposit of funds or withdrawal of funds from such deposit
accounts.
3. Authority. If a corporation or a partnership, each Company is
duly organized and validly existing and in good standing under
the laws of the jurisdiction of its organization and is
qualified and licensed to do business in those jurisdictions
where the conduct of its business or ownership of its
properties requires such qualification; and each Company has
the power and authority to own the Collateral held by such
Companies, to enter into and perform this Security Agreement
and any other documents or instruments executed in connection
herewith, and to incur the Liabilities.
4. Duly Authorized; Not in Violation of Law. This Security
Agreement and any other documents or instruments executed in
connection herewith have been duly authorized, and/or
executed, and delivered, and constitute the legal, valid, and
binding obligations of each Company, enforceable against such
Companies in accordance with their terms. This Security
Agreement and any other documents and instruments executed in
connection herewith do not and will not violate any law, the
charter, organizational documents, or by-laws of any
Companies, or any other agreement or instrument to which any
Companies or any of its property may be bound or subject.
5. No Consents Necessary. No consent or approval of any person or
entity, including, without limitation, any debt or equity
holder of any Companies, or of any public authority, is
necessary for the valid execution, delivery and performance of
this Security Agreement, or any document or instrument
executed in connection herewith, or the exercise by Agent or
Lenders of their rights and remedies hereunder.
6. Title. The Companies are, or to the extent that any Collateral
will be acquired after the date hereof, will be, the owners of
the Collateral, holding good and marketable title thereto,
free from any lien, security interest, encumbrance, or claim
other than the liens and encumbrances of Agent and have the
right to grant the security interests created by this Security
Agreement.
7. Materially Misleading Statements. No representation, warranty,
or statement made herein, on any Schedule or Exhibit hereto or
in any certificate or document furnished or to be furnished
pursuant hereto contains or will contain any untrue statement
of fact or omits or will omit any fact necessary to make it
not misleading.
8. No Fictitious Names. The Companies do not operate or issue
invoices under any name other than the name(s) set forth on the
signature page hereof and as otherwise disclosed on Schedule A.
9. Collateral Not Subject to Agreements or Licenses. The
Collateral is not subject to or restricted by any agreement or
license relating to patents, trademarks, trade secrets, or
copyrights, except that the Companies' computer and word
processing equipment is subject to various software licenses.
E. Covenants. Each Company hereby covenants and agrees that for as long as
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any Liabilities are outstanding:
1. Defense of Collateral. The Companies shall defend the
Collateral against all claims and demands of all persons or
entities at any time claiming any interest therein other than
Agent.
2. Notice of Changes in Location of Chief Executive Office,
Residence, Books and Records, Collateral. The Companies shall
provide Agent with prompt written notice of: (i) any intended
change in the chief executive office or residence of the
Companies, and/or any office where the Companies maintain their
Books and Records; (ii) the location or movement of any
Collateral to or at an address other than the addresses set
forth on Schedule A hereto; and (iii) the establishment of any
new deposit account, all such notices to be received by Agent
at least 30 days prior to the effective date of any such
change. If any such new location as set forth in subparagraphs
(i) and (ii) hereof is on leased or mortgaged premises, the
Companies, upon request of Agent, will furnish Agent, prior to
the effective date of any such change, with landlord's or
mortgagee's waivers pertaining to such premises in form and
substance satisfactory to Agent in its sole discretion. With
respect to any new deposit account, the Companies shall, prior
to the first use of such deposit account, furnish to Agent with
blocked account letters or such other agreements with the
applicable depository institution as Agent shall reasonably
require, in each case in form and substance satisfactory to
Agent.
3. Prompt Payment of Taxes; Delivery to Bank of Proof of Payment.
The Companies shall promptly pay any and all taxes,
assessments, and/or governmental charges upon the Collateral
held by the Companies on the dates such taxes, assessments,
and/or governmental charges are due and payable, except to the
extent that such taxes, assessments, and/or charges are
contested in good faith by the Companies by appropriate
proceedings and for which the Companies are maintaining
adequate reserves. Upon request of Agent, the Companies shall
deliver to Agent such receipts and other proofs of payment as
Agent may request.
4. Notice of Adverse Changes, Events of Default, Seizures and
Institution of Litigation. The Companies shall immediately notify
Agent of: (i) any material adverse changes in its business,
property, or financial condition, including, without limitation,
any loss of or damage to any material portion of Collateral; (ii)
the occurrence of an Event of Default under this Security
Agreement; (iii) any seizure of any material amount of Collateral
or any claims or alleged claims of third parties to any material
amount of the Collateral, and (iv) the institution of any
litigation, arbitration, governmental investigation or
administrative proceedings against or affecting the Companies or
the Collateral which is reasonably likely to have a material
adverse effect on the Companies, its ability to perform its
obligations hereunder, or the ability of Agent to realize on the
Collateral.
5. Insurance. The Companies shall keep and maintain all of its
property and assets in good order and repair and covered by
insurance with reputable and financially sound insurance
companies against such hazards and in such amounts as is
customary in the industry, under policies requiring the insurer
to furnish reasonable notice to Agent and opportunity to cure any
non-payment of premiums prior to termination of coverage and
having Agent, for the benefit of Lenders, as loss payee and
additional insured. The Companies shall furnish Agent with
certificates or other evidence satisfactory to Agent of
compliance with the foregoing insurance provisions.
6. Disposition of Collateral. The Companies shall not sell, offer to
sell, otherwise assign, or permit the involuntary transfer of, or
disposition of the Collateral or any interest therein, except as
permitted pursuant to the Credit Agreement.
7. Security Interests in Collateral. The Companies shall keep the
Collateral free from any lien, security interest, or encumbrance
except those in favor of Agent and except as permitted pursuant
to the Credit Agreement, in good order and repair, reasonable
wear and tear excepted, and will not waste or destroy the
Collateral or any part thereof. If reasonably requested by Agent,
the Companies shall give notice of Agent's security interests in
the Collateral to any third person with whom the Companies has
any actual or prospective contractual relationship or other
business dealings.
8. Compliance with Laws. The Companies shall continue to be in
compliance with all applicable laws, statutes, rules, and
regulations with respect to the Collateral.
9. Maintenance, Inspection of Books and Records. The Companies shall
maintain complete and accurate Books and Records and shall make
all necessary entries therein to reflect the costs, values and
locations of the Collateral and all payments, credits and
adjustments thereto. The Companies shall keep Agent
fully informed as to the location of all such Books and Records
and shall permit Agent and its authorized agents to have full,
complete and unrestricted access thereto at all reasonable times
to inspect, audit and make copies of any and all such Books and
Records. Upon submission to the Companies of an invoice therefor,
the Companies will reimburse Agent for any and all fees and costs
related to any inspection and/or audit by Agent and its
authorized agents of the Books and Records. Agent's rights
hereunder shall be enforceable at law or in equity, and the
Companies consents to the entry of judicial orders or injunctions
enforcing specific performance of such obligations hereunder.
10. Maintenance and Inspection of Equipment. With respect to
equipment constituting Collateral, the Companies shall: (i) keep
accurate books and records with respect thereto, including,
without limitation, maintenance records; (ii) upon request,
deliver to Agent all evidence of ownership in such Collateral,
including certificates of title with Agent's interest
appropriately noted on the certificate; (iii) permit Agent and
its authorized agents to inspect any or all such equipment at all
reasonable times; (iv) preserve such equipment in good condition
and repair, and pay the cost of all replacement parts, repairs to
and maintenance of such equipment, and (v) if after the date
hereof, any of the Collateral is moved to or located upon land
(other than at locations identified on the Security Agreement
Questionnaire) which land is the subject of a lease or mortgage,
at the request of Agent, deliver an agreement of subordination
from the lessor or mortgagee providing that any lien of such
party shall be subordinate to the security interest of Agent
granted herein.
11. Continuing of Perfected Status of Collateral. The Companies
agrees to cooperate and join, at its expense, with Agent in
taking such steps as are necessary, in Agent's judgment, to
perfect or continue the perfected status of the security
interests granted herein, including, without limitation, the
execution and delivery of any financing statements, amendments
thereto and continuation statements, the notation of encumbrances
in favor of Agent on certificates of title, and the execution and
filing of any collateral assignments and any other instruments
requested by Agent to perfect its security interest in the
Collateral and any and all general intangibles relating to the
Collateral. Agent is expressly authorized to file financing
statements without the Companies' signature.
F. General Authority.
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1. Bank as Attorney-in-Fact. Each Company hereby irrevocably
appoints Agent (and any of its attorneys, officers, employees, or
agents), upon the occurrence and during the continuation of an
Event of Default, as its true and lawful attorney-in-fact, said
appointment being coupled with an interest, with full power of
substitution, in the name of the Companies, Agent, or otherwise,
for the sole use and benefit of Agent in its sole discretion, but
at the Companies' by law, in its name or in the name
of the Companies or otherwise, the powers set forth herein,
whether or not any of the Liabilities are due, such powers,
including, but not limited to, the power at any time: (i) to
endorse the name of the Companies upon any instruments of
payment, invoice, freight, or express xxxx, xxxx of lading,
storage, or warehouse receipt relating to the Collateral; (ii) to
demand, collect, receive payment of, settle, compromise, or
adjust all or any of the Collateral; (iii) to sign and file one
or more financing statements naming the Companies as debtor and
Agent as secured party and indicating therein the types or
describing the items of Collateral herein specified; (iv) to
correspond and negotiate directly with insurance carriers; and
(v) to execute any notice, statement, instrument, agreement, or
other paper that Agent may require to create, preserve, perfect,
or validate any security interest granted pursuant hereto or to
enable Agent to exercise or enforce its rights hereunder or with
respect to such security interest.
2. Liability of Bank as Attorney-in-Fact. Neither Agent nor its
attorneys, officers, employees, or agents shall be liable for
acts, omissions, any error in judgment, or mistake in fact in
its/their capacity as attorney-in-fact. Each Company hereby
ratifies all acts of Agent as its attorney-in-fact. This power,
being coupled with an interest, is irrevocable until the
Liabilities have been fully satisfied. Agent shall not be
required to take any steps necessary to preserve any rights
against prior parties with respect to any of the Collateral.
3. Effect of Extensions and Modifications. Agent may extend the time
of payment, arrange for payment in installments, or otherwise
modify the terms of, or release, any of the Collateral, without
thereby incurring responsibility to, or discharging or otherwise
affecting any liability of, any Companies or any other obligor.
G. Events of Default. The occurrence of an Event of Default under the
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Credit Agreement shall constitute an Event of Default and under this
Security Agreement.
H. Remedies.
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1. Acceleration of Liabilities; General Rights of Bank. Upon the
occurrence and during the continuance of an Event of Default,
Agent may, at its option, exercise any and all rights and
remedies it has under this Security Agreement, any other Loan
Document and/or applicable law.
2. Right of Setoff. If any Liabilities shall be due and payable or
any one or more Events of Default shall have occurred and be
continuing, whether or not the Agent shall have made demand under
any Loan Document and regardless of the adequacy of any
collateral for the Liabilities or other means of obtaining
repayment of the Liabilities, each Lender shall have the right,
without notice to the Borrower and is specifically authorized
hereby to set-off against and apply to the then unpaid balance of
the Liabilities any items or funds of the Borrower
held by each Lender or any affiliate of such Lender, any and all
deposits (whether general or special, time or demand, matured or
unmatured) or any other property of the Borrower including,
without limitation, securities and/or certificates of deposit,
now or hereafter maintained by any Borrower for its or their own
account with any Lender or any affiliate of such Lender, and any
other indebtedness at any time held or owing by any Lender or any
affiliate of such Lender, to or for the credit or the account of
Borrower, even if effecting such set-off results in a loss or
reduction of interest or the imposition of a penalty applicable
to the early withdrawal of time deposits. For such purpose, the
Lenders shall have, and Borrower hereby grant to each Lender, a
first lien on and security interest in such deposits, property,
funds and accounts and the proceeds thereof.
3. Turnover of Property Held by Affiliates. Each Company authorizes
any affiliate of each Lender, upon the occurrence and during the
continuance of an Event of Default, at the request of any such
Lender, and without notice to Borrower, to turn over to the Agent
any property of such Companies, including, without limitation,
funds and securities, held by any Lender's affiliate for any such
Companies's account and to debit any deposit account maintained
by such Companies with such Lender's affiliate (even if such
deposit account is not then due or there results a loss or
reduction of interest or the imposition of a penalty in
accordance with law applicable to the early withdrawal of time
deposits), in the amount requested by the Lenders up to the
amount of the Liabilities, and to pay or transfer such amount or
property to the Agent for application to the Liabilities.
4. Additional Rights and Remedies. In addition to the rights and
remedies available to Agent as set forth above, upon the
occurrence of an Event of Default hereunder, or at any time
thereafter, Agent may at its option, immediately and without
notice, do any or all of the following, which rights and remedies
are cumulative, may be exercised from time to time, and are in
addition to any rights and remedies available to Agent under any
other agreement or instrument by and between any Companies and
Agent:
a. Exercise any and all of the rights and remedies of a secured
party under the Uniform Commercial Code, including, without
limitation, the right to require the Companies to assemble
the Collateral and make it available to Agent at a place
reasonably convenient to the parties;
b. Notify account debtors of any Companies that their
obligations to such Companies are payable directly to Agent,
for benefit of the Lenders, and collect such sums.
c. Operate, utilize, recondition and/or refurbish any of the
Collateral for the purpose of enhancing or preserving the
value thereof by any means
deemed appropriate by Agent, in its sole discretion,
including, without limitation, converting raw materials
and/or work-in-process into finished goods;
d. Demand, xxx for, collect, or retrieve any money or
property at any time payable, receivable on account
of, or in exchange for, or make any compromise, or
settlement deemed desirable with respect to any of
the Collateral;
e. Upon five (5) calendar days' prior written notice to the
Borrower (or one (1) day notice by telephone with respect to
Collateral that is perishable or threatens to decline rapidly
in value), which each Company hereby acknowledges to be
sufficient, commercially reasonable and proper, Agent may
sell, lease or otherwise dispose of any or all of the
Collateral at any time and from time to time at public or
private sale, with or without advertisement thereof. Upon a
sale of the Collateral by Agent, Agent shall apply the sale
proceeds: first, to the amount of any reasonable expenses,
including counsel fees and expenses, incurred by Agent in
connection with (i) the administration of this Security
Agreement, (ii) the custody, preservation, sale or collection
or realization of the Collateral, (iii) the exercise or
enforcement of Agent's rights hereunder, or (iv) the failure
of Companies to perform hereunder; second, to accrued and
unpaid interest and fees; and third, to the principal balance
of indebtedness under the Credit Agreement to Lenders on the
basis of their pro rata shares of the outstanding principal
balance of the Loans (as defined therein), except the fees
payable under Paragraph 2.13 thereof, which shall be paid
solely to Agent. Such distribution of payments shall be made
promptly in federal funds immediately available at the office
of each Lender set forth in the Credit Agreement. Each Company
waives the benefit of any marshaling doctrine with respect to
Agent's exercise of its rights hereunder. Each Company grants
a royalty - free license to Agent for all patents, service
marks, trademarks, tradenames, copyrights, computer programs
and other intellectual property and proprietary rights
sufficient to permit Agent to exercise all rights granted to
Agent under this Section. Agent or anyone else may be the
purchaser of any or all of the Collateral so sold and
thereafter hold such Collateral absolutely, free from any
claim or right of whatsoever kind, including any equity of
redemption of any Companies or any other obligor, any such
notice, right and/or equity of redemption being hereby
expressly waived and released.
5. Sale of Collateral by Agent.
I. Miscellaneous.
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1. Remedies Cumulative; No Waiver. The rights, powers and remedies of
Agent provided in this Security Agreement and any of the other
Loan Documents are cumulative and not exclusive of any right,
power or remedy provided by law or equity. No failure or delay on
the part of Agent in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy preclude any other or
further exercise thereof, or the exercise of any other right,
power or remedy.
2. Notices. Each Company agrees that any notice, request or consent
required to be given to such Companies hereunder or in connection
herewith may be given to Borrower on behalf of such Companies. Any
notice, request or consent required hereunder or in connection
herewith shall be deemed satisfactorily given if in writing and
delivered by hand, mailed (registered or certified mail) or sent
by facsimile transmission to Agent or Borrower at their respective
addresses or telecopier number set forth below, or to any party at
such other addresses or telecopier numbers as may be given by any
party to the others in writing:
if to Borrower:
Xxxxxxx American Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention:
Telecopier:
if to Agent:
First Union National Bank
0000 Xxxxxxxx Xxxxxx
XX 4843
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
3. Costs and Expenses; Indemnification. Whether or not the
transactions contemplated by this Security Agreement and the other
Loan Documents are fully consummated, the Borrower shall promptly
pay (or reimburse, as Agent may elect) all costs and expenses
which Agent has incurred or may hereafter incur in connection with
the negotiation, preparation, reproduction, interpretation,
perfection, monitoring, administration and enforcement of the Loan
Documents, the collection of all amounts due under the Loan
Documents, and all amendments, modifications, consents or waivers,
if any, to the Loan Documents. Such costs and expenses shall
include, without limitation, the fees
and disbursements of counsel to Agent (including Agent's in-house
counsel), the costs of appraisals, searches of public records,
costs of filing and recording documents with public offices,
internal and/or external audit and/or examination fees and costs,
stamp, excise and other taxes, the fees of Agent's accountants,
consultants or other professionals, costs and expenses from any
actual or attempted sale of all or any part of the Collateral, or
any exchange, enforcement, collection, compromise, or settlement of
any of the Collateral or receipt of the proceeds thereof, and for
the care and preparation for sale of the Collateral (including
insurance costs) and defending and asserting the rights and claims
of Agent in respect thereof, by litigation or otherwise. Each
Company shall indemnify, defend and hold harmless Agent with
respect to any and all claims, expenses, demands, losses, costs,
fines or liabilities of any kind (including, without limitation,
those involving death, personal injury or property damage and
including reasonable attorneys fees and costs) arising from the use
or ownership of the Collateral. The reimbursement and
indemnification obligations of the Companies under this Section
shall constitute Liabilities secured by the Collateral and shall
survive any termination of the Loan Documents.
4. Governing Law. This Security Agreement shall be construed in
accordance with and governed by the substantive laws of the
Commonwealth of Pennsylvania without reference to conflict of laws
principles.
5. Integration. This Security Agreement and the other Loan Documents
constitute the sole agreement of the parties with respect to the
subject matter hereof and thereof and supersede all oral
negotiations and prior writings with respect to the subject matter
hereof and thereof.
6. Amendment; Waiver. No amendment of this Security Agreement, and no
waiver of any one or more of the provisions hereof shall be
effective unless set forth in writing and signed by the parties
hereto.
7. Successors and Assigns. This Security Agreement (i) shall be
binding upon the Companies and the Agent and, where applicable,
their respective heirs, executors, administrators, successors and
permitted assigns, and (ii) shall inure to the benefit of the
Companies and the Agent and, where applicable, their respective
heirs, executors, administrators, successors and permitted assigns;
provided, however, that no Companies may assign its rights
hereunder or any interest herein without the prior written consent
of Agent, and any such assignment or attempted assignment by such
Companies shall be void and of no effect with respect to Agent.
8. Severability. The illegality or unenforceability of any provision
of this Security Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of
this Security Agreement or any instrument or agreement required
hereunder. In lieu of any illegal or unenforceable provision in
this Security Agreement, there shall be added automatically as a
part of this Security Agreement a legal and enforceable provision
as similar in terms to such illegal or unenforceable provision as
may be possible.
9. Consent to Jurisdiction and Service of Process. Each Company
irrevocably appoints each officer of Borrower as its attorney upon
whom may be served any notice, process or pleading in any action or
proceeding against it arising out of or in connection with this
Security Agreement, the Credit Agreement, the Notes, the Loan
Documents or any of the Collateral; each Company hereby consents
that any action or proceeding against it be commenced and
maintained in any court within the Commonwealth of Pennsylvania or
in the United States District Court for the Eastern District of
Pennsylvania by service of process on any officer of Borrower; and
each Company agrees that the courts of the Commonwealth of
Pennsylvania and the United States District Court for the Eastern
District of Pennsylvania shall have jurisdiction with respect to
the subject matter hereof and the person of each Company and the
Collateral. Notwithstanding the foregoing, Agent, in its absolute
discretion may also initiate proceedings in the courts of any other
jurisdiction in which any Companies may be found or in which any of
its properties or Collateral may be located.
10. Inconsistencies. The Loan Documents are intended to be consistent.
However, in the event of any inconsistencies among any of the Loan
Documents, such inconsistency shall not affect the validity or
enforceability of any Loan Document. In the event of any
inconsistency or ambiguity in any of the Loan Documents, the Loan
Documents shall not be construed against any one party but shall be
interpreted consistent with Agent's policies and procedures.
11. Headings. The headings of sections and paragraphs have been
included herein for convenience only and shall not be considered in
interpreting this Security Agreement.
12. Schedules. If a Schedule and/or an Exhibit is attached hereto, the
provisions thereof are incorporated herein.
13. Waiver of Jury Trial; Acknowledgments.
a. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE NOTES OR
OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF AGENT OR LENDERS. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR AGENT'S ENTERING INTO
THIS AGREEMENT ON BEHALF OF THE LENDERS.
b. BORROWER ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF
COUNSEL IN THE REVIEW AND EXECUTION OF THIS AGREEMENT AND,
SPECIFICALLY, PARAGRAPH 10.14 HEREOF, AND FURTHER ACKNOWLEDGES
THAT THE MEANING AND EFFECT OF THE FOREGOING WAIVER OF JURY
TRIAL HAVE BEEN FULLY EXPLAINED TO BORROWER BY SUCH COUNSEL.
IN WITNESS WHEREOF the parties hereto have executed this Security Agreement as
of the date above first written.
Attest: XXXXXXX AMERICAN CORPORATION
By:________________________ By:______________________________
Name: Name:
Title: Title:
Attest: XXXXXXX ENTERPRISES, INC.
By:__________________________ By:______________________________
Name: Name:
Title: Title:
Attest: XXXXXX-AMERICAN COMPANY, INC.
By:__________________________ By:______________________________
Name: Name:
Title: Title:
Attest: [_______________________________]
By:__________________________ By:______________________________
Name: Name:
Title: Title:
SCHEDULE A
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Security Agreement Questionnaire Attached
SCHEDULE B
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Deposit Accounts
