EXHIBIT 10.7
SECURITY AGREEMENT
Date: March 12, 2002
Secured
Debtor: _________________________________ Party: XXXX Finance Co, LLC
Address: ________________________________ Address: 0000 Xxxxx xxx Xxx Xxxxx
________________________________ Xxxxxxx, XX 00000
________________________________
Federal Tax I.D. No.: ___________________
Organizational identification
Number issued by state of
Incorporation: __________________________
1. OBLIGATIONS SECURED. This Agreement secures the following (called the
Obligations "):
All debts, liabilities and obligations of every type and description
which the Debtor may now or at any time owe to the Secured Party,
including but not limited to all principal, interest, and other charges,
fees, expenses and amounts, and all notes, guaranties, agreements
(specifically including the guaranty agreement dated the date hereof),
and other writings in favor of the Secured Party, whether now existing
or hereafter arising, direct or indirect, due or to become due, absolute
or contingent, primary or secondary, liquidated or unliquidated,
independent, joint, several, or joint and several.
All debts, liabilities and obligations of Holiday RV Superstores, Inc.,
a Delaware corporation ("Parent") which owns all of the outstanding
capital stock of Debtor, under (a) that certain promissory note in the
original principal amount of $1,600,000 from Parent to the Secured
Party, including but not limited to all principal, interest, charges,
fees, expenses and amounts, and all amendments, extensions, renewals and
replacements of such note, and (b) that certain loan and security
agreement dated the date hereof (the "Loan Agreement") between Parent
and the Secured Party, including but not limited to all principal,
interest, charges, fees, expenses and amounts, and all amendments,
extensions, renewals and replacements of the Loan Agreement.
2. DEFINED TERMS. Each term defined in Schedule 1 attached hereto is
used herein as therein defined.
3. SECURITY INTEREST. To secure the prompt and complete payment,
performance and observance of all of the Obligations, the Debtor hereby grants,
assigns, conveys, mortgages, pledges, hypothecates and transfers to the Secured
Party a Lien in and upon all of its right, title and interest in, to and under
all personal property and other assets whether now owned by or owing to, or
hereafter acquired by or arising in favor of Debtor (including under any trade
names, styles or derivations thereof), and whether owned or
consigned by or to, or leased from or to, Debtor, and regardless of where
located (all of which being hereinafter collectively referred to as the
"Collateral"), including:
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Documents;
(iv) all Equipment
(v) all General Intangibles (including payment
intangibles and Software);
(vi) all Goods (including Inventory, Equipment and
Fixtures);
(vii) all Instruments;
(viii) all Inventory, including but not limited to all
goods, merchandise and other personal property,
now owned or hereafter acquired by Debtor which
is held for sale or lease or furnished or to be
furnished under a contract for service or raw
materials, and all work in progress and
materials used or consumed or to be used or
consumed in the Debtor's business, including but
not limited to all new and used recreational
vehicles, boats, and other vehicles, and all
keys, parts, returns, repossessions,
replacements, attachments, additions, and
accessories relating to any of the foregoing;
(ix) all Investment Property;
(x) all Deposit Accounts and all other bank accounts
and all deposits therein;
(xi) all money, cash or cash equivalents of Debtor;
(xii) all Supporting Obligations and Letter-of-Credit
Rights of Grantor;
(xiii) all amounts payable by, and rights and claims
against, any manufacturer or vendor of
Inventory, such as volume purchase discounts,
advertising rebates, price protection, warranty
work, finance reserves, hold-backs, incentives
and credits;
(xiv) all property of Debtor now or hereafter in
possession of or under control of Lender, or any
correspondent or Affiliate of Lender, in any
capacity whatsoever, including, but not limited
to any deposit
2
account and any funds or balances in any
checking or depository account or investment
account;
(xv) all other property of whatever kind or nature
(excluding real estate), including but not
limited to commercial tort claims;
(xvi) all insurance policies and proceeds relating to
the foregoing;
(xvii) all books and records relating to the foregoing;
and
to the extent not otherwise included, all Proceeds, tort claims,
insurance claims and other rights to payments not otherwise included in
the foregoing and products of the foregoing and all accessions to,
substitutions and replacements for, and rents and profits of, each of
the foregoing.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The Debtor represents and
warrants to the Secured Party and agrees as follows:
a. The Debtor is a corporation incorporated under the laws of the
State of _____________, and the address of the Debtor's chief executive office
is shown at the beginning of this Agreement. The Debtor has not used any trade
name, assumed name, or other name except the Debtor's name stated above and
names set forth on Schedule 2 attached hereto The Debtor shall not change its
state of organization without the Secured Party's prior written consent. The
Debtor shall give the Secured Party at least fifteen (15) days prior written
notice of any change in such address or the Debtor's name or if the Debtor uses
any other name. The Debtor has authority to execute and perform this Agreement.
The Debtor's federal tax identification number is shown above.
b. If any Collateral is or will become a fixture, the record
owner of the real estate and the legal description of the real estate are set
forth on Schedule 3 attached hereto.
c. Except as set forth in any existing or future agreement
executed by the Secured Party: the Debtor is the owner of the Collateral, or
will be the owner of the Collateral hereafter acquired, free of all security
interests, liens and encumbrances other than the Security Interest and any other
security interest of the Secured Party; the Debtor shall not permit any security
interest, lien or encumbrance, other than the Security Interest and any other
security interest of the Secured Party, to attach to any Collateral without the
prior written consent of the Secured Party; the Debtor shall defend the
Collateral against the claims and demands of all persons and entities other than
the Secured Party, and shall promptly pay all taxes, assessments and other
Government charges upon or against the Debtor, any Collateral and the Security
Interest; and no financing statement covering any Collateral is on file in any
public office except as set forth on Schedule 4 attached hereto. If any
Collateral is or will become a fixture, the Debtor, at the request of the
Secured Party, shall furnish the Secured Party with a statement or statements
executed by all persons and entities who have or claim an interest in the real
estate, in form acceptable to the Secured Party, which statement or statements
shall provide that such persons and entities consent to the Security Interest.
3
d. The Debtor shall not sell or otherwise dispose of any
Collateral or any interest therein without the prior written consent of the
Secured Party, except that, until the occurrence of an Event of Default or the
revocation by the Secured Party of the Debtor's right to do so, the Debtor may
sell or lease any Collateral constituting Inventory in the ordinary course of
business at prices constituting the fair market value thereof. For purposes of
this Agreement, a transfer in partial or total satisfaction of a debt,
obligation or liability shall not constitute a sale or lease in the ordinary
course of business.
e. Each Account, Instrument, Investment Property, Chattel Paper,
Letter-of-Credit Right, Letter of Credit, other right to payment, Document, and
General Intangible constituting Collateral is, or will be when acquired, the
valid, genuine and legally enforceable obligation of the account debtor or other
issuer or obligor named therein or in the Debtor's records pertaining thereto as
being, obligated to pay such obligation, subject to no defense, setoff or
counterclaim. The Debtor shall not, without the prior written consent of the
Secured Party, agree to any material modification or amendment of any such
obligation or agree to any subordination or cancellation of any such obligation.
f. Other than Inventory in transit and motor vehicles in use, all
tangible Collateral shall be located at the Debtor's address stated above and
the addresses set forth in Schedule 5 attached hereto and no such Collateral
shall be located at any other address without the prior written consent of the
Secured Party.
g. The Debtor shall: (i) keep all tangible Collateral in good
condition and repair, normal depreciation excepted; (ii) from time to time
replace any worn, broken or defective parts thereof; (iii) promptly notify the
Secured Party of any loss of or material damage to any Collateral or of any
adverse change in the prospect of payment of any account, instrument, chattel
paper, other right to payment or General Intangible constituting Collateral;
(iv) not permit any Collateral to be used or kept for any unlawful purpose or in
violation of any federal, state or local law; (v) keep all tangible Collateral
insured in such amounts, against such risks and in such companies as shall be
acceptable to the Secured Party, with lender loss payable clauses in favor of
the Secured Party to the extent of its interest in form acceptable to the
Secured Party (including without limitation a provision for at least 30 days'
prior written notice to the Secured Party of any cancellation or modification of
such insurance), and deliver policies or certificates of such insurance to the
Secured Party; (vi) at the Debtor's chief executive office, keep accurate and
complete records pertaining to the Collateral and the Debtor's financial
condition, business and property, and provide the Secured Party such periodic
reports concerning the Collateral and the Debtor's financial condition, business
and property as the Secured Party may from time to time request; (vii) at all
reasonable times permit the Secured Party and its representatives to examine and
inspect any Collateral, and to examine, inspect and copy the Debtor's records
pertaining to the Collateral and the Debtor's financial condition, business and
property; and (viii) at the Secured Party's request, promptly execute, endorse
and deliver such financing statements and other instruments, documents, control
agreements, chattel paper and writings and take such other actions deemed by the
Secured Party to be necessary or desirable to establish, protect, perfect or
enforce the Security Interest and the rights of the Secured Party under this
Agreement and applicable law, and pay
4
all costs of filing financing statements and other writings in all public
offices where filing is deemed by the Secured Party to be necessary or
desirable.
h. The Debtor authorizes the Secured Party to file all of the
Secured Party's financing statements and amendment to financing statements, and
all terminations of the filings of other secured parties, all with respect to
the Collateral, in such form and substance as the Secured Party, in its sole
discretion, may determine.
i. If requested by Secured Party, Debtor agrees to enter into the
control agreement in the form of Exhibit A attached hereto for any financial
institution where Debtor's funds are located.
5. COLLECTION RIGHTS. At any time after an Event of Default, the Secured
Party may, and at the request of the Secured Party the Debtor shall, promptly
notify any account debtor, issuer or obligor of any Account, Instrument,
Investment Property, Chattel Paper, Letter-of-Credit Right, Letter of Credit,
other right to payment or General Intangible constituting Collateral that the
same has been assigned to the Secured Party and direct such account debtor,
issuer or obligor to make all future payments to the Secured Party. In addition,
at the request of the Secured Party, the Debtor shall deposit in a collateral
account designated by the Secured Party all proceeds constituting Collateral, in
their original form received (with any necessary endorsement), within one
business day after receipt of such proceeds by the Debtor. Until the Debtor
makes each such deposit, the Debtor will hold all such proceeds separately in
trust for the Secured Party for deposit in such collateral account, and will not
commingle any such proceeds with any other property. The Debtor shall have no
right to withdraw any funds from such collateral account, and the Debtor shall
have no control over such collateral account. Such collateral account and all
funds at any time therein shall constitute Collateral under this Agreement.
Before or upon final collection of any funds in such collateral account, the
Secured Party, at its discretion, may release any such funds to the Debtor or
any Account of the Debtor or apply any such funds to the Obligations whether or
not then due. Any release of funds to the Debtor or any Account of the Debtor
shall not prevent the Secured Party from subsequently applying any funds to the
Obligations. All items credited to such collateral account and subsequently
returned and all other costs, fees and charges of the Secured Party in
connection with such collateral account may be charged by the Secured Party to
any account of the Debtor, and the Debtor shall pay the Secured Party all such
amounts on demand.
6. LIMITED POWER OF ATTORNEY. If the Debtor at any time fails to perform
or observe any agreement herein, the Secured Party, in the name and on behalf of
the Debtor or, at its option, in its own name, may perform or observe such
agreement and take any action which the Secured Party may deem necessary or
desirable to cure or correct such failure. The Debtor irrevocably authorizes
Secured Party and grants the Secured Party a limited power of attorney in the
name and on behalf of the Debtor or, at its option, in its own name, to collect,
receive, receipt for, create, prepare, complete, execute, endorse, deliver and
file any and all financing statements, control agreements, insurance
applications, remittances, instruments, documents, chattel paper and other
writings, to grant any extension to, compromise, settle, waive, notify, amend,
adjust, change and release any obligation of any Account Debtor, issuer,
5
obligor, insurer or other person or entity pertaining to any Collateral, to
demand terminations of other security interests in any of the Collateral, and to
take any other action deemed by the Secured Party to be necessary or desirable
to establish, perfect, protect or enforce the Security Interest. All of the
Secured Party's advances, fees, charges, costs and expenses, including but not
limited to audit fees and expenses and reasonable attorneys' fees and legal
expenses, in connection with the Obligations and in the protection and exercise
of any rights or remedies hereunder, together with interest thereon at the
highest rate then applicable to any of the Obligations, shall be secured
hereunder and shall be paid by the Debtor to the Secured Party on demand.
7. EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an "Event of Default": (a) any breach or default in the payment
or performance of any of the Obligations; or (b) any breach or default under the
terms of this Agreement or any other note, obligation, mortgage, deed of trust,
assignment, guaranty, other agreement, or other writing heretofore, herewith or
hereafter existing to which the Debtor, Parent or any maker, endorser, guarantor
or surety of any of the Obligations or any other person or entity providing
security for any of the Obligations or for any guaranty of any of the
Obligations is a party; or (c) the insolvency, death, dissolution, liquidation,
merger or consolidation of the Debtor, Parent or any such maker, endorser,
guarantor, surety or other person or entity, or (d) any appointment of a
receiver, trustee or similar officer of any property of the Debtor, Parent or
any such maker, endorser, guarantor, surety or other person or entity; or (e)
any assignment for the benefit of creditors of the Debtor, Parent or any such
maker, endorser, guarantor, surety or other person or entity; or (f) any
commencement of any proceeding under any bankruptcy, insolvency, receivership,
dissolution, liquidation or similar law by or against the Debtor, Parent or any
such maker, endorser, guarantor, surety or other person or entity; or (g) the
sale, lease or other disposition (whether in one or more transactions) to one or
more persons or entities of all or a substantial part of the assets of the
Debtor, Parent or any such maker, endorser, guarantor, surety or other person or
entity; or (h) the Debtor, Parent or any such maker, endorser, guarantor, surety
or other person or entity takes any action to go out of business, or to revoke
or terminate any agreement, liability or security in favor of the Secured Party;
or (i) the entry of any judgment or other order for the payment of money in the
amount of $100,000.00 or more against the Debtor, Parent or any such maker,
endorser, guarantor, surety or any other person or entity; or (j) the issuance
or levy of any writ, warrant, attachment, garnishment, execution or other
process against any property of the Debtor, Parent or any such maker, endorser,
guarantor, surety or any other person or entity; or (k) the attachment of any
tax lien to any property of the Debtor, Parent or any such maker, endorser,
guarantor, surety or other person or entity; or (1) any statement,
representation or warranty made by the Debtor, Parent or any such maker,
endorser, guarantor, surety or other person or entity (or any representative of
the Debtor, Parent or any such maker, endorser, guarantor, surety or other
person or entity) to the Secured Party at any time shall be incorrect or
misleading in any material respect when made; or (m) there is a material adverse
change in the condition (financial or otherwise), business or property of the
Debtor, Parent or any such maker, endorser, guarantor, surety or other person or
entity; or (n) the Secured Party shall in good faith believe that the prospect
for due and punctual payment or performance of any of the Obligations, this
Agreement or any other note, obligation, mortgage, deed of trust, assignment,
guaranty, or other agreement heretofore, herewith or hereafter given to or
acquired by the Secured Party in connection with any of the
6
Obligations is impaired; or (o) any "Event of Default" as defined in the Loan
Agreement shall have occurred.
8. REMEDIES. Upon the commencement of any proceeding under any
bankruptcy law by or against the Debtor or any such maker, endorser, guarantor,
surety or other person or entity, all Obligations automatically shall become
immediately due and payable in full, without declaration, presentment, or other
notice or demand, all of which are hereby waived by the Debtor. In addition,
upon the occurrence of any Event of Default and at any time thereafter, the
Secured Party may exercise any one or more of the following rights and remedies:
(a) declare all Obligations to be immediately due and payable in full, and the
same shall thereupon be immediately due and payable in full, without presentment
or other notice or demand, all of which are hereby waived by the Debtor; (b)
require the Debtor to assemble all or any part of the Collateral and make it
available to the Secured Party at a place to be designated by the Secured Party
which is reasonably convenient to both parties; or (c) exercise and enforce any
and all rights and remedies available upon default under this Agreement, the
Code, and any other applicable agreements and laws. If notice to the Debtor of
any intended disposition of Collateral or other action is required, such notice
shall be deemed reasonably and properly given if mailed by regular or certified
mail, postage prepaid, to the Debtor at the address stated at the beginning of
this Agreement or at the most recent address shown in the Secured Party's
records, at least 10 days prior to the action described in such notice.
9. JURISDICTION. AT THE OPTION OF SECURED PARTY, THIS AGREEMENT MAY BE
ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN MINNEAPOLIS,
MINNESOTA; AND DEBTOR CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT
AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE
EVENT DEBTOR COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY
TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP
CREATED BY THIS GUARANTY, SECURED PARTY AT ITS OPTION SHALL BE ENTITLED TO HAVE
THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED IF
SUCH TRANSFER CAN BE ACCOMPLISHED UNDER APPLICABLE LAW. IF SUCH TRANSFER CANNOT
BE ACCOMPLISHED UNDER APPLICABLE LAW, SECURED PARTY AT ITS OPTION SHALL BE
ENTITLED TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
10. MISCELLANEOUS. A carbon, photographic or other reproduction of this
Agreement is sufficient as a financing statement. No provision of this Agreement
can be waived, modified, amended, abridged, supplemented, terminated or
discharged and the Security Interest cannot be released or terminated, except by
a writing duly executed by the Secured Party. A waiver shall be effective only
in the specific instance and for the specific purpose given. No delay or failure
to act shall preclude the exercise or enforcement of any of the Secured Party's
rights or remedies. All rights and remedies of the Secured Party shall be
cumulative and may be exercised singularly, concurrently or successively at the
Secured Party's option, and the exercise or enforcement of any one such right or
remedy shall not be a condition to or bar the exercise or enforcement of any
other. This Agreement shall bind and
7
benefit the Debtor and the Secured Party and their respective heirs,
representatives, successors and assigns and shall take effect when executed by
the Debtor and delivered to the Secured Party, and the Debtor waives notice of
the Secured Party's acceptance hereof. If any provision or application of this
Agreement is held unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications which can be
given effect, and this Agreement shall be construed as if the unlawful or
unenforceable provision or application had never been contained herein or
prescribed hereby. All representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement and the creation, payment and performance of the Obligations. This
Agreement and the rights and duties of the parties shall be governed by and
construed in accordance with the internal laws of the State of Delaware
(excluding conflict of law rules).
THE DEBTOR REPRESENTS AND WARRANTS TO THE SECURED PARTY AND AGREES THAT
THE DEBTOR HAS READ ALL OF THIS AGREEMENT AND UNDERSTANDS ALL OF THE PROVISIONS
OF THIS AGREEMENT.
___________________________________
Debtor's Name
By:________________________________
Title:_____________________________
8
SCHEDULE 1
Definitions
"Account Debtor" means any person who may become obligated to Debtor
under, with respect to, or on account of, an Account, Chattel Paper or General
Intangibles (including a payment intangible).
"Accounts" means all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by Debtor, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper, Documents or Instruments),
(including any such obligations that may be characterized as an account or
contract right under the Code), (b) all of Debtor's rights in, to and under all
purchase orders or receipts for goods or services, (c) all of Debtor's rights to
any goods represented by any of the foregoing (including unpaid sellers' rights
of rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), (d) all rights to payment due to
Debtor for property sold, leased, licensed, assigned or otherwise disposed of,
for a policy of insurance issued or to be issued, for a secondary obligation
incurred or to be incurred, for energy provided or to be provided, for the use
or hire of a vessel under a charter or other contract, arising out of the use of
a credit card or charge card, or for services rendered or to be rendered by
Debtor or in connection with any other transaction (whether or not yet earned by
performance on the part of Debtor), (e) all health care insurance receivables
and (f) all collateral security of any kind, given by any Account Debtor or any
other Person with respect to any of the foregoing.
"Chattel Paper" means any "chattel paper," as such term is defined in
the Code, including electronic chattel paper, now owned or hereafter acquired by
Debtor.
"Code" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of Delaware; provided, that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9 shall
govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to Secured Party's Security Interest in any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of Delaware, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Deposit Accounts" means all "deposit accounts" as such term is defined
in the Code, now or hereafter held in the name of Debtor.
"Documents" means all "documents" as such term is defined in the Code,
now owned or hereafter acquired by Debtor, wherever located.
9
"Equipment" means all "equipment," as such term is defined in the Code,
now owned or hereafter acquired by Debtor, wherever located and, in any event,
including all Debtor's machinery and equipment, including processing equipment,
conveyors, machine tools, data processing and computer equipment, including
embedded software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.
"Fixtures" means all "fixtures" as such term is defined in the Code, now
owned or hereafter acquired by Debtor.
"General Intangibles" means all "general intangibles" as such term is
defined in the Code, now owned or hereafter acquired by Debtor, including all
right, title and interest that Debtor may now or hereafter have in or under any
contract, all payment intangibles, customer lists, licenses, copyrights,
trademarks, patents, and all applications therefor and reissues, extensions or
renewals thereof, rights in Intellectual Property, interests in partnerships,
joint ventures and other business associations, licenses, permits, copyrights,
trade secrets, proprietary or confidential information, inventions (whether or
not patented or patentable), technical information, procedures, designs,
knowledge, know-how, software, data bases, data, skill, expertise, experience,
processes, models, drawings, materials and records, goodwill (including the
goodwill associated with any trademark or trademark license), all rights and
claims in or under insurance policies (including insurance for fire, damage,
loss and casualty, whether covering personal property, real property, tangible
rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), uncertificated securities,
choses in action, deposit, checking and other bank accounts, rights to receive
tax refunds and other payments, rights to receive dividends, distributions,
cash, Instruments and other property in respect of or in exchange for pledged
Stock and Investment Property, rights of indemnification, all books and records,
correspondence, credit files, invoices and other papers, including without
limitation all tapes, cards, computer runs and other papers and documents in the
possession or under the control of Debtor or any computer bureau or service
company from time to time acting for Debtor.
"Goods" means all "goods" as defined in the Code, now owned or hereafter
acquired by Debtor, wherever located, including embedded software to the extent
included in "goods" as defined in the Code, manufactured homes, standing timber
that is cut and removed for sale and unborn young of animals.
"Instruments" means all "instruments" as such term is defined in the
Code, now owned or hereafter acquired by Debtor, wherever located, and, in any
event, including all certificated securities, all certificates of deposit, and
all promissory notes and other evidences of
10
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.
"Inventory" means all "inventory" as such term is defined in the Code,
now owned or hereafter acquired by Debtor, wherever located, and in any event
including inventory, merchandise, goods and other personal property that are
held by or on behalf of Debtor for sale or lease or are furnished or are to be
furnished under a contract of service, or that constitute raw materials, work in
process, finished goods, returned goods, or materials or supplies of any kind,
nature or description used or consumed or to be used or consumed in Debtor's
business or in the processing, production, packaging, promotion, delivery or
shipping of the same, including all supplies and embedded software.
"Investment Property" means all "investment property" as such term is
defined in the Code now owned or hereafter acquired by Debtor, wherever located,
including (i) all securities, whether certificated or uncertificated, including
stocks, bonds, interests in limited liability companies, partnership interests,
treasuries, certificates of deposit, and mutual fund shares; (ii) all securities
entitlements of Debtor, including the rights of Debtor to any securities account
and the financial assets held by a securities intermediary in such securities
account and any free credit balance or other money owing by any securities
intermediary with respect to that account; (iii) all securities accounts of
Debtor; (iv) all commodity contracts of Debtor; and (v) all commodity accounts
held by Debtor.
"Letter-of-Credit Rights" means letter-of-credit rights as such term is
defined in the Code, now owned or hereafter acquired by Debtor, including rights
to payment or performance under a letter of credit, whether or not Debtor, as
beneficiary, has demanded or is entitled to demand payment or performance.
"Lien" means any security interest, lien, pledge, encumbrance, charge or
adverse claim of any kind, including without limitation any agreement to give or
not to give any lien, or any conditional sale or other title retention
agreement.
"Proceeds" means "proceeds" as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to Debtor from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority), (c) any claim of Debtor against third parties (i) for
past, present or future infringement of any patent or patent license, or (ii)
for past, present or future infringement or dilution of any copyright, copyright
license, trademark or trademark license, or for injury to the goodwill
associated with any trademark or trademark license, (d) any recoveries by Debtor
against third parties with respect to any litigation or dispute concerning any
of the Collateral including claims arising out of the loss or nonconformity of,
interference with the use of, defects in, or infringement of rights in, or
damage to, Collateral, (e) all amounts collected on, or distributed on account
of, other Collateral, including dividends, interest, distributions and
Instruments with respect to Investment Property and pledged stock, and (f) any
and all other amounts, rights to payment or
11
other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
"Software" means all "software" as such term is defined in the Code, now
owned or hereafter acquired by Debtor, other than software embedded in any
category of goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.
"Supporting Obligations" means all supporting obligations as such term
is defined in the Code, including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents, General Intangibles, Instruments,
or Investment Property.
12
SCHEDULE 2
Other Names of Debtor
13
SCHEDULE 3
Owner of Real Estate and Legal Description
SCHEDULE 4
Prior Financing Statement Filings
14
SCHEDULE 5
Inventory Locations
15
EXHIBIT A
CONTROL AGREEMENT
(DEPOSIT ACCOUNT)
Date:________________
DEBTOR: _____________________________
_____________________________
Address: _____________________________
_____________________________
_____________________________
Fax No: _____________________________
_____________________________
SECURED PARTY: _____________________________
Address: _____________________________
_____________________________
_____________________________
Fax No: _____________________________
FINANCIAL
INSTITUTION: _____________________________
_____________________________
Address: _____________________________
_____________________________
_____________________________
Fax No: _____________________________
In consideration of the mutual agreements stated in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged by each of the parties, the Debtor, the Secured Party,
and the Financial Institution agree as follows:
1. Definitions. In this Agreement:
(a) "Control" means control of a deposit account, as defined in Revised
Article 9.
1
(b) "Debtor" means each and all of the persons or entities shown
above as Debtor. All agreements of the Debtor in this Agreement
are joint, several, and joint and several.
(c) "Financial Institution" means the Financial Institution shown
above.
(d) "Instrument" is defined in Revised Article 9.
(e) "Revised Article 9" means Revised Article 9 of the Uniform
Commercial Code.
(f) "Secured Party" means the Secured Party shown above.
(g) "Security" is defined in Article 8 of the Uniform Commercial
Code.
2. Security Interest. The Debtor has given the Secured Party a security interest
in, and has assigned to the Secured Party, the following property (the
"Collateral"):
(a) All of the Debtor's existing, and future accounts with the
Financial Institution, and all amendments, extensions, renewals
and replacements thereof (collectively called the "Account"),
and all amounts now or at any time hereafter in the Account, and
all interest and other earnings which may now or hereafter
accrue thereon, whether now owned or hereafter acquired, whether
now existing or hereafter arising,, and all proceeds of the
foregoing property.
(b) Account number _________________ with the Financial Institution,
and all amendments, extensions, renewals and replacements
thereof (called the "Account"), and all amounts now or at any
time hereafter in the Account, and all interest and other
earnings which may now or hereafter accrue thereon, whether now
owned or hereafter acquired, whether now existing or hereafter
arising, and all proceeds of the foregoing property.
Such security interest and assignment are called the "Security
Interest". The Debtor and the Secured Party hereby give the Financial
Institution notification of the Security Interest, and the Financial
Institution acknowledges receipt of such notification.
3. Control. The Collateral constitutes a deposit account, as defined in
Revised Article 9. The Debtor represents to the Secured Party and the
Financial Institution that the transaction secured by the Security
Interest is not a consumer transaction, as defined in Revised Article 9.
By entering into this Agreement, the Debtor, the Secured Party, and the
Financial Institution are giving the Secured Party Control over the
Collateral, and are perfecting the Security Interest in the Collateral
by Control. The Financial Institution will comply with all instructions
originated by the Secured Party directing disposition of the funds in
the Account without any further consent by the Debtor. This means that
the Financial Institution will comply with all orders, notices, requests
and other instructions of the Secured Party relating to the Collateral,
including but not limited to orders, notices, requests and other
instructions to withdraw or transfer any Collateral, to redeem or
2
terminate the Account, and to pay or transfer any Collateral to the
Secured Party or any other person or entity.
4. Rights of Debtor and Others. Until the Financial Institution receives
notice from the Secured Party that the Debtor's rights are terminated,
the Financial Institution will comply with all notices, requests and
other instructions from the Debtor for disposition of funds in the
Account, including but not limited to orders, notices, requests or
Instructions to withdraw or transfer any Collateral, and to pay or
transfer any Collateral to the Debtor or any other person or entity, but
not to redeem or terminate the Account. Except in accordance with the
previous sentence, without the Secured Party's written consent the
Financial Institution will not comply with any order, notice, request or
other instruction from the Debtor or any other person or entity except
the Secured Party relating to any Collateral, and the Financial
Institution will not pay or transfer any Collateral to the Debtor or any
other person or entity except the Secured Party.
5. Representations and Agreements. The Debtor and the Financial Institution
represent to the Secured Party, and agree that:
(a) No person or entity except the Secured Party has Control over
any of the Collateral. Neither the Debtor nor the Financial Institution
has entered into any agreement that gives any person or entity except
the Secured Party Control over any Collateral. Neither the Debtor nor
the Financial Institution will permit any person or entity except the
Secured Party to have Control over any of the Collateral, and neither
the Debtor nor the Financial Institution will enter into any agreement
that gives any person or entity except the Secured Party Control over
any of the Collateral. The Debtor is and will remain the sole account
holder of the Account. No person or entity (except the Debtor, the
Secured Party, and the Financial Institution) has any security interest,
other interest, lien or other right in any of the Collateral. The Debtor
and the Financial Institution will immediately notify the Secured Party
if any person or entity (other than the Debtor, the Secured Party, or
the Financial Institution) makes a claim against any of the Collateral,
or claims any security interest, other interest, lien or other right in
any of the Collateral.
(b) The Financial Institution has not issued, and will not issue,
any Instrument, Security, or certificate for any Collateral, and the
Financial Institution will not give to the Debtor or any other person or
entity any Instrument, Security, or certificate for any Collateral.
(c) At all times after the Financial Institution's receipt of any
order, notice, request or other instruction of the Secured Party under
Section 3 or 4 of this Agreement, without the Secured Party's consent
the Financial Institution shall not honor any check or other item drawn
on the Account or any other withdrawal or transfer from the Account,
except in favor of the Secured Party.
(d) The Financial Institution agrees that all of the Financial
Institution's existing and future security interests, liens, claims,
rights of setoff and recoupment, and other right, title and interest in
any of the Collateral are fully subordinate to the Security
3
Interest. The Financial Institution will not assert or enforce any of
the Financial Institution's existing or future security interests,
liens, claims, rights of setoff or recoupment, or other right, title or
interest in any of the Collateral. Notwithstanding the foregoing, the
Financial Institution may char-e the Account for the Financial
Institution's standard account fees for the Account.
(e) The Financial Institution is a bank, as defined in Revised
Article 9. The State of ______________ is the Financial Institution's
jurisdiction for purposes of Revised Article 9.
(f) At the Secured Party's request, the Financial Institution
will send to the Secured Party a copy of the Financial Institution's
statements on the Collateral and any other information about the
collateral. The Financial Institution will comply with all other orders,
notices, requests and other instructions of the Secured Party relating
to any of the Collateral.
6. Tax Reporting. Until the Secured Party notifies the Financial
Institution to use a different name and number, the Financial
Institution will make all reports relating to the Collateral to all
federal, state and local tax authorities under the name and tax
identification number of the Debtor.
7. Other Provisions. No provision in this Agreement can be amended,
modified, waived, or terminated, except by a writing executed by the
Debtor, the Secured Party, and the Financial institution. All notices,
orders, requests, and other instructions and communications to any party
under this Agreement shall be delivered, mailed, or faxed to such
party's address or fax number stated above. This Agreement shall bind
and benefit the parties and their respective heirs, representatives,
successors and assigns. This Agreement may be enforced in an action for
specific performance. This Agreement shall be governed by and construed
in accordance with the laws of the state specified above. This Agreement
may be executed in counterparts, and all counterparts together
constitute one and the same Agreement.
[The balance of this page is intentionally left blank.]
4
Executed as of the date first above written.
_______________________________________
Debtor
_______________________________________
_______________________________________
_______________________________________
Secured Party
By:____________________________________
Title:_________________________________
_______________________________________
Financial Institution
By:____________________________________
Title:_________________________________
Acknowledgment of Financial Institution:
STATE OF ___________________________)
) SS.
COUNTY OF __________________________)
This instrument was acknowledged before me on _________________,
_________ by ___________________________, as ____________________ of
___________________, a ______________________________, on behalf of the
_____________________.
(Seal)
______________________________________
Notary Public
My commission expires:
5
