SECURITY AGREEMENT
This is a Security Agreement dated as of September 18, 1995 (this
"Agreement"), between UNIDIAL INCORPORATED, a Kentucky corporation (the
"Lender") and UNIQUEST COMMUNICATIONS, INC., a Utah corporation (the
"Borrower").
Recitals
A. The Borrower and the Lender are entering into a Loan Agreement dated as
of the date of this Agreement (the "Loan Agreement") (to which the form
of this Agreement is attached as Annex B, pursuant to which, among
other things, the Lender has agreed to provide the Borrower with the
Revolving Credit (as that term is defined in the Loan Agreement).
B. The Borrower is entering into this Agreement to secure the payment of
the Revolving Credit and the Borrower's other obligations to the
Lender, including under the Loan Agreement and the other Borrower
Documents (as that term is defined in the Loan Agreement).
C. This Agreement is being entered into concurrently with the extension of
the Revolving Credit, and the Lender is extending the Revolving Credit
in reliance up the Borrower's obligations evidenced by this Agreement.
NOW, THEREFORE, the Borrower and the Lender agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein
shall have the meanings given them in the Loan Agreement. In
addition the following terms shall have the following
meanings, and the meanings assigned to all capitalized terms
used herein shall be equally applicable to both the singular
and plural forms of the terms defined:
"Accounts Receivable" shall have the meaning given that term in
the Loan Agreement.
"Collateral" shall mean any or all of the property in which the
Borrower grants to the Lender a security interest under Section 2
of this Agreement.
"Event of Default" shall have the meaning given that term in
Section 8 of this Agreement.
"General Intangibles" shall have the meaning given that term in
the Loan Agreement.
"Inventory" shall have the meaning given that term in the Loan
Agreement.
"Person" shall have the meaning given that term in the Loan
Agreement.
"Revolving Credit Loan" shall have the meaning given that term in
the Loan Agreement.
"Revolving Credit Note" shall have the meaning given that term in
the Loan Agreement.
"Secured Obligations" shall mean all of the obligations secured by
this Agreement as set forth in Section 3 of this Agreement.
"Tangible Property" shall have the meaning given that term in the
Loan Agreement.
"Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect in the Commonwealth of Kentucky.
"Unmatured Default" shall mean the happening of any event or
occurrence which, together with the giving of any required notice
or the passage of any required period of time, or both, would
constitute an Event of Default.
2. Grant of Security Interests.
(a) The Borrower grants to the Lender a security interest in
the following property:
(1) All of the Debtor's right, title and interest under
that certain Independent Agent Agreement dated July
24, 1994 between the Debtor and the Secured Party;
(2) All of the Debtor's right, title and interest under
that certain Distributor Agreement dated August 31,
1995, between the Debtor and Automated Solutions,
Inc.;
(3) All of Debtor's right, title and interest to its
customer lists and client lists;
(4) All accounts arising under the Agreements referenced
in (1) and (2) above;
(5) Any and all of the foregoing property, whether now
existing or hereafter acquired; and
(b) The Borrower grants a further security interest to the
Lender in the proceeds and products of any sale, exchange,
collection or other disposition of the Collateral or any
part thereof.
3. Obligations Secured. The security interest granted by the Borrower
hereby secure the payment and performance of all of the following
Secured Obligations: (a) any and all indebtedness of the Borrower
to the Lender evidenced by the Revolving Credit Note, and any and
all obligations contained in the Revolving Credit Note; (b) any
and all of the representations, warranties, obligations,
agreements, covenants and promises of the Borrower contained in
the Loan Agreement, the Revolving Credit Note, this Agreement and
the other Borrower Documents, whether or not now or hereafter
evidenced by any note, instrument or other writing; and (c) any
and all indebtedness, obligations and liabilities of the Borrower
to the Lender, however evidenced, whether now existing or
hereafter arising, direct or indirect, absolute or contingent, or
acquired by the Lender, including without limitation, any and all
other indebtedness, liabilities and obligations of Borrower to the
Lender that exist on the date of this Agreement, or arise or are
created or acquired after the date of this Agreement, regardless
of whether of the same or of a different class or type as the
indebtedness evidenced by the Revolving Credit Note and/or the
other Borrower Documents, and whether or not the creation thereof
was reasonably foreseeable or would be naturally contemplated by
the Borrower or the Lender as the date of this Agreement.
4. Representation and Warranties. To induce the Lender to enter into
this Agreement, any and all of the representations and warranties
made by the Borrower in the Loan Agreement and the other Borrower
Documents are incorporated herein by reference, and the Borrower
further represents, warrants and agrees as follows:
(a) The Borrower has full right, power, authority and capacity
to enter into and perform this Agreement; and this
Agreement has been duly entered into and delivered and
constitutes a legal, valid and binding obligation of the
Borrower enforceable in accordance with its terms.
(b) The Borrower has good and marketable title to the
Borrower's Collateral, and the Collateral is not subject
to any lien, charge, pledge, encumbrance, claim or
security interest other than the security interests
created by this Agreement.
(c) The Borrower's chief place of business is located at 0000
Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000.
(d) The Collateral is used and will be used for business use
only.
(e) The registered office of the Borrower's registered agent
in Utah is located in Salt Lake County, Utah.
(f) Within the five (5) consecutive years last preceding the
date of this Agreement, the Borrower has not conducted
business under, or otherwise used, any name other than
UniQuest Communications, Inc.
(g) The Borrower understands and acknowledges that the Lender
is extending the Revolving Credit in reliance upon the
security interests granted by the Borrower evidenced by
this Agreement. The Borrower intends to induce the Lender
to extend the Revolving Credit, recognizing that such
inducement results in this Agreement becoming legally
valid and enforceable.
5. Duration of Security Interests. The Lender, its successors and
assigns, shall hold the security interests created hereby upon the
terms of this Agreement, and this Agreement shall continue until
the Revolving Credit Note has been paid in full, the other Secured
Obligations have been performed, executed, or satisfied in their
entirety, and no commitment to lend or extend credit which is
intended to be secured hereby remains outstanding. After payment
of any part of the Secured Obligations, the Lender may, at its
option, retain all or any portion of the Collateral as security
for any remaining Secured Obligations and retain this Agreement as
evidence of such security. The security interest granted hereunder
shall not be impaired or affected by any renewals or extensions of
time for payment of any of the Secured Obligations, or by release
of any party liable on the Secured Obligations; by any
acquisition, release or surrender of other security, collateral or
guaranty; by delay in enforcement of payment of any of the Secured
Obligations; or by delay in enforcement of payment of any of the
Secured Obligations; or by delay in enforcement of any security.
6. Certain Notices. The Borrower shall notify the Lender of any and
all changes of location of the Borrower's chief place of business
and of the registered office of the Borrower's registered agent in
Utah and of the location of the Collateral at least ten (10) days
prior to effecting any such change.
7. Covenant Not to Dispose of or Impair Collateral. The Borrower
shall not, without the prior written consent of the Lender, sell,
transfer or otherwise dispose of the Collateral, or any part
thereof or interest therein. The Borrower shall not permit any of
the Collateral to be levied upon under any legal process, nor
permit anything to be done that may impair the value of the
Collateral or the security intended to be provided by this
Agreement.
8. Default. The occurrence of an Event of Default under the Loan
Agreement shall constitute a default under this Agreement (an
"Event of Default").
9. Loan Remedies. Upon any Event of Default, the Lender may at its
option declare any and all of the Revolving Credit Loans and the
other Secured Obligations to be immediately due and payable; and
k, in addition to that right, and in addition to exercising all
other rights or remedies, the Lender may proceed to exercise with
respect to the Collateral all rights, options and remedies of a
secured party upon default as provided for under the Uniform
Commercial Code. The rights of the Lender upon an Event of Default
shall include, without limitation, any and all rights and remedies
in any and all other documents, instruments, agreements and other
writings between the Lender and the Borrower, all rights and
remedies as provided by law, in equity or otherwise, and in
addition thereto, the following:
(a) The right to require the Borrower to assemble the
Collateral and make it available to the Lender at a place
or places to be designated by the Lender.
(b) The right to sell the Collateral at public or private sale
in one or more lots in accordance with Uniform Commercial
Code. The Lender may bid upon and purchase any or all of
the Collateral at any of the Collateral shall extinguish
the Borrower's rights under section 9-506 of the Uniform
Commercial Code upon application of the unpaid portion of
the Secured Obligations. The Lender shall be entitled to
apply the proceeds of any such sale to the satisfaction of
the Secured Obligations and to expenses incurred in
realizing upon the Collateral in accordance with the
Uniform Commercial Code.
(c) The right to recover the reasonable expenses of taking
possession of any of the Collateral that may be reduced to
possession, preparing the Collateral for sale, selling the
Collateral, and other like expenses.
(d) The right to recover all of the Lender's expenses of
collection, including, without limitation, court costs and
reasonable attorneys' fees and disbursements incurred in
realizing upon the Collateral or enforcing or attempting
to enforce any provision of this Agreement.
(e) The right to retain the Collateral and become the owner
thereof, in accordance with the provisions of the Uniform
Commercial Code.
(f) The right to proceed by appropriate legal process at law
or in equity to enforce any provision of this Agreement or
in a id of the execution of any power of sale, or for
foreclosure of the security interest of the Lender, or for
the sale of the Collateral under the judgment or decree of
any court.
(g) The right to enter any premises where any Collateral may
be located for the purpose of taking possession or
removing the same.
10. Cumulative Remedies. The rights and remedies of the Lender shall
be deemed to be cumulative, and any exercise of any right or
remedy shall not be deemed to be an election of that right remedy
to the exclusion of any other right or remedy. Notwithstanding the
foregoing, the Lender shall be entitled to recover by the
cumulative exercise of all remedies no more than the sum of (a)
the Secured Obligation at the time of exercise of remedies, plus
(b) the costs, fees and expenses the Lender is otherwise entitled
to recover.
11. Waivers. The Borrower acknowledges that this Agreement involves
the grant of multiple security interests, and the Borrower hereby
waives, to the extent permitted by applicable law, (a) any
requirement of marshalling assets or proceeding against Persons or
assets in any particular order, and (b) any and all notices of
every kind and description which may be required to be given by
any statute or rule of law and any defense of any kind which the
Borrower may now or hereafter have with respect to the rights of
the Lender with respect to the Collateral under this Agreement.
12. Certain Obligations Regarding Collateral.
(a) The Borrower shall keep and maintain the Borrower's
Inventory and Tangible Property in good condition and
repair and under adequate condition of storage to prevent
its deterioration or depreciation in value.
(b) The Borrower shall keep the Collateral free and clear of
any and all liens other than the security interests
created in favor of the Lender under this Agreement or
permitted by the Borrower Documents, and shall declare and
pay any and all fees, assessments, charges and taxes
allocable to the Collateral, or which might result in a
lien against the Collateral if left unpaid unless the
Borrower at the Borrower's own expense is contesting the
validity or amount thereof in good faith by an appropriate
proceeding timely instituted which shall operate to
prevent the collection or satisfaction of the lien or
amount so contested. If the Borrower fails to pay such
amount and is not contesting the validity or amount
thereof in accordance with the preceding sentence, the
Lender may, but is not obligated to, pay such amount, and
such payment shall be deemed conclusive evidence of the
legality or validity of such amount. The Borrower shall
promptly reimburse the Lender for any and all payments
made by the Lender in accordance with the preceding
sentence, and until reimbursement, such payments shall be
part or the Secured Obligations.
13. Use and Inspection of Collateral. The Borrower shall not use the
Collateral in violation of any statute or ordinance, and the
Lender shall have the right, at reasonable hours, to inspect the
Collateral at the premises of the Borrower or wherever the
Collateral may be located.
14. Notice.
(a) Any requirement of the Uniform Commercial Code or other
applicable law of reasonable notice shall be met if such
notice is given at least five (5) business days before the
time of sale, disposition or other event or thing giving
rise to the requirement of notice.
(b) All notices and other communications under this Agreement
shall be delivered in accordance with and subject to
Section 12 of the Loan Agreement.
15. Further Assurance. The Borrower shall sign from time to time such
financing statements and other documents and instruments and take
such other actions as the Lender may reasonably request from time
to time to more fully create, perfect, continue, maintain or
terminate the security interests in the Collateral intended to be
created in this Agreement.
16. Miscellaneous.
(a) Failure by the Lender to exercise any right shall not be
deemed a waiver of that right, and any single or partial
exercise of any right shall not preclude the further
exercise of that right. Every right of the Lender shall
continue in full force and effect until such right is
specifically waived in a writing signed by the Lender.
(b) If any part, term or provision of this Agreement is held
by any court to be prohibited by any law applicable to
this Agreement, the rights and obligations of the parties
shall be construed and enforced with that part, term or
provision enforced to the greatest extent allowed by law,
or if it is totally unenforceable, as if this Agreement
did not contain that particular part, term or provision.
(c) The headings in this Agreement have been included for ease
and reference only, and shall not be considered in the
construction or interpretation of this Agreement.
(d) This Agreement shall inure to benefit of the Lender, its
successors and assigns, and all obligations of the
Borrower shall bind the Borrower's successors and assigns.
(e) To the extent allowed under the Uniform Commercial Code,
this Agreement shall in all respects be governed by and
construed in accordance with the laws of the Commonwealth
of Kentucky.
(f) This agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof. No
change, modification, addition or termination of this
Agreement shall be enforceable unless in writing and
signed by the party against whom enforcement is sought.
(g) This Agreement may be signed by each party upon a separate
copy, and in such cases one counterpart of this Agreement
shall consist of enough of such copies to reflect the
signature of each party.
(h) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original,
and it shall not be necessary in making proof of this
Agreement or terms thereof to produce or account for more
than one such counterpart.
(i) THE BORROWER CONSENTS TO ONE OR MORE ACTIONS BEING
INSTITUTED AND MAINTAINED IN THE JEFFERSON COUNTY,
KENTUCKY, CIRCUIT COURT TO ENFORCE THIS AGREEMENT AND/OR
ONE OR MORE OF THE OTHER BORROWER DOCUMENTS, AND WAIVES
ANY OBJECTION TO ANY SUCH ACTION BASED UPON LACK OF
PERSONAL OR SUBJECT MATTER JURISDICTION OR IMPROPER VENUE.
THE BORROWER AGREES THAT ANY PROCESS OR OTHER LEGAL
SUMMONS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING
MAY BE SERVED BY MAILING A COPY THEREOF BY CERTIFIED MAIL,
OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL, ADDRESSED TO
THE BORROWER AS PROVIDED IN SECTION 12 OF THE LOAN
AGREEMENT.
(j) THE BORROWER ACKNOWLEDGES THAT THE BORROWER HAS RECEIVED A
COPY OF THIS AGREEMENT AND EACH OF THE OTHER BORROWER
DOCUMENTS, AS FULLY EXECUTED BY THE PARTIES THERETO. THE
BORROWER ACKNOWLEDGES THAT THE BORROWER (A) HAS READ THIS
AGREEMENT AND THE OTHER BORROWER DOCUMENTS OR HAS CAUSED
SUCH DOCUMENTS TO BE EXAMINED BY THE BORROWER'S
REPRESENTATIVES OR ADVISORS; (B) IS THOROUGHLY FAMILIAR
WIT THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT AND
THE OTHER BORROWER DOCUMENTS; AND (C) HAS HAD THE
OPPORTUNITY TO ASK SUCH QUESTIONS TO REPRESENTATIVES OF
THE LENDER, AND RECEIVE ANSWERS THERETO, CONCERNING THE
TERMS AN CONDITIONS OF THE TRANSACTIONS CONTEMPLATED IN
THIS AGREEMENT AND THE OTHER BORROWER DOCUMENTS AS THE
BORROWER DEEMS NECESSARY IN CONNECTION WITH THE BORROWER'S
DECISION TO ENTER INTO THIS AGREEMENT.
IN WITNESS WHEREOF, the Borrower and the Lender have executed and delivered this
Agreement as of the date set out in the preamble hereto, but actually on the
date(s) set forth below.
BORROWER:
UNIQUEST COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxxx, President
Date: 2/24/96
STATE OF UTAH
COUNTY OF SALT LAKE
The foregoing instrument was acknowledged before me by Xxxxxx X.
Xxxxxxxxx, the President of UniQuest Communications, Inc., a Utah corporation,
on behalf of the Corporation, on February 24, 1996.
Notary Public: /s/ Xxxx Xxxxxxx
Commission expires: May 30, 1999
By: /s/ Xxxxx Xxxxxxxxxx
---------------------
Xxxxx X. Xxxxxxxxxx, III
Vice President, Treasurer
Date: February 24, 0000
XXXXX XX XXXX
XXXXXX XX XXXX XXXX
The foregoing instrument was acknowledged before me by Xxxxx X.
Xxxxxxxxxx, III, the Vice President, Treasurer of UniQuest Communications, Inc.,
a Utah corporation, on behalf of the Corporation, on February 24, 1996.
Notary Public: /s/ Xxxx Xxxxxxx
Commission expires: May 30, 1999
LENDER:
UNIDIAL INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Date: March 5, 1996
STATE OF KENTUCKY
COUNTY OF JEFFERSON
The foregoing instrument was acknowledged before me by Xxxxxxx X.
Xxxxxx, the Secretary/Treasurer of UniDial Incorporated, a Kentucky corporation,
on behalf of the Corporation, on March 5, 1996.
Notary Public: /s/ Xxxxxx X. Xxxx
Commission expires: August, 26, 1998
