Exhibit 10.3
CHASE Continuing Security Agreement
Name of Debtor: SHARPS COMPLIANCE CORP.
Taxpayer I.D. No.: 00-0000000
State Organization No.: 2316242
Debtor's Address: 0000 Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000
Dated as of March 27, 2006
Grant of Security Interest. SHARPS COMPLIANCE CORP. (whether one or more, the
"Debtor", individually and collectively if more than one) grants to JPMorgan
Chase Bank, N.A., whose address is 000 Xxxxxx, 0xx Xxxxx, Xxxxxxx, XX 00000
(together with its successors and assigns, the "Bank") a continuing security
interest in, pledges and assigns to Bank all of the "Collateral" (as hereinafter
defined) in which the Debtor has rights or power to transfer rights and all
Collateral in which the Debtor later acquires ownership, other rights or rights
or power to transfer rights to secure the payment and performance of the
Liabilities.
Borrower. "Borrower" means each and all of SHARPS COMPLIANCE CORP.
Liabilities. "Liabilities" means all obligations, indebtedness and liabilities
of the Borrower whether individual, joint and several, absolute or contingent,
direct or indirect, liquidated or unliquidated, now or hereafter existing in
favor of the Bank, including without limitation, all liabilities, all interest,
costs and fees arising under or from any note, open account, overdraft, letter
of credit application, endorsement, surety agreement, guaranty, credit card,
lease, Rate Management Transaction, acceptance, foreign exchange contract or
depository service contract, whether payable to the Bank or to a third party and
subsequently acquired by the Bank, any monetary obligations (including interest)
incurred or accrued during the pendency of any bankruptcy, insolvency,
receivership or other similar proceedings, regardless of whether allowed or
allowable in such proceeding, and all renewals, extensions, modifications,
consolidations, rearrangements, restatements, replacements or substitutions of
any of the foregoing. "Rate Management Transaction" means any transaction
(including an agreement with respect thereto) that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option, derivative transaction or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures. The
Debtor and the Bank specifically contemplate that Liabilities include
indebtedness hereafter incurred by the Borrower to the Bank.
Collateral. Accounts; Chattel Paper; Equipment; General Intangibles;
Instruments; and Inventory.
Description of Collateral. As used in this agreement, the term "Collateral"
means all of the Debtor's property whether owned individually or jointly with
others of the types indicated above and defined below, whether now owned or
hereafter acquired, whether now existing or hereafter arising, and wherever
located, including but not limited to any items listed on any schedule or list
attached hereto. In addition, the term "Collateral" includes all "proceeds,"
"products" and "supporting obligations" (as such terms are defined in the "UCC,"
meaning the Uniform Commercial Code of Texas, as in effect from time to time) of
the Collateral indicated above, including but not limited to all stock rights,
subscription rights, dividends, stock dividends, stock splits, or liquidating
dividends, and all cash, accounts, chattel paper, "instruments," "investment
property," "financial assets," and "general intangibles" (as such terms are
defined in the UCC) arising from the sale, rent, lease, casualty loss or other
disposition of the Collateral, and any Collateral returned to, repossessed by or
stopped in transit by the Debtor, and all insurance claims relating to any of
the Collateral (defined above). The term "Collateral" further includes all of
the Debtor's right, title and interest in and to all books, records and data
relating to the Collateral identified above, regardless of the form of media
containing such information or data, and all software necessary or desirable to
use any of the Collateral identified above or to access, retrieve, or process
any of such information or data. Where the Collateral is in the possession of
the Bank or the Bank's agent, the Debtor agrees to deliver to the Bank any
property that represents an increase in the Collateral or profits or proceeds of
the Collateral.
1. "Accounts" means all of the Debtor's "accounts" as defined in Article 9 of
the UCC.
2. "Chattel Paper" means all of the Debtor's "chattel paper" as defined in
Article 9 of the UCC.
3. "Equipment" means all of the Debtor's "equipment" as defined in Article 9
of the UCC. In addition, "Equipment" includes any "documents" (as defined
in Article 9 of the UCC) issued with respect to any of the Debtor's
"equipment" (as defined in Article 9 of the UCC) and certificates of title
relating to the foregoing. Without limiting the security interest granted,
the Debtor represents and warrants that the Debtor's Equipment is presently
located at 0000 Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000.
4. "General Intangibles" means all of the Debtor's "general intangibles" as
defined in Article 9 of the UCC. In addition, "General Intangibles" further
includes any right to a refund of taxes paid at any time to any
governmental entity.
5. "Instruments" means all of the Debtor's "instruments" as defined in Article
9 of the UCC.
6. "Inventory" means all of the Debtor's "inventory" as defined in Article 9
of the UCC. In addition, "Inventory" includes any "documents" and
certificates of title issued with respect to any of the Debtor's
"inventory" (as defined in Article 9 of the UCC). Without limiting the
security interest granted, the Debtor represents and warrants that the
Debtor's Inventory is presently located at 0000 Xxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, XX 00000.
Representations, Warranties and Covenants. The Debtor represents and warrants
to, and covenants and agrees with the Bank that each of the following is true
and will remain true until termination of this agreement and full and final
payment of all Liabilities:
1. Its principal residence or chief executive office is at the address shown
above;
2. The Debtor's name as it appears in this agreement is its exact name as it
appears in the Debtor's organizational documents, as amended, including any
trust documents;
3. It is or will become the owner of the Collateral free from any liens,
encumbrances or security interests, except for this security interest and
existing liens disclosed to and accepted by the Bank in writing, and it
will defend the Collateral against all claims and demands of all persons at
any time claiming any interest in the Collateral;
4. It will keep the Collateral free of liens, encumbrances and other security
interests, except for this security interest, maintain the Collateral in
good repair, not use it illegally and exhibit the Collateral to the Bank on
demand;
5. At its own expense, the Debtor will maintain comprehensive casualty
insurance on the Collateral against such risks, in such amounts, with such
deductibles and with such companies as may be satisfactory to the Bank.
Each insurance policy shall contain a lender's loss payable endorsement in
form and substance satisfactory to the Bank and a prohibition against
cancellation or amendment of the policy or removal of the Bank as loss
payee without at least thirty (30) days prior written notice to the Bank.
In all events, the amounts of such insurance coverages shall conform to
prudent business practices and shall be in such minimum amounts that the
Debtor will not be deemed a co-insurer. The policies and certificates
evidencing them, shall, if the Bank so requests, be deposited with the
Bank. The Debtor authorizes the Bank to endorse on the Debtor's behalf and
to negotiate drafts reflecting proceeds of insurance of the Collateral,
provided that the Bank shall remit to the Debtor such surplus, if any, as
remains after the proceeds have been applied, at the Bank's option, to the
satisfaction of all of the Liabilities (in such order of application as the
Bank may elect) or to the establishment of a cash collateral account for
the Liabilities;
6. It will not sell, lease, license or offer to sell, lease, license or
otherwise transfer the Collateral or any rights in or to the Collateral,
without the written consent of the Bank, except in the ordinary course of
business;
7. It will not change the location of the Collateral from the locations of the
Collateral described in this agreement, without providing at least ten (10)
days prior written notice to the Bank;
8. It will pay promptly when due all taxes and assessments upon the
Collateral, or for the use or operation of the Collateral;
9. No financing statement covering all or any part of the Collateral or any
proceeds is on file in any public office, unless the Bank has approved that
filing. From time to time at the Bank's request, the Debtor will execute
one or more financing statements or similar record and a control agreement
with respect to the proceeds in form satisfactory to the Bank and will pay
the cost of filing them in all public offices where filing is deemed by the
Bank to be necessary or desirable. In addition, the Debtor shall execute
and deliver, or cause to be executed and delivered, such other documents as
the Bank may from time to time request to perfect or to further evidence
the security interest created in the Collateral by this agreement
including, without limitation: (a) any certificate or certificates of title
to the Collateral with the security interest of the Bank noted thereon or
executed applications for such certificates of title in form satisfactory
to the Bank; (b) any assignments of claims under government contracts which
are included as part of the Collateral, together with any notices and
related documents as the Bank may from time to time request; (c) any
assignment of any specific account receivable as the Bank may from time to
time request; (d) a notice of and acknowledgment of the Bank's security
interest and a control agreement with respect to any Collateral, all in
form and substance satisfactory to the Bank; (e) a notice to and
acknowledgment from any person holding or in possession of any Collateral
that such persons holds the Collateral as a bailee for the Bank's benefit,
all in form and substance satisfactory to the Bank; and (f) any consent to
the assignment of proceeds of any letter of credit, all in form and
substance satisfactory to the Bank;
10. It will not, without the Bank's prior written consent, change the Debtor's
name, the Debtor's business organization, the jurisdiction under which the
Debtor's business organization is formed or organized, or the Debtor's
chief executive office, or of any additional places of the Debtor's
business;
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11. It will provide any information that the Bank may reasonably request and
will permit the Bank or the Bank's agents to inspect and copy its books,
records, data and the Collateral at any time during normal business hours;
12. The Bank shall have the right now, and at any time in the future in its
sole and absolute discretion, without notice to the Debtor, to (a) prepare,
file and sign the Debtor's name on any proof of claim in bankruptcy or
similar document against any owner of the Collateral and (b) prepare, file
and sign the Debtor's name on any financing statement, notice of lien,
assignment or satisfaction of lien or similar document in connection with
the Collateral. The Debtor hereby authorizes the Bank to file financing
statements covering Collateral or such lesser amount of assets as the Bank
may determine, or the Bank may, at its option, file financing statements or
similar records containing any collateral description which reasonably
describes the Collateral in which a security interest is granted under this
agreement;
13. Immediately upon the Debtor's receipt of any Collateral evidenced by an
agreement, "instrument," "chattel paper," certificated "security" or
"document" (as such terms are defined in the UCC) (collectively, "Special
Collateral"), the Debtor shall xxxx the Special Collateral to show that it
is subject to the Bank's security interest and shall deliver the original
to the Bank together with appropriate endorsements and other specific
evidence of assignment or transfer in form and substance satisfactory to
the Bank;
14. The Debtor shall keep all tangible Collateral in good order and repair and
shall not waste or destroy any of the Collateral, nor use any of the
Collateral in violation of any applicable law or any policy of insurance
thereon. To the extent that the Collateral consists of "farm products" (as
defined in the UCC), the Debtor shall attend to and care for the crops and
livestock in accordance with the best practices of good husbandry, and do,
or cause to be done, any and all acts that may at any time be appropriate
or necessary to grow, raise, harvest, care for, preserve and protect the
farm products;
15. Except as may be otherwise disclosed in writing by the Debtor to the Bank,
none of the Collateral is attached to real estate so as to constitute a
"fixture" (as defined in the UCC) and none of the Collateral shall at any
time hereafter be attached to real estate so as to constitute a fixture. If
any of the Collateral is now or at any time hereafter becomes so attached
to real estate so as to constitute a fixture, the Debtor shall, at any time
upon the Bank's request, furnish the Bank with a disclaimer of interest in
the Collateral executed by each person or entity having an interest in such
real estate.
Accounts; Chattel Paper; General Intangibles and Instruments. If the Collateral
includes the Debtor's "Accounts, Chattel Paper, General Intangibles and
Instruments" and until the Bank gives notice to the Debtor to the contrary, the
Debtor will, in the usual course of its business and at its own expense, on the
Bank's behalf but not as the Bank's agent, demand and receive and use its best
efforts to collect all moneys due or to become due with respect to the
Collateral. Until the Bank gives notice to the Debtor to the contrary or until
the Debtor is in default, it may use the funds collected in its business. Upon
notice from the Bank or upon default, the Debtor agrees that all sums of money
it receives on account of or in payment or settlement of the Accounts, Chattel
Paper, General Intangibles and Instruments shall be held by it as trustee for
the Bank without commingling with any of the Debtor's other funds, and shall
immediately be delivered to the Bank with endorsement to the Bank's order of any
check or similar instrument. It is agreed that, at any time the Bank so elects,
the Bank shall be entitled, in its own name or in the name of the Debtor or
otherwise, but at the expense and cost of the Debtor, to collect, demand,
receive, xxx for or compromise any and all Accounts, Chattel Paper, General
Intangibles, and Instruments, and to give good and sufficient releases, to
endorse any checks, drafts or other orders for the payment of money payable to
the Debtor and, in the Bank's discretion, to file any claims or take any action
or proceeding which the Bank may deem necessary or advisable. It is expressly
understood and agreed, however, that the Bank shall not be required or obligated
in any manner to make any demand or to make any inquiry as to the nature or
sufficiency of any payment received by it or to present or file any claim or
take any other action to collect or enforce the payment of any amounts which may
have been assigned to the Bank or to which the Bank may be entitled at any time
or times. All notices required in this paragraph will be immediately effective
when sent. Such notices need not be given prior to the Bank's taking action. The
Debtor appoints the Bank or the Bank's designee as the Debtor's attorney-in-fact
to do all things with reference to the Collateral as provided for in this
section including without limitation (1) to notify the post office authorities
to change the Debtor's mailing address to one designated by the Bank, (2) to
receive, open and dispose of mail addressed to the Debtor, (3) to sign the
Debtor's name on any invoice or xxxx of lading relating to any Collateral, on
assignments and verifications of account and on notices to the Debtor's
customers, and (4) to do all things necessary to carry out this agreement or to
perform any of the obligations of the Debtor under this agreement. The Debtor
ratifies and approves all acts of the Bank as attorney-in-fact. The Bank shall
not be liable for any act or omission, nor any error of judgment or mistake of
fact or law, but only for its gross negligence or willful misconduct. This power
being coupled with an interest is irrevocable until all of the Liabilities have
been fully satisfied and shall survive the death or disability of the Debtor.
Pledge. If the Debtor is not liable for all or any part of the Liabilities, then
the Debtor agrees that:
1. If any moneys become available from any source other than the Collateral
that the Bank can apply to the Liabilities, the Bank may apply them in any
manner it chooses, including but not limited to applying them against
obligations, indebtedness or liabilities which are not secured by this
agreement.
2. The Bank may take any action against the Borrower, the Collateral or any
other collateral for the Liabilities, or any other person or entity liable
for any of the Liabilities.
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3. The Bank may release the Borrower or anyone else from the Liabilities,
either in whole or in part, or release the Collateral in whole or in part
or any other collateral for the Liabilities, and need not perfect a
security interest in the Collateral or any other collateral for the
Liabilities.
4. The Bank does not have to exercise any rights that it has against the
Borrower or anyone else, or make any effort to realize on the Collateral or
any other collateral for the Liabilities, or exercise any right of setoff.
5. Without notice or demand and without affecting the Debtor's obligations
hereunder, from time to time, the Bank is authorized to: (a) renew, modify,
compromise, rearrange, restate, consolidate, extend, accelerate or
otherwise change the time for payment of, or otherwise change the terms of
the Liabilities or any part thereof, including increasing or decreasing the
rate of interest thereon; (b) release, substitute or add any one or more
sureties, endorsers, or guarantors; (c) take and hold other collateral for
the payment of the Liabilities, and enforce, exchange, substitute,
subordinate, impair, waive or release any such collateral; (d) proceed
against the Collateral or any other collateral for the Liabilities and
direct the order or manner of sale as the Bank in its discretion may
determine; and (e) apply any and all payments received by the Bank in
connection with the Liabilities, or recoveries from the Collateral or any
other collateral for the Liabilities, in such order or manner as the Bank
in its discretion may determine.
6. The Debtor's obligations hereunder shall not be released, diminished or
affected by (a) any act or omission of the Bank, (b) the voluntary or
involuntary liquidation, sale or other disposition of all or substantially
all of the assets of the Borrower, or any receivership, insolvency,
bankruptcy, reorganization, or other similar proceedings affecting the
Borrower or any of its assets or any other obligor on the Liabilities or
that obligor's assets, (c) any change in the composition or structure of
the Borrower or any other obligor on the Liabilities, including a merger or
consolidation with any other person or entity, or (d) any payments made
upon the Liabilities.
7. The Debtor expressly consents to any impairment of any other collateral for
the Liabilities, including, but not limited to, failure to perfect a
security interest and release of any other collateral for the Liabilities
and any such impairment or release shall not affect the Debtor's
obligations hereunder.
8. The Debtor waives and agrees not to enforce any rights of subrogation,
contribution or indemnification that it may have against the Borrower, any
person or entity liable on the Liabilities, or the Collateral, until the
Borrower and the Debtor have fully performed all their obligations to the
Bank, even if those obligations are not covered by this agreement.
9. The Debtor waives (a) to the extent not prohibited by applicable law, all
rights and benefits under any laws or statutes regarding sureties, as may
be amended, (b) any right the Debtor may have to receive notice of the
following matters before the Bank enforces any of its rights: (i) the
Bank's acceptance of this agreement, (ii) incurrence or acquisition of any
Liabilities, any credit that the Bank extends to the Borrower, (iii) the
Borrower's default, (iv) any demand, intent to accelerate, diligence,
presentment, dishonor and protest, or (v) any action that the Bank takes
regarding the Borrower, anyone else, any other collateral for the
Liabilities, or any of the Liabilities, which it might be entitled to by
law or under any other agreement, (c) any right it may have to require the
Bank to proceed against the Borrower, any guarantor or other obligor on the
Liabilities, the Collateral or any other collateral for the Liabilities, or
pursue any remedy in the Bank's power to pursue, (d) any defense based on
any claim that the Debtor's obligations exceed or are more burdensome than
those of the Borrower, (e) the benefit of any statute of limitations
affecting the Debtor's obligations hereunder or the enforcement hereof, (f)
any defense arising by reason of any disability or other defense of the
Borrower or by reason of the cessation from any cause whatsoever (other
than payment in full) of the obligation of the Borrower for the
Liabilities, and (g) any defense based on or arising out of any defense
that the Borrower may have to the payment or performance of the Liabilities
or any portion thereof. The Bank may waive or delay enforcing any of its
rights without losing them. Any waiver affects only the specific terms and
time period stated in the waiver.
10. The Debtor agrees that to the extent any payment or transfer is received by
the Bank in connection with the Liabilities, and all or any part of such
payment or transfer is subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be transferred or repaid by the
Bank or paid over to a trustee, receiver or any other person or entity,
whether under any bankruptcy act or otherwise (any of those payments or
transfers is hereinafter referred to as a "Preferential Payment"), then
this agreement shall continue to be effective or shall be reinstated, as
the case may be, even if all Liabilities have been paid in full, and
whether or not the Bank is in possession of this agreement or whether this
agreement has been marked paid, cancelled, released or returned to Debtor,
and, to the extent of the payment or repayment or other transfer by the
Bank, the Liabilities or part intended to be satisfied by the Preferential
Payment shall be revived and continued in full force and effect as if the
Preferential Payment had not been made. If this agreement must be
reinstated, the Debtor agrees to execute and deliver to the Bank any new
security agreements and financing statements, if necessary or if requested
by the Bank, in form and substance acceptable to the Bank, covering the
Collateral.
11. The Debtor agrees to fully cooperate with the Bank and not to delay, impede
or otherwise interfere with the efforts of the Bank to secure payment from
the assets which secure the Liabilities including actions, proceedings,
motions, orders, agreements or other matters relating to relief from
automatic stay, abandonment of property, use of cash collateral and sale of
the Bank's collateral free and clear of all liens.
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12. The Debtor has (a) without reliance on the Bank or any information received
from the Debtor and based upon the records and information the Debtor deems
appropriate, made an independent investigation of the Borrower, the
Borrower's business, assets, operations, prospects and condition, financial
or otherwise, and any circumstances that may bear upon those transactions,
the Borrower or the obligations, liabilities and risks undertaken pursuant
to this agreement; (b) adequate means to obtain from the Borrower on a
continuing basis information concerning the Borrower and the Debtor has no
duty to provide any information concerning the Borrower or other obligor on
the Liabilities to the Debtor; (c) full and complete access to the Borrower
and any and all records relating to any Liabilities now or in the future
owing by the Borrower; (d) not relied and will not rely upon any
representations or warranties of the Debtor not embodied in this agreement
or any acts taken by the Debtor prior to or after the execution or other
authentication and delivery of this agreement (including but not limited to
any review by the Debtor of the business, assets, operations, prospects and
condition, financial or otherwise, of the Borrower); and (e) determined
that the Debtor will receive benefit, directly or indirectly, and has or
will receive fair and reasonably equivalent value, for the execution and
delivery of this agreement and the rights provided to the Bank. By entering
into this agreement, the Debtor does not intend: (i) to incur or believe
that the Debtor will incur debts that would be beyond the Debtor's ability
to pay as those debts mature; or (ii) to hinder, delay or defraud any
creditor of the Debtor. The Debtor is neither engaged in nor about to
engage in any business or transaction for which the remaining assets of the
Debtor are unreasonably small in relation to the business or transaction,
and any property remaining with the Debtor after the execution or other
authentication of this agreement is not unreasonably small capital.
13. Without limiting any foregoing waiver, consent or agreement, the Debtor
further waives all rights, if any, of the Debtor under Rule 31, Texas Rules
of Civil Procedure, or Chapter 34 of the Texas Business and Commerce Code,
or Section 17.001 of the Texas Civil Practice and Remedies Code; and (i) to
the extent the Debtor is subject to the Texas Revised Partnership Act
("TRPA") or Section 152.306 of the Texas Business Organizations Code
("BOC"), compliance by the Debtor with Section 3.05(d) of TRPA and Section
152.306(b) of BOC.
Default; Remedies. If any of the Liabilities are not paid at maturity, whether
by acceleration or otherwise, or if a default by anyone occurs under the terms
of any agreement related to any of the Liabilities, then the Bank shall have the
rights and remedies provided by law or this agreement, including but not limited
to the right to require the Debtor to assemble the Collateral and make it
available to the Bank at a place to be designated by the Bank which is
reasonably convenient to both parties, the right to take possession of the
Collateral with or without demand and with or without process of law, and the
right to sell and dispose of it and distribute the proceeds according to law.
Should a default occur, the Debtor will pay to the Bank all costs reasonably
incurred by the Bank for the purpose of enforcing its rights hereunder, to the
extent not prohibited by law, including, without limitation: costs of
foreclosure; costs of obtaining money damages; and a reasonable fee for the
services of internal and outside attorneys employed or engaged by the Bank or
its affiliates for any purpose related to this agreement, including, without
limitation, consultation, drafting documents, sending notices or instituting,
prosecuting or defending litigation or any proceeding. The Debtor agrees that
upon default the Bank may dispose of any of the Collateral in its then present
condition, that the Bank has no duty to repair or clean the Collateral prior to
sale, and that the disposal of the Collateral in its present condition or
without repair or clean-up shall not affect the commercial reasonableness of
such sale or disposition. The Bank's compliance with any applicable state or
federal law requirements in connection with the disposition of the Collateral
will not adversely affect the commercial reasonableness of any sale of the
Collateral. The Bank may disclaim warranties of title, possession, quiet
enjoyment, and the like, and the Debtor agrees that any such action shall not
affect the commercial reasonableness of the sale. In connection with the right
of the Bank to take possession of the Collateral, the Bank may take possession
of any other items of property in or on the Collateral at the time of taking
possession, and hold them for the Debtor without liability on the part of the
Bank. The Debtor expressly agrees that the Bank may enter upon the premises
where the Collateral is believed to be located without any obligation of payment
to the Debtor, and that the Bank may, without cost, use any and all of the
Debtor's "equipment" (as defined in the UCC) in the manufacturing or processing
of any "inventory" (as defined in the UCC) or in growing, raising, cultivating,
caring for, harvesting, loading and transporting of any of the Collateral that
constitutes "farm products" (as defined in the UCC). If there is any statutory
requirement for notice, that requirement shall be met if the Bank sends notice
to the Debtor at least ten (10) days prior to the date of sale, disposition or
other event giving rise to the required notice, and such notice shall be deemed
commercially reasonable. The Debtor is liable for any deficiency remaining after
disposition of the Collateral.
Miscellaneous.
1. Where the Collateral is located at, used in or attached to a facility
leased by the Debtor, the Debtor will obtain from the lessor a consent to
the granting of this security interest and a release or subordination of
the lessor's interest in any of the Collateral, in form and substance
satisfactory to the Bank.
2. At its option the Bank may, but shall be under no duty or obligation to,
discharge taxes, liens, security interests or other encumbrances at any
time levied or placed on the Collateral, pay for insurance on the
Collateral, and pay for the maintenance and preservation of the Collateral,
and the Debtor agrees to reimburse the Bank on demand for any payment made
or expense incurred by the Bank, with interest at the highest rate at which
interest may accrue under any of the instruments or documents evidencing
the Liabilities.
3. No delay on the part of the Bank in the exercise of any right or remedy
waives that right or remedy, no single or partial exercise by the Bank of
any right or remedy precludes any other exercise of it or the exercise of
any other right or remedy, and no waiver or indulgence by the Bank of any
default is effective unless it is in writing and signed by the Bank, nor
does a waiver on one occasion waive that right on any future occasion.
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4. If any provision of this agreement is invalid, it shall be ineffective only
to the extent of its invalidity, and the remaining provisions shall be
valid and effective.
5. Except as provided in the Accounts; Chattel Paper; General Intangibles; and
Instruments paragraph above, any notices and demands under or related to
this document shall be in writing and delivered to the intended party at
its address stated herein, and if to the Bank, at its main office if no
other address of the Bank is specified herein, by one of the following
means: (a) by hand, (b) by a nationally recognized overnight courier
service, or (c) by certified mail, postage prepaid, with return receipt
requested. Notice shall be deemed given: (a) upon receipt if delivered by
hand, (b) on the Delivery Day after the day of deposit with a nationally
recognized courier service, or (c) on the third Delivery Day after the
notice is deposited in the mail. "Delivery Day" means a day other than a
Saturday, a Sunday, or any other day on which national banking associations
are authorized to be closed. Any party may change its address for purposes
of the receipt of notices and demands by giving notice of such change in
the manner provided in this provision.
6. All rights of the Bank benefit the Bank's successors and assigns; and all
obligations of the Debtor bind the Debtor's heirs, executors,
administrators, successors and assigns. If more than one person or entity
signs as the Debtor, their obligations are joint and several and each
agreement, representation, warranty and covenant shall be individual, joint
and several and the "Collateral" includes any property that is owned by any
Debtor individually or jointly with any other.
7. A carbon, photographic or other reproduction of this agreement is
sufficient as, and can be filed as, a financing statement. The Bank is
irrevocably appointed the Debtor's attorney-in-fact to execute any
financing statement on the Debtor's behalf covering the Collateral. The
Debtor authorizes the Bank to file one or more financing statements or
similar records related to the security interests created by this
agreement, and further authorizes the Bank, as secured party herein,
instead of the Debtor, to sign such financing statements and other similar
records.
Indemnification. The Debtor agrees to indemnify, defend and hold the Bank, its
parent companies, subsidiaries, affiliates, their respective successors and
assigns and each of their respective shareholders, directors, officers,
employees and agents (collectively the "Indemnified Persons") harmless from and
against any and all loss, liability, obligation, damage, penalty, judgment,
claim, deficiency, expense, interest, penalties, attorneys' fees (including the
fees and expenses of attorneys engaged by the Indemnified Person at the
Indemnified Person's reasonable discretion) and amounts paid in settlement
("Claims") to which any Indemnified Person may become subject arising out of or
relating to this agreement or the Collateral, including any Claims resulting
from any Indemnified Person's own negligence, except to the limited extent that
the Claims are proximately caused by the Indemnified Person's gross negligence
or willful misconduct. The indemnification provided for in this paragraph shall
survive the termination of this agreement and shall not be affected by the
presence, absence or amount of or the payment or nonpayment of any claim under,
any insurance.
Governing Law and Venue. This agreement shall be governed by and construed in
accordance with the laws of the State of Texas (without giving effect to its
laws of conflicts), and to the extent applicable, federal law, except to the
extent that the laws regarding the perfection and priority of security interests
of the state(s) in which either the Debtor or any property securing the
Liabilities is located, are applicable. The Debtor agrees that any legal action
or proceeding with respect to any of its obligations under this agreement may be
brought by the Bank in any state or federal court located in the State of Texas,
as the Bank in its sole discretion may elect. By the execution and delivery of
this agreement, the Debtor submits to and accepts, for itself and in respect of
its property, generally and unconditionally, the non-exclusive jurisdiction of
those courts. The Debtor waives any claim that the State of Texas is not a
convenient forum or the proper venue for any such suit, action or proceeding.
Additional Representations, Warranties and Covenants. The Debtor represents,
warrants and covenants to the Bank that each of the following is true and will
remain true until termination of this agreement and payment in full of all
Liabilities: (a) the execution and delivery of this agreement and the
performance of the obligations it imposes do not violate any law, do not
conflict with any agreement by which it is bound, and do not require the consent
or approval of any governmental authority or any third party; (b) this agreement
is a valid and binding agreement, enforceable according to its terms; and (c)
all balance sheets, profit and loss statements, and other financial statements
furnished to the Bank in connection with the Liabilities are accurate and fairly
reflect the financial condition of the organizations and persons to which they
apply on their effective dates, including contingent liabilities of every type,
which financial condition has not changed materially and adversely since those
dates. The Debtor, other than a natural person, further represents that: (a) it
is duly organized and validly existing under the laws of the state where it is
organized and is in good standing in each state where it is doing business; and
(b) the execution and delivery of this agreement and the performance of the
obligations it imposes (i) are within its powers and have been duly authorized
by all necessary action of its governing body; and (ii) do not contravene the
terms of its articles of incorporation or organization, its by-laws, or any
agreement or document governing its affairs.
WAIVER OF SPECIAL DAMAGES. THE DEBTOR WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER FROM
THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.
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JURY WAIVER. THE DEBTOR AND THE BANK (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR
OTHERWISE) BETWEEN OR AMONG THE DEBTOR AND THE BANK ARISING OUT OF OR IN ANY WAY
RELATED TO THIS DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO
PROVIDE THE FINANCING DESCRIBED HEREIN.
THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT OF THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Debtor:
SHARPS COMPLIANCE CORP.
By:
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Printed Name Title
Date Signed:
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The Bank is executing this agreement for the purpose of acknowledging and
agreeing to the foregoing Jury Waiver, the notice given under ss.26.02 of the
Texas Business and Commerce Code and to comply with the waiver requirements of
TRPA and BOC, and the Bank's failure to execute or authenticate this agreement
will not invalidate this agreement.
Bank:
JPMorgan Chase Bank, N.A.
By:
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Printed Name Title
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