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SECURITY AGREEMENT
THIS SECURITY AGREEMENT made this 2nd day of October, 1998, between
XXXXXXX INTERNATIONAL, LTD. whose principal place of business is Xxx Xxxxxxxxx
Xxxx, Xxxxxxx, Xxxxxxxxxxx 00000 (the "Debtor"), and JUNE X. XXXXXX, XXXX X.
XXXXXXX, XX., XXXXXX X. XXXXXX and the UNITED STATES TRUST COMPANY OF NEW YORK,
as Co-Executors of the Estate of Xxxxxx X. Xxxxxx, Late of New York, New York
having an address c/o United States Trust Company of New York, 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (collectively, the "Secured Party").
WITNESSETH:
In consideration of the mutual covenants and agreements contained
herein and for other good and valuable consideration, receipt of which is hereby
acknowledged, Debtor and Secured Party agree as follows:
1. LOAN FROM SECURED PARTY. Simultaneously with the execution hereof,
Secured Party has made a loan to Debtor in the original principal amount of
$1,701,168.75 (the "Loan") which loan is evidenced by a certain $1,701,168.75
Promissory Note made by Debtor to the order of Security Party (the "Note").
2. SECURITY INTEREST. To secure payment and performance of each and all of
the Obligations, as herein defined, Debtor hereby assigns and grants to Secured
Party a continuing, (i)
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security interest in all of its tangible and intangible personal property
whether now owned or hereafter acquired, including, without limitation,
Accounts, Chattel Paper, Equipment, General Intangibles (excluding Patents and
Trademarks), Instruments, Fixtures and Inventory subject only to the lien
previously granted in such property to XXXXXXX PARTNERS, LLC (the "New Lender")
and (ii) a security interest in Patents and Trademarks subject only to the liens
previously granted in such Patents and Trademarks to Connecticut Innovations,
Inc. and the New Lender; together, in each instance, with the renewals,
substitutions, replacements, additions, rental payments, products and proceeds
(including, without limitation, insurance proceeds) thereof, (hereinafter, all
of the property described in (i) and (ii) above collectively called the
"Collateral").
3. COLLECTION OF ACCOUNTS. Subject to the rights of the New Lender, at any
time after the occurrence of an Event of Default and during the continuance
thereof, Secured Party shall have the right to require Debtor to, and Debtor
shall, upon written notice from Secured Party:
(a) Make collections of proceeds upon its Accounts, as herein
defined, hold the proceeds received from collections in trust for Secured Party
and turn over such proceeds to Secured Party daily in the exact form in which
they are received, together with a collection report in form satisfactory
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to Secured Party. Secured Party shall immediately apply, subject to collection,
such proceeds and any proceeds of Accounts received by it pursuant to the
following provisions of this Section 2 to the payment of the Obligations in such
order of application as Secured Party, in its sole discretion, may determine;
(b) Assign or endorse the Accounts to Secured Party, and notify
account debtors that the Accounts have been assigned and should be paid directly
to Secured Party;
(c) Turn over to Secured Party all Inventory, as herein defined,
returned in connection with any of the Accounts;
(d) Xxxx or stamp each of its individual ledger sheets or cards
pertaining to its Accounts with the legend "Assigned to June X. Xxxxxx, Xxxx X.
Xxxxxxx, Xx., Xxxxxx X. Xxxxxx and the United States Trust Company of New York,
as Co-Executors of the Estate of Xxxxxx X. Xxxxxx and stamp or otherwise xxxx
and keep its books, records, documents and instruments relating to the Accounts
in such manner as Secured Party may require; and
(e) Xxxx or stamp all invoices with a legend satisfactory to Secured
Party so as to indicate that the same should be paid directly to Secured Party.
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Notwithstanding the foregoing, subject to the rights of the New
Lender, Secured Party shall have the right, at any time after the occurrence of
an Event of Default, and during the continuance thereof, to itself so notify
such account debtors to make such payments of the Accounts directly to Secured
Party and Secured Party shall have the further right to notify the post office
authorities to change the address for delivery of mail of Debtor to an address
designated by Secured Party and to receive, open and dispose of all mail
addressed to Debtor relating to Accounts; all of Debtor's other mail received by
Secured Party shall be delivered by Secured Party to Debtor promptly after
receipt.
For the purpose of this Section 3, subject to the rights of the New
Lenders, Debtor hereby irrevocably constitutes Secured Party as Debtor's
attorney-in-fact to issue in the name and execute or endorse on behalf of Debtor
each and every notice, instrument and document necessary to carry out the
purposes of the provisions of this Section 3, and to take such action in
connection with the collection of the Accounts, including, without limitation,
suing thereon, compromising or adjusting the same, as Secured Party, in its sole
discretion, deems necessary. The power of attorney granted hereby shall be
self-executing, but Debtor shall promptly execute and deliver to Secured Party,
upon written request of Secured Party, such
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additional separate powers of attorney, as Secured Party may from time to time
reasonably request.
4. DEFINITIONS.
(a) The term "Accounts" shall mean, any right to payment held by
Debtor, whether in the form of accounts receivable, notes, drafts, acceptances
or other forms of obligations and receivables now or hereafter received by or
belonging to Debtor for Inventory sold or leased by it or for services rendered
by it whether or not earned by performance, together with all guarantees and
security therefor and all proceeds thereof, whether cash proceeds or otherwise,
including, without limitation, all right, title and interest of Debtor in the
Inventory which gave rise to any such Accounts, including, without limitation,
the right of stoppage in transit and all returned, rejected, rerouted or
repossessed Inventory;
(b) The term "Chattel Paper" shall mean a writing or writings which
evidence both a monetary obligation and a security interest in or a lease of
specific goods, whether now or hereafter held by Debtor;
(c) The term "Equipment" shall mean all the machinery, equipment,
furniture, tools, goods and other tangible personal property, excluding Motor
Vehicles and Inventory, now owned or hereafter acquired by Debtor;
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(d) The term "General Intangibles" shall mean any intangible
personal property (including, without limitation, things in action) now or
hereafter held by Debtor, other than Accounts, Chattel Paper and Instruments;
(e) The term "Instruments" shall mean a negotiable instrument or a
certificate security, as defined in the Uniform Commercial Code of Connecticut,
or any other writing which evidences a right to the payment of money and is not
itself a security agreement or lease and is of a type which, in the ordinary
course of business, is transferred by delivery with any necessary endorsement or
assignment, whether now or hereafter held by Debtor;
(f) The term "Inventory" shall mean all goods, merchandise, raw
materials, work in process, finished goods and products and other tangible
personal property now owned or hereafter acquired by Debtor and held for sale or
lease, or furnished or to be furnished under contracts of service or used or
consumed in Debtor's business;
(g) The term "Motor Vehicles" shall have the same meaning as that
contained in Chapter 246 of the Connecticut General Statutes;
(h) The term "Obligations" shall mean any and all loans,
indebtedness, obligations and liabilities of Debtor to Secured Party of every
kind and description, direct or indirect,
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absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising, under this Agreement and the Note, and all costs,
expenses, fees, charges and attorneys' and other professional fees incurred by
Secured Party in connection with any of the foregoing, or in any way connected
with or related to the preservation, realization, enforcement, protection or
defense of the Collateral, this Agreement, the Note, and the other Financing
Agreements, and the rights and remedies hereunder or thereunder.
(i) The term "Patents" shall mean all interests in patents now owned
or hereafter acquired by Debtor.
(j) The term "Trademarks" shall mean all interests in trademarks now
owned or hereafter acquired by Debtor.
5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Secured Party that as of the date hereof:
(a) Ownership of Assets. Debtor has good and marketable title to its
assets, free from any liens, mortgages, security interests, pledges or
encumbrances, except as shown on Exhibit A attached hereto. Except as shown on
Exhibit A, no financing statements covering all or any part of Debtor's assets
are on file in the Office of the Secretary of the State of Connecticut or in any
other federal, state or local governmental office, whether or not properly filed
under applicable law.
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(b) Corporate Organization. Debtor is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and is duly qualified as a foreign corporation in good standing in every
jurisdiction in which such qualification is necessary. Debtor has corporate
power to enter into this Agreement and the Note and to borrow under the Note,
and has all requisite authorizations and permits to own and operate Debtor's
properties and assets and to carry on Debtor's business as now being conducted.
(c) Authority. The execution, delivery and performance of this
Agreement, the Note, and each and every other agreement, instrument and document
required to be executed or delivered to Secured Party by Debtor in connection
with the Loan have been duly authorized by all necessary corporate action; the
execution, delivery and performance of said agreements, instruments and
documents, the consummation of the transactions therein contemplated, and the
fulfillment of or compliance with the terms and provisions therein, are within
Debtor's powers and are not in contravention of any provisions of Debtor's
Certificate of Incorporation or By-Laws. The execution, delivery and performance
of said agreements, instruments and documents will not result in a violation of
any laws, or a breach of, or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any of
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Debtor's assets (other than the security interest granted to Secured Party
hereunder and the security interest granted to the New Lenders as identified on
Exhibit A) pursuant to any of the terms, conditions or provisions of any
agreement, instrument or other undertaking to which Debtor is a party or by
which Debtor is bound. No consent, approval, authorization or other order of, or
registration or filing with any governmental body is required in connection with
the execution, delivery and performance of said agreements, instruments and
documents.
(d) Business Location. The Collateral, the books and records
relating thereto, and the principal place of business of Debtor are all at the
address of Debtor first written above.
(e) Business Name. The name of Debtor has not changed for at least
the past ten (10) years and during such period, Debtor has conducted, and
currently conducts, its business solely in its own name without the use of a
tradename or the intervention of or through any entity of any kind.
6. AFFIRMATIVE COVENANTS. Debtor covenants and agrees that, from the date
hereof until the payment and performance of all the Obligations, unless Secured
Party otherwise agrees in writing, Debtor shall:
(a) Taxes and Other Liens. File all required federal, state and
local tax returns and pay when due all taxes, assessments and other charges of
every nature which may be
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levied or assessed against Debtor or its assets, including without limitation,
claims for labor, supplies and rent, except those liabilities being contested in
good faith and for which Debtor maintains reserves in amount and form
satisfactory to Secured Party.
(b) Casualty Insurance. Keep its properties insured against fire and
other hazards (so-called "All Risk" coverage) in amounts and with insurers
reasonably satisfactory to Secured Party, which insurance shall, subject to the
interests of the New Lenders, by the terms of the policy be payable to Secured
Party as its interest may appear pursuant to a loss payee/mortgagee clause
reasonably satisfactory to Secured Party. Subject to the rights of the New
Lender, Secured Party shall have the right to apply the proceeds of any such
insurance in reduction of the Obligations, whether or not then due and payable,
in such manner as Secured Party in its reasonable discretion may determine.
Without limiting the generality of the foregoing, such insurance must provide
that it may not be canceled without thirty (30) days prior written notice to
Secured Party. If Debtor fails to maintain the foregoing insurance, Secured
Party may, at its option, obtain such policies as it deems necessary and the
premiums therefor, together with interest at the Default Rate, as defined in the
Note, from the date of receipt of written demand therefor from
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Secured Party to Debtor shall be payable by Debtor to Secured Party immediately
upon receipt of such demand. Subject to the rights of the New Lender, Debtor
hereby appoints Secured Party its attorney-in-fact, coupled with an interest, to
settle, adjust and compromise any insurance losses, to collect and receive
payments of insurance, and to endorse Debtor's name on all documents, checks and
drafts in connection therewith.
(c) Maintain Collateral. Maintain and preserve the Collateral in
good repair, working order and condition, and make all needed and proper
repairs, renewals, replacements, additions or improvements thereto, and
immediately notify Secured Party of any event causing material loss or
depreciation in the value of the Collateral and the amount of such loss or
depreciation.
(d) Inspection. Allow Secured Party by or through any of its
officers, agents, attorneys, or accountants designated by it, to enter the
offices and plants of Debtor to examine, inspect and make copies of the books
and records of Debtor and to inspect the Collateral, all at such times and as
often as Secured Party may reasonably request.
(e) Liability Insurance. Maintain general public liability insurance
against claims for personal injury, death or property damage in forms, amounts,
and with companies reasonably satisfactory to Secured Party, and workmen's
compensation
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insurance, employment or similar insurance, as required by applicable law.
(f) Defend Collateral. Defend the Collateral against all liens,
claims and demands of all persons, and allow Secured Party, at the expense of
Debtor, to contest or defend any such liens, claims and demands in Debtor's
name. Cause the security interest of Secured Party to be properly noted on all
certificates of title issued or outstanding with respect to any of the
Collateral and, unless the same are deposited with the New Lenders, deposit same
with Secured Party.
(g) Financing Statements. From time to time, at the request of
Secured Party, (i) execute, deliver and file one or more financing statements,
assignments, and other agreements, instruments or documents, and amendments and
renewals thereof, and do all other acts as Secured Party reasonably deems
necessary or desirable (x) to create and maintain a valid and enforceable second
priority security interest in the Collateral other than Patents and Trademarks
and (y) to create and maintain a valid and enforceable security interest in
Patents and Trademarks subject only to the liens currently granted to
Connecticut Innovations, Inc. and the New Lender and (ii) pay, upon demand,
Secured Party's costs, charges and expenses, including without limitations
attorneys' fees incurred by Secured Party in connection therewith.
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(h) Books and Records. Maintain complete and accurate books and
records relating to its financial affairs at all times in accordance with
generally accepted accounting principles, the Collateral, the Obligations, and
Debtor's covenants hereunder.
(i) Compliance with Laws. Comply in all material respects with all
laws, orders, rules and regulations applicable to Debtor of any governmental
body or agency, including without limitation, environmental and health and
safety laws, orders, rules and regulations.
(j) Notification of Default. Give prompt written notice to Secured
Party upon the occurrence of an Event of Default, or of any state of facts which
would constitute an Event of Default hereunder or, which, but for the giving of
notice or passage of time, or both, would constitute an Event of Default.
(k) ERISA; Labor Disputes. Give prompt written notice to Secured
Party of: (i) any event which causes Debtor to become subject to the Employee
Retirement Income Security Act of 1974 ("ERISA") and, upon becoming subject
thereto, comply in all respects with ERISA; and (ii) any labor dispute or
controversy resulting or likely to result in a strike or work stoppage against
Debtor.
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7. NEGATIVE COVENANTS. Debtor covenants and agrees that, from the date
hereof until the payment and performance of the Obligations, unless Secured
Party otherwise agrees in writing, Debtor shall not change Debtor's name, adopt
any trade names or conduct Debtor's business under any trade name or style or
change Debtor's place of business or the present location of the Collateral, or
any records relating to the Collateral.
8. PAYMENTS BY SECURED PARTY. At its option, but without any liability for
failing to do so, Secured Party may pay for insurance on the Collateral and
taxes, assessments or other charges which Debtor fails to pay in accordance with
the provisions hereof. Any payment made, or expense incurred by Secured Party,
pursuant to this or any other Section of this Agreement shall be added to and
become a part of the Obligations, shall bear interest at the Default Rate, and
shall be payable immediately by Debtor upon receipt of written demand therefor
by Secured Party.
9. EVENTS OF DEFAULT. Subject to the rights of the New Lender, Secured
Party shall have the right at its option to declare all of the Obligations to be
immediately due and payable without demand or notice (except as otherwise
required by this Section 9) upon the occurrence of any one of the following
events (each being an "Event of Default"):
(a) The failure by Debtor to pay any of the Obligations when due;
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(b) The failure by Debtor to observe, perform or comply with any
condition or covenant in this Agreement or any of the other Financing
Agreements; provided, however, that Debtor shall have an opportunity to cure any
such failure for a period of fifteen (15) days after such failure provided such
failure (i) does not constitute a failure of payment pursuant to Section 9(a)
above.
(c) If any representation or warranty made by Debtor in this
Agreement or in any of the other Financing Agreements, or any statement,
certificate or other data furnished by Debtor in connection with any of the
Obligations proves to be incorrect or untrue in any material respect when made;
(d) The entry of a judgment for the payment of money against Debtor,
which remains unsatisfied and in effect for any period of thirty (30)
consecutive days without a stay of execution, or appeal;
(e) The insolvency of Debtor (the term "insolvency" shall mean an
inability to pay Debtor's debts as they mature);
(f) The filing by or against Debtor of any petition seeking an
arrangement, reorganization or the like, the commencement of any proceedings
under any bankruptcy or insolvency law by or against Debtor, the adjudication of
Debtor as a bankrupt, the appointment of a receiver for all or any part of
Debtor's assets, or the making of an assignment for the
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benefit of creditors, or the calling of a meeting of creditors, or the
appointment of a committee of creditors or liquidating agents, by, for, or of
Debtor, and in the case of any of the foregoing actions which are involuntary,
if such actions are not withdrawn, dismissed, discharged or removed, as the case
may be, within thirty (30) days after the commencement thereof;
(g) The dissolution, liquidation, insolvency, or termination of
legal existence of Debtor; or
(h) The failure by Debtor to pay when due any other indebtedness or
obligations owed to others for borrowed money which failure continues beyond any
applicable grace period with respect thereto.
10. REMEDIES OF SECURED PARTY; NOTICES. When the Obligations, or any of
them, become immediately due and payable, whether by reason of passage of time,
acceleration or otherwise, Secured Party may, in addition to and not in
limitation of Secured Party's rights set forth in Section 3 of this Agreement,
pursue any legal remedy available to it to collect the Obligations outstanding
at said time and to enforce any and all other rights or remedies available to it
both under the Uniform Commercial Code of Connecticut (the "Code") and
otherwise, including, without limitations the right to take possession of the
Collateral and dispose of the same on Debtor's premises, all without judicial
process, Debtor hereby waiving any right Debtor
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might otherwise have to require Secured Party to resort to judicial process and
further waiving Debtor's right to notice and hearing under the Constitution of
the United States or any state or under any Federal or state law, and no such
action shall operate as a waiver of any other right or remedy of Secured Party
under the law, all rights and remedies of Secured Party being cumulative and not
alternative. In addition, Secured Party may require Debtor to assemble the
Collateral and make it available to Secured Party at a place to be designated by
Secured Party which is reasonably convenient to both parties.
The net cash proceeds resulting from the collection, liquidation,
sale, lease or other disposition of the Collateral shall be applied first to the
expenses (including, without limitation, all reasonable attorneys' fees) of
retaking, holding, storing, processing and preparing for sale, selling,
collecting, liquidating and the like, and then to the satisfaction of all
Obligations, application as to particular Obligations or against principal or
interest to be in Secured Party's sole discretion. Any notice which Secured
Party is required to give Debtor under the Code shall be deemed to constitute
reasonable notice if such notice is mailed, postage prepaid, return receipt
requested, at least seven (7) days prior to such action. Debtor shall be liable
to Secured Party and shall pay to Secured Party on demand any deficiency which
may
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remain after such sale, lease, disposition, collection or liquidation of the
Collateral. Debtor agrees that the powers granted hereunder, being coupled with
an interest, shall be irrevocable so long as any of the Obligations remain
outstanding.
All rights and remedies of Secured Party provided herein shall be
subject to the rights of the New Lenders.
11. SET-OFF. Debtor hereby grants to Secured Party a lien and right of
set-off for all Obligations upon or against all moneys, deposits, property,
collateral and securities and the proceeds thereof, now or hereafter held or
received by, or in transit to, Secured Party from or for Debtor, whether for
safekeeping, pledge, custody, transmission, collection or otherwise. Subject to
the rights of the New Lender, Secured Party may at any time after the
occurrence, and during the continuance, of an Event of Default, apply the same,
or any part thereof, to the Obligations, or any part thereof, whether or not
matured or demanded at the time of such application.
12. RIGHTS OF SECURED PARTY. With respect both to the Obligations and the
Collateral, Debtor hereby consents to any extension or postponement of the time
of payment or any other indulgence, to any substitution, exchange or release of
the Collateral, to the addition or release of any party or person primarily or
secondarily liable, to the acceptance of partial
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payments thereon and the settlement, compromising or adjusting of any claims
thereof, all in such manner and at such time or times as Secured Party may deem
advisable. Secured Party shall have no duty as to the collection or protection
of the Collateral or any income thereon, nor as to the preservation of any
rights against prior parties, nor as to the preservation of any rights
pertaining thereto beyond the safe custody thereof. Secured Party may exercise
its rights with respect to the Collateral without resorting or regard to other
collateral or sources of reimbursement for the Obligations. Secured Party shall
not be deemed to have waived any of its rights upon or under the Obligations or
the Collateral unless such waiver is in writing and signed by Secured Party. No
delay or omission on the part of Secured Party in exercising any right shall
operate as a waiver of such right or any other right. A waiver on any one
occasion shall not be construed as a bar to or waiver of any right on any future
occasion. Secured Party may revoke any permission or waiver previously granted
to Debtor, and such revocation shall be effective whether given orally or in
writing. All rights and remedies of Secured Party with respect to the
Obligations or the Collateral, whether evidenced hereby or by any other
document, shall be cumulative and may be exercised singularly or concurrently.
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13. GENERAL PROVISIONS.
(a) Expenses. Debtor will pay on demand all expenses of Secured
Party arising out of the collection, defense, protection, preservation or
enforcement of, or realization on, this Agreement, the Obligations, or any of
the Collateral, including, without limitation, reasonable attorneys' and other
professionals' reasonable fees, and the amounts of all such expenses shall,
until paid, be Obligations secured by the Collateral.
(b) Survival. This Agreement and the security interest granted to
Secured Party by Debtor and every representation, warranty, covenant and other
term contained herein shall survive until the Obligations have been paid in
full.
(c) Notices. Any notice required to be given hereunder shall be
effective when delivered in person, or one (1) day after delivery to a
nationally recognized overnight mail or messenger service or three (3) days
after being deposited in the United States mail, first class, postage prepaid,
registered or certified mail, return receipt requested, to Debtor or Secured
Party, as the case may be, at its address set forth above. Any such notice to
Debtor shall be sent to the attention President of Debtor at Debtor's address
set forth above and to the attention of Xxxxxx X. Xxxxxxxxxxx at Secured Party's
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address set forth above. Either of the parties hereto may notify the other that
any such notice shall be given to such other address as such party may so
instruct by written notice similarly given.
(d) Entire Agreement. This Agreement is the entire agreement between
the parties hereto and cannot be amended or modified except by a writing signed
by Debtor and Secured Party.
(e) Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Connecticut. Secured Party and
Debtor each hereby consent to service of process, and to be sued, in the State
of Connecticut and consent to the jurisdiction of the courts of the State of
Connecticut and the United States District Court for the District of
Connecticut, for the purpose of any suit, action, or other proceeding arising
hereunder, and expressly waive any and all objections it may have to venue in
any such courts.
(f) Headings. Sections and subsection headings have been inserted
herein for convenience only and form no part of this Agreement and shall not be
deemed to affect the meaning or construction of any of the covenants,
agreements, conditions or terms hereof.
(g) Severability. If any term or provision of this Agreement shall
be invalid, illegal or unenforceable for any reason whatsoever, such term or
provision shall be severable
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from the remainder of this Agreement and the validity, legality and
enforceability of the remaining terms and provisions shall not in any way be
affected or impaired thereby.
(h) Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
provided, however, that Debtor may not assign its rights hereunder without prior
written consent of Secured Party in its sole discretion, and any such attempted
assignment without such consent shall be null and void.
(i) Interpretation. As used herein, plural or singular include each
other, and pronouns of any gender are to be construed as masculine, feminine or
neuter, as context requires.
(j) Exhibits. All Exhibits referred to herein are intended to be and
hereby are specifically made a part of this Agreement.
14. PREJUDGMENT REMEDY WAIVER; WAIVERS. DEBTOR ACKNOWLEDGES THAT THE LOAN
EVIDENCED AND SECURED BY THIS AGREEMENT IS A COMMERCIAL TRANSACTION AND WAIVES
ITS RIGHTS TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL
STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH RESPECT TO
ANY PREJUDGMENT REMEDY WHICH SECURED PARTY MAY DESIRE TO USE, and further waives
diligence, demand, presentment
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for payment, notice of nonpayment, protest and notice of protest, and notice of
any renewals or extensions of the Note, and all rights under any statute of
limitations.
15. WAIVER OF JURY TRIAL. DEBTOR HEREBY WAIVES TRIAL BY JURY IN ANY COURT
AND IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH
OR IN ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT IS A
PART AND/OR THE ENFORCEMENT OF ANY OF SECURED PARTY'S RIGHTS AND REMEDIES.
DEBTOR ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY
AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS
ATTORNEYS. NO PARTY TO THIS AGREEMENT HAS AGREED WITH OR REPRESENTED TO ANY
OTHER PARTY HERETO THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY
ENFORCED IN ALL INSTANCES.
16. SUBORDINATION OF LIEN AND RIGHT TO PAYMENT. Secured Party acknowledges
and agrees that (i) pursuant to that certain Subordination and Intercreditor
Agreement dated the date hereof by and among Secured Party, the New Lender and
Debtor (the "Subordination and Intercreditor Agreement"), Secured Party has
subordinated (a) its lien and security interest in and to the Collateral to the
lien and security interest of the New Lender therein and (b) its right to
payment of the Obligations to the right of the New Lender to be repaid the
Primary Obligations, as defined in the Subordination and Intercreditor
Agreement, and
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(ii) its rights and remedies hereunder are subject to the provisions of the
Subordination and Intercreditor Agreement.
17. EXECUTION BY TELEFACSIMILE TRANSMISSION. Telefacsimile transmissions
of any executed original document and/or retransmission of any executed
telefacsimile transmission shall be deemed to be the same as the delivery of an
executed original. At the request of any party hereto, the other parties shall
confirm telefacsimile transmissions by executing duplicate original documents
and delivering the same to the requesting party or parties.
[Rest of This Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
XXXXXXX INTERNATIONAL, LTD.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President & CEO
THE ESTATE OF XXXXXX X. XXXXXX
By: /s/ June X. Xxxxxx
June X. Xxxxxx,
Its Co-Executor
By: /s/ Xxxx X. Xxxxxxx, Xx.
Xxxx X. Xxxxxxx, Xx.,
Its Co-Executor
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
Its Co-Executor
By: UNITED STATES TRUST
COMPANY OF NEW YORK,
Its Co-Executor
By: /s/ Xxxxxx Xxxxx Xxxxxxxxxxx
Name: Xxxxxx Xxxxx Xxxxxxxxxxx
Title: Vice President
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SIGNATURE PAGE SECURITY AGREEMENT
