Exhibit 10.21
SECURITY AGREEMENT
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THIS IS A SECURITY AGREEMENT (the "Agreement"), made and entered into this
31st day of October, 1995, by and between XXXXXX-AMERICAN COMPANY OF FLORIDA,
INC., a North Carolina corporation, located at X.X. Xxx 000000, Xxxxxxxxx, X.X.
00000-0000 (the "Debtor"), who is hypothecating the Collateral (as defined
herein) to XXXXXX-XXXXX OF TAMPA, INC., XXXXXX-XXXXX OF JACKSONVILLE, INC.,
XXXXXX-XXXXX OF MIAMI, INC. AND X.X. XXXXX, XX. of X.X. Xxx 00000, Xxxxx,
Xxxxxxx 00000, (collectively the "Secured Party"), for a purchase money loan
to Debtor and to secure other obligations of Debtor. XXXXXX-AMERICAN COMPANY,
INC., a North Carolina Corporation of X.X. Xxx 000000, Xxxxxxxxx, X.X.
00000-0000 (hereinafter referred to as "Xxxxxx-American") has entered into this
Agreement for purposes of its obligations under Section 1.05 hereinbelow.
NOW, THEREFORE, in consideration of the covenants and conditions stated in
this Agreement and by virtue of the Indebtedness (as defined herein), the
parties agree as follows:
1. Security Interest. For value received, Debtor gives Secured Party a
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security interest (the "Security Interest") in and to all the following goods,
accounts, inventory and general intangibles, and in all parts, accessories,
attachments, additions, replacements, and in all proceeds and products thereof,
in any form, including insurance policies from the loss thereof (collectively
the "Collateral"):
1.01 Accounts: All present and after-acquired accounts receivable,
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defined as any right to payment for goods sold or for services rendered, whether
or not it has been earned by performance, including, without limitation all
income of every type or character due to Debtor for brokerage services (or goods
sold relative thereto) from or with respect to its principals or principal
accounts.
1.02 Furniture, Furnishings, Fixtures, Equipment. All furniture,
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furnishings, fixtures, and equipment, including but not limited to leasehold
improvements, now owned or hereafter acquired, located on the property herein
described or on any other property owned or leased currently or in the future
for the operation of the Debtor's business.
1.03 Inventory. Inventory now owned or hereafter owned or acquired
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by Debtor, including without limitation goods held for sale or lease or to be
furnished under contracts of service, raw materials, work in process and
materials to be used or consumed in the Debtor's business.
1.04 General Intangibles. All general intangibles owned or hereafter
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owned by the Debtor, including without limitation goodwill, leases of real
and/or personal property, trademarks, trade styles, trade names, and deposit
accounts, principal accounts, principal lists and contracts with principals,
including, without limitation, those principals set out on Exhibit "A" attached
hereto, to include all such general intangibles now owned or hereafter created
or acquired.
1.05 Stock Pledge. Xxxxxx-American hereby grants, conveys, assigns
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and pledges to Secured Party as additional Collateral for the Indebtedness all
of the shares of common stock owned by Xxxxxx-American in Debtor pursuant to
that certain Stock Pledge Agreement attached hereto as Exhibit "B" and
incorporated herein by this reference (the "Stock Pledge Agreement"). Such
shares of stock shall, for all purposes herein, be included as part of the
Collateral.
2. Indebtedness Secured. This Agreement and the Security Interest
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created by it secure payment of all indebtedness of every kind owing by the
Debtor to the Secured Party or to any party included within the definition of
"Secured Party", whether now existing or hereafter incurred, direct or indirect,
and whether the indebtedness is from time to time reduced and thereafter
increased or entirely extinguished and thereafter reincurred (the
"Indebtedness"). The Indebtedness includes any sums advanced and any expenses
incurred by the Secured Party pursuant to this Agreement, and includes but is
not limited to the indebtedness evidenced by (a) the certain Promissory Note of
even date herewith in the original principal amount of FOUR MILLION DOLLARS
($4,000,000.00), a copy of which is attached as Exhibit "C" (the "Goodwill
Note"); (b) the certain Promissory Note to be given by Debtor to the Secured
Party under Section 1.1(b) of the "Asset Purchase Agreement" (as defined
hereinbelow), a copy of the agreed upon form of which is attached hereto as
Exhibit "D" (the "Loan Amount Note"); (c) that certain
Employment/Non-Competition/Non-Disclosure Agreement of even date herewith, a
copy of which is attached hereto as Exhibit "E" (the "Xxxxx Agreement"); (d)
that certain Unconditional and Continuing Guaranty of even date herewith
executed by Xxxxxx-American (the "Guaranty"); and (e) that certain Asset
Purchase Agreement dated October 17, 1995 between the parties hereto (the
"Asset Agreement").
3. Representations and Warranties of Debtor. The Debtor represents and
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warrants as of the date hereof, that (which representations and warranties shall
survive the execution hereof):
3.01 The Debtor is the owner of the Collateral free of all security
interests or other encumbrances other than the Security Interest.
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3.02 The Debtor is authorized to enter into this Security Agreement
and into the transactions evidenced by the Collateral.
3.03 The Collateral is used or bought for use primarily in business
or professional operations.
3.04 If any item of the Collateral is or will become a fixture, it
will, subject to the conditions set forth in Paragraph 4.07 hereinbelow, be
affixed to real property located at the Debtor's address(es) specified on
Exhibit "F" attached hereto. The real property to which the Collateral will be
affixed is owned by those persons set forth on Exhibit "F".
3.05 The Debtor is engaged in business operations which are carried
on at the address(es) specified on Exhibit "F".
3.06 The Collateral is located at the address(es) specified on
Exhibit "F".
4. Covenants of Debtor. The Debtor covenants that so long as any
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Indebtedness remains unpaid, the Debtor:
4.01 Will defend the Collateral against the claims and demands of all
other parties except purchasers of inventory in the ordinary course of the
Debtor's business.
4.02 Will keep the Collateral free from all security interests or
other encumbrances except the Security Interest.
4.03 Subject to the conditions set forth in Paragraph 4.07
hereinbelow, will not sell, transfer, assign, deliver or otherwise dispose of
any Collateral or any interest therein without the prior written consent of the
Secured Party, except that until the occurrence of an event of default the
Debtor may sell inventory in the ordinary course of the Debtor's business.
4.04 Will not without the written consent of the Secured Party create
in favor of anyone other than the Secured Party a security interest in its
principal accounts, contracts with principals or its other assets.
4.05 Will execute and deliver to the Secured Party such financing
statements and other documents, pay all costs of title searches and filing
financing statements and other documents in all public offices requested by the
Secured Party and take such other action as the Secured Party may deem advisable
to perfect the Security Interest created by this Agreement.
4.06 Will pay or cause to be paid all taxes, assessments and other
charges of every nature which may be properly levied or assessed against the
Collateral.
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4.07 Will keep the Collateral at the address(es) specified above and
will not remove said Collateral without, no less than sixty (60) days prior to
the intended move or relocation, submitting written notice to the Secured Party
of such removal of Collateral, and without, prior to any such relocation, all
steps being taken and completed and all documents being executed and filed
necessary to continue and protect Secured Party's Security Interest in the
Collateral as a prior perfected lien, including filing any amended or substitute
UCC financing statements.
4.08 Will keep the Collateral in good condition and repair and will
not use the Collateral in violation of any provisions of this Security
Agreement, of any applicable statute, regulation or ordinance or of any policy
of insurance insuring the Collateral.
5. Verification of Collateral.
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5.01 The Secured Party shall have the right to verify any Collateral
in any manner and through any medium which the Secured Party may consider
appropriate and the Debtor shall furnish such assistance and information and
perform such acts as the Secured Party may require in connection therewith.
5.02 Secured Party shall have the right at any time to review,
inspect and copy all books and records of Debtor and Debtor's business
operations, including, without limitation, all checkbooks, bank statements,
accounts receivable and payable records, insurance records, etc. Debtor shall
provide Secured Party with monthly, quarterly and annual financial statements of
Debtor and Xxxxxx-American and a copy of all tax returns filed in connection
with Debtor's business operations.
6. Default.
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6.01 Events of Default. Any of the following events or conditions
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shall constitute an event of default:
(a) Subject to any notice requirements and cure opportunities
expressly provided therein, non-payment when due whether by acceleration or
otherwise of the principal of or other payment due on any Indebtedness, time
being of the essence.
(b) Failure by the Debtor to perform any obligations under this
Agreement within ten (10) days after notice from Secured Party to do so, or,
subject to any notice requirements and cure opportunities expressly provided
therein, failure by the Debtor to perform any obligations under any other
agreement between the Debtor and the Secured Party, including, without
limitation, the Goodwill Note, Loan Amount Note or Xxxxx Agreement.
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(c) The commission or alleged commission of any act outside of
the normal, ordinary course of business conducted in good faith which would give
rise to suspension, termination, default, or revocation of or under any
principal contract or principal account or any other contract, agreement or
instrument forming a part of the Collateral, unless within twenty (20) days of
written notice from Secured Party, Debtor provides Secured Party with
substituted collateral of a type, quality and value reasonably acceptable to
Secured Party.
(d) Failure by the Debtor to comply with all terms and conditions
of, or the occurrence of any act of default under, the Loan Amount Note,
Goodwill Note and/or Xxxxx Agreement, subject to any notice requirements and
cure opportunities expressly provided therein.
(e) Filing by or against the Debtor of a petition in bankruptcy
or for reorganization under the Bankruptcy Code or for an arrangement under the
Bankruptcy Code.
(f) Making a general assignment by the Debtor for the benefit of
creditors; the appointment of a receiver or trustee for the Debtor or for any of
the Debtor's assets; or the institution by or against the Debtor of any kind of
insolvency proceedings or any proceeding for the dissolution or liquidation of
the Debtor.
(g) The occurrence of any event described in subparagraphs 6.01
(a), (b), (c), (d), (e) or (f) hereof with respect to any endorser or guarantor
or any party liable for payment of any Indebtedness.
(h) Material falsity in any certificate, statement,
representation, warranty, or audit at any time furnished to the Secured Party by
or on behalf of the Debtor or any endorser or guarantor or any other party
liable for payment of any Indebtedness, pursuant to or in connection with the
Security Agreement or otherwise (including warranties in this Agreement), and
including any omission to disclose any substantial contingent or liquidated
liabilities or any material adverse change in any facts disclosed by any
certificate statement, representation, warranty or audit furnished to the
Secured Party.
(i) A default by Debtor or any endorser or guarantor in any
agreement assigned to the Secured Party as Collateral for the Indebtedness,
unless, within twenty (20) days notice from Secured Party to Debtor, such
default shall have been cured and/or otherwise remedied to the reasonable
satisfaction of Secured Party.
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(j) The failure on the part of Debtor or Xxxxxx-American to
comply with, or any breach or violation of, any of the terms, covenants,
representations and/or warranties of either Debtor or Xxxxxx-American under the
provisions of the Asset Agreement, including, without limitation, those set
forth in Articles IV and VI of said Asset Agreement, but subject to the notice
requirements and cure opportunities expressly set forth in Section 9.1 of the
Asset Agreement.
(k) Subject to any notice requirements and cure opportunities
expressly provided therein, the failure on the part of Xxxxxx-American to comply
with or perform any obligations of, or the occurrence of any act of default
under, the Stock Pledge Agreement or the Guaranty.
6.02 Remedies Upon Default. Subject to any notice requirements and
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cure opportunities expressly stated therein, the Secured Party may accelerate
and declare all or part of the Indebtedness to be immediately due upon the
happening of any event of default under this Agreement or any document forming a
part of the Indebtedness or if the Secured Party in good faith believes that the
prospect of payment of all or any part of the Indebtedness or the performance of
the Debtor's obligations under this Agreement or any other agreement now or
hereafter in effect between the Debtor and the Secured Party is impaired and,
within thirty (30) days after notice to Debtor, such potential impairment of
future payment and/or performance is not remedied to the reasonable satisfaction
of Secured Party. This paragraph is not intended to affect any rights of the
Secured Party with respect to any Indebtedness which may now or hereafter be
payable on demand.
6.03 Rights of Secured Party Upon Default. Upon the happening of any
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event of default the Secured Party's rights with respect to the Collateral shall
be those of a secured party under the Uniform Commercial Code and any other
applicable law from time to time in effect. The Secured Party shall also have
any additional rights granted herein and in any other agreement now or hereafter
in effect between the Debtor and the Secured Party, including, without
limitation, the Goodwill Note, Loan Amount Note, Xxxxx Agreement, Stock Pledge
Agreement, Guaranty and the aforementioned Asset Agreement. If requested by the
Secured Party the Debtor will assemble the Collateral and make it available to
the Secured Party at a place to be designated by the Secured Party.
6.04 Notice. The Debtor agrees that any notice by the Secured Party of
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the sale or disposition of the Collateral or any other intended action
hereunder, whether required by the Uniform Commercial Code or otherwise, shall
constitute reasonable notice to the Debtor if the notice is mailed by regular or
certified mail, postage prepaid, at least five (5) days before the action, to
the Debtor's address as specified in this Agreement or to any other address
which the Debtor has specified in writing to
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the Secured Party as the address to which notice shall be given to the Debtor.
6.05 Costs. Debtor shall pay all reasonable costs and expenses
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incurred by the Secured Party in enforcing this Agreement, realizing upon any
Collateral and collecting any Indebtedness. Costs and expenses will include all
reasonable attorney's fees (as defined in the promissory notes attached to this
Agreement as Exhibits "C" and "D"). In the event of any litigation commenced
under this Agreement, such costs and expenses shall be paid by Debtor only to
the extent Secured Party prevails in any such action.
7. Miscellaneous.
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7.01 Perfection of Security Interest. The Debtor authorizes the
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Secured Party at the Debtor's expense to file any financing statement or
statements relating to the Collateral (without the Debtor's signature thereon)
which the Secured Party deems appropriate, and the Debtor appoints the Secured
Party as the Debtor's attorney-in-fact to execute any such financing statement
or statements in the Debtor's name and to perform all other acts which the
Secured Party deems appropriate to perfect and to continue perfection of the
Security Agreement. All financing statements to be initially filed under this
Agreement in connection with the execution hereof shall be signed by both
Secured Party and Debtor.
7.02 Failure to Perform; Reimbursement. Upon the Debtor's failure to
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perform any of its duties hereunder the Secured Party may, but it shall not be
obligated to, perform any of such duties and the Debtor shall forthwith upon
demand reimburse the Secured Party for any expenses incurred by the Secured
Party in doing so.
7.03 Non-Waiver; Cumulative Rights. No delay or omission by the
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Secured Party in exercising any right hereunder or with respect to any
Indebtedness shall operate as a waiver of that or any other right, and no single
or partial exercise of any right shall preclude the Secured Party from any other
or future exercise of the right or the exercise of any other right or remedy.
The Secured Party may cure any default by the Debtor in any reasonable manner
without waiving the default so cured and without waiving any other prior or
subsequent default by the Debtor. All rights and remedies of the Secured Party
under this Agreement and under the Uniform Commercial Code shall be deemed
cumulative.
7.04 Waiver of Notice of Dishonor and Protest. Except as expressly
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provided to the contrary herein, the Debtor waives notice of dishonor and
protest of any instrument constituting Collateral at any time held by the
Secured Party on
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which the Debtor is in any way liable and waives notice of any other action by
the Secured Party.
7.05 Rights of Acquiring Parties. The rights and benefits of the
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Secured Party under this Agreement shall, if the Secured Party agrees, inure to
any party properly acquiring an interest in the Indebtedness or any part
thereof; such rights of Secured Party to assign or otherwise transfer the rights
and benefits under this Agreement being limited as set forth in Section 9.1 of
the Asset Agreement, and the rights to assign this Agreement by Xxxxxx-American
being limited as set forth in Sections 6.7 and 9.11 of the Asset Agreement.
Debtor has no right to assign this Agreement without the written consent of the
Secured Party.
7.06 Applicability of Terms. The terms "Secured Party" and "Debtor" as
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used in this Agreement include the heirs, personal representatives, permitted
successor(s) and permitted assigns of these parties.
7.07 Multiple Debtors. If more than one Debtor executes this Security
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Agreement, the term "Debtor" includes each of the Debtors as well as all of
them, and their obligations under this Agreement shall be joint and several.
7.08 Amendment; Waiver. This Agreement may not be modified or amended,
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nor shall any provision of it be waived except by a written instrument signed by
an authorized officer of the Debtor and by an authorized officer of the Secured
Party.
7.09 Choice of Law. This Agreement has been delivered in the State of
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Florida and shall be construed under the Uniform Commercial Code as enacted in
the State of Florida and any other applicable Florida laws in effect from time
to time and shall be enforceable, at the option of the Secured Party, only in a
court of competent jurisdiction in the County of Hillsborough, State of Florida,
notwithstanding the location of the Collateral. Debtor, Secured Party and
Xxxxxx-American each hereby expressly waive all rights to a jury trial with
respect to any and all actions commenced by any party hereto under or in
connection with this Security Agreement.
7.10 Continuing Agreement. This Agreement is a continuing agreement
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which shall remain in force until all of the Indebtedness contracted for or
created and any extension or renewals on that Indebtedness together with all
interest thereon shall be paid in full.
7.11 Exhibits. All exhibits and other documents and instruments
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attached to, or referred to, in this Agreement are hereby incorporated into this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
"Debtor"
XXXXXX-AMERICAN COMPANY OF
FLORIDA, INC., a North Carolina
Corporation
illegible
--------------------------------
illegible By: /s/ Xxxx X. Xxxxxx
-------------------------------- --------------------------------
Witnessed as to Debtor
Name: XXXX X. XXXXXX
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Title: CHAIRMAN
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"Secured Party"
XXXXXX-XXXXX OF TAMPA, INC., a
Florida Corporation
illegible
--------------------------------
illegible By: /s/ X.X. Xxxxx, Xx.
-------------------------------- --------------------------------
Witnessed as to Secured Party X.X. XXXXX, XX.
President
XXXXXX-XXXXX OF JACKSONVILLE,
INC., a Florida Corporation
illegible
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illegible By: /s/ X.X. Xxxxx, Xx.
-------------------------------- --------------------------------
Witnessed as to Secured Party X.X. XXXXX, XX.
President
XXXXXX-XXXXX OF MIAMI, INC., a
Florida Corporation
illegible
--------------------------------
illegible By: /s/ X.X. Xxxxx, Xx.
-------------------------------- --------------------------------
Witnessed as to Secured Party X.X. XXXXX, XX.
President
illegible
--------------------------------
illegible By: /s/ X.X. Xxxxx, Xx.
-------------------------------- --------------------------------
Witnessed as to Secured Party X.X. XXXXX, XX.
Individually
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"Xxxxxx-American"
XXXXXX-AMERICAN COMPANY, INC.,
a North Carolina Corporation
/s/ Xxxxx X. Xxxxxx
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illegible
------------------------ By: /s/ Xxxx X. Xxxxxx
Witnessed as to Xxxxxx- ---------------------------
American
Name: XXXX X. XXXXXX
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Title: CHAIRMAN
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STATE OF NORTH CAROLINA
COUNTY OF UNION
The foregoing instrument was acknowledged before me this 27th day of
October, 1995, by Xxxx X. Xxxxxx, as Chairman of XXXXXX-AMERICAN COMPANY OF
FLORIDA, INC., a North Carolina Corporation, on behalf of the Corporation.
He/she is personally known to me or who has produced North Carolina Driver's
License 0000000 as identification and who did [did not] take an oath.
/s/ Xxxxxx X. Xxxxx
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NOTARY PUBLIC -
State of North Carolina
My Commission Expires: 0-0-0000
XXXXX XX XXXXXXX
XXXXXX XX XXXXXXXXXXXX
The foregoing instrument was acknowledged before me this 27th day of
October, 1995, by X.X. XXXXX, XX., as President of XXXXXX-XXXXX OF TAMPA, INC.,
a Florida Corporation, on behalf of the Corporation. He is personally known to
me or who has produced Florida Driver's License personally known as
identification and who did take an oath.
/s/ Xxxxx X. Xxxx
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NOTARY PUBLIC - State of Florida
My Commission Expires: 12-29-98
----------------------------------
OFFICIAL NOTARY SEAL
XXXXX X XXXX
NOTARY PUBLIC XXXXX XX XXXXXXX
XXXXXXXXXX XX. XX000000
MY COMMISSION EXP. DEC. 29, 1998
----------------------------------
00
XXXXX XX XXXXXXX
XXXXXX XX XXXXXXXXXXXX
The foregoing instrument was acknowledged before me this 27th day of
October, 1995, by X.X. XXXXX, XX., as President of XXXXXX-XXXXX OF JACKSONVILLE,
INC., a Florida Corporation, on behalf of the Corporation. He is personally
known to me or who has produced Florida Driver's License (personally known) as
identification and who did take an oath.
/s/ Xxxxx X. Xxxx
----------------------------------
NOTARY PUBLIC - State of Florida
My Commission Expires: 12-29-98
----------------------------------
OFFICIAL NOTARY SEAL
XXXXX X XXXX
STATE OF FLORIDA NOTARY PUBLIC XXXXX XX XXXXXXX
XXXXXX XX XXXXXXXXXXXX XXXXXXXXXX XX. XX000000
MY COMMISSION EXP. DEC 29, 1998
----------------------------------
The foregoing instrument was acknowledged before me this 27th day of
October, 1995, by X.X. XXXXX, XX., as President of XXXXXX-XXXXX OF MIAMI, INC.,
a Florida Corporation, on behalf of the Corporation. He is personally known to
me or who has produced Florida Driver's License (personally known) as
identification and who did take an oath.
/s/ Xxxxx X. Xxxx
----------------------------------
NOTARY PUBLIC - State of Florida
My Commission Expires: 12-29-98
----------------------------------
OFFICIAL NOTARY SEAL
XXXXX X XXXX
STATE OF NORTH CAROLINA NOTARY PUBLIC XXXXX XX XXXXXXX
XXXXXX XX XXXXX XXXXXXXXXX XX. XX000000
MY COMMISSION EXP. DEC 29, 1998
----------------------------------
The foregoing instrument was acknowledged before me this 27th day of
October, 1995, by Xxxx X. Xxxxxx, as Chairman of XXXXXX-AMERICAN COMPANY, INC.,
a North Carolina Corporation, on behalf of the Corporation. He/she is personally
known to me or who has produced North Carolina Driver's License 16-53193 as
identification and who did take an oath.
/s/ Xxxxxx X. Xxxxx
------------------------------
NOTARY PUBLIC - State of
North Carolina
My Commission Expires: 5-2-2000
00
XXXXX XX XXXXXXX
XXXXXX XX XXXXXXXXXXXX
The foregoing instrument was acknowledged before me this 27th day of
October, 1995, by X.X. XXXXX, XX, individually, who is personally known to me or
who has produced Florida Driver's License (personally known) as identification
and who did take an oath.
/s/ Xxxxx X. Xxxx
---------------------------------
NOTARY PUBLIC - State of Florida
My Commission Expires: 12-29-98
-----------------------------------
OFFICIAL NOTARY SEAL
XXXXX X XXXX
NOTARY PUBLIC XXXXX XX XXXXXXX
XXXXXXXXXX XX. XX000000
MY COMMISSION EXP. DEC 29, 1998
-----------------------------------
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