SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is dated as of this December 21,
2004 day of December, 2004, by and between Gold Bank having an address
at 000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("Secured Party")
and AMCON Distributing Company, a Delaware corporation having an address
at 0000 Xxxxxxxxx Xxxx, Xxxxx, XX 00000 ("Debtor").
WHEREAS, Debtor is the maker of that certain Term Equipment Promissory
Note in the principal amount of up to $480,000.00 ("Term Equipment
Promissory Note") and Term Real Estate Promissory Note in the principal
amount of up to $984,000.00 ("Term Real Estate Promissory Note"), both
of even date herewith executed by Debtor in favor of Secured Party (the
Term Equipment Promissory Note and the Term Real Estate Promissory Note
shall collectively be referred to herein as the "Promissory Notes" or
the "Loans").
WHEREAS, as further inducement for Secured Party to advance the amounts
contemplated by the Promissory Notes, Debtor has agreed to grant to
Secured Party a security interest in all of the personal property and
assets of Debtor as described herein.
NOW, THEREFORE, as a condition and as an inducement for Secured Party to
accept the Promissory Notes, and for other good and valuable
consideration given by Secured Party, the receipt and sufficiency of
which is hereby acknowledged by Debtor, the parties hereto agree as
follows:
ARTICLE 1
GRANT OF SECURITY INTEREST
As security for all Obligations (as such term is defined in Article 2 of
this Agreement) now existing or hereinafter arising, Debtor hereby
grants to Secured Party a security interest in the "Collateral" as
defined in Exhibit A attached hereto and incorporated herein by
reference, and all proceeds of said Collateral, as now owned or
hereafter acquired.
ARTICLE 2
OBLIGATIONS SECURED
The term "Obligations" means all obligations, indebtedness or
liabilities of Debtor to the Secured Party of every kind, including but
not limited to Debtor's obligations pursuant to the Promissory Notes,
now or hereafter existing, whether absolute or contingent, primary, or
otherwise, and whether for principal, interest, fees, costs, expenses or
otherwise, including all fees and expenses incurred in the enforcement
or collection of amounts due under the Promissory Notes or other
indebtedness, obligation or liability and all liabilities and
obligations of Debtor incurred or to be incurred under the Term
Equipment Promissory Note, Term Real Estate Promissory Note, this
Security Agreement, the Mortgage executed by Debtor in favor of Secured
Party of even date herewith securing the funds advanced under the Term
Real Estate Promissory Note ("Mortgage") and all amendments thereto
executed by Debtor in favor of Secured Party and all other liabilities
and obligations of Debtor incurred or to be incurred under the Loan
Documents as hereafter defined (the Promissory Notes, this Security
Agreement, related UCC-1 financing statements, the Mortgage, and all
such other related documents are hereafter referred to herein as the
"Loan Documents"). The term "Obligations" shall also include all, fees,
costs and expenses and reasonable attorney's fees incurred by Debtor in
connection with the Loans both before and after Default (as hereinafter
defined) to the extent allowed by Federal Bankruptcy Law.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO COLLATERAL
Debtor makes the following continuing warranties and representations
with respect to the Collateral hereunder:
A. CORPORATE POWER AND AUTHORITY.
The execution, delivery, and performance by Debtor of this Agreement,
the Promissory Notes, the Loan Documents and all other documents,
agreements, instruments or certificates executed in connection therewith
have been duly authorized by all necessary corporate action and do not
and will not: (a) require any consent or approval of the stockholders
of Debtor; (b) contravene Debtor's charter or bylaws; (c) violate any
provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination, or award presently in effect having
applicability to Debtor; (d) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other
agreement, lease, or instrument to which Debtor is a party or by which
its properties may be bound or affected; result in, or require, the
creation or imposition of any lien, upon or with respect to any of the
properties now owned or hereafter acquired by Debtor; and (e) cause
Debtor to be in default under any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination, or award or any such
indenture, agreement, lease, or instrument.
B. LEGALLY ENFORCEABLE AGREEMENT.
This Agreement shall be, when executed and delivered by Debtor, the
legal, valid, and binding obligations of Debtor, enforceable against
Debtor, in accordance with their terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency, and
other similar laws affecting creditors' rights generally.
C. LIENS AND ENCUMBRANCES.
Debtor represents and warrants to Secured Party that Debtor holds all
Collateral, free and clear of all other liens and encumbrances. Except
for the financing statements in favor of Secured Party pursuant to this
Agreement, no financing statement covering any of the Collateral is on
file in any public office and Secured Party shall remain first in
priority with respect to the Collateral described in Exhibit A and the
Real Estate as described in the Mortgage so long as any of the Loans are
outstanding. Debtor shall defend Secured Party's rights in the
Collateral against the claims and demands of all other persons.
D. DEBTOR'S PRINCIPAL OFFICE.
Debtor's chief executive office and the location where Debtor keeps its
records concerning all Collateral is 0000 Xxxxxxxxx Xxxx, Xxxxx, XX
00000.
E. NO MATERIAL MISREPRESENTATIONS.
The representations and warranties contained in this Article 3 and all
other information, exhibits, reports, instruments, documents or
certificates furnished by Debtor to Secured Party in connection with the
negotiation of this Agreement do not contain any material misstatement
of fact or omit to state a material fact or any fact necessary to make
the statement contained therein not materially misleading.
ARTICLE 4
COVENANTS OF DEBTOR
So long as this Agreement is in effect and until such time as the
Obligations secured hereunder have been fully paid and discharged,
Debtor covenants and agrees that:
A. FURTHER ASSURANCES.
Debtor will execute and deliver to Secured Party, in a form acceptable
to Secured Party, any instrument, document, financing statement,
assignment or other writing which Secured Party may reasonably deem
necessary or desirable to carry out the terms of this Agreement, to
perfect Secured Party's security interest in the Collateral for the
Obligations to Secured Party, or to enable Secured Party to enforce
conveniently its security interest in any of the foregoing.
B. BOOKS AND RECORDS.
Debtor will maintain, in accordance with sound accounting practice,
accurate records and books of account showing, among other things, all
Collateral, the proceeds of the sale or other disposition thereof and
the collections therefrom; and Secured Party shall have the right, upon
the reasonable request of Secured Party, without hindrance or delay, to
inspect the Collateral and to inspect, audit, check and make extracts
from the books, records, journals, orders, receipts, correspondence and
other data relating to Collateral, at Secured Party's sole expense.
C. LEGENDS.
Debtor will, if requested by Secured Party, xxxx its records concerning
its Collateral in a manner satisfactory to Secured Party to show Secured
Party's security interest therein.
D. FINANCIAL REPORTING.
Debtor will furnish Secured Party, from time to time when requested by
Secured Party, with balance sheets, operating statements and net worth
reconciliations financial statements of Debtor as of the close of such
accounting periods as Secured Party may reasonably request; and such
other information respecting the financial condition and affairs of
Debtor (including, without limitation, copies of federal income tax
returns) as Secured Party may, from time to time, reasonably request.
Such balance sheets and operating statements shall be prepared in
accordance with generally accepted accounting principles certified or
audited by a firm of certified public accountants at least annually when
requested by Secured Party.
(i) Debtor will pay and discharge when due all premiums of insurance
required hereunder and all taxes, levies and other charges on its
property; and authorizes Secured Party to pay for the account of Debtor
any of the foregoing (or, as to insurance, premiums for insurance of
Secured Party's interest alone) which Debtor fails to pay, and any such
payment by Secured Party shall constitute an item of Obligations to
Secured Party.
(ii) Debtor shall keep the Collateral insured in a manner consistent
with sound business practices and Secured Party shall appear as a named
insured (to whom loss shall be payable) in such amounts, in such
companies and against such risks as may be reasonably satisfactory to
Secured Party; pay the cost of all such insurance; secure the obligation
of the insurer to notify Secured Party at least ten (10) days prior to
the modification, expiration, revocation or cancellation of such
insurance; deliver certificates evidencing such insurance to Secured
Party; and, up to the amount of any and all of the Obligations, Debtor
assigns to Secured Party all right to receive proceeds of such
insurance; directs any insurer to pay all proceeds directly to Secured
Party, and authorizes Secured Party to endorse Debtor's name to any
draft or check for such proceeds; which proceeds Secured Party may set-
off against Obligations, or hold as security for Obligations; any
proceeds in excess of Obligations to be delivered to Debtor.
(iii) In addition to insuring its Collateral as required above, Debtor
will maintain adequate insurance against loss or damage to all of its
other properties in such manner and to the extent which like properties
are so insured by others owning, operating or leasing properties of
similar character, and will maintain adequate insurance against
liability for damage to the person or property of others.
E. COSTS AND EXPENSES.
Upon the occurrence of a Default or an Event of Default, Debtor will pay
Secured Party, upon demand, the cost of collection or enforcement
(including reasonable attorneys' fees) of any Collateral for Obligations
to Secured Party, if Secured Party itself undertakes such collection or
enforcement, together with all charges and expenses of every kind or
description (including taxes with respect to Collateral) paid or
incurred by Secured Party under or with respect to the Obligations or
any Collateral therefor, or execution or levy on such Collateral, and
any such charges shall be considered part of the Obligations.
F. PRINCIPAL BUSINESS ADDRESS.
Debtor will promptly advise Secured Party in writing of any new
principal place of business, and of any change in Debtor's name.
G. SCHEDULE OF PROPERTIES.
Debtor, upon request of Secured Party, will deliver to Secured Party in
a form satisfactory to Secured Party a schedule of real properties and
collateral locations relating to Debtor's operations, including without
limitation the following: (a) all real property owned or being purchased
by Debtor; (b) all real property being rented or leased by Debtor; (c)
all storage facilities owned, rented, leased, or being used by Debtor;
and (d) all of the properties where collateral is or may be located.
H. COLLATERAL.
(i) Except in the ordinary course of business, or as provided in this
Agreement, or for purposes of replacement and repair, Debtor will not
remove the Collateral (or allow removal), from Debtor's Rapid City
facility legally described as set forth on Exhibit B attached hereto and
incorporated by reference herein without the prior written consent of
Secured Party. Debtor will promptly give written notice to Secured Party
of any loss or damage by fire or other casualty to any substantial part
of the Collateral.
(ii) Debtor, at its sole cost and expense, will protect and defend this
Agreement, all of the rights of Secured Party hereunder, and its
interest in the Collateral against the claims and demands of all other
parties.
(iii) Debtor will at all times keep the Collateral in good order,
repair and condition, ordinary wear and tear excepted, and, in the
ordinary course of business, will promptly replace any part thereof that
from time to time may become obsolete, badly worn, or in a state of
disrepair.
(iv) Secured Party or its representative may at any and all reasonable
times inspect the Collateral and may enter upon any and all of the
premises where the same is kept or might be located.
(v) Debtor will not, without obtaining the prior written consent of
Secured Party, transfer or permit any transfer of the Collateral or any
part thereof to be made, or any interest therein to be created by way of
a sale, or by way of a grant of a security interest, or by way of a levy
or other judicial process.
(vi) Debtor will promptly notify Secured Party of any levy, distraint
or other seizure by legal process or otherwise of any part of the
Collateral, and of any threatened or filed claims or proceedings that
might in any way affect or impair any of the rights of Secured Party
under this Security Agreement.
(vii) Debtor has, and will continue to have, full title to the
Collateral free from any liens, leases, encumbrances, judgments or other
claims. Debtor will do all acts and things, and will execute and file
all instruments (including but not limited to security agreements,
financing statements, continuation statements, etc.) reasonably
requested by Secured Party to establish, maintain and continue the
perfected security interest of Secured Party in the Collateral.
(viii) Debtor agrees not to take any action whatsoever which would
impair the Collateral as security for the Obligations.
I. RIGHT TO CURE.
Secured Party may, at its option, and without any obligation to do so,
pay, perform and discharge any and all amounts, costs, expenses and
liabilities herein agreed to be paid or performed by Debtor, and all
amounts expended by Secured Party in so doing shall become part of the
Obligations secured hereby, and shall be immediately due and payable by
Debtor to Secured Party upon demand theretofore, and shall bear interest
at the Default Interest Rate (as defined in the Promissory Notes) from
the dates of such expenditures until paid.
ARTICLE 5
ADDITIONAL SECURITY
Secured Party shall have the right to call for and be provided with
additional security reasonably satisfactory to Secured Party should the
value of the existing security decline or be deemed by Secured Party to
be inadequate or unsatisfactory. Debtor hereby agrees to execute and
deliver to Secured Party such additional agreements, instruments,
certificates or financing statements, and to take such additional
actions, as Secured Party may reasonably require, to protect Secured
Party's security interest in the Collateral granted hereunder and to
perfect any additional security interest requested by Secured Party
hereunder.
ARTICLE 6
WAIVER OF RIGHTS
Secured Party may, at its option, without notice to Debtor, extend the
maturity of the Obligations or exchange or release any of the Collateral
without affecting the liability of Debtor. Debtor hereby waives
presentment and demand for payment, protest and notice of nonpayment,
notice of dishonor, diligence and suit. Debtor hereby waives all
defenses based on suretyship or impairment of collateral, and any
defenses which Debtor may assert on the underlying debt including but
not limited to failure of consideration, breach of warranty, fraud,
statute of frauds, bankruptcy, lack of legal capacity, statute of
limitations, lender liability, accord and satisfaction and usury. The
delay or failure in the exercise of any right, remedy or power shall not
operate as a waiver thereof, nor shall any single or partial exercise or
waiver thereof preclude or limit any other or future exercise thereof.
All waivers, consents, notices and other communications must be in
writing and shall be sufficient if given in the manner as provided in
Section 9.A. hereof.
ARTICLE 7
DEFAULT
DEBTOR SHALL BE IN DEFAULT under this Security Agreement upon the
happening of any one or more of the following events:
A. Default in the payment or performance of the Promissory Notes or any
amounts due hereunder by Debtor or default in the payment or performance
of any of the other Loan Documents or any Obligation, covenant or
liability of the Debtor contained or referred to herein, including but
not limited to those Obligations, covenants or liabilities referenced in
the Promissory Notes, the Loan Documents or any other document executed
in connection therewith, and such Default is not cured within ten (10)
business days of such default, regardless of whether Debtor has received
notice of such default.
B. Any warranty, representation or statement made or furnished to the
Secured Party by the Debtor for the purpose of obtaining credit or
pursuant to this Agreement the Promissory Notes or the Loan Documents
proves to have been false in any material respect when made or
furnished.
C. Significant loss, theft, damage, destruction, misuse, sale, lease or
additional encumbrances on any of the Collateral, or the making of any
levy, seizure or attachment or any other proceedings which in the
opinion of the Secured Party would impair the Secured Party's rights to
or diminish the value of the Collateral.
D. Dissolution, insolvency, business failure or cessation, appointment
of a receiver of any part of the property of, assignment for the benefit
of creditors by, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against the Debtor, or any endorser,
guarantor or surety for Debtor.
E. Failure by the Debtor to keep, observe or perform any material
provision of this Agreement or any other Loan Documents required to be
kept, observed or performed by Debtor.
Should any of the above-described events occur and be continuing, each
shall be considered to be an "Event of Default" (subject to the
applicable cure period with respect to Article 7, Section A above).
ARTICLE 8
REMEDIES
Should an Event of Default occur, Secured Party shall have the right to:
A. avail itself of such rights with respect to any and all Collateral
which are provided for herein, in the Promissory Notes, in the Loan
Documents or in any other agreement between Secured Party and Debtor.
B. all rights of a secured party with respect to the Collateral which
are provided for in the Uniform Commercial Code as amended from time to
time and as adopted in the State of Kansas or other state with proper
jurisdiction over the Collateral or this Agreement (hereinafter the
"Code"), including the right to require Debtor, upon written notice, to
promptly assemble any Collateral for Obligations to Secured Party, and
to make it available to Secured Party at a place reasonably convenient
to both parties.
X. xxxx that any notice of sale or other disposition of the whole or
any part of the Collateral, received by Debtor at least five (5) days
prior to such action, shall constitute reasonable notice to Debtor.
D. collect from Debtor and Debtor agrees that Debtor shall pay to
Secured Party the reasonable costs and expenses (including attorneys'
fees and disbursements) of the collection of the Obligations secured
hereunder and of all of the Obligations, and that in the event of
foreclosure upon Debtor's Collateral, the proceeds shall be first
applied to such expenses.
E. take any and all actions and incur any and all expenses with respect
to the Collateral which Secured Party reasonably deems necessary and
proper in order to enhance Secured Party's ability to effectively levy
on such Collateral, including without limitation, causing such
Collateral to be completed, cleaned or repaired. Debtor shall assist
Secured Party in such actions; any such expenses shall be included as
Obligations; and any proceeds from the Collateral shall be first applied
to such expenses.
F. take control of any and all contracts with respect to which
"Contract Rights" (as defined in Exhibit A attached hereto) have arisen
or may arise at the time of such default and perform and take title to
such contracts, however, Secured Party shall be under absolutely no
obligation to do so and shall not incur additional liability if Secured
Party elects to do so or not.
G. set-off against any amounts owed by Secured Party to Debtor for any
purpose whatsoever, at all times before, at or after such Default.
H. avail itself of any and all other remedies at law or equity which
may be available to Secured Party with respect to Debtor, the Collateral
and any co-signer, guarantor or surety.
The parties hereto hereby declare that all Collateral transferred to
Secured Party hereunder is transferred in fact to secure loans and is
not, in fact, sold to Secured Party regardless of whether any assignment
thereof, which is separate from this Agreement, is in form absolute.
All rights and remedies of Secured Party whether granted hereunder,
under the Code or otherwise are cumulative and not alternative. The
exercise, full or partial, or the commencement of the exercise of any
one right or remedy, shall not preclude the further exercise of it or
any other remedy.
ARTICLE 9
MISCELLANEOUS
A. NOTICES.
All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been fully
given if delivered personally or sent by certified mail, postage
prepaid, to the following addresses:
If to Debtor:
AMCON Distributing Company
Attn: Xxxxxxx X. Xxxxx
0000 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
If to Secured Party:
Gold Bank
Attn: Xxxx Xxxxxxxx
000 Xxxx 00xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
with a copy to:
Attn: Xxxxxx X. Xxxx, Esq.
Xxxxxxxx Xxxxxxx & Xxxxxx, P.C.
Twelve Wyandotte Plaza
000 X. 00xx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
or to any other address or addresses as may hereafter be specified by
written notice given by any of the above for itself to the others.
Additionally, notices and other communications required or permitted to
be given hereunder may be sent using any other means (including
expedited courier, messenger service, facsimile transmission or
electronic mail), but no such notices or other communications shall be
deemed to have been given unless and until they are actually received by
the intended recipient if personally delivered or the next business day
after the same is sent by facsimile transmission (if delivered by
facsimile coupled with overnight delivery service).
B. WRITTEN AMENDMENT.
No amendment, modification or termination of any provision of this
Agreement shall be effective unless set forth in a writing by all of the
parties hereto.
C. SEVERABLILITY.
If any clause, provision or section of this Agreement be held illegal or
invalid by any court, the invalidity of such clause, provision or
section shall not affect any of the remaining clauses, provisions or
sections hereof, and this Agreement shall be construed and enforced as
if such illegal or invalid clause, provision or section had not been
contained herein. In case any agreement or obligation contained in this
Agreement be held to be in violation of law, then such agreement or
obligation shall be deemed to be the agreement or obligation of Debtor,
as the case may be, to the full extent permitted by law.
D. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and the successors or assigns of Secured Party. Debtor
shall not assign or delegate its rights, liabilities or obligations
hereunder. Secured Party shall have the right to sell, transfer,
delegate or assign its rights, liabilities or obligations under this
Agreement, the Promissory Notes, the Loan Documents, and any UCC-1
financing statements filed in connection herewith.
E. STATE LAW.
The validity of this Agreement, the terms hereof, and all duties,
obligations and rights arising therefrom, shall be governed by and
interpreted in accordance with the laws and decisions of the State of
Kansas, as applicable to contracts made and to be performed in the State
of Kansas without reference or regard to conflicts of laws principles.
F. CAPTIONS.
All captions are for ease of reference only and shall in no way be
construed to alter or limit the substance of the provisions of this
Agreement. If more than one person executes this Agreement as a debtor,
the term "Debtor" shall mean all such persons, shall apply to each
person both individually and collectively and such persons shall be
jointly and severally liable.
G. EXHIBITS.
All Exhibits referred to in this Agreement shall be attached hereto and
incorporated herein by reference.
H. ENTIRE AGREEMENT.
This Agreement contains the entire agreement between the parties
respecting the matters herein set forth and supersedes all prior
agreements between the parties respecting such matters. Time is of the
essence of this Agreement. If any party obtains a judgment against any
other party by reason of a breach of this Agreement, a reasonable
attorneys' fee as fixed by the court shall be included in such judgment.
No remedy conferred upon a party in this Agreement is intended to be
exclusive of any other remedy herein or by law provided or permitted,
but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law, in equity or
by statute.
I. CONTINUING AGREEMENT.
This Agreement shall remain in full force and effect until all
Obligations pursuant to this Agreement, the Promissory Notes and the
Loan Documents have been fully and completely terminated or discharged.
J. NO WAIVER.
No failure or delay by any party hereto in exercising any right, power
or privilege hereunder (and no course of dealing between or among any of
the parties) shall operate as or constitute a waiver of any subsequent
or other default. No single or partial exercise of any right, power or
privilege shall preclude the further exercise thereof or of any other
right, power or privilege.
K. RECITALS/PREAMBLE.
The preamble and recitals to this Agreement are hereby incorporated by
reference and made a part hereof.
L. FACSIMILE SIGNATURES.
The parties hereby agree that, for purposes of the execution of this
Agreement, facsimile signatures shall constitute original signatures.
M. COUNTERPARTS.
This Agreement may be executed in two or more counterparts and by the
different parties hereto on separate counterparts, each of which shall
be deemed an original, but all such counterparts shall together
constitute but one and the same instrument.
N. WAIVER OF JURY TRIAL.
The parties hereto waive trial by jury in any action, proceeding or
counterclaim brought by any party against the other on any matter
arising out of or in any way connected with this Agreement, the Loan
Documents or the relationship of the parties created hereunder.
O. LOAN FEE.
In addition to reimbursing the Secured Party for any and all costs and
expenses incurred in connection with issuing the Loans as described
herein, Debtor agrees to pay to Secured Party at Closing a .50% loan fee
on each amount borrowed under the Promissory Notes.
P. CROSS COLLATERALIZED, CROSS-DEFAULTED AND CO-TERMINUS.
Debtor and Secured Party acknowledge and agree that the Loans are cross-
collateralized, cross-defaulted and co-terminus. In addition, the Loans
are cross-defaulted and co-terminus with any and all other loans now or
hereafter existing by and between Debtor, Debtor's subsidiaries or
affiliates and Secured Party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
DEBTOR:
AMCON Distributing Company,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxx X. Xxxxx
------------------------
Title: VP of Finance and CFO
------------------------
SECURED PARTY:
GOLD BANK
By: /s/ Xxxx Xxxxxxxx
-----------------------
Name: Xxxx Xxxxxxxx
-----------------------
Title: Vice President
-----------------------
EXHIBIT A
DESCRIPTION OF COLLATERAL
I. As used herein, the following terms mean:
(A) "Equipment" means any property, goods, furniture, office supplies,
furnishings, machinery, tools, dies, hand tools, vehicles, motorized or
otherwise, titled or otherwise, used, bought, leased or otherwise
acquired for the business of DEBTOR.
(B) "Fixtures" means any goods, equipment or property which is so
related or affixed to real property that it may not be easily or readily
removed and in which an interest arises under the real estate law.
Except as otherwise defined in the Security Agreement, all terms of the
Security Agreement shall have the meanings to the extent the same are
defined or used therein, provided by the Code as defined in the Security
Agreement, so long as such meaning is reasonable given the context in
which it appears.
II. To secure prompt performance and payment of all Obligations (as
defined in the Security Agreement) of the DEBTOR to SECURED PARTY
pursuant to the Security Agreement, DEBTOR hereby grants to SECURED
PARTY a continuing security interest in, a lien upon and a right of set
off against, and hereby assigns to SECURED PARTY all right, title and
interest in and to the following property of DEBTOR whether acquired by
purchase, lease or otherwise, and whether now owned or hereafter
acquired or existing, that is or at any time has been or hereafter is
located in, on or around the warehouse facility of Debtor having an
address at 0000 Xxxxxxx Xxxxx, Xxxxx Xxxx, XX 00000 ("Warehouse")
(together with all other collateral security for the Obligations at any
time granted to or held by SECURED PARTY, collectively, the following is
the "Collateral"):
(1) all of DEBTOR's right, title and interest in and to DEBTOR'S
Equipment as well as all of DEBTOR'S right, title and interest to any
and all equipment purchased with the proceeds of the Loans as defined in
the Security Agreement (regardless of whether said equipment is located
in, on or around the Warehouse);
(2) all of DEBTOR's Fixtures and Equipment, including but not limited
to all furniture, furnishings, office supplies, machinery, storage
shelves, vehicles, motorized or otherwise, titled or otherwise, used,
bought, leased or otherwise, rolling stock and other goods used in the
conduct of DEBTOR's business, now or hereafter acquired together with
all increases, parts, fittings, accessories, attachments, additions,
materials, components, special tools and accessions now or hereafter
attached thereto or used in connection therewith, and any and all
replacements of all or any part thereof;
(3) all interest of DEBTOR in parts, accessories, attachments,
additions, materials, components, replacements and accessions to any and
all of the foregoing, now existing or hereafter coming into existence;
(4) all of DEBTOR's books and records and other instruments and
documents of title now existing or coming into existence pertaining to
any of the collateral described above;
(5) all interest of DEBTOR in money, cash, non-cash and other proceeds
received should any of the foregoing be sold, exchanged, collected or
otherwise disposed of for all of the foregoing, including but not
limited to, deposit accounts, claims and demands, and insurance proceeds
(or rights thereto), now existing or hereafter coming into existence;
and
(6) all interest of DEBTOR in any insurance proceeds received related
to any of the foregoing.
EXHIBIT B
LEGAL DESCRIPTION
Lot 1R in Block Two (2), Rushmore Regional Industrial Park, City of
Rapid City, as shown by the plat recorded in Book 16 of plats on page
107 in the office of the Register of Deeds, Xxxxxxxxxx County, South
Dakota.
