Exhibit 10(jj)
SECURITY AGREEMENT
Date: October , 1995
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Debtor: SYTRON, INC.
Address: 0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Secured
Parties: KATONAH WEST PENSION PLAN at the above address
SPRINGHILL HOLDINGS, LTD.
XXXXXX HOLDINGS, LTD.
Address: 0 Xxxxxxxxx Xxxxx, Xxxxx Xxxxxx
Xx. Xxxxxx, Xxxxxx XX0 0XX
Channel Islands
1. Security Interest. Debtor hereby grants to Secured Parties a security
interest ("Security Interest") in all of the following property and in all
Proceeds and Products thereof in any form including, but not limited to,
insurance proceeds, all parts, accessories, attachments, special tools,
additions and accessions thereto and thereof, increases and profits received
therefrom, all substitutions therefor, goods represented by, and books and
records pertaznang thereto, whether any of the foregoing is now owned or
hereafter accuirec:
All accounts, inventory, equipment, fixtures and general intangibles
of Debtor now owned or hereafter acquired (hereinafter referred to as the
"Collateral")
2. Indebtedness Secured. The Security Interest granted by Debtor secures
payment of any and all indebtedness and liabilities of Debtor to Secured
Parties, whether now existing or hereafter incurred, of every kind and
character, direct or indirect, joint or several, absolute or contingent, due or
to become due, and whether any such indebtedness or liability is from time to
time reduced and thereafter increased or entirely extinguished and thereafter
reincurred, including, without limitation, any sums advanced by Secured Parties
for taxes, assessments, insurance and other charges and expenses as hereinafter
provided.
3. Representations and Warranties of Debtor. Debtor represents and warrants
and, so long as any Indebtedness remains unpaid, shall be deemed continuously to
represent and warrant that: (a) Debtor is the owner of the Collateral free of
all security interests, adverse claims or other encumbrances, except the
Security Interest and prior security interests in Debtor's Collateral and
accounts receivable, held by those parties
previously disclosed to Secured Parties, attached hereto as Exhibit "1". Secured
Parties hereby acknowledge that the security interest granted herein shall be
subordinate to those security interests included in Exhibit 1 previously granted
by Debtor; (b) Debtor is authorized to enter into this Security Agreement and
this Security Agreement is not in contravention of any law or any indenture,
agreement or undertaking to which Debtor is a party or by which it is bound; (c)
Debtor is duly organized and existing under the laws of the state of
Pennsylvania and in good standing and authorized to do business in all states in
which Debtor is doing business; (d) Debtor is engaged in business operations,
Debtor's business is carried on, Debtor's chief executive office is located and
Debtor's records concerning the Collateral are kept at the address specified
above and the Collateral is located at the address specified above; (e) each
Account, Chattel Paper, Document, Instrument, General Intangible, which is an
outstanding obligation, and Contract is genuine and enforceable in accordance
with its terms against the party obligated to pay it ("Account Debtor"); (f) any
amounts represented by Debtor to Secured Parties as owing by each or any Account
Debtor is the correct amount owing, not subject to any defense, offset, claim or
counterclaim against Debtor; and (g) the Collateral shall be used exclusively
for business purposes.
4. Covenants of Debtor. So long as any Indebtedness remains unpaid, Debtor
(a) will defend the Collateral against the claims and demands of all other
parties, including any Account Debtor, will keep the Collateral free from all
security interests or other encumbrances, except as disclosed herein and the
Security Interest and will not sell, transfer, lease, or otherwise dispose of
any Collateral or any interest, other than in the normal course of Debtor's
business, without the prior written consent of Secured Parties; (b) will notify
Secured Parties promptly in writing of any change in Debtor's address, specified
above or in Debtor's name, identity or corporate structure; (c) will notify
Secured Parties promptly in writing of any change in the location of any
Collateral or of the records with respect thereto or any additional locations at
which the Collateral or records are kept, and upon reasonable notice will permit
Secured Parties or its agents to inspect the Collateral; (d) will notify the
Secured Parties immediately upon the acquisition of any titled vehicle or other
assets constituting collateral which may not be perfected by the filing of a
financing statement under the Uniform Commercial Code; (e) in connection
herewith, will execute and deliver to Secured Parties such financing statements,
and other documents as may be requested by Secured Parties, will pay all
reasonable costs of title searches, and filing financing statements and other
documents in all public offices requested by Secured Parties, and will do such
other things as Secured Parties may request; (f) if the Collateral is not a
fixture, will prevent the Collateral or any part thereof from being or becoming
a fixture; (g) will keep, in accordance with generally accepted accounting
principles, consistently applied, accurate and complete books and records
concerning the Collateral, will xxxx any
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and all such records concerning the Collateral, at Secured Parties' request to
indicate the Security Interest, and will permit Secured Parties or its agents to
audit and make extracts from and copy such records or any of Debtor's books,
ledgers, reports, correspondence or other records and will furnish Secured
Parties with financial statements and such other information; (h) will not,
without Secured Parties's written consent, make or agree to make any alteration,
modification or cancellation of, or substitution for, or credits, adjustments or
allowances on, any Collateral; (i) will promptly notify Secured Parties of any
default by any Account Debtor in payment or performance of its obligations with
respect to any of the Collateral; and (j) will promptly notify the Secured
Parties in the event of a materially adverse change in business or Collateral or
any other occurrences which could materially and adversely affect the security
of the Secured Parties.
5. Verification of Collateral. Secured Parties shall have the right to
verify all or any Collateral in any manner and through any medium Secured
Parties may consider appropriate and Debtor agrees to furnish all assistance and
information and perform any acts which Secured Parties may require in connection
therewith.
6. Default.
(a) Any of the following events or conditions shall constitute an
event of default ("Event of Default") hereunder: (i) nonpayment when due,
whether by acceleration or otherwise, of, principal or of interest of any
Indebtedness, or failure by Debtor to perform any obligation, term or condition
of this Security Agreement or any other agreement between Debtor and Secured
Parties and such nonpayment or failure continues for a period of ten (10) days
after such Event of Default; (ii) nonpayment when due of any tax imposed on
Debtor or on any assets of Debtor or any other liability of Debtor for borrowed
money; (iii) if Debtor or any indorser or guarantor of any of the Indebtedness
commences a voluntary case under any Chapter of the Bankruptcy Code as now or
hereafter in effect, takes any equivalent or similar action by filing a petition
or otherwise under any other federal or state law in effect at such time
relating to bankruptcy or insolvency, makes a general assignment for the benefit
of creditors or admits in writing an inability to pay its debts generally as
they become due; (iv) a petition is filed against the Debtor, any general
partner of Debtor or any such indorser or guarantor under any other federal or
state law in effect at the time relating to bankruptcy or insolvency, or a
trustee, receiver, custodian or agent is appointed under applicable law, or
under contract, whose appointment or authority is to take charge of any property
of the Debtor, any general partner of Debtor or any such indorser or guarantor
is for the purpose of enforcing a lien against such property or is for the
purpose of general administration of such property for the benefit of the
creditors of the Debtor, any general partner of Debtor or any such indorser or
guarantor; and (v) if any certificate, statement, representation, warranty or
audit heretofore or
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hereafter furnished by or on behalf of Debtor pursuant to or in connection with
this Security Agreement or otherwise (including, without limitation,
representations and warranties contained herein) or as an inducement to Secured
Parties to extend any credit to or to enter into this or any other agreement
with Debtor, proves to have been false in any material respect or to have
omitted any substantial contingent or unliquidated liability of or claim against
Debtor, or if upon the date of execution of this Security Agreement, there shall
have been any materially adverse change in any of the facts disclosed by any
such certificate, representation, statement, warranty or audit, which change
shall not have been disclosed in writing to Secured Parties at or prior to the
time of such execution.
(b) The Secured Parties, either jointly or severally, at their sole
election, may declare all or any part of any Indebtedness not payable on demand
to be immediately due and payable upon the happening of any Event of Default.
The provisions of this paragraph are not intended in any way to affect any
rights of Secured Parties with respect to any Indebtedness which may now or
hereafter be payable on demand;
(c) Upon the happening of any Event of Default, Secured Parties'
rights and remedies with respect to the Collateral shall be those of a secured
party under the Uniform Commercial Code and under any other applicable law, as
the same may from time to time be in effect, in addition to those rights granted
herein and in any other agreement now or hereafter in effect between Debtor and
Secured Parties;
(d) Without in any way requiring notice to be given in the following
manner, Debtor agrees that any notice by any of the Secured Parties of sale,
disposition or other intended action hereunder in connection herewith, whether
required by the Uniform Commercial Code or otherwise, shall constitute
reasonable notice to Debtor if such notice is mailed by regular or certified
mail, postage prepaid, at least five (5) days prior to such action, to Debtor's
address specified above or to any other address which Debtor has specified in
writing to Secured Parties as the address to which notices hereunder shall be
given to Debtor; and
(e) Debtor agrees to pay all costs and expenses incurred by Secured
Parties in enforcing this Security Agreement, in preserving, processing,
selling, collecting upon or in realizing upon any Collateral and in enforcing
and collecting any Indebtedness, including, without limitation, if Secured
Parties retains counsel for any such purpose, a reasonable attorney's fee.
7. Miscellaneous.
(a) Debtor hereby authorizes Secured Parties, at Debtor's expense, to
file such financing statement or statements, or other documents relating to the
Collateral without Debtor's
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signature thereon as Secured Parties at their option may deem appropriate and
appoints Secured Parties as Debtor's attorney-in-fact without requiring Secured
Parties to execute any such financing statement or other documents in Debtor's
name and to perform all other acts which Secured Parties deems appropriate to
perfect and continue the Security Interest and to protect and preserve the
Collateral;
(b) After the occurrence of an Event of Default as hereinabove
describe, Secured Parties may notify any or all Account Debtors and other
parties obligated to pay the Collateral of the Security Interest granted hereby
and may also direct any and all such parties to make all payments of the
Collateral to Secured Parties;
(c) (i) As further security for payment of the Indebtedness, Debtor
hereby grants to Secured Parties a security interest in and lien on any and all
property of Debtor which is or may hereafter be in Secured Parties's possession
in any capacity, including, without limitation, all monies owed or to be owed by
Secured Parties to Debtor, and with respect to all of such property, Secured
Parties shall have the same rights hereunder as it has with respect to the
Collateral;
(ii) Without limiting any other right of Secured Parties, whenever
Secured Parties have the right to declare any Indebtedness to be immediately due
and payable (whether or not it has so declared), Secured Parties at their sole
election may set off against the Indebtedness any and all monies then owed to
Debtor by either of the Secured Parties in any capacity, whether or not due, and
Secured Parties shall be deemed to have exercised such right of set-off
immediately at the time of such election even though any charge therefor is made
or entered on Secured Parties' records subsequent thereto;
(d) Upon Debtor's failure to perform any of its duties hereunder after
applicable ten (10) day notice, Secured Parties may, but shall not be obligated
to, perform any and all such duties and Debtor shall pay an amount equal to the
expense thereof to Secured Parties forthwith upon written demand by Secured
Parties;
(e) Secured Parties may demand, collect and xxx on the Collateral (in
either Debtor's or Secured Parties' name, at the latter's option) with the right
to enforce, compromise, settle or discharge the Collateral and may indorse
Debtor's name on any and all checks, commercial paper, and any other Instruments
pertaining to or constituting the Collateral;
(f) No course of dealing and no delay or omission by Secured Parties
in exercising any right or remedy hereunder with respect to any Indebtedness
shall operate as a waiver thereof or of any other right or remedy and no single
or partial exercise thereof
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shall preclude any other or further exercise thereof or the exercise of any
other right or remedy. Secured Parties may remedy any default by Debtor
hereunder or with respect to any Indebtedness in any reasonable manner without
waiving the default remedied and without waiving any other prior or subsequent
default by Debtor. All rights and remedies of Secured Parties hereunder are
cumulative;
(g) Secured Parties shall have no obligation to take, and Debtor shall
have the sole responsibility for taking, any and all steps to preserve rights
against any and all prior parties to any Instrument or Chattel Paper, whether
Collateral or Proceeds and whether or not in Secured Parties' possession. Debtor
waives protest of any Instrument constituting Collateral at any time held by
Secured Parties on which Debtor is in any way liable;
(h) The rights and benefits of Secured Parties hereunder shall, if
Secured Parties so agree, inure to any party acquiring any interest in the
Indebtedness or any part thereof;
(i) If more than one Debtor executes this Security Agreement, the term
"Debtor" shall include each as well as all of them and their obligations,
warranties and representations as used herein, shall include the heirs,
executors or administrators and the successors or assigns of those parties;
(j) No modification, rescission, waiver, release or amendment of any
provision of this Security Agreement shall be made except by a written agreement
subscribed by Debtor and by a duly authorized officers of Secured Parties;
(k) All terms herein shall have the same definitions as set forth in
the Uniform Commercial Code of the State of Colorado unless otherwise defined
herein;
(1) This Security Agreement shall remain in full force and effect
until Secured Parties shall give written notice of its discontinuance to the
Debtor.
8. Risk of Loss. Debtor shall at all times bear the full risk of loss or
theft of, damage to or destruction of the Collateral.
9. Severability. If any provision of this Security Agreement shall be held
invalid under any applicable laws, such invalidity shall not affect any other
provision of this Security Agreement that can be given effect without the
invalid provision, and, to this end, the provisions hereof are severable.
10. Governing Law. This Security Agreement and the transactions evidenced
hereby shall be construed under the internal laws of the State of Colorado
without regard to principles of conflict of law.
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11. Execution by Secured Parties. This Agreement shall take effect
immediately upon execution by the Debtor and the execution hereof by the Secured
Parties shall not be required as a condition to the effectiveness of this
Security Agreement. The provision for execution by the Secured Parties is solely
for the purpose of filing this Security Agreement to the extent required or
permitted by law.
12. Notice. Any notice under this Agreement shall be in writing and shall
be deemed delivered if sent certified return receipt requested, to a party at
the principal place of business specified in this Agreement or such other
address as may be specified by notice given after the date hereof.
This Agreement shall have the effect of an instrument under seal.
ATTEST DEBTOR: SYTRON, INC.
/s/ Xxxxxx X. W By: /s/ Xxxxxxx X. Case
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Xxxxxxx X. Case, President
Secured Parties:
KATONAH WEST PENSION PLAN
By:
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Trustee
SPRINGHILL HOLDINGS, LTD.
By:
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XXXXXX HOLDINGS, LTD.
By:
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