EXHIBIT (c)(18)
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement") is entered into as of October
31, 1996, by and among The Cross Country Group, L.L.C. (the "Secured Party"),
Homeowners Marketing Services, Inc. ("HMSI") and Homeowners Marketing Services
International, Inc. ("HMSII" and collectively with HMSI, the "Debtors").
RECITALS
WHEREAS, simultaneous with the execution and delivery of this
Agreement, Secured Party has acquired from Acceleration National Insurance
Company of all its rights under that certain judgment in consolidated cases
styled Acceleration National Insurance Company v. Homeowners Marketing Services,
Inc., et al, in the Court of Common Pleas, Franklin County, Ohio, Case No. 9 1
CVHI 1-9404 and 94CVlD5-3083 (the "Judgment");
WHEREAS, Secured Party, Homeowners Group, Inc. and HMSI have,
contemporaneously with the execution of this Security Agreement, entered into a
Settlement Agreement with respect to the Judgment to, among other things, extend
the date by which amounts payable by HMSI must be paid (the "Settlement
Agreement");
WHEREAS, CC Acquisition Corporation, an affiliate of the Secured Party,
has confirmed its intent to consummate the transactions described in that
certain Agreement and Plan of Merger dated as of May 14, 1996 among CC
Acquisition Corporation, Homeowners Group, Inc. and The Cross Country Group,
Inc., as amended by amendment of even date herewith;
WHEREAS, Secured Party has required that Debtors enter into this
Security Agreement as a condition to the Secured Party entering into the
Settlement Agreement;
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the parties hereto
agree as follows-
1. HMSII Guaranty. In consideration of Secured Party's execution of the
Settlement Agreement, HMSII absolutely and unconditionally guarantees the
performance by HMSI of its obligations under the Judgment and the Settlement
Agreement, as amended (collectively, the "Obligations").
2. Security Interest. In consideration of and as an inducement for the
Secured Party's execution of the Settlement Agreement, Debtors hereby grant the
Secured Party a security interest (the "Security Interest") in each of the
assets of the Debtors (the "Collateral") to secure HMSI's Obligations and
HMSII's guaranty thereof
3. Representations and Warranties of Debtors. The Debtors represent and
warrant, and so long as the Judgment remains unpaid shall be deemed continuously
to represent and warrant, that:
(a) The Debtors are the owners of the Collateral free of all
security interests or other encumbrances except for the security interest in
favor of Secured Party,
(b) This Security Agreement is being executed on behalf of
Debtors by one or more properly authorized officers and all necessary actions
have been taken by Debtors to authorize such execution.
(c) The Debtors are engaged in business operations which are
carried on at the following address: 000 Xxxxxxxx Xxxxxxxxx Xxxxxxx, Xxxxxxx,
Xxxxxxx 00000.
4. Covenants of Debtors. So long as the Obligations of HMSI under the
Settlement Agreement and/or the Judgment remain outstanding, the Debtors: (a)
will defend the Collateral against the claims and demands of all other parties-
will keep the Collateral free from all security interests or other encumbrances
except the Security Interest; (b) will keep accurate and complete records
concerning the Collateral- at the Secured Party's request will xxxx any such
records and the Collateral to give notice of the Security Interest; (c) will,
upon demand, deliver to Secured Party any documents relating to the Collateral
or any part thereof, and any and all other schedules, documents and statements
which the Secured party may from time to time request- (d) win notify the
Secured Party promptly in writing of any change in the Debtors' address
specified above- and (e) in connection herewith will execute and deliver to the
Secured Party such financing statements and other documents, pay all costs of
and filing financing statements and other documents in all public offices
requested by the Secured Party and do such other things as the Secured Party may
request to protect the Collateral and Secured Party's Security Interest.
5. Defaults and Remedies. (a) In the event that HMSI shall default in
the performance of its Obligations under the Settlement Agreement and/or the
Judgment beyond any grace or cure period provided therein, and HMSII shall have
failed within five (5) days of notice of such default and expiration of any
applicable cure period from Secured Party to cure the same (such default and
failure to cure, an "Event of Default"), Secured Party shall have all rights
with respect to the Collateral as shall be provided to Secured Party under the
Uniform Commercial Code as then in effect in the State of Florida.
(b) The Debtors agree that any notice by the Secured Party of
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 Debtors if the notice is sent by a
recognized overnight delivery service at least ten (10) days before the action
to the Debtors' address as specified in this Agreement or to any other address
which the Debtors have specified in writing to the Secured Party as the address
to which notices shall be given to the Debtors.
6. Miscellaneous.
(a) The Debtors authorize the Secured Party at the Debtors'
expense to file any financing statement or other documents or statements
relating to the Collateral (without the Debtors' signature thereon) which the
Secured Party deems appropriate, and the Debtors appoint the Secured Party as
the Debtors' attorney-in-fact to execute any such financing statement or
statements in the
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Debtors' name and to perform all other acts which the Secured Party deems
sappropriate to perfect and to continue perfection of the Security Interest.
(b) After any Event of Default, the Secured Party may notify
any party obligated to pay proceeds of the existence of the obligation under the
Satisfaction Agreement and may direct them to make payments of all proceeds to
the Secured Party.
(c) No delay or omission by the Secured Party in exercising
any right hereunder or with respect to the Judgment and/or the Settlement
Agreement 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. All
rights and remedies of the Secured Party under this Agreement and under the
Uniform Commercial Code shall be deemed cumulative.
(d) The terms "Secured Party" and "Debtors" as used in this
Agreement include the heirs, personal representatives, and successors or assigns
of those parties.
(d) This Agreement may not be modified or amended nor shall
any provision of it be waived except in a writing signed by the Debtors and by
an authorized officer of the Secured Party.
(e) This Agreement shall be construed under the Florida
Uniform Commercial Code and any other applicable Florida laws in effect from
time to time.
(f) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of the remaining
provisions.
(g) All sections and descriptive headings in this Agreement
are inserted for convenience only, and shall not affect the construction or
interpretation hereof
(h) This Security Agreement is a continuing agreement which
shall remain in force and effect until all obligations under the Satisfaction
Agreement have been satisfied in fun.
(i) This Security Agreement may be signed in one or more
counterparts.
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IN WITNESS WHEREOF, each party has executed this Agreement by its duly
authorized representative as of the date set forth above.
HOMEOWNERS MARKETING SERVICES, INC.
By: /s/ C. Xxxxxxx Xxxxxx
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C. Xxxxxxx Xxxxxx, Vice President, Treasurer &
Chief Financial Officer
HOMEOWNERS MARKETING SERVICES
INTERNATIONAL, INC.
By: /s/ C. Xxxxxxx Xxxxxx
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C. Xxxxxxx Xxxxxx, Vice President, Treasurer &
Chief Financial Officer
THE CROSS COUNTRY GROUP, L.L.C.
By: /s/ Xxxxxx X. Xxxx
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