THIS AGREEMENT SECURES
OBLIGATORY ADVANCES MADE
FOR COMMERCIAL PURPOSES
AMENDED AND RESTATED
SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Security Agreement"), dated
as of April 30, 1996 made by PLASTI-LINE, INC., a Tennessee corporation,
XXXXXX-XXXX, INC., a Georgia corporation, and AMERICAN SIGN AND MARKETING
SERVICES, INC., a Kentucky corporation (each a "Grantor" and collectively, the
"Grantors") to SUNTRUST BANK, EAST TENNESSEE, N.A., a national banking
association, Knoxville, Tennessee (the "Administrative Agent"), acting in its
capacity as collateral and administrative agent for the equal and ratable
benefit of (a) SunTrust Bank, East Tennessee, N.A. as lender ("SunTrust")
pursuant to the terms of a $9,500,000 Amended and Restated Revolving Credit Note
dated as of the date hereof made by the Grantors payable to SunTrust (as such
may be amended, modified, restated or supplemented from time to time, the
"SunTrust Note") and (b) National City Bank, Kentucky ("NCB"), a national
banking association, as lender pursuant to the terms of an $9,500,000 Revolving
Credit Note dated as of the date hereof made by the Grantors payable to NCB (as
such may be amended, modified, restated or supplemented from time to time, the
"NCB Note") (hereinafter the SunTrust Note and the NCB Note are referred to
collectively as the "Notes", and SunTrust and NCB in their capacities as lenders
under the Notes and pursuant to the terms of the Amended and Restated Credit
Agreement by and among the Grantors, the Administrative Agent and SunTrust and
NCB as lenders dated as of the date hereof (as such may be amended, modified,
restated or supplemented from time to time, the "Credit Agreement") are referred
to collectively as the "Lenders"), recites and provides:
W I T N E S S E T H :
WHEREAS, pursuant to the Notes and the Credit Agreement, the Lenders have agreed
to extend revolving credit loans (collectively, the "Loans") to the Grantors in
an aggregate principal amount not to exceed $19,000,000 in accordance with their
respective Commitments for those business purposes set forth in the Credit
Agreement; and WHEREAS, the Lenders are willing to make the Loans and enter into
the Credit Agreement, but only upon the condition, among
others, that the Grantors shall have executed and delivered this Security
Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Defined Terms. The following capitalized terms when used herein
shall have the meanings set forth below. Capitalized terms not defined herein
shall have the meanings set forth in the Credit Agreement. "Accounts": any
"Account", as such term is defined in Section 9-106 of the Code, in which the
Grantors shall now or hereafter have any right, title or interest.
"Account Debtor": the party who is obligated on an
Account.
"Administrative Agent": the meaning set forth in the
preamble to this Security Agreement.
"Chattel Paper": any "chattel paper", as such term is
defined in Section 9-105 of the Code, in which the Grantors
shall now or hereafter have any right, title or interest.
"Code": the Uniform Commercial Code as adopted in
Tennessee, as amended from time to time.
"Collateral": the meaning assigned to it in Section
2 of this Security Agreement.
"Collateral Account": the meaning assigned to it in
Section 3 of this Security Agreement.
"Credit Agreement": the meaning set forth in the
preamble to this Security Agreement.
"Documents": any "documents", as such term is defined
in Section 9-105 of the Code, in which the Grantors shall
now or hereafter have any right, title or interest.
"Event of Default": any of the events specified in
Section 8 of this Security Agreement.
"General Intangibles": any "general intangibles", as
such term is defined in Section 9-106 of the Code, in which
the Grantors shall now or hereafter have any right, title or
interest.
"Grantor" and "Grantors": the meanings set forth in the preamble to this
Security Agreement.
"Instrument": any "instrument", as such term is defined in Section 9-105 of
the Code, in which the Grantors shall now or hereafter have any right, title or
interest.
"Inventory": any "inventory", as such term is defined in Section 9-109(4)
of the Code, in which the Grantors shall now or hereafter have any right, title
or interest.
"Lenders": the meaning set forth in the preamble to this Security
Agreement.
"Lien": any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind whatsoever (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction).
"Loan Documents": the meaning set forth in the Credit Agreement, and also
including any and all documents and instruments executed in connection therewith
(as such may be amended, modified, restated or supplemented from time to time).
"Loans": the meaning set forth in the recitals to this Security Agreement.
"NCB": the meaning set forth in the preamble to this Security Agreement.
"Notes": the meaning set forth in the recitals to this Security Agreement.
"Obligations": all indebtedness, liabilities and obligations of any and all
of the Grantors to the Lenders, and/or either Lender, now existing or hereafter
incurred, direct or indirect, absolute or contingent, secured or unsecured,
matured or unmatured, joint or several, whether for principal, interest, fees,
expenses or other costs, whether arising out of or in connection with any Loan
Document, and whether written or oral, or arising by operation of law and
whether or not evidenced by promissory notes or other evidence of indebtedness.
"Permitted Liens": Liens permitted to exist under the Credit Agreement.
"Proceeds": any "proceeds", as such term is defined in Section 9-306 of the
Code.
"Security Agreement": this Security Agreement, as such may be amended,
modified, restated or supplemented from time to time.
"SunTrust": the meaning set forth in the recitals to this Security
Agreement.
Section 2. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due of all the Obligations, the
Grantors hereby sell, assign, convey, mortgage, pledge, hypothecate and transfer
to the Administrative Agent for the equal and ratable benefit of the Lenders,
all of the following property of Grantors (all of which being hereinafter
collectively referred to as the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Documents;
(iv) all General Intangibles;
(v) all Instruments;
(vi) all Inventory;
(vii) all Grantors' books of account, records,
ledger sheets and documents relating to the
foregoing; and
(viii) to the extent not otherwise included, all
Proceeds and products of any or all of the
foregoing.
Section 3. Rights of the Administrative Agent. (a) If required by the
Administrative Agent at any time after the occurrence of an Event of Default,
any Proceeds collected by any or all of the Grantors and received as payment in
respect of any Collateral shall be promptly deposited by the Grantor(s) in
precisely the form received, except for its endorsement when required, in a
special bank account maintained by the Administrative Agent (the "Collateral
Account"), subject to withdrawal by the Administrative Agent only, as
hereinafter provided, and until so turned over, shall be deemed to be held in
trust by the Grantor(s) for and as the property of the Administrative Agent and
shall not be commingled with the Grantors' other funds. Such proceeds, when
deposited, shall continue to be collateral security for all of the Obligations
and shall not constitute payment thereof until applied as hereinafter provided.
If an Event of Default shall have occurred and be continuing, the Administrative
Agent shall, at such intervals as
it shall determine, apply all or any part of the funds on deposit in the
Collateral Account on account of the principal of and/or interest on any of the
Obligations, the order and method of such application to be in the discretion of
the Administrative Agent, and any part of such funds which the Administrative
Agent elects not so to apply and deems not required as collateral security for
the Obligations shall be paid over from time to time by the Administrative Agent
to the Grantor(s). If an Event of Default shall not be continuing, funds
deposited in the Collateral Account shall be immediately released to the
Grantor(s). At the Administrative Agent's request, the Grantor(s) shall deliver
to the Administrative Agent all original and other documents evidencing, and
relating to, the sale and delivery of Inventory or the performance of labor or
service which created the Accounts, including, but not limited to, all original
orders, invoices and shipping receipts.
(b) The Administrative Agent may at any time notify Account Debtors that
the Accounts have been assigned to the Administrative Agent and that payments
shall be made directly to the Administrative Agent. Upon the request of the
Administrative Agent at any time, the Grantors will so notify such Account
Debtors. The Administrative Agent may in its own name or in the name of others
communicate with Account Debtors in order to verify with them, to the
Administrative Agent's satisfaction, the existence, amount and terms of any
Accounts.
(c) The Administrative Agent shall have the right to make test
verifications of the Accounts in any manner and through any medium it considers
advisable, and the Grantors agree to furnish all such assistance and information
as the Administrative Agent may require in connection therewith. The Grantors at
their expense will cause independent public accountants satisfactory to the
Administrative Agent to furnish to the Administrative Agent at any time and from
time to time promptly upon the Administrative Agent's request, the following
reports: (i) reconciliation of all Accounts, (ii) an aging of all Accounts,
(iii) trial balances, and (iv) a test verification of such Accounts.
Section 4. Representations and Warranties. The Grantors hereby represent
and warrant that:
(a) This Security Agreement constitutes a valid obligation of the Grantors,
legally binding upon them and enforceable in accordance with its terms. No
consent of any other party (including, without limitation, any stockholders or
other creditors of the Grantors) and no consent, license, approval or
authorization of, or registration or declaration with, any governmental
authority, except for filings of financing statements in the appropriate filing
offices, all of which have been duly made or are presently contemplated
to be made, is required in connection with the execution, delivery,
performance, validity or enforceability of this Security Agreement with respect
to Collateral in existence on the date hereof.
(b) The Grantors are (or, in the case of after- acquired property, will be)
the sole owner or owners, as applicable, of each item of the Collateral, having
good and marketable title thereto, free and clear of any and all Liens except
for Permitted Liens. No amounts payable under or in connection with any of the
Collateral are evidenced by promissory notes or other instruments.
(c) No security agreement, financing statement, equivalent security or Lien
instrument or continuation statement covering all or any part of the Collateral
is on file or of record in any public office, except such as may have been filed
in connection with the Permitted Liens or except as may otherwise have been
disclosed to the Administrative Agent.
(d) This Security Agreement constitutes a valid and continuing Lien on the
Collateral, and upon the proper filing of financing statements in accordance
with the Code, Administrative Agent shall possess a perfected security interest
in the Collateral in favor of the Administrative Agent (excepting that
Collateral in which a security interest cannot be perfected under the Code by
the filing of financing statements), and such security interest shall be prior
to all other liens, encumbrances, security interests and rights of others except
for Permitted Liens, and is enforceable as such as against creditors of and
purchasers from the Grantors. All action necessary or desirable to protect and
perfect such security interest in each item of the Collateral currently existing
has been duly taken or is presently contemplated to be taken.
(e) The Grantors' principal places of business and chief executive offices
and the locations where their records concerning the Collateral are kept is set
forth on Exhibit A attached hereto (hereinafter, collectively, the "Main
Offices"), and the Grantors will not change the Main Offices or remove such
records therefrom without the express prior written consent of the
Administrative Agent. The Inventory is located at the Main Offices.
(f) The amount represented by the Grantors to the Administrative Agent from
time to time as owing by each Account Debtor or by all Account Debtors in
respect of the Accounts will at such time be the correct amount actually and
unconditionally owing by such Account Debtors thereunder.
(g) The only names under which the Collateral is owned, used or sold are
the names of the Grantors as described in this Security Agreement.
(h) Each Schedule and/or Exhibit hereto contains true and complete
information with respect to the subject matter covered thereby.
Section 5. Covenants. Each of the Grantors covenants and agrees that from
and after the date of this Security Agreement and until the Obligations are
fully satisfied:
(a) Further Documentation. At any time and from time to time, upon the
written request of the Administrative Agent, and at the sole expense of the
Grantors, the Grantors will promptly and duly execute and deliver any and all
such further instruments and documents and take such further action as the
Administrative Agent may reasonably deem desirable in obtaining the full
benefits of this Security Agreement and the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Code with respect to the Liens and security interests
granted hereby, transferring Collateral to the Administrative Agent's possession
and using its best efforts to obtain waivers from any landlords and mortgagees.
The Grantors also hereby authorize the Administrative Agent to file any such
financing or continuation statement without the signature of the Grantors to the
extent permitted by applicable law.
(b) Limitation on Liens on Collateral. The Grantors will not create, permit
or suffer to exist, and will defend the Collateral against and take such other
action as is necessary to remove, any Lien on the Collateral except Permitted
Liens and will defend the right, title and interest of the Administrative Agent
in and to any of the Grantors' rights in the Collateral and in and to the
Proceeds and products thereof against the claims and demands of all persons
whomsoever.
(c) Limitations on Dispositions of Collateral. The Grantors will not sell,
transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer
or contract to do so except such as are in the ordinary course of Grantors'
businesses.
(d) Further Identification of Collateral. The Grantors will furnish to the
Administrative Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.
(e) Notices. The Grantors will advise the Administrative Agent
promptly, in reasonable detail, (i) of any Lien asserted or claim made
against any of the Collateral, (ii) of any material change in the
composition of the Collateral, (iii) of the occurrence of any other
event which would have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereunder and
(iv) of any Event of Default hereunder.
(f) Continuous Perfection. No Grantor will change its name,
identity or corporate structure in any manner which might make any
financing or continuation statement filed hereunder seriously
misleading within the meaning of Section 9-402(7) of the Code, unless
such Grantor shall have given the Administrative Agent at least 30
days' prior written notice thereof, or shall have delivered to the
Administrative Agent acknowledgment copies of UCC-3 financing
statements duly executed and duly filed in each jurisdiction in which
UCC-l filings were required in order to perfect the security interest
granted by this Security Agreement in the Collateral and shall have
taken all action (or made arrangements to take such action
substantially simultaneously with such change if it is impossible to
take such action in advance) necessary or reasonably requested by the
Administrative Agent to amend such financing statement or continuation
statement so that it is not seriously misleading.
Section 6. Administrative Agent's Appointment as Attorney- in-Fact.
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, from time to time in the Administrative Agent's discretion, for the
purpose of carrying out the terms of this Security Agreement, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this Security
Agreement.
Section 7. Performance by Administrative Agent of Grantors'
Obligations. If any Grantor fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for by the
terms of this Security Agreement, shall itself perform or comply, or otherwise
cause performance or compliance, with such agreement, the expenses of the
Administrative Agent incurred in connection with such performance or compliance,
together with interest thereon at the highest rate provided for in respect of
the Notes, shall be
payable by such Grantor to the Administrative Agent on demand and shall
constitute Obligations secured hereby.
Section 8. Events of Default. Each of the following shall
constitute an Event of Default under this Security Agreement:
(a) Failure of any Grantor to perform or observe any
covenant set forth herein;
(b) Discovery by the Administrative Agent or either Lender
that any representation or warranty made by the Grantors herein, or any
statement or representation made in any certificate, report or opinion delivered
pursuant hereto or in connection herewith was materially untrue or is breached
in any material respect; or
(c) The occurrence of an Event of Default under or
with respect to any Loan Document.
Section 9. Remedies, Rights Upon Default. (a) If an Event
of Default shall occur and be continuing:
(i) All payments received by any and all Grantors under or in
connection with any of the Collateral shall be held by such Grantor(s)
in trust for the Administrative Agent, shall be segregated from other
funds of such Grantor(s) and shall forthwith upon receipt by such
Grantor(s), be turned over to the Administrative Agent, in the same
form as received by such Grantor(s) (duly indorsed by such Grantor(s)
to the Administrative Agent, if required). Any and all such payments so
received by the Administrative Agent (whether from any Grantor or
otherwise) may, in the sole discretion of the Administrative Agent, be
held by the Administrative Agent as collateral security for, and/or
then or at any time thereafter applied in whole or in part by the
Administrative Agent, against all or any part of the Obligations in
such order as the Administrative Agent shall elect. Any balance of such
payments held by the Administrative Agent and remaining after payment
in full of all the Obligations shall be paid over to the Grantor(s) or
to whomsoever may be lawfully entitled to receive the same.
(ii) The Administrative Agent may exercise in addition to all
other rights and remedies granted to it in this Security Agreement and
in any other instrument or agreement securing, evidencing or relating
to the Obligations, all rights and remedies of a secured party under
the Code.
(iii) Upon request of the Administrative Agent, the Grantors
shall assemble the Collateral, make it available to the Administrative
Agent at a place or places which the Administrative Agent shall select
which shall be reasonably
convenient to the Administrative Agent and the Grantors, whether at a
Grantor's premises or elsewhere. To the extent permitted by applicable
law, the Grantors waive all claims, damages, and demands against the
Administrative Agent and the Lenders arising out of the repossession,
retention or sale of the Collateral. The Grantors agree that the
Administrative Agent need not give more than 10 days' notice (which
notification shall be deemed given when mailed, postage prepaid,
addressed to the Grantors at their respective addresses set forth in
Section 12 hereof) of the time and place of any public sale or of the
time after which a private sale may take place and that such notice is
reasonable notification of such matters.
(b) The Grantors also agree to pay all costs of the
Administrative Agent and any Lender, including reasonable attorneys' fees,
incurred with respect to the collection of any of the Obligations and the
enforcement of any of their respective rights hereunder.
(c) The Grantors hereby waive presentment, demand, protest or
any notice (to the extent permitted by applicable law) of any kind in connection
with this Security Agreement or any Collateral, except as otherwise provided
herein or in the Credit Agreement.
Section 10. Limitation on Administrative Agent's Duty in Respect of
Collateral. Beyond the safe custody thereof, the Administrative Agent shall not
have any duty as to any Collateral in its possession or control or in the
possession or control of any agent or nominee of it or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto. The powers conferred on the Administrative Agent hereunder
are solely to protect the Lenders' respective interests in the Collateral and
shall not impose any duty upon the Administrative Agent to exercise any such
powers. The Administrative Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither it nor
any of its officers, directors, employees or agents shall be responsible to the
Grantors for any act or failure to act, except for its own gross negligence or
willful misconduct.
Section 11. Concerning Administrative Agent. In furtherance and not in
derogation of the rights, privileges and immunities of Administrative Agent set
forth herein and in the Loan Documents, Administrative Agent is authorized to
take all such action as is provided to be taken by it hereunder and all other
action reasonably incidental thereto. As to any matters not expressly provided
for herein (including the timing and methods of realization upon the
Collateral), Administrative Agent may act or
refrain from acting in the exercise of its sole and absolute
discretion.
Section 12. Notices. All notices hereunder to either party
hereto shall be delivered:
(a) if to the Grantors, in all cases to:
Plasti-Line, Inc.
Attn: Xxxx X. Xxxxxxxx
000 Xxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Fax: (000) 000-0000
(b) if to any Lender, in all cases to the Administrative
Agent at:
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
(Attn: T. L. "Chip" Xxxxxxxxx)
Fax: (000) 000-0000
with a copy to:
National City Bank, Kentucky
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
(Attn: Xxxxxx Xxxx)
Fax: (000) 000-0000
Section 13. Severability. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 14. Successors and Assigns; Governing Law. This
-------------------------------------
Security Agreement and all obligations of the Grantors hereunder
shall be binding upon the successors and assigns of the Grantors,
and shall, together with the rights and remedies of the
Administrative Agent hereunder, inure to the benefit of the
Administrative Agent and its successors and assigns. This
Security Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of
Tennessee.
Section 15. Amendments. This Security Agreement may be
modified or amended only by a writing executed by the parties
hereto.
Section 16. Entire Agreement. This Security Agreement
constitutes the entire agreement as to the matters set forth
herein and supersedes all prior oral discussions or agreements as
to the matters set forth herein.
Section 17. Waivers. Administrative Agent may at any time and from time
to time waive any one or more of the terms, covenants, provisions or conditions
contained in this Security Agreement, but any such waiver shall be deemed made
in pursuance hereof or thereof and not in modification thereof, and any such
waiver in any particular instance or circumstance shall in no event or under any
circumstance be considered a waiver of any such term, covenant, provision or
condition in any other instance or any other circumstance.
Section 18. Amendment and Restatement. This Security
Agreement amends and restates the Security Agreement dated as of
November 2, 1995 by and among SunTrust, Plasti-Line, Inc., CM
Acquisition Corp. and American Sign and Marketing Services, Inc.
IN WITNESS WHEREOF, each of the Grantors and the Administrative Agent
have caused this Security Agreement to be executed by their duly authorized
officers as of the date first set forth above.
SUNTRUST BANK, EAST TENNESSEE
N.A., as Administrative Agent
By: /s/ T.L. Chip Xxxxxxxxx
X.X. "Chip" Xxxxxxxxx
Title: Vice President
PLASTI-LINE, INC., as Grantor
By: /s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
Title: Vice President - Finance
XXXXXX-XXXX, INC., as Grantor
By: /s/ Xxxx X. Xxxxxxxx
Title: Secretary - Treasurer
AMERICAN SIGN AND MARKETING
SERVICES, INC., as Grantor
By: /s/ Xxxx X. Xxxxxxxx
Title: Secretary
EXHIBIT A
Plasti-Line, Inc.
000 Xxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Xxxxxx-Xxxx, Inc.
0000 Xxxx Xxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
American Sign and Marketing Services, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
