SECURITY AGREEMENT
Exhibit
10.2
This
Security Agreement ("Agreement") is made and executed on the 14th day of June,
2006 by and between Ascendant Solutions, Inc. ("Debtor") and Ampco Partners,
Ltd. ("Secured Party").
R
E C I T A L
S:
WHEREAS,
Debtor has of even date herewith executed a Promissory Note ("Note") payable
to
Secured Party in the original principal amount of Five Hundred Thousand and
no/100 Dollars ($500,000.00);
WHEREAS,
Debtor owns an interest (“Partnership Interest”) as a Limited Partner in Ampco
Partners, Ltd., the Secured Party. Debtor and other parties entered into a
partnership agreement dated April 5, 2002. Such partnership agreement was
amended and restated by Amended and Restated Agreement of Limited Partnership
(such Amended and Restated Agreement is hereinafter referred to as the
“Partnership Agreement”).
WHEREAS,
as security for the Note, the Secured Party requires that the Debtor grant
a
security interest in the aforesaid Partnership Interest to secure the payment
and performance of the Note.
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged
and
confessed, the parties hereto agree as follows:
1. The
Pledge and Security Interest.
The
Debtor hereby grants to the Secured Party a security interest in and to the
aforesaid Partnership Interest (herein sometimes called the
"Collateral").
2. The
Indebtedness.
This
Agreement is being executed and delivered to secure, and the security interests
herein granted (the "Security Interests") shall secure (a) full payment and
performance of all of the indebtedness and obligations owing to the Secured
Party by the Debtor under the Note; (b) all other indebtedness of the Debtor
under the Note (all of such debts, indebtedness, liabilities and duties referred
to in (a) and (b) of this paragraph are hereinafter collectively referred to
as
the "Indebtedness").
3. Representations
and Warranties of the Debtor.
The
Debtor represents and warrants to the Secured Party that: (a) the Debtor is
the
owner of the Collateral; (b) the Security Interests are first and prior Security
Interests in and to all of the Collateral; and (c) no dispute, right of set-off,
counterclaim or defenses exist with respect to all or any part of the
Collateral.
4. Affirmative
Covenants of the Debtor.
So long
as any part of the Indebtedness remain unpaid or unperformed, the Debtor
covenants and agrees to: (a) from time to time, and at any time, promptly
execute and deliver to the Secured Party all other assignments, certificates
and
supplemental documents, and do all other acts or things as the Secured Party
may
reasonably request in order to more fully evidence and perfect the security
interest herein created; (b) promptly furnish such information as the Secured
Party may reasonably request concerning the Collateral; (c) promptly notify
the
Secured Party of any change in the fact or circumstance warranted or represented
by the Debtor herein; and (d) promptly notify the Secured Party of any claim,
action, or proceeding with respect to the Collateral.
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5. Negative
Covenants of the Debtor.
The
Debtor further covenants and agrees that, without the prior written consent
of
the Secured Party, the Debtor will not (a) sell, assign or transfer any of
the
Debtor's rights in the Collateral; or (b) create any other security interest
in,
mortgage or otherwise encumber the Collateral, or any part thereof, or permit
the same to be or become subject to any lien, attachment, execution,
sequestration, other legal or equitable process or any encumbrance of any kind
or character, except the Security Interests herein created.
6. Default.
As used
herein, the term "Default" means the occurrence of one or more of the following,
including the passage of time or the giving of notice of both provided for
herein, if any: (a) the failure or refusal of Debtor to pay principal or
interest under the Note secured hereby; (b) the failure or refusal to timely
perform any nonmonetary obligations or covenants contained herein or in the
Note
secured hereby and such failure or refusal continues for a period of thirty
(30)
days after written notice to Debtor of such failure; (c) the sale, loss, theft,
destruction, encumbrance or transfer of any of the Collateral in violation
hereof, or substantial damage to of any the Collateral; (d) the commencement
of
any proceeding under any bankruptcy or insolvency law by or against the Debtor,
and such assignment or proceeding is not stayed or terminated within sixty
(60)
days; (e) the failure to have discharged within a period of thirty (30) days
any
levy on, seizure or attachment of the Collateral, or any part
thereof.
7. Remedies.
Upon
the occurrence of a Default, in addition to any and all other rights and
remedies which the Secured Party may then have hereunder, under the Uniform
Commercial Code of the State of Texas or of any other pertinent jurisdiction
(the "Code"), or otherwise, the Secured Party may, and at its option: (a)
foreclose or otherwise enforce the Security Interests, in whole or in part,
by
any available judicial procedure; (b) after notification, if any, provided
for
herein, sell, lease, or otherwise dispose of, at the office of the Secured
Party, on the premises of the Debtor, or elsewhere, all or any part of the
Collateral, in its then condition or following any commercially reasonable
preparation or processing, and any such sale or other disposition may be as
a
unit or in parcels, by public or private proceedings, and by way of one or
more
contracts (it being agreed that the sale of any part of the Collateral shall
not
exhaust the Secured Party's power of sale, but sales may be made from time
to
time, and at any time, until all of the Collateral has been sold or until the
Indebtedness has been paid and performed in full), and at any such sale it
shall
not be necessary to exhibit any of the Collateral; (c) enter upon the premises
where any of the Collateral not in the possession of Secured Party or its agent
is located and take possession thereof and remove the same, with or without
judicial process; (d) at its discretion, surrender any policies of insurance
on
the Collateral and receive the unearned premiums, and, as the agent and
attorney-in-fact for Debtor to collect such premiums; (e) at its discretion,
retain the Collateral in satisfaction of the Indebtedness where the
circumstances are such that the Secured Party is entitled to do so under the
Code or otherwise. Additionally, Secured Party shall have the right to offset
any distributions due the Debtor under the aforesaid Partnership Agreement
against any amounts due under the Note or under this Security Agreement. Such
distributions (collectively “Distributions”) shall include, but not be limited
to, Net Cash Flow, Capital Transaction Proceeds and all other payments to which
Debtor may be entitled under the Partnership Agreement.
8. Offset.
Debtor
hereby grants Secured Party the right to offset any and all Distributions due
Debtor under the Partnership Agreement and as a partner in the Partnership
against all amounts due under the Note. Such authorization shall be effective
immediately and shall continue without further notice or consent by
Debtor.
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9. Costs,
risks.
Debtor
covenants to promptly reimburse and pay to the Secured Party, at the Secured
Party's request, the amount of all reasonable expenses (including the costs
of
any insurance and payment of taxes or other changes) incurred by the Secured
Party in connection with its custody, preservation, use, or operation of the
Collateral, and, all such expenses, costs, taxes, and other charges shall be
a
part of the Indebtedness and shall bear interest at the maximum rate permitted
by applicable law from the date incurred until the date repaid to the Secured
Party. It is agreed, however, that the risk of loss or damage to such Collateral
is on the Debtor, and the Secured Party shall have no liability whatsoever
for
failure to obtain or maintain insurance, nor to determine whether any insurance
ever in force is adequate as to amount or as to the risks insured.
10. Notice.
Reasonable notification of the time and place of any public sale of the
Collateral, or reasonable notification of the time after which any private
sale
or other intended disposition of the Collateral is to be made (including
retention thereof in satisfaction if the Indebtedness), shall be sent to the
Debtor and to any person entitled under the Code to notice. It is agreed that
notice sent or given at least ten (10) calendar days prior to the taking of
the
action to which the notice relates is reasonable notification and notice for
the
purposes of this paragraph.
11. Rights
Cumulative.
All
rights and remedies of the Secured Party hereunder are cumulative of each other
and of every other right or remedy which the Secured Party may otherwise have
at
law or in equity or under any other contract or other writing for the
enforcement of the Security Interests herein or in the collection of the Note
or
the Indebtedness, and the exercise of one or more rights or remedies shall
not
prejudice or impair the concurrent or subsequent exercise of other rights and
remedies.
12. Assignment.
The
rights, powers and interests held by the Secured Party hereunder, together
with
the Collateral, may be transferred and assigned by the Secured Party, in whole
or in part, at such time and upon such terms as the Secured Party may deem
advisable.
13. Rights
of Secured Party.
Secured
Party shall have the rights contained in this Section 13 at all times during
the
period of time this Agreement is effective.
(a) Financing
Statements Filings.
Debtor
hereby authorizes Secured Party to file, without the signature of Debtor, one
or
more financing or continuation statements, and amendments thereto, relating
to
the Collateral. Debtor further agrees that a carbon, photographic or other
reproduction of this Security Agreement or any financing statement describing
any Collateral is sufficient as a financing statement and may be filed in any
jurisdiction Secured Party may deem appropriate.
(b) Power
of Attorney.
Debtor
hereby irrevocably appoints Secured Party as Debtor's attorney-in-fact, such
power of attorney being coupled with an interest, with full authority in the
place and stead of Debtor and in the name of Debtor or otherwise, after the
occurrence of an event of Default, to take any action and to execute any
instrument which Secured Party may deem necessary or appropriate to accomplish
the purposes of this Agreement, including without limitation: (i) to obtain
and
adjust insurance required by Secured Party hereunder; (ii) to demand, collect,
xxx for, recover, compound, receive and give acquittance and receipts for moneys
due and to become due under or in respect of the Collateral; (iii) to receive,
endorse and collect any drafts or other instruments, documents and chattel
paper
in connection with clause (i) or (ii) above; and
(iv)
to
file any claims or take any action or institute any proceedings which Secured
Party may deem necessary or appropriate for the collection and/or preservation
of the Collateral or otherwise to enforce the rights of Secured Party with
respect to the Collateral.
(c) Performance
by Secured Party.
If
Debtor fails to perform any agreement or obligation provided herein, Secured
Party may itself perform, or cause performance of, such agreement or obligation,
and the expenses of Secured Party incurred in connection therewith shall be
a
part of the Indebtedness, secured by the Collateral and payable by Debtor on
demand.
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14. No
Waivers.
No
failure on the part of the Secured Party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Secured Party of any
right, power or remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.
15. Binding
Effect.
This
Agreement shall be binding on the Debtor and Debtor's successors and assigns
and
shall inure to the benefit of the Secured Party, and the Secured Party's
successors and assigns.
16. Termination.
This
Agreement and the Security Interest in the Collateral will terminate when the
Indebtedness secured hereby has been paid in full by extinguishment thereof
but
not by renewal, modification or extension thereof.
17. Governing
Law.
The law
governing this Agreement will be that of the State of Texas in force on the
date
of execution of this Agreement. All obligations of the Debtor under the terms
of
this Agreement shall be performable in Dallas County, Texas.
18. Mailings.
Any
notice, request, instruction or other document required or permitted to be
delivered hereunder by either party hereto to the other shall be in writing
and
shall be delivered or mailed, registered or certified, postage prepaid,
addressed as follows:
To
the Debtor:
00000
Xxxxxx Xxxxxxx
Xxxxx
000
Xxxxxx,
Xxxxx 00000
To
the Secured Party:
000
Xxxxxx Xxxxx
Xxxxxxx,
Xxxxx 00000
or
to
such other address as any party hereto shall hereafter designate by written
notice to the other party.
19. Agreement
as Financing Statement.
The
Secured Party shall have the right at any time to execute and file this
Agreement as a financing statement, but the failure of the Secured Party to
do
so shall not impair the validity or enforceability of this
Agreement.
20. Severability.
If any
provision of this Agreement is held to be illegal, invalid, or unenforceable
under present or future laws effective during the term of this Agreement, the
legality, validity, and enforceability of the remaining provisions of this
Agreement shall not be affected thereby, and in lieu of each such illegal,
invalid, or unenforceable provision there shall be added automatically as a
part
of this Agreement a provision as similar in terms to such illegal, invalid,
or
unenforceable provision as may be possible and be legal, valid, and
enforceable.
21. Counterparts.
This
Agreement has been executed in a number of identical counterparts, each of
which, for all purposes, is to be deemed an original, and all of which
collectively constitute one agreement, but in making proof of this Agreement,
it
shall not be necessary to produce or account for one than one such
counterpart.
22. Number
and Gender of Words.
Whenever herein the singular is used, the same shall include the plural where
appropriate, and the words of any gender shall include each other where
appropriate.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the day, month and year first above written.
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DEBTOR:
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ASCENDANT
SOLUTIONS, INC.
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By:
/s/ Xxxx X. Xxxx
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Name:
Xxxx X. Xxxx
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Title:
Chief Financial Officer
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SECURED
PARTY:
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AMPCO
PARTNERS, LTD.
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By:
KRBL Management Company, Inc.,
General
Partner
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By:
/s/ Xxxxx Xxxx
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Name:
Xxxxx Xxxx
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Title:
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