1
Exhibit 10.63
SECURITY AGREEMENT
This agreement is made effective March 27, 1997, at Columbus, Ohio,
between Crown NorthCorp, Inc., a Delaware corporation ("Debtor"), having its
principal place of business at 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 and The
Fifth Third Bank of Columbus, an Ohio banking corporation ("Secured Party"),
having its principal place of business at 00 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx
00000, who hereby agree as follows:
ss.
Grant of Security Interest. To secure the payment of all of the
Obligations (defined in ss.2, below), including without limitation all of the
Notes (defined in ss.2, below), Debtor grants to Secured Party a security
interest in, and pledges, assigns, and transfers to Secured Party, all of
Debtor's rights, title, and interests in and to all of the foregoing
(collectively referred to hereinafter as, the "Collateral"):
(a) All of Debtor's machinery, equipment, tools, furniture,
furnishings and fixtures including, but not limited to, all
manufacturing, fabricating, processing, transporting and packaging
equipment, power systems, heating, cooling and ventilating systems,
lighting and communications systems, electric, gas and water
distribution systems, food service systems, fire prevention, alarm and
security systems, laundry systems and computing and data processing
systems, excepting Debtor's leasehold interest in any of the above
("Equipment"); all of Debtor's inventory, including, but not limited
to, parts, supplies, raw materials, work in process, finished goods,
materials used or consumed in Debtor's business, repossessed and
returned goods (hereinafter the "Inventory"); all of Debtor's
accounts, accounts receivable, contract rights, guaranties of
accounts, accounts receivable and contract rights and security
therefor, chattel paper, income tax refunds, instruments, negotiable
documents, notes, drafts, acceptances and other forms of obligations
and receivables arising from or in connection with the operation of
Debtor's business including, but not limited to, those arising from or
in connection with Debtor's sale, lease or other disposition of the
Inventory (hereinafter the "Receivables"); and all books, records,
ledger cards, computer programs and other documents or property at any
time evidencing or relating to the Receivables; all of Debtor's
general intangibles, trade names, trademarks, trade secrets, goodwill,
patents, patent applications, copyrights, deposit accounts, licenses
and franchises; and any and all deposits or other sums at any time
credited by or due from the Secured Party to the Debtor, any and all
policies, certificates of insurance, securities, goods, accounts
receivable, choses in action, cash, property and the proceeds thereof
owned by the Debtor or in which the Debtor has an interest, which now
or hereafter are at any time in the possession or control of the
Secured Party or in transit by mail or carrier to or from the Secured
Party, or in the possession of any third party acting in the Secured
Party's behalf, without regard to whether the Secured Party received
the same in pledge for safekeeping, as agent for collection or
transmission or otherwise, or whether the Secured Party has
conditionally released the same (all of the
-1-
2
foregoing items and types of property hereinafter the "Business
Assets"); whether Debtor's interests in the Business Assets as owner,
co-owner, lessee, consignee, secured party or otherwise be now owned
or existing, or hereafter arising or acquired, and wherever located,
together with all substitutions, replacements, additions and
accessions therefor or thereto, all replacement and repair parts
therefor, all documents including, but not limited to, negotiable
documents, documents of title, warehouse receipts, storage receipts,
dock receipts, dock warrants, express bills, freight bills, airbills,
bills of lading and other documents relating thereto, all products
thereof and all cash and non-cash proceeds thereof including, but not
limited to, notes, drafts, checks, instruments, insurance proceeds,
indemnity proceeds, warranty and guaranty proceeds and proceeds
arising in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Business
Assets by any governmental body, authority, bureau or agency (or any
person acting under color of governmental authority); and
(b) All payments on and proceeds of any of the foregoing
Collateral, and including all rights to payments under any insurance
policy or any warranty, guaranty, or indemnity, payable with respect
to any of the foregoing Collateral.
ss.1. Obligations Secured. This agreement is being made in connection
with the Loan Agreement dated this same date between Debtor and Secured Party
(the "Loan Agreement") and shall secure all obligations of Debtor to Secured
Party, including without limitation all obligations arising under
(collectively, the "Obligations"): (a) the $750,000 Note, the $950,000 Note,
and the $125,000 Note (all as defined in the Loan Agreement and collectively,
the "Notes"); (b) the Loan Agreement; (c) all of Debtor's obligations under the
other Loan Documents (as defined in the Loan Agreement); and (d) any other
indebtedness to Secured Party, whether or not any such obligations are now or
hereafter evidenced by promissory notes or other documents and irrespective of
any guarantees or other security now or hereafter given for any such
obligations.
ss.2. Representations and Warranties. Debtor represents and warrants
to Secured Party that: (a) other than the Huntington Liens (defined below)
which Borrower is causing to be terminated and released of record prior to the
execution and delivery of this agreement, Debtor owns all of the Collateral
free and clear of all leases, security interests, liens, encumbrances, charges,
liabilities, or claims of any nature, except the security interest created by
this agreement; (b) other than financing statements relating to the Huntington
Liens and financing statements in favor of Secured Party, no financing
statements covering all or any part of the Collateral are on file with the
Secretary of State of any state, the recorder of any county, or any other
recording office; (c) upon filing UCC-3 termination statements relating to the
Huntington Liens, which Borrower will file immediately upon execution of this
agreement, this agreement will create a valid first-priority security interest
in all the Collateral securing the payment and performance of the Obligations;
and (d) all filings or other actions necessary or desirable to perfect and
protect such security interests, including without limitation the termination
and release of the Huntington Liens, have been duly made or taken or shall be
duly made or taken immediately upon execution of this agreement. For purposes
of this agreement, the "Huntington Liens" shall mean the first-
-2-
3
priority security interests and liens of The Huntington National Bank in all of
the business assets of Debtor, as modified by the Intercreditor Agreement among
Debtor, Secured Party, and The Huntington National Bank dated this same date
(the "Intercreditor Agreement"), which are security for the HNB Indebtedness
(as defined in the Intercreditor Agreement).
ss.3. Location of Office and Collateral. Debtor warrants that: (a)
Debtor's principal office and principal place of business in the State of Ohio
is located at the address specified at the beginning of this agreement (the
"Principal Office"); (b) Debtor's principal office and principal place of
business in the States of Georgia, Texas, New Jersey, Virginia, and Missouri
are located at the respective addresses specified on the Exhibit A attached to
this agreement (each, a "State Office"); (c) Debtor will not change the
location of the Principal Office in Ohio or the location of the State Office in
each of those states listed in (b), above, without the giving of written notice
to Secured Party not less than 15 days prior to any such change.
ss.4. Use of Collateral. Except in connection with the ordinary and
usual course of its business, Debtor shall not sell, assign, pledge, or
otherwise transfer or encumber any Collateral.
ss.5. Financing Statements. Debtor hereby irrevocably authorizes
Secured Party or Secured Party's designees to execute on behalf of Debtor such
one or more financing statements, continuation statements, or amendments
thereto, and such other instruments or notices as Secured Party may consider
necessary or desirable to perfect, protect, or preserve the security interest
granted or purported to be granted by this agreement.
ss.6. Execution of Documents. Debtor shall execute any documents and
take any other actions requested by Secured Party from time to time to perfect
or protect the security interest granted or purported to be granted by this
agreement or to enable Secured Party to exercise or enforce its rights or
remedies under this agreement.
ss.7. Event of Default. Upon the occurrence of an Event of Default (as
defined in the Loan Agreement), Secured Party may exercise with respect to the
Collateral all rights and remedies of a secured party upon default under the
Uniform Commercial Code as adopted and set forth in the Ohio Revised Code
(including without limitation Chapter 1309, Ohio Revised Code) and all other
rights and remedies under this agreement or otherwise available to Secured
Party. In any action or proceeding to enforce its rights or remedies under this
agreement, Secured Party shall be entitled forthwith to immediate exclusive
possession and control of the Collateral and to receive directly all payments
due or otherwise being made on any of the Collateral, and, upon ex parte
application by Secured Party to any court of competent jurisdiction without
notice to Debtor, shall be entitled to an order giving such immediate exclusive
possession and control to Secured Party or, if Secured Party so elects, to an
order appointing a receiver for the Collateral and without any requirement of
bond or other security and without any showing that immediate or irreparable
injury, loss, or damage will result if such an order is not issued by that
court. For purposes of this agreement, notice to Debtor prior to the date of
public sale of any Collateral or five days prior to the date after which
private sale or other disposition of any Collateral will be made shall
constitute reasonable notice of any such sale.
-3-
4
ss.8. Notices. All notices and other communications under this
agreement to be made to either Secured Party or Debtor shall be in writing and
shall be deemed given when delivered personally, telecopied (which is confirmed
electronically), or mailed by certified mail (return receipt requested) or sent
by Federal Express, UPS, or other nationally recognized overnight delivery
service for overnight delivery to that party at the address for that party (or
at such other address for such party as such party shall have specified in
notice to the other party):
(a) If to Secured Party:
The Fifth Third Bank of Columbus
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxx
Telecopy No.: (000) 000-0000
With a copy to Secured Party's Counsel:
Xxxxx & Xxxxxxxxx LLP
00 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) If to Debtor:
Crown NorthCorp, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Crown NorthCorp, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Telecopy No.: (000) 000-0000
ss.9. Governing Law. Except as to issues relating to perfection of the
security interests granted by Debtor to Secured Party in states other than
Ohio, which shall be construed and resolved under the laws of such other state,
all questions concerning the validity or meaning of
-4-
5
this agreement or relating to the rights and obligations of the parties with
respect to performance under this agreement shall be construed and resolved
under the laws of Ohio.
ss.10. Severability. The intention of the parties to this agreement is
to comply fully with all laws and public policies, and this agreement shall be
construed consistently with all laws and public policies to the extent
possible. If and to the extent that any court of competent jurisdiction
determines it is impossible to construe any provision of this agreement
consistently with any law or public policy and consequently holds that
provision to be invalid, such holding shall in no way affect the validity of
the other provisions of this agreement, which shall remain in full force and
effect.
ss.11. Venue. The parties to this agreement hereby designate the Court
of Common Pleas of Franklin County, Ohio, as a court of proper jurisdiction and
exclusive venue for any actions or proceedings relating to this agreement;
hereby irrevocably consent to such designation, jurisdiction, and venue; and
hereby waive any objections or defenses relating to jurisdiction or venue with
respect to any action or proceeding initiated in the Court of Common Pleas of
Franklin County, Ohio.
ss.12. Nonwaiver. No failure by either party to insist upon compliance
with any term of this agreement or to exercise any option, enforce any right,
or seek any remedy upon any default of either party shall affect or constitute
a waiver of the first party's right to insist upon such strict compliance,
exercise that option, enforce that right, or seek that remedy with respect to
that default or any prior, contemporaneous, or subsequent default; nor shall
any custom or practice of the parties at variance with any provision of this
agreement affect, or constitute a waiver of, either party's right to demand
strict compliance with the provisions of this agreement.
ss.13. No Third Party Benefit. This agreement is intended for the
exclusive benefit of the parties to this agreement and their respective heirs,
successors, and assigns, and nothing contained in this agreement shall be
construed as creating any rights or benefits in or to any third party.
ss.14. Jury Trial Waiver. Debtor, after consulting or having the
opportunity to consult with legal counsel, knowingly, voluntarily and
intentionally waives any right it may have to a trial by jury in any action or
proceeding based upon or arising out of this agreement or any of the Loan
Documents or any course of conduct, dealings, statements, whether oral or
written, or actions of either party. Debtor shall not seek to consolidate, by
counterclaim or otherwise, any action in which a jury trial has been waived
with any other action in which a jury trial cannot be or has not been waived.
ss.16. Complete Agreement. This agreement (including any exhibits and
any documents incorporated into this agreement by reference) contains the
entire agreement among the parties and supersedes any prior agreements,
negotiations, representations, or discussions among them with respect to the
subject matter of this agreement. No additions or other changes to this
agreement shall be binding upon either party unless made in writing and signed
by both parties.
-5-
6
ss.17. Counterparts. This agreement may be executed in multiple
counterparts, and all such executed counterparts shall constitute one original
agreement, binding on all of the parties, whether or not both of the parties
have executed the same counterparts and whether or not the signature pages from
different counterparts have been combined, and the signature of any party to
any counterpart shall be deemed to be that party's signature to any other
counterpart and may be appended to any other counterpart.
ss.18. Captions. The captions of the various sections of this
agreement are not part of the context of this agreement, but are only labels to
assist in locating those sections, and shall be ignored in construing this
agreement.
ss.19. Survival. All agreements, obligations, warranties, and
representations under this agreement shall survive any modifications made by
either party to this agreement.
ss.20. Genders and Numbers. When permitted by the context, each
pronoun used in this agreement includes the same pronoun in other genders or
numbers and each noun used in this agreement includes the same noun in other
numbers.
ss.21. Successors. This agreement shall be binding upon, inure to the
benefit of, and be enforceable by and against the respective heirs, personal
representatives, successors and assigns of each party to this agreement.
ss.22. Cumulative Effect. This agreement is intended as additional
security to Secured Party and does not supersede, waive, or otherwise affect
any other security interests, guarantees, or other agreements between Secured
Party and Debtor.
CROWN NORTHCORP, INC. THE FIFTH THIRD BANK OF
COLUMBUS
By /s/ By /s/
Print Name: Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxx
Its: Senior Vice President Vice President
-6-
7
EXHIBIT A
-7-
8
EXHIBIT A
1. Atlanta, Georgia Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
2. Austin, Texas Office
Prime TEMPUS
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
3. Dallas, Texas Office
Park Central VII
00000 Xxxxx Xxxxx
Xxxxx 0000
Xxxxxx, XX 00000
4. Columbus, Ohio Xxxxxx
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
5. Hoboken, New Jersey Xxxxxx
0 Xxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
6. McLean, Virginia Xxxxxx
x/x Xxxxxxx Xxxxxx
Xxxxx 000
0000 Xxxxxxxxxx Xxxx
XxXxxx, XX 00000
