EXHIBIT 10.59
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of February 27, 2003, between XXXXXXX FOOD
SERVICE, INC., a Delaware corporation (the "Company"), and OLD NATIONAL BANK, a
national banking association (the "Lender").
WHEREAS, the Company has entered into a Credit Agreement dated as of
even date (as amended and in effect from time to time, the "Credit Agreement"),
with the Lender, pursuant to which the Lender, subject to the terms and
conditions contained therein, is to make loans or otherwise to extend credit to
the Company; and
WHEREAS, it is a condition precedent to the Lender's making any loans
or otherwise extending credit to the Company under the Credit Agreement that the
Company execute and deliver to the Lender a security agreement in substantially
the form hereof, and
WHEREAS, the Company wishes to grant security interests in favor of the
Lender as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. All capitalized terms used herein without
definitions shall have the respective meanings provided therefor in the Credit
Agreement. The term "State", as used herein, means the State of Indiana. All
terms defined in the Uniform Commercial Code of the State and used herein shall
have the same definitions herein as specified therein. However, if a term is
defined in Article 9 of the Uniform Commercial Code of the State differently
than in another Article of the Uniform Commercial Code of the State, the term
has the meaning specified in Article 9.1 The term "Obligations", as used herein,
means all of the indebtedness, obligations and liabilities of the Company to the
Lender, individually or collectively, whether direct or indirect, joint or
several, absolute or contingent, due or to become due, now existing or hereafter
arising under or in respect of the Credit Agreement, any promissory notes,
guaranties or other instruments or agreements executed and delivered pursuant
thereto or in connection therewith or this Agreement, and the term "Event of
Default", as used herein, means the failure of the Company to pay or perform any
of the Obligations as and when due to be paid or performed under the terms of
the Credit Agreement.
2. GRANT OF SECURITY INTEREST. The Company hereby grants to the
Lender, to secure the payment and performance in full of all of the Obligations,
a security interest in and so pledges and assigns to the Lender the following
properties, assets and rights of the Company, wherever located, whether now
owned or hereafter acquired or arising, and all proceeds and products thereof
(all of the same being hereinafter called the "Collateral"): all personal and
fixture property of every kind and nature including without limitation all goods
(including inventory, equipment and any accessions thereto), instruments
(including promissory notes), documents, accounts (including health-care
insurance receivables), chattel paper (whether tangible or electronic), deposit
accounts, letter-of-credit rights (whether or not the letter of credit is
evidenced by a writing), commercial tort claims, securities and all other
investment property, supporting obligations, any other contract rights or rights
to the payment of money, insurance claims and proceeds, tort claims, and all
general intangibles including, without limitation, all payment intangibles,
patents, patent applications, trademarks, trademark applications, trade names,
copyrights, copyright
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applications, software, engineering drawings, service marks, customer lists,
goodwill, and all licenses, permits, agreements of any kind or nature pursuant
to which the Company possesses, uses or has authority to possess or use property
(whether tangible or intangible) of others or others possess, use or have
authority to possess or use property (whether tangible or intangible) of the
Company, and all recorded data of any kind or nature, regardless of the medium
of recording including, without limitation, all software, writings, plans,
specifications and schematics. The Lender acknowledges that the attachment of
its security interest in any commercial tort claim as original collateral's
subject to the Company's compliance with Section 4.7 hereof.
3. AUTHORIZATION TO FILE FINANCING STATEMENTS. The Company hereby
irrevocably authorizes the Lender at any time and from time to time to file in
any Uniform Commercial Code jurisdiction any initial financing statements and
amendments thereto that (a) indicate the Collateral (i) as all assets of the
Company or words of similar effect, regardless of whether any particular asset
comprised in the Collateral falls within the scope of Article 9 of the Uniform
Commercial Code of the State or such Jurisdiction, or (ii) as being of an equal
or lesser scope or with greater detail, and (b) contain any other information
required by part 5 of Article 9 of the Uniform Commercial Code of the State for
the sufficiency or filing office acceptance of any financing statement or
amendment, including (i) whether the Company is an organization, the type of
organization and any organization identification number issued to the Company
and, (ii) in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of real property to which the Collateral relates. The
Company agrees to furnish any such information to the Lender promptly upon
request. The Company also ratifies its authorization for the Lender to have
filed in any Uniform Commercial Code Jurisdiction any like initial financing
statements or amendments thereto if filed prior to the date hereof.
4. OTHER ACTIONS. Further to insure the attachment, perfection
and first priority of, and the ability of the Lender to enforce, the Lender's
security interest in the Collateral, the Company agrees, in each case at the
Company's own expense, to take the following actions with respect to the
following Collateral:
4.1. PROMISSORY NOTES AND TANGIBLE CHATTEL PAPER. If the
Company shall at any time hold or acquire any
promissory notes or tangible chattel paper, the
Company shall forthwith endorse, assign and deliver
the same to the Lender, accompanied by such
instruments of transfer or assignment duly executed
in blank as the Lender may from time to time specify.
4.2. DEPOSIT ACCOUNTS. For each deposit account that the
Company at any time opens or maintains, the Company
shall, at the Lender's request and option, pursuant
to an agreement in form and substance satisfactory to
the Lender, either (a) cause the depositary bank to
agree to comply at any time with instructions from
the Lender to such depositary bank time directing the
disposition of funds from time to time credited to
such deposit account, without further consent of the
Company, or (b) arrange for the Lender to become the
customer of the depositary bank with respect to the
deposit account, with the Company being permitted,
only with the consent of the Lender, to exercise
rights to withdraw funds from such deposit account.
The Lender agrees with the Company that the Lender
shall not give any such instructions or withhold any
withdrawal rights from the Company, unless an Event
of Default has occurred and is continuing, or, after
giving effect to any withdrawal not otherwise
permitted by the Loan Documents,
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would occur. The provisions of this paragraph shall
not apply to (i) any deposit account for which the
Company, the depositary bank and the Lender have
entered into a cash collateral agreement specially
negotiated among the Company, the depositary bank and
the Lender for the specific purpose set forth
therein, (ii) deposit accounts for which the Lender
is the depositary and (iii) deposit accounts
specially and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to
or for the benefit of the Company's salaried
employees.
4.3. INVESTMENT PROPERTY. If the Company shall at any time
hold or acquire any certificated securities, the
Company shall forthwith endorse, assign and deliver
the same to the Lender, accompanied by such
instruments of transfer or assignment duly executed
in blank as the Lender may from time to time specify.
If any securities now or hereafter acquired by the
Company are uncertificated and are issued to the
Company or its nominee directly by the issuer
thereof, the Company shall immediately notify the
Lender thereof and, at the Lender's request and
option, pursuant to an agreement in form and
substance satisfactory to the Lender, either (a)
cause the issuer to agree to comply with instructions
from the Lender as to such securities, without
further consent of the Company or such nominee, or
(b) arrange for the Lender to become the registered
owner of the securities. If any securities, whether
certificated or uncertificated, or other investment
property now or hereafter acquired by the Company are
held by the Company or its nominee through a
securities intermediary or commodity intermediary,
the Company shall immediately notify the Lender
thereof and, at the Lender's request and option,
pursuant to an agreement in form and substance
satisfactory to the Lender, either (1) cause such
securities intermediary or (as the case may be)
commodity intermediary to agree to comply with
entitlement orders or other instructions from the
Lender to such securities intermediary as to such
securities or other investment property, or (as the
case may be) to apply any value distributed on
account of any commodity contract as directed by the
Lender to such commodity intermediary, in each case
without further consent of the Company or such
nominee, or (ii) in the case of financial assets or
other investment property held through a securities
intermediary, arrange for the Lender to become the
entitlement holder with respect to such investment
property, with the Company being permitted, only with
the consent of the Lender, to exercise rights to
withdraw or otherwise deal with such investment
property. The Lender agrees with the Company that the
Lender shall not give any such entitlement orders or
instructions or directions to any such issuer,
securities intermediary or commodity intermediary,
and shall not withhold its consent to the exercise of
any withdrawal or dealing rights by the Company,
unless an Event of Default has occurred and is
continuing, or, after giving effect to any such
investment and withdrawal rights not otherwise
permitted by the Loan Documents, would occur. The
provisions of this paragraph shall not apply to any
financial assets credited to a securities account for
which the Lender is the securities intermediary.
4.4. COLLATERAL IN THE POSSESSION OF A BAILEE. If any
goods are at any time in the possession of a bailee,
the Company shall promptly notify the Lender thereof
and, if requested by the Lender, shall promptly
obtain an acknowledgment from
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the bailee, in form and substance satisfactory to the
Lender, that the bailee holds such Collateral for the
benefit of the Lender and shall act upon the
instructions of the Lender, without the further
consent of the Company. The Lender agrees with the
Company that the Lender shall not give any such
instructions unless an Event of Default has occurred
and is continuing or would occur after taking into
account any action by the Company with respect to the
bailee.
4.5. ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS. If
the Company at any time holds or acquires an interest
in any electronic chattel paper or any "transferable
record," as that term is defined in Section 201 of
the federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the
Uniform Electronic Transactions Act as in effect in
any relevant jurisdiction, the Company shall promptly
notify the Lender thereof and, at the request of the
Lender, shall take such action as the Lender may
reasonably request to vest in the Lender control,
under Section 9-105 of the Uniform Commercial Code,
of such electronic chattel paper or control under
Section 201 of the federal Electronic Signatures in
Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions
Act, as so in effect in such Jurisdiction, of such
transferable record. The Lender agrees with the
Company that the Lender will arrange, pursuant to
procedures satisfactory to the Lender and so long as
such procedures will not result in the Lender's loss
of control, for the Company to make alterations to
the electronic chattel paper or transferable record
permitted under UCC Section 9-105 or, as the case may
be, Section 201 of the federal Electronic Signatures
in Global and National Commerce Act or Section 16 of
the Uniform Electronic Transactions Act for a party
in control to make without loss of control, unless an
Event of Default has occurred and is continuing or
would occur after taking into account any action by
the Company with respect to such electronic chattel
paper or transferable record.
4.6. LETTER-OF-CREDIT RIGHTS. If the Company is at any
time a beneficiary under a letter of credit now or
hereafter issued in favor of the Company, the Company
shall promptly notify the Lender thereof and, at the
request and option of the Lender, the Company shall,
pursuant to an agreement in form and substance
satisfactory to the Lender, either (i) arrange for
the issuer and any confirmer of such letter of credit
to consent to an assignment to the Lender of the
proceeds of any drawing under the letter of credit or
(ii) arrange for the Lender to become the transferee
beneficiary of the letter of credit, with the Lender
agreeing, in each case, that the proceeds of any
drawing under the letter to credit are to be applied
as provided in the Credit Agreement.
4.7. COMMERCIAL TORT CLAIMS. If the Company shall at any
time hold or acquire a commercial tort claim, the
Company shall immediately notify the Lender in a
writing signed by the Company of the brief details
thereof and grant to the Lender in such writing a
security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with
such writing to be in form and substance satisfactory
to the Lender.
4.8. OTHER ACTIONS AS TO ANY AND AIL COLLATERAL. The
Company further agrees to take any other action
reasonably requested by the Lender to insure the
attachment,
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perfection and first priority of, and the ability of
the Lender to enforce, the Lender's security interest
in any and all of the Collateral including, without
limitation, (a) executing, delivering and, where
appropriate, filing financing statements and
amendments relating thereto under the Uniform
Commercial Code, to the extent, if any, that the
Company's signature thereon is required therefor, (b)
causing the Lender's name to be noted as secured
party on any certificate of title for a titled good
if such notation is a condition to attachment,
perfection or priority of, or ability of the Lender
to enforce, the Lender's security interest in such
Collateral, (c) complying with any provision of any
statute, regulation or treaty of the United States as
to any Collateral if compliance with such provision
is a condition to attachment, perfection or priority
of, or ability of the Lender to enforce, the Lender's
security interest in such Collateral, (d) obtaining
governmental and other third party consents and
approvals, including without limitation any consent
of any licensor, lessor or other person obligated on
Collateral, (e) obtaining waivers from mortgagees and
landlords in form and substance satisfactory to the
Lender and (f) taking all actions required by any
earlier versions of the Uniform Commercial Code or by
other law, as applicable in any relevant Uniform
Commercial Code jurisdiction, or by other law as
applicable in any foreign jurisdiction.
5. RELATION TO OTHER SECURITY DOCUMENTS. The provisions of this
Agreement supplement the provisions of any real estate mortgage or deed of trust
granted by the Company to the Lender and securing the payment or performance of
any of the Obligations. Nothing contained in any such real estate mortgage or
deed of trust shall derogate from any of the rights or remedies of the Lender
hereunder. In addition, the provisions of this Agreement shall he read and
construed with the other Security Documents indicated below in the manner so
indicated.
6. REPRESENTATIONS AND WARRANTIES CONCERNING COMPANY'S LEGAL
STATUS. The Company has previously delivered to the Lender a certificate signed
by the Company and entitled "Perfection Certificate" (the "Perfection
Certificate") in substantially the form attached hereto as APPENDIX I. The
Company represents and warrants to the Lender as follows: (a) the Company's
exact legal name is that indicated on the Perfection Certificate and on the
signature page hereof, (b) the Company is an organization of the type and
organized in the jurisdiction set forth in the Perfection Certificate, (c) the
Perfection Certificate accurately sets forth the Company's organizational
identification number or accurately states that the Company has none, (d) the
Perfection Certificate accurately sets forth the Company's place of business or,
if more than one, its chief executive office as well as the Company's mailing
address if different and (e) all other information set forth on the Perfection
Certificate pertaining to the Company is accurate and complete.
7. COVENANTS CONCERNING COMPANY'S LEGAL STATUS. The Company
covenants with the Lender as follows: (a) without providing at least 30 days
prior written notice to the Lender, the Company will not change its name, its
place of business or, if more than one, chief executive office, or its mailing
address or organizational identification number if it has one, (b) if the
Company does not have an organizational identification number and later obtains
one, the Company shall forthwith notify the Lender of such organizational
identification number, and (c) the Company will not change its type of
organization, jurisdiction of organization or other legal structure.
8. REPRESENTATIONS AND WARRANTIES CONCERNING COLLATERAL, ETC. The
Company further represents and warrants to the Lender as follows: (a) the
Company is the owner of or has other rights in or
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power to transfer the Collateral, free from any adverse lien, security interest
or other encumbrance, except for the security interest created by this Agreement
and other liens permitted by the Credit Agreement, (b) none of the Collateral
constitutes, or is the proceeds of, "farm products" as defined in Section
9-102(a)(34) of the Uniform Commercial Code of the State, (c) none of the
account debtors or other persons obligated on any of the Collateral is a
governmental authority subject to the Federal Assignment of Claims Act or like
federal, state or local statute or rule in respect of such Collateral, (d) the
Company holds no commercial tort claim except as indicated on the Perfection
Certificate, and (e) the Company has at all times operated its business in
compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and with all applicable provisions of federal, state and local
statutes and ordinances dealing with the control, shipment, storage or disposal
of hazardous materials or substances and (f) all other information set forth on
the Perfection Certificate pertaining to the Collateral is accurate and
complete.
9. COVENANTS CONCERNING COLLATERAL, ETC. The Company further
covenants with the Lender as follows: (a) the Collateral, to the extent not
delivered to the Lender pursuant to Section 4 hereof, will be kept at those
locations listed on the Perfection Certificate and the Company will not remove
the Collateral from such locations, without providing at least 30 days prior
written notice to the Lender, (b) except for the security interest herein
granted and liens permitted by the Credit Agreement, the Company shall be the
owner of or have other rights in the Collateral free from any lien, security
interest or other encumbrance, and the Company shall defend the same against all
claims and demands of all persons at any time claiming the same or any interests
therein adverse to the Lender, (c) the Company shall not pledge, mortgage or
create, or suffer to exist a security interest in the Collateral in favor of any
person other than the Lender except for liens permitted by the Credit Agreement,
(d) the Company will keep the Collateral in good order and repair and will not
use the same in violation of law or any policy of insurance thereon, (e) as
provided in the Credit Agreement, the Company will permit the Lender, or its
designee, to inspect the Collateral at any reasonable time, wherever located,
(f) the Company will pay promptly when due all taxes, assessments, governmental
charges and levies upon the Collateral or incurred in connection with the use or
operation of such Collateral or incurred in connection with this Agreement, (g)
the Company will continue to operate, its business in compliance with all
applicable provisions of the federal Fair Labor Standards Act, as amended, and
with all applicable provisions of federal, state and local statutes and
ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances, and (h) the Company will not sell or otherwise dispose,
or offer to sell or otherwise dispose, of the Collateral or any interest therein
except for (i) sales of inventory in the ordinary course of business and (ii) so
long as no Event of Default has occurred and is continuing, sales or other
dispositions of obsolescent items of equipment in the ordinary course of
business consistent with past practices.
10. INSURANCE.
10.1. MAINTENANCE OF INSURANCE. The Company will maintain
with financially sound and reputable insurers
insurance with respect to its properties and business
against such casualties and contingencies as shall be
in accordance with general practices of businesses
engaged in similar activities in similar geographic
areas. Such insurance shall be in such minimum
amounts that the Company will not be deemed a
coinsurer under applicable insurance laws,
regulations and policies and otherwise shall be in
such amounts, contain such terms, be in such forms
and be for such periods as may be reasonably
satisfactory to the Lender. In addition, all such
insurance shall be payable to the Lender as loss
payee. Without limiting the foregoing, the Company
will (i) keep all of its physical property insured
with casualty or physical hazard insurance on an "all
risks" basis, with broad form
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flood and earthquake coverages and electronic data
processing coverage, with a full replacement cost
endorsement and an "agreed amount" clause in an
amount equal to 100% of the full replacement cost of
such property, (ii) maintain all such workers'
compensation or similar insurance as may be required
by law and (iii) maintain, in amounts and with
deductibles equal to those generally maintained by
businesses engaged in similar activities in similar
geographic areas, general public liability insurance
against claims of bodily injury, death or property
damage occurring, on, in or about the properties of
the Company; business interruption insurance; and
product liability insurance.
10.2. INSURANCE PROCEEDS. The proceeds of any casualty
insurance in respect of any casualty loss of any of
the Collateral shall, subject to the rights, if any,
of other parties with a prior interest in the
property covered thereby, (i) so long as no Default
or Event of Default has occurred and is continuing
and to the extent that the amount of such proceeds is
less than $10,000.00, be disbursed to the Company for
direct application by the Company solely to the
repair or replacement of the Company's property so
damaged or destroyed and (ii) in all other
circumstances, be held by the Lender as cash
collateral for the Obligations. The Lender may, at
its sole option, disburse from time to time all or
any part of such proceeds so held as cash collateral,
upon such terms and conditions as the Lender may
reasonably prescribe, for direct application by the
Company solely to the repair or replacement of the
Company's property so damaged or destroyed, or the
Lender may apply all or any part of such proceeds to
the Obligations.
10.3. NOTICE OF CANCELLATION, ETC. All policies of
insurance shall provide for at least thirty (30) days
prior written cancellation notice to the Lender. In
the event of failure by the Company to provide and
maintain insurance as herein provided, the Lender
may, at its option, provide such insurance and charge
the amount thereof to the Company. The Company shall
furnish the Lender with certificates of insurance and
policies evidencing compliance with the foregoing
insurance provision.
11. COLLATERAL PROTECTION EXPENSES: PRESERVATION OF COLLATERAL.
11.1. EXPENSES INCURRED BY LENDER. In its discretion, the
Lender may discharge taxes and other encumbrances at
any time levied or placed on any of the Collateral,
make repairs thereto and pay any necessary filing
fees or, if the debtor fails to do so, insurance
premiums. The Company agrees to reimburse the Lender
on demand for any and all expenditures so made. The
Lender shall have no obligation to the Company to
make any such expenditures, nor shall the making
thereof relieve the Company of any default.
11.2. LENDER'S OBLIGATIONS AND DUTIES. Anything herein to
the contrary notwithstanding, the Company shall
remain liable under each contract or agreement
comprised in the Collateral to be observed or
performed by the Company thereunder. The Lender shall
not have any obligation or liability under any such
contract or agreement by reason of or arising out of
this Agreement or the receipt by the Lender of any
payment relating to any of the Collateral, nor shall
the Lender be obligated in any manner to perform any
of the obligations of
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the Company under or pursuant to any such contract or
agreement, to make inquiry as to the nature or
sufficiency of any payment received by the Lender in
respect of the Collateral or as to the sufficiency of
any performance by any party under any such contract
or agreement, to present or file any claim, to take
any action to enforce any performance or to collect
the payment of any amounts which may have been
assigned to the Lender or to which the Lender may be
entitled at any time or times. The Lender's sole duty
with respect to the custody, safe keeping and
physical preservation of the Collateral in its
possession, under Section 9.1-207 of the Uniform
Commercial Code of the State or otherwise, shall be
to deal with such Collateral in the same manner as
the Lender deals with similar property for its own
account.
12. SECURITIES AND DEPOSITS. The Lender may at any time following
and during the continuance of a Default and Event of Default, at its option,
transfer to itself or any nominee any securities constituting Collateral,
receive any income thereon and hold such income as additional Collateral or
apply to the Obligations. Whether or not any Obligations are due, the Lender
may, following and during the continuance of a Default and Event of Default
demand, xxx for, collect, or make any settlement or compromise which it deems
desirable with respect to the Collateral. Regardless of the adequacy of
Collateral or any other security for the Obligations, any deposits or other sums
at any time credited by or due from the Lender to the Company may at any time be
applied to or set off against any of the Obligations then due and owing.
13. NOTIFICATION TO ACCOUNT DEBTORS AND OTHER PERSONS OBLIGATED ON
COLLATERAL. If an Event of Default shall have occurred and be continuing, the
Company shall, at the request of the Lender, notify account debtors and other
persons obligated on any of the Collateral of the security interest of the
Lender in any account, chattel paper, general intangible, instrument or other
Collateral and that payment thereof is to be made directly to the Lender or to
any financial institution designated by the Lender as the Lender's agent
therefor, and the Lender may itself, if a Default or an Event of Default shall
have occurred and be continuing, without notice to or demand upon the Company,
so notify account debtors and other persons obligated on Collateral. After the
making of such a request or the giving of any such notification, the Company
shall hold any proceeds of collection of accounts, chattel paper, general
intangibles, instruments and other Collateral received by the Company as trustee
for the Lender without commingling the same with other funds of the Company and
shall turn the same over to the Lender in the identical form received, together
with any necessary endorsements or assignments. The Lender shall apply the
proceeds of collection of accounts, chattel paper, general intangibles,
instruments and other Collateral received by the Lender to the Obligations, such
proceeds to be immediately entered after final payment in cash or other
immediately available funds of the items giving rise to them.
14. POWER OF ATTORNEY.
14.1. APPOINTMENT AND POWERS OF LENDER. The Company hereby
irrevocably constitutes and appoints the Lender and
any officer or agent thereof, with full power of
substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and
authority in the place and stead of the Company or in
the Lender's own name, for the purpose of carrying
out the terms of this Agreement, to take any and all
appropriate action and to execute any and all
documents and instruments that may be necessary or
desirable to accomplish the purposes of this
Agreement and, without limiting the generality of the
foregoing, hereby gives
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said attorneys the power and right, on behalf of the
Company, without notice to or assent by the Company,
to do the following:
(a) upon the occurrence and during the
continuance of an Event of Default,
generally to sell, transfer, pledge, make
any agreement with respect to or otherwise
deal with any of the Collateral in such
manner as is consistent with the Uniform
Commercial Code of the State and as fully
and completely as though the Lender were the
absolute owner thereof for all purposes, and
to do at the Company's expense, at any time,
or from time to time, all acts and things
which the Lender deems necessary to protect,
preserve or realize upon the Collateral and
the Lender's security interest therein, in
order to effect the intent of this
Agreement, all as folly and effectively as
the Company might do, including, without
limitation, (i) the filing and prosecuting
of registration and transfer applications
with the appropriate federal or local
agencies or authorities with respect to
trademarks, copyrights and patentable
inventions and processes, (ii) upon written
notice to the Company, the exercise of
voting rights with respect to voting
securities, which rights may be exercised,
if the Lender so elects, with a view to
causing the liquidation in a commercially
reasonable manner of assets of the issuer of
any such securities and (iii) the execution,
delivery and recording, in connection with
any sale or other disposition of any
Collateral, of the endorsements, assignments
or other instruments of conveyance or
transfer with respect to such Collateral;
and
(b) to the extent that the Company's
authorization given in Section 3 above is
not sufficient, to file such financing
statements with respect hereto, with or
without the Company's signature, or a
photocopy of this Agreement in substitution
for a financing statement, as the Lender may
deem appropriate and to execute in the
Company's name such financing statements and
amendments thereto and continuation
statements which may require the Company's
signature.
14.2. RATIFICATION BY COMPANY. To the extent permitted by
law, the Company hereby ratifies all that said
attorneys shall lawfully do or cause to be done by
virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable.
14.3. No DUTY ON LENDER. The powers conferred on the Lender
hereunder are solely to protect its interests in the
Collateral and shall not impose any duty upon it to
exercise any such powers. The Lender shall be
accountable only for the 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
Company for any act or failure to act, except for the
Lender's own gross negligence or willful misconduct.
15. REMEDIES. If an Event of Default shall have occurred and be
continuing, the Lender may, without notice to or demand upon the Company,
declare this Agreement to be in default, and the Lender shall thereafter have in
any jurisdiction in which enforcement hereof is sought, in addition to all
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other rights and remedies, the rights and remedies of a secured party under the
Uniform Commercial Code of the State or of any jurisdiction in which Collateral
is located, including, without limitation, the right to take possession of the
Collateral, and for that purpose the Lender may, so far as the Company can give
authority therefor, enter upon any premises on which the Collateral may be
situated and remove the same therefrom. The Lender may in its discretion require
the Company to assemble all or any part of the Collateral at such location or
locations within the jurisdictions of the Company's principal office(s) or at
such other locations as the Lender may reasonably designate. Unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Lender shall give to the
Company at least five Business Days prior written notice of the time and place
of any public sale of Collateral or of the time after which any private sale or
any other intended disposition is to be made. The Company hereby acknowledges
that five Business Days prior written notice of such sale or sales shall be
reasonable notice. In addition, the Company waives any and all rights that it
may have to a judicial hearing in advance of the enforcement of any of the
Lender's rights hereunder, including, without limitation, its right following an
Event of Default to take immediate possession of the Collateral and to exercise
its rights with respect thereto.
16. STANDARDS FOR EXERCISING REMEDIES. To the extent that
applicable law imposes duties on the Lender to exercise remedies in a
commercially reasonable manner, the Company acknowledges and agrees that it is
not commercially unreasonable for the Lender (a) to fall to incur expenses
reasonably deemed significant by the Lender to prepare Collateral for
disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (b) to fail to obtain
third party consents for access to Collateral to be disposed of, or to obtain
or, if not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or
disposed of, (c) to fall to exercise collection remedies against account debtors
or other persons obligated on Collateral or to remove liens or encumbrances on
or any adverse claims against Collateral, (d) to exercise collection remedies
against account debtors and other persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists, (e) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (f) to
contact other persons, whether or not in the same business as the Company, for
expressions of interest in acquiring all or any portion of the Collateral, (g)
to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the collateral is of a specialized nature, (h) to
dispose of Collateral by utilizing Internet sites that provide for the auction
of assets of the types included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets, (i) to
dispose of assets in wholesale rather than retail markets, (j) to disclaim
disposition warranties, (k) to purchase insurance or credit enhancements to
insure the Lender against risks of loss, collection or disposition of Collateral
or to provide to the Lender a guaranteed return from the collection or
disposition of Collateral, or (l) to the extent deemed appropriate by the
Lender, to obtain the services of other brokers, investment bankers, consultants
and other professionals to assist the Lender in the collection or disposition of
any of the Collateral. The Company acknowledges that the purpose of this Section
16 is to provide non-exhaustive indications of what actions or omissions by the
Lender would not be commercially unreasonable in the Lender's exercise of
remedies against the Collateral and that other actions or omissions by the
Lender shall not be deemed commercially unreasonable solely on account of not
being indicated in this Section 16. Without limitation upon the foregoing,
nothing contained in this Section 16 shall be construed to grant any rights to
the Company or to impose any duties on the Lender that would not have been
granted or imposed by this Agreement or by applicable law in the absence of this
Section 16.
17. NO WAIVER BY LENDER, ETC. The Lender shall not be deemed to
have waived any of its rights upon or under the Obligations or the Collateral
unless such waiver shall be in writing and signed by
10
the Lender. No delay or omission on the part of the Lender in exercising any
right shall operate as a waiver of such right or any other right: A waiver on
any one occasion shall not be construed as a bar to or waiver of any right on
any future occasion. All rights and remedies of the Lender with respect to the
Obligations or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly,
alternatively, successively or concurrently at such time or at such times as the
Lender deems expedient.
18. SURETYSHIP WAIVERS BY COMPANY. The Company waives demand,
notice, protest, notice of acceptance of this Agreement, notice of loans made,
credit extended, Collateral received or delivered or other action taken in
reliance hereon and all other demands and notices of any description. With
respect to both the Obligations and the Collateral, the Company assents to any
extension or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Lender may deem advisable. The Lender shall have no
duty as to the collection or protection of the Collateral or any income thereon,
nor as to the preservation of rights against prior parties, nor as to the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in Section 11.2. The Company further waives any and all other
suretyship defenses.
19. MARSHALLING. The Lender shall not be required to marshal any
present or future collateral security (including but not limited to this
Agreement and the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of its rights hereunder
and in respect of such collateral security and other assurances of payment shall
be cumulative and in addition to all other rights, however existing or arising.
To the extent that it lawfully may, the Company hereby agrees that it will not
invoke any law relating to the marshalling of collateral which might cause delay
in or impede the enforcement of the Lender's rights under this Agreement or
under any other instrument creating or evidencing any of the Obligations or
under which any of the Obligations is outstanding or by which any of the
Obligations is secured or payment thereof is otherwise assured, and, to the
extent that it lawfully may, the Company hereby irrevocably waives the benefits
of all such laws.
20. PROCEEDS OF DISPOSITIONS; EXPENSES. The Company shall pay to
the Lender on demand any and all expenses, including reasonable attorneys' fees
and disbursements, incurred or paid by the Lender in protecting, preserving or
enforcing the Lender's rights under or in respect of any of the Obligations or
any of the Collateral. After deducting all of said expenses, the residue of any
proceeds of collection or sale of the Obligations or Collateral shall, to the
extent actually received in cash, be applied to the payment of the Obligations
in such order or preference as the Lender may determine, proper allowance and
provision being made for any Obligations not then due. Upon the final payment
and satisfaction in full of all of the Obligations and after making any payments
required by Sections 9- 608(a)(1)(C) or 9615(a)(3) of the Uniform Commercial
Code of the State, any excess shall be returned to the Company, and the Company
shall remain liable for any deficiency in the payment of the Obligations.
21. OVERDUE AMOUNTS. Until paid, all amounts due and payable by
the Company hereunder shall be a debt secured by the Collateral and shall bear,
whether before or after judgment, interest at the rate of interest for overdue
principal set forth in the Credit Agreement.
22. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT IS
INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND
11
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE. The Company agrees that any
suit for the enforcement of this Agreement may be brought in the courts of the
State or any federal court sitting therein and consents to the non-exclusive
Jurisdiction of such court and to service of process in any such suit being made
upon the Company by mail at the address specified in the Credit Agreement. The
Company hereby waives any objection that it may now or hereafter have to the
venue of any such suit or any such court or that such suit is brought in an
inconvenient court.
23. WAIVER OF JURY TRIAL. THE COMPANY WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the
Company waives any right which it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. The Company (1) certifies that neither the Lender nor any
representative, agent or attorney of the Lender has represented, expressly or
otherwise, that the Lender would not, in the event of litigation, seek to
enforce the foregoing waivers and (ii) acknowledges that, in entering into the
Credit Agreement and the other Loan Documents to which the Lender is a party,
the Lender is relying upon, among other things, the waivers and certifications
contained in this Section 23.
24. MISCELLANEOUS. The headings of each section of this Agreement
are for convenience only and shall not define or limit the provisions thereof.
This Agreement and all rights and obligations hereunder shall be binding upon
the Company and its respective successors and assigns, and shall inure to the
benefit of the Lender and its successors and assigns. If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity of
all other terms hereof shall in no way be affected thereby, and this Agreement
shall be construed and be enforceable as if such invalid, illegal or
unenforceable term had not been included herein. The Company acknowledges
receipt of a copy of this Agreement,
IN WITNESS WHEREOF, intending to be legally bound, the Company has
caused this Agreement to be duly executed as of the date first above written.
XXXXXXX FOOD SERVICE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx, President
Accepted:
OLD NATIONAL BANK
By: /s/ Xxxxxx X. XxxXxxXxxxx
------------------------------------
Xxxxxx X. XxxXxxXxxxx, Vice President
12
STATE OF INDIANA )
) SS:
COUNTY OF XXXXXX )
Before me, a Notary Public in and for said County and State, personally
appeared Xxxxxxx X. Xxxxxxx, the President of Xxxxxxx Food Service, Inc., a
Delaware corporation, who, having been duly sworn, acknowledged the execution of
the foregoing Security Agreement for and on behalf of such corporation as such
officer and stated that all representations therein contained are true.
WITNESS my hand and Notarial Seal this 27th day of February, 2003.
/s/ XXXXXXX X. XXXXX
-------------------------
Notary Public
_________________________
Notary Public (Printed)
My Commission Expires: My County of Residence:
_________________________
XXXXXXX X. XXXXX, Notary Public
[SEAL] My Commission Expires: August 28, 2006
Residing in Xxxxxxxx County
13
APPENDIX I
PERFECTION CERTIFICATE
The undersigned, the President OF XXXXXXX FOOD SERVICE, INC. (the
"Company"), hereby certify, with reference to a certain Security Agreement dated
as of February 27, 2003 (terms defined in such Security Agreement having the
same meanings herein as specified therein), between the Company and OLD NATIONAL
BANK (the "Lender"), to the Lender as follows:
1. NAME. The exact legal name of the Company as that name appears
on its Certificate of Incorporation is as follows:
2. OTHER IDENTIFYING FACTORS.
(a) The following is the mailing address of the Company:
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
(b) If different from its mailing address, the Company's
place of business or, if more than one, its chief
executive office is located at the following address:
Address County State
(c) The following is the type of organization of the
Company:
Corporation
(d) The following is the Jurisdiction of the Company's
organization:
Delaware
(e) The following is the Company's state issued
organizational identification number [state "None"
if the state does not issue such a number]:
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3. OTHER NAMES, ETC.
(a) The following is a list of all other names (including
trade names or similar appellations) used by the
Company, or any other business or organization to
which the Company became the successor by merger,
consolidation, acquisition, change in form, nature or
jurisdiction of organization or otherwise, now or at
any time during the past five years:
(b) Attached hereto as Schedule 3 is the information
required in Section 2 for any other business or
organization to which the Company became the
successor by merger, consolidation, acquisition,
change in form, nature or Jurisdiction of
organization or otherwise, now or at any time during
the past five years:
4. OTHER CURRENT LOCATIONS.
(a) The following are all other locations in the United
States of America in which the Company maintains any
books or records relating to any of the Collateral
consisting of accounts, instruments, chattel paper,
general intangibles or mobile goods:
Address County State
(b) The following are all other places of business of the
Company in the United States of America:
Address County State
15
(c) The following are all other locations in the United
States of America where any of the Collateral
consisting of inventory or equipment is located:
Address County State
(d) The following are the names and addresses of all
persons or entities other than the Company, such as
lessees, consignees, warehousemen or purchasers of
chattel paper, which have possession or are intended
to have possession of any of the Collateral
consisting of instruments, chattel paper, inventory
or equipment:
Name Mailing Address County State
5. PRIOR LOCATIONS.
(a) Set forth below is the information required by
Sections 4(a) or (b) with respect to each location or
place of business previously maintained by the
Company at any time during the past five years in a
state in which the Company has previously maintained
a location or place of business at any time during
the past four months:
Address County State
(b) Set forth below is the information required by
Section 4(c) or (d) with respect to each other
location at which, or other person or entity with
which, any of the Collateral consisting of inventory
or equipment has been previously held at any time
during the past twelve months:
Name Address County State
16
6. FIXTURES. Attached hereto as Schedule 6 is the information
required by UCC Section 9.1-502(b) or former UCC Section 9.1-402(5) of each
state in which any of the Collateral consisting of fixtures are or are to be
located and the name and address of each real estate recording office where a
mortgage on the real estate on which such fixtures are or are to be located
would be recorded.
IN WITNESS WHEREOF, the undersigned has hereunto signed this
Certificate on February 27, 2003.
_____________________________________
Xxxxxxx X. Xxxxxxx, President
17
SCHEDULE 3
TRADENAMES
18
SCHEDULE 6
REAL ESTATE LEGAL DESCRIPTIONS
19
