Exhibit 10.11(b)
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COMMERCIAL SECURITY AGREEMENT
Borrower: AMERICAN FIRE RETARDANT CORPORATION Lender: WHITNEY NATIONAL BANK
(TIN: 00-0000000) TIN: 00-0000000
000 XXXXX XXXX X.X. Xxx 0000
XXXXXXXXX, XX 00000 XXXXXXXXX, XX 00000
THIS COMMERCIAL SECURITY AGREEMENT is entered into between AMERICAN FIRE
RETARDANT CORPORATION (referred to below as "Grantor"); and WHITNEY NATIONAL
BANK (referred to below as "Lender"). For valuable consideration, Grantor hereby
pledges to Lender and grants to Lender a continuing security interest in the
Collateral to secure Grantor's present and future indebtedness and agrees that
Lender shall have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which Lender may have by law or
otherwise.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms In the Louisiana Commercial Laws (La. R.S. 10:
9-101, et seq.). All references to dollar amounts shall mean amounts in lawful
money of the United States America.
Agreement. The word "Agreement" moans this Commercial Security Agreement,
as this Commercial Security Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached or to be
attached to this Commercial Security Agreement from time to time.
Collateral. The word "Collateral" means Individually, collectively and
Interchangeably any and all of Grantor's present and future rights, title
and interest in and to the following described property, together with any
and all present and future additions thereto, substitutions therefor, and
replacements thereof:
1996 FORD F150 TRUCK, VIN # 00XXX00X0XXX00000
1996 FORD F150 TRUCK, VIN # 00XXX00X0XXX00000
The word "Collateral" also includes any and all present or future parts,
accessories, attachments, additions, accessions, substitutions and
replacements to and for the collateral. The word "Collateral" further
includes any and all of Grantor's present and future rights to any proceeds
derived or to be derived from the sale, lease, damage, destruction,
insurance loss, expropriation and other disposition of the collateral,
including without limitation, any and all of Grantor's rights to enforce
collection and payment of such proceeds.
Encumbrances. The word "Encumbrances" means individually, collectively and
Interchangeably any and all presently existing and/or future mortgages,
liens, privileges and other contractual and/or statutory security Interests
and rights of every nature and kind that, now and/or in the future, may
affect the Collateral or any part or parts thereof. Event of Default. The
words "Event of Default' mean Individually, collectively, and
Interchangeably any of the Events of Default set forth below In the section
titled "Events of Default."
Grantor. The word "Grantor" means Individually, collectively and
Interchangeably AMERICAN FIRE RETARDANT CORPORATION, its successors and
assigns.
Guarantor. The word "Guarantor" means and includes individually,
collectively, interchangeably and without limitation each and all of the
guarantors, sureties, and accommodation parties In connection with the
Indebtedness.
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Indebtedness. The word "Indebtedness" means the indebtedness evidenced by
the Note, in principal, interest, costs, expenses and attorneys' fees and
all other fees and charges, together with all other Indebtedness and costs
and expenses for which Grantor is responsible under this Agreement or under
any of the Related Documents. In addition, the word "Indebtedness" also
Includes any and all other loans, extensions of credit, obligations, debts
and liabilities, plus Interest thereon, of Grantor, or any one or more of
them, that may now and In the future be owed to or incurred in favor of
Lender, as well as all claims by Lender against Grantor, or any one or more
of them, whether existing now or later; whether they are voluntary or
Involuntary, whether related or unrelated, whether committed or purely
discretionary, due or to become due, direct or indirect or by way of
assignment, determined or undetermined, absolute or contingent, liquidated
or unliquidated; whether Grantor may be liable individually or jointly with
others. of every nature and kind whatsoever, In principal, Interest, costs,
expenses and attorneys' fees and all other fees and charges-, whether
Grantor may be obligated as guarantor, surety, accommodation party or
otherwise; whether recovery upon such Indebtedness may be or hereafter may
become barred by any statute of limitations; and whether such indebtedness
may be or hereafter may become void or otherwise unenforceable.
Lender. The word "Lender' means WHITNEY NATIONAL BANK TIN: 00-0000000, Its
successors and assigns, and any subsequent holder or holders of the Note,
or any interest therein.
Note. The word "Note" means the note or credit agreement dated September
18, 1996, in the principal amount of $42,888.46 from AMERICAN FIRE
RETARDANT CORPORATION to Lender, together with all substitute or
replacement notes therefor, as well as all renewals, extensions,
modifications, refinancings, consolidations and substitutions of and for
the note or credit agreement.
Related Documents. The words "Related Documents" mean and include
individually, collectively, interchangeably and without limitation all
promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, collateral
mortgages, deeds of trust, and all other instruments, agreements and
documents. whether now or hereafter existing, executed in connection with
the Indebtedness.
CONTINUING SECURITY INTEREST TO SECURE PRESENT AND FUTURE INDEBTEDNESS. Grantor
affirms that Grantor has granted a continuing security interest in the
Collateral in favor of Lender to secure any and all present and future
indebtedness of Grantor in favor of Lender. as may be outstanding from time to
time set forth above, in principal, interest, costs, expenses, attorneys' fees
and other fees and charges, with the continuing preferences and priorities
provided under applicable Louisiana law. Grantor agrees that all such additional
loans and indebtedness will be secured under this Agreement without the
necessity that Grantor (or any of them) agree or consent to such a result at the
time such additional loans are made and indebtedness incurred, without the
further necessity that the note or notes evidencing such additional loans or
indebtedness refer to the fact that such notes are secured by this Agreement.
Grantor further agrees Grantor may not subsequently have a change of mind and
Insist that any such additional loans or indebtedness not be secured by this
Agreement unless Lender specifically agrees to such a request in writing.
DURATION OF THIS AGREEMENT. This Agreement shall remain In full force and effect
until such time as this Agreement and the security interests created hereby are
terminated and cancelled by Lender under a written cancellation Instrument In
favor of Grantor.
OBLIGATIONS OF GRANTOR. Grantor represents, warrants and covenants to Lender as
follows:
Organization. Grantor is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Louisiana.
Authorization. Grantor's execution, delivery and performance of this
Agreement have been duly authorized, and do not conflict with, and will not
result in a violation of, or constitute or give rise to an event of default
under Grantor's Articles of Incorporation or Bylaws, or any agreement or
other Instrument which may be binding upon Grantor, or under any law or
governmental regulation or court decree or order applicable to Grantor
and/or its properties.
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Perfection of Security Interest. Grantor agrees to execute such financing
statements and to take whatever other actions are requested by Lender to
perfect and continue Lender's security Interest In the Collateral. Upon
request of Lender, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and Grantor will note
Lender's Interest upon any and all chattel paper If not delivered to Lender
for possession by Lender. Grantor hereby appoints Lender as its Irrevocable
attorney-in-fact for the purpose of executing any documents necessary to
perfect or to continue the security interest granted in this Agreement.
Lender may at any time, and without further authorization from Grantor,
file a carbon, photographic, facsimile, or other reproduction of any
financing statement. Grantor will reimburse Lender for all expenses for the
perfection, termination, and the continuation of the perfection of Lender's
security Interest in the Collateral. Grantor promptly will notify Lender
before any change In Grantor's name Including any change to the assumed
business names of Grantor. Grantor also promptly will notify Lender of any
change In Grantor's Employer Identification Number. Grantor further agrees
to notify Lender In writing prior to any change in address or location of
Grantor's principal governance office. Grantor represents and warrants to
Lender that Grantor has provided Lender with Grantor's correct Employer
Identification Number and that Grantor has no other Employer Identification
Numbers. Grantor Promptly shall notify Lender should Grantor apply for or
obtain a new Employer Identification Number or should Grantor merge or
consolidate with any other entity.
No Violation. The execution and delivery of this agreement will not violate
any law or agreement governing Grantor or to which Grantor is a party, and
its certificate or articles of incorporation and bylaws do not prohibit any
term or condition of this Agreement.
Enforceability or Collateral. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and fully compiles
with applicable state and federal laws and regulations concerning form,
content and manner of preparation and execution, and all persons appearing
to be obligated on the Collateral have authority and capacity to contract
and are in fact obligated as they appear to be on the Collateral, free of
any offset, compensation, deduction or counterclaim.
Removal of Collateral. Grantor shall keep the Collateral (or to the extent
the Collateral consists of intangible property such as accounts, the
records concerning the Collateral) at Grantor's address shown above, or at
such other locations as are acceptable to Lender. Except in the ordinary
course of its business, including the sales of inventory, Grantor shall not
remove the Collateral from its existing locations without the prior written
consent of Lender. To the extent that the Collateral consists of vehicles,
or other titled property, Grantor shall not take or permit any action which
would require application for certificates of title for the vehicles
outside the State of Louisiana without the prior written consent of Lender.
Transactions Involving Collateral. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall not
sell, offer to sell, or otherwise transfer or dispose of the Collateral.
Grantor shall not pledge, mortgage, encumber or otherwise permit the
Collateral to be subject to any Encumbrance or charge, other than the
security interest provided for in this Agreement, without the prior written
consent of Lender. This includes security interests even if junior in right
to the security interests granted under this Agreement. Unless waived by
Lender, all proceeds from any disposition of the Collateral (for whatever
reason) shall be hold in trust for Lender and shall not be commingled with
any other funds; provided however, this requirement shall not constitute
consent by Lender to any sale or other disposition. Upon receipt, Grantor
shall immediately deliver any such proceeds to Lender.
Title, Authority, Binding Effect. Grantor represents and warrants to Lender
that it holds good and marketable title to the Collateral, free and clear
of all Encumbrances except for Lender's security interest. No financing
statement covering any of the Collateral is on file in any public office
other than those which reflect the security interest created by this
Agreement or to which Lender has specifically consented. Grantor further
represents and warrants that it has requisite authority to enter into this
Agreement in favor of Lender and to grant to Lender the security interest
in the Collateral as provided herein. Grantor additionally represents and
warrants that this Agreement is binding upon Grantor as well as Grantor's
heirs, successors, transferees and assigns, and is legally enforceable in
accordance with its terms. The foregoing representations and warranties and
all other representations and warranties of Grantor under this Agreement
shall be continuing and shall survive the termination of this Agreement.
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Repairs and Maintenance. Grantor shall keep and maintain and shall cause
others to keep and maintain the Collateral in good order, repair and
merchantable condition. Grantor shall further make and/or cause all
necessary repairs to be made to the Collateral, including the repair and
restoration of any portion of the Collateral that may be damaged, lost or
destroyed. In addition, Grantor shall not, without the prior written
consent of Lender, make or permit to be made any alterations to any of the
Collateral that may reduce or impair the Collateral's use, value or
marketability. Furthermore, Grantor shall not, nor shall Grantor permit
others to abandon, commit waste, or destroy the Collateral or any part of
parts thereof.
Taxes. Grantor shall promptly pay or cause to be paid when due, all taxes,
local and special assessments, and governmental and other charges of every
type and description, that may from time to time be imposed, assessed and
levied against the Collateral or against Grantor. Grantor further agrees to
furnish Lender with evidence that such taxes, assessments, and governmental
and other charges have been paid in full and in a timely manner. Grantor
may withhold any such payment or elect to contest any lien if Grantor is in
good faith conducting an appropriate proceeding to contest the obligation
to pay and so long as Lender's interest in the Collateral is not
jeopardized.
Compliance With Governmental Requirements. Grantor shall comply promptly
with, and shall cause others to comply with, all laws, ordinances, rules
and regulations of all governmental authorities, now or hereafter in effect
applicable to the ownership, production, disposition, or use of the
Collateral. Grantor may contest in good faith any such law, ordnance or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Lender's interest in the Collateral. In
Lender's opinion, is not jeopardized. Grantor shall not use the Collateral,
and shall not permit others to use the Collateral, for any purpose other
than those previously agreed to by Lender in writing; but in no event shall
any of the Collateral be used in any manner that would damage, depreciate
or diminish its value or that may result in cancellation or termination of
insurance coverage. Grantor additionally agrees not to do or suffer to be
done anything that may increase the risk of fire or other hazards to the
Collateral.
Hazardous Substances. Grantor represents and warrants that the Collateral
never has been, and never will be so long as this Agreement remains a lien
on the Collateral, used for the generation, manufacture, storage,
transportation, treatment disposal, release or threatened release of any
hazardous waste or substance, as those term are defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, 42 U.S.C. Section 9601, at seq. ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 Pub. L. No. 99-499 ("XXXX"), the
Hazardous Materials Transportation Act 49 U.S.C. Section 1801, at seq, the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or
other applicable state or Federal laws, rules, or regulations adopted
pursuant to any of the foregoing. The terms "hazardous waste" and
"hazardous substance" shall also include, without limitation, petroleum and
petroleum by-products or any fraction thereof and asbestos. The
representations and warranties contained herein are based on Grantor's due
diligence in investigating the Collateral for hazardous wastes and
substances. Grantor hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws, and (b) agrees to
indemnity and hold harmless Lender against any and all claims and losses
resulting from a breach of this provision of this Agreement. This
obligation to indemnity shall survive the payment of the indebtedness and
the satisfaction of this Agreement.
Required Insurance. So long as this Agreement remains in effect Grantor
shall, at its sole cost keep and/or cause others, at their expense, to keep
the Collateral constantly insured against loss by fire, by hazards included
within the term "extended coverage," and by such other hazards (including
flood insurance where applicable) as may be required by Lender. Such
insurance shall be in an amount not less than the full replacement value of
the Collateral, or such other amount or amounts as Lender may require or
approve in writing. Grantor shall further provide and maintain, at its sole
cost and expense, comprehensive public liability insurance, naming both
Grantor and Lender as parties insured, protecting against claims for bodily
injury, death and/or property damage arising out of the use, ownership,
possession, operation and condition of the Collateral, and further
containing a broad form contractual liability endorsement covering
Grantor's obligations to indemnity Lender as provided hereunder.
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Grantor may purchase such insurance from any insurance company or broker
that is acceptable to Lender, provided that such approval may not be
unreasonably withheld. All such insurance policies, including renewals and
replacements, must also be in form and substance acceptable to Lender, and
must additionally contain a loss payable or other endorsement in favor of
Lender providing in part that (a) all proceeds and returned premiums under
such policies of insurance will be paid directly to Lender, and (b) no act
or omission on the part of Grantor, or any of its officers, agents,
employees or representatives, nor breach of any warranty contained in such
policies, shall affect the obligations of the insurer to pay the full
amount of any loss to Lender. Such policies of insurance may also contain a
provision prohibiting cancellation or the alteration of such insurance
without at least thirty (30) days' prior written notice to Lender of such
intended cancellation or alteration.
Grantor agrees to provide Lender with originals or certified copies of such
policies of insurance. Grantor further agrees to promptly furnish Lender
with copies of all renewal notices and, if requested by Lender, with copies
of receipts for paid premiums. Grantor shall provide Lender with originals
or certified copies of all renewal or replacement policies of insurance no
later than fifteen (15) days before any such existing policy or policies
should expire. It Grantor's insurance polices and renewals we hold by
another person, Grantor agrees to supply original or certified copies of
the same to Lender within the time periods required above.
Grantor agrees to notify immediately Lender in writing of any material
casualty to or accident involving the Collateral, whether or not such
casualty or loss is covered by insurance. Grantor further agrees to
promptly notify Grantor's insurance company and to submit an appropriate
claim and proof of claim to the insurance company in the event that any
Collateral is lost, damaged, or destroyed as a result of an insured hazard.
Lender may submit such a claim and proof of claim to this insurance company
on Grantor's behalf, should Grantor fail to do so promptly for any reason.
Grantor hereby irrevocably appoints Lender as its agent and
attorney-in-fact such agency being coupled with an interest to make, settle
and adjust claims under such policy or policies of insurance and to endorse
the name of Grantor on any check or other item of payment for the proceeds
thereof, it being understood, however, that unless one or more Events of
Default exist under this Agreement, Lender will not settle or adjust any
such claim without the prior approval of Grantor (which approval shall not
be unreasonably withheld).
Insurance Proceeds. Lender shall have the right to directly receive the
proceeds of all insurance protecting the Collateral. In the event that
Grantor should receive any such insurance proceeds, Grantor agrees to
immediately turn over and to pay such proceeds directly to Lender. All
insurance proceeds may be applied, at Lender's sole option and discretion,
and in such a manner as Lender may determine (after payment of all
reasonable costs, expenses and attorneys' fees necessarily paid or fees
necessarily paid or incurred by Lender in this connection), for the purpose
of: (a) repairing or restoring the lost, damaged or destroyed Collateral;
or (b) reducing the then outstanding balance of Grantor's Indebtedness.
Lender's receipt of such insurance proceeds and the application of such
proceeds as provided herein shall not, however, affect the lien of this
Agreement. Nothing under this section shall be deemed to excuse Grantor
from its obligations promptly to repair, replace or restore any lost or
damaged Collateral, whether or not the same may be covered by insurance,
and whether or not such proceeds of insurance are available, and whether
such proceeds are sufficient in amount to complete such repair, replacement
or restoration to the satisfaction of Lender. Furthermore, unless otherwise
confirmed by Lender in writing, the application or release of any insurance
proceeds by Lender shall not be doomed to cure or waive any Event of
Default under this Agreement. Any proceeds which have not been disbursed
within six (6) months after their receipt and which Grantor has not
committed to the repair or restoration of the Collateral shall be used to
prepay the indebtedness.
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Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender
reports on each existing policy of insurance showing such information as
Lender may reasonably request Including the following: (a) the name of the
Insurer; (b) the risks Insured; (c) the amount of the policy; (d) the
property Insured; (e) the then current value on the basis of which
insurance has been obtained and the manner of determining that value; and
(f) the expiration date of the policy. In addition, Grantor shall upon
request by Lender (however not more often than annually) have an
independent appraiser satisfactory to Lender determine, as applicable, the
cash value or replacement cost of the Collateral.
Prior Encumbrances. To the extent applicable, Grantor shall fully and
timely perform any and all of its obligations under any prior Encumbrances
affecting the Collateral. Without limiting the foregoing, Grantor shall not
commit or permit to exist any breach of or default under any such prior
Encumbrances. Grantor shall further promptly notify Lender in writing upon
the occurrence of any event or circumstances that would, or that might,
result In a breach of or default under any such prior Encumbrance. Grantor
shall further not modify or extend any of the terms of any prior
Encumbrance or any indebtedness secured thereby, or request or obtain any
additional loans or other extensions of credit from any third party
creditor or creditors whenever such additional loan advances or other
extensions of credit may be directly or Indirectly secured, whether by
cross-collateralization or otherwise, by the Collateral, or any part or
parts thereof, with possible preference and priority over Lender's security
Interest. Grantor additionally agrees to obtain, upon request by Lender,
and in form and substance as may then be satisfactory to Lender,
appropriate waivers and/or subordinations of any lessors liens or
privileges, vendor's liens or privileges, purchase money security
interests, and any other encumbrances that may affect the Collateral at any
time.
Future Encumbrances. Grantor shall not, without the prior written consent
of Lender, grant any Encumbrance that may affect the collateral, or any
part or parts thereof, nor shall Grantor permit or consent to any
Encumbrance attaching to or being filed against any of the Collateral in
favor of anyone other then Lender. Grantor shall further promptly pay when
due all statements and charges of mechanics, materialmen, laborers and
others incurred in connection with the alteration, improvement, repair and
maintenance of the Collateral, or otherwise furnish appropriate security or
bond, so that no future Encumbrance may ever attach to or be filed against
any Collateral. Grantor additionally agrees to obtain. upon request by
Lender, and in form and substance as may then be satisfactory to Lender.
appropriate waivers and/or subordinations of any lessor's liens or
privileges, vendor's liens or privileges, purchase money security
Interests, and any other Encumbrances that may affect the Collateral at any
time. Notice of Encumbrances. Grantor shall Immediately notify Lender in
writing upon the Filing of any attachment, lien, judicial process, claim,
or other Encumbrance. Grantor additionally agrees to notify Lender
Immediately in writing upon the occurrence of any default, or event that
with the passage of time, failure to cure, or giving of notice, might
result in a default under any of Grantor's obligations that may be secured
by any presently existing or future Encumbrance, or that might result In an
Encumbrance affecting the Collateral, or should any of the Collateral be
seized or attached or levied upon. or threatened by seizure or Attachment
or levy, by any person other than Lender.
Books and Records. Grantor will keep proper books and records with regard
to Grantor's business activities and the Collateral in which a security
Interest is granted hereunder, In accordance with generally accepted
accounting principles, applied on a consistent basis throughout, which
books and records shall at all reasonable times be open to inspection and
copying by Lender or its designated agents. Lender shall also have the
right to Inspect Grantor's books and records, and to discuss Grantor's
affairs and finances with Grantor's officers and representatives, at such
reasonable times as Lender may designate.
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GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession and
beneficial use of all the Collateral and may use it in any lawful manner not
inconsistent with this Agreement or the Related Documents, provided that
Grantor's right to possession and beneficial use shall not apply to any
Collateral where possession of the Collateral by Lender is required by law to
perfect Lender's security interest in such Collateral. If Lender at any time has
possession of any Collateral, whether before or after an event of Default,
Lender shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if Lender takes such action for that purpose as
Grantor shall request or as Lender, in Lender's sole discretion, shall deem
appropriate under the circumstances, but failure to honor any request by Grantor
shall not of itself be deemed to be a failure to exercise reasonable care.
Lender shall not be required to take any steps necessary to preserve any rights
in the Collateral against prior parties, nor to protect, preserve or maintain
any security interest given to secure the indebtedness.
EXPENDITURES BY LENDER. Grantor recognizes and agrees that Lender may incur
certain expenses in connection with Lender's exercise of rights under this
Agreement. If not discharged or paid when due, Lender may (but shall not be
obligated to) discharge or pay any amounts required to be discharged or paid by
Grantor under this Agreement, including without limitation all taxes,
Encumbrances and other claims. at any time levied or placed on the Collateral.
Lender also may (but shall not be obligated to) pay all costs for insuring,
maintaining and preserving the Collateral, including without limitation. the
purchase of insurance protecting only Lender's Interest in the Collateral.
Lender may further take such other action or actions and incur such additional
expenditures as Lender may deem to be necessary and proper to cure or rectify
any actions or inactions on Grantor's part as may be required under this
Agreement. Nothing under this Agreement or otherwise shall obligate Lender to
take any such actions or to incur any such additional expenditures on Grantor's
behalf, or as making Lender in any way responsible or liable for any loss,
damage, or Injury to the Collateral, to Grantor, or to any other person or
persons, resulting from Lender's election not to take such actions or to Incur
such additional expenses. In addition, Lender's election to take any Such
actions or to incur such additional expenditures shall not constitute a waiver
or forbearance by Lender of any Event of Default under this Agreement. All such
expenditures Incurred or paid by Lender for such purposes will then bear
Interest at the rate charged under the Note from the data incurred or paid by
Lender to the date of repayment. All such expenses shall become a part of the
Indebtedness and, at Lender's option, will (a) be payable on demand, (b) be
added to the balance of the Note and be apportioned among and be payable with
any payments to become due during either (i) the term of any applicable
Insurance policy or (ii) the remaining term of the Note, or (c) be treated as a
balloon payment which will be due and payable at the Note's maturity. This
Agreement also will secure payment of these amounts. such right shall be in
addition to all other rights and remedies to which Lender may be entitled upon
the occurrence of an Event of Default.
EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
events of Default under this Agreement:
Default under the Indebtedness. Should Grantor default in the payment of
principal or interest under any of the indebtedness.
Default under this Agreement. Should Grantor violate, or fall to comply
fully with any of the terms and conditions of, or default under this
Agreement.
Default Under Other Agreements. Should any event of default occur or exist
under any related document which directly or indirectly secures repayment
of any of the indebtedness.
Other Defaults In Favor of Lender. Should Grantor or any Guarantor default
under any other loan, extension of credit, security agreement, or
obligation in favor of Lender.
Default In Favor of Third Parties. Should Grantor or any Guarantor default
under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement. In favor of Any other creditor or person
that may materially affect any of Grantor's property, or Grantor's or any
Guarantor's ability to perform their respective obligations under this
Agreement, or any Related Document, or pertaining to the Indebtedness.
Insolvency. Should the suspension, failure or Insolvency, however
evidenced. of Grantor or any Guarantor occur or exist.
Page 7
Readjustment of Indebtedness. Should proceedings for readjustment of
Indebtedness, reorganization, composition or extension under any Insolvency
law be brought by or against Grantor or any Guarantor.
Assignment for Benefit of Creditors. Should Grantor or any Guarantor file
proceedings for a respite or make a general assignment for the benefit of
creditors.
Receivership. Should a receiver of all or any part of Grantor's property,
or the property of any Guarantor, be applied for or appointed.
Dissolution Proceedings. Should proceedings for the dissolution or
appointment of a liquidator of Grantor or any Guarantor be commenced. False
Statements. Should any representation or warranty of Grantor or any
Guarantor made in connection with the indebtedness prove to be incorrect or
misleading in any respect.
Defective Collateralization. Should this Agreement or any of the Related
Documents cease to be in full force and effect (including failure of any
Collateral documents to create a valid and perfected security Interest or
lien) at any time and for any reason.
Insecurity. Should Lender deem itself to be insecure with regard to
repayment of the indebtedness.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under applicable law, and more specifically under the Louisiana Commercial
Laws (La. R.S. 10: 9-101 et seq.). In addition and without limitation, Lender
may exercise any one or more of the following rights and remedies:
Accelerate Indebtedness. Lender may declare the entire indebtedness,
including any prepayment penalty which Grantor would be required to pay,
immediately due and payable, without notice or further demand for payment.
Seizure and Sale of Collateral in Louisiana. In the event that Lender
elects to commence appropriate Louisiana foreclosure proceedings under this
Agreement, Lender may cause the Collateral, or any part thereof, to be
immediately seized wherever found, and sold, whether in terms of Court or
in vacation, under ordinary or executory process, in accordance with
applicable Louisiana law, to the highest bidder for cash with or without
appraisement, and without the necessity of making additional demand upon or
notifying Grantor or placing Grantor in default, all of which are expressly
waived.
Confession of Judgment. For purposes of foreclosure under Louisiana
executory process procedures, Grantor confesses judgment and acknowledges
to be indebted unto and in favor of Lender, up to the full amount of the
indebtedness, in principal, interest costs, expenses, attorneys' fees and
other fees and charges. Grantor further confesses judgment and acknowledges
to be indebted unto and in favor of Lender in the amount of all additional
advances that Lender may make on Grantor's behalf pursuant to this
Agreement, together with interest thereon, up to a maximum of two (2) times
the face amount of the aforesaid Note. To the extent permitted under
applicable Louisiana law, Grantor additionally waives: (a) the benefit of
appraisal as provided In Articles 2332, 2336, 2723 and 2724 of the
Louisiana Code of Civil Procedure, and all other laws with regard to
appraisal upon judicial sale; (b) the demand and three (3) days' delay as
provided under Articles 2639 and 2721 of the Louisiana Code of Civil
Procedure; (c) the notice of seizure as provided under Articles 2293 and
2721 of the Louisiana Code of Civil Procedure. (d) the three (3) days'
delay provided under Articles 2331 and 2722 of the Louisiana Code of Civil
Procedure; and (e) all other benefits provided under Articles 2331, 2722
and 2723 of the Louisiana Code of Civil Procedure and all other Articles
not specifically mentioned above.
Keeper. Should any or all of the Collateral be seized as an incident to an
action for the recognition or enforcement of this Agreement, by executory
process, sequestration, attachment, writ of fieri facias or otherwise,
Grantor hereby agrees that the court issuing any such order shall, if
requested by Lender, appoint Lender, or any agent designated by Lender, or
any person or entity named by Lender at the time such seizure is requested,
Page 8
or any time thereafter, as Keeper of the Collateral as provided under La.
R.S. 9:5136, et seq. Such a Keeper shall be entitled to reasonable
compensation. Grantor agrees to pay the reasonable fees of such Keeper,
which are hereby fixed at $50.00 per hour, which compensation to the Keeper
shall also be secured by this Agreement in the form of an additional
advance as provided herein.
Declaration of Fact. Should It become necessary for Lender to foreclose
under this Agreement, all declarations of fact, which are made under an
authentic act before a Notary Public in the presence of two witnesses, by a
person declaring such facts to lie within his or her knowledge, shall
constitute authentic evidence for purposes of executory process and also
for purposes of La. R.S. 9:3509.1, La. R.S. 9:3504(D)(6) and La. R.S.
10:9-508, as applicable.
Deliver Collateral. This provision applies, to the extent applicable, if
and when the Collateral for any reason is located outside the State of
Louisiana following the occurrence of any Event of Default, or should there
be a subsequent change in Louisiana law permitting such remedies. Lender
may require Grantor to deliver to Lender all or any portion of the
Collateral and any and all certificates of title and other documents
relating to the Collateral. Lender may require Grantor to assemble the
Collateral and make it available to Lender at a place to be designated by
Lender. Lender also shall have full power to enter upon the property of
Grantor to take possession of and remove the Collateral. If the Collateral
contains other goods not covered by this Agreement at the time of
repossession, Grantor agrees Lender may take such other goods, provided
that Lender maim reasonable efforts to return them to Grantor after
repossession.
Public or Private Safe of Collateral. To the extent that any of the
Collateral is then In Lender's possession, Lender shall have full power to
sell, lease, transfer, or otherwise deal with the Collateral or proceeds
thereof in its own name or that of Grantor. Lender may sell the Collateral
at public auction or private sale. Unless the Collateral threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, Lender will give Grantor reasonable notice of the time after which
any private sale or any other intended disposition of the Collateral is to
be made. The requirements of reasonable notice shall be met if such is
given at least ten (10) days before the time of the sale or disposition.
All expenses relating to the disposition of the Collateral, including
without limitation the expenses of retaking, holding, insuring, preparing
for sale and selling the Collateral, shall become a part of the
Indebtedness secured by this Agreement and shall be payable on demand, with
interest at the Note rate from date of expenditure until repaid. Grantor
agrees that any such sale shall be conclusively doomed to be conducted in a
commercially reasonable manner if it is made consistent with the standard
of similar sales of collateral by commercial banks in LAFAYETTE, Louisiana.
Appoint Receiver. This provision applies if and when the Collateral for any
reason is located outside the State of Louisiana following the occurrence
of any Event of Default, or should Louisiana law change or be interpreted
to permit such a remedy. Lender shall have the following rights and
remedies regarding the appointment of a receiver: (a) Lender may have a
receiver appointed as a matter of right, (b) the receiver may be an
employee of Lender and may serve without bond, and (c) all fees of the
receiver and his or her attorney shall become part of the indebtedness
secured by this Agreement and shall be payable on demand, with interest at
the Note rate from date of expenditure until repaid.
Collect Revenues, Apply Accounts. Lender shall have the right, at its sole
option and election, at any time, whether or not one or more Events of
Default then exist under this Agreement, to directly collect and receive
all proceeds and/or payments arising under or in any way accruing from the
Collateral, as such amounts become due and payable. In order to permit the
foregoing, Grantor unconditionally agrees to deliver to Lender, immediately
following demand, any and all of Grantor's records, ledger sheets, and
other documentation, in the form requested by Lender, with regard to the
Collateral and any and all proceeds and/or payments applicable thereto.
Page 9
Lender shall have the further right, whether or not an Event of Default
then exists under this Agreement, where appropriate and within Lender's
sole discretion, to file suit, either In Lender's own name or in the name
of Grantor, to collect any and all proceeds and payments that may then
and/or in the future be due and owing under this Agreement, and if as a
result of such it is necessary for Lender to attempt to collect any such
proceeds and/or payments from the obligors therefor, Lender may compromise,
settle, extend, or renew for any period (whether or not longer than the
original period) any obligation or indebtedness thereunder or evidenced
thereby, or surrender, release, or exchange all or any part of said
obligation or indebtedness, without affecting the liability of Grantor
under this Agreement or under the indebtedness. To that end, Grantor hereby
irrevocably constitutes and appoints Lender as its attorney-in-fact,
coupled with an interest and with full power of substitution, to take any
and all such actions and any and all other actions permitted hereby, either
in the name of Grantor or Lender.
Additional Expenses. In the event that it should become necessary for
Lender to conduct a search for any of the Collateral in connection with any
foreclosure action, or should it be necessary to remove the Collateral, or
any part or parts thereof, from the premises in which or on which the
Collateral is then located, and/or to store and/or refurbish such
Collateral. Grantor agrees to reimburse Lender for the cost of conducting
such a search and/or removing and/or storing and/or refurbishing such
Collateral, which additional expense shall also be secured by the lien of
this Agreement.
Specific Performance. Lender may, in addition to the foregoing remedies, or
in lien thereof, in Lender's sole discretion, commence an appropriate
action against Grantor seeking specific performance of any covenant
contained herein, or in aid of the execution or enforcement of any power
herein granted.
Obtain Deficiency. Lender may obtain a judgment against Grantor for any
deficiency remaining on the indebtedness due to Lender after application of
all amounts received from the exercise of the rights provided in this
Agreement and any Related Document.
Other Rights and Remedies. In addition, Lender shall have and may exercise
any or all other rights and remedies it may have available at law, in
equity, or otherwise.
Cumulative Remedies. All of Lender's rights and remedies, whether evidenced
by this Agreement or the Related Documents or by any other writing, shall
be cumulative and may be exercised singularly at concurrently. Election by
Lender to pursue any remedy shall not exclude pursuit of any other remedy,
and an election to make expenditures or to take action to perform an
obligation of Grantor under this Agreement, after Grantor's failure to
perform, shall not affect Lender's right to declare a default and to
exercise its remedies.
ASSIGNMENT OF INDEBTEDNESS. Grantor hereby recognizes and agrees that Lender may
assign all or any portion of the indebtedness to one or more third party
creditors. Such transfers may include, but are not limited to, sales of
participation interests in the Indebtedness. Grantor specifically agrees and
consents to all such transfers and assignments and further waives any subsequent
notice of such transfers or assignments as may be provided under applicable law.
Grantor additionally agrees that any and all of the Indebtedness in favor of
such a third party assignee, for the limited purposes set forth above, will be
secured by the Collateral.
PROTECTION OF LENDER'S SECURITY RIGHTS. Grantor will be fully responsible for
any losses that Lender may suffer as a result of anyone other than Lender
asserting any rights or interest in or to the Collateral. Grantor agrees to
appear in and to defend all actions or proceedings purporting to affect Lender's
security interests in any of the Collateral subject to this Agreement and any of
the rights and powers granted Lender hereunder. In the event that Grantor fails
to do what is required of it under this Agreement, or if any action or
proceeding is commenced naming Lender as a party or affecting Lender's security
interests or the rights and powers granted under this Agreement, then Lender
may, without releasing Grantor from any of its obligations under this Agreement,
do whatever Lender believes to be necessary and proper within its sole
discretion to protect the security of this Agreement, including without
limitation making additional advances on Grantor's behalf as provided herein.
Page 10
INDEMNIFICATION OF LENDER. Grantor agrees to indemnity, to defend and to save
and hold Lender harmless from any and all claims, suits, obligations, damages,
losses, costs, expenses (including without limitation Lender's attorneys' fees),
demands, liabilities. penalties, fines and forfeitures of any nature whatsoever
that may be asserted against or incurred by Lender arising out of or in any
manner occasioned by this Agreement and the exercise of the rights and remedies
granted Lender hereunder. The foregoing indemnity provisions shall survive the
cancellation of this Agreement as to all matters arising or accruing prior to
such cancellation, and the foregoing indemnity shall survive in the event that
Lender elects to exercise any of the remedies as provided under this Agreement
following default hereunder.
EXECUTION OF ADDITIONAL DOCUMENTS. Grantor agrees to execute all additional
documents, instruments and agreements that Lender may deem to be necessary and
proper, within its sole discretion, in form and substance satisfactory to
Lender, to keep this Agreement in effect, to better reflect the true intent of
this Agreement, and to consummate fully all of the transactions contemplated
hereby and by any other agreement, instrument or document heretofore, now or at
any time or times hereafter executed by Grantor and delivered to Lender.
INSPECTION; AUDITS. Lender and its agents may periodically enter upon Grantor's
promises at reasonable hours and Inspect the Collateral. Lender and its agents
may also periodically conduct audits of the Collateral and may further inspect
and audit Grantor's books and records that In any way pertain to the Collateral
and any part or parts thereof.
APPLICATION OF PAYMENTS. Grantor agrees that all payments and other sums and
amounts received by Lender under the Indebtedness or under this Agreement, shall
be applied: first, to reimburse Lender for its costs of collecting the same
(including but not limited to, reimbursement of Lender's reasonable attorneys'
fees); second, to the repayment of interest on all additional advances that
Lender may have made on Grantor's behalf pursuant to this Agreement; third, to
the payment of principal of all such additional advances; and finally, to the
payment of principal and Interest on the Indebtedness then outstanding, which
may be applied in such order and priority as Lender may determine within its
sole discretion.
TAXATION. In the event that there should be any change in law with regard to
taxation of security agreements or the debts they secure, Grantor agrees to pay
any taxes, assessments or charges that may be imposed upon Lender as a result of
this Agreement.
EFFECT OF WAIVERS. Grantor has waived, and/or does by these presents waive,
presentment for payment, protest, notice of protest and notice of nonpayment
under all of the indebtedness secured by this Agreement. Grantor has further
waived, and/or does by these presents waive, all pleas of division and
discussion, and all similar rights with regard to the Indebtedness, and agrees
that Grantor shall remain liable, together with any and all Guarantors, on a
"solidary" or "Joint and several" basis. Grantor further agrees that discharge
or release of any party who is,' may, or will be liable to Lender under any of
the Indebtedness, or the release of the Collateral or any other collateral
directly or Indirectly securing repayment of the same, shall not have the affect
of releasing or otherwise diminishing or reducing the actual or potential
liability of Grantor and/or any other party or parties guaranteeing payment of
the indebtedness, who shall remain liable to Lender, and/or of releasing any
Collateral or other collateral that is not expressly released by Lender.
Grantor additionally agrees that Lender's acceptance of payments other than in
accordance with the terms of any agreement or agreements governing repayment of
the indebtedness, or Lender's subsequent agreement to extend or modify such
repayment terms, shall likewise not have the effect of releasing any party or
parties from their respective obligations to Lender. and/or of releasing any of
the Collateral or other collateral directly or indirectly securing repayment of
the Indebtedness. In addition, no course of dealing between Grantor and Lender,
nor any failure or delay on the part of Lender to exercise any of the rights and
remedies granted to Lender under this Agreement, or under any other agreement or
agreements by and between Grantor and Lender, shall have the affect of waiving
any of Lender's rights and remedies. Any partial exercise of any rights and
remedies granted to Lender shall furthermore not constitute a waiver of any of
Lender's other rights and remedies, It being Grantor's Intent and agreement that
Lender's rights and remedies shall be cumulative in nature. Grantor further
agrees that, upon the occurrence of any Event of Default under this Agreement,
any waiver or forbearance on the part of Lender to pursue the rights and
remedies available to Lender, shall be binding upon Lender only to the extent
that Lender specifically agrees to any such waiver or forbearance In writing. A
waiver or forbearance as to one Event of Default shall not constitute a waiver
Page 11
or forbearance as to any other Event of Default. None of the warranties,
conditions, provisions and terms contained In this Agreement or any other
agreement. document, or instrument now or hereafter executed by Grantor and
delivered to Lender, shall be deemed to have been waived by any act or knowledge
of Lender, Its agents, officers or employees; but only by an Instrument In
writing specifying such waiver, signed by a duly authorized officer of Lender
and delivered to Grantor.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
Applicable Law. This Agreement has been delivered to Lender and accepted by
Lender In the State of Louisiana. Lender and Grantor hereby waive the right
to any jury trial In any action, proceeding, or counterclaim brought by
either Lender or Grantor against the other. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Louisiana.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's legal
expenses, Incurred in connection with the enforcement of this Agreement.
Lender may pay someone else to help enforce this Agreement, and Grantor
shall pay the costs and expenses of such enforcement. Costs and expenses
Include Lender's attorneys' fees and legal expenses whether or not there Is
a lawsuit, Including attorneys' fees and legal expenses for bankruptcy
proceedings (and Including efforts to modify or vacate any automatic stay
or Injunction), appeals, and any anticipated post-judgment collection
services. Grantor also shall pay all court costs and such additional fees
as may be directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to Interpret or define the provisions
of this Agreement.
Notices. To give Grantor any notice required under this Agreement, Lender
may hand deliver or mail such notice to Grantor. Lender will deliver or
mail any notice to Grantor (or any of them if more than one) at any address
which Grantor may have given Lender by written notice as provided In this
paragraph. In the event that there is more than one Grantor under this
Agreement, notice to a single Grantor shall be considered as notice to all
Grantors. To give Lender any notice under this Agreement, Grantor (or any
Grantor) shall mail the notice to Lender by registered or certified mail at
the address specified in this Agreement, or at any other address that
Lender may have given to Grantor (or any Grantor) by written notice as
provided In this paragraph. All notices required or permitted under this
Agreement must be In writing and will be considered as given on the day it
is delivered by hand or deposited In the U.S. Mail, by registered or
codified mail to the address specified In this Agreement.
Power of Attorney. Grantor hereby appoints lender as its true and lawful
attorney-in-fact, irrevocably, with full power of substitution to do the
following: (a) to demand, collect, receive. receipt for, xxx and recover
all sums of money or other property which may now or hereafter become due,
owing or payable from the Collateral; (b) to execute. sign and endorse any
and all claims, instruments, receipts. checks, drafts or warrants issued in
payment for the Collateral; (c) to settle or compromise any and all claims
arising under the Collateral, and, in the place and stead of Grantor, to
execute and deliver its release and settlement for the claim; and (d) to
file any claim or claims or to take any action or Institute or take part in
any proceedings, either in its own name or in the name of Grantor. or
otherwise, which in the discretion of Lender may seem to be necessary or
advisable. This power is given as security for the indebtedness, and the
authority hereby conferred is and shall be irrevocable and shall remain in
full force and effect until renounced by Lender.
Page 12
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement In all other respects shall remain valid and enforceable.
Sole Discretion of Lender. Whenever Lender's consent or approval is
required under this Agreement, the decision as to whether or not to consent
or approve shall be in the sole and exclusive discretion of Lender and
Lender's decision shall be final and conclusive.
Successors and Assigns Bound; Solidary Liability. Grantor's obligations and
agreements under this Agreement shall be binding upon Grantor's successors,
heirs, legalees, devisees, administrators, executors find assigns. in the
event that there is more than one Grantor under this Agreement, all of the
agreements and obligations made and/or Incurred by Grantors under this
Agreement shall be on a "solidary" or "Joint and several" basis.
AUTHORIZATION FOR FACSIMILE FILINGS. Grantor agrees that Lender may at any time,
and without further authorization from Grantor, file a carbon, photographic,
facsimile, or other reproduction of Grantees security agreement or financing
statement as a financing statement.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED SEPTEMBER
18, 1996.
GRANTOR:
AMERICAN FIRE RETARDANT CORPORATION
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------
By: XXXXXX X. XXXXXXX, XX., SECRETARY
LENDER:
WHITNEY NATIONAL BANK
/S/ Xxxxxxxx Xxx
--------------------------------------
By: Xxxxxxxx Xxx
Authorized Officer
Page 13
