EXHIBIT 10.23
SECURITY AGREEMENT (STOCK)
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THIS SECURITY AGREEMENT (STOCK), dated as of December 29, 1994, is from
XXXX X. XXXX ("Shareholder") to and for the benefit of XXXXXXX XXXXXX MEZZANINE
FUND, L.P. (which, together with its successors, assigns, endorsees, transferees
and assignees, is hereinafter referred to as "Secured Party").
Recitals
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A. Shareholder is the owner of 2918 shares (the "Stock") of issued and
outstanding common stock of CPS Systems, Inc., a Texas corporation (the
"Company"), successor by merger to CPS Acquisition Corp., a Georgia corporation
("Acquisition Corp."), evidenced by Stock Certificates bearing the numbers set
forth on Exhibit A attached hereto, standing in the name of Shareholder on the
books of the Company.
B. Secured Party has made certain financing available to Acquisition Corp.
and the Company in the principal face amount of $2,100,000 (the "Indebtedness")
on and subject to the terms and conditions of a Note Agreement (the "Note
Agreement") of even date herewith by and between Acquisition Corp., the Company
and Secured Party. The Indebtedness is evidenced by a Promissory Note (the
"Note") of even date herewith in the principal face amount of $2,100,000 from
Acquisition Corp. and the Company payable to the order of Secured Party.
C. The funds comprising the Indebtedness were used by Acquisition Corp. in
connection with the purchase of all outstanding stock of the Company.
Immediately after such purchase, Acquisition Corp. was merged into the Company.
D. Such Indebtedness will directly benefit Shareholder, a shareholder of
the Company.
E. In order to more fully secure repayment of the Indebtedness, Shareholder
has agreed to grant a security interest in the Stock to Secured Party.
Agreement
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IN CONSIDERATION of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which
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are hereby acknowledged, Shareholder agrees with Secured Party as follows:
SECTION 1. Grant of Security. Shareholder hereby assigns and grants to
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Secured Party a lien on and security interest in, all of Shareholder's right,
title and interest in and to the Stock and, subject to Section 7 below, (a) all
rights of Shareholder to receive monies due or to become due with respect to any
or all of the Stock, (b) all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for or in connection with any or all of the Stock, c) all
additional shares of stock of the Company from time to time acquired by
Shareholder in respect of or in exchange for any or all of the Stock, and the
certificates representing such additional shares, and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Stock,
and (d) to the extent not included in the foregoing, all proceeds of any or all
of the Stock (collectively the "Collateral").
SECTION 2. Security for Obligations. This Agreement secures the payment of
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all obligations of Acquisition Corp. and the Company to Secured Party now or
hereafter existing under this Agreement, the Note, the Note Agreement or any
other document, instrument or agreement evidencing, securing, or in any way
relating to the Indebtedness, including any extensions, replacements,
modifications, substitutions, amendments and renewals of this Agreement, the
Note, the Note Agreement or such other agreement (collectively the "Financing
Documents"), whether for principal, interest, fees, expenses or otherwise (all
such obligations being the "Obligations").
SECTION 3. Delivery of Collateral. Subject to the Greyhound Security
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Interest (as defined below), all certificates or instruments representing or
evidencing the Collateral shall be delivered to and held by or on behalf of
Secured Party pursuant hereto, and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance acceptable to Secured Party.
Subject to the Greyhound Security Interest, Secured Party shall have the right,
at any time after the occurrence of an Event of Default, as defined herein, in
its discretion and without notice to Shareholder, to transfer to or to register
in the name of Secured Party or any of its nominees any or all of the
Collateral.
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SECTION 4. Release of Collateral. Upon payment in full of the entire
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outstanding amount of the Indebtedness and all accrued but unpaid interest and
all amounts due Secured Party hereunder, Shareholder shall be entitled to a
release of the Collateral.
SECTION 5. Representations and Warranties. Shareholder represents and
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warrants as follows:
(a) Shareholder is the legal and beneficial owner of the Collateral free
and clear of any lien, claim, security interest, option, charge or encumbrance
whatsoever other than the security interest (the "Greyhound Security Interest")
granted in favor of Greyhound Financial Corporation, a Delaware corporation
("Greyhound"), which security interest is prior and superior to the security
interest granted herein and which is being given by Shareholder as security for
two loans from Greyhound to the Company in the original aggregate principal
amount of not more than $2,500,000 (the "Greyhound Financing"). The Collateral
is not subject to any trust or similar arrangement.
(b) Shareholder has legal title to and all necessary right and authority to
assign the Collateral and to deliver the Collateral, subject to the Greyhound
Security Interest. Except for the Greyhound Security Interest, the Collateral is
not subject to any restrictions on the sale or other transfer thereof.
(c) The Stock is duly authorized, validly issued and is fully paid and
nonassessable. The Stock is registered in the name of Shareholder on the
transfer records of the Company.
(d) There has been no transfer of ownership (record or otherwise) of the
Stock since the Stock was acquired by Shareholder.
(e) All of the Stock has been paid in full (and not subject to any short
position, put or other option to sell), and Shareholder has beneficially owned
(under the meaning of Rule 144 of the Securities Act of 1933) the Stock since
the date of the closing of the transaction described in Recital B above.
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(f) Upon the occurrence of an Event of Default, Secured Party may sell the
stock pursuant to and in accordance with (i) Rule 144(k) of the Securities Act
of 1933 and (ii) the terms of this Agreement.
(g) The Stock is common stock of the Company.
(h) Shareholder's social security identification number is ###-##-####.
(i) The delivery of the Collateral to Secured Party or its designee
pursuant to this Agreement will create a valid and perfected security interest
in the Collateral securing the payment of the Obligations.
(j) This Agreement constitutes a legal, valid and binding obligation of
Shareholder, enforceable against Shareholder in accordance with its terms.
(k) The execution, delivery and performance of this Agreement by
Shareholder does not and will not (i) violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
currently in effect having applicability to Shareholder or the Collateral or
(ii) violate, conflict with or result in a breach of or constitute a default
under any document, agreement, lease or instrument to which Shareholder is a
party or by which Shareholder or the Stock may be bound or affected.
(l) Except for the Greyhound Security Interest, Shareholder has made no
contract or arrangement of any kind, the performance of which contract or
arrangement by another party could give rise to a lien on the Collateral. Except
for the Greyhound Security Interest, Shareholder has not performed any acts or
entered into any agreement or contract of any kind which might prevent the
Secured Party from enforcing any of the terms and conditions of this Agreement
or selling the Collateral following foreclosure or which would limit the Secured
Party in any such enforcement. Except for the Greyhound Security Interest,
Shareholder is not a party to any agreement and no agreement exists which would
restrict or limit Shareholder's ability to grant a security interest in the
Collateral.
(m) None of the proceeds of the Indebtedness will be used for the purpose
of purchasing or carrying any
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"margin stock" as defined in Regulations U and G of the Board of Governors of
the Federal Reserve System (12 C.F.R. Parts 221 and 207), or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry a margin stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of such Regulations U and G.
Shareholder is not engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock. Neither Shareholder nor any party acting
on behalf of Shareholder has taken or will take any action which might cause the
Note or any of the Financing Documents, including this Agreement, to violate
Regulations U or G or any other regulation of the Board of Governors of the
Federal Reserve System or to violate Section 7 of the Securities Exchange Act of
1934 or any rule or regulation thereunder, in each case as now in effect or as
the same may hereinafter be in effect.
SECTION 6. Covenants/Further Assurances.
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(a) Shareholder agrees that, at any time and from time to time,
Shareholder will promptly execute and deliver all further instruments and
documents and take all further action that may be reasonably necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect the assignment and security interest granted or purported to be granted
hereby or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any Collateral.
(b) Subject to Section 7 below and except as otherwise provided to the
contrary in the Greyhound Security Interest, Shareholder agrees to deliver all
cash, instruments and other property described in Section 1 above and all
additional shares of stock described in Section 1 above to Secured Party within
five days after receipt by Shareholder and to execute all security agreements,
stock powers and all other documents required to grant Secured Party a valid,
perfected security interest in such stock.
SECTION 7. Voting, Dividends and Other Payments.
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(a) So long as there exists no Event of Default hereunder:
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(i) Shareholder shall be entitled to exercise any and all voting and/or
consensual rights and powers relating or pertaining to the Stock for any purpose
not inconsistent with the terms hereof;
(ii) Shareholder shall be entitled to receive dividends made in the
ordinary course of business on the Stock; and
(iii) Subject to the Greyhound Security Interest, any and all stock or
liquidating dividends, distributions in property, returns of capital or other
distributions and payments made on or in respect of the Collateral, whether
resulting from a subdivision, combination or reclassification of the outstanding
Collateral or received in exchange therefor or for any part thereof or as a
result of any merger, consolidation, acquisition or other exchange of assets to
which any such issuer may be a party or otherwise, and any and all cash and
other property received in exchange for or redemption of any Collateral, shall
be and become part of the Collateral and, if received by Shareholder, shall be
held in trust by Shareholder for the benefit of Secured Party and shall
forthwith be delivered by Shareholder to Secured Party (registered in the name
of the Secured Party, or accompanied by proper instruments of assignment
executed by Shareholder, in accordance with the Secured Party's instructions) to
be held subject to the terms hereof.
(b) Upon the occurrence of an Event of Default all rights of Shareholder to
exercise the voting and/or consensual rights and powers which it is entitled to
exercise pursuant to Section 7(a) and to receive dividends pursuant to Section
7(a) shall, at Secured Party's option, immediately and without notice to
Shareholder, cease, and all such rights shall thereupon become vested in Secured
Party, subject to the Greyhound Security Interest, who shall have the sole and
exclusive right and authority, but shall not be obligated, to exercise such
voting and/or consensual rights and powers. Upon the occurrence of an Event of
Default, Secured Party shall, subject to the Greyhound Security Interest, be
entitled to receive dividends on the Collateral, which dividends shall be held
as additional collateral hereunder.
SECTION 8. Transfers and Other Liens. Shareholder shall not, without the
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prior written consent of Secured Party:
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(a) Sell, assign or otherwise dispose of any of the Collateral; or
(b) Create or suffer to exist any lien, security interest or other charge
or encumbrance upon or with respect to any of the Collateral, except for the
assignments and security interests created by this Agreement and the Greyhound
Security Interest.
SECTION 9. Events of Default. The occurrence of an event of default,
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however defined, under any Financing Document shall constitute an event of
default ("Event of Default") under this Agreement and all other Financing
Documents.
SECTION 10. Remedies. Upon the occurrence of an Event of Default hereunder:
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(a) All rights of Debtor to exercise the voting and other consensual rights
which it would otherwise be entitled to exercise pursuant to Section 7 and to
receive the distributions which it would otherwise be authorized to receive and
retain pursuant to Section 7 shall cease, and all such rights shall, at the
option of Secured Party, and subject to the Greyhound Security Interest,
thereupon become vested in Secured Party, who shall thereupon have the sole
right to exercise such voting and other consensual rights and to receive and
hold as Collateral such distributions.
(b) Subject to the Greyhound Security Interest, all payments received by
Shareholder under or in connection with the Collateral shall be received in
trust for the benefit of Secured Party, shall be segregated from other funds of
Shareholder and shall be forthwith paid over to Secured Party in the same form
as so received (with any necessary endorsement), to the extent of the
Obligations then due.
(c) Subject to the Greyhound Security Interest, Secured Party may exercise
in respect of the Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party on default under the Uniform Commercial Code (the "Code") in
effect in the State of Colorado at that time (whether or not the Code applies to
the affected Collateral) and also may without notice, except as specified below,
sell the Collateral or any part thereof in one or more parcels at
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public or private sale, at any of Secured Party's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as Secured
Party may deem commercially reasonable. Shareholder agrees that, to the extent
notice of sale shall be required by law, at least five days' notice to
Shareholder of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification, but notice
given in any other reasonable manner or at any other reasonable time shall be
sufficient. Without precluding any other methods of sale, the sale of Collateral
shall have been made in a commercially reasonable manner if conducted in
conformity with reasonable commercial practices of banks disposing of similar
property, but in any event, the Secured Party may sell at its option on such
terms as it may choose without assuming any credit risk and without obligation
to advertise. Secured Party shall not be obligated to make any sale of
Collateral, regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(d) If Secured Party in good faith believes that the Securities Act of 1933
or any other state or federal law prohibits or restricts the customary manner of
sale or distribution of any of the Collateral, Secured Party may sell such
Collateral privately or in any other manner deemed advisable by Secured Party at
such price or prices as Secured Party determines in its sole discretion.
Shareholder recognizes that such prohibition or restriction may cause the
Collateral to have less value than it otherwise would have and that,
consequently, such sale or disposition by Secured Party may result in a lower
price than if the sale were otherwise held.
(e) Upon the occurrence of an Event of Default, subject to the Greyhound
Security Interest, the Company will pay to the Secured Party, as soon as
incurred, all costs and expenses, including attorneys' fees, related or
incidental to the care, retaking, preparing f or sale, selling or collection of
or realization upon any of the Collateral or relating or incidental to the
establishment or preserving or enforcement of the rights of the Secured Party
hereunder or in respect of any of the property, and obtaining legal advice
related to any of the foregoing. Further, that net proceeds of the
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Collateral, resulting from sale, collection or otherwise, and other available
moneys coming into the hands of the Secured Party may be applied by it, before
or after default, to the satisfaction or reduction of such of the Obligations or
costs and expenses as it may see fit, whether or not matured, in such order as
Secured Party determines, subject, however, to the Greyhound Security Interest.
(f) Subject to the Greyhound Security Interest, Secured Party shall have
the right, at any time after the occurrence of an Event of Default hereunder, in
its discretion and without notice to Shareholder, to transfer to or to register
in the name of Secured Party or any of its nominees any or all of the
Collateral.
(g) Subject to the Greyhound Security Interest, without any notice to
Shareholder, Secured Party may instruct the depository, transfer agent, trustee
or other holder of the Collateral to immediately pay over the Collateral to
Secured Party or sell the Collateral and pay the proceeds to Secured Party.
Shareholder hereby authorizes and instructs the depository, trustee, transfer
agent or holder of the Collateral to immediately pay over the Collateral to
Secured Party or sell the Collateral and pay the proceeds to Secured Party upon
notice from Secured Party without the need for any acknowledgement or consent by
Shareholder or further action on the part of Shareholder and Shareholder hereby
agrees to indemnify and hold harmless the depository, transfer agent, trustee or
other holder of the Collateral from and against any and all claims, demands,
causes of action, losses or expenses as a result of the depository, transfer
agent, trustee or other holder of the Collateral delivering the Collateral to
Secured Party or liquidating the Collateral and paying the proceeds to Secured
Party.
(h) Subject to the Greyhound Security Interest, Secured Party may exercise
all of the remedies set forth herein at any time and from time to time upon the
occurrence of any Event of Default and may exercise the remedies set forth
herein separately in connection with the occurrence of each Event of Default.
The exercise of any remedies herein in connection with one Event of Default
shall not prevent Secured Party from exercising any and all remedies set forth
herein in connection with any subsequent Event of Default.
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(i) In exercising its rights hereunder, Secured Party shall use reasonable
efforts, to the extent practical, to liquidate only so much of the Collateral as
is required to repay the Indebtedness and all other amounts due Secured Party.
SECTION 11. Secured Party Appointed Attorney-in-Fact. Upon the occurrence
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of an Event of Default, and subject to the Greyhound Security Interest,
Shareholder irrevocably appoints Secured Party as Shareholder's attorney-in-
fact, with full authority in the place and stead of Shareholder and in the name
of Shareholder or otherwise, from time to time in Secured Party's discretion, to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;
(b) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above;
(c) to file any claims or take any action or institute any proceedings
which Secured Party may deem necessary or desirable f or the collection of any
of the Collateral or otherwise to enforce the rights of Secured Party with
respect to any of the Collateral; and
(d) at Secured Party's option, to effect the transfer of record of the
Collateral in and to the name of Secured Party and to sell or otherwise transfer
the Collateral in accordance with the terms of this Agreement.
SECTION 12. Security Interest Absolute. Subject to Greyhound Security
--------------------------
Interest, Shareholder agrees that all rights of Secured Party and the assignment
and security interest hereunder and all obligations of Shareholder hereunder and
under the Financing Documents shall be absolute and unconditional, irrespective
of and Shareholder hereby consents to:
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(a) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations or any other amendment or
waiver of or any consent to any departure from the Financing Documents;
(b) any amendment, modification or restatement of the Financing
Documents;
(c) any exchange, release or nonperfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Obligations; or
(d) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, which might otherwise constitute a defense
available to, or a discharge of, Shareholder or a third-party grantor of a
security interest.
SECTION 13. Notices. Except as otherwise expressly provided herein, any
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notice required to be given to any party pursuant to any provision of this
Agreement, shall be (i) hand delivered, (ii) sent by Federal Express or other
nationally recognized overnight courier service, or (iii) sent by facsimile
transmission, and, if hand delivered shall be deemed received when delivered, if
sent by Federal Express or other nationally recognized overnight courier service
shall be deemed received one day after having been deposited with Federal
Express or other nationally recognized overnight courier service if designated
for next-day delivery, and if sent by facsimile transmission, when a
confirmation slip indicates the transmission was received, addressed as follows:
(a) If to Shareholder:
Xxxx X. Xxxx
Chairman and CEO
CPS Systems, Inc.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile No. (000) 000-0000 or 000-0000
Phone No. (000) 000-0000
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With a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Xxxxx, Xxxx & Xxxxxxxx
Cumberland Center II
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile No. (000) 000-0000
Phone No. (000) 000-0000
(b) If to Secured Party:
Xxxxxxx Xxxxxx Mezzanine Fund, L.P.
c/x Xxxxxxx Xxxxxx Capital Partners
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No. (000) 000-0000
Phone No. (000) 000-0000
with a copy to:
Holme Xxxxxxx & Xxxx LLC
0000 Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Facsimile No. (000) 000-0000
Phone No. (000) 000-0000
Any party may change its address for the giving of notice by notice
hereunder.
SECTION 14. Continuing Security Interest; Transfer of Note; Release of
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Collateral. This Agreement shall create a continuing security interest in the
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Collateral and shall (a) remain in full force and effect until the payment in
full of the Obligations, (b) be binding upon and inure to the benefit of
Shareholder, its heirs and assigns and (c) be binding upon and inure, together
with the rights and remedies of Secured Party hereunder, to the benefit of
Secured Party, its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), Secured Party may assign or otherwise
transfer the Note, or any other Financing Document, or any portion thereof to
any other person or entity and such other person or entity shall thereupon
become vested with all the benefits in respect thereof granted to Secured
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Party herein or otherwise. Shareholder shall be entitled to a release of the
Collateral only upon payment in full and satisfaction of all of the Obligations.
SECTION 15. INTERCREDITOR AGREEMENT. Shareholder acknowledges and agrees
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that, pursuant to a Subordination and Intercreditor Agreement (the
"Intercreditor Agreement") of even date herewith by and between Secured Party,
Greyhound, Acquisition Corp. and the Company, upon the Company's repayment of
the loans made by Greyhound (which loans are more particularly described in the
Intercreditor Agreement), Greyhound has agreed to immediately terminate the
Greyhound Security Interest and deliver the Collateral directly to Secured Party
upon such termination. If, in the event of such termination, the Collateral is
delivered to Shareholder, Shareholder hereby covenants and agrees to immediately
deliver the Collateral to Secured Party and execute all other documents and
instruments necessary to provide Secured Party with a first perfected security
interest in the Collateral and to undertake all other actions which may be
reasonably necessary to effectuate the terms and provisions of the Intercreditor
Agreement relating to Secured Party's security interest in the Collateral.
SECTION 16. CONFLICT WITH GREYHOUND FINANCING/INTERCREDITOR AGREEMENT.
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This Agreement and all Financing Documents are subject to the following:
(a) TO THE EXTENT THAT ANY REQUIREMENT, COVENANT OR AGREEMENT
CONTAINED HEREIN IS ALSO REQUIRED BY OR REFERRED TO IN THE DOCUMENTS SETTING OUT
THE GREYHOUND FINANCING, COMPLIANCE WITH SUCH REQUIREMENT, COVENANT OR AGREEMENT
IN THE GREYHOUND FINANCING SHALL BE DEEMED TO BE COMPLIANCE WITH SUCH
REQUIREMENT, COVENANT OR AGREEMENT IN THIS SECURITY AGREEMENT AND/OR THE OTHER
FINANCING DOCUMENTS, EVEN IF THERE IS NO ACTUAL COMPLIANCE UNDER THE FINANCING
DOCUMENTS; AND
(b) UNTIL THE GREYHOUND FINANCING IS FULLY SATISFIED, SECURED
PARTY AGREES TO FORBEAR FROM THE EXERCISE OF ANY REMEDY IT HAS HEREUNDER, UNDER
THE OTHER FINANCING DOCUMENTS OR BY LAW TO THE EXTENT BUT ONLY TO THE EXTENT
REQUIRED IN THE INTERCREDITOR AGREEMENT.
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SECTION 17. Miscellaneous.
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(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO WITHOUT REGARD TO
COLORADO'S CONFLICTS OF LAW PRINCIPLES.
(b) Entire Agreement. This Agreement and the Financing Documents
----------------
constitute and incorporate the entire agreement between Secured Party and
Shareholder concerning the subject matter of this Agreement and supersede any
prior agreements between Secured Party and Shareholder concerning the subject
matter thereof.
(c) Jurisdiction and Venue. Any action concerning this Agreement
----------------------
or any other Financing Document may be brought in (i) the United States District
Court for the District of Colorado, or (ii) any other court where venue and
jurisdiction are proper, and Shareholder hereby consents to nonexclusive venue
and jurisdiction in any of the courts described above and hereby irrevocably
waives the defense of inconvenient forum to the maintenance of any such action
or proceeding. Shareholder hereby irrevocably agrees that the summons and
complaint or any other process in any action in any jurisdiction may be served
by mailing in accordance with Section 13. Such service will be complete on the
date such process is so mailed or delivered, and Shareholder will have 30 days
from such completion of service in which to respond in the manner provided by
law. Shareholder may also be served in any other manner permitted by law, in
which event Shareholder's time to respond shall be the time provided by law.
(d) Waiver of Jury Trial. Shareholder and Secured Party hereby
--------------------
waive any right to jury trial of any claim, cross-claim or counterclaim relating
to or arising out of or in connection with this Agreement or any of the other
Financing Documents.
(e) Right of Offset. Upon the occurrence of any Event of Default
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under this Agreement, Secured Party is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by Secured Party to or for the credit or the account of
Shareholder against any and all of the Obligations, irrespective of whether or
not Secured Party
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shall have made any demand under the Financing Documents and although such
Obligations may be unmatured. The rights of Secured Party under this section are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) Secured Party may have.
(f) Provisions Several/Illegality. The unenforceability or
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invalidity of any provision or provisions hereof shall not render any other
provision or provisions herein contained unenforceable or invalid and in lieu of
each such illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
(g) Time of the Essence. Time is of the essence hereof with
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respect to the dates, terms and conditions of this Agreement.
(h) Amendments and Waivers. No amendment or waiver of any
----------------------
provision of this Agreement nor consent to any departure by Shareholder
herefrom, shall in any event be effective unless the same shall be in writing
and signed by Secured Party, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
(i) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, Shareholder has caused this Agreement to be duly
executed and delivered as of the date first above written.
SHAREHOLDER:
/s/ Xxxx X. Xxxx
-----------------------------------
Xxxx X. Xxxx
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CPS Systems, Inc., a Texas corporation, hereby accepts and agrees to be
bound by the terms and conditions of this Security Agreement (Stock) as of the
29th day of December, 1994.
CPS SYSTEMS, INC., a Texas
corporation
By: /s/ Xxxx X. Xxxx
-----------------------------------
Name: XXXX X. XXXX
---------------------------------
Title: PRESIDENT
--------------------------------
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EXHIBIT A
CPS Systems, Inc. No. of Shares
Stock Certificate No. 31 2918
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