SECURITY AGREEMENT
(Negotiable Collateral)
For value received, the undersigned ("Debtor") assigns, transfers,
delivers, and pledges to Comerica Bank, a Michigan banking corporation, whose
address is 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 ("Bank"), a
continuing security interest in (a) the following securities, stocks, bonds,
notes, instruments, documents of title, and/or other property; (b) interest,
dividends, increase, profits, new securities or other increments, distributions
or rights of any kind received on account of this property; (c) Debtor's
Property in Possession of Bank; and (d) all property substituted therefor or for
any part thereof, all records (including computer software) pertaining thereto
and all rights, products or Proceeds thereof (whether cash or non-cash Proceeds)
resulting from any sale or exchange or transfer thereof or arising by virtue of
ownership thereof (such as, but not limited to, the rights to additional or
other securities or property upon any corporate reorganization, merger,
consolidation, liquidation, or dissolution, offering of stock rights, stock
split or stock or liquidating dividend or the rights to any goods evidenced by
such property or insurance proceeds with respect thereto), and all subscription,
voting, and preferential rights:
1,660,000 shares of the common stock of Xxxxxxxx Controls, Inc.
1,864,000 shares of the common stock of Ajay Sports, Inc.
to secure payment of any and all sums, indebtedness and liabilities of any and
every kind now owing or later to become due to the Bank from Enercorp, Inc.
("Borrower") and Debtor or any or all of them during the term of this Agreement,
however created, incurred, evidenced, acquired or arising, whether under any
note(s), guaranty(ies), letter of credit agreement(s), evidence(s) of
indebtedness or under any other instrument, obligation, guaranty, contract or
agreement or dealing of any and every kind now existing or later entered into
between the Debtor or the Borrower and the Bank, or otherwise, and whether
direct, indirect, primary, secondary, fixed, contingent, joint or several, due
or to become due, together with interest and charges, and including, without
limit, all present and future indebtedness or obligations of third parties to
the Bank which is guaranteed by the Debtor or the Borrower or any or all of them
and the present or future indebtedness originally owing by the Debtor or the
Borrower or any or all of them to third parties and assigned by third parties to
the Bank, and any and all renewals, extensions or modifications of any of them
(the "Indebtedness").
1. Definitions. As used in this Agreement:
1.1 "Collateral" means any and all property of Debtor in which Bank now
has or by this Agreement now or later acquires a security interest.
4
1.2 "Debtor's Property in Possession of Bank" means goods, instruments,
documents, policies and certificates of insurance, deposits, money
or other property now owned or later acquired by Debtor or in which
Debtor now has or later acquires an interest and which are now or
later in possession of Bank, or as to which Bank now or later
controls possession by documents or otherwise.
1.3 "Environmental Law" means any laws, ordinances, directives,
orders, statutes, or regulations an object of which is to
regulate or improve health, safety, or the environment,
including, without limit, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42
USC 9601 et seq.), the Resource Conservation and Recovery Act, as
amended (42 USC 6901 et seq.), and the Michigan Environmental
Response Act, as amended (MCL 299.601 et seq.).
1.4 "Hazardous Materials" means each and all of the following: hazardous
materials and/or substances as defined in any Environmental Law,
petroleum, petroleum by-products, natural gas, flammable explosives,
radioactive materials, and toxic materials.
1.5 "Proceeds" has the meaning assigned it in Article 9 of the Uniform
Commercial Code, as of the date of this Agreement, and also
includes, without limit, cash or other property which were proceeds
and are recovered by a bankruptcy trustee or otherwise as a
preferential transfer by Debtor.
1.6 "Uniform Commercial Code" means Act No. 174 of the Michigan
Public Acts of 1962, as amended.
1.7 Except as otherwise provided in this Agreement, all terms in this
Agreement have the meanings assigned to them in Article 9 (or,
absent definition in Article 9, in any other Article) of the Uniform
Commercial Code, as of the date of this Agreement.
2. Warranties, Covenants and Agreements. Debtor warrants, covenants and
agrees as follows:
2.1 Bank at its option may disburse loan proceeds directly to the seller
of any Collateral to be acquired with proceeds of loans from Bank.
2.2 Bank, at its option, may require delivery of any Collateral to Bank
at any time with such endorsements or assignments of the Collateral
as Bank may request.
2.3 Debtor shall (a) keep adequate records of the Collateral and other
records as Bank shall determine to be appropriate; and (b) allow
Bank to examine, inspect and make abstracts from, or copy any of
Debtor's books and records (relating to the Collateral or otherwise
and whether printed or in magnetic tape or discs or in other machine
readable form).
2.4 At any time and without notice, the Bank may (a) cause the
Collateral or any portion of it to be transferred to its name or
to the name of its nominee or nominees; (b) receive or collect by
legal proceedings or otherwise all dividends, interest, principal
payments and other sums and all other distributions at any time
payable or receivable on account of the Collateral, and hold the
same as Collateral, or apply the same to the Indebtedness, the
manner and distribution of the application to be in the sole
discretion of the Bank; (c) enter into any extension,
subordination, reorganization, deposit, merger or consolidation
agreement or any other agreement relating to or affecting the
Collateral, and deposit or surrender control of the Collateral,
and accept other property in exchange for the Collateral and hold
or apply the property or money so received in accordance with the
provisions of this Agreement.
2.5 The Bank may assign any of the Indebtedness and deliver all or any
part of the Collateral to its assignee, who then shall have with
respect to the Collateral so delivered all the rights and powers of
the Bank under this Agreement, and after that the Bank shall be
fully discharged from all liability and responsibility with respect
to the Collateral so delivered.
2.6 If Bank, acting in its sole discretion, redelivers Collateral to
Debtor or Debtor's designee for the purpose of
(a) the ultimate sale or exchange thereof, or
(b) presentation, collection, renewal, or registration of
transfer thereof, or
(c) loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing therewith
preliminary to sale or exchange, such redelivery shall be
in trust for the benefit of Bank and shall not constitute a
release of Bank's security interest therein or in the
proceeds or products thereof unless Bank specifically so
agrees in writing. If Debtor requests any such redelivery,
Debtor will deliver with such request a duly executed
financing statement in form and substance satisfactory to
Bank. Any proceeds of Collateral coming into Debtor's
possession as a result of any such redelivery shall be held
in trust for Bank and forthwith delivered to Bank for
application on the Indebtedness. Bank may (if, in its sole
discretion, it elects to do so) deliver the Collateral or
any part of the Collateral to Debtor, and such delivery by
Bank shall discharge Bank from any and all liability or
responsibility for such Collateral.
2.7 Debtor acknowledges and agrees that the Bank has no obligation to
acquire or perfect any lien on or security interest in any asset(s),
whether realty or personalty, to secure payment of the Indebtedness,
and Debtor is not relying upon assets in which the Bank has or may
have a lien or security interest for payment of the Indebtedness.
2.8 Debtor shall at the request of Bank (a) xxxx its records and the
Collateral to clearly indicate the security interest of Bank
under this Agreement, and (b) deliver to Bank all accounting and
other records pertaining to, and all writings evidencing, the
Collateral or any portion of it, together with all books, records
and documents of Debtor related to it in whatever form kept by
Debtor, whether printed or in magnetic tape or discs or in other
machine readable form or otherwise, and all forms, programs,
software and other materials and instructions necessary or useful
to Bank, to monitor the Collateral or enforce its rights under
this Agreement.
2.9 At the time any Collateral becomes, or is represented to be,
subject to a security interest in favor of Bank, Debtor shall be
deemed to have warranted that (a) Debtor is the lawful owner of
the Collateral and has the right and authority to subject it to a
security interest granted to Bank; (b) none of the Collateral is
subject to any security interest other than that in favor of Bank
and there are no financing statements on file, other than in
favor of Bank; and (c) Debtor acquired its rights in the
Collateral in the ordinary course of its business.
2.10 Debtor will keep the Collateral free at all times from any and
all claims, liens, security interests and encumbrances other than
those in favor of Bank. Debtor will not, without the prior
written consent of Bank, sell, transfer or lease, or permit or
suffer to be sold, transferred or leased, any or all of the
Collateral. Bank or its agents or attorneys may at all reasonable
times inspect the Collateral and may enter upon all premises
where the Collateral is kept or might be located.
2.11 Debtor shall take or cause to be taken and execute or cause to be
executed all financing statements, endorsements, assignments and
other writings requested by Bank to establish, maintain,
reinstate, and/or continue the perfected and first priority
status of the security interest of Bank in the Collateral or to
implement or further effectuate the terms or purpose of this
Agreement, although the failure of the Debtor to do so shall not
affect in any way Bank's perfected and first priority security
interest in the Collateral, and will on demand pay all costs and
expenses of filing and recording, including the costs of any
record searches, deemed necessary by Bank from time to time, to
establish or determine the validity and the priority of Bank's
security interest. Debtor further makes, constitutes and appoints
Bank its true and lawful attorney-in-fact with full power of
substitution to take any action in furtherance of this Agreement,
including, without limitation, the signing of financing
statements, endorsing of instruments, and the execution and
delivery of all documents and agreements necessary to obtain or
accomplish any protection for or collection or disposition of any
part of the Collateral. Such appointment shall be deemed
irrevocable and coupled with an interest.
2.12 Debtor will pay promptly and within the time that they can be
paid without interest or penalty all taxes, assessments and
similar imposts and charges which at any time are or may become a
lien, charge, or encumbrance upon any of the Collateral, except
to the extent contested in good faith and bonded in a manner
satisfactory to Bank. If Debtor fails to pay any of these taxes,
assessments or other charges in the time provided above, Bank has
the option (but not the obligation) to do so and Debtor agrees to
repay all amounts so expended by Bank immediately upon demand,
together with interest at the highest default rate which could be
charged by Bank to Debtor on any Indebtedness.
2.13 If at any time the outstanding principal balance of the
Indebtedness exceeds 50% of the value of the Collateral, as such
value is determined from time to time in the sole, but reasonable
discretion of Bank (herein called the "Margin Requirement"),
Debtor shall, upon five (5) days prior written notice from Bank,
pay or cause to be paid to Bank an amount sufficient to reduce
the Indebtedness such that the remaining principal outstanding
thereunder is equal to or less than the Margin Requirement. Bank
shall apply payments made under this paragraph in payment of the
Indebtedness in such order and manner of application as Bank in
its sole discretion elects. In the alternative, Debtor may
provide or cause to be provided to Bank additional collateral in
the form of cash or other property acceptable to Bank and with a
value, as determined by Bank, that when added to the Collateral
will constitute compliance with the Margin Requirement.
2.14 If any of the Collateral (or any records concerning the
Collateral) is located or kept by Debtor on leased premises,
Debtor will: (a) provide a complete and correct copy of all
applicable leases to Bank, (b) furnish or cause to be furnished
to Bank from each landlord under such leases a lessor's
acknowledgment and subordination in form satisfactory to Bank
authorizing, on Default, Bank's entry on such premises to enforce
its rights and remedies under this Agreement and (c) comply with
all such leases. Debtor's rights under all such leases shall
further be part of the Collateral, and included in the security
interest granted to Bank hereunder.
2.15 Debtor agrees to reimburse Bank upon demand for all fees and
expenses incurred by Bank (a) in seeking to collect the
Indebtedness or any part of it (through formal or informal
collection actions, workouts or otherwise), in defending the
validity or priority of its security interest, or in pursuing its
rights and remedies under this Agreement or under any other
agreement between Bank and Debtor; (b) in connection with any
proceeding (including, without limit, bankruptcy, insolvency,
administrative, appellate, or probate proceedings or any lawsuit)
in which Bank at any time is involved as a result of any lending
relationship or other financial accommodation involving Bank and
Debtor; or (c) incurred by Bank during the continuance of an
Event of Default, which fees and expenses relate to or would not
have been incurred but for any lending relationship or other
financial accommodation involving Bank and Debtor. The fees and
expenses include, without limit, court costs, legal expenses,
reasonable attorneys' fees, paralegal fees, internal transfer
charges for in-house attorneys and paralegals and other services,
and audit expenses.
2.16 Debtor at all times shall be in strict compliance with all
applicable laws.
2.17 (a) Debtor is and shall be in strict compliance with all
Environmental Laws. There are not and will not be Hazardous
Materials on, in or under any real or personal property
("Property") now or at any time owned, occupied, or
operated by Debtor which in any manner violates any
Environmental Law or which could be subject to remediation
pursuant to any Environmental Law. Debtor has not disposed
of, manufactured, treated, stored, handled, used,
transported, or generated Hazardous Materials, and shall
not in the future do any of the above acts in violation of
any Environmental Law.
(b) Debtor shall promptly conduct all investigations, testing,
removal and other actions necessary to clean up and remove all
Hazardous Materials on or affecting the Property in accordance
with all Environmental Laws. These actions will not be deemed
to cure any breach of this Section.
(c) Debtor shall defend, indemnify and hold harmless Bank, its
employees, agents, shareholders, officers, and directors
from and against any and all claims, damages, fines,
expenses, liabilities or causes of action of whatever kind,
including without limit consultant fees, legal expenses,
and reasonable attorneys' fees, suffered by any of them as
a direct or indirect result of any actual or asserted
violation of any Environmental Law or of any remediation
relating to the Property required by any Environmental Law.
(d) Upon ten days notice to Debtor (except in an emergency or
where not practical under applicable law), Bank may (but is
not obligated to) enter on the Property or take such other
actions as it deems appropriate to inspect, test for, clean
up, remove, minimize the impact of, or advise governmental
agencies of the possible existence of any Hazardous
Materials upon Bank's receipt of any notice from any source
asserting the existence of any Hazardous Materials in
violation of Environmental Laws. All costs and expenses so
incurred by Bank, including without limit consultant fees,
legal expenses and reasonable attorneys' fees, shall be
payable by Debtor upon demand, together with interest at
the highest default rate which could be charged by Bank to
Debtor on any Indebtedness.
(e) The provisions of this section shall survive the repayment of
the Indebtedness, the satisfaction of all other obligations of
Debtor to Bank, the discharge or termination by Bank of any
lien or security interest from Debtor, and the foreclosure of
or exercise of rights as to any Collateral.
2.18 Debtor acknowledges and agrees that if any Guaranty is executed by
the Debtor in connection with or related to this Agreement, all
waivers contained in that Guaranty shall be and are incorporated by
reference into this Agreement.
3. Collection of Proceeds.
3.1 Immediately upon notice to Debtor by Bank and at all times after
that, Debtor agrees to hold in trust for Bank all payments
received in connection with the Collateral and from the sale,
lease or other disposition of any Collateral, all rights by way
of suretyship or guaranty and all rights in the nature of a
mortgage, lien or security interest which Debtor now has or may
later acquire regarding the Collateral. Debtor agrees to collect
and enforce payment of all Collateral until Bank shall direct
Debtor to the contrary and, from and after this direction, Debtor
agrees to fully and promptly cooperate and assist Bank (or any
other person as Bank shall designate) in the collection and
enforcement of all Collateral. Immediately upon notice to such
effect to Debtor by Bank and at all times after that, Debtor
agrees to (a) endorse to Bank and immediately deliver to Bank all
payments received by Debtor on Collateral or from the sale, lease
or other disposition of any Collateral or arising from any other
rights or interests of Debtor in the Collateral, in the form
received by Debtor without commingling with any other funds, and
(b) immediately deliver to Bank all property in Debtor's
possession or later coming into Debtor's possession through
enforcement of Debtor's rights or interests.
3.2 Debtor irrevocably authorizes Bank or any Bank employee or agent to
endorse the name of Debtor upon any Collateral, checks, or other
items which are received in payment of any Collateral, and to do any
and all things necessary in order to reduce these items to money.
3.3 Bank shall have no duty as to the collection or protection of
Collateral or the proceeds of it, nor as to the preservation of
any related rights, beyond the use of reasonable care in the
custody and preservation of Collateral in the possession of Bank.
Debtor agrees to take all steps necessary to preserve rights
against prior parties with respect to Debtor's Property in
Possession of Bank.
3.4 For the purpose of calculating interest on the Indebtedness,
Debtor understands that Bank imposes a minimum one business day
delay in crediting payments received by Bank against the
Indebtedness to allow time for collection and Debtor agrees that
Bank may, at Bank's option, make such credits only when payments
are actually collected by Bank in immediately available funds.
Any credit of payment by Bank prior to receipt by Bank of
immediately available funds is conditional upon Bank's receipt of
those funds. For the purpose of calculating the principal amount
which Debtor may request to borrow from Bank under any borrowing
arrangements with Bank, Debtor understands that Bank may, at
Bank's option, use a method different from that used for the
purpose of calculating interest.
4. Defaults, Enforcement and Application of Proceeds.
4.1 Upon the occurrence of any of the following events (each an "Event
of Default"), Debtor shall be in default under this Agreement:
(a) Any failure or neglect to comply with, or breach of, any of
the terms, provisions, warranties or covenants of this
Agreement, or any other agreement or commitment between Debtor
or any guarantor of any of the Indebtedness ("guarantor") and
Bank; or
(b) Any failure to pay the Indebtedness when due, or such
portion of it as may be due, by acceleration or otherwise;
or
(c) Any warranty, representation, financial statement or other
information made, given or furnished to Bank by or on behalf
of Debtor or any guarantor shall be, or shall prove to have
been, false or materially misleading when made, given, or
furnished; or
(d) Any loss, theft, substantial damage or destruction to or of
any of the Collateral, or the issuance or filing of any
attachment, levy, garnishment or the commencement of any
proceeding in connection with any of the Collateral or of any
other judicial process of, upon or in respect of Debtor or any
guarantor or any of the Collateral; or
(e) Sale or other disposition by Debtor or guarantor of any
substantial portion of its assets or property or voluntary
suspension of the transaction of business by Debtor or any
guarantor, or death, dissolution, termination of existence,
merger, consolidation, insolvency, business failure or
assignment for the benefit of creditors of or by Debtor or
any guarantor; or commencement of any proceedings under any
state or federal bankruptcy or insolvency laws or laws for
the relief of debtors by or against Debtor or any
guarantor; or the appointment of a receiver, trustee, court
appointee, sequestrator or otherwise, for all or any part
of the property of Debtor or any guarantor; or
(f) Any termination or notice of termination of any guaranty of
collection or payment of, or any breach, termination or notice
of termination of any subordination agreement, pledge, or
collateral assignment relating to, all or any part of the
Indebtedness; or
(g) Any failure by Debtor or any guarantor to pay when due any of
its indebtedness (other than to Bank) or in the observance or
performance of any term, covenant or condition in any
agreement evidencing, securing or relating to that
indebtedness; or
(h) Bank deems the margin of Collateral insufficient or itself
insecure, in good faith believing that the prospect of payment
of the Indebtedness or performance of this Agreement is
impaired or shall fear deterioration, removal or waste of the
Collateral.
4.2 Upon the occurrence of any Event of Default, Bank may at its
discretion and without prior notice to Debtor declare any or all of
the Indebtedness to be immediately due and payable, and shall have
and may exercise any one or more of the following rights and
remedies:
(a) exercise all the rights and remedies upon default, in
foreclosure and otherwise, available to secured parties under
the provisions of the Uniform Commercial Code and other
applicable law;
(b) institute legal proceedings to foreclose upon and against the
lien and security interest granted by this Agreement, to
recover judgment for all amounts then due and owing as
Indebtedness, and to collect the same out of any of the
Collateral or the proceeds of any sale of it;
(c) institute legal proceedings for the sale, under the
judgment or decree of any court of competent jurisdiction,
of any or all of the Collateral; and/or
(d) personally or by agents, attorneys, or appointment of a
receiver, enter upon any premises where the Collateral or any
part of it may then be located, and take possession of all or
any part of it and/or render it unusable; and without being
responsible for loss or damage to such Collateral,
(i) hold, store, and keep idle, or lease, operate,
remove or otherwise use or permit the use of
the Collateral or any part of it, for that time
and upon those terms as Bank, in its sole
discretion, deems to be in its own best
interest, and demand, collect and retain all
resulting earnings and other sums due and to
become due from any party, accounting only for
net earnings, if any (unless the Collateral is
retained in satisfaction of the Indebtedness,
in which case no accounting will be necessary),
arising from that use (which net earnings may
be applied against the Indebtedness) and
charging against all receipts from the use of
the Collateral or from its sale, by court
proceedings or pursuant to subsection (ii)
below, all other costs, expenses, charges,
damages and other losses resulting from that
use; and/or
(ii) sell, lease, dispose of, or cause to be sold,
leased or disposed of, all or any part of the
Collateral at one or more public or private
sales, leasings or other dispositions, at
places and times and on terms and conditions as
Bank may deem fit, without any previous demand
or advertisement; and except as provided in
this Agreement, all notice of sale, lease or
other disposition, and advertisement, and other
notice or demand, any right or equity of
redemption, and any obligation of a prospective
purchaser or lessee to inquire as to the power
and authority of Bank to sell, lease or
otherwise dispose of the Collateral or as to
the application by Bank of the proceeds of sale
or otherwise, which would otherwise be required
by, or available to Debtor under, applicable
law are expressly waived by Debtor to the
fullest extent permitted.
At any sale pursuant to this Section 4.2, whether under the
power of sale, by virtue of judicial proceedings or otherwise,
it shall not be necessary for Bank or a public officer under
order of a court to have present physical or constructive
possession of the Collateral to be sold. The recitals
contained in any conveyances and receipts made and given by
Bank or the public officer to any purchaser at any sale made
pursuant to this Agreement shall, to the extent permitted by
applicable law, conclusively establish the truth and accuracy
of the matters stated (including, without limit, as to the
amounts of the principal of and interest on the Indebtedness,
the accrual and nonpayment of it and advertisement and conduct
of the sale); and all prerequisites to the sale shall be
presumed to have been satisfied and performed. Upon any sale
of any of the Collateral, the receipt of the officer making
the sale under judicial proceedings or of Bank shall be
sufficient discharge to the purchaser for the purchase money,
and the purchaser shall not be obligated to see to the
application of the money. Any sale of any of the Collateral
under this Agreement shall be a perpetual bar against Debtor
with respect to that Collateral.
4.3 Debtor shall (at any time) at the request of Bank, notify the
obligors of the security interest of Bank in any Collateral and
direct payment of it to Bank. Bank may, itself, upon the occurrence
of any Event of Default so notify and direct any obligor and may
take control of any proceeds to which it may be entitled under this
Agreement.
4.4 The proceeds of any sale or other disposition of Collateral
authorized by this Agreement shall be applied by Bank first upon
all expenses authorized by the Uniform Commercial Code and all
reasonable attorney fees and legal expenses incurred by Bank; the
balance of the proceeds of the sale or other disposition shall be
applied in the payment of the Indebtedness, first to interest,
then to principal, then to remaining Indebtedness and the
surplus, if any, shall be paid over to Debtor or to such other
person(s) as may be entitled to it under applicable law. Debtor
shall remain liable for any deficiency, which it shall pay to
Bank immediately upon demand.
4.5 Nothing in this Agreement is intended, nor shall it be construed,
to preclude Bank from pursuing any other remedy provided by law
for the collection of any or all of the Indebtedness or for the
recovery of any other sum to which Bank may be or become entitled
for the breach of this Agreement by Debtor. Nothing in this
Agreement shall reduce or release in any way any rights or
security interests of Bank contained in any existing agreement
between Debtor and Bank, nor shall anything in this Agreement
modify the terms of any Indebtedness owing to Bank on a demand
basis.
4.6 No waiver of default or consent to any act by Debtor shall be
effective unless in writing and signed by an authorized officer of
Bank. No waiver of any default or forbearance on the part of Bank in
enforcing any of its rights under this Agreement shall operate as a
waiver of any other default or of the same default on a future
occasion or of any rights.
4.7 Debtor irrevocably appoints Bank or any employee or agent of Bank
(which appointment is coupled with an interest) the true and lawful
attorney of Debtor (with full power of substitution) in the name,
place and stead of, and at the expense of, Debtor:
(a) to demand, receive, xxx for and give receipts or acquittances
for any moneys due or to become due on any Collateral and to
endorse any item representing any payment on or proceeds of
the Collateral;
(b) with respect to any Collateral, to assent to any or all
extensions or postponements of the time of its payment or
any other indulgence in connection with it, to the
substitution, exchange, or release of Collateral, to the
addition or release of any party primarily or secondarily
liable, to the acceptance of partial payments on it and the
settlement, compromise or adjustment of it, all in a manner
and at times as Bank shall deem advisable;
(c) to make all necessary transfers of all or any part of the
Collateral in connection with any sale, lease or other
disposition made pursuant to this Agreement;
(d) to adjust and compromise any insurance loss on the
Collateral and to endorse checks or drafts payable to
Debtor in connection with the insurance;
(e) to execute and deliver for value all necessary or
appropriate bills of sale, assignments and other
instruments in connection with any sale, lease or other
disposition of the Collateral. Debtor ratifies and confirms
all that its said attorney (or any substitute) shall
lawfully do under this Agreement. Nevertheless, if
requested by Bank or a purchaser or lessee, Debtor shall
ratify and confirm any sale, lease or other disposition by
executing and delivering to Bank or the purchaser or lessee
all proper bills of sale, assignments, releases, leases and
other instruments as may be designated in any request; and
(f) to execute and file in the name of and on behalf of Debtor all
financing statements or other filings deemed necessary or
desirable by Bank to evidence, perfect or continue the
security interests granted in this Agreement.
4.8 Upon the occurrence of an Event of Default, Debtor also agrees, upon
request of Bank, to assemble the Collateral and make it available to
Bank at any place designated by Bank which is reasonably convenient
to Bank and Debtor.
5. Miscellaneous.
5.1 This Agreement shall in all respects be governed by and construed in
accordance with the laws of the State of Michigan.
5.2 This Agreement shall be terminated only by the filing of a
termination statement in accordance with the applicable
provisions of the Uniform Commercial Code, but the obligations
contained in Section 2.17 of this Agreement shall survive
termination. Until terminated, the security interest created by
this Agreement shall continue in full force and effect and shall
secure and be applicable to all advances now or later made by
Bank to Debtor, whether or not Debtor is indebted to Bank
immediately prior to the time of any advance, and to all other
Indebtedness.
5.3 Notwithstanding any prior revocation, termination, surrender or
discharge of this Agreement, the effectiveness of this Agreement
shall automatically continue or be reinstated, as the case may
be, in the event that (a) any payment received or credit given by
the Bank in respect of the Indebtedness is returned, disgorged or
rescinded as a preference, impermissible setoff, fraudulent
conveyance, diversion of trust funds, or otherwise under any
applicable state or federal law, including, without limitation,
laws pertaining to bankruptcy or insolvency, in which case this
Agreement shall be enforceable against Debtor as if the returned,
disgorged or rescinded payment or credit had not been received or
given, whether or not the Bank relied upon this payment or credit
or changed its position as a consequence of it; or (b) any
liability is imposed, or sought to be imposed, against the Bank
relating to the environmental condition of, or the presence of
Hazardous Materials on, in or about, any Property given as
Collateral to the Bank whether this condition is known or
unknown, now exists or subsequently arises (excluding only
conditions which arise after any acquisition by the Bank of any
such Property, by foreclosure, in lieu of foreclosure or
otherwise, to the extent due to the wrongful act or omission of
the Bank), in which case this Agreement shall be enforceable to
the extent of all liability, costs and expenses (including
without limit reasonable attorney fees) incurred by the Bank as
the direct or indirect result of any environmental condition or
Hazardous Materials. In the event of continuation or
reinstatement of this Agreement, Debtor agree(s) upon demand by
the Bank to execute and deliver to the Bank those documents which
the Bank determines are appropriate to further evidence (in the
public records or otherwise) this continuation or reinstatement,
although the failure of Debtor to do so shall not affect in any
way the reinstatement or continuation. If Debtor does not execute
and deliver to the Bank upon demand such documents, the Bank and
each Bank officer is irrevocably appointed (which appointment is
coupled with an interest) the true and lawful attorney of Debtor
(with full power of substitution) to execute and deliver such
documents in the name and on behalf of Debtor.
5.4 This Agreement and all the rights and remedies of Bank under this
Agreement shall inure to the benefit of Bank's successors and
assigns and to any other holder who derives from Bank title to or an
interest in the Indebtedness or any portion of it, and shall bind
Debtor and the heirs, legal representatives, successors and assigns
of Debtor.
5.5 If there is more than one Debtor, all undertakings, warranties and
covenants made by Debtor and all rights, powers and authorities
given to or conferred upon Bank are made or given jointly and
severally.
5.6 In addition to Bank's other rights, any indebtedness owing from Bank
to Debtor can be set off and applied by Bank on any Indebtedness at
any time(s) either before or after maturity or demand without notice
to anyone.
5.7 Bank assumes no duty of performance or other responsibility under
any contracts contained within the Collateral.
5.8 In the event that applicable law shall obligate Bank to give
prior notice to Debtor of any action to be taken under this
Agreement, Debtor agrees that a written notice given to it at
least five days before the date of the act shall be reasonable
notice of the act and, specifically, reasonable notification of
the time and place of any public sale or of the time after which
any private sale, lease or other disposition is to be made,
unless a shorter notice period is reasonable under the
circumstances. A notice shall be deemed to be given under this
Agreement when delivered to Debtor or when placed in an envelope
addressed to Debtor and deposited, with postage prepaid, in a
post office or official depository under the exclusive care and
custody of the United States Postal Service. The mailing shall be
registered, certified, or first class mail.
5.9 A carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement under the Uniform Commercial
Code and may be filed by Bank in any filing office.
5.10 No single or partial exercise, or delay in the exercise, of any
right or power under this Agreement, shall preclude other or further
exercise of the rights and powers under this Agreement.
5.11 The unenforceability of any provision of this Agreement shall not
affect the enforceability of the remainder of this Agreement.
5.12 No waiver, consent, modification or change of the terms of this
Agreement shall bind the Debtor or the Bank unless in writing and
signed by the waiving party or an authorized officer of the waiving
party, and then this waiver, consent, modification or change shall
be effective only in the specific instance and for the specific
purpose given.
5.13 This Agreement constitutes the entire agreement of Debtor and Bank
with respect to the subject matter of this Agreement.
5.14 To the extent that any of the Indebtedness is payable upon
demand, nothing contained in this Agreement shall modify the
terms and conditions of that Indebtedness nor shall anything
contained in this Agreement prevent Bank from making demand,
without notice and with or without reason, for immediate payment
of any or all of that Indebtedness at any time(s), whether or not
an Event of Default has occurred.
6. Statement of Business Name, Residence and Location of Collateral.
Debtor warrants, covenants and agrees as follows:
6.1 Debtor's chief executive office is located in the County of
Oakland.
Mailing Address: 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxx
Xxxxxxxxxx, XX 00000-0000
This location is (check one box): |_| Owned |X| Leased by
the Debtor.
6.2 If Debtor is an individual or sole proprietor, Debtor's residence
(if any) is located in the County of ________
--------------------.
Mailing Address:__________________________________________.
No. and Street City State Zip Code
6.3 Any other place of business and/or residence of Debtor are
indicated below:___________________________________
-------------------------------------------------------
------------------------------------------------------.
6.4 Debtor's correct legal name is set forth at the end of this
Agreement. During the past five years, Debtor has not conducted
business under any other name except as set forth in any
appropriately labeled schedule attached to this Agreement.
6.5 Until Bank is advised in writing by Debtor to the contrary, all
notices, requests and demands required under this Agreement or by
law shall be given to, or made upon, Debtor at the address indicated
in Section 6.2 above.
6.6 _____________________________________________________________.
No. and Street City State Zip Code
6.7 Debtor will give Bank not less than ninety (90) days prior written
notice of all contemplated changes in Debtor's name, identity,
corporate structure, and/or any of the above addresses, but the
giving of this notice shall not cure any default caused by this
change.
7. Jury Waiver.
7.1 DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR
MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF
LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY
WAY RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.
8. Special Provisions Applicable to this Agreement. (None, if left blank)
Dated and delivered on:
July 30, 1997 ENERCORP, INC.
at Detroit, Michigan
By:___________________________
Its:_________________________
By:___________________________
Its:_________________________
