EXHIBIT 10.9
[BANK LEUMI LETTERHEAD]
SECURITY AGREEMENT
In consideration of financial accommodations heretofore extended or to be
extended or continued to the undersigned by BANK LEUMI USA (the "Bank"), the
undersigned hereby agrees as follows:
1. As security for the full and prompt payment of any and all Liabilities
(as hereinafter defined), the undersigned hereby assigns and transfers to the
Bank and grants the Bank a security interest in all Security (as hereinafter
defined). Said grant is made for the benefit of the Bank and/or any others
having a participation or other interest in any of the Liabilities, in such
proportions as the Bank shall in its sole discretion determine. It is the true,
clear, and express intention of the undersigned that the continuing grant of
this security interest, and the Security covered hereby, remain as security for
payment and performance of any of the Liabilities, whether now existing or which
may hereinafter be incurred by future advances otherwise and whether or not any
of such Liabilities is related to a transaction out of which any other
Liabilities arose, by class, or kind, or whether or not contemplated by the
parties at the time of the granting of this security interest. Notice of the
continuing grant of this security interest shall not be required to be stated on
the face of any document representing any of such Liabilities, nor otherwise
identified as being secured hereby; and if any of such Liabilities shall remain
or become that of less than all of the undersigned herein, any of the
undersigned not liable therefor hereby expressly hypothecates his, her, its, or
their ownership interest in the Security to the extent required to satisfy any
of said Liabilities, without restriction, or limitation. Any of such Liabilities
shall be deemed to have been made pursuant to Section 9-204(3) of the Uniform
Commercial Code of the State of New York.
2. The term "Liabilities" as used herein shall include all liabilities and
obligations of any kind of the undersigned (or any partnership or other group of
which the undersigned is a member) to (i) the Bank (ii) any group of which the
Bank is a member or (iii) any other person if the Bank has a participation or
other interest in such liabilities or obligations, whether (a) for the Bank's
own account or as agent for others, (b) acquired directly or indirectly by the
Bank from the undersigned or others, (c) absolute or contingent, joint or
several, secured or unsecured, liquidated or unliquidated, due or not due,
contractual or tortious, now existing or hereinafter arising, or (d) incurred by
the undersigned as principal, surety, endorser, guarantor or otherwise, and
including without limitation all expenses, including attorneys' fees, incurred
by the Bank in connection with any such liabilities or obligations or any
Security therefor.
3. The term "Security" as used herein shall include all of the property
described in Schedule A hereto.
4. The right is granted to the Bank, in its discretion, to file one or
more financing statements, amendments thereto and continuations thereof (with,
or, to the extent permitted by law, without the signature of the undersigned)
under the Uniform Commercial Code naming the undersigned as debtor and the Bank
as secured party and indicating therein the types or describing the items of
Security herein specified. The undersigned will execute, file and record any,
notices, affidavits or other documents and take all such other actions as the
Bank may deem appropriate to protect or perfect its security interest in the
Security or to otherwise accomplish the purposes of this agreement. The
undersigned hereby agrees to pay on demand, and/or authorizes the Bank to charge
its account with the cost of, any and all filing, recording and other fees and
expenses which the Bank deems appropriate in order to protect or perfect its
security interest in the Security or to otherwise accomplish the purposes of
this agreement, including without limitation the cost of all searches of public
records as the Bank in its sole discretion shall require. The undersigned will
promptly notify the Bank of the imposition at any time of any lien or
encumbrance upon any of the Security. Notwithstanding the foregoing, the
undersigned represents, warrants and covenants that all of the Security now
existing or hereafter arising or acquired is and will be owned by the
undersigned free and clear of all security interests, liens and encumbrances of
any kind, except for the security interest herein granted to the Bank. The
undersigned shall promptly pay when due all taxes and transportation, storage
and warehousing charges affecting or arising out of the Security. The
undersigned will defend the Security against all claims and demands of all
persons at any time claiming the same or any interest therein adverse to the
Bank.
Notwithstanding the foregoing, the Bank shall have no obligation to
comply with any recording, re-recording, filing, re-filing, or other legal
requirements necessary to establish or maintain the validity, priority or
enforceability of, or the Bank's right in or to, the Security or any part
thereof.
5. The right is granted to the Bank, in its discretion, at any time,
(a) to transfer to or register in the name of itself or any of its nominees any
of the Security, and whether or not so transferred or registered, to receive the
income and dividends thereon, including stock dividends and rights to subscribe,
and to hold the same as a part of the Security and/or apply the same as
hereinafter provided; (b) to exchange any of the Security for other property
upon any reorganization, recapitalization, or other readjustment and in
connection therewith to deposit any of the Security with any committee or
depositary upon such terms as the Bank may determine; (c) in any bankruptcy or
similar proceeding to file a proof of claim for the full amount of the Security
and to vote such claim for or against any arrangement or with respect to any
other matter; (d) in its own name or in the name of the undersigned or any other
appropriate person, to demand, xxx for, collect or receive any money or property
at any time payable or receivable on account of or in exchange for, or make any
compromise or settlement it may deem desirable with respect to, any of the
Security; (e) to extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, or release, any of the Security;
(f) to contest, pay and/or discharge all liens, encumbrances, taxes or
assessments on, or claims, actions or demands against, any of the Security and
to take all actions and proceedings in its own name or in the name of the
undersigned or any other appropriate person in order to remove or contest such
liens, encumbrances, taxes, assessments, claims, actions or demands; or to
refrain from doing any of the foregoing, all without affecting the Liabilities
and the Security and without notice or liability to, or the consent of the
undersigned except to account for property actually received by the Bank. The
undersigned hereby irrevocably appoints the Bank its attorney-in-fact, with
authority to receive, open and dispose of all mail addressed to the undersigned
and to notify the Post Office authorities to change the address for delivery of
mail addressed to the undersigned to such address as the Bank may designate: to
endorse the name of the undersigned on any instruments that may come into the
Bank's possession; to sign the name of the undersigned on any notices to account
debtors of the undersigned and requests for verification of accounts; to sign
the name of the undersigned on any assignment or other instruments of conveyance
or transfer of any of the Security; and to take all such other actions as the
Bank may deem appropriate to carry out and enforce this agreement and to
exercise the Bank's rights hereunder. The Bank shall not be obligated to
exercise any authority or right granted to it hereunder and shall not be liable
for any action taken or omitted or the manner of taking any action, except for
its willful misconduct, and in no event for consequential damages.
6. The undersigned will pay to the Bank all costs and expenses incurred
and sums paid by the Bank (including without limitation attorneys' fees,
insurance premiums and sales commissions) in connection with the custody, care,
collection, repair, storage or preparation for, or any actual or attempted
disposition of any of the Security, the collection of any proceeds of insurance
with respect to the Security or otherwise in connection with this agreement.
7. At any time and from time to time, upon demand by the Bank, the
undersigned will (a) deliver to the Bank, endorsed and, or accompanied by
instruments of assignment and transfer, in such form and containing such terms
as the Bank may request, any and all instruments, documents and/or chattel paper
constituting part of the Security, as the Bank may specify in its demand, (b)
xxxx all Security and all books and records relating thereto in such manner as
the Bank may require, and (c) permit representatives of the Bank at any time to
inspect the Security and to inspect and make abstracts from any of the
undersigned's books and records and to answer promptly all of the Bank's written
or oral inquiries with respect thereto. If the undersigned, as registered
holder of any of the Security, shall receive any stock certificate, option or
right, whether as an addition to, or in substitution or exchange for, any
Security, or otherwise, the undersigned agrees to accept the same as the Bank's
agent and to hold the same in trust for the Bank, and to forthwith deliver the
same to the Bank in the exact form received, with the undersigned's endorsement
thereof if requested by the Bank, to be held by the Bank as part of the
Security. The undersigned assigns to the Bank all of the undersigned's rights
(but none of its obligations) in, to and under all collateral, guarantees,
subordinations and other rights and benefits now or hereafter received by the
undersigned with respect to the Security and agrees to deliver to the Bank, upon
demand, all agreements, instruments and or documents evidencing same, endorsed
and/or accompanied by instruments of assignment and transfer, in such form and
containing such terms as the Bank may request.
8. Upon demand from the Bank at any time that any of the Liabilities are
outstanding, the undersigned will assign and transfer to the Bank and grant to
the Bank a security interest in additional Security of a value and character
satisfactory to the Bank or make such payment on account of the Liabilities as
the Bank may require.
9. The undersigned represents and warrants that (i) it is a Delaware
corporation with its chief executive office located at 00 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, (xx) it, if other than an individual(s) has not in the past five years
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changed its name or been known by any other name, been party to a merger,
consolidation or other change in structure, changed or had its registration
number in its state of organization changed; (iii) the location of all Security
owned by the undersigned is as referenced in this Agreement; (iv) the
undersigned is the legal and beneficial owner of the Security and has the right
to pledge, sell, assign or transfer the same; (v) it, if other than an
individual(s), will promptly notify the Bank of any change of its registration
number if it is organized and registered in a State having registration numbers
and; (vi) the undersigned shall, if not an individual(s), provide to the Bank,
on a going-forward basis, all of the information related to its organizational
status is required by the Bank in order to comply with Revised Article 9 of the
Uniform Commercial Code, as it may be adopted or amended, in States necessary
for the Bank to maintain a perfected security interest in the Security.
10. The undersigned covenants that, so long as any of the Liabilities
shall remain outstanding, the undersigned shall not, without providing thirty
(30) days prior written notice to the Bank and without first assisting the Bank
in filing such amendments to any previously filed financing statements as the
Bank may require, change its name, change its State of organization, be party to
a merger, consolidation or other change in structure. The undersigned further
covenants (i) that if any Security is subject to perfection by control with a
financial intermediary, financial institution or otherwise, the undersigned
agrees to take all necessary steps as the Bank may request to achieve and
maintain control of such Security in the Bank's favor; and (ii) the
undersigned, shall, upon receipt of notice of termination of a control agreement
entered into between the undersigned, the Bank and a financial institution or
financial intermediary, or notice of the closing of an account which is the
subject of such control agreement, cause the possessory Security which is the
subject of the control agreement to be moved to another financial institution
or financial intermediary subject to a control agreement, satisfactory in all
respects to the Bank, executed by the parties thereto and delivered to the Bank
no later than ten (10) days before the scheduled termination date of the control
agreement.
11. Upon the occurrence of an Event of Default (as hereinafter defined),
(a) any or all of the Liabilities shall, at the option of the Bank and
notwithstanding any time or credit allowed by any instrument evidencing a
Liability, be immediately due and payable without notice, demand or presentment;
(b) the Bank may, in its discretion, take possession of the Security and, for
that purpose, may enter, with the assistance of any persons, any premises where
the Security or any part thereof may be located, and retain possession of the
Security at such premises or remove the same therefrom; (c) the undersigned
shall, at the request of the Bank, assemble the Security at such places as the
Bank may designate and cooperate in all other respects with the Bank in the
exercise of its rights hereunder, (d) the Bank may vote any shares of stock or
other securities and exercise all or any powers with respect thereto with the
same force and effect as an absolute owner thereof; (e) the Bank may sell any of
the Security or cause the same to be sold in the Borough of Manhattan, New York
City, or elsewhere, in one or more sales or parcels, at such price and on such
terms as the Bank may deem advisable, for cash or on credit, for immediate or
future delivery, without assumption of any credit risk, at any public or private
sales or other dispositions, without demand of performance (which demand is
hereby expressly waived), on at least 5 days notice to the undersigned (if any
notice is required by law) of any public sale or the time after which a private
sale or other disposition may be made (which notice the undersigned acknowledges
is reasonable), and in connection therewith may grant options and may impose
reasonable conditions thereon, and the purchasers of any of the Security so sold
shall thereafter hold the same absolutely, free from any claim or right of any
kind, including any equity of redemption of the undersigned (any such equity
being hereby expressly waived and released), and the Bank or any of its nominees
or agents may buy at any public sale and if the Security is of a type sold in a
recognized market, or is of a type which is the subject of widely distributed
standard price quotations, buy at private sale; and (f) in addition to and
notwithstanding any other rights granted by law or herein (or any limitations
contained herein on any such rights), the Bank shall have the rights and
remedies with respect to the Security of a secured party under the Uniform
Commercial Code of the State of New York. The undersigned agrees that any action
taken by the Bank in accordance with this paragraph shall be deemed to be
commercially reasonable.
12. As used in this agreement, the term "Event of Default" shall mean:
(a) nonpayment when due of any of the Liabilities or failure on the part of an
Obligor (as hereinafter defined) to observe or perform any agreement or
obligation to be observed or performed hereunder or under any other agreement or
instrument relating to the Liabilities or to any other liability or obligation
of an Obligor to the Bank; (h) making by an Obligor of any misrepresentation to
the Bank or failure on the part of an Obligor to disclose to the Bank any
material fact in connection with obtaining credit or an extension of credit,
either contemporaneously herewith or at any time prior or subsequent to the
execution hereof: (c) failure of an Obligor to furnish financial information
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forthwith on demand by the Bank or to permit the inspection of any books or
records: (d) failure of an Obligor to pay, withhold, collect or remit when
assessed or due any tax, assessment or other sum payable with respect to any of
the Security (including without limitation any premium on any insurance policy
assigned to the Bank as part of the Security), or the making of any tax
assessment against any Obligor by the United States or any state or local
government; (e) commencement of any proceeding, procedure, or remedy
supplementary to or in enforcement of any judgment (including without limitation
a proceeding under Article 52 of the New York Civil Practice Law and Rules),
issuance of any writ or order of attachment or garnishment, or the existence of
any other lien against or with respect to any property of an Obligor; (f) death
of an Obligor, if an individual, or any member of an Obligor, if a partnership
or joint venture; (g) dissolution, liquidation or other termination of existence
or adoption of any resolution for the dissolution, liquidation or other
termination of existence, of an Obligor; (h) suspension of the usual business of
an Obligor or the condemnation or seizure of a substantial part of an Obligor's
property by any governmental authority or court at the instance thereof; (i)
failure of an Obligor to generally pay its debts as they become due or
insolvency or business failure of an Obligor, filing of an application for or
appointment of a trustee, custodian or receiver for an Obligor or of any part of
an Obligors property, assignment for the benefit of creditors by an Obligor,
filing of a petition in bankruptcy by or against an Obligor, or commencement by
or against an Obligor of any proceeding under any bankruptcy or insolvency law
or any other law relating to the relief of debtors, readjustment of
indebtedness, reorganization, receivership, composition or extension; (j) making
or sending notice of any intended bulk transfer by an Obligor; (k) failure on
the part of the undersigned or any of the Security to comply with Regulation U
of the Federal Reserve Board or any comparable provision of law hereinafter
enacted; (l) such a change in the condition or affairs (financial or otherwise)
of an Obligor as in the opinion of the Bank impairs the Security or increases
the Bank's risk with respect to the Liabilities; or (m) default (which shall be
continuing) with respect to any indebtedness of an Obligor to any other
individual or entity if such default would enable said individual or entity to
accelerate the maturity of such indebtedness.
For the purposes of this agreement, the term "Obligor" shall include the
undersigned and any maker, drawer, acceptor, endorser, guarantor, hypothecator,
surety, accommodation party, or other party liable for any of the Liabilities in
addition to the undersigned.
13. Notwithstanding the continued possession of the Security by the Bank,
whether on its own behalf or on behalf of others, the undersigned shall remain
liable for the payment in full of the Liabilities. The undersigned assumes all
liability and responsibility for the Security, and the obligation of the
undersigned to pay the Liabilities shall in no way be affected or diminished by
reason of the fact that any of the Security may be lost, destroyed, stolen,
damaged or for any other reason whatsoever unavailable to the undersigned or
that the value of the Security shall be diminished. In the event of any partial
or complete loss or destruction of any of the Security by any means, the
undersigned shall, at its own expense, cause such repairs to be made as the Bank
may deem appropriate for its protection or, at the option of the Bank, replace
the Security with new Security having a value equal to the value of the lost or
destroyed Security prior to such loss or destruction. The undersigned agrees, at
its own expense, to keep all insurable Security insured against loss or damage
by fire, theft or any other risk to which the Security may be subject (including
without limitation such hazards as the Bank may specify), for the full insurable
value thereof, under policies and with insurers acceptable to the Bank, which
policies shall provide for all losses to be payable to the Bank and for at least
30 days prior notice to the Bank of any intended cancellation or modification of
the policy. The undersigned will deliver to the Bank on request policies or
certificates of such insurance with evidence of payment of the premium thereon.
If the undersigned fails to maintain said insurance, then, in addition to any
other right or remedy that the Bank may have and without waiving the
consequences of such default, the Bank may but need not obtain and maintain said
insurance, at the expense of the undersigned, which expense shall be deemed one
of the Liabilities and shall be payable to the Bank on demand. The Bank is
irrevocably authorized to file claims and shall have the sole right to adjust,
settle and collect claims under said insurance by such means, at such times, on
such terms and in the name of the Bank or the undersigned, as the Bank may see
fit and in the name and on behalf of the undersigned to execute releases and
endorse checks or drafts payable in respect of any such insurance claims. All
sums received by the Bank from any such insurance may be held as part of the
Security and/or applied as hereinafter provided.
14. The Bank, at anytime, at its option, may apply all of any net cash
receipts from the Security (whether received on a sale of the Security in
accordance with paragraph 11 hereof, on collection in accordance with paragraph
5 hereof, as proceeds of insurance in accordance with paragraph 13 hereof, or
otherwise) to the payment, in whole or in part, of principal of and/or interest
on any or all of the Liabilities, whether or not then due, allocating the same
4
as it shall elect, making rebate of interest or discount to the extent required
by law and so as not to make the rate of interest charged unlawful with respect
to the undersigned. If any Liabilities shall be contingent, the Bank may retain
a sufficient amount of the net cash receipts from the Security to cover the
largest aggregate sum which may become due or owing thereunder with prospective
interest, costs, expenses and attorneys' fees and shall not be charged with any
interest with respect thereto.
15. Until the occurrence of an Event of Default or notice from the Bank
terminating or limiting the right of the undersigned to do so, or, in the case
of the collection, compromise, or adjustment of accounts receivable, until the
Bank takes any action pursuant to paragraph (5) (e) hereof, the undersigned may
sell or lease in the ordinary course of its regular business inventory
constituting a part of the Security and may collect, compromise and adjust
accounts receivable constituting a part of the Security, all on such terms as
the undersigned may in good xxxxx xxxx advisable in the ordinary course of its
regular business, and may retain all sums so collected. Except as permitted by
this paragraph 15, the undersigned may not sell, lease, assign or otherwise
dispose of any of the Security without the prior written consent of the Bank. In
addition, the undersigned may not sell, assign or otherwise dispose of any
shares of stock or other securities now owned or hereafter acquired by the
undersigned which are issued by the same issuer and are of the same class as any
shares of stock or other securities constituting a part of the Security. The
undersigned shall keep all of the Non-Possessory Security (as described in
Schedule A hereto) at the undersigned's premises listed in Schedule A hereto and
shall not remove any of the Non-Possessory Security therefrom without the Bank's
prior written consent.
16. In any litigation or legal proceeding arising out of, or relating to,
this agreement or any of the Liabilities or Security, in which the Bank and the
undersigned shall be adverse parties, the undersigned waives the right to
interpose any defense, set-off or counterclaim of any kind not directly arising
herefrom or therefrom, as the case may be, and also waives the right to a trial
by jury. In the event that the Bank brings any action or suit in any court of
record of New York State or the Federal Government to enforce any or all of the
Liabilities or any of the Bank's rights hereunder, service of process may be
made upon the undersigned by mailing a copy of the summons to the undersigned at
its chief executive office set forth in Schedule A hereto, and the undersigned
hereby irrevocably submits to the jurisdiction of any New York State or Federal
Court located in New York City over any action, suit or proceeding arising out
of any dispute between the undersigned and the Bank.
17. If in its sole discretion the Bank deems it desirable, it may remove
any Security held by it from the place where it may now or hereafter be located
to any other place and deal with it there as herein provided.
18. Upon the occurrence of an Event of Default, and at any time thereafter,
the Bank shall have and may exercise, without further notice, a right of set-off
and/or banker's lien against and in respect of any of the Security then or
thereafter held by the Bank. Any right of set-off exercised by the Bank shall be
deemed to have been exercised immediately on the occurrence of an Event of
Default, even though such set-off is made or entered on the books of the Bank
subsequent thereto.
19. If the time for payment of principal of or interest on any of the
Liabilities or any other money payable hereunder or with respect to any of the
Liabilities is extended because said sum becomes due on a Saturday, Sunday or
public holiday, interest shall be payable for such extended time.
20. The Bank shall not be deemed to have modified or waived any of its
rights hereunder or any terms or conditions hereof unless such modification or
waiver is in writing and signed by a duly authorized officer of the Bank. No
such modification or waiver, unless so expressly stated herein, shall be
effective as to any transaction which occurs subsequent to the date of such
modification or waiver nor shall it constitute a continuing modification or
waiver. No delay on the part of the Bank in exercising any power or right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any power or right hereunder preclude any other or further exercise
thereof or the exercise of any other power or right. All rights and remedies of
the Bank with respect to the Liabilities or Security, whether evidenced hereby
or by any other instrument or paper, shall be cumulative and may be exercised
singularly or concurrently.
21. The Bank may assign and/or transfer to any assignee or transferee
of any of the Liabilities any or all of the Security and the Bank's rights
hereunder with respect thereto, and thereafter the Bank shall be fully
discharged from all responsibility with respect to the Security so assigned
5
and/or transferred. Such assignee or transferee shall be vested with all the
powers and rights of the Bank hereunder with respect to such Security, but the
Bank shall retain all rights and powers hereby given with respect to any of the
Security not so assigned or transferred. The undersigned will not assert against
any assignee or transferee of any of the liabilities any claims or defenses it
may have against the Bank.
22. The undersigned hereby waives presentment, notice of dishonor and
protest with respect to all instruments included in or evidencing the
Liabilities or the Security and, except as specified herein, any and all other
notices and demands whatsoever, whether or not relating to such instruments.
23. The undersigned will indemnify and save the Bank harmless from and
against all loss or damage to it and any claims and actions, whether groundless
or otherwise, arising in connection with this agreement, the Liabilities or the
Security, and all costs and expenses (including attorneys' fees) incurred by the
Bank in respect thereof.
24. If any term, condition or provision of this agreement or any other
agreement or document executed in connection herewith or in connection with any
of the Liabilities or Security is determined to be invalid or unenforceable,
such determination shall not affect the validity or enforceability of any other
term, condition or provision.
25. Any demand upon or notice to the undersigned that the Bank may elect to
give shall be effective if deposited in the mails addressed to or otherwise
delivered to the undersigned at its chief executive office or if the undersigned
has notified the Bank in writing by registered mail of a change of address, at
the last address of which the Bank has received notice, Demands or notices
addressed or otherwise delivered to the address at which the Bank customarily
communicates with the undersigned shall also be effective.
26. If any of the Security is or is to be attached to or installed or
located on real estate, the undersigned will upon demand furnish the Bank with a
disclaimer signed by all persons having an interest in said real estate of any
interest prior to the Bank's interest in the Security.
27. From and after maturity (whether by acceleration or otherwise) of
any of the Liabilities, any unpaid balance remaining shall bear interest at the
higher of 12% per annum or 3% in excess of the rate specified in the instrument
evidencing the Liability. Anything in this agreement or any other agreement,
instrument or document to the contrary notwithstanding, in no event shall
interest on any Liability exceed the maximum rate permitted under any applicable
law or regulation, and if any provision of this agreement or any other
agreement, instrument or document is in contravention of any such law or
regulation, such provision shall be deemed amended to provide for interest at
said maximum rate.
28. The undersigned, if more than one, shall be jointly and severally
liable hereunder and all provisions hereof regarding the Liabilities or Security
shall apply to any Liability or any Security of any or all of them. This
agreement shall be binding upon the heirs, executors, administrators, successors
and assigns of the undersigned and shall inure to the benefit of the Bank and
its successors and assigns. For purposes of this agreement, the term "Bank"
shall include the Bank and any and all subsidiaries of the Bank. If all
Liabilities shall at any time be paid in full, this agreement shall nonetheless
remain in full force and effect with respect to any Liabilities thereafter
incurred. If the undersigned is a corporation, this agreement shall be binding
upon any other corporation into or with which the undersigned shall be merged,
consolidated, reorganized or absorbed, or which shall acquire the undersigned's
business or substantially all of its assets. If the undersigned is a
partnership, the members thereof shall also be individually bound and liable
hereunder and this agreement shall continue in force notwithstanding any change
in or termination of such partnership, whether such change occurs through death,
retirement or otherwise. Except as otherwise provided herein, all terms used
herein which are defined in the Uniform Commercial Code of the State of New York
shall have the meanings therein stated. If this agreement shall differ in terms
with any other agreement or obligation or the terms of any of the Liabilities,
that which gives the Bank the greater right shall prevail.
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29. If any of the Security is applied on account of any of the
Liabilities, the undersigned shall not have any right of subrogation to the
Bank's right in any other Security held by the Bank with respect to the
Liabilities or any right of contribution from the Bank by reason thereof.
30. The Bank is authorized to correct patent errors herein. This
agreement shall take effect immediately upon execution by the undersigned, and
the execution hereof by the Bank shall not be required as a condition to the
effectiveness of this agreement.
31. Notwithstanding anything to the contrary contained herein, the term
"Security" as used herein shall be deemed to include any and all book-entry U.S.
Treasury bills and other book-entry securities purchased on behalf of the
undersigned and maintained in an account at the Bank, which may have a related
account at a bank which is a member of the Federal Reserve System. The
undersigned authorizes the Bank to serve as its bailee and agent with respect to
the aforementioned book-entry Treasury bills and other book-entry securities and
to take such action and to execute and deliver such documents on behalf of the
undersigned as the Bank deems necessary or desirable in order to perfect the
Bank's security interest therein. The undersigned hereby gives notice to the
Bank, in the Bank's capacity as bailee and agent, of the Bank's security
interest in the aforementioned book-entry Treasury bills and other book-entry
securities.
32. This agreement shall be interpreted, and all the rights and obligations
arising hereunder or from any document relating hereto shall be determined, in
accordance with the laws of the State of New York.
SCHEDULE A
The term "Security" shall, include the property of the undersigned in which the
Bank has been, or shall hereafter be, granted a lien or security interest under
this Security Agreement. Such property shall include, without limitation, all
of the undersigned's now owned or existing and hereafter arising or acquired (i)
equipment and goods located at the Hyatt Regency Hotel, San Francisco,
California, used or intended for use by the undersigned in performing its
obligations pursuant to the "Hyatt Agreement", (ii) all accounts (including
accounts receivable), contract rights and general intangibles of the undersigned
arising out of the Hyatt Agreement, or its performance by the undersigned, (iii)
all instruments, documents and chattel paper of the undersigned arising out of
the Hyatt Agreement, or its performance, and (iv) proceeds of all of the
foregoing. "Hyatt Agreement" means the Installation and Outsource Operation
Agreement, executed by the undersigned on February 13, 2002, between the
undersigned and Hyatt Corporation.
The undersigned represents and warrants to the Bank that (a) the location
of the undersigned's chief executive office is as set forth below, and (b) each
premises where any non-possessory Security is located or owned as set forth
below.
Chief Executive Office - Other premises where Security is located -
00 Xxxx Xxxxxx Xxxxx Regency, Xxx Xxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 0 Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
Xxx Xxxx, Xxx Xxxx
July __ , 2002
HOTEL OUTSOURCE SERVICES, INC.
/s/ Xxxx Xxxxxx
By:_____________________________
Xxxx Xxxxxx, President
7
