Exhibit 99.12
SECURITY AGREEMENT
THIS AGREEMENT, entered into as of the 29th day of September,
1999, by and between PITTSFIELD MOLD & TOOL, INC., a Massachusetts
corporation, with its principal place of business at Stearnsville
Industrial Park, 00 XXXXX Xxxxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000 ( the "Debtor"), and the XXXXX X. XXXXXXXX
AND XXXXXXX X. XXXXXXXX, Trustees of the XXXXXXXX FAMILY NOMINEE
TRUST, under Declaration of Trust dated February 6, 1996 and
recorded with the Berkshire County (Middle District) Registry of
Deeds in Book 910, Page 800, with its principal place of business
at Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Secured
Party");
W I T N E S S E T H:
WHEREAS, the Secured Party has agreed to lend $3,950,000.00 to the
Debtor (the "Loan") to be evidenced by a $1,750,000.00 Promissory
Note and a $2,200,000.00 Promissory Note (collectively the "Note")
to the Debtor and secured by a Mortgage and Security Agreement, a
Stock Pledge Agreement, a $250,000.00 Letter of Credit and a
Security Agreement (the Note, the Mortgage, the Stock Pledge, the
Letter of Credit, the Security Agreement, and other documents
executed in connection therewith are hereinafter referred to as
the "Loan Documents"); and
WHEREAS, as a material inducement to the Secured Party to
consummate the transactions evidenced by the Loan Documents, the
Debtor has agreed to enter into this Security Agreement, and
acknowledges that the Secured Party intends to rely upon the
representation, warranties, covenants and indemnifications
contained herein;
NOW THEREFORE, in consideration of the willingness of the Secured
Party to enter into the Loan Documents and to agree, subject to
the terms and conditions set forth herein, to make the Loan to the
Debtor pursuant thereto, and in consideration of the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Secured Party and the Debtor hereby agree as
follows:
ARTICLE 1. GRANT OF SECURITY INTEREST
1.1 To secure the prompt, punctual and faithful performance of
all and each of the present and future Obligations, the Debtor
hereby grants to the Secured Party a continuing security interest
in and to, and assigns to the Secured Party, all of the Debtor=s
right, title and interest in the following properties, assets and
rights, all wherever located and whether now existing or hereafter
acquired or arising (all of which, together with any other
property in which the Secured Party may in the future be granted a
security interest pursuant hereto, is referred to hereinafter as
the "Collateral"): (a) all Accounts and all Receivables; (b) all
Inventory; (c) all General Intangibles; (d) all Equipment; (e) all
Fixtures; (f) all Goods; (g) all Tangible Personal Property; (h)
all Chattel Paper; (i) all books, records, ledgers, printouts,
papers, data, file materials and information relating to the
Property, the Collateral, any account debtors in respect thereof
and/or to the operation of the Debtor=s business, and all rights
of access to such books, records, ledgers, pinouts, papers, file
materials and information, and all property in which such books,
records, ledgers, pinouts, data, file materials and information
are stored, recorded, and maintained; (j) all Instruments,
Documents of Title, Documents, policies and certificates of
insurance, Securities, deposits, deposit accounts, money, cash or
other property; (k) all federal, state, and local tax refunds
and/or abatements to which the Debtor is, or becomes entitled, no
matter how or when arising, including, but not limited to any loss
carryback tax refunds; (l)all trade secrets, computer programs,
customer lists, manuals, developmental ideas and concepts, and all
papers, drawings, blueprints, sketches and documents relating to
all of the foregoing and/or relating to the operation of the
Debtor's business and/or the Collateral; and (m) all insurance
proceeds, refunds and premium rebates, whether any of such
proceeds, refunds and premium rebates arise out of any of the
foregoing or otherwise; together with (i) all security pledged,
assigned, hypothecated or granted to or held by the Debtor to
secure any of the foregoing, (ii) General Intangibles arising out
of the Debtor's rights in any Goods, the sale of which gave rise
thereto, (iii) any property received in payment, settlement or
compromise of any Account or Receivable, (iv) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing,
(v) all rights, remedies and privileges pertaining to any of the
foregoing, (vi) all powers of attorney for the execution of any
evidence of indebtedness or security or other writing in
connection therewith, (vii) all evidence of the filing of
financing statements and other statements and the registration of
other instruments in connection therewith and amendments thereto
and (viii) all of the Debtor's rights to use, in perpetuity, in
connection with the operation of the Property, the name
"PITTSFIELD MOLD & TOOL, INC." and any other names similar thereto
and the good will of the Debtor with respect thereto.
1.2 The Debtor shall execute, upon request of the Secured Party,
all such instruments as may be required by the Secured Party with
respect to the perfection of the security interests granted
herein. A carbon, photographic, or other reproduction of this
Agreement or of any financing statement or other instrument
executed pursuant to this Section 1.2 shall be sufficient for
filing to perfect the security interests granted herein, to the
extent permitted under applicable law.
ARTICLE 2. CERTAIN DEFINITIONS
All capitalized terms not defined herein shall have the same
meanings ascribed to such terms under the Loan Documents.
As herein used, the following terms have the following meanings:
2.1 The term "Accounts" shall have the same meaning ascribed to
such term under the UCC.
2.2 The term "Chattel Paper" shall have the same meaning ascribed
to such term under the UCC.
2.3 The term "Collateral" shall have the same meaning ascribed to
such term in Section 1.1.
2.4 The term "Debtor" shall have the same meaning ascribed to such
term in the preamble of this Agreement.
2.5 The term "Documents" shall have the same meaning ascribed to
such term under the UCC.
2.6 The term "Documents of Title" shall have the same meaning
ascribed to such term under the UCC.
2.7 The term "Equipment" shall have the same meaning ascribed to
such term under the UCC.
2.8 The term Event of Default shall have the same meaning ascribed
to such term in Article 5 of this Agreement.
2.9 The term "Fixtures" shall have the same meaning ascribed to
such term under the UCC.
2.10 The term "General Intangibles" shall have the same meaning
ascribed to such term under the UCC.
2.11 The term "Goods" shall have the same meaning ascribed to such
term under the UCC.
2.12 The term "Instruments" shall have the same meaning ascribed
to such term under the UCC.
2.13 The term "Inventory" shall have the same meaning ascribed to
such term under the UCC.
2.14 The term "Liable Person" shall have the same meaning ascribed
to such term in Section 7.3.
2.15 The term "Proceeds" shall have the meaning ascribed to such
term under the UCC.
2.16 The term "Receivables" shall mean collectively, all
(i)Instruments, Documents, Accounts, Proceeds, General Intangibles
and Chattel Paper and (ii) rights to payment for goods sold or
leased or services rendered by the Debtor or any other party,
whether now in existence or arising from time to time hereafter
and whether or not yet earned by performance, including, without
limitation, obligations evidenced by an account, note, contract,
security agreement, chattel paper, or other evidence of
indebtedness.
2.17 The term "Receivables Collateral" refers to the Debtor's
Accounts, Receivables, Chattel Paper, Instruments, Documents of
Title, Documents, Securities, Letters of Credit, the Secured
Party's Acceptance, and any other rights to payment now held or in
which the Debtor has an interest, or hereafter acquired, or in
which the Debtor obtains an interest.
2.18 The term "Secured Party" shall have the meaning ascribed to
such term in the preamble of this Agreement.
2.19 The term "Secured Party's Rights and Remedies" shall have the
meaning ascribed to such term in Section 6.4.
2.20 The term "Securities" shall have the same meaning ascribed to
such term under the UCC.
2.21 The term "UCC" shall mean the Uniform Commercial Code as
adopted in the Commonwealth of Massachusetts.
ARTICLE 3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 The Collateral is and shall be primarily kept and maintained
at the PITTSFIELD MOLD & TOOL, INC., Stearnsville Industrial Park,
00 XXXXX Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Premises").
3.2 The Debtor shall do, make, execute and deliver all such
additional and further acts, things, deeds, assurances and
instruments as the Secured Party may reasonably request, to vest
more completely in and assure to the Secured Party its rights
hereunder and in or to the Collateral including, without
limitation, compliance with the Federal Assignment of Claims Act.
3.3 The agreements, representations, covenants and warranties
contained herein are in addition to any others previously,
presently or hereafter made by the Debtor to or with the Secured
Party in any other instrument.
ARTICLE 4. COLLECTION OF ACCOUNTS RECEIVABLE, CONTRACT
RIGHTS AND OTHER RECEIVABLES COLLATERAL
4.1 The Debtor hereby irrevocably constitutes and appoints the
Secured Party as the Debtor's true and lawful attorney, with full
power of substitution, such powers to be effective following the
occurrence of an Event of Default, to convert the Receivables
Collateral into cash at the sole risk, cost, and expense of the
Debtor, but for the sole benefit of the Secured Party. Subject to
applicable law, the rights and powers granted the Secured Party by
the within appointment include but are not limited to the right
and power to: prosecute, defend, compromise, settle, or release
any action relating to the Collateral; receive, open, and dispose
of all mail addressed to the Debtor and to take therefrom any
remittances on or proceeds of any Collateral; sign change of
address forms to change the address to which the Debtor's mail is
to be sent as the Secured Party shall designate; endorse the name
of the Debtor in favor of the Secured Party upon any and all
checks or other items constituting remittances or proceeds of
Collateral; sign and endorse the name of the Debtor on, and to
receive as secured party, any of the Collateral, any invoices,
schedules of Collateral, freight or express receipts, or bills of
lading, storage receipts, warehouse receipts, or other documents
of title of a same or different nature relating to the Collateral;
sign the name of the Debtor on any notice to the obligors on the
Receivables Collateral; take all such action as may be necessary
to obtain the payment on any Letter of Credit of which the Debtor
is a beneficiary; and sign and file or record on behalf of the
Debtor any financing or other statement in order to perfect or
protect the Secured Party's security interest. The Secured Party
shall not be obligated to perform any of such acts or to exercise
any of such powers, but if the Secured Party elects so to perform
or exercise, the Secured Party shall not be accountable for more
than it actually receives as a result of such exercise of power,
and shall not be responsible to Debtor except for the Secured
Party's actual willful misconduct. All powers conferred upon the
Secured Party by this Agreement, being coupled with an interest,
shall be irrevocable until terminated by a written instrument
executed by a duly authorized officer of the Secured Party and
shall not be affected by any disability or incapacity which the
Debtor may suffer and shall survive the same. The power of
attorney conferred on the Secured Party pursuant to the provisions
of this Article 4 is provided solely to protect the interests of
the Secured Party and shall not impose any duty on the Secured
Party to exercise any such power, and neither the Secured Party
nor such attorney-in-fact shall be liable for any act, omission,
error in judgment or mistake of law, except as the same may result
from its gross negligence or willful misconduct.
ARTICLE 5. EVENTS OF DEFAULT
Upon the occurrence of a default beyond the applicable notice
and/or grace periods, if any, under this Agreement or any of the
other Loan Documents including without limitation, a "USC Default"
as that term is defined per a certain Cross-Default and Cross-
Collateral Agreement of even date executed by Debtor and Secured
Party (each, hereinafter referred to as an "Event of Default"
hereunder), at the option of the Secured Party, the Obligations
shall become immediately due and payable by the Debtor; in
addition to which, the Secured Party may exercise its rights and
remedies upon default, as set forth under this Agreement.
ARTICLE 6. RIGHTS AND REMEDIES UPON DEFAULT
6.1 Upon the occurrence of any Event of Default and at any time
thereafter, the Secured Party shall have all of the rights and
remedies of a secured party upon default under the UCC; in
addition to which, the Secured Party shall have all of the
following rights and remedies: (a) to collect the Receivables
Collateral; (b) to take possession of the Collateral and to
maintain and to use the same at the Property (or elsewhere)
pending any disposition thereof; (c) to sell, lease, or otherwise
dispose of any or all of the Collateral in its then condition or
following such preparation or processing as the Secured Party
deems advisable having due regard to compliance with any statute
or regulation which might affect, limit, or apply to the Secured
Party's disposition of the Collateral; (d) to apply the
Receivables Collateral, or the proceeds of the Collateral, towards
(but not necessarily in complete satisfaction of) the Loan
Obligations in such order as the Secured Party may determine (in
its sole and absolute discretion); (e) to prosecute the
$250,000.00 Letter of Credit referred to at Section 8.8 (i) of the
Stock Purchase Agreement; (f) to release Xxxxxx X. Xxxxxxxx of his
obligations under the Employment Agreement; and/or (g) to release
Xxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxxx of their obligations
under the Non-Competition Agreement. The Secured Party may
conduct any such sale or other disposition of the Collateral at
the Premises (or elsewhere). Unless the Collateral is perishable,
threatens to decline speedily in value, or is of a type
customarily sold on a recognized market (in which event the
Secured Party shall give the Debtor such notice as may be
practicable under the circumstances), the Secured Party shall give
the Debtor at least the greater of the minimum notice required by
law or seven (7) days' prior written notice of the date, time and
place of any proposed public sale, and/or of the date after which
any private sale or other disposition of the Collateral may be
made. The Secured Party may purchase the Collateral, or any
portion of it, at any public sale conducted pursuant to this
Agreement.
6.2 In connection with the Secured Party's exercise of the
Secured Party's Rights and Remedies, in accordance with and to the
maximum extent permitted by applicable law, the Secured Party may
enter upon, occupy, and use any premises owned or occupied by the
Debtor, and may exclude the Debtor from such premises or portion
thereof as may have been so entered upon, occupied, or used by the
Secured Party. The Secured Party shall not be required to remove
any of the Collateral from any such premises upon the Secured
Party's taking possession thereof, and may render any Collateral
unusable to the Debtor. In no event shall the Secured Party be
liable to the Debtor for use or occupancy by the Secured Party of
any premises pursuant to this Agreement, nor for any charge (such
as wages for the Debtor's employees and utilities) incurred in
connection with the Secured Party's exercise of the Secured
Party's Rights and Remedies.
6.3 Upon the occurrence of any Event of Default, the Secured
Party may require the Debtor to assemble the Collateral and make
it available to the Secured Party at the Debtor's sole risk and
expense at a place or places designated by the Secured Party which
are reasonably convenient to both the Secured Party and the
Debtor.
6.4 The rights, remedies, powers, privileges, and discretions of
the Secured Party hereunder and under the other Loan Documents
(herein, the "Secured Party's Rights and Remedies") shall be
cumulative and not exclusive of any rights or remedies which it
otherwise may have. No delay or omission by the Secured Party in
exercising or enforcing any of the Secured Party's Rights and
Remedies shall operate as, or constitute, a waiver thereof. No
waiver by the Secured Party of any Event of Default shall operate
as a waiver of any other default hereunder or under any of the
other Loan Documents. No exercise of any of the Secured Party's
Rights and Remedies and no other agreement or transaction of
whatever nature entered into between the Secured Party and the
Debtor at any time, shall preclude any other exercise of the
Secured Party's Rights and Remedies. No waiver by the Secured
Party of any of the Secured Party's Rights and Remedies on any one
occasion shall be deemed a waiver on any subsequent occasion, nor
shall it be deemed a continuing waiver. All of the Secured Party's
Rights and Remedies and all of the Secured Party's rights,
remedies, powers, privileges, and discretions under any Related
Party Agreement are cumulative and not alternative or exclusive
and may be exercised by the Secured Party at such time or times
and in such order of preference as the Secured Party in its sole
discretion may determine.
ARTICLE 7. MISCELLANEOUS
7.1 The Secured Party shall have no duty as to the collection or
protection of the Collateral beyond the safe custody of such of
the Collateral as may come into the possession of the Secured
Party and shall have no duty as to the preservation of rights
against prior parties or of any other rights pertaining thereto.
The Secured Party's Rights and Remedies may be exercised without
resort or regard to any other source of satisfaction of the Loan
Obligations.
7.2 The obligations of the Debtor under this Agreement shall
continue in full force and effect until all of the Loan
Obligations have been fully paid and performed.
7.3 The Secured Party shall be at liberty, without giving notice
to or obtaining the assent of the Debtor and without relieving the
Debtor of any of the Loan Obligations, to deal with each other
Person who now is or after the date hereof becomes liable in any
manner for any of the Obligations (a "Liable Person"), in such
manner as the Secured Party in its sole discretion deems fit, and
to this end the Debtor gives to the Secured Party full authority
in its sole discretion to do any or all of the following things:
(a) extend credit, make loans, and afford other financial
accommodations to any Liable Person, enter into leases of real and
personal property and agreements and contracts of any nature
whatsoever, at such times, in such amounts, and on such terms as
the Secured Party may approve, (b) vary the terms and grant
extensions or renewals of any present or future indebtedness or
obligation to the Secured Party of any Liable Person, (c) grant
time, waivers, and other indulgences in respect thereto, (d) vary,
exchange, release or discharge, wholly or partially, or delay in
or abstain from perfecting and enforcing any security or guaranty
or other means of obtaining payment of any of the Loan Obligations
which the Secured Party now has or acquires after the date hereof,
(e) accept partial payments from any Liable Person, (f) release or
discharge, wholly or partially, any endorser or guarantor and (g)
compromise or make any settlement or other arrangement with any
Liable Person. The Debtor waives all surety ship defenses of every
kind and nature.
7.4 This Agreement shall be in addition to any guaranty or other
security for the Loan Obligations, and it shall not be prejudiced
or rendered unenforceable by the invalidity of any such guaranty
or other security.
7.5 As long as the Obligations remain unpaid or undischarged, the
Debtor will not, by paying any sum recoverable hereunder (whether
or not demanded by the Secured Party) or by any means or on any
other ground, claim any set-off or counterclaim against any Liable
Person in respect of any liability of the Debtor to such Liable
Person or, in proceedings under the bankruptcy or other similar
laws of the United States, any state or any other jurisdiction or
any insolvency proceedings of any nature, prove in competition
with the Secured Party in respect of any payment hereunder or be
entitled to have the benefit of any counterclaim or proof of claim
or dividend or payment by or on behalf of any Liable Person or the
benefit of any other security for any Liability which, now or
hereafter, the Secured Party may hold or in which it may have any
share.
7.6 The Debtor shall pay, on demand, all costs and expenses
(including, without limitation, attorneys' fees and expenses) now
or hereafter reasonably incurred by the Secured Party in
connection with the protection or enforcement of any of the
Secured Party's rights and remedies against the Debtor, any of the
Collateral, and any other Liable Person (including, without
limitation, the exercise of any of the Secured Party's Rights and
Remedies).
7.7 This Agreement shall be construed, and the rights and
obligations of the Debtor and the Secured Party shall be
determined, in accordance with the laws of the Commonwealth of
Massachusetts, except (a) that the laws of the state where the
Collateral is located shall govern this Agreement to the extent
necessary to perfect and/or enforce the Liens created by this
Agreement and to the extent necessary to obtain the benefit of the
rights and remedies set forth herein with respect to the
Collateral and (b) for procedural requirements which must be
governed by the laws of the state in which the Collateral is
located. To the maximum extent permitted by applicable law, the
Debtor hereby submits to the jurisdiction of the courts of the
Commonwealth of Massachusetts and the United States District Court
for the District of Massachusetts, as well as to the jurisdiction
of all courts from which an appeal may be taken from the aforesaid
courts, for the purpose of any suit, action or other proceeding
arising out of, or with respect to any of the Loan Documents, the
negotiation and/or consummation of the transactions evidenced by
the Loan Documents, and/or the performance of any obligation or
the exercise of any remedy under any of the Loan Documents and
expressly waives any and all objections the Debtor may have as to
venue in any of such courts.
7.8 This Agreement shall remain in full force and effect until
specifically terminated in writing by a duly authorized officer of
the Secured Party. In the event that any of the Loan Obligations
remain outstanding, such termination by the Secured Party may be
conditioned upon such further indemnifications provided to the
Secured Party by or on behalf of the Debtor as the Secured Party
may request. Until specifically terminated in writing as set
forth above, this Agreement shall itself constitute conclusive
evidence of validity, effectiveness and continuing force hereof
and any Person may rely hereon. Upon the satisfaction in full of
all of the Loan Obligations, the Secured Party, upon the written
request of the Debtor, shall execute and deliver to the Debtor, at
the Debtor's expense, all instruments of assignment or other
instruments as may be necessary to establish full title of the
Debtor to the Collateral, subject to any prior sale or other
disposition pursuant to the terms and provisions of this
Agreement.
7.9 It is intended that the security interests created by this
Agreement attached to all of the Debtor's assets now owned or
hereafter acquired which are capable of being subject to a
security interest.
7.10 Any notice, request, demand, statement or consent made
hereunder shall be in writing and shall be deemed duly given if
personally delivered, sent by certified mail, return receipt
requested, or sent by a nationally recognized commercial overnight
delivery service with provisions for a receipt, postage or
delivery charges prepaid, and shall be deemed given when
postmarked or placed in the possession of such mail or delivery
service and addressed as follows:
If to the Debtor: United Xxxxxxx Corporation
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxx 00000,
With a copy to: Xxxxx X. Xxxxxxx, Esquire
Xxxxxxxx & Shohl LLP
1900 Chemed Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
If to the Secured Party: XXXXXXXX FAMILY NOMINEE TRUST
x/x Xxxxx X. Xxxxxxxx
Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
With copies to: Xxxx X. Xxxxxx, Xx., Esquire
Xxxxxx & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
or at such other place as any of the parties hereto may from time
to time hereafter designate to the others in writing. The Bank
may also provide notice to the address at which the Secured Party
customarily communicates with the Debtor. Any notice given to the
Debtor by the Secured Party at any time shall not imply that such
notice or any further or similar notice was or is required.
IN WITNESS WHEREOF, the Debtor and the Secured Party duly executed
this Agreement as a sealed instrument as of the day and year first
above written.
WITNESSES: DEBTOR:
PITTSFIELD MOLD & TOOL, INC.
/s/ By: /s/Xxxxxxx X. Xxxx III
Xxxxxxx X. Xxxx III
Its President
SECURED PARTY:
XXXXXXXX FAMILY NOMINEE TRUST
/s/ By: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Its: Trustee
/s/ By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Its: Trustee
