EXHIBIT 2.10
SECURITY AGREEMENT
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, OSP
PUBLISHING INC. and GLOBAL ONE DISTRIBUTION & MERCHANDISING INC. (hereinafter
"Debtors"), and GOLDEN STATE GRAPHICS INC. (hereinafter "Secured Party"),
agree this 25th day of April, 1997, as follows:
1. WARRANTIES OF DEBTORS:
(a) Debtors are corporations with their principal place of business
located at 0000 Xxxxxxxxx Xxxx, Xxxx, Xxxxxxxxxx.
(b) Debtors own the collateral, free from all prior liens and
security interest, except as disclosed to and accepted by Secured
Party, Exhibit "A" hereto.
2. SECURITY INTEREST:
Debtors hereby grant to Secured Party continuing security interests
in the following property, wherever located, now owned or hereafter acquired,
and all proceeds, products, additions, accessions, substitutions,
replacements, parts, accessories and returns thereof or thereto or used in
conjunction therewith (hereinafter referred to collectively as "Collateral"),
to secure the payment of Debtors' indebtedness to Security Party represented
by the Secured Promissory Note dated April 25, 1997, as well as future goods
and services provided, whether promissory note, trade acceptance, open
account, guarantee or otherwise, arising after this Agreement or any other
future agreement between the parties, together with interest on and renewals
and extensions of time of said obligations (hereinafter referred to as
"Indebtedness") until the Secured Promissory Note above is paid in full. The
security interest is junior to the security interest on Exhibit A, as well as
to any replacement financing therefor the amount owed to Foothill as of April
25, 1997.
(a) All present and future deposit accounts, accounts contracts,
contract rights, instruments, documents, chattel paper, open
accounts receivable, book debts, notes, general intangibles,
choses in action, tax refunds, and insurance proceeds, any
other obligations or indebtedness owed to Debtors from
whatever source arising; all rights of Debtors to receive any
payments in the money or kin; all guaranties of the foregoing
and security therefor; all of the right, title and interest of
Debtors in and with respect to the goods, services, or other
property that gave rise to or that secure any of the foregoing
and insurance proceeds relating thereto, and all the rights of
Debtors as an unpaid seller of goods and services, including,
but not limited to, the rights of stoppage in transit,
replevin, reclamation and resale, and all of the foregoing,
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whether now owned or existing or hereafter created or acquired;
(b) All goods, merchandise, and other personal property now owned or
hereafter acquired by Debtors that is held for sale or lease, or
are furnished or to be furnished under any contract of service or
are raw materials, work-in-progress, supplies, or materials used
or consumed in Debtors' business wherever located, and all
products thereof, and all substitutions, replacements, additions,
or accessions therefor and thereto:
(c) All machinery, equipment, furniture and fixtures now owned or
hereafter acquired by Debtors, and used or acquired for use in
the business of Debtors, together with all accessions thereto and
all substitutions and replacements thereof and parts therefor;
(d) All cash or non-cash proceeds of any of the foregoing, including
insurance proceeds; and
(e) All ledger sheets, files, records, documents, and instruments
(including, but not limited to, computer programs, tapes, and
related electronic data processing software) evidencing an
interest in or relating to the above.
(f) All patents, patent applications, copyrights, royalties and
licenses.
(g) All Goodwill, names, service marks, drawings, trademarks,
blueprints, trade names, trade search and customer lists.
(h) Printing plates.
(i) Any and all contract rights and/or agreements and/or licenses
from all sources pursuant to which Debtors have the right and
authority to market and sell posters and/or buttons.
3. COVENANTS OF DEBTORS:
Debtors shall:
(a) Give Secured Party prior written notice if Debtors change its
name or change the form under which its business is operated.
(b) Promptly pay all taxes and assessments with respect to the
Collateral or its use or operation.
(c) Allow Secured Party to inspect and inventory this Collateral and
Debtors'
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books and records at any reasonable time and wherever located.
(d) Keep its books and records at its principal place of business.
(e) Deliver to Secured Party an annual financial statement within
sixty (60) days from the end if its fiscal or calendar year, and
in addition, upon Secured Party's request made at any time and
from time to time a current financial statement.
(f) Not merge or conolidate or acquire all or substantially all of
the stock or business or assets of any other person, corporation,
or business organization without prior written notification to
Secured Party.
(g) Notify Secured Party within three (3) days if Debtors become
involved in any claims, litigation, or other legal proceedings
before any court, tribunal, or governmental body in which any
potential recovery against Debtors may exceed $25,000.00.
(h) Maintain adequate insurance at all times with respect to the
Collateral against risks of fire and theft and including extended
coverage, and containing such terms and in such form and written
by such companies as may be satisfactory to Secured Party; such
insurance to be payable to Secured Party and Debtors as their
interests may appear. All such policies of insurance shall
provide that Secured Party shall receive at least thirty (30)
days prior to written notice of material change or cancellation,
and Debtors' shall furnish Secured Party with a Certificate of
Insurance or a copy of each Insurance policy within thirty (30)
days from the date of this Agreement.
4. DEFAULT:
Debtors shall be in default under this Agreement upon the
happening of any one of the following events:
(a) Failure to pay any indebtedness owed to Secured Party when due,
or failure to comply with Paragraph 3(e) and (g).
(b) Failure to perform one or more of the obligations set forth in
this Security Agreement or any Promissory Note or any other
agreement with or in favor of Secured Party.
(c) When any warranty, covenant, or representation made to Secured
Party in this Agreement or in any financial statement or
information is false when made or furnished.
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(d) Loss, theft, damage, destruction, levy or seizure of any portion
of the Collateral, unless the Collateral subject to such loss,
theft, damage, or destruction is either covered by insurance, or
replaced by property (which also is subject to the security
interest granted here) or equal value, or the levy is released or
dissolved within 15 days.
(e) Dissolution, termination of existence, cessation of business,
insolvency, inability to pay its debts as they mature,
appointment of a receiver of any part of the property of Debtors,
assignment for the benefit of creditors of Debtors, commencement
of any proceeding under bankruptcy or insolvency law of which
Debtors is the subject, or transfer of a substantial portion of
the property of Debtors.
5. SECURED PARTY'S REMEDIES:
Upon Debtors' default as set forth above, Secured Party, at its
option, following written notice of default to Debtors, and the elapse of 20
days without cure of said default by Debtor, may do any one or more of the
following:
(a) Declare all indebtedness immediately due and payable and interest
shall accrue on the indebtedness at the rate of ten percent (10%)
per annum or the maximum rate permitted by law, whichever is
less, unless another rate of interest is provided for with
respect thereto.
(b) Immediately take possession of the Collateral wherever it may be
found, and Debtor hereby authorizes and gives Secured Party the
right to enter upon the locations wherever the Collateral may be
found and remove the Collateral.
(c) Sell the Collateral at public or private sale, with or without
having the Collateral at the place of sale, on such terms and in
such manner as Secured Party may determine in compliance with the
applicable Uniform Commercial Code (hereinafter referred to as
Commercial Code), and Secured Party may purchase at the sale.
Debtors agree that reasonable notification of the time and place
of sale shall be five (5) days. Secured Party may exercise any
and all remedies under the Commercial Code, and shall have the
right to apply the proceeds of sale against the indebtedness in
any manner Secured Party in it discretion may direct. If the sum
realized from any disposition of Collateral is not sufficient to
pay all indebtedness, Debtors agree to pay Secured Party any
deficiency.
(d) Upon demand by Secured party, Debtors shall deliver to Secured
Party the proceeds of any sale or other disposition of
Collateral, and Secured Party may notify any or all account
debtors of Debtors that Secured Party has a security
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interest and may require the remittance of all sums directly to
Secured Party. Secured Party may endorse the name of Debtors on
any check, notes, or other documents received in payment of any
account.
(e) Secured Party shall have the right to enforce one or more
remedies under this Agreement and any other agreement it may
have, successively or concurrently, and any such action shall not
estop or prevent Secured Party from pursuing any further remedies
that it may have by this Agreement, or any other agreement, or by
law.
(f) Debtors will reimburse Secured Party for all expenses incurred in
taking, holding, and preparing the Collateral for sale, and in
arranging for the sale, including but not limited to, reasonable
attorneys' fees, legal expenses, and collection agency fees
incurred by Secured Party in connection with the exercise of any
right or remedy pursuant to the terms of this Security Agreement
and in collecting the indebtedness. All such expenses shall be
secured by this Security Agreement and shall be included in the
term "indebtedness" as it is used in this Agreement.
(g) Accelerate and declare all or any part of the "Indebtedness" as
the term is used in this Agreement to be immediately due, payable
and performable notwithstanding any deferred or installment
payments allowed by any instrument evidencing or relating to any
indebtedness.
6. GENERAL PROVISIONS:
(a) Debtors shall join with Secured Party in executing one or more
Financing Statement(s) pursuant to the Commercial Code.
(b) No waiver by Secured Party of any default shall operate as a
waiver of any other default of the same default on a future
occasion.
(c) All notices provided for herein shall be validly given if in
writing and delivered personally, or if mailed by registered or
certified mail to the person entitled to receive the same at the
following addresses:
IF TO THE SECURED PARTY: GOLDEN STATE GRAPHICS INC.
------------- 00000 Xxxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
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IF TO THE DEBTORS: OSP PUBLISHING INC. and
------- GLOBAL ONE DISTRIBUTION
& MERCHANDISING INC.
0000 Xxxxxxxxx Xxxx
Xxxx, XX 00000
(d) Where Debtors are corporations or partnerships, it is not
necessary for Secured Party to inquire into the power of Debtors
or the officers, directors, partners or agents acting or
purporting to act on their behalf.
(e) Should any provision of this Agreement be invalid, void, or
unenforceable for any reason, the remaining provisions of this
Agreement shall remain in full force and effect so long as the
essential purposes of this Agreement are not materially altered.
(f) This Agreement shall bind and inure to the benefit of the heirs,
legal representatives, successors, and assigns of the parties
hereto.
(g) A carbon, photographic or other reproduction of this Security
Agreement or any financing statement shall be sufficient as a
financing statement pursuant to the Uniform Commercial Code.
(h) This Agreement shall be construed and enforced under the laws of
California.
(i) That this Agreement has been entered into and is to be performed
in the County of Los Angeles, State of California, and any action
brought hereunder shall be brought in said County and State at
the option of and in the sole discretion of Secured Party.
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Executed as of the date first given above.
OSP PUBLISHING INC.
Debtor
/s/ XXXXXXX XXXX
---------------------------------------
Signature
PRESIDENT
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Print Name and Title
GLOBAL ONE DISTRIBUTION &
MERCHANDISING INC.
Debtors
/s/ XXXXXX X. XXXXXXX
---------------------------------------
Signature
PRESIDENT
---------------------------------------
Print Name and Title
GOLDEN STATE GRAPHICS INC.
Secured Party
/s/ XXXX XXXX
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Signature
PRESIDENT
---------------------------------------
Print Name and Title
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EXHIBIT A
Amended and Restated Loan and Security Agreement
Dated August 29, 1996
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