Exhibit 10.58
SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") dated as of January
1, 1996, is made by Xxxx X. Xxxxxx ("Pledgor"), having his principal residence
at (and whose mailing address is ) 00000 Xxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000
(the "Address") in favor of Polyphase Corporation, a Nevada corporation, having
its principal place of business at (and the address where information concerning
the security interest herein granted may be obtained is) 00000 Xxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxx Xxxxx 00000 ("Secured Party").
WHEREAS, Pledgor has executed and delivered to Secured Party a Guaranty,
dated as of even date herewith (as the same may be modified, amended or
restated, the "Guaranty"); and
WHEREAS, Secured Party has made and is willing to make the loans evidenced
by the Guaranty on the condition, among others, that Pledgor shall have executed
and delivered to Secured Party this Agreement.
NOW, THEREFORE. In consideration of the promises and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, Pledgor and Secured Party hereby agree as follows:
1. Incorporation of Note. The Guaranty, and the terms and provisions
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thereof are hereby incorporated herein in their entirety. Unless
otherwise defined herein, the terms defined in the Guaranty and used
herein shall have the respective meanings set forth in the Note and
the master Loan Agreement.
2. Certain Definitions. As used herein, the following terms have the
meanings indicated:
"Accounts Receivable" shall mean any "account", as such term is defined in
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the UCC, now owned or hereafter acquired by Pledgor and, in any event, shall
include, without limitation, all accounts, accounts receivable, other
receivables, contract rights, chattel paper, instruments, documents, notes,
purchase orders, receipts and other forms of obligations now owned or hereafter
received or acquired by or belonging or owing to Pledgor (including, without
limitation, under any trade names, styles or divisions thereof) whether arising
out of goods sold or services rendered by Pledgor or from any other transaction,
and all of Pledgor's rights to any goods represented by any of the foregoing,
and all rights to the payment of money, including but not limited to tax refunds
and insurance proceeds.
"Chattel Paper" shall mean any "chattel paper", as such term is defined in
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the UCC, now owned or hereafter acquired by Pledgor.
"Collateral" shall have the meaning assigned to such term in Section 3 of
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this Security Agreement.
"Contracts" shall mean all contracts, licenses, undertakings or other
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agreements in or under which Pledgor may now or hereafter have any right, title
or interest, including, without limitation, (i) with respect to Account
Receivable, any agreement relating to the terms of payment or the terms of
performance thereof, and (ii) all lease agreements relating to Real Property or
personal property, rental contracts, rent-to-own contracts, rent-to-rent
contracts, lease-purchase agreements and any and all related agreements.
"Documents" shall mean any "documents", as such term is defined in the UCC,
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now owned or hereafter acquired by Pledgor, including, but not limited to all
files, records, books, ledger card, computer programs, tapes, disks and related
electronic data processing software.
"Equipment" shall mean any "equipment", as such term is defined is defined
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in the UCC, now owned or hereafter acquired by the Pledgor and, in any event,
shall include, without limitation, all machinery, equipment, furnishings,
fixtures, vehicles, trucks, automobiles, tools, dies, computers and office
equipment now owned or hereafter acquired by Pledgor and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
"Event of Default" shall have the meaning specified in the Guaranty.
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"Intangible Assets" shall mean any "general intangibles". As such term is
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defined in the UCC, now owned or hereafter acquired by Pledgor and, in any
event, shall include without limitation, all right, title and interest which
Pledgor may now or hereafter have in or under all licenses, customer lists,
trade names, assumed names, rights in intellectual property, permits, service
marks, service xxxx applications, patents, patent applications, trademarks,
trademark applications, telephone numbers and listings of Pledgor, copyrights,
trade secrets, proprietary or confidential information, inventions (whether
patented, patentable or not), technical information, procedures, designs,
knowledge, know-how, software, databases, data, skill, expertise, experience,
processes, models, drawings, materials, books, records, tax refunds, prepaid
expenses, rights under capitalized leases, lease agreements relating to Real
property or personal property, rental contracts, lease-purchase agreements and
related agreements, goodwill and rights of indemnification now owned or
hereafter acquired by Pledgor.
"Instruments" shall mean any "instrument", as such term is defined in the
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UCC, now owned or hereafter acquired by Pledgor.
"Proceeds" shall mean "proceeds", as such term is defined in the UCC and,
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in any event, shall include, without limitation, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to Pledgor from time to time
with respect to any of the Collateral, (ii) any and all payments made or due and
payable to Pledgor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental body, authority, bureau or agency (or any person
acting under color of governmental authority), (iii) any and all other amounts
from time to time paid or payable under or in connection with any of the
Collateral, and (iv) any cash, deposits, securities, instruments, documents,
policies and certificates of insurance.
"Real Property" shall mean all right, title and interest now or hereafter
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held by Pledgor (whether in fee, under leasehold or otherwise) to or in any real
property.
"Secured Obligations" shall mean all of Pledgor's liabilities, obligations
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and indebtedness to Secured Party of any and every kind and nature, whether
arising under the Note, the Guaranty, this Security Agreement, or any of the
other documents (including any amendments, restatements, extensions, renewals or
other modifications of any of the foregoing) executed in connection herewith or
therewith by Pledgor (the "transaction Documents") or otherwise, now or
hereafter owing, arising, due or payable from Pledgor or the Company to Secured
Party and howsoever evidenced, created, incurred, acquired or owing, whether
primary, secondary, direct, contingent, fixed or otherwise, including
obligations or performance.
"Transaction Documents" shall have the meaning set forth in the definition
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of "Secured Obligations."
"UCC" shall mean the Uniform Commercial Code as the same may, from time to
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time, be in effect in the State of Texas; provided, however, in the event that,
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by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of Secured Party's security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of Texas, the term "UCC" shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions hereof
relating thereto.
3. Grant of Security Interest. As collateral security for the prompt and
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complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all the Secured Obligations and to induce
Secured Party to make the loans to PLY Stadium Partners, Inc. (the
"Company") contemplated by the Master Loan Agreement or Note, Pledgor
hereby assigns, conveys, mortgages, pledges, hypothecates and transfers to
Secured Party and hereby grants to Secured Party a continuing security
interest in all of Pledgor's right, title and interests in and to all of
the following property and interest in property of Pledgor, whether now
owned or existing, hereafter acquired or arising, or in which Pledgor now
or hereafter has any rights, wheresoever located: All right, title,
interest and ownership in and to Polyphase Corporation, Pyrenees Group,
Inc. and PLY Stadium Partners, Inc., and to the extent not otherwise
included, all Proceeds of each of the foregoing and all accessions to,
substitutions, additions, products, proceeds and replacements for, and
rents, profits, and products of each of the foregoing (all of the foregoing
being hereinafter collectively referred to as "Collateral"). The
assignments and security interests granted herein are made as security only
and shall not subject Secured Party to, or transfer or in any way affect or
modify, any obligation of Pledgor with respect to any of the Collateral or
any transaction involving or giving rise thereto.
4. Rights of Secured Party; Limitations on Secured Party's Obligations. It is
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expressly agreed by Pledgor that, anything herein to the contrary
notwithstanding, Pledgor shall remain liable under each of his Contracts,
each Transaction Document and other Collateral to observe and perform all
the conditions and obligations to be observed and performed by him
thereunder. Secured Party shall not have any obligation or liability under
any Contract, any Transaction Document or other Collateral by reason of or
arising out of this Security Agreement or the granting to Secured Party of
a security interest therein or the receipt by Secured Party of any payment
relating thereto, nor shall Secured Party be required or obligated in any
manner to perform or fulfill any of the obligations of Pledgor under or
pursuant thereto, or to make any inquiry as to the nature of the
sufficiency of any payment received by him or the sufficiency of any
performance by any party thereunder, or to present or file any claim, or to
take any action to collect or enforce any performance or the payment of any
amounts which may have been assigned to it or to which it may be entitled
at any time or times.
5. Representations and Warranties. Pledgor represents and warrants to Secured
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Party, as of the date hereof and continuously, all of which representations
and warranties shall survive indefinitely, that:
(a) Pledgor is solvent; and possesses all requisite power and
authority to execute, deliver and comply with the terms of this
Agreement, the Guaranty and all other Transaction Documents to
which Pledgor is party.
(b) The Transaction Documents to which Pledgor is a party, when
executed and delivered by all parties thereto, will constitute the
valid, legal and binding obligations of Pledgor, enforceable
against Pledgor in accordance with their terms.
(c) Pledgor is the sole owner of each item of the Collateral in which
it purports to grant a security interest hereunder, having good
and marketable title thereto, free and clear of any and all liens
and encumbrances. No material amounts payable under or in
connection with any of its Accounts Receivable, Contracts or any
Transaction Document are evidenced by Instruments which have not
been delivered to Secured Party.
(d) No effective security agreement, financing statement, equivalent
security or lien instrument or continuation statement covering all
or any part of the Collateral is on
file or of record in any public office, except such as may have
been filed by Pledgor in favor of Secured Party.
(e) Upon the filing of UCC financing statements at the Texas Secretary
of State and in Dallas County, Texas and upon Secured Party
obtaining possession of all instruments, Chattel Paper and pledged
shares of the Pledgor, this Security Agreement will be effective
to create a valid and continuing lien on and perfected security
interest in the Collateral prior to all other liens and security
interests. All action necessary or desirable to protect and
perfect such security interest in each item of the Collateral has
been duly taken.
(f) Pledgor is not in default under the Transaction Documents to which
Pledgor is a party.
(g) Pledgor's principal residence and location where its records
concerning the Collateral are kept is the Address. All offices and
places of business of Pledgor and all locations of Collateral are
as described on Schedule 5(g) hereof (collectively the "Collateral
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Locations"), which Schedule sets forth (i) the complete address
for each such Collateral Location, (ii) identifies whether each
such Collateral Location is used by Pledgor as an office,
warehouse or otherwise, and (iii) provides a description of the
lease pertaining to such Collateral Location, including the term,
rental payment obligations and full name and address of landlord.
Pledgor owns no Real Property.
(h) Secured Party will have a valid and perfected first priority lien
and security interest in all Collateral.
6. Certain Covenants. Until the Secured Obligations are paid and performed in
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full, Pledgor covenants and agrees with Secured Party as follows:
(a) Financing Statements and Further Documentation. Pledgor will join
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with Secured Party in the execution and filing of such financing
statement or statements in form and content satisfactory to
Secured Party. Pledgor will pay all costs of filing any financing,
continuation or termination statements with respect to the
security interest created by this Agreement, together with costs
and expenses of any lien search required by Secured Party, from
time to time so long as this Agreement is in effect. At any time
and from time to time, upon the written request of Secured Party,
and at the sole expense of Pledgor, Pledgor will promptly and duly
execute and deliver any and all such further instruments and
documents and take such further action as Secured Party may
reasonably deem desirable to obtain the full benefits of this
Security Agreement and of the rights and powers herein granted.
(b) Certain Collateral. Immediately upon Pledgor's receipt of all
certificates or instruments representing pledged shares or any
other Collateral which is or becomes evidenced by any agreement,
instrument and/or document including, without limitation,
promissory notes, trade acceptances, documents of title and
warehouse receipts, Pledgor shall deliver the original thereof to
Secured Party, together with appropriate endorsements, duly
executed instruments of transfer or assignment or other specific
evidence (in form and substance acceptable to Secured Party) of
assignment thereof to Secured Party. After the occurrence and
during the continuation of an Event of Default, the Secured Party
shall have the right at any time to exchange certificates or
instruments representing or evidencing any Collateral in its
possession for certificates or instruments of smaller or larger
denominations.
(c) Indemnification. In any suit, proceeding or action brought by
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Secured Party relating to any of the Collateral for any sum owing
thereunder, or to enforce any provision of any of the Collateral,
Pledgor will save, indemnify and keep Secured Party harmless from
and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction of
liability whatsoever of the obligor thereunder, arising out of a
breach by Pledgor of any obligation thereunder or arising out of
any other agreement, indebtedness or liability at any time owing
to, or in favor of, such obligor or its successors from Pledgor,
and all such obligations of Pledgor shall be and remain
enforceable against and only against Pledgor and shall not be
enforceable against Secured Party.
(d) Compliance with Laws, etc. Pledgor will comply, in all material
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respects, with all laws, acts, rules, regulations, orders, decrees
and directions of any governmental authority applicable to the
Collateral or any part thereof.
(e) Limitation of Liens on Collateral. Pledgor will not create, permit
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or suffer to exist, and will defend the Collateral against and
take such other action as is necessary to remove, any lien,
security interest or encumbrance on the Collateral except for the
security interest of Secured Party hereunder, and will defend the
right, title and interest of Secured Party in and to any of the
Pledgor's rights under the Collateral against the claims and
demands of all entities and persons whomsoever.
(f) Maintenance of Insurance. Pledgor will maintain, with financially
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sound and reputable companies, insurance policies insuring its
tangible property against loss and business interruption by fire,
explosion, theft and such other casualties as are usually insured
against by companies in the same or similar businesses, and
insuring Pledgor and Secured Party against liability for personal
injury and property damage relating to the Collateral, such
policies to be in such amounts and against at least such risks as
are usually insured against, in the same general area by companies
in the same or a similar business, and notify Secured Party
promptly of any occurrence causing a material loss or decline in
value of the Collateral and the estimated or actual amount of such
loss or decline. Pledgor shall deliver to Secured Party the
original (or a certified copy thereof) of each policy of insurance
and evidence of payment of all premiums therefore. Such policies
of insurance shall contain an endorsement, in form and substance
acceptable to Secured party, naming Secured Party as an additional
insured with losses payable to Pledgor and Secured Party under a
standard non-contributory "secured party" clause. Pledgor hereby
directs all insurers under such policies of insurance to pay all
proceeds payable thereunder directly to Secured Party, as its
interest may appear. All such insurance shall contain a clause
which provides that Secured Party's interest under the policy will
not be invalidated by any act or omission of, or any breach of
warranty by, the insured, or by any change in the title, ownership
or possession of the insured property, or by the use of the
property for purposes more hazardous than is permitted in the
policy, and provide that no cancellation, reduction in amount or
change in coverage thereof shall be effective until at least
thirty (30) days after the receipt by Secured Party of written
notice thereof.
(g) Limitations on Disposition. Pledgor will not sell, lease, transfer
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or otherwise dispose of any material portion of the Collateral, or
attempt or contract to do so, without the prior consent of secured
Party.
(h) Right of Inspection. During regular business hours (unless an
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Event of Default has occurred and is continuing, in which case at
all times), Secured Party shall have full and free access to all
books and records of Pledgor, and Secured Party and its
representatives may examine the same and take extracts therefrom
for the purpose of protecting and verifying its interests in the
Collateral hereunder. Secured Party and its representatives shall
also have the right to enter into and upon any premises where any
Collateral is located during such times for the purposes of
inspecting the same or otherwise protecting interest therein.
(i) Maintenance of Equipment. Pledgor will keep and maintain the
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Equipment in good operating condition on a basis with past
practices, and Pledgor will provide all maintenance and service
and all repairs necessary for such purpose.
(j) Continuous Perfection. Pledgor will not change his name or
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identity in any manner which might make any financing or
continuation statement filed in connection herewith seriously
misleading within the meaning of Section 9-402 of the UCC (or any
other then applicable provision of the UCC) unless Pledgor shall
have given Secured Party at least twenty (20) days' prior written
notice thereof and shall have taken all action necessary or
requested by Secured Party to amend each financing statement or
continuation statement so that it is not seriously misleading.
(k) Location of Collateral. Pledgor will not maintain any office or
other place of business of any kind at any location other then the
Collateral Location described on Schedule 5(e) hereof, unless
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Pledgor shall have given Secured Party at least twenty (20) days'
prior written notice thereof and shall have taken all actions
necessary or requested by Secured Party to perfect its security
interest in the Collateral at such location.
7. Secured Party's Appointment as Attorney-in-Fact.
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(a) Pledgor hereby irrevocably constitutes and appoints Secured Party
and any officers, designees or agents thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Pledgor
and in the name of Pledgor or in its own name, from time to time
in Secured Party's sole discretion, for the purposes of carrying
out the terms of this Security Agreement, without notice to
Pledgor, to take any and all appropriate action and to execute and
deliver any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Security
Agreement, including, without limitation, to ask, demand, collect,
receive, settle, compromise, adjust and give discharges, releases,
acquittances and receipts for any and all moneys due and to become
due under any Collateral, to enter on the premises of Pledgor to
take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys
due under any Collateral, or any other Collateral, to pay or
discharge taxes, liens, security interests or other encumbrances
levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of
this Security Agreement and to pay all or any part of the premiums
therefor and the costs thereof, to receive, open and dispose of
mail addressed to either Pledgor, to sell, assign, transfer, make
any arrangements in respect of, or otherwise deal with or exercise
rights in respect of any Collateral as though Secured Party were
the absolute owner thereof, to adjust and settle claims under any
insurance policy, to execute financing statements or amendments
thereto or any other document or writing deemed necessary by
Secured Party to evidence or perfect its security interest in any
Collateral and to effect an assignment of Pledgor's telephone
numbers and listings.
(b) Secured Party agrees that, except upon or after the occurrence of
any Event of Default, it will not exercise the power of attorney
or any rights granted to secured
party pursuant to this Section 7, except with respect to the power
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to execute financing statements or amendments thereto or any
document or writing deemed necessary by Secured Part to evidence
or perfect its security interest in the Collateral. Pledgor hereby
ratifies, to the extent permitted by law, all that said attorneys
shall lawfully do or cause to be done by virtue hereof. The power
of attorney granted herein is a power coupled with an interest and
shall be irrevocable until the Secured Obligations are
indefeasibly paid in full. The powers conferred on Secured Party
hereunder are solely to protect Secured Party's interests in the
Collateral and shall not impose any duty upon it to exercise any
such powers and Secured Party shall be accountable only for
amounts that it actually receives as a result of the exercise of
such powers.
8. Performance by Secured Party of Pledgor's Obligation. If Pledgor fails to
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perform or comply with any of its agreements contained herein and Secured
Party, as provided for by the terms of this Security Agreement, shall itself
perform or comply, or otherwise cause performance or compliance, with such
agreement, the reasonable expenses of Secured Party incurred in connection
with such performance or compliance, together with interest thereon at the
rate of 10% per annum, shall be payable by Pledgor to Secured Party on
demand and shall constitute Secured Obligations hereunder.
9. Remedies, Rights Upon Default. Upon the occurrence of any Event of Default,
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Secured Party may exercise in addition to all other rights and remedies
granted to it in this Security Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under the UCC, including but not
limited to the right to accelerate all of the Secured Obligations, to take
immediate possession of the Collateral without notice or demand, to enter
upon any premises where the Collateral is located and remove the same or
remain on such premises in possession of the Collateral, to sell, lease or
dispose of the Collateral, to setoff or apply any Collateral held by Secured
Party, or the like. To the maximum extent permitted by applicable law,
Pledgor waives all claims, damages and demands against Secured Party arising
out of the repossession, retention or sale of the Collateral. Pledgor agrees
that Secured Party need not give more than ten (1) days' notice of the time
after which a private or public sale may take place and that such notice is
reasonable notification of such matters. The requirement of reasonable
notice to Pledgor of the time and place of any public sale or private sale
of the Collateral shall be met if such notice is mailed, postage prepaid, to
Pledgor at the address set forth in the Note. Pledgor shall remain liable
for any deficiency if the proceeds of any sale or disposition of the
Collateral are insufficient to pay all amounts to which Secured Party is
entitled, Pledgor also being liable for all costs of Secured Party,
including, without limitation, reasonable attorneys' fees, incurred in
connection with the enforcement of any of its rights and remedies hereunder.
Pledgor hereby waives presentment, demand, protest or any notice, including,
without limitation, notice of intent to accelerate and notice of
acceleration (to the maximum extent permitted by applicable law) of any kind
in connection with this Security Agreement or any Collateral. Pledgor shall,
upon demand, make the Collateral available to Secured Party at a place and
time designated by Secured Party.
10. Application of Proceeds. The proceeds of any sale, disposition or other
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realization upon all or any part of the Collateral shall be applied and
distributed by Secured Party in the following order of priorities:
first, to Secured party in an amount sufficient to pay in fill the
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reasonable expenses of Secured party in connection with such sale,
disposition or other realization, including all expenses, liabilities and
advances incurred or made by Secured Party in connection therewith,
including, without limitation, reasonable attorneys' fees;
second, to Secured party in an amount sufficient to discharge all of
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the Secured Obligations; and
finally, upon payment in full of all the Secured Obligations, to pay to
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Pledgor, or its representatives or as a court of competent jurisdiction
may direct, any surplus then remaining from such proceeds.
11. Indemnification. Pledgor hereby assumes all liability for the collateral,
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and for any use, possession and management of Collateral, including
without limitation, any taxes arising as a result of, or in connection
with, the transactions contemplated herein and agrees to assume liability
for, and to indemnify and hold Secured Party harmless from and against any
and all claims, causes of action, or liability, howsoever arising from or
incident to such use, possession or management. Pledgor further agrees to
exonerate Secured Party from any liability for any loss, depreciation or
other damage to the Collateral by virtue of any action or inaction by
Secured Party.
12. Reinstatement. This Agreement shall remain in full force and effect and
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continue to be effective should any petition be filed by or against
Pledgor for liquidation should Pledgor become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee
for all or any significant part of Pledgor's assets, and shall continue to
be effective or be reinstated, as the case may be, if at any time payment
and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a "voidable preference", "fraudulent conveyance",
or otherwise, all as though such payment, or any part thereof, is
rescinded reduced, restored or returned, the Secured Obligations shall be
reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
13. Miscellaneous.
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(a) Waivers. Pledgor hereby waives (I) any right to require Secured
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Party to proceed against any person or entity, to exhaust its
rights in the Collateral, or to pursue any other right which
Secured Party may have; (ii) with respect to the Secured
Obligations, except as expressly required by the Note, presentment
and demand for payment, notice of protest and non-payment, notice
of the intention to demand or accelerate, notice of acceleration
and notice of dishonor, and diligence in collection, review or
sale of Collateral, grace, notice and protest; and (iii) all
rights of redemption and of marshaling in respect of any and all
of the Collateral.
(b) Severability. Any provision of this Security Agreement which is
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prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
uneforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
(c) No Waiver; Cumulative Remedies. Secured Party shall not by any
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act, delay omission or otherwise be deemed to have waived any of
its rights or remedies hereunder, and no waiver shall be valid
unless in writing, signed by Secured Party and then only to the
extent therein set forth. A waiver by Secured party of any right
or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which Secured Party would otherwise
have had on any future occasion. No failure to exercise nor any
delay in exercising on the part of Secured Party, any right, power
or privilege hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or
privilege hereunder
preclude any other or future exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies
hereunder provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies
provided by law.
(d) Notices. All notices, demands, requests, consents and other
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communications hereunder shall be delivered pursuant to the terms
and at the addresses set forth in the notice provisions of the
Guaranty.
(e) Amendments; Assignments. This Agreement may be amended only by a
writing executed jointly by Pledgor and Secured Party. This
agreement is for the benefit of and binding upon the parties
hereto and their respective successors and assigns. Secured Party
may assign all or a part of its interest in this Security
Agreement and its rights hereunder to any party.
(f) Counterparts. This Agreement may be executed in any number of
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counterparts which shall, collectively and separately, constitute
one agreement.
(g) Section Titles and Headings. All section titles and headings
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contained in this Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of
the agreement between the parties hereto.
(h) GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE DEEMED A CONTRACT
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AND INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF TEXAS AND
ACCEPTED BY PLEDGOR IN SAID STATE, THE LOCATION OF SECURED PARTY'S
PRINCIPAL PLACE OF BUSINESS, AND ANY AND ALL CLAIMS, DEMANDS OR
ACTIONS IN ANY WAY RELATING THERETO OR INVOLVING ANY DISPUTE
BETWEEN ANY OF THE PARTIES HERETO, WHETHER ARISING IN CONTRACT OR
TORT, AT LAW, IN EQUITY OR STATUTORILY, SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND/OR GOVERNED BY THE LAWS OF THE
STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF AMERICA.
PLEDGOR HEREBY IRREVOCABLY SUBMITS ITSELF TO THE NON-EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF TEXAS
AND AGREES BAND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON
IT IN ANY LEGAL PROCEEDING RELATING TO THE TRANSACTION DOCUMENTS,
THE RELATIONSHIPS CREATED THEREBY OR THE SECURED OBLIGATIONS BY
ANY MEANS ALLOWED UNDER TEXAS OR FEDERAL LAW. VENUE FOR ANY LEGAL
PROCEEDING MAY BE DALLAS COUNTY, TEXAS; PROVIDED, THAT SECURED
PARTY MAY CHOOSE ANY VENUE IN ANY STATE WHICH IT DEEMS APPROPRIATE
IN THE EXERCISE OF ITS SOLE DISCRETION.
(i) WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY HEREBY KNOWINGLY,
--------------------
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH, THIS NOTE, THE SECURITY AGREEMENT,
THE WARRANT PURCHASE AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF PAYEE OR MAKER IN CONNECTION
HEREWITH, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE. MAKER AND PAYEE
HEREBY CONSENT AND AGREE THAT ANY SUCH CLAIM, DEMAND ACTION, CAUSE
OF ACTION, SUIT OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL,
WITHOUT A JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OR COPY OF THIS SECURITY AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE OTHER PARTIES' CONSENT TO SUCH.
(j) Severability. If any provision of this Security Agreement or any
------------
payments pursuant to the terms hereof shall be invalid or
unenforceable to any extent, the remainder of this Security
Agreement and any other payments hereunder shall not be affected
thereby and shall be enforceable to the greatest extent permitted
by law.
(k) LEGAL COUNSEL. PLEDGOR AND SECURED PARTY ACKNOWLEDGE THAT EACH HAS
-------------
HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL
IN CONNECTION WITH ALL MATTERS CONCERNING THIS AGREEMENT,
INCLUDING, BUT NOT LIMITED TO, THE NEGOTIATION, ACCEPTANCE AND
EXECUTION OF THIS AGREEMENT; THAT EACH HAD THE OPPORTUNITY TO RELY
UPON THE ADVICE OF ITS INDEPENDENT LEGAL COUNSEL IN AGREEING TO
THE TERMS AND CONDITIONS HEREIN AND IN EXECUTING THIS SECURITY
AGREEMENT; THAT EACH HAS READ, REVIEWED AND UNDERSTOOD THE
TRANSACTION DOCUMENTS AND THAT THE OBLIGATIONS THEREUNDER
REPRESENT VALID AND BINDING OBLIGATIONS OF PLEDGOR; AND THAT EACH
HAS FREELY AND VOLUNTARILY ENTERED INTO THIS SECURITY AGREEMENT AS
THE PRODUCT OF ARM'S LENGTH NEGOTIATIONS.
(l) ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH THE OTHER
----------------
TRANSACTION DOCUMENTS, EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG
THE PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN
OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND NOT TO BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENT OR DISCUSSIONS OF THE PARTIES HERETO.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
PLEDGOR:
--------------------------------------
Xxxx X. Xxxxxx
ACCEPTED BY SECURED PARTY
AT DALLAS, TEXAS:
POLYPHASE CORPORATION
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
