Covenants Concerning Collateral. Pledgor covenants that: (a) Pledgor will keep the Collateral free and clear of any and all security interests, liens, assignments or other encumbrances, except Permitted Encumbrances. (b) Pledgor agrees to execute and deliver any applications for certificates of title, certificates of title, and other documents (properly endorsed, if necessary) reasonably requested by Secured Party for perfection or, during the continuation of an Event of Default, enforcement of any security interest or lien, and to give good faith, diligent cooperation to Secured Party with respect thereto, and to perform such other acts reasonably requested by Secured Party for perfection and, during the continuation of an Event of Default, enforcement of any security interest or lien created hereunder, including, without limitation, obtaining control for purposes of perfection with respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paper. Secured Party is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or lien granted hereunder. Notwithstanding anything to the contrary, so long as no Event of Default is continuing and the Secured Party has not given notice to the Pledgor that its rights under this sentence are terminated, Pledgor shall have the right to collect all cash dividends and distributions upon, and exercise all rights (including, without limitation, contractual and governance rights) with respect to, all equity interests and investment property constituting Collateral. (c) Pledgor shall not, in any material respect, misuse or conceal the Equipment or, in any material respect, in any way permit the Equipment to be used unlawfully or contrary to the provisions of any insurance coverage. Risk of loss of the Equipment shall be on Pledgor at all times unless Secured Party takes possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not release Pledgor from any of the obligations secured by the Equipment. (d) Pledgor shall submit to Secured Party reports as to the Inventory and the Accounts at such times and in such form as Secured Party may reasonably request. Pledgor will at all times keep accurate and complete, in all material respects, records of the Inventory and the Accounts. (e) Until Secured Party exercises its rights as a secured party with respect to the Inventory by taking actual or constructive possession thereof or otherwise during an Event of Default, or by giving notice to Pledgor of its intent to do so pursuant to an Event of Default, Pledgor shall have the right to sell or otherwise dispose of the Inventory in the ordinary course of business. Except as permitted by the Loan Agreement, no other disposition of the Inventory may be made without the prior written consent of Secured Party. (f) If an Event of Default has occurred and is continuing, all proceeds from the sale or other disposition of the Inventory and Accounts and all collections and other proceeds therefrom shall, at Secured Party’s request, be deposited into an account designated by Secured Party (the “Cash Collateral Account”), which account shall be under the sole and exclusive control of Secured Party. After such request, such proceeds and collections shall not be commingled with any other funds and shall be promptly and directly deposited into such account in the form in which received by Pledgor. After such request, such proceeds and collections shall not be deposited in any other account and such Cash Collateral Account shall contain no funds other than such proceeds and collections. All or any portion of the funds on deposit in such Cash Collateral Account may, in the sole discretion of Secured Party, be applied from time to time as Secured Party elects to payment of obligations secured by this Security Agreement or Secured Party may elect to turn over to Pledgor, from time to time, all or any portion of said funds. (g) Pledgor agrees to use diligent and good faith efforts in accordance with its normal practices to collect the Accounts in the ordinary course of business. After the occurrence and during the continuation of an Event of Default, Secured Party, in its sole discretion, may, upon written notice to Pledgor, notify any and all account debtors to make payment thereon directly to Secured Party, and to take possession of all proceeds from the Accounts, and to take any action which Pledgor might or could take to collect the Accounts, including the right to make any compromise, discharge, or extension of the Accounts. After the occurrence and during the continuation of an Event of Default, upon request of Secured Party, Pledgor agrees to execute and deliver to Secured Party a notice to Pledgor’s account debtors instructing said account debtors to pay Secured Party. After the occurrence and during the continuation of an Event of Default, Pledgor further agrees to execute and deliver to Secured Party all other notices and similar documents reasonably requested by Secured Party to facilitate collection of the Accounts. (h) All costs of collection of the Accounts, including reasonable attorneys fees and legal expenses, shall be borne solely by Pledgor, whether such costs are incurred by or for Pledgor or Secured Party and whether not legal proceedings are commenced. In the event Secured Party elects to undertake direct collection of the Accounts during the continuation of an Event of Default, Pledgor agrees to deliver to Secured Party, if so requested, all books, records, and documents in Pledgor’s possession or under its control as may relate to the Accounts or as may be helpful to facilitate such collection. Secured Party shall have no obligation to cause an attorneys demand letter to be sent, to file any lawsuit, or to take any other legal action in collection of the Accounts. (i) Pledgor does hereby make, constitute, and appoint Secured Party and its designees as Pledgor’s true and lawful attorney in fact, with full power of substitution, such power to be exercised in the following manner: (1) after the occurrence and during the continuation of an Event of Default, Secured Party may receive and open all mail addressed to Pledgor and remove therefrom any cash, notes, checks, acceptances, drafts, money orders or other instruments in payment of the Accounts; (2) after the occurrence and during the continuation of an Event of Default, Secured Party may cause mail relating to the Inventory and Accounts to be delivered to a designated address of Secured Party where Secured Party may open all such mail and remove therefrom any cash, notes, checks, acceptances, drafts, money orders, or other instruments in payment of the Accounts; (3) after the occurrence and during the continuation of an Event of Default, Secured Party may endorse Pledgor’s name upon such notes, checks, acceptances, drafts, money orders, or other forms of payment; (4) after the occurrence and during the continuation of an Event of Default, Secured Party may settle or adjust disputes or claims in respect to the Accounts for amounts and upon such terms as Secured Party, in its sole discretion and in good faith, deems to be advisable, in such case crediting Pledgor with only the proceeds received and collected by Secured Party after deduction of Secured Party’s costs, including reasonable attorneys fees and legal expenses; and (5) Secured Party may do any and all other things reasonably necessary or proper to carry out the intent of this Security Agreement and to perfect and protect the liens and rights of Secured Party created under this Security Agreement. (j) Pledgor agrees to use diligent and good faith efforts to collect the Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral in the ordinary course of business. After the occurrence and during the continuation of an Event of Default, upon written notice by Secured Party to Pledgor, Secured Party may at any time terminate such authority. Upon such termination, Secured Party is authorized by Pledgor, without further act, to notify any and all obligors on that Collateral to make payment thereon directly to Secured Party, to take possession of all proceeds from any such payments, and to take any action which Pledgor might or could take to collect that Collateral, including the right to make any compromise, discharge or extension of that Collateral. After the occurrence and during the continuation of an Event of Default, upon request of Secured Party, Pledgor agrees to execute and deliver to Secured Party a notice to the obligors on that Collateral instructing said obligors to pay Secured Party. Pledgor further agrees to execute and deliver to Secured Party all other notices and similar documents reasonably requested by Secured Party to facilitate collection of that Collateral. Pledgor hereby irrevocably makes, constitutes, and appoints Secured Party and its designees as Pledgor’s true and lawful attorney in fact, with full power of substitution, to, after the occurrence and during the continuation of an Event of Default, endorse Pledgor’s name upon checks, drafts, money orders, or other forms of payment of the Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral or on any other documents relating to collection of that Collateral. All costs of collection of the Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral, including reasonable attorneys fees and legal expenses, shall be borne solely by Pledgor, whether such costs are incurred by or for Pledgor or Secured Party. After the occurrence and during the continuation of an Event of Default, in the event Secured Party elects to undertake direct collection of that Collateral pursuant to the terms of this Security Agreement, Pledgor agrees to deliver to Secured Party, upon request, all books, records, and documents in Pledgor’s possession or under its control as may relate to that Collateral or as may be helpful to facilitate such collection. (k) Immediately upon execution of this Security Agreement, if so requested by Secured Party, Pledgor shall deliver to Secured Party all Promissory Notes and Chattel Paper. Upon creation of any Promissory Notes or Chattel Paper in the future, Pledgor shall, at the request of Secured Party, deliver the Promissory Notes and Chattel Paper to Secured Party. (l) Pledgor shall, promptly upon obtaining knowledge thereof, report to Secured Party in writing any material default on any item of Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral, any material claim or dispute asserted by any obligor on any item of that Collateral, and any other material matters if such affects the value, enforceability or collectability of any material portion of the Collateral. (m) Pledgor shall not, without Secured Party’s written consent, make any material settlement, compromise or adjustment of any item of Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral or grant any material discounts, extensions, allowances or credits thereon other than in the ordinary course of business. (n) Pledgor will at all times keep accurate and complete, in all material respects, records as to the Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral and payments thereon.
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Covenants Concerning Collateral. Pledgor Borrower covenants that:
(a) Pledgor a. Borrower will keep the Collateral free and clear of any and all security interests, liens, assignments or other encumbrances, except Permitted Encumbrances.
(b) Pledgor b. Borrower agrees to execute and deliver any applications for certificates of title, certificates of title, and other documents (properly endorsed, if necessary) reasonably requested by Secured Party for perfection or, during the continuation of an Event of Default, or enforcement of any security interest or lien, and to give good faith, diligent cooperation to Secured Party with respect theretoParty, and to perform such other acts reasonably requested by Secured Party for perfection and, during the continuation of an Event of Default, and enforcement of any security interest or lien created hereunder, including, without limitation, obtaining control for purposes of perfection with respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights, and electronic chattel paper. Secured Party is authorized to file, record, or otherwise utilize such documents as it deems necessary to perfect and/or or enforce any security interest or lien granted hereunder. Notwithstanding anything to the contrary, so long as no Event of Default is continuing and the Secured Party has not given notice to the Pledgor that its rights under this sentence are terminated, Pledgor shall have the right to collect all cash dividends and distributions upon, and exercise all rights (including, without limitation, contractual and governance rights) with respect to, all equity interests and investment property constituting Collateral.
(c) Pledgor c. Borrower shall not, in any material respect, misuse or conceal keep the Equipment orin good repair, in any material respectordinary wear and tear and obsolescence excepted. Borrower shall pay when due all taxes, license fees and other charges on the Equipment. Borrower shall not sell, misuse, conceal, or in any way permit dispose of the Equipment or permit it to be used unlawfully or for hire or contrary to the provisions of any insurance coverage. Risk of loss of the Equipment shall be on Pledgor Borrower at all times unless Secured Party takes possession of the Equipment. Loss of or damage to the Equipment or any part thereof shall not release Pledgor Borrower from any of the obligations secured by the Equipment. Secured Party or its representatives may, at any time and from time to time upon reasonable notice to Borrower, enter any premises owned or leased by Borrower where the Equipment is located and inspect, audit and check the Equipment.
(d) Pledgor shall submit d. Borrower agrees to Secured Party reports as to insure the Inventory Equipment, at Borrower's expense, against loss, damage, theft, and the Accounts at such times and in such form other risks as Secured Party may reasonably request to the full insurable value thereof with insurance companies and policies reasonably satisfactory to Secured Party. Proceeds from such insurance shall be payable to Secured Party as its interest may appear and such policies shall provide for a minimum ten days written cancellation notice to Secured Party. Upon request, policies or certificates attesting to such coverage shall be delivered to Secured Party. Pledgor will at all times keep accurate and completeInsurance proceeds may be applied by Secured Party toward payment of any obligation secured by this Security Agreement, whether or not due, in all material respects, records such order of the Inventory and the Accountsapplication as Secured Party may elect.
(e) Until Secured Party exercises its rights e. So long as a Borrower is not in default hereunder or under any obligation secured party with respect to the Inventory by taking actual or constructive possession thereof or otherwise during an Event of Defaulthereby, or by giving notice to Pledgor of its intent to do so pursuant to an Event of Default, Pledgor Borrower shall have the right to sell or otherwise dispose of the Inventory in the ordinary course of business. Except as permitted by the Loan Agreement, no No other disposition of the Inventory may be made without the prior written consent of Secured Party.
(f) f. If an Event Borrower is in default hereunder or if Lender deems itself insecure, Borrower agrees that Secured Party shall have the right to appropriate and apply to the payment of Default has occurred all liabilities of Borrower to the Secured Party any and is continuing, all commissions and amounts owed or owing by Secured Party to Borrower under the terms of the Assignment and Exclusive Services Agreement.
g. All proceeds from the sale or other disposition of the Inventory and Accounts and all collections and other proceeds therefrom shall, at Secured Party’s 's request, be deposited into an account designated by Secured Party (the “"Cash Collateral Account”"), which account shall be under the sole and exclusive control of Secured Party. After such request, such Such proceeds and collections shall not be commingled with any other funds and shall be promptly and directly deposited into such account in the form in which received by PledgorBorrower. After such request, such Such proceeds and collections shall not be deposited in any other account and such Cash Collateral Account shall contain no funds other than such proceeds and collections. All or any portion of the funds on deposit in such Cash Collateral Account may, in the sole discretion of Secured Party, be applied from time to time as Secured Party elects to payment of obligations secured by this Security Agreement or Secured Party may elect to turn over to PledgorBorrower, from time to time, all or any portion of said funds.
(g) Pledgor h. Borrower agrees to use diligent and good faith efforts in accordance with its normal practices to collect the Accounts and Financial Obligations Collateral. Borrower is authorized to collect the Accounts and Financial Obligations Collateral in the ordinary course of businessa commercially reasonable manner. After the occurrence and during the continuation of an Event of Default, Secured Party, in its sole discretion, maymay terminate such authority whereupon Secured Party is authorized by Borrower, upon written notice without further act, to Pledgor, notify any and all account debtors or other obligors on such Collateral to make payment thereon directly to Secured Party, and to take possession of all proceeds from the AccountsAccounts and any such payments, and to take any action which Pledgor that Borrower might or could take to collect the AccountsAccounts and the Financial Obligations Collateral, including the right to make any compromise, discharge, or extension of the AccountsAccounts or such Collateral. After the occurrence and during the continuation of an Event of Default, upon Upon request of Secured Party, Pledgor Borrower agrees to execute and deliver to Secured Party a notice to Pledgor’s Borrower's account debtors or obligors instructing said account debtors or obligors to pay Secured Party. After the occurrence and during the continuation of an Event of Default, Pledgor Borrower further agrees to execute and deliver to Secured Party all other notices and similar documents reasonably requested by Secured Party to facilitate collection of the AccountsAccounts and such Collateral.
(h) i. All costs of collection of the AccountsAccounts and Financial Obligations Collateral, including reasonable attorneys attorneys' fees and legal expenses, shall be borne solely by PledgorBorrower, whether such costs are incurred by or for Pledgor Borrower or Secured Party and whether not legal proceedings are commencedParty. In the event Secured Party elects to undertake direct collection of the Accounts during the continuation of an Event of Defaultor Financial Obligations Collateral, Pledgor Borrower agrees to deliver to Secured Party, if so requested, all books, records, and documents in Pledgor’s Borrower's possession or under its control as may relate to the Accounts or Financial Obligations Collateral or as may be helpful to facilitate such collection. Secured Party shall have no obligation to cause an attorneys attorney demand letter to be sent, to file any lawsuit, or to take any other legal action in collection thereof. It is agreed that collection of the AccountsAccounts and Financial Obligations Collateral in a commercially reasonable manner does not require that any such legal action be taken.
(i) Pledgor j. Borrower does hereby make, constitute, and appoint Secured Party and its designees as Pledgor’s Borrower's true and lawful attorney in fact, with full power of substitution, such power to be exercised in the following manner: (1) after the occurrence and during the continuation of an Event of Default, Secured Party may receive and open all mail addressed to Pledgor Borrower and remove therefrom any cash, notes, checks, acceptances, drafts, money orders or other instruments in payment of the Accounts; (2) after the occurrence and during the continuation of an Event of Default, Secured Party may cause mail relating to the Inventory and Accounts or Financial Obligations Collateral to be delivered to a designated address of Secured Party where Secured Party may open all such mail and remove therefrom any cash, notes, checks, acceptances, drafts, money orders, or other instruments in payment of the Accounts; (3) after the occurrence and during the continuation of an Event of Default, Secured Party may endorse Pledgor’s name upon such notes, checks, acceptances, drafts, money orders, Accounts or other forms of payment; (4) after the occurrence and during the continuation of an Event of Default, Secured Party may settle or adjust disputes or claims in respect to the Accounts for amounts and upon such terms as Secured Party, in its sole discretion and in good faith, deems to be advisable, in such case crediting Pledgor with only the proceeds received and collected by Secured Party after deduction of Secured Party’s costs, including reasonable attorneys fees and legal expenses; and (5) Secured Party may do any and all other things reasonably necessary or proper to carry out the intent of this Security Agreement and to perfect and protect the liens and rights of Secured Party created under this Security Agreement.
(j) Pledgor agrees to use diligent and good faith efforts to collect the Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral in the ordinary course of business. After the occurrence and during the continuation of an Event of Default, upon written notice by Secured Party to Pledgor, Secured Party may at any time terminate such authority. Upon such termination, Secured Party is authorized by Pledgor, without further act, to notify any and all obligors on that Collateral to make payment thereon directly to Secured Party, to take possession of all proceeds from any such payments, and to take any action which Pledgor might or could take to collect that Financial Obligations Collateral, including the right to make any compromise, discharge or extension of that Collateral. After the occurrence and during the continuation of an Event of Default, upon request of Secured Party, Pledgor agrees to execute and deliver to Secured Party a notice to the obligors on that Collateral instructing said obligors to pay Secured Party. Pledgor further agrees to execute and deliver to Secured Party all other notices and similar documents reasonably requested by Secured Party to facilitate collection of that Collateral. Pledgor hereby irrevocably makes, constitutes, and appoints Secured Party and its designees as Pledgor’s true and lawful attorney in fact, with full power of substitution, to, after the occurrence and during the continuation of an Event of Default, endorse Pledgor’s name upon checks, drafts, money orders, or other forms of payment of the Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral or on any other documents relating to collection of that Collateral. All costs of collection of the Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral, including reasonable attorneys fees and legal expenses, shall be borne solely by Pledgor, whether such costs are incurred by or for Pledgor or Secured Party. After the occurrence and during the continuation of an Event of Default, in the event Secured Party elects to undertake direct collection of that Collateral pursuant to the terms of this Security Agreement, Pledgor agrees to deliver to Secured Party, upon request, all books, records, and documents in Pledgor’s possession or under its control as may relate to that Collateral or as may be helpful to facilitate such collection.
(k) Immediately upon execution of this Security Agreement, if so requested by Secured Party, Pledgor shall deliver to Secured Party all Promissory Notes and Chattel Paper. Upon creation of any Promissory Notes or Chattel Paper in the future, Pledgor shall, at the request of Secured Party, deliver the Promissory Notes and Chattel Paper to Secured Party.
(l) Pledgor shall, promptly upon obtaining knowledge thereof, report to Secured Party in writing any material default on any item of Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral, any material claim or dispute asserted by any obligor on any item of that Collateral, and any other material matters if such affects the value, enforceability or collectability of any material portion of the Collateral.
(m) Pledgor shall not, without Secured Party’s written consent, make any material settlement, compromise or adjustment of any item of Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral or grant any material discounts, extensions, allowances or credits thereon other than in the ordinary course of business.
(n) Pledgor will at all times keep accurate and complete, in all material respects, records as to the Promissory Notes, Leases, Chattel Paper, and Security Agreements Collateral and payments thereon.;
Appears in 1 contract
Sources: Security Agreement (Cirtran Corp)