EXHIBIT 10.48
SECURITY AGREEMENT AND
COLLATERAL ASSIGNMENT OF CONTRACTS
THIS SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT OF CONTRACTS
("Agreement") is made and entered into as of the 9th day of November 2004, by
ONESOURCE TECHNOLOGIES, INC., a Delaware corporation ("Debtor"), in favor of
COMERICA BANK ("Secured Party").
FACTUAL BACKGROUND
A. Debtor has entered into a Credit Agreement of even date herewith
("Credit Agreement") with Secured Party pursuant to which Secured Party has
agreed to advance funds to or for the benefit of Debtor as well as for the
benefit of subsidiaries or affiliates of Debtor that hereafter become
"borrowers", from time to time upon the terms contained therein.
B. Secured Party has agreed to advance funds to Debtor upon the terms and
conditions set forth in the Credit Agreement, on the express condition that
Debtor execute and deliver this Agreement as collateral security for the
advances.
C. All undefined capitalized terms used herein shall have the meaning given
them in the Credit Agreement.
1. SECURITY INTEREST
Debtor hereby grants to Secured Party a security interest ("Security
Interest") in all of Debtor's right, title and interest in and to the personal
property described on Schedule A attached hereto ("Collateral").
2. COLLATERAL ASSIGNMENT
Debtor hereby assigns, transfers and sets over to Secured Party all of
Debtor's right, title and interest in and to the contracts and agreements listed
on Schedule A-1 attached hereto (the "Contracts"), together with all amendments,
addenda, supplements, modifications and extensions thereto, whether made now or
hereafter (the "Collateral Assignment").
3. OBLIGATIONS SECURED
The Security Interest and Collateral Assignment shall secure, in such order
of priority as Secured Party may elect, in its sole discretion, the following
(collectively, the "Obligations"):
(a) payment and performance of all obligations of Borrower under the
terms of the Credit Agreement (including the obligations of Borrower under
the Loans), together with all extensions, modifications, substitutions or
renewals thereof, or other advances made thereunder;
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(b) payment and performance of all obligations of Borrower under the
terms of (i) the Facility A Note, (ii) the Facility B Note, and (iii) any
other Notes; together with all extensions, modifications, substitutions, or
renewals thereof, or other advances made thereunder;
(c) payment and performance of every obligation, covenant and
agreement of Debtor contained in this Agreement; together with all
extensions, modifications, substitutions or renewals hereof;
(d) payment and performance of every obligation, covenant and
agreement of Debtor contained in each of the other Loan Documents and the
Related Documents; together with all extensions, modifications,
substitutions or renewals thereof; and
(e) payment and performance of all other obligations and liabilities
of Debtor to Secured Party, whether now existing or hereafter incurred or
created, whether voluntary or involuntary, whether due or not due, whether
absolute or contingent, or whether incurred directly or acquired by Secured
Party by assignment or otherwise.
4. USE; LOCATION; CONSTRUCTION
Debtor hereby covenants that until the Obligations are repaid and
performed in full:
4.1 Use. The Collateral is or will be used or produced primarily for
business purposes.
4.2 Location. The Collateral will be kept at Debtor's place(s) of business
at the location(s) listed on Schedule B attached hereto.
4.3 Location or Books and Records. Debtor's records concerning the
Collateral will be kept at Debtor's place(s) of business at the location(s)
listed on Schedule B attached hereto.
4.4 Business Names. Debtor does not do business under any name other than
the names listed on the Schedule C attached hereto.
5. REPRESENTATIONS AND WARRANTIES OF DEBTOR
Debtor hereby represents and warrants, as of the date of this Agreement and
at all times until the Obligations are repaid and performed in full, that:
5.1 Title. Debtor is the owner of and holds good title to the Collateral
free of all claims, liens, security interests and other encumbrances except the
Security Interest, the Collateral Assignment and Permitted Liens, and no
financing statement covering the Collateral is filed or recorded in any public
office except with respect to any Permitted Liens.
5.2 Use of Collateral. The Collateral is, and is intended to be, used,
produced or acquired by Debtor for use primarily for business purposes. The
address(es) of Debtor set forth on Schedule B attached hereto is/are the
business and chief executive office(s) of Debtor.
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5.3 Obligors. Each account, chattel paper or general intangible included in
the Collateral is genuine and enforceable in accordance with its terms against
the party named therein who is obligated to pay the same ("Obligor"), and the
security interests that are part of each item of chattel paper included in the
Collateral are valid, first and prior perfected security interests. To the
knowledge of Debtor, based upon a reasonable inquiry, each Obligor is solvent,
and the amount that Debtor has represented to Secured Party as owing by each
such Obligor is the amount actually and unconditionally owing by that Obligor,
without deduction except for normal cash discounts where applicable. To the
knowledge of Debtor, based upon a reasonable inquiry, no Obligor has any
defense, setoff, claim or counterclaim against Debtor that can be asserted
against Secured Party whether in any proceeding to enforce the Security Interest
or otherwise. Each document, instrument and chattel paper included in the
Collateral is complete and regular on its face and free from evidence of forgery
or alteration. No default has occurred in connection with any instrument,
document or chattel paper included in the Collateral, no payment in connection
therewith is overdue and no presentment, dishonor or protest has occurred in
connection therewith.
5.4 Conflict with Other Agreements. The execution, delivery and performance
by Debtor of this Agreement and all other documents and instruments relating to
the Obligations will not result in any breach of the terms and conditions or
constitute a default under any agreement or instrument under which Debtor is a
party or is obligated or to which any of Debtor's assets are subject, the
violation of which would materially and adversely affect the properties,
business or financial condition of Debtor. Except as described in the Credit
Agreement, Debtor is not in default in the performance or observance of any
covenants, conditions or provisions of any such agreement or instrument.
5.5 Priorty. The Security Interest in the Collateral granted to Secured
Party constitutes, and hereafter will constitute, a security interest of first
priority, other than Permitted Liens.
5.6 Authority. Debtor has the full power, authority and legal right to make
the Collateral Assignment and to grant to Secured Party the Security Interest,
and no further consent, authorization, approval or other action is required for
the Collateral Assignment, the grant of the Security Interest or for Secured
Party's exercise of its rights and remedies under this Agreement.
5.7 Contracts. Each of the Contracts is in full force and effect as of the
date hereof.
6. COVENANTS OF DEBTOR
6.1 Transfers. Except as otherwise permitted in the Credit Agreement, and
except as to its inventory which may be sold in the ordinary course of business,
Debtor shall not sell, transfer, assign or otherwise dispose of any Collateral
or any interest therein other than pursuant to the terms of the Credit Agreement
and shall keep the Collateral free of all security interests or other
encumbrances except the Security Interest and any Permitted Liens. Although
proceeds of Collateral are covered by this Agreement, this shall not be
construed to mean that Secured Party consents to any sale or other transfer of
the Collateral.
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6.2 Maintenance. Debtor shall keep and maintain the Collateral in good
condition and repair and shall not use the Collateral in violation of any
provision of this Agreement or any applicable statute, ordinance or regulation
or any policy of insurance insuring the Collateral.
6.3 Insurance. Debtor shall provide and maintain insurance in accordance
with the provisions of the Credit Agreement.
6.4 Casualties. Debtor shall give prompt written notice to Secured Party of
the happening of any casualty to or in connection with the Collateral or any
part thereof, whether or not covered by insurance. In the event of such
casualty, the gross proceeds of the insurance relating to the Collateral
("Insurance Proceeds") in excess of $50,000, less all expenses (including
attorneys' fees) incurred in the collection of such Insurance Proceeds, shall be
payable to Secured Party, and Debtor hereby authorizes and directs any affected
insurance company to make payment of such Insurance Proceeds in excess of
$50,000, directly to Secured Party. Any Insurance Proceeds in an amount of
$50,000 or less shall be payable to Debtor. If Debtor receives any Insurance
Proceeds in excess of $50,000, Debtor shall promptly pay over such Insurance
Proceeds to Secured Party. Secured Party is hereby authorized and empowered by
Debtor at Secured Party's option and in Secured Party's sole discretion, as
attorney-in-fact for Debtor, with full power of substitution, to make proof of
loss, to appear in and prosecute any action arising from any policy or policies
of insurance, and to settle, adjust, or compromise any claim for loss, theft,
damage or destruction under any policy or policies of insurance. The appointment
granted herein is a power coupled with an interest. Debtor shall not settle,
adjust or compromise any claim for loss, theft, damage or destruction of the
Collateral or any part thereof under any policy or policies of insurance without
the prior written consent of Secured Party to such settlement, adjustment or
compromise. In the event of any loss, theft, damage to or destruction of the
Collateral and so long as no Event of Default has occurred or all Events of
Default have been expressly waived in writing by Secured Party, Secured Party
shall remit or make available to Debtor, pursuant to Secured Party's customary
practice, all Insurance Proceeds up to the amount required to complete such
replacement, restoration and repair, and all such Insurance Proceeds shall be
applied solely to the replacement, repair and restoration of the Collateral. In
the event of any loss, theft, damage to or destruction of the Collateral and an
Event of Default has occurred (unless expressly waived in writing by Secured
Party), all of the Insurance Proceeds shall be applied to the Obligations.
Unless all Obligations are satisfied in full, nothing herein contained shall be
deemed to excuse Debtor from maintaining the Collateral as provided in Section
6.2 hereof, replacing any lost or stolen Collateral or replacing or restoring
all damage or destruction to the Collateral, regardless of whether or not there
are Insurance Proceeds available to Debtor or whether any such Insurance
Proceeds are sufficient in amount. Application or release by Secured Party of
any Insurance Proceeds shall not cure or waive any default, notice of default or
Event of Default under this Agreement or invalidate any act done pursuant to
such notice.
6.5 Payments of Charges. Debtor shall pay when due all taxes, assessments
and other charges which may be levied or assessed against the Collateral.
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6.6 Fixtures and Accessions. Debtor shall prevent any portion of the
Collateral that is not a fixture from being or becoming a fixture and shall
prevent any portion of the Collateral from being or becoming an accession to
other goods that are not part of the Collateral.
6.7 Possession by Secured Party. Debtor, upon demand, shall promptly
deliver to Secured Party all instruments, documents and chattel paper included
in the Collateral and all invoices, shipping or delivery records, purchase
orders, contracts, endorsements or other items related to the Collateral. Debtor
shall notify Secured Party immediately of any default by any Obligor in the
payment or performance of its Obligations with respect to any Collateral.
Debtor, without Secured Party's prior written consent, shall not make or agree
to make any material alteration, modification or cancellation of, or
substitution for, or credit adjustment or allowance on, any Collateral.
6.8 Notice to Lender. Debtor shall give Secured Party immediate written
notice of any change in the name under which Debtor does business or in the
location of: (i) any of the facilities of Debtor, including without limitation,
Debtor's chief executive office; (ii) the Collateral or any part thereof; or
(iii) Debtor's records concerning the Collateral.
6.9 Inspections. Secured Party or its agents may inspect the Collateral and
may enter into any premises where the Collateral is or may be located upon
reasonable notice and during regular business hours. Debtor shall keep records
concerning the Collateral in accordance with generally accepted accounting
principles. Secured Party shall have free and complete access to Debtor's
records and shall have the right to make extracts therefrom or copies thereof
upon reasonable notice and during regular business hours. Upon request of
Secured Party from time to time, Debtor shall submit up-to-date schedules of the
items comprising the Collateral in such detail as Secured Party may reasonably
require.
6.10 Defense of Collateral. Debtor, at its cost and expense, shall protect
and defend this Agreement, all of the rights of Secured Party hereunder, and the
Collateral against all claims and demands of other parties, including without
limitation defenses, setoffs, claims and counterclaims asserted by any Obligor
against Debtor and/or Secured Party. Debtor shall pay all claims and charges
that, in the opinion of Secured Party, might prejudice, imperil or otherwise
affect the Collateral or the Security Interest. Debtor shall promptly notify
Secured Party of any levy, distraint or other seizure by legal process or
otherwise of any part of the Collateral and of any threatened or filed claims or
proceedings that might in any way affect or impair the terms of this Agreement.
6.11 Trademark/ Names. Within 30 days after the Effective Date, Debtor
shall take all action necessary to preserve and perfect the Lien of Lender in
Trademarks/names, Copyrights and Patents and any other intellectual property of
Debtor. The actions of Debtor shall include appropriate filings with the U.S.
Patent and Copyright Office. At such times as Debtor acquires any additional
federal registrations to Trademarks/names, Copyrights and Patents, Debtor will
immediately notify Secured Party of such acquisition and Debtor shall cooperate
with Secured Party to perfect the security interest of Secured Party in such
rights.
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6.12 Perfection of Security Interest. The Security Interest, at all times,
shall be perfected and except for Permitted Liens shall be prior to any other
interests in the Collateral. Debtor shall act and perform as necessary and shall
execute and file all security agreements, financing statements, continuation
statements and other documents requested by Secured Party to establish, maintain
and continue the perfected Security Interest. Debtor, on demand, shall promptly
pay all costs and expenses of filing and recording, including the costs of any
searches, deemed necessary by Secured Party from time to time to establish and
determine the validity and the continuing priority of the Security Interest.
6.13 Advances by Secured Party. If Debtor shall fail to pay any taxes,
assessments, expenses or charges, to keep all of the Collateral free from other
security interests, encumbrances or claims, other than for Permitted Liens, to
keep the Collateral in good condition and repair, to procure and maintain
insurance thereon, or to perform otherwise as required herein, Secured Party may
advance the monies necessary to pay the same, to accomplish such repairs, to
procure and maintain such insurance or to so perform. Secured Party is hereby
authorized to enter upon any property in the possession or control of Debtor for
such purposes.
6.14 Rights and Powers. All rights, powers and remedies granted Secured
Party herein, or otherwise available to Secured Party, are for the sole benefit
and protection of Secured Party, and Secured Party may exercise any such right,
power or remedy at its option and in its sole and absolute discretion without
any obligation to do so. In addition, if under the terms hereof, Secured Party
is given two or more alternative courses of action, Secured Party may elect any
alternative or combination of alternatives at its option and in its sole and
absolute discretion. All monies advanced by Secured Party under the terms hereof
and all amounts paid, suffered or incurred by Secured Party in exercising any
authority granted herein, including reasonable attorneys' fees, shall be added
to the Obligations, shall be secured by the Security Interest, shall bear
interest at the highest rate payable on any of the Obligations until paid, and
shall be due and payable by Debtor to Secured Party immediately without demand.
6.15 Performance under Contracts. Debtor will perform its obligations under
the Contracts and Debtor also agrees it will make no material changes in or
material amendments to the Contracts, including, without limitation, any
amendments, supplements, addenda, modifications or extensions, without the
express written consent of Secured Party. Debtor agrees to make, execute and
deliver all such further or additional instruments as may be reasonably
necessary to satisfy the intent and purposes hereof and to perfect the
Collateral Assignment.
7. NOTIFICATION AND PAYMENTS; COLLECTION OF COLLATERAL; USE OF COLLATERAL
BY DEBTOR
7.1 Notice to Obligors. If an Event of Default has occurred and is
continuing (unless expressly waived in writing by Secured Party), Secured Party
may notify any or all Obligors of the existence of the Security Interest and may
direct the Obligors to make all payments on the Collateral to Secured Party.
Except as provided herein, prior to the occurrence of an Event of Default and
until Secured Party has notified the Obligors to remit payments directly to it,
Debtor, at Debtor's own cost and expense, shall collect or cause to be collected
the accounts and monies due under the accounts, documents, instruments and
general intangibles or pursuant to the terms
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of the chattel paper. Secured Party shall not be liable or responsible for any
embezzlement, conversion, negligence or default by Debtor or Debtor's agents
with respect to such collections; all agents used in such collections shall be
agents of Debtor and not agents of Secured Party. Unless Secured Party notifies
Debtor in writing that it waives one or more of the requirements set forth in
this sentence, any payments or other proceeds of Collateral received by Debtor,
after the occurrence of an Event of Default and during the continuation thereof,
and after notification to Obligors, shall be held by Debtor in trust for Secured
Party in the same form in which received, shall not be commingled with any
assets of Debtor and shall be turned over to Secured Party not later than the
next Business Day following the day of receipt. After the occurrence of an Event
of Default and during the continuation thereof (unless expressly waived in
writing by Secured Party), all payments and other proceeds of Collateral
received by Secured Party directly or from Debtor shall be applied to the
Obligations in such order and manner and at such time as Secured Party, in its
sole discretion, shall determine. In addition, Debtor shall promptly notify
Secured Party of the return of any Collateral; Debtor shall hold the same in
trust for Secured Party and shall dispose of the same as Secured Party directs.
7.2 Collection. After the occurrence of an Event of Default and during the
continuation thereof (unless expressly waived in writing by Secured Party),
Secured Party, after notice to Debtor, may demand, collect and ▇▇▇ on the
Collateral (either in Debtor's or Secured Party's name), enforce, compromise,
settle or discharge the Collateral and endorse Debtor's name on any instruments,
documents, or chattel paper included in or pertaining to the Collateral;
provided, however, that no notice to Debtor is required if an Event of Default
has occurred (unless expressly waived in writing by Secured Party). Debtor
hereby irrevocably appoints Secured Party its attorney in fact for all such
purposes.
7.3 Use of Collateral. Until the occurrence of an Event of Default (unless
expressly waived in writing by Secured Party), Debtor may: (i) use, consume and
sell any inventory included in the Collateral in any lawful manner in the
ordinary course of Debtor's business provided that all sales shall be at
commercially reasonable prices; and (ii) retain possession of any other
Collateral and use it in any lawful manner consistent with this Agreement and
the Credit Agreement.
8. COLLATERAL IN THE POSSESSION OF SECURED PARTY
8.1 Care. Secured Party shall use such reasonable care in handling,
preserving and protecting the Collateral in its possession as it uses in
handling similar property for its own account. Unless caused solely by the gross
negligence or willful misconduct of Secured Party (as determined by a final,
non-appealable judgment of a court of competent jurisdiction), Secured Party
shall have no liability for the loss, destruction or disappearance of any
Collateral. A lack of due care shall not be implied solely by virtue of any
loss, destruction or disappearance.
8.2 Preservation of Collateral. Debtor shall be solely responsible for
taking any and all actions to preserve rights against all Obligors; Secured
Party shall not be obligated to take any such actions whether or not the
Collateral is in Secured Party's possession. Debtor waives presentment and
protest with respect to any instrument included in the Collateral on which
Debtor is in any way liable and waives notice of any action taken by Secured
Party with respect
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to any instrument, document or chattel paper included in any Collateral that is
in the possession of Secured Party.
9. EVENTS OF DEFAULT; REMEDIES
9.1 Events of Default. The occurrence of any of the following events or
conditions shall constitute and is hereby defined to be an "Event of Default":
(a) The occurrence of any Event of Default under and as defined in the
Credit Agreement.
(b) Any failure or neglect to perform, observe or comply with any
term, obligation, provision, covenant or condition of this Agreement, and
such failure or neglect is not remedied within fifteen (15) days after such
failure.
(c) Any warranty, representation or statement made by Debtor pursuant
to this Agreement is false or misleading in any material respect, either
now or at the time made.
(d) Any levy or execution upon, or judicial seizure of, any portion of
the Collateral or any other collateral or security for the Obligations.
(e) Any attachment or garnishment of, or the existence or filing of
any lien or encumbrance, except for Permitted Liens, against any portion of
the Collateral or any other collateral or security for the Obligations.
(f) The abandonment by Debtor of all or any part of the Collateral,
other than inventory sold in the ordinary course of business.
(g) The loss, theft or destruction of, or any substantial damage to
any portion of the Collateral or any other collateral or security for the
Obligations.
9.2 Remedies. Upon the occurrence of any Event of Default (unless expressly
waived in writing by Secured Party), Secured Party shall have the following
rights and remedies and may do one or more of the following:
(a) Declare all or any part of the Obligations to be immediately due
and payable, and the same, with all costs and charges, shall be collectible
thereupon by action at law.
(b) Without further notice or demand and without legal process, take
possession of the Collateral wherever found and, for this purpose, enter
upon any property occupied by or in the control of Debtor. Debtor, upon
demand by Secured Party, shall assemble the Collateral and deliver it to
Secured Party or to a place designated by Secured Party that is reasonably
convenient to both parties.
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(c) Operate the business of Debtor as a going concern, including,
without limitation, extend sales or services to new customers and advance
funds for such operation. Secured Party shall not be liable for any
depreciation, loss, damage or injury to the Collateral or other property of
Debtor as a result of such action. Debtor hereby waives any claim of
trespass or replevin arising as a result of such action.
(d) Pursue any legal or equitable remedy available to collect the
Obligations, to enforce its title in and right to possession of the
Collateral and to enforce any and all other rights or remedies available to
it.
(e) Upon obtaining possession of the Collateral or any part thereof,
after notice to Debtor as provided in Section 9.4 herein, sell such
Collateral at public or private sale either with or without having such
Collateral at the place of sale. The proceeds of such sale, after deducting
therefrom all reasonable expenses of Secured Party in taking, storing,
repairing and selling the Collateral (including reasonable attorneys' fees)
shall be applied to the payment of the Obligations, and any surplus
thereafter remaining shall be paid to Debtor or any other person that may
be legally entitled thereto. In the event of a deficiency between such net
proceeds from the sale of the Collateral and the total amount of the
Obligations, Debtor, upon demand, shall promptly pay the amount of such
deficiency to Secured Party.
9.3 Purchase of Collateral. Secured Party, so far as may be lawful, may
purchase all or any part of the Collateral offered at any public or private sale
made in the enforcement of Secured Party's rights and remedies hereunder.
9.4 Notice. Any demand or notice of sale, disposition or other intended
action hereunder or in connection herewith, whether required by the UCC or
otherwise, shall be deemed to be commercially reasonable and effective if such
demand or notice is given to Debtor at least ten (10) days prior to such sale,
disposition or other intended action, in the manner provided herein for the
giving of notices.
9.5 Costs and Expenses. Debtor shall pay all costs and expenses, including
without limitation costs of UCC searches, court costs and reasonable attorneys'
fees, incurred by Secured Party in enforcing payment and performance of the
Obligations or in exercising the rights and remedies of Secured Party hereunder.
All such costs and expenses shall be secured by this Agreement and by all deeds
of trust and other lien and security documents securing the Obligations. In the
event of any court proceedings, court costs and attorneys' fees shall be set by
the court and not by jury and shall be included in any judgment obtained by
Secured Party.
9.6 Bankruptcy. In the event of the commencement of a bankruptcy case by or
against Debtor or involving any of the Collateral, Secured Party, to the extent
not already provided for herein or in the Credit Agreement, shall be entitled to
recover, and Debtor shall be obligated to pay, Secured Party's reasonable
attorneys' fees and costs incurred in connection with: (a) any determination of
the applicability of the bankruptcy laws to the terms of this
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Agreement, the Credit Agreement, the Loan Documents, the Related Documents or
Secured Party's rights hereunder or thereunder; (b) any attempt by Secured Party
to enforce or preserve its rights under the bankruptcy laws, or to prevent
Debtor or any other person from seeking to deny Secured Party its rights
thereunder; (c) any effort by Secured Party to protect, preserve, or enforce its
rights against the Collateral, or seeking authority to modify the automatic stay
of 11 U.S.C. ss. 362 or otherwise seeking to engage in such protection,
preservation, or enforcement; or (d) any civil proceeding(s) arising under the
bankruptcy laws, or arising in or related to a case under the bankruptcy laws.
9.7 Additional Remedies. In addition to any remedies provided herein for an
Event of Default, Secured Party shall have all the rights and remedies afforded
a secured party under the UCC and all other legal and equitable remedies allowed
under applicable law and the Credit Agreement. No failure on the part of Secured
Party to exercise any of its rights hereunder arising upon any Event of Default
shall be construed to prejudice its rights upon the occurrence of any other or
subsequent Event of Default. No delay on the part of Secured Party in exercising
any such rights shall be construed to preclude it from the exercise thereof at
any time after the occurrence of such Event of Default (unless expressly waived
in writing by Secured Party). Secured Party may enforce any one or more rights
or remedies hereunder successively or concurrently. By accepting payment or
performance of any of the Obligations after its due date, Secured Party shall
not thereby waive the agreement contained herein that time is of the essence,
nor shall Secured Party waive either its right to require prompt payment or
performance when due of the remainder of the Obligations or its right to
consider the failure to so pay or perform an Event of Default.
9.8 Exercise Rights under Collateral Assignment. Secured Party may exercise
its rights under the Collateral Assignment only upon the occurrence of an Event
of Default (unless expressly waived in writing by Secured Party), and
immediately upon written notice to Debtor made as provided in the Credit
Agreement that Secured Party is exercising its rights hereunder, Secured Party
shall succeed to all Debtor's right, title and interest to and under the
Contracts; provided, however, that Secured Party does not hereby assume any of
Debtor's obligations or duties under or in connection with said Contracts until
and unless Secured Party shall exercise its rights hereunder. Unless and until
Secured Party has sent Debtor notice of its exercise of its rights hereunder
after the occurrence of an Event of Default under the Credit Agreement, Debtor
shall have the sole right to retain, use, and enjoy the benefits of the
Contracts.
10. TERMINATION
This Agreement shall terminate and be of no further force or effect, except
for such representations, covenants and indemnities which survive the
termination of this Agreement, upon the full satisfaction of all Obligations
under any of the Loan Documents.
11. MISCELLANEOUS PROVISIONS
11.1 Power of Attorney. Debtor hereby appoints Secured Party as its true
and lawful attorney-in-fact, with full power of substitution to do the
following: (i) to demand, collect, receive, receipt for, ▇▇▇ and recover all
sums of money or other property which may now or
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hereafter become due, owing or payable from the Collateral; (ii) to execute,
sign and endorse any and all claims, instruments, receipts, checks, drafts or
warrants issued in payment for the Collateral; (iii) to settle or compromise any
and all claims arising under the Collateral, and, in the place and stead of
Debtor to execute and deliver its release and settlement for the claim; (iv) to
file any claim or claims or to take any action or institute or take part in any
proceedings, either in its own name or in the name of Debtor, or otherwise,
which in the sole and absolute discretion of Secured Party may seem to be
necessary or advisable; (v) to execute any documents necessary to perfect or
continue the Security Interest; (vi) to exercise any or all of Debtor's rights
in, to and under the Contracts and (vii) to do any or all other acts, in
Debtor's name or in Secured Party's own name, that Debtor could do under the
Contracts with the same force and effect as if the Collateral Assignment had not
been made. The powers granted in clauses (i), (ii), (iii), (iv), (vi) and (vii)
may only be exercised by Secured Party after the occurrence of a Default or an
Event of Default (unless expressly waived in writing by Secured Party). This
power is a power coupled with an interest and is given as security for the
Obligations, and the authority hereby conferred is and shall be irrevocable and
shall remain in full force and effect until renounced by Secured Party or until
all of the Obligations of Borrower to Lender pursuant to the Loan Documents are
repaid and performed in full.
11.2 Secured Party's Right of Setoff. In addition to all liens upon and
rights of setoff against the monies, securities or other property of Debtor
given to Secured Party by law, Secured Party shall have a lien and a right of
setoff against, and Debtor hereby grants to Secured Party a security interest
in, all monies, securities and other property of Debtor now or hereafter in the
possession of or on deposit with Secured Party, whether held in a general or
special account or deposit including any account or deposit held jointly by
Debtor with any other person or entity, or for safekeeping or otherwise, except
to the extent specifically prohibited by law. Every such lien, right of setoff
and security interest may be exercised after the occurrence of an Event of
Default (unless expressly waived in writing by Secured Party), and without any
additional demand upon or notice to Debtor. No lien, right of setoff or security
interest shall be deemed to have been waived by any act or conduct on the part
of Secured Party, by any neglect to exercise such right of setoff or to enforce
such lien or security interest, or by any delay in so doing.
11.3 Indemnification. In addition to the indemnities contained in the
Credit Agreement, Debtor agrees to indemnify, defend, protect and hold harmless
Secured Party, and its affiliates and their respective successors, assigns and
shareholders and the directors, officers, employees, agents and attorneys of the
foregoing (collectively, "Indemnified Parties") for, from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including the reasonable fees and disbursements of counsel
for such Indemnified Parties in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
such Indemnified Parties are designated parties thereto) that may be imposed on,
incurred by, or asserted against the Indemnified Parties, in any manner relating
to or arising out of the Loans, the Credit Agreement, this Agreement or the
other Loan Documents and Related Documents ("Indemnified Liabilities");
provided, however, that Debtor shall have no obligation to any Indemnified
Parties hereunder with respect to Indemnified Liabilities arising from the gross
negligence or intentional or willful misconduct of that Indemnified Party (as
determined by a final, non-appealable judgment of a court of competent
jurisdiction).
11
11.4 Other Security. The acceptance of this Agreement by Secured Party
shall not be considered a waiver of or in any way to affect or impair any other
security that Secured Party may have, acquire simultaneously herewith, or
hereafter acquire for the payment or performance of the Obligations, nor shall
the taking by Secured Party at any time of any such additional security be
construed as a waiver of or in any way to affect or impair the Security
Interest; Secured Party may resort, for the payment or performance of the
Obligations, to its several securities therefor in such order and manner as it
may determine.
11.5 Actions by Secured Party. Without notice or demand, without affecting
the obligations of Debtor hereunder and without affecting the Security Interest
or the priority thereof, Secured Party, from time to time, may: (i) extend the
time for payment of all or any part of the Obligations, accept a renewal note
therefor, reduce the payments thereon, release any person liable for all or any
part thereof, or otherwise change the terms of all or any part of the
Obligations; (ii) take and hold other security for the payment or performance of
the Obligations and enforce, exchange, substitute, subordinate, waive or release
any such security; (iii) join in any extension or subordination agreement; or
(iv) release any part of the Collateral from the Security Interest.
11.6 Waivers. Debtor waives and agrees not to assert: (i) any right to
require Secured Party to proceed against any guarantor, to proceed against or
exhaust any other security for the Obligations, to pursue any other remedy
available to Secured Party, or to pursue any remedy in any particular order or
manner; (ii) the benefits of any legal or equitable doctrine or principle of
marshalling; (iii) the benefits of any statute of limitations affecting the
enforcement hereof; (iv) demand, diligence, presentment for payment, protest and
demand, and notice of extension, dishonor, protest, demand and nonpayment,
relating to the Obligations; and (v) any benefit of, and any right to
participate in, any other security now or hereafter held by Secured Party.
11.7 Governing Law; Jurisdiction; Venue; Waiver of Jury Trial. This
Agreement shall be governed by and construed according to the substantive laws
of the State of Arizona, except to the extent Secured Party has greater rights
or remedies under Federal law, whether as a national bank or otherwise, in which
case such choice of Arizona law shall not be deemed to deprive Secured Party of
any such rights and remedies as may be available under Federal law. Debtor
consents to the personal jurisdiction and venue of the state courts located in
Maricopa County, Arizona in connection with any controversy related to this
Agreement, waives any argument that venue in any such forum is not convenient
and agrees that, at the option of Secured Party, any litigation initiated by any
of them in connection with this Agreement may be venued in the Superior Court of
Maricopa County, Arizona. The parties waive any right to trial by jury in any
action or proceeding based on or pertaining to this Agreement. EACH PARTY HERETO
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO
REQUIRE A TRIAL BY JURY IN ANY COURT ACTION PERTAINING TO THE OBLIGATIONS OR THE
LOAN DOCUMENTS, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
11.8 Severability. Each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement
12
is held to be void or invalid, the same shall not affect the remainder hereof
which shall be effective as though the void or invalid provision had not been
contained herein.
11.9 Amendments. No modification, change, rescission, waiver, release or
amendment of any provision of this Agreement shall be made except by a written
agreement executed by Debtor and a duly authorized officer of Secured Party.
11.10 Continuing Agreement. This is a continuing Agreement which shall
remain in full force and effect until actual receipt by Debtor of written notice
of its revocation as to future transactions and shall remain in full force and
effect thereafter until all of the Obligations incurred before the receipt of
such notice, and all of the Obligations incurred thereafter under commitments
extended by Secured Party before the receipt of such notice, shall have been
paid and performed in full.
11.11 No Setoffs by Debtor. No setoff or claim that Debtor now has or may
in the future have against Secured Party shall relieve Debtor from paying or
performing the Obligations.
11.12 Time of Essence; Binding Nature. Time is of the essence hereof. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their heirs, personal representatives, successors and assigns. The
term "Secured Party" shall include not only the original Secured Party hereunder
but also any future owner and holder, including pledgees, of note or notes
evidencing the Obligations. The provisions hereof shall apply to the parties
according to the context thereof and without regard to the number or gender of
words or expressions used.
11.13 No Transfer by Debtor. Debtor shall not transfer or assign any of the
rights or obligations of Debtor under the Credit Agreement, this Agreement, the
other Loan Documents or Related Documents without the prior written consent of
Secured Party, which may be given or withheld by Secured Party in its sole and
absolute discretion.
11.14 Notices. All notices required or permitted to be given hereunder
shall be in writing and may be given, and shall become effective, as provided in
the Credit Agreement.
11.15 Copy. A carbon, photographic or other reproduced copy of this
Agreement and/or any financing statement relating hereto shall be sufficient for
filing and/or recording as a financing statement.
11.16 Waiver of Defenses. Debtor authorizes Secured Party, without notice
or demand, without affecting the Obligations of Debtor hereunder and without
affecting the lien or the priority of the Security Interest, from time to time,
at the request of any person primarily obligated therefor, to renew, compromise,
extend, accelerate or otherwise change the time for payment or performance of,
or otherwise change the terms of, all or any part of the Obligations, including
increase or decrease any rate of interest thereon. Debtor waives and agrees not
to assert: (i) the benefits of any statutory provision limiting the liability of
a surety, including without limitation the benefit of Section 12-1641, et seq.,
of the Arizona Revised Statutes and (ii)
13
any defense arising by reason of any disability or other defense of Debtor or by
reason of the cessation from any cause whatsoever of the liability of Debtor
except the defense of payment and performance. Debtor shall not have any right
of subrogation and Debtor hereby waives any right to enforce any remedy which
Secured Party now has, or may hereafter have, against Debtor.
11.17 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but such counterparts shall together
constitute but one and the same document. Signatures may be given by facsimile
or other electronic transmission, and such signatures shall be fully binding on
party sending the same.
11.18 Section Headings. The section headings set forth in this Agreement
are for convenience only and shall not have substantive meaning hereunder or be
deemed part of this Agreement.
11.19 Entire Agreement. The Credit Agreement, this Agreement and the other
Loan Documents and Related Documents contain the entire agreement and
understanding of the parties with respect to the subject matter thereof,
supersede all other prior understandings, oral or written, with respect to the
subject matter thereof, and are intended by Secured Party and Debtor as the
final, complete and exclusive statement of the terms agreed to by them.
[Signature page follows]
14
IN WITNESS WHEREOF, these presents are executed as of the date indicated
above.
DEBTOR:
ONESOURCE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CEO
SECURED PARTY:
COMERICA BANK,
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
STATE OF ARIZONA )
)ss.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this 9th day of
November 2004, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as CEO of ONESOURCE TECHNOLOGIES, INC., a
Delaware corporation, on behalf of the company.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Notary Public
My Commission Expires: March 26, 2005
STATE OF ARIZONA )
)ss.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me this 9th day of
November 2004, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, as Vice President of Comerica Bank, a
Michigan banking corporation, on behalf of the company.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Notary Public
My Commission Expires: March 26, 2005
SCHEDULE "A"
COLLATERAL DESCRIPTION
All of the property described below in, to or under which Debtor now has or
hereafter acquires any right, title or interest, whether present, future or
contingent, and in any of Debtor's expectancy to acquire such property (all of
the property described on this schedule is herein called the "Collateral"):
1. All accounts, receivables, contract rights, rights to payment,
documents of title, deposit accounts, certificates of deposit,
investment property, intellectual property, general intangibles,
instruments, documents and chattel paper (including all accounts
receivable, notes, drafts, lease agreements and security agreements),
and all goods, if any, represented thereby, whether now existing or
hereafter acquired or created from time to time in the course of
Debtor's business, including, without limitation, such agreements as
are set forth on Schedule A-1 attached hereto, as the same may be
amended or supplemented from time to time;
2. All inventory now owned or hereafter acquired, including all goods
held for sale or lease in Debtor's business, as now or hereafter
conducted, and all materials, work in process and finished goods used
or to be consumed in Debtor's business (whether or not the inventory
is represented by warehouse receipts or bills of lading or has been or
may be placed in transit or delivered to a public warehouse);
3. All equipment now owned or hereafter acquired, including all
furniture, fixtures, furnishings, vehicles (whether titled or
non-titled), machinery, materials and supplies, wherever located,
including but not limited to such items described on the collateral
schedule (if any) attached hereto and by this reference made a part
hereof, together with all parts, accessories, attachments, additions
thereto or replacements therefor;
4. All negotiable and nonnegotiable documents of title;
5. All monies, securities, instruments, documents and chattel paper now
held by or hereafter delivered to Secured Party, together with all
property rights and security interests evidenced thereby, all
increases thereof (including, without limitation, stock dividends),
all profits therefrom and all transformations thereof, including but
not limited to such items described on the collateral schedule (if
any) attached hereto and by this reference made a part hereof;
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6. All tax refund claims, all policies or certificates of insurance
covering any of the Collateral, all contracts, agreements or rights of
indemnification, guaranty or surety relating to any of the Collateral,
and all claims, awards, loss payments, proceeds and premium refunds
that may become payable with respect to any such policies,
certificates, contracts, agreements or rights;
7. All ledger cards, invoices, delivery receipts, worksheets, books of
accounts, statements, correspondence, customer lists, files, journals,
data, ledgers and records in any form, written or otherwise, including
any computer readable memory and any computer hardware or software
necessary to utilize, create, maintain and process such memory related
to any of the Collateral;
8. Trademarks, tradenames, copyrights, patents, service marks, logos,
insignia and other distinctive marks or names (subject to any
franchise or license agreements relating thereto);
9. All claims for loss or damage to or in connection with any of the
Collateral, all other claims in any form for the payment of money,
including tort claims, and all rights with respect to such claims and
all proceeds thereof;
10. All Debtor's rights to any insurance policies or proceeds paid from
insurance policies on Debtor's assets, including all insured
inventory;
11. All attachments, accessions, tools, parts, supplies, increases and
additions to and replacements, extensions, renewals, modifications of
and substitutions for any of the Collateral; and
12. All products and proceeds of the Collateral, in any form, including
all proceeds received, due or to become due from any sale, lease
exchange or other disposition of any of the Collateral, whether such
proceeds are cash or noncash in nature or are represented by checks,
drafts, notes or other instruments for the payment of money.
All "Collateral Schedules," if any, attached hereto are hereby incorporated into
this collateral description as if set forth here and at each reference thereto.
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SCHEDULE "A-1"
AGREEMENTS AND CONTRACTS
1. The Equipment Blanket Service Agreement between ▇▇▇▇▇▇ Companies, Inc. dba
King Soopers and City Market and OneSource Technologies, Inc., dated as of
January 6, 2004
2. Employment Agreement between OneSource Technologies, Inc. and ▇▇▇ ▇.
▇▇▇▇▇▇▇▇, dated as of November 9, 2004
3. Employment Agreement between OneSource Technologies, Inc. and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, dated as of November 9, 2004
4. Employment Agreement between OneSource Technologies, Inc. and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, dated as of November 9, 2004
5. Independent Contractor Agreement between OneSource Technologies, Inc. and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, dated as of November 9, 2004
1
SCHEDULE "B"
ADDRESSES
(Section 4.3)
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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SCHEDULE "C"
NAMES
(Section 4.4)
OneSource Technologies, Inc.
First Financial Computer Services, Inc.
2