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EXHIBIT 10.10
COMMERCIAL SECURITY AGREEMENT
(FIBT Form 000-70034 (Rev. 9/86))
Dated March 27, 1998
Debtor(s) Secured Party
CONDOR HOLDINGS, INC. ▇▇▇▇▇ FARGO BANK (TEXAS),
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ NATIONAL ASSOCIATION
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
(HEREINAFTER REFERRED TO AS "DEBTOR" ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
WHETHER ONE OR MORE) (HEREINAFTER REFERRED TO AS "SECURED
PARTY")
FOR VALUE RECEIVED, the receipt and sufficiency of which is hereby
acknowledged, Debtor grants to Secured Party the security interest (and the
pledges and assignments as applicable) hereinafter set forth and agrees with
Secured Party as follows:
a. OBLIGATIONS SECURED. The security interest and pledges and
assignments as applicable granted hereby are to secure punctual
payment and performance of the following: (i) that certain
Guaranty Agreement of even date herewith executed by Debtor in
favor of Secured Party, and any and all extensions, renewals,
modifications and rearrangements thereof; and (ii) any and all
other indebtedness, liabilities and obligations whatsoever and of
whatever nature of Debtor to Secured Party whether direct or
indirect, absolute or contingent, primary or secondary, due or to
become due and whether now existing or hereafter arising and
howsoever evidenced or acquired, whether joint or several, or
joint and several (all of which are herein separately and
collectively referred to as the "Obligations"). Debtor
acknowledges that the security interest (and pledges and
assignments as applicable) hereby granted shall secure all future
advances from Secured Party to Debtor, as well as any and all
other indebtedness, liabilities and obligations of Debtor to
Secured Party whether now in existence or hereafter arising.
b. USE OF COLLATERAL. Debtor represents, warrants and
covenants that the Collateral will be used by the Debtor
primarily for business use, unless otherwise specified as
follows:
______ Personal, family or household purposes;
______ Farming operations.
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c. DESCRIPTION OF COLLATERAL. Debtor hereby grants to Secured
Party a security interest in (and hereby pledges and assigns as
applicable) and agrees that Secured Party shall continue to have
a security interest in (and a pledge and assignment as
applicable), the following property, to-wit:
(DEBTOR TO INITIAL APPROPRIATE BLANKS)
[X] ALL ACCOUNTS. A security interest in all accounts now owned or
existing as well as any and all that may hereafter arise or be
acquired by Debtor, and all the proceeds and products thereof,
including without limitation, all notes, drafts, acceptances,
instruments and chattel paper arising therefrom, and all returned or
repossessed goods arising from or relating to any such accounts, or
other proceeds of any sale or other disposition of inventory.
[X] ALL INVENTORY. A security interest in all of Debtor's inventory,
including all goods, merchandise, raw materials, goods in process,
finished goods and other tangible personal property, wheresoever
located, now owned or hereafter acquired and held for sale or lease
or furnished or to be furnished under contracts for service or used
or consumed in Debtor's business and all additions and accessions
thereto and contracts with respect thereto and all documents of title
evidencing or representing any part thereof, and all products and
proceeds thereof, including, without limitation, all of such which is
now or hereafter located at the following locations: (give locations)
1. ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
2. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
3. The additional locations described on Schedule 1 hereto.
[X] ALL EQUIPMENT. A security interest in all equipment of every
nature and description whatsoever now owned or hereafter
acquired by Debtor including all appurtenances and additions thereto
and substitutions therefor, wheresoever located, including all tools,
parts and accessories used in connection therewith.
[X] GENERAL INTANGIBLES. A security interest in all general
intangibles and other personal property now owned or hereafter
acquired by Debtor other than goods, accounts, chattel paper,
documents and instruments.
[X] CHATTEL PAPER. A security interest in all of Debtor's interest
under chattel paper, lease agreements and other instruments or
documents, whether now existing or owned by Debtor or hereafter
arising or acquired by Debtor, evidencing both a debt and security
interest in or lease of specific goods.
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[X] INSTRUMENTS. A pledge and assignment of and security interest
in all of Debtor's now owned or existing as well as hereafter
acquired or arising instruments and documents.
[ ] OTHER. A security interest in all of Debtor's interest, now owned
or hereafter acquired, in and to the property described below: (give
description)
The term "Collateral" as used in this Agreement shall mean and include,
and the security interest (and pledge and assignment as applicable) shall cover,
all of the foregoing property, whether now owned or hereafter acquired, as well
as any accessions, additions and attachments thereto and the proceeds and
products thereof, including without limitation, all cash, general intangibles,
accounts, inventory, equipment, fixtures, farm products, notes, drafts,
acceptances, securities, instruments, chattel paper, insurance proceeds payable
because of loss or damage, or other property, benefits or rights arising
therefrom, and in and to all returned or repossessed goods arising from or
relating to any of the property described herein or other proceeds of any sale
or other disposition of such property.
As additional security for the punctual payment and performance of the
Obligations, and as part of the Collateral, Debtor hereby grants to Secured
Party a security interest in, and a pledge and assignment of, any and all money,
property, deposit accounts, accounts, securities, documents, chattel paper,
claims, demands, instruments, items or deposits of the Debtor, and each of them,
or to which any of them is a party, now held or hereafter coming within Secured
Party's custody or control, including, without limitation, all certificates of
deposit and other depository accounts, whether such have matured or the exercise
of Secured Party's rights results in loss of interest or principal or other
penalty on such deposits, but excluding deposits subject to tax penalties if
assigned. Without prior notice to or demand upon the Debtor, Secured Party may
exercise its rights granted above at any time when a default has occurred or
Secured Party deems itself insecure. Secured Party's rights and remedies under
this paragraph shall be in addition to and cumulative of any other rights or
remedies at law and equity, including, without limitation, any rights of set-off
to which Secured Party may be entitled.
d. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Debtor represents and warrants as follows:
i. OWNERSHIP; NO ENCUMBRANCES. Except for the
security interest (and pledges and assignments as
applicable) granted hereby, the Debtor is, and as to any
property acquired after the date hereof which is included
within the Collateral, Debtor will be, the owner of all
such Collateral free and clear from all charges, liens,
security interests, adverse claims and encumbrances of any
and every nature whatsoever.
ii. NO FINANCING STATEMENTS. There is no financing
statement or similar filing now on file in any public
office covering any part of the Collateral, and Debtor
will not execute and there will not be
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on file in any public office any financing statement or
similar filing except the financing statements filed or to
be filed in favor of Secured Party.
iii. ACCURACY OF INFORMATION. All information furnished
to Secured Party concerning Debtor, the Collateral and the
Obligations, or otherwise for the purpose of obtaining or
maintaining credit, is or will be at the time the same is
furnished, accurate and complete in all material respects.
iv. AUTHORITY. Debtor has full right and authority to
execute and perform this Agreement and to create the
security interest (and pledges and assignment as
applicable) created by this Agreement. The making and
performance by Debtor of this Agreement will not violate
any articles of incorporation, bylaws or similar document
respecting Debtor, any provision of law, any order of
court or governmental agency, or any indenture or other
agreement to which Debtor is a party, or by which Debtor
or any of Debtor's property is bound, or be in conflict
with, result in a breach of or constitute (with due notice
and/or lapse of time) a default under any such indenture
or other agreement, or result in the creation or
imposition of any charge, lien, security interest, claim
or encumbrance of any and every nature whatsoever upon the
Collateral, except as contemplated by this Agreement.
v. ADDRESSES. The address of Debtor designated at the
beginning of this Agreement is Debtor's place of business
if Debtor has only one place of business; Debtor's chief
executive office if Debtor has more than one place of
business; or Debtor's residence if Debtor has no place of
business. Debtor agrees not to change such address without
advance written notice to Secured Party.
e. GENERAL COVENANTS. Debtor covenants and agrees as
follows:
i. OPERATION OF THE COLLATERAL. Debtor agrees to
maintain and use the Collateral solely in the conduct of
its own business, in a careful and proper manner, and in
conformity with all applicable permits or licenses. Debtor
shall comply in all respects with all applicable statutes,
laws, ordinances and regulations. Debtor shall not use the
Collateral in any unlawful manner or for any unlawful
purposes, or in any manner or for any purpose that would
expose the Collateral to unusual risk, or to penalty,
forfeiture or capture, or that would render inoperative
any insurance in connection with the Collateral.
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ii. CONDITION. Debtor shall maintain, service and repair
the Collateral so as to keep it in good operating
condition. Debtor shall replace within a reasonable time
all parts that may be worn out, lost, destroyed or
otherwise rendered unfit for use, with appropriate
replacement parts. Debtor shall obtain and maintain in
good standing at all times all applicable permits,
licenses, registrations and certificates respecting the
Collateral.
iii. ASSESSMENTS. Debtor shall promptly pay when due all
taxes, assessments, license fees, registration fees, and
governmental charges levied or assessed against Debtor or
with respect to the Collateral or any part thereof.
iv. NO ENCUMBRANCES. Debtor agrees not to suffer or
permit any charge, lien, security interest, adverse claim
or encumbrance of any and every nature whatsoever against
the Collateral or any part thereof.
v. NO REMOVAL. Except as otherwise provided in this
Agreement, Debtor shall not remove the Collateral from the
county or counties designated at the beginning of this
Agreement without Secured Party's prior written consent.
vi. NO TRANSFER. Except as otherwise provided in this
Agreement with respect to inventory, Debtor shall not,
without the prior written consent of Secured Party, sell,
assign, transfer, lease, charter, encumber, hypothecate or
dispose of the Collateral, or any part thereof, or
interest therein, or offer to do any of the foregoing.
vii. NOTICES AND REPORTS. Debtor shall promptly notify
Secured Party in writing of any change in the name,
identity or structure of Debtor, any charge, lien,
security interest, claim or encumbrance asserted against
the Collateral, any litigation against Debtor or the
Collateral, any theft, loss, injury or similar incident
involving the Collateral, and any other material matter
adversely affecting Debtor or the Collateral. Debtor shall
furnish such other reports, information and data regarding
Debtor's financial condition and operations, the
Collateral and such other matters as Secured Party may
request from time to time.
viii. LANDLORD'S WAIVERS. Debtor shall furnish to Secured
Party, if requested, a landlord's waiver of all liens with
respect to any Collateral covered by this Agreement that
is or may be located upon
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leased premises, such landlord's waivers to be in such
form and upon such terms as are acceptable to Secured
Party.
ix. ADDITIONAL FILINGS. Debtor agrees to execute
and deliver such financing statement or statements, or
amendments thereof or supplements thereto, or other
documents as Secured Party may from time to time require
in order to comply with the Texas Uniform Commercial Code
(or other applicable state law of the jurisdiction where
any of the Collateral is located) and to preserve and
protect the Secured Party's rights to the Collateral.
x. PROTECTION OF COLLATERAL. Secured Party, at its
option, whether before or after default, but without any
obligation whatsoever to do so, may (a) discharge taxes,
claims, charges, liens, security interests, assessments or
other encumbrances of any and every nature whatsoever at
any time levied, placed upon or asserted against the
Collateral, (b) place and pay for insurance on the
Collateral, including insurance that only protects Secured
Party's interest, (c) pay for the repair, improvement,
testing, maintenance and preservation of the Collateral,
(d) pay any filing, recording, registration, licensing or
certification fees or other fees and charges related to
the Collateral, or (e) take any other action to preserve
and protect the Collateral and Secured Party's rights and
remedies under this Agreement as Secured Party may deem
necessary or appropriate. Debtor agrees that Secured Party
shall have no duty or obligation whatsoever to take any of
the foregoing action. Debtor agrees to promptly reimburse
Secured Party upon demand for any payment made or any
expense incurred by the Secured Party pursuant to this
authorization. These payments and expenditures, together
with interest thereon from date incurred until paid by
Debtor at the maximum contract rate allowed under
applicable laws, which Debtor agrees to pay, shall
constitute additional Obligations and shall be secured by
and entitled to the benefits of this Agreement.
xi. INSPECTION. Debtor shall at all reasonable times
allow Secured Party by or through any of its officers,
agents, attorneys or accountants, to examine the
Collateral, wherever located, and to examine and make
extracts from Debtor's books and records.
xii. FURTHER ASSURANCES. Debtor shall do, make, procure,
execute and deliver all such additional and further acts,
things, deeds, interests and assurances as Secured Party
may require from time to time to protect, assure and
enforce Secured Party's rights and remedies.
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xiii. INSURANCE. Debtor shall have and maintain insurance
at all time with respect to all tangible Collateral
insuring against risks of fire (including so-called
extended coverage), theft and other risks as Secured Party
may require, containing such terms, in such form and
amounts and written by such companies as may be
satisfactory to Secured Party, all of such insurance to
contain loss payable clauses in favor of Secured Party as
its interest may appear. All policies of insurance shall
provide for ten (10) days' written minimum cancellation
notice to Secured Party and at the request of Secured
Party shall be delivered to and held by it. Secured Party
is hereby authorized to act as attorney for Debtor in
obtaining, adjusting, settling and canceling such
insurance and endorsing any drafts or instruments. Secured
Party shall be authorized to apply the proceeds from any
insurance to the Obligations secured hereby whether or not
such Obligations are then due and payable. Debtor
specifically authorizes Secured Party to disclose
information from the policies of insurance to prospective
insurers regarding the Collateral.
xiv. ADDITIONAL COLLATERAL. If Secured Party should at
any time be of the opinion that the Collateral is
impaired, not sufficient or has declined or may decline in
value, or should Secured Party deem payment of the
Obligations to be insecure, then Secured Party may call
for additional security satisfactory to Secured Party, and
Debtor promises to furnish such additional security
forthwith. The call for additional security may be oral,
by telegram, or United States mail addressed to Debtor,
and shall not affect any other subsequent right of Secured
Party to exercise the same.
f. ADDITIONAL PROVISIONS REGARDING ACCOUNTS. The following
provisions shall apply to all accounts included within the
Collateral:
i. DEFINITIONS. The term "account", as used in this
Agreement, shall have the same meaning as set forth in the
Uniform Commercial Code of Texas in effect as of the date
of execution hereof, and as set forth in any amendment to
the Uniform Commercial Code of Texas to become effective
after the date of execution hereof, and also shall include
all present and future notes, instruments, documents,
general intangibles, drafts, acceptances and chattel paper
of Debtor, and the proceeds thereof.
ii. ADDITIONAL WARRANTIES. As of the time any account
becomes subject to the security interest (or pledge of
assignment as
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applicable) granted hereby, Debtor shall be deemed further
to have warranted as to each and all of such accounts as
follows: (a) each account and all papers and documents
relating thereto are genuine and in all respects what they
purport to be; (b) each account is valid and subsisting
and arises out of a bona fide sale of goods sold and
delivered to, or out of and for services theretofore
actually rendered by the Debtor to, the account debtor
named in the account; (c) the amount of the account
represented as owing is the correct amount actually and
unconditionally owing except for normal cash discounts and
is not subject to any set-offs, credits, defenses or
counter- charges; and (d) Debtor is the owner thereof free
and clear of any charges, liens, security interests,
adverse claims and encumbrances of any and every nature
whatsoever.
iii. COLLECTION OF ACCOUNTS. Secured Party shall have
the right in its own name or in the name of the Debtor,
whether before or after default, to require Debtor
forthwith to transmit all proceeds of collection of
accounts to Secured Party, to notify any and all account
debtors to make payments of the accounts directly to
Secured Party, to demand, collect, receive, receipt for,
▇▇▇ for, compound and give acquittal for, any and all
amounts due or to become due on the accounts and to
endorse the name of the Debtor on all commercial paper
given in payment or part payment thereof, and in Secured
Party's discretion to file any claim or take any other
action or proceeding that Secured Party may deem necessary
or appropriate to protect and preserve and realize upon
the accounts and related Collateral. Unless and until
Secured Party elects to collect accounts, and the
privilege of Debtor to collect accounts is revoked by
Secured Party in writing, Debtor shall continue to collect
accounts, account for same to Secured Party, and shall not
commingle the proceeds of collection of accounts with any
funds of the Debtor. In order to assure collection of
accounts in which Secured Party has a security interest
(or pledge or assignment of as applicable) hereunder,
Secured Party may notify the post office authorities to
change the address for delivery of mail addressed to
Debtor to such address as Secured Party may designate, and
to open and dispose of such mail and receive the
collections of accounts included herewith. Secured Party
shall have no duty or obligation whatsoever to collect any
account, or to take any other action to preserve or
protect the Collateral; however, should Secured Party
elect to collect any account or take possession of any
Collateral, Debtor releases Secured Party from any claim
or claims for loss or damage arising from any act or
omission in connection therewith.
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iv. IDENTIFICATION AND ASSIGNMENT OF ACCOUNTS. Upon
Secured Party's request, whether before or after default,
Debtor shall take such action and execute and deliver such
documents as Secured Party may reasonably request in order
to identify, confirm, ▇▇▇▇, segregate and assign accounts
and to evidence Secured Party's interest in same. Without
limitation of the foregoing, Debtor, upon request, agrees
to assign accounts to Secured Party, identify and ▇▇▇▇
accounts as being subject to the security interest (or
pledge or assignment as applicable) granted hereby, ▇▇▇▇
Debtor's books and records to reflect such assignments,
and forthwith to transmit to Secured Party in the form as
received by Debtor any and all proceeds of collection of
such accounts.
v. ACCOUNT REPORTS. Upon Secured Party's request,
Debtor will deliver to Secured Party, prior to the tenth
(10th) day of each month, or on such other frequency as
Secured Party may request, a written report in form and
content satisfactory to Secured Party, showing a listing
and aging of accounts and such other information as
Secured Party may request from time to time. Debtor shall
immediately notify Secured Party of the assertion by any
account debtor of any set-off, defense or claim regarding
an account or any other matter adversely affecting an
account.
vi. SEGREGATION OF RETURNED GOODS. Returned or
repossessed goods arising from or relating to any accounts
included within the Collateral shall if requested by
Secured Party be held separate and apart from any other
property. Debtor shall as often as requested by Secured
Party, but not less often than weekly even though no
special request has been made, report to Secured Party the
appropriate identifying information with respect to any
such returned or repossessed goods relating to accounts
included in assignments or identifications made pursuant
hereto.
g. ADDITIONAL PROVISIONS REGARDING INVENTORY. The following
provisions shall apply to all inventory included within the
Collateral:
i. INVENTORY REPORTS. Upon request by Secured Party,
Debtor will deliver to Secured Party, prior to the tenth
(10th) day of each month, or on such other frequency as
Secured Party may request, a written report in form and
content satisfactory to Secured Party, with respect to the
preceding month or other applicable period, showing
Debtor's opening inventory, inventory acquired, inventory
sold, inventory returned, inventory used in Debtor's
business, closing inventory, any other inventory not
within the preceding
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categories, and such other information as Secured Party
may request from time to time. Debtor shall immediately
notify Secured Party of any matter adversely affecting the
inventory, including, without limitation, any event
causing loss or depreciation in the value of the inventory
and the amount of such possible loss or depreciation.
ii. LOCATION OF INVENTORY. Debtor will promptly notify
Secured Party in writing of any addition to, change in or
discontinuance of its place(s) of business as shown in
this agreement, the places at which inventory is located
as shown herein, the location of its chief executive
office and the location of the office where it keeps its
records as set forth herein. All Collateral will be
located at the place(s) of business shown at the beginning
of this agreement as modified by any written notice(s)
given pursuant hereto, and all Collateral shall be in
possession of Debtor unless Secured Party is otherwise
notified by Debtor in writing.
iii. USE OF INVENTORY. Unless and until the privilege of
Debtor to use inventory in the ordinary course of Debtor's
business is revoked by Secured Party in the event of
default or if Secured Party deems itself insecure, Debtor
may use the inventory in any manner not inconsistent with
this Agreement, may sell that part of the Collateral
consisting of inventory provided that all such sales are
in the ordinary course of business, and may use and
consume any raw materials or supplies that are necessary
in order to carry on Debtor's business. A sale in the
ordinary course of business does not include a transfer in
partial or total satisfaction of a debt.
iv. ACCOUNTS AS PROCEEDS. All accounts that are proceeds
of the inventory included within the Collateral shall be
subject to all of the terms and provisions hereof
pertaining to accounts.
v. PROTECTION OF INVENTORY. Debtor shall take all
action necessary to protect and preserve the inventory.
h. ADDITIONAL PROVISIONS REGARDING SECURITIES AND SIMILAR
COLLATERAL. The following provisions shall apply to all
securities and similar property included within the Collateral:
i. ADDITIONAL WARRANTIES. As to each and all
securities and similar property included within the
Collateral (including securities hereafter acquired that
are part of the Collateral), Debtor further represents
and warrants, as of the time of delivery of same to
Secured Party, as follows: (a) such securities are
genuine, validly issued and outstanding, fully paid and
nonassessable, and are not
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issued in violation of the preemptive rights of any person
or of any agreement by which the issuer or obligor thereof
or Debtor is bound; (b) such securities are not subject to
any interest, option or right of any third person; (c)
such securities are in compliance with applicable law
concerning form, content and manner of preparation and
execution; and (d) Debtor acquired and holds the
securities in compliance with all applicable laws and
regulations.
ii. DIVIDENDS AND PROCEEDS. Any and all payments,
dividends, other distributions (including stock redemption
proceeds), or other securities in respect of or in
exchange for the Collateral, whether by way of dividends,
stock dividends, recapitalizations, mergers,
consolidations, stock splits, combinations or exchanges of
shares or otherwise, received by Debtor shall be held by
Debtor in trust for Secured Party and Debtor shall
immediately deliver same to Secured Party to be held as
part of the Collateral. Debtor may retain ordinary cash
dividends unless and until Secured Party requests that
same be paid and delivered to Secured Party (which Secured
Party may request either before or after default).
iii. COLLECTIONS. Secured Party shall have the right at
any time and from time to time (whether before or after
default) to notify and direct the issuer or obligor to
make all payments, dividends and distributions regarding
the Collateral directly to Secured Party. Secured Party
shall have the authority to demand of the issuer or
obligor, and to receive and receipt for, any and all
payments, dividends and other distributions payable in
respect thereof, regardless of the medium in which paid
and whether they are ordinary or extraordinary. Each
issuer and obligor making payment to Secured Party
hereunder shall be fully protected in relying on the
written statement of Secured Party that it then holds a
security interest which entitles it to receive such
payment, and the receipt by Secured Party for such payment
shall be full acquittance therefor to the one making such
payment.
iv. VOTING RIGHTS. Upon default, or if Secured Party
deems itself insecure, Secured Party shall have the right,
at its discretion, to transfer to or register in the name
of Secured Party or any nominee of Secured Party any of
the Collateral, and/or to exercise any or all voting
rights as to any or all of the Collateral. For such
purposes, Debtor hereby names, constitutes and appoints
the President or any Vice President of Secured Party as
Debtor's proxy in the Debtor's name, place and stead to
vote any and all of the securities, as such proxy may
elect, for and in the name, place and stead of Debtor, as
to all matters coming before shareholders, such
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proxy to be irrevocable and deemed coupled with an
interest. The rights, powers and authority of said proxy
shall remain in full force and effect, and shall not be
rescinded, revoked, terminated, amended or otherwise
modified, until all Obligations have been fully satisfied.
v. NO DUTY. Secured Party shall never be liable for
its failure to give notice to Debtor of default in the
payment of or upon the Collateral. Secured Party shall
have no duty to fix or preserve rights against prior
parties to the Collateral and shall never be liable for
its failure to use diligence to collect any amount
payable in respect to the Collateral, but shall be liable
only to account to Debtor for what it may actually
collect or receive thereon. Without limiting the
foregoing, it is specifically understood and agreed that
Secured Party shall have no responsibility for
ascertaining any maturities, calls, conversions,
exchanges, offers, tenders, or similar matters relating
to any of the Collateral or for informing Debtor with
respect to any of such matters (irrespective of whether
Secured Party actually has, or may be deemed to have,
knowledge thereof). The foregoing provisions of this
paragraph shall be fully applicable to all securities or
similar property held in pledge hereunder, irrespective
of whether Secured Party may have exercised any right to
have such securities or similar property registered in
its name or in the name of a nominee.
vi. FURTHER ASSURANCES. Debtor agrees to execute such
stock powers, endorse such instruments, or execute such
additional pledge agreements or other documents as may be
required by the Secured Party in order effectively to
grant to Secured Party the security interest in (and
pledge and assignment of) the Collateral and to enforce
and exercise Secured Party's rights regarding same.
vii. SECURITIES LAWS. Debtor hereby agrees to cooperate
fully with Secured Party in order to permit Secured Party
to sell, at foreclosure or other private sale, the
Collateral pledged hereunder. Specifically, Debtor agrees
to fully comply with the securities laws of the United
States and of the State of Texas and to take such action
as may be necessary to permit Secured Party to sell or
otherwise transfer the securities pledged hereunder in
compliance with such laws. Without limiting the foregoing,
Debtor, at its own expense, upon request by Secured Party,
agrees to effect and obtain such registrations, filings,
statements, rulings, consents, and other matters as
Secured Party may request.
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viii. POWER OF ATTORNEY. Debtor hereby makes, constitutes
and appoints Secured Party or its nominee, its true and
lawful attorney in fact and in its name, place, and stead,
and on its behalf, and for its use and benefit to
complete, execute and file with the United States
Securities and Exchange Commission one or more notices of
proposed sale of securities pursuant to Rule 144 under the
Securities Act of 1933 and/or any similar filings or
notices with any applicable state agencies, and said
attorney in fact shall have full power and authority to
do, take and perform all and every act and thing
whatsoever requisite, proper or necessary to be done, in
the exercise of the rights and powers herein granted, as
fully to all intents and purposes as Debtor might or could
do if personally present. This power shall be irrevocable
and deemed coupled with an interest. The rights, powers
and authority of said attorney in fact herein granted
shall commence and be in full force and effect from the
date of this agreement, and such rights, powers and
authority shall remain in full force and effect, and this
power of attorney shall not be rescinded, revoked,
terminated, amended or otherwise modified, until all
Obligations have been fully satisfied.
ix. PRIVATE SALES. Because of the Securities Act of
1933, as amended, or any other laws or regulations, there
may be legal restrictions or limitations affecting Secured
Party in any attempts to dispose of certain portions of
the Collateral in the enforcement of its rights and
remedies hereunder. For these reasons Secured Party is
hereby authorized by Debtor, but not obligated, in the
event any default hereunder, to sell all or any part of
the Collateral at private sale, subject to investment
letter or in any other manner which will not require the
Collateral, or any part thereof, to be registered in
accordance with the securities Act of 1933, as amended, or
the rules and regulations promulgated thereunder, or any
other law or regulation. Secured Party is also hereby
authorized by Debtor, but not obligated, to take such
actions, give such notices, obtain such rulings and
consents, and do such other things as Secured Party may
deem appropriate in the event of a sale or disposition of
any of the Collateral. Debtor clearly understands that
Secured Party may in its discretion approach a restricted
number of potential purchasers and that a sale under such
circumstances may yield a lower price for the Collateral
or any part or parts thereof than would otherwise be
obtainable if same were registered and sold in the open
market, and Debtor agrees that such private sales shall
constitute a commercially reasonable method of disposing
of the Collateral.
i. ADDITIONAL PROVISIONS REGARDING CERTIFICATES OF DEPOSIT
AND SIMILAR COLLATERAL. The following
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provisions shall apply to certificates of deposit and
similar property included within the Collateral:
i. COLLECTION OF DEPOSITS. Debtor agrees that Secured
Party may, at any time (whether before or after default)
and in its sole discretion, surrender for payment and
obtain payment of any portion of the Collateral, whether
such have matured or the exercise of Secured Party's
rights results in loss of interest or principal or other
penalty on such deposits, and, in connection therewith,
cause payment to be made directly to Secured Party.
ii. NOTICE TO THIRD PARTY ISSUER. With regard to any
certificates of deposit or similar Collateral for which
Secured Party is not the issuer, Debtor agrees to notify
the issuer or obligor of the interests hereby granted to
Secured Party and to obtain from such issuer or obligor
acknowledgment of the interests in favor of Secured Party
and the issuer's or obligor's agreement to waive in favor
of Secured Party any and all rights of set-off or similar
rights or remedies to which such issuer or obligor may be
entitled, and, in connection therewith, to execute and
cause the issuer or obligor to execute, any and all
acknowledgments, waivers and other agreements in such form
and upon such terms as Secured Party may request.
iii. PROCEEDS. Any and all replacement or renewal
certificates, instruments, or other benefits or proceeds
related to the Collateral that are received by Debtor
shall be held by Debtor in trust for Secured Party and
immediately delivered to Secured Party to be held as part
of the Collateral.
iv. NO DUTY. Secured Party shall never be liable for
its failure to give notice to Debtor of default in the
payment of or upon the Collateral. Secured Party shall
have no duty to fix or preserve rights against prior
parties to the Collateral and shall never be liable for
its failure to use diligence to collect any amount payable
in respect to the Collateral, but shall be liable only to
account to Debtor for what it may actually collect or
receive thereon. Without limiting the foregoing, it is
specifically understood and agreed that Secured Party
shall have no responsibility for ascertaining any
maturities or similar matters relating to any of the
Collateral or for informing Debtor with respect to any of
such matters (irrespective of whether Secured Party
actually has, or may be deemed to have, knowledge
thereof).
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j. EVENTS OF DEFAULT. Debtor shall be in default
hereunder upon the happening of any of the following
events or conditions: (i) non- payment when due (whether
by acceleration of maturity or otherwise) of any payment
of principal, interest or other amount due on any
Obligation; (ii) the occurrence of any event which under
the terms of any evidence of indebtedness, indenture, loan
agreement, security agreement or similar instrument
permits the acceleration of maturity of any obligation of
Debtor or BearCom Operating, L.P. (whether to Secured
Party or to others); (iii) any representation or warranty
made by Debtor to Secured Party in connection with this
Agreement, the Collateral or the Obligations, or in any
statements or certificates, proves incorrect in any
material respect as of the date of the making or the
issuance thereof; (iv) default occurs in the observance or
performance of, or if Debtor fails to furnish adequate
evidence of performance of, any provision of this
Agreement or of any note, assignment, transfer, other
agreement, document or instrument delivered by Debtor to
Secured Party in connection with this Agreement, the
Collateral or the Obligations; (v) death, dissolution,
liquidation, termination of existence, insolvency,
business failure or winding-up of Debtor or any maker,
endorser, guarantor, surety or other party liable in any
capacity for any of the Obligations; (vi) the commission
of an act of bankruptcy by, or the application for
appointment of a receiver or any other legal custodian for
any part of the property of, assignment for the benefit of
creditors by, or the commencement of any proceedings under
any bankruptcy, arrangement, reorganization, insolvency or
similar laws for the relief of debtors by or against, the
Debtor or any maker, endorser, guarantor, surety or other
party primarily or secondarily liable for any of the
Obligations; (vii) the Collateral becomes, in the judgment
of Secured Party, impaired, unsatisfactory or insufficient
in character or value; or (viii) the filing of any levy,
attachment, execution, garnishment or other process
against the Debtor or any of the Collateral or any maker,
endorser, guarantor, surety, or other party liable in any
capacity for any of the Obligations.
k. REMEDIES. Upon the occurrence of an event of default,
or if Secured Party deems payment of the Obligations to be
insecure, Secured Party, at its option, shall be entitled
to exercise any one or more of the following remedies (all
of which are cumulative):
i. DECLARE OBLIGATIONS DUE. Secured Party, at its
option, may declare the Obligations or any part
thereof immediately due and payable, without demand,
notice of intention to accelerate, notice of
acceleration, notice of non-payment, presentment,
protest, notice of dishonor, or any other notice
whatsoever, all of which are hereby waived by Debtor
and any maker, endorser, guarantor, surety or other
party liable in any capacity for any of the
Obligations.
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ii. REMEDIES. Secured Party shall have all of the
rights and remedies provided for in this Agreement
and in any other agreements executed by Debtor, the
rights and remedies of the Uniform Commercial Code of
Texas, and any and all of the rights and remedies at
law and in equity, all of which shall be. deemed
cumulative. Without limiting the foregoing, Debtor
agrees that Secured Party shall have the right to:
(a) require Debtor to assemble the Collateral and
make it available to Secured Party at a place
designated by Secured Party that is reasonably
convenient to both parties, which Debtor agrees to
do; (b) peaceably take possession of the Collateral
and remove same, with or without judicial process;
(c) without removal, render equipment included within
the Collateral unusable, and dispose of the
Collateral on the Debtor's premises; (d) sell, lease
or otherwise dispose of the Collateral, at one or
more locations, by public or private proceedings, for
cash or credit, without assumption of credit risk;
and/or (e) whether before or after default, collect
and receipt for, compound, compromise, and settle,
and give releases, discharges and acquittances with
respect to, any and all amounts owed by any person or
entity with respect to the Collateral. Unless the
Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on
a recognized market, Secured Party will send Debtor
reasonable notice of the time and place of any public
sale or of the time after which any private sale or
other disposition will be made. Any requirement of
reasonable notice to Debtor shall be met if such
notice is mailed, postage prepaid, to Debtor at the
address of Debtor designated at the beginning of this
Agreement, at least five (5) days before the day of
any public sale or at least five (5) days before the
time after which any private sale or other
disposition will be made.
iii. EXPENSES. Debtor shall be liable for and
agrees to pay the reasonable expenses incurred by
Secured Party in enforcing its rights and remedies,
in retaking, holding, testing, repairing, improving,
selling, leasing or disposing of the Collateral, or
like expenses, including, without limitation,
attorneys' fees and legal expenses incurred by
Secured Party. These expenses, together with
interest thereon from date incurred until paid by
Debtor at the maximum contract rate allowed under
applicable laws, which Debtor agrees to pay, shall
constitute additional Obligations and shall be
secured by and entitled to the benefits of this
Agreement.
iv. PROCEEDS; SURPLUS; DEFICIENCIES. Proceeds
received by Secured Party from disposition of the
Collateral shall be applied toward Secured Party's
expenses and other Obligations in such
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order or manner as Secured Party may elect. Debtor
shall be entitled to any surplus if one results after
lawful application of the proceeds. Debtor shall
remain liable for any deficiency.
v. REMEDIES CUMULATIVE. The rights and remedies
of Secured Party are cumulative and the exercise of
any one or more of the rights or remedies shall not
be deemed an election of rights or remedies or a
waiver of any other right or remedy. Secured Party
may remedy any default and may waive any default
without waiving the default remedied or without
waiving any other prior or subsequent default.
l. OTHER AGREEMENTS.
i. SAVINGS CLAUSE. Notwithstanding any provision
to the contrary herein, or in any of the documents
evidencing the Obligations or otherwise relating
thereto, no such provision shall require the payment
or permit the collection of interest in excess of the
maximum permitted by applicable usury laws. If any
such excessive interest is so provided for, then in
such event (i) the provisions of this paragraph shall
govern and control, (ii) neither the Debtor nor his
heirs, legal representatives, successors or assigns
or any other party liable for the payment thereof,
shall be obligated to pay the amount of such interest
to the extent that is in excess of the maximum amount
permitted by law, (iii) any such excess interest that
may have been collected shall be, at the option of
the holder of the instrument evidencing the
Obligations, either applied as a credit against the
then unpaid principal amount thereof or refunded to
the maker thereof, and (iv) the effective rate of
interest shall be automatically reduced to the
maximum lawful rate under applicable usury laws as
now or hereafter construed by the courts having
jurisdiction.
ii. JOINT AND SEVERAL RESPONSIBILITY. If this
Security Agreement is executed by more than one
Debtor, the obligations of all such Debtors shall be
joint and several.
iii. WAIVERS. Debtor and any maker, endorser,
guarantor, surety or other party liable in any
capacity respecting the Obligations hereby waive
demand, notice of intention to accelerate, notice of
acceleration, notice of non-payment, presentment,
protest, notice of dishonor and any other similar
notice whatsoever.
iv. SEVERABILITY. Any provision hereof found to
be invalid by courts having jurisdiction shall be
invalid only with respect to such
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provision (and then only to the extent necessary to
avoid such invalidity). The offending provision shall
be modified to the maximum extent possible to confer
upon Secured Party the benefits intended thereby.
Such provision as modified and the remaining
provisions hereof shall be construed and enforced to
the same effect as if such offending provision (or
portion thereof) had not been contained herein, to
the maximum extent possible.
v. USE OF COPIES. Any carbon, photographic or other
reproduction of any financing statement signed by
Debtor is sufficient as a financing statement for all
purposes, including without limitation, filing in any
state as may be permitted by the provisions of the
Uniform Commercial Code of such state.
vi. RELATIONSHIP TO OTHER AGREEMENTS. This Security
Agreement and the security interests (and pledges and
assignments as applicable) herein granted are in
addition to (and not in substitution, novation or
discharge of) any and all prior or contemporaneous
security agreements, security interests, pledges,
assignments, liens, rights, titles or other interests
in favor of Secured Party or assigned to Secured
Party by others in connection with the Obligations.
All rights and remedies of Secured Party in all such
agreements are cumulative, but in the event of actual
conflict in terms and conditions, the terms and
conditions of the latest security agreement shall
govern and control.
vii. NOTICES. Any notice or demand given by Secured
Party to Debtor in connection with this Agreement,
the Collateral or the Obligations, shall be deemed
given and effective upon deposit in the United States
mail, postage prepaid, addressed to Debtor at the
address of Debtor designated at the beginning of this
Agreement. Actual notice to Debtor shall always be
effective no matter how given or received.
viii. HEADINGS AND GENDER. Paragraph headings in
this Agreement are for convenience only and shall be
given no meaning or significance in interpreting this
Agreement. All words used herein shall be construed
to be of such gender or number as the circumstances
require.
ix. AMENDMENTS. Neither this Agreement nor any
of its provisions may be changed, amended, modified,
waived or discharged orally, but only by an
instrument in writing signed by the party against
whom enforcement of the change, amendment,
modification, waiver or discharge is sought.
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x. CONTINUING AGREEMENT. The security interest
(and pledges and assignments as applicable) hereby
granted and all of the terms and provisions in this
Agreement shall be deemed a continuing agreement and
shall continue in full force and effect until
terminated in writing. Any such revocation or
termination shall only be effective if explicitly
confirmed in a signed writing issued by Secured Party
to such effect and shall in no way impair or affect
any transactions entered into or rights created or
Obligations incurred or arising prior to such
revocation or termination as to which this Agreement
shall be fully operative until same are repaid and
discharged in full. Unless otherwise required by
applicable law, Secured Party shall be under no
obligation to issue a termination statement or
similar documents unless Debtor requests same in
writing and, provided further, that all Obligations
have been repaid and discharged in full and there are
no commitments to make advances, incur any
Obligations or otherwise give value.
xi. BINDING EFFECT. The provisions of this Security
Agreement shall be binding upon the heirs, personal
representatives, successors and assigns of Debtor and
the rights, powers and remedies of Secured Party
hereunder shall inure to the benefit of the
successors and assigns of Secured Party.
xii. GOVERNING LAW. This Security Agreement shall
be governed by the law of the State of Texas and
applicable federal law.
xiii. AGREEMENT FOR BINDING ARBITRATION. DEBTOR
AGREES TO BE BOUND BY THE TERMS AND PROVISIONS OF THE
ARBITRATION PROGRAM (DATED 9/23/94) WHICH IS
INCORPORATED BY REFERENCE HEREIN AND IS ACKNOWLEDGED
AS RECEIVED BY DEBTOR PURSUANT TO WHICH ANY AND ALL
DISPUTES SHALL BE RESOLVED BY MANDATORY BINDING
ARBITRATION UPON THE REQUEST OF ANY PARTY.
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EXECUTED as of this 27th day of March, 1998.
"DEBTOR"
CONDOR HOLDINGS, INC.
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇
Authorized Officer
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