Exhibit 10.36
SECURITY AGREEMENT
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Date: As of October 1, 1997
The undersigned, ▇▇▇▇▇▇▇▇ ADHESIVES, INC., a Virginia corporation with
an office for the transaction of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (herein referred to as "Debtor"), hereby agrees in favor
of KEYBANK NATIONAL ASSOCIATION, a national banking association with an office
for the transaction of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(herein referred to as "Secured Party"), as follows:
1. THE INDEBTEDNESS. In consideration of (i) the issuance by the
Secured Party of a letter of credit in the amount of $6,180,822 (the "Letter of
Credit") in favor of Star Bank, N.A., as Trustee (the "Trustee") and the
obligations of Debtor to make payments to the Secured Party as outlined in a
Letter of Credit Reimbursement Agreement dated as of October 1, 1997 (the
"Reimbursement Agreement") and (ii) the loan evidenced by that certain
$1,500,000 Promissory Note (the "Term Loan Note"), Debtor hereby grants to
Secured Party a continuing security interest in and a right of set-off against,
and Debtor hereby assigns to Secured Party, the Collateral described in
Paragraph 2, to secure the payment, performance and observance of the
indebtedness, obligations, liabilities and agreements of any kind of Debtor to
the Secured Party, now existing or hereafter arising, direct or indirect,
absolute or contingent, secured or unsecured, due or not, arising out of or
relating to the Reimbursement Agreement, the Term Loan Note and any of the other
Financing Documents (as that term is defined in a Trust Indenture dated as of
October 1, 1997 (the "Indenture") between the County of Saratoga Industrial
Development Agency (the "Issuer") and the Trustee) (the "Obligations").
2. THE COLLATERAL. The Collateral is described on Schedule "A"
annexed hereto as part hereof and also includes all attachments, accessions and
equipment now or hereafter affixed to the Collateral or used in connection
therewith, substitutions and replacements therefor, all items of Collateral now
owned or existing and hereafter acquired, created or arising, and all proceeds
thereof (including, without limitation, claims of Debtor against third parties
for loss or damage to or destruction of any Collateral).
3. WARRANTIES, REPRESENTATIONS AND COVENANTS. Debtor warrants,
represents and covenants that:
(a) The chief executive office and other places of business
of Debtor, the Collateral and the books and records relating to the
Collateral are, and have been during the four month period prior to the
date hereof (or in the case of a new business, from the date of
commencement of said business), located at the address(es) set forth
below and Debtor will not change the same, or merge or consolidate with
any person or change its name, without prior written notice to and
consent of the Secured Party:
Addresses:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, New York ▇▇▇▇▇
▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) Debtor will use the Collateral for lawful and business
purposes only, with all reasonable care and caution and in conformity
with all applicable laws, ordinances and regulations;
(c) Debtor will keep the Collateral in first class order,
repair, running and marketable condition (normal wear and tear
excepted), at Debtor's sole cost and expense;
(d) The Secured Party shall at all reasonable times have free
access to and right of inspection of the Collateral and any records
pertaining thereto (and the right to make extracts from and to receive
from Debtor originals or true copies of such records and any papers and
instruments relating to any Collateral upon request therefor) and
Debtor hereby grants to the Secured Party a security interest in all
such records, papers and instruments to secure the payment, performance
and observance of the Obligations;
(e) The Collateral is now and shall remain personal property,
is not now a fixture and Debtor will not permit any Collateral which is
not now a fixture to become a fixture without prior written notice to
and consent of the Secured Party and without first making all
arrangements, and delivering, or causing to be delivered, to the
Secured Party all instruments and documents, including, without
limitation, waivers and subordination agreements by any landlords or
mortgagees, requested by and satisfactory to the Secured Party to
preserve and protect the primary security interest granted herein
against all persons;
(f) Debtor, at its sole cost and expense, will insure the
Collateral in the name of and with loss or damage payable solely to the
Secured Party, as its interest may appear, against such risks, with
such companies and in such amounts, as may be required by the
Installment Sale Agreement (as defined in the Indenture) and Debtor
will deliver to the Secured Party the original or duplicate policies,
or certificates or other evidence satisfactory to the Secured Party
attesting thereto, and Debtor will promptly notify the Secured Party of
any loss or damage to any Collateral or arising from its use;
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(g) Debtor will, at its sole cost and expense, and at all
times, pay and discharge all taxes and assessments in accordance with
the terms of the Installment Sale Agreement and keep the Collateral
free and clear of any and all liens, security interests or
encumbrances, other than Permitted Liens (as defined in the
Reimbursement Agreement), perform all acts and execute all documents
requested by the Secured Party from time to time to evidence, perfect,
maintain or enforce the Secured Party's primary security interest
granted herein or otherwise in furtherance of the provisions of this
Security Agreement;
(h) At any time and from time to time, Debtor shall, at its
sole cost and expense, execute and deliver to the Secured Party such
financing statements pursuant to the Uniform Commercial Code ("UCC"),
applications for certificate of title and other papers, documents or
instruments as may be requested by the Secured Party in connection with
this Security Agreement, and Debtor hereby authorizes the Secured Party
to execute and file at any time and from time to time one or more
financing statements or copies thereof or of this Security Agreement
with respect to the Collateral signed only by the Secured Party;
(i) In its discretion, the Secured Party may, at any time and
from time to time, after a Default (as hereinafter defined) has
occurred and is continuing, in its name or Debtor's or otherwise,
notify any account debtor or obligor of any account, contract,
document, instrument, chattel paper or general intangible included in
the Collateral to make payment to the Secured Party;
(j) In its discretion, Secured Party may, at any time and
from time to time, after a Default has occurred and is continuing,
demand, ▇▇▇ for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for, or make any
compromise or settlement deemed desirable by Secured Party with respect
to, any Collateral, and/or extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of, or release,
any Collateral or Obligations, all without notice to or consent by
Debtor and without otherwise discharging or affecting the Obligations,
the Collateral or the security interest granted herein;
(k) In its discretion, Secured Party may, at any time and
from time to time, for the account of Debtor, pay any amount or do any
act required of Debtor hereunder and which Debtor fails to do or pay,
and any such payment shall be deemed an advance by Secured Party to
Debtor payable on demand together with interest at the highest rate
then payable on any of the Obligations;
(l) Debtor will pay Secured Party for any sums, costs, and
expenses which Secured Party may pay or incur pursuant to the
provisions of this Security Agreement or in negotiating, executing,
perfecting, defending, or protecting the security interest granted
herein or in enforcing payment of the Obligations or otherwise in
connection with the provisions hereof, including but not limited to
court costs, collection charges, travel
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expenses, and reasonable attorneys' fees, all of which, together with
interest at the highest rate then payable on any of the Obligations,
shall be part of the Obligations and be payable on demand;
(m) All proceeds of any other Collateral received by Debtor
after the occurrence of a Default shall not be commingled with other
property of Debtor, but shall be segregated, held by Debtor in trust
for Secured Party, and immediately delivered to Secured Party in the
form received, duly endorsed in blank where appropriate to effectuate
the provisions hereof, the same to be held by Secured Party as
additional Collateral hereunder or, at Secured Party's option, to be
applied to payment of the Obligations, whether or not due and in any
order; and
(n) In its sole discretion, Secured Party may, at any time
and from time to time, assign, transfer or deliver to any transferee of
any Obligations, any Collateral, whereupon Secured Party shall be fully
discharged from all responsibility and the transferee shall be vested
with all powers and rights of Secured Party hereunder with respect
thereto, but Secured Party shall retain all rights and powers with
respect to any Collateral not assigned, transferred or delivered.
4. DEFAULT. It shall constitute an event of default ("Default")
under this Security Agreement if an Event of Default shall have occurred under
any of the Financing Documents or if any one or more of the following shall
occur:
(a) Debtor fails to perform any covenant, agreement or
obligation contained in this Security Agreement and such failure
remains unremedied for thirty (30) calendar days after the Secured
Party shall have given written notice thereof to Debtor, or, if such
covenant, condition or agreement is capable of cure but cannot be cured
within such thirty (30) day period, the failure of the Debtor to
commence to cure within such thirty (30) day period and thereafter
diligently proceed with all action required to complete said cure
within ninety (90) days of such written notice unless such time to cure
is otherwise extended by the Secured Party in writing; or
(b) Except as permitted by the Financing Documents, the
Collateral shall be subjected to sale, transfer or other disposition or
any lien, encumbrance or other imposition is placed upon said
Collateral; or
(c) Except as permitted by the Financing Documents, any levy,
seizure, attachment, condemnation, forfeiture or other proceeding shall
be brought against or with respect to the Collateral.
5. REMEDIES. Upon the occurrence of any Default and at any time
thereafter, Secured Party shall have the following rights and remedies (to the
extent permitted by applicable law) in addition to all rights and remedies of a
secured party under the UCC or of Secured Party
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under the Obligations, all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively or concurrently:
(a) Secured Party may at any time and from time to time, with
or without judicial process or the aid and assistance of others, but
without causing a breach of the peace, enter upon any premises in which
any Collateral may be located and, without resistance or interference
by Debtor, take possession of the Collateral; and/or dispose of any
Collateral on any such premises; and/or require Debtor to assemble and
make available to Secured Party at the expense of Debtor any Collateral
at any place and time designated by Secured Party which is reasonably
convenient to both parties; and/or remove any Collateral from any such
premises for the purpose of effecting sale or other disposition thereof
(and if any of the Collateral consists of motor vehicles, Secured Party
may use Debtor's license plates); and/or sell, resell, lease, assign
and deliver, grant options for or otherwise dispose of any Collateral
in its then condition or following any commercially reasonable
preparation or processing, at public or private sale or proceedings or
otherwise, by one or more contracts, in one or more parcels, at the
same or different times, with or without having the Collateral at the
place of sale or other disposition, for cash and/or credit, and upon
any terms, at such place(s) and time(s) and to such person(s) as
Secured Party deems best, all without demand, notice or advertisement
whatsoever except that where an applicable statute requires reasonable
notice of sale or other disposition Debtor hereby agrees that the
sending of ten days' notice by ordinary mail, postage prepaid, to any
address of Debtor set forth in this Security Agreement shall be deemed
reasonable notice thereof. If any Collateral is sold by Secured Party
upon credit or for future delivery, Secured Party shall not be liable
for the failure of the purchaser to pay for same and in such event
Secured Party may resell such Collateral. Secured Party may buy any
Collateral at any public sale and, if any Collateral is of a type
customarily sold in a recognized market or is of the type which is the
subject of widely distributed standard price quotations, Secured Party
may buy such Collateral at private sale and in each case may make
payment therefor by any means. Secured Party may apply the sale
proceeds actually received from any sale or other disposition to the
reasonable expenses of retaking, holding, preparing for sale, selling,
leasing and the like, to reasonable attorneys' fees and all legal,
travel and other expenses which may be incurred by Secured Party in
attempting to collect the Obligations or enforce this Security
Agreement or in the prosecution or defense of any action or proceeding
related to the subject matter of this Security Agreement; and then to
the Obligations in such order and as to principal or interest as
Secured Party may desire; and Debtor shall remain liable and will pay
Secured Party on demand any deficiency remaining, together with
interest thereon at the highest rate then payable on the Obligations
and the balance of any expenses unpaid, with any surplus to be paid to
Debtor, subject to any duty of Secured Party imposed by law to the
holder of any subordinate security interest in the Collateral known to
Secured Party;
(b) Secured Party may appropriate, set off and apply to the
payment of the Obligations, any Collateral in or coming into the
possession of Secured Party or its
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agents, without notice to Debtor and in such manner as Secured Party
may in its discretion determine.
6. DESIGNATION AND AUTHORIZATION. To effectuate the terms and
provisions hereof, Debtor hereby designates and appoints Secured Party and each
of its designees or agents as attorney-in-fact of Debtor, irrevocably and with
power of substitution, with authority, after the occurrence of a Default, to:
endorse the name of Debtor on any notes, acceptances, checks, drafts, money
orders, instruments or other evidences of Collateral that may come into Secured
Party's possession; sign the name of Debtor on any invoices, documents, drafts
against and notices to account debtors or obligors of Debtor, assignments and
requests for verification of accounts; execute proofs of claim and loss; execute
endorsements, assignments of other instruments of conveyance or transfer; adjust
and compromise any claims under insurance policies or otherwise; execute
releases; and do all other acts and things necessary or advisable in the sole
discretion of Secured Party to carry out and enforce this Security Agreement or
the Obligations. All acts done under the foregoing authorization, except acts
constituting gross negligence or willful misconduct on the part of the Secured
Party, are hereby ratified and approved and neither Secured Party nor any
designee or agent thereof shall be liable for such acts of commission or
omission, for any error of judgment or for any mistake of fact or law. This
power of attorney being coupled with an interest is irrevocable while any
Obligations shall remain unpaid.
7. PRESERVATION AND DISPOSITION OF COLLATERAL; MISCELLANEOUS.
Secured Party shall have the duty to exercise reasonable care in the custody and
preservation of any Collateral in its possession, which duty shall be fully
satisfied if Secured Party maintains safe custody of such Collateral. Except as
hereinabove specifically set forth, Secured Party shall not be deemed to assume
any other responsibility for, or obligation or duty with respect to, any
Collateral, or its use, of any nature or kind, or any matter or proceedings
arising out of or relating thereto, including, without limitation, any
obligation or duty to take any action to collect, preserve or protect its or
Debtor's rights in the Collateral or against any prior parties thereto, but the
same shall be at Debtor's sole risk and responsibility at all times. Debtor
hereby releases Secured Party from any claims, causes of action and demands at
any time arising out of or with respect to this Security Agreement, the
Obligations, the Collateral and its use and/or any actions taken or omitted to
be taken by Secured Party with respect thereto, and Debtor hereby agrees to hold
Secured Party harmless from and with respect to any and all such claims, causes
of action and demands. Secured Party's prior recourse to any Collateral shall
not constitute a condition of any demand, suit or proceeding for payment or
collection of the Obligations. No act, omission or delay by Secured Party shall
constitute a waiver of its rights and remedies hereunder or otherwise. No single
or partial waiver by Secured Party of any Default or right or remedy which it
may have shall operate as a waiver of any other Default, right or remedy or of
the same Default, right or remedy on a future occasion. Debtor hereby waives
presentment, notice of dishonor and protest of all instruments included in or
evidencing any Obligations or Collateral, and all other notices and demands
whatsoever (except as expressly provided herein). In the event of any litigation
with respect to any matter connected with this Security Agreement, the
Obligations or the Collateral, Debtor hereby waives
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the right to a trial by jury and all defenses, rights of set-off and rights to
interpose counterclaims of any nature. Debtor hereby irrevocably consents to the
jurisdiction of the Courts of the State of New York and of any Federal Court
located in such State in connection with any action or proceeding arising out of
or relating to the Obligations, this Security Agreement or the Collateral, or
any document or instrument delivered with respect to any of the Obligations.
Debtor hereby waives personal service of any process in connection with any such
action or proceeding and agrees that the service thereof may be made by
certified or registered mail directed to Debtor at any address of Debtor set
forth in this Security Agreement. Debtor so served shall appear or answer to
such process within thirty (30) days after the mailing thereof. Should Debtor so
served fail to appear or answer within said thirty (30) day period, Debtor shall
be deemed in default and judgment may be entered by Secured Party against Debtor
for the amount or such other relief as may be demanded in any process so served.
In the alternative, in its discretion, Secured Party may effect service upon
Debtor in any other form or manner permitted by law. All capitalized terms used
and not otherwise defined shall have the meanings set forth in the reimbursement
agreement and other terms herein shall have the meanings as defined in the UCC,
unless the context otherwise requires. No provision hereof shall be modified,
altered or limited except by a written instrument expressly referring to this
Security Agreement and to such provision, and executed by the party to be
charged. This Security Agreement and all Obligations shall be binding upon the
successors, or assigns of Debtor and shall, together with the rights and
remedies of Secured Party hereunder, inure to the benefit of Secured Party and
its successors, endorsees and assigns. This Security Agreement and the
Obligations shall be governed in all respects by the laws of the State of New
York applicable to contracts executed and to be performed in such State. If any
term of this Security Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby. Secured Party is authorized to annex hereto any schedules
referred to herein. Debtor acknowledges receipt of a copy of this Security
Agreement.
IN WITNESS WHEREOF, the undersigned has executed or caused this
Security Agreement to be executed in the State of New York as of the date first
above set forth.
▇▇▇▇▇▇▇▇ ADHESIVES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Executive Vice President
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STATE OF NEW YORK )
) SS.:
COUNTY OF SARATOGA )
On the 9th day of October, 1997, before me personally appeared ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, to me known, who being by me duly sworn, did depose and say that he
resides at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, that he is the Executive
Vice President of ▇▇▇▇▇▇▇▇ ADHESIVES, INC., the corporation described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said corporation.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Notary Public - State of New York
My Commission Expires:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public, State of New York
Qualified in Albany County
Commission Expires 10/31/97
01294\secagr.rev
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SCHEDULE A
(DESCRIPTION OF COLLATERAL)
All of the Debtor's present and future personal property of every kind,
nature and description, wherever located, and to the full extent of Debtor's
interest therein including but not limited to: accounts; contract rights;
chattel paper; general intangibles (including but not limited to tax refunds,
insurance proceeds, patents and patent applications, copyrights, licenses,
trademarks, trade names, customer lists, rights of indemnification, contribution
and subrogation, royalties, computer programs, tapes and software, deposits and
know-how) instruments; documents and documents of title; letters of credit and
all of Debtor's interest in letters of credit; inventory of every kind and
nature and wherever located, including but not limited to, raw materials, work
in process, finished goods, consigned goods to the extent of Debtor's interest
therein, packing materials and advertising materials; automotive equipment;
machinery and equipment and all additions, accessions, substitutions,
replacements, parts and fuel in respect to the same, all Debtor's rights against
suppliers, manufacturers or maintainers of the same, all manuals, drawings, and
materials relating thereto to and for the same; furniture; fixtures; equipment;
and all records and files relating to all of the foregoing, all of the Debtor's
property of any kind in the possession of, or under the custody or control of,
Secured Party or any affiliate or correspondent of Secured Party or in which
Secured Party or any affiliate may have a security interest or title retention
interest; all permits, licenses, certificates, approvals, authorizations and
agreements issued to, used, or owned by Debtor in connection with the operation
of its business; and all proceeds of all of the foregoing, including deposit
accounts.
All of the terms set forth in this Schedule "A" shall have the meanings
set forth in the New York Uniform Commercial Code as in effect on the date
hereof.
01294\security.agr
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