Exhibit 10.12
NationsBank Security Agreement
NationsBank of Florida, N.A.
Date October 2, 1997
Between and
Bank (Secured Party) Debtor/Pledgor:
NationsBank N.A. Elcotel Direct, Inc.
Banking Center: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Name and address including county)
(address including county)
Elcotel Direct, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Debtor/Pledgor is: [_] Individual [X] Corporation [_] Partnership [_] Other
Address is Debtor's: [_] Residence [X] Place of Business
[_] Chief Executive Office if more than one place of business.
(This Agreement contains some provisions preceded by boxes. ▇▇▇▇ only those
boxes beside provisions which will be applicable to this transaction. A box
which Is not marked means that the provision beside It Is not applicable to this
transaction.)
A. Security Interest. For good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged and subject to the applicable terms of
this agreement, Debtor/Pledgor (hereinafter referred to as Debtor) assigns and
grants to Bank (also known as Secured Party), a security interest and lien in
the Collateral to secure the payment and the performance of the Obligation.
B. Collateral. The security interest is granted in the following ("Collateral)
(Check as applicable)
1.
[X] Accounts. Any and all accounts, accounts receivable, receivables, contract
rights, book debts, checks, notes, drafts, instruments, chattel paper,
acceptances, choses in action, any and all amounts due to Debtor from a factor
or other forms of obligations and receivables now existing or hereafter arising
out of the business of the Debtor, as well as any and all returned, refused and
repossessed goods, and the cash or non-cash proceeds resulting therefrom.
[X] Inventory. Any and all of Debtor's inventory, including without limitation
any and all goods held for sale or lease or being processed for sale or lease in
Debtor's business as now or hereafter conducted, whether now owned or
hereinafter acquired, including all materials, goods and work in process,
finished goods, and other tangible property held for sale or lease or furnished
or to be furnished under contracts of service or used or consumed in Debtor's
business, along with all documents (including documents of title) covering
inventory, all cash and non-cash proceeds from the sale of inventory including
proceeds from insurance and specifically including but not limited to (attach
Schedule if necessary):
[X] Equipment. Any and all of Debtor's furnishings, fixtures and equipment,
wherever located, whether now owned or hereafter acquired, together with all
increases, parts, fittings, accessories, equipment, and special tools now or
hereafter affixed to any part thereof or used in connection therewith, and
all products, additions, substitutions, accessions, and all cash and non-cash
proceeds, including proceeds from insurance thereof and thereto, including
without limitation the following (attach Schedule if necessary):
[X] Fixtures. All of Debtor's fixtures now existing or hereafter acquired,
together with all substitutes and replacements therefor, all accessions and
attachments thereto, and all tools, parts and equipment now or hereafter added
to or used in connection therewith. These goods are or will become fixtures on
the following described real estate in _______County, ________(State), owned by:
__________[name of owner] more particularly described as
follows:___________________ [insert legal description (or attach Exhibit) of
property, not street address], including without limitation the following
(attach schedule if necessary):
-------------------------
[X] Instruments and/or Investment Documents. The following described instruments
and documents including, without limitation, negotiable instruments, promissory
notes, and documents of title owned or to be owned by Debtor, certificates of
deposit, and all liens, security agreements, leases and other contracts securing
or otherwise relating to any of said instruments or documents, and all cash and
non-cash proceeds and products thereof and such additional property receivable
or distributed in respect of or in exchange for all or any of such instruments
or documents (attach Schedule if necessary): _________________________________
[X] General Intangibles. All patents, trademarks, service marks, trade secrets,
copyrights and exclusive licenses (whether issued or pending) and all documents,
applications materials and other matters related thereto, all inventions, and
all manufacturing, engineering and production plans, drawings, specifications,
processes and systems, all trade names, computer programs, data bases, systems
and software (including source and object codes), goodwill, chases in action and
all other general intangibles of Debtor whether now owned or hereafter acquired
and all cash and non-cash proceeds thereof, including without limitation the
following described intangible personal property, and all chattel paper,
documents and instruments relating to such intangibles, including without
limitation (attach schedule if necessary): ____________________________
[_] Timber. All of Debtor's uncut timber growing or to be grown on the following
described property, and all cash and non-cash proceeds including proceeds from
insurance, and all products thereof (complete legal description of real property
required) (attach Exhibit if necessary):
[_] Other" See Exhibit "A" attached hereto and made a part hereof. (hereinafter
referred to as "Goods" and all proceeds thereon.
2. All substitutes and replacements for, accessions, attachments and other
additions to, tools, parts and equipment used in connection with, and proceeds
and products of, the above Collateral (including all income and benefits
resulting from any of the above, such as dividends payable or distributable in
cash, property or stock; interest, premium and principal payments; redemption
proceeds and subscription rights; all certificates of title, manufacturer's
statements of origin, other documents, accounts and chattel paper arising from
or related to the above Collateral, and returned or repossessed Collateral, any
of which, if received by Debtor, upon request shall be delivered immediately to
Bank.
3. The balance of every deposit account of Debtor under control of Bank and any
other claim of Debtor against Bank, now or hereafter existing, liquidated or
unliquidated, and all money, instruments, securities, documents, chattel paper,
credits, claims, demands, income, and any other property, rights and interests
of Debtor which at any time shall come into the possession or custody or under
the control of Bank or any of its agents, affiliates or correspondents, for any
purpose, and the proceeds of any thereof. Bank shall be deemed to have
possession of any of the Collateral in transit to or set apart for it or any of
its agents, affiliates or correspondents.
C. Obligation.
1. Description of Obligation. The following obligations ("Obligation") are
secured by this agreement: (a) All debts, obligations, liabilities and
agreements of Debtor to Bank, now or hereafter existing, arising directly or
indirectly between Debtor and Bank whether absolute or contingent, joint or
several, secured or unsecured, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise, and all
renewals, extensions or rearrangement of any of the above, (b) Bank's
participation in any loan or other debt of Debtor to another person; (c) All
costs incurred by Bank to obtain, preserve, perfect and enforce this agreement
and maintain, preserve, collect and enforce the Collateral; (d) Interest on the
above amounts as agreed between Bank and Debtor; (e) All debt, obligations and
liabilities of Elcotel, Inc., a Delaware corporation
(if the proceeding space is completed, such party, together with the Debtor
named above, is hereinafter referred to collectively as "Debtor") to Bank of the
kinds described in this Item C, now existing or hereafter arising; (f) All
expenses of the Bank, including fees and expenses of the Bank's counsel,
incident to the enforcement of payment of all obligations of the Debtor by any
action or participation in, or in connection with a case or proceeding under the
Bankruptcy Code, or any successor statute thereto; (g) If the Debtor is not the
obligor of any of the Obligations, and in the event any amount paid to the Bank
on any Obligation is subsequently recovered from the Bank in or as a result of
any bankruptcy, insolvency or fraudulent conveyance proceeding, the Debtor shall
be liable to the Bank for the amounts so recovered up to the fair market value
of the Collateral whether or not the Collateral has been released or the
security interest terminated. In the event the Collateral has been released or
the security interest terminated, the fair market value of the Collateral shall
be determined, at the Bank's option, as of the date the Collateral was released,
the security interest terminated, or said amounts were recovered; and (h) All
amounts which may be owed to Bank pursuant to all other loan documents executed
between Bank and any other Debtor.
Notwithstanding the foregoing, if the Collateral is personal property used as a
principal residence (such as a mobile home or a houseboat) or "household goods"
(as that term is defined at 12 C.F.R. paragraph 227.12, as it may be amended
from time to time) which are not in the Bank's possession and which are not
fixtures, such Collateral shall not secure any liability contracted for personal
family or household purposes between the Debtor or an obligor and the Bank
already in existence on the date hereof or that arises hereafter, unless the
Debtor otherwise expressly agrees.
D. Debtor's Warranties. Debtor hereby represents and warrants to Bank as
follows:
1. Financing Statements. Except as may be noted by schedule attached hereto and
incorporated herein by reference, no financing statement covering the Collateral
is or will be on file in any public office, except the financing statements
relating to this security interest, and no security interest, other than the one
herein created, has attached or been perfected in the Collateral or any part
thereof.
2. Ownership. Debtor owns, or will use the proceeds of any loans by Bank to
become the owner of, the Collateral free from any setoff, claim, restriction,
lien, security interest or encumbrance except liens for taxes not yet due and
the security interest hereunder.
3. Fixtures and Accessions. None of the Collateral is affixed to real estate or
is an accession to any goods, or will become a fixture or accession, except as
expressly set out herein.
4. Claims on Debtors on Collateral. All account debtors and other obligors whose
debts or obligations are part of the Collateral have no right to setoffs,
counterclaims or adjustments, and no defenses in connection therewith.
5. Power and Authority. Debtor has full power and authority to make this
agreement.
E. Debtor's Covenants. Until full payment and performance of all Obligations and
termination or expiration of any obligation or commitment of Bank to make
advances or loans to Debtor, unless Bank otherwise consents in writing:
1. Obligation and This Agreement. Debtor shall perform all of its agreements
herein and in any other agreements between it and Bank.
2. Ownership of Collateral. Debtor shall defend the Collateral against all
claims and demands of all persons at any time cleaning any interest therein
adverse to Bank. Debtor shall keep the Collateral free from all liens and
security interests except those for taxes not yet due and the security interest
hereby created.
3. Insurance. Debtor shall insure the Collateral with companies acceptable to
Bank. Such insurance shall be in an amount not less than the fair market value
of the Collateral and shall be against such casualties, with such deductible
amounts as Bank shall approve. All insurance policies shall be written for the
benefit of Debtor and Bank as their interests may appear, payable to Bank as
loss payee, or in other form satisfactory to Bank, and such policies or
certificates evidencing the same shall be furnished to Bank. All policies of
insurance shall provide for written notice to Bank at least 30 days prior to
cancellation. Risk of loss or damage is Debtor's to the extent of any deficiency
in any effective insurance coverage.
4. Maintenance. Debtor shall keep all tangible Collateral in good condition.
5. Bank's Costs. Debtor shall pay all costs necessary to obtain, preserve,
perfect, defend and enforce this security interest, collect the Obligation, and
preserve, defend, enforce and collect the Collateral including but not limited
to taxes, assessments, insurance premiums, repairs, reasonable attorney's fees
and legal expenses, feed, rent, storage costs and expenses of sales. Whether
Collateral is or is not in Bank's possession, and without any obligation to do
so and without waiving Debtor's default for failure to make any such payment,
Bank at its option may pay any such costs and expenses, discharge encumbrances
on Collateral, and pay for insurance of Collateral, and such payment shall be a
part of the Obligation and bear interest at the rate set out in the Obligation.
Debtor agrees to reimburse Bank on demand for any costs so incurred.
6. Information and Inspection. Debtor shall (i) promptly furnish Bank any
information with respect to Collateral requested by Bank, (ii) allow Bank or its
representatives to inspect the Collateral at any time and wherever located, and
to inspect and copy, or furnish Bank or its representatives with copies of, all
records relating to the Collateral and the Obligation; (iii) furnish Bank or its
representatives such information as Bank may request to identify Collateral, at
the time and in the form requested by Bank; and (iv) deliver upon request to
Bank shipping and delivery receipts evidencing the shipment of goods and
invoices evidencing the receipt of, and the payment for, Collateral.
7. Additional Documents. Debtor shall sign and deliver any papers furnished by
Bank which are necessary or desirable in the judgment of Bank to obtain,
maintain and perfect the security interest hereunder and to enable Bank to
comply with the Federal Assignment of Claims Act or any other federal or state
law in order to obtain or perfect Bank's interest in Collateral or to obtain
proceeds of Collateral.
8. Parties Liable on Collateral. Debtor will preserve the liability of all
obligors on any Collateral, will preserve the priority of all security therefor,
and will deliver to Bank the original certificates of title on all motor
vehicles or other titled vehicles constituting the Collateral. Bank shall have
no duty to preserve such liability or security, but may do so at the expense of
Debtor, without waiving Debtor's default.
9. Right of Bank to Notify Debtors. At any time, whether Debtor is or is not in
default hereunder, Bank may notify persons obligated on any Collateral to make
payments directly to Bank and Bank may take control of all proceeds of any
Collateral. Until Bank elects to exercise such rights, Debtor, as agent of Bank,
shall collect and enforce all payments owed on Collateral.
10. Records of Collateral. Debtor at all times will maintain accurate books and
records covering the Collateral. Debtor immediately will ▇▇▇▇ all books and
records with an entry showing the absolute assignment of all Collateral to Bank
and Bank is hereby given the right to audit the books and records of Debtor
relating to Collateral at any time and from time to time. The amounts shown as
owed to Debtor on Debtor's books and on any assignment schedule will be the
undisputed amounts owing and unpaid.
11. Disposition of Collateral. If disposition of any Collateral gives rise to an
account, chattel paper or instrument, Debtor immediately shall notify Bank, and
upon request of Bank shall assign or indorse the same to Bank. No Collateral may
be sold, leased, manufactured, processed or otherwise disposed of by Debtor in
any manner without the prior written consent of Bank, except Collateral sold,
leased, manufactured, processed or consumed in the ordinary course of business.
12. Accounts . Each account held as Collateral will represent the valid and
legally enforceable obligation of third parties, and shall not be evidenced by
any instrument or chattel paper.
13. Location of Collateral. Debtor shall give Bank written notice of each office
of Debtor in which records of Debtor pertaining to accounts held as Collateral
are kept, and each location at which Collateral is or will be kept, and of any
change of any such location. If no such notice is given, all records of Debtor
pertaining to Collateral are and shall be kept at Debtor's address shown above.
All Collateral of Debtor will be kept at Debtor's address shown above unless
otherwise noted as follows:
14. Notice of Changes. Debtor will notify Bank immediately of any material
change in the Collateral, of a change in Debtor's residence or location, of a
change in any matter warranted or represented by Debtor in this agreement or
furnished to Bank, and of any event of default.
15. Use and Removal of Collateral. Debtor will not use the Collateral illegally
nor, unless previously indicated as a fixture, permit the Collateral to be
affixed to real or personal property without the prior written consent of Bank.
Debtor will not permit any of the Collateral to be removed from the locations
specified herein without the prior written consent of Bank, except for the sale
of inventory in the ordinary course of business.
16. Possession of Collateral. Debtor will deliver all other instruments,
documents and chattel paper which are part of the Collateral and in Debtor's
possession to the Bank immediately, or if hereafter acquired, immediately
following acquisition, appropriately indorsed to Bank's order, or with
appropriate, executed powers. Debtor waives presentment notice of acceleration,
demand, notice of dishonor, protest, and all other notices with respect thereto.
17. Consumer Credit. If any Collateral or proceeds includes obligations of third
parties to Debtor, the transactions giving rise to the Collateral shall conform
in all respects to he applicable state or federal law including but not limited
to consumer credit law. Debtor shall hold harmless and indemnify Bank against
any cost, loss or expense arising from debtor's breach of this covenant.
18. Change of Name/Status. Without the written consent of Bank, Debtor shall not
change its name, change its corporate status, use any trade name or engage in
any Business in which it was not engaged on the date of this agreement.
19. Power of Attorney. Debtor appoints Bank as Debtor's attorney-in-fact with
full power in Debtor's name and behalf to do every act which Debtor is obligated
to do or may be required to do hereunder; however, nothing in this paragraph
shall be construed to obligate Bank to take any action hereunder nor shall Bank
be liable to Debtor for failure to eke any action hereunder. This appointment
shall be deemed a power coupled with an interest and shall not be terminable as
long as the Obligations are outstanding and shall not terminate on the
disability or incompetence of the Debtor.
20. Waivers by Debtor. Debtor waives notice of the creation, advance, increase,
existence, extension or renewal of, and of any indulgence with respect to, the
Obligation; waives presentment, demand, notice of dishonor, and protest; waives
notice of the amount of the Obligation outstanding at any time, notice of any
change in financial condition of any person liable for the Obligation or any
part thereof, notice of any event of default, and all other notices respecting
the Obligation; and agrees that maturity of the Obligation and any part thereof
may be accelerated, extended or renewed one or more times by Bank in its
discretion, without notice to Debtor. Debtor waives any right to require that
any action be brought against any other person or to require that resort be had
to any other security or to any balance of any deposit account. The Debtor
further waives any right of Abrogation or to enforce any right of action against
any other Debtor until the Obligation is paid in full.
21. Other Parties and Other Collateral. No renewal or extension of or any other
indulgence with respect to the Obligation or any part thereof, no release of any
security, to release of any person (including any maker, indorser, guarantor or
surety) liable on the Obligation, no delay in enforcement of payment, and no
delay or omission or lack of diligence or care in exercising any right or power
with respect to the Obligation or any security therefor or guaranty thereof or
under this agreement shall in any manner impair or affect the rights of Bank
under the law, hereunder, or under any other agreement pertaining to the
Collateral. Bank need not file suit or assert a claim for personal judgment
against any person for any part of the Obligation or seek to realize upon any
other security for the Obligation, before foreclosing or otherwise realizing
upon the Collateral for the purpose of paying the Obligation. Debtor waives any
right to the benefit of or to require or control application of any other
security or proceeds thereof, and agrees that Bank shall have no duty or
obligation to Debtor to apply to the Obligation any such other security or
proceeds thereof.
22. Collection and Segregation of Accounts. The Bank hereby authorizes the
Debtor to collect the Collateral, subject to the direction and control of the
Bank, but the Bank may without cause or notice, curtail or terminate said
authority at any time. Upon notice by the Bank, whether oral or in writing, to
the Debtor, the Debtor shall forthwith upon receipt of all checks, drafts, cash,
and other remittances in payment of or on account of the Collateral, deposit the
same in one or more special accounts maintained with the Bank over which the
Bank alone shall have the power of withdrawal. The remittance of the proceeds of
such Collateral shall not, however, constitute payment or liquidation of such
Collateral until the Bank shall receive good funds for such proceeds. Funds
placed in such special accounts shall be held by the Bank as security for all
Obligations secured hereunder. These proceeds shall be deposited in precisely
the form received, except for the indorsement of the Debtor where necessary to
permit collection of items, which indorsement the Debtor agrees to make, and
which indorsement the Bank is also hereby authorized, as attorney-in-fact, to
make on behalf of the Debtor. In the event the Bank has notified the Debtor to
make deposits to a special account, pending such deposit, the Debtor agrees that
it will not commingle any such checks, drafts, cash or other remittances with
any funds or other property of the Debtor, but will hold them separate and apart
therefrom, and upon an express trust for the Bank until deposit thereof is made
in the special account. The Bank will, from time to time, apply the whole or any
part of the Collateral funds on deposit in this special account against such
Obligations as are secured hereby as the Bank may in its sole discretion elect.
At the sole election of the Bank, any portion of said funds on deposit in the
special account which the Bank shall elect not to apply to the Obligations, may
be paid over by the Bank to the Debtor.
23. Compliance with State and Federal Laws. Debtor will comply with all State
and Federal laws and regulations applicable to its business, whether now in
effect or hereafter enacted including but not limited to the wage and hours laws
and relating to the use or disposal of hazardous materials and wastes.
F. Rights and Powers of Bank
1. General. Bank, before or after default, without liability to Debtor may:
obtain from any person information regarding Debtor or Debtor's business, which
information any such person also may furnish without liability to Debtor;
require Debtor to give possession or control of any Collateral to Bank; indorse
as Debtor's agent any instruments documents or chattel paper in Collateral or
representing proceeds of Collateral; contact account debtors directly to verify
information furnished by Debtor; take control of proceeds, including stock
received as dividends or by reason of stock splits; release Collateral in its
possession to any Debtor, temporarily or otherwise; require additional
Collateral; reject as unsatisfactory any property hereafter offered by Debtor as
Collateral; set standards from time to time to govern what may be used as after
acquired Collateral; designate, from time to time, a certain percent of the
Collateral as the loan value and require Debtor to maintain the Obligation at or
below such figure; take control of funds generated by the Collateral, such as
cash dividends, interest and proceeds or refunds from insurance, and use same to
reduce any part of the Obligation and exercise all other rights which an owner
of such Collateral may exercise, except the right to vote or dispose of
Collateral before an event of default; at any time transfer any of the
Collateral or evidence thereof into its own name or that of its nominee; and
demand, collect, convert, redeem, receipt for, settle, compromise, adjust, ▇▇▇
for, foreclose or realize upon Collateral, in its own name or in the name of
Debtor, as Bank may determine. Bank shall not be liable for failure to collect
any account or instruments, or for any act fir omission on the part of the Bank,
its of ricers, agents or employees, except willful misconduct and gross
negligence. The foregoing rights and powers of Bank will be in addition to, and
not a limitation upon, any rights and powers of Bank given by law, elsewhere in
this agreement, or otherwise. If Debtor fails to maintain any required
insurance, to the extent permitted by applicable law Bank may (but is not
obligated to) purchase single interest insurance coverage for the Collateral
which insurance may at Bank's option (i) protect only Bank and not provide any
remuneration or protection for Debtor directly and (ii) provide coverage only
after the Obligation has been declared due as herein provided. The premiums for
any such insurance purchased by Bank shall be a part of the Obligation and shall
bear interest as provided in B. 1. d. hereof.
2. Convertible Collateral. Bank, may present for conversion any Collateral which
is convertible into any other instrument or investment security or a combination
thereof with cash, but Bank shall not have any duty to present for conversion
any Collateral unless it shall have received from Debtor detailed written
instructions to that effect at a time reasonably far in advance of the final
conversion date to make such conversion possible.
G. Default
1. Event of Default. An event of default shall occur if: (i) there is a loss,
theft, damage or destruction of any material portion of the Collateral for which
there is no insurance coverage or for which, in the opinion of the Bank there is
insufficient insurance coverage; or (ii) if Debtor or any other obligor on the
Obligation shall fail to timely and properly pay or observe, keep or perform any
term, covenant, agreement or condition in this agreement or in any other
agreement between Debtor and any other obligor on the Obligation, including in
any other note or instrument, loan agreement, security agreement, deed of trust,
mortgage, promissory note, assignment or other agreement or instrument
concerning the Obligation.
2. Rights and Remedies. If any Event of Default shall occur, then, in each and
every such case, the Bank may, without presentment, demand, or protest; notice
of default, dishonor, demand, non-payment, or protest; notice of intent to
accelerate all or any part of the Obligation; notice of acceleration of all or
any part of the Obligation; or notice of any other kind, all of which Debtor
hereby expressly waives, (except for any notice required under this agreement,
any other loan document or applicable law); at any time thereafter exercise
and/or enforce any of the following rights and remedies:
a) Possession and Collection of Collateral. At its option: (i) take possession
or control of, store, lease, operate, manage, sell or otherwise dispose of, all
or any part of the Collateral; (ii) notify all parties under any account or
contract right forming all or any part of the Collateral to make any payments
otherwise due to the Debtor directly to the Bank, (iii) in the Bank's own name,
or in the name of the Debtor, demand, collect, receive, ▇▇▇ for, and give
receipts and releases for, any and all amounts due under such accounts and
contract rights; (iv) indorse as the agent of the Debtor any check, note,
chattel paper, documents, or instruments forming all or any part of the
Collateral, (v) make formal application for transfer to the Bank (or to any
assignee of the Bank to any purchaser of any of the Collateral) of all of the
Debtor's permits, licenses, approvals, agreements, and the like relating to the
Collateral or to the Debtor's business; (vi) take any other action which the
Bank deems necessary or desirable to protect and realize upon its security
interest in the Collateral; and (vii) in addition to the foregoing, and not in
substitution therefor, exercise any one or more of the rights and remedies
exercisable by the Bank under any other provision of this agreement, under any
of the other loan documents, or as provided by applicable law (including,
without limitation, the Uniform Commercial Code as in effect in Florida
(hereinafter referred to as the "UCC")). In taking possession of the Collateral
the Bank may enter the Debtor's premises and otherwise proceed without legal
process, if this can be done without breach of the peace. The Debtor shall, upon
the Bank's demand, promptly make the Collateral or other security available to
the Bank at a place designated by the Bank, which place shall be reasonably
convenient to both parties.
The Bank shall not be liable for, nor be prejudiced by, any loss, depreciation
or other damages to the Collateral, unless caused by the Bank's willful and
malicious act. The Bank shall have no duty to take any action to preserve or
collect the Collateral.
b) Receiver. Obtain the appointment of a receiver for all or any of the
Collateral, the Debtor hereby consenting to the appointment of such a receiver
and agreeing not to oppose any such appointment.
c) Right of Set Off. Without notice or demand to the Debtor, set off and apply
against any and all of the Obligations any and all deposits (general or special,
time or demand, provisional or final) and any other indebtedness, at any time
held or owing by the Bank to or for the credit of the account of the Debtor.
Bank shall be entitled to immediate possession of all books and records
evidencing any Collateral or pertaining to chattel paper covered by this
agreement and it or its representatives shall have the authority to enter upon
any premises upon which any of the same, or any Collateral, may be situated and
remove the same therefrom without liability. Bank may surrender any insurance
policies in Collateral and receive the unearned premium thereon. Debtor shall be
entitled to any surplus and shall be liable to Bank for any deficiency. The
proceeds of any disposition after default available to satisfy the Obligation
shall be applied to the Obligation in such order and in such manner as Bank in
its discretion shall decide.
H. General
1. Parties Bound. Bank's rights hereunder shall inure to the benefit of its
successors and assigns, and in the event of any assignment or transfer of any of
the Obligation or the Collateral, Bank thereafter shall be fully discharged from
any responsibility with respect to the Collateral so assigned or transferred,
but Bank shall retain all rights and powers hereby given with respect to any of
the obligation or Collateral not so assigned or transferred. All
representations, warranties and agreements of Debtor if more than one are joint
and several and all shall be binding upon the personal representatives, heirs,
successors and assigns of Debtor.
2 . Waiver. No delay of Bank in exercising any power or right shall operate as a
waiver thereof; nor shall any single or partial exercise of any power or right
preclude other or further exercise thereof or the exercise of any other power or
right. No waiver by Bank of any right hereunder or of any default by Debtor
shall be binding upon Bank unless in writing, and no failure by Bank to exercise
any power or right hereunder or waiver of any default by Debtor shall operate as
a waiver of any other or further exercise of such right or power or of any
further default. Each right, power and remedy of the Bank as provided for in any
of the loan documents, or which shall now or hereafter exist at law or in equity
or by statute or otherwise, shall be cumulative and concurrent and shall be in
addition to every other such right, power or remedy. The exercise or beginning
of the exercise by the Bank of any one or more of such rights, powers or
remedies shall not preclude the simultaneous or later exercise by the Bank of
any or all other such rights, powers or remedies.
3. Agreement Continuing This agreement shall constitute a continuing agreement,
applying to all future as well as existing transactions, whether or not of the
character contemplated at the date of this agreement, and if all transactions
between Bank and Debtor shall be closed at any time, shall be equally applicable
to any new transactions thereafter. Provisions of this agreement, unless by
their terms exclusive, shall be in addition to other agreements between the
parties. Time is of the essence of this agreement.
4. Definitions. Unless the context indicates otherwise, definitions in the UCC
apply to words and phrases in this agreement; if UCC definitions conflict,
Article 9 definitions apply.
5. Notice. Notice shall be deemed reasonable if mailed postage prepaid at least
5 days before the related action (or if the UCC elsewhere specifies a longer
period, such longer period) to the address of Debtor given above.
6. Modifications. No provision hereof shall be modified or limited except by a
written agreement expressly referring hereto and to the provisions so modified
or limited and signed by the Debtor and Bank, nor by course of conduct, usage of
trade.
7. Partial Invalidity. The unenforceability or invalidity of any provision of
this security agreement shall not affect the enforceability or validity of any
other provision herein and the invalidity or unenforceability of any provision
of any loan document to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to other persons or
circumstances.
8. Gender and Number. Where appropriate, the use of one gender shall be
construed to include the others or any of them; and the singular number shall be
construed to include the plural, and vice versa.
9. Applicable Law and Venue. This agreement has been delivered in the State of
Florida and shall be construed in accordance with the laws of that State. It is
performable by Debtor in the county or city of Bank's address set out above and
Debtor expressly waives any objection as to venue in any such location. Wherever
possible 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 shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this agreement.
10. Financing Statement. To the extent permitted by applicable law, a carbon,
photographic or other reproduction of this security agreement or any financing
statement covering the Collateral shall be sufficient as a financing statement.
11. Counterparts. This agreement may be executed in any number of counterparts,
each of which shall be considered to be an original, but all of which shall
constitute one in the same instrument. As used herein "this agreement" shall
include all attachments and addenda.
12. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON OR
ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE
APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION
OF COMMERCIAL DISPUTES OF JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC.
(J.A.M.S.) AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO
COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES
IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF THE
BORROWER'S DOMICILE AT THE TIME OF THIS AGREEMENT'S EXECUTION AND ADMINISTERED
BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION
ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90
DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A
SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP
TO AN ADDITIONAL 60 DAYS.
B. RESERVATIONS OF RIGHTS. NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO (1)
LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION
OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (11) BE A WAIVER BY
THE BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATIE LAW; OR (111) LIMIT THE RIGHT OF THE BANK HERETO
(A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B)
TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN
FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE BANK
MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS AGREEMENT. AT BANK'S OPTION,
FORECLOSURE UNDER A DEED OF TRUST OR MORTGAGE MAY BE ACCOMPLISHED BY ANY OF THE
FOLLOWING: THE EXERCISE OF A POWER OF SALE UNDER THE DEED OF TRUST OR MORTGAGE,
OR BY JUDICIAL SALE UNDER THE DEED OF TRUST OR MORTGAGE, OR BY JUDICIAL
FORECLOSURE. NEITHER THIS EXERCISE OR SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES
SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN
ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES. DEBTOR AGREES THAT BANK AT ITS SOLE OPTION MAY CHOOSE
MEDIATION, AND/OR BINDING ARBITRATION PROCEDURES PERTAINING TO ANY
CONTROVERSY(IES) OR DISPUTE(S) ARISING BETWEEN DEBTOR AND BANK. DEBTOR AGREES TO
ABIDE BY THE SELECTION THAT BANK MAKES TO RESOLVE ANY CONFLICTS OR DISPUTES
BETWEEN DEBTOR AND BANK AND TO PARTICIPATE IN THE MEDIATION AND/OR BINDING
ARBITRATION PROCESS IF SELECTED. DEBTOR AND BANK AGREE THAT EACH WILL BEAR THEIR
PORTION OF EXPENSES RELATED TO MEDIATION AND/OR BINDING ARBITRATION.
13. NOTICE OF FINAL AGREEMENT. FLORIDA LAW PROVIDES THAT ANY AGREEMENT ASSERTIED
AS A CLAIM OR DEFENSE IN AN ACTION RELATED TO THIS TRANSACTION MUST BE IN
WRITING AND SIGNED BY THE PARTIES. ORAL AGREEMENTS ARE NOT ENFORCEABLE. YOU MAY
RELY ONLY ON A WRITTEN AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly
executed under seal by their duly authorized representatives as of the date
first above written.
Bank/Secured Party:
NationsBank of Florida, N.A. Debtor/Pledgor:
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ (Seal) Print Individual's Name:
--------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇ (Seal)
Title Vice President
ELCOTEL DIRECT, INC.
(Name of Corporation,
Partnership, etc)
Corporate Borrower or Partnership: ELCOTEL DIRECT, INC.
(Name of Corporation,
Partnership, etc)
Attest (If Applicable)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------
[Corporate Seal] ▇▇▇▇▇▇ ▇. ▇▇▇▇,
Vice President
ALLONGE
This Allonge is attached to and made a part of that certain Security Agreement
dated October 2, 1997, executed by ▇▇▇▇▇▇ ▇. ▇▇▇▇, as Vice President of ELCOTEL
DIRECT, INC., a Florida corporation, as Debtor, and NATIONSBANK, N.A., a
National Banking Association, as Secured Party.
Paragraph 12.(A) is amended to read as follows:
"A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN SARASOTA, FLORIDA, AND
ADMINISTERED BY ENDISPUTE, INC., D/B/A J.A.M.S./ENDISPUTE WHO WILL APPOINT AN
ARBITRATOR; IF J.A.M.S./ENDISPUTE IS UNABLE OR LEGALLY PRECLUDED FROM
ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL
SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND
FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS."
Dated: October 2, 1997 ELCOTEL DIRECT, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(CORPORATE SEAL)
DEBTOR
NATIONSBANK, N.A., a National
Banking Association
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇▇▇▇, Vice President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(CORPORATE SEAL)
SECURED PARTY