*1390000522187363335009526*
COMMERCIAL SECURITY AGREEMENT
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Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$250,000.00 10-29-2000 4-30-2001 *** 0095 78 FKW
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References in the shaded area are for Lender's use only and do not limit the applicability of this document
to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.
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GRANTOR: P.P.C.T. PRODUCTS, L.L.C. (TIN: 65-0888611) LENDER: SOUTHTRUST BANK, N.A.
7635 W. 28TH AVENUE PEMBROKE PINES OFFICE
HIALEAH, FL 33016 12440 S. W. PINES BOULEVARD
PEMBROKE PINES, FL 33027
(954) 432-6900
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THIS COMMERCIAL SECURITY AGREEMENT dated October 29, 2000, is made and
executed between P.P.C.T. Products, L.L.C. ("Guarantor") and SouthTrust
Bank, N.A. ("Lender").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to
Lender a security interest in the Collateral to secure the indebtedness and
agrees that Lender shall have the rights stated in this Agreement with
respect to the Collateral, in addition to all other rights which Lender may
have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement
means the following described property, whether now owned or hereafter
acquired, whether now existing or hereafter arising, and wherever located,
in which Grantor is giving to Lender a security interest for the payment
due of the indebtedness and performance of all other obligations under the
Note and this Agreement:
ALL INVENTORY, CHATTEL PAPER, ACCOUNTS, EQUIPMENT AND GENERAL INTANGIBLES
In addition, the word "Collateral" also includes all of the following,
whether now owned or hereafter acquired, whether now existing or hereafter
arising, and wherever located:
(A) All accessions, attachments, accessories, tools, parts, supplies,
replacements and additions to any of the collateral described herein,
whether added now or later.
(B) All products and produce of any of the property described in this
Collateral section.
(C) All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease, or other
disposition of any of the property described in this Collateral
section.
(D) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section, and sums due from a third party
who has damaged or destroyed the Collateral or from that party's
insurer, whether due to judgment, settlement or other process.
(E) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of
Grantor's right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or
data on electronic media.
Despite any other provision of this Agreement, Lender is not granted, and
will not have, a nonpurchase money security interest in household goods, to
the extent such a security interest would be prohibited by applicable law.
In addition, if because of the type of any Property, Lender is required to
give a notice of the right to cancel under Truth in Lending for the
indebtedness, then lender will not have a security interest in such
Property unless and until such a notice is given.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Grantor's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts
Grantor holds jointly with someone else and all accounts Grantor may open
in the future. However, this does not include any IRA or Keogh accounts,
or any trust accounts for which the grant of a security interest would be
prohibited by law. Grantor authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness
against any and all such accounts, and, at Lender's option to
administratively freeze all such accounts to allow Lender to protect
Lender's charge and setoff rights provided in this paragraph.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.
With respect to the Collateral, Grantor represents and warrants to Lender
that:
PERFECTION OF SECURITY INTEREST. Grantor agrees to execute financing
statements and to take whatever other actions are requested by Lender
to perfect and continue Lender's security interest in the Collateral.
Upon request of Lender, Grantor will deliver to Lender any and all of
the documents evidencing or constituting the Collateral, and Grantor
will note Lender's interest upon any and all chattel paper if not
delivered to Lender for possession by Lender.
NOTICES TO LENDER. Grantor will notify Lender in writing at Lender's
address shown above (or such other addresses as Lender may designate
from time to time) prior to any (1) change in Grantor's name, (2)
change in Grantor's assumed business name(s), (3) change in the
management or in the members or managers of the limited liability
company, (4) change in the authorized signer(s), (5) change in
Grantor's principal office address, (6) conversion of Grantor to a new
or different type of business or entity, or (7) change in any other
aspect of Grantor that directly or indirectly relates to any agreements
between Grantor and Lender. No change in Grantor's name will take
effect until after Lender has been notified.
NO VIOLATION. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is
a party, and its membership agreement does not prohibit any term or
condition of this Agreement.
ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists
of accounts, chattel paper, or general intangibles, as defined by the
Uniform Commercial Code, the Collateral is enforceable in accordance
with its terms, is genuine, and fully complies with all applicable
laws and regulations concerning form, content and manner of
preparation and execution, and all persons appear to be obligated on
the Collateral have authority and capacity to contract and are in fact
obligated as they appear to be on the Collateral. At the time any
Account becomes subject to a security interest in favor of Lender, the
Account shall be a good and valid account representing an undisputed,
bona fide indebtedness incurred by the account debtor, for merchandise
held subject to delivery instructions or previously shipped or
delivered pursuant to a contract of sale, or for services previously
performed by Grantor with or for the account debtor. So long as this
Agreement remains in effect, Grantor shall not, without Lender's prior
written consent, compromise, settle, adjust, or extend payment under
or with regard to any such Accounts. There shall be no setoffs or
counterclaims against any of the Collateral, and no agreement shall
have been made under which any deductions or discounts may be claimed
concerning the Collateral except those disclosed to Lender in writing.
*1390000522187363335009526*
COMMERCIAL SECURITY AGREEMENT PAGE 2
(CONTINUED)
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LOCATION OF THE COLLATERAL. Except in the ordinary course of
Grantor's business, Grantor agrees to keep the Collateral (or to the
extent the Collateral consists of intangible property such as accounts
or general intangibles, the records concerning the Collateral) at
Grantor's address shown above or at such other locations as are
acceptable to Lender. Upon Lender's request, Grantor will deliver to
Lender in form satisfactory to Lender a schedule of real properties
and Collateral locations relating to Grantor's operations, including
without limitation the following: (1) all real property Grantor owns
or is purchasing; (2) all real property Grantor is renting or leasing;
(3) all storage facilities Grantor owns, rents, leases, or uses; and
(4) all other properties where Collateral is or may be located.
REMOVAL OF THE COLLATERAL. Except in the ordinary course of Grantor's
business, including the sales of inventory, Grantor shall not remove
the Collateral from its existing location without Lender's prior
written consent. To the extent that the Collateral consists of
vehicles, or other titled property, Grantor shall not take or permit
any action which would require application for certificates of title
for the vehicles outside of the State of Florida, without Lender's
prior written consent. Grantor shall, whenever requested, advise Lender
of the exact location of the Collateral.
TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or
accounts collected in the ordinary course of Grantor's business, or as
otherwise provided for in this Agreement, Grantor shall not sell,
offer to sell, or otherwise transfer or dispose o the Collateral.
While Grantor is not in default under this Agreement, Grantor may sell
inventory, but only in the ordinary course of its business and only to
buyers who qualify as a buyer in the ordinary course of business. A
sale in the ordinary course of Grantor's business does not include a
transfer in partial or total satisfaction of a debt or any bulk sale.
Grantor shall not pledge, mortgage, encumber or otherwise permit the
Collateral to be subject to any lien, security interest, encumbrance,
or charge, other than the security interest provided for in this
Agreement, without the prior written consent of Lender. This includes
security interests even if junior in right to the security interests
granted under this Agreement. This includes security interests even
if junior in right to the security interests granted under this
Agreement. Unless waived by Lender, all proceeds from any disposition
of the Collateral (for whatever reason) shall be held in trust for
Lender and shall not be commingled with any other funds; provided
however, this requirement shall not constitute consent by Lender to
any sale or other disposition. Upon receipt, Grantor shall
immediately deliver any such proceeds to Lender.
TITLE. Grantor represents and warrants to Lender that Grantor holds
good and marketable title to the Collateral, free and clear of all
liens and encumbrances except for the lien of this Agreement. No
financing statement covering any of the Collateral is on file in any
public office other than those which reflect the security interest
created by this Agreement or to which Lender has specifically
consented. Grantor shall defend Lender's rights in the Collateral
against the claims and demands of all other persons.
REPAIRS AND MAINTENANCE. Grantor agrees to keep and maintain, and to
cause others to keep and maintain, the Collateral in good order,
repair and condition at all times while this Agreement remains in
effect. Grantor further agrees to pay when due all claims for work
done on, or services rendered or material furnished in connection with
the Collateral so that no lien or encumbrance may ever attach to or be
filed against the Collateral.
INSPECTION OF COLLATERAL. Lender and Lender's designated
representatives and agents shall have the right at all reasonable
times to examine and inspect the Collateral wherever located.
TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its use or operation, upon
this Agreement, upon any promissory note or notes evidencing the
indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor
is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender's interest in the Collateral
is not jeopardized in Lender's sole option. If the Collateral is
subject to a lien which is not discharged within fifteen (15) days,
Grantor shall deposit with Lender cash, a sufficient corporate surety
bond or other security satisfactory to Lender in an amount adequate to
discharge of the lien plus any interest, costs, reasonable attorneys'
fees or other charges that could accrue as a result of foreclosure or
sale of the Collateral. In any contest Grantor shall defend itself
and Lender and shall satisfy any final adverse judgment before
enforcement against the Collateral. Grantor shall name Lender as an
additional obligee under any surety bond furnished in the contest
proceedings. Grantor further agrees to furnish Lender with evidence
that such taxes, assessments, and governmental and other charges have
been paid in full and in a timely manner. Grantor may withhold any
such payment or may elect to contest any lein if Grantor is in good
faith conducting an appropriate proceeding to contest the obligation
to pay and so long as Lender's interest in the Collateral is not
jeopardized.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply
promptly with all laws, ordinances, rules and regulations of all
governmental authorities, now or hereafter in effect, applicable to
the ownership, production, disposition, or use of the Collateral.
Grantor may contest in good faith any such law, ordinance or
regulation and withhold compliance during any proceeding, including
appropriate appeals. so long as Lender's interest in the Collateral,
in Lender's opinion, is not jeopardized.
HAZARDOUS SUBSTANCES. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used in violation of any
Environmental Laws or for the generation, manufacture, storage,
transportation, treatment, disposal, release or threatened release of
any Hazardous Substance. The representations and warranties contained
herein are based on Grantor's due diligence in investigating the
Collateral or Hazardous Substances. Grantor hereby (1) releases and
waives any future claims against Lender for indemnity or contribution
in the event Grantor becomes liable for cleanup or other costs under
any Environmental Laws, and (2) agrees to indemnify and hold harmless
Lender against any and all claims and losses resulting from a breach
of this provision of this Agreement. This obligation to indemnify
shall survive the payment of the indebtedness and the satisfaction of
this Agreement.
MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain
all risks insurance, including without limitation fire, theft and
liability coverage together with such other insurance as Lender may
require with respect to the Collateral, in form, amounts, coverages
and basis reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Grantor, upon request of
Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished
without at least ten (10) days' prior written notice to Lender and not
including any disclaimer of the insurer's liability for failure to
give such a notice. Each insurance policy also shall include and
endorsement providing that coverage in favor of Lender will not be
impaired in any way by any act, omission or default of Grantor or any
other person. In connection with all policies covering assets in
which Lender holds or is offered a security interest, Grantor will
provide Lender with such loss payable or other endorsements as Lender
may require. If Grantor at any time fails to obtain or maintain any
insurance as required under this Agreement, Lender may (but shall not
be obligated to) obtain such insurance as Lender deems appropriate,
including if Lender so chooses "single interest insurance," which will
cover only Lender's interest in the Collateral.
APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify
Lender of any loss or damage to the Collateral. Lender may make proof
of loss if Grantor fails to do so within fifteen (15) days of the
casualty. All proceeds of any insurance on the Collateral, including
accrued proceeds thereon, shall be held by Lender as part of the
Collateral. If Lender consents to repair or replacement of the
damaged or destroyed Collateral, Lender shall, upon satisfactory proof
of expenditure, pay or reimburse Grantor from the proceeds for the
reasonable cost of repair or restoration. If Lender does not consent
to repair or replacement of the Collateral, Lender shall retain a
sufficient amount of the proceeds to pay all of the indebtedness, and
shall pay the balance to Grantor. Any proceeds which have not be
disbursed within six (6) months after their receipt and which Grantor
has not committed to the repair or restoration of the Collateral shall
be used to prepay the indebtedness.
INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
reserves for payment of insurance premiums, which reserves shall be
created by monthly payments from Grantor of a sum estimated by Lender
to be sufficient to produce, at least fifteen (15) days before the
premium due date, amounts at least equal to the insurance premiums to
be paid. If fifteen (15) days before payment is due, the reserve funds
are insufficient, Grantor shall upon demand pay any deficiency to
Lender. The reserve funds shall be held by Lender as a general deposit
and shall constitute a non-interest-bearing account which Lender may
satisfy by payment of the insurance premiums required to be paid by
Grantor as they become due. Lender does not hold the reserve funds in
trust for Grantor, and Lender is not the agent of Grantor for payment
of the insurance premiums required to be paid by Grantor. The
responsibility for the payment of premiums shall remain Grantor's sole
responsibility.
INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following:
(1) the name of the insurer; (2) the risks insured; (3) the amount of
the policy; (4) the property insured; (5) the then current value on
the basis of which insurance has been obtained and the manner of
determining that value; and (6) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often
than annually) have an independent appraiser satisfactory to Lender
determine, as applicable, the cash value or replacement cost of the
Collateral.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and
except as otherwise provided below with respect to accounts, Grantor may
have possession of the tangible personal property and beneficial use of all
the Collateral and may use it in any lawful manner not inconsistent with
this Agreement or the Related Documents, provided that Grantor's right to
possession and beneficial use shall not apply to any Collateral where
possession of the Collateral by Lender is required by law to perfect
Lender's security interest in such Collateral. Until otherwise notified by
Lender, Grantor may collect any of the Collateral consisting of accounts.
At any time and even through no Event of Default exists, Lender may
exercise its rights to collect the accounts and to notify account debtors
to make payments directly to Lender for application to the indebtedness.
If Lender at any time has possession of any Collateral, whether before or
after an Event of Default, Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if Lender
takes such action for that purpose as Grantor shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the
circumstances, but failure to honor any request by Grantor shall not of
itself be deemed to be a failure to exercise reasonable care. Lender shall
not be required to take any steps necessary to preserve any rights in the
Collateral against prior parties, nor to protect, preserve or maintain any
security interest given to secure the indebtedness.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails
to comply with any provision of this Agreement or any Related Documents,
including but not limited to Grantor's failure to discharge or pay when due
any amounts Grantor is required to discharge or pay under this Agreement or
any Related Documents, Lender on Grantor's behalf may (but shall not be
obligated to) take any action that Lender deems appropriate, including but
not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on the
Collateral and paying all costs for insuring, maintaining and preserving
the Collateral. All such expenditures incurred or paid by Lender for such
purposes will then bear interest at the rate charged under the Note from
the date incurred or paid by Lender to the date of repayment by Grantor.
All such expenses will become a part of the indebtedness and, at Lender's
option, will (A) be payable on demand; (B) be added to the balance of the
Note and be apportioned among and be payable with any installment payments
to become due during either (1) the term of any applicable insurance
policy; or (2) the remaining term of the Note; or (C) be treated as a
balloon payment which will be due and payable at the Note's maturity. The
Collateral also will secure payment of these amounts. Such right shall be
in addition to all other rights and remedies to which Lender may be
entitled upon Default.
DEFAULT. Each of the following shall constitute an Event of Default under
this Agreement:
PAYMENT DEFAULT. Grantor fails to make any payment when due under the
Indebtedness.
OTHER DEFAULTS. Grantor fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement or
in any of the Related Documents or to comply with or to perform any
term, obligation, covenant or condition contained in any other
agreement between Lender and Grantor.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Grantor or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Grantor's
property or Grantor's or any Grantor's ability to repay the
indebtedness or perform their respective obligations under this
Agreement or any of the Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor's behalf under this
Agreement, the Note, or the Related Documents is false or misleading
in any material respect, either now or at the time made or furnished
or becomes false or misleading at any time thereafter.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any collateral document to create a valid and perfected security
interest or lien) at any time and for any reason.
INSOLVENCY. The dissolution (regardless of whether election to
continue is made), any member withdraws from the limited liability
company, or any other termination of Grantor's existence as a going
business or the death of any member, the insolvency of Grantor, the
appointment of a receiver for any part of Grantor's property, any
assignment for the benefit of creditors, any type of creditor workout,
or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Grantor.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against any collateral securing the indebtedness.
This includes a garnishment of any of Grantor's accounts, including
deposit accounts, with Lender. However, this Event of Default shall
not apply if there is a good faith dispute by Grantor as to the
validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Grantor gives Lender written
notice of the creditor of forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion,
as being an adequate reserve or bond for the dispute.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to Guarantor of any of the indebtedness or Guarantor dies or
becomes incompetent or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness.
ADVERSE CHANGE. A material adverse change occurs in Grantor's
financial condition, or Lender believes the prospect of payment or
performance of the indebtedness is impaired.
INSECURITY. Lender in good faith believes itself insecure.
CURE PROVISIONS. If any default, other than a default in payment, is
curable and if Grantor has not been given a notice of a breach of the
same provision of this Agreement within the preceding twelve (12)
months, it may be cured (and no event of default will have occurred)
if Grantor, after receiving written notice from Lender demanding cure
of such default: (1) cures the default within fifteen (15) days; or
(2) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's sole discretion to be
sufficient to cure the
*1390000522187363335009526*
COMMERCIAL SECURITY AGREEMENT PAGE 3
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default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the Florida Uniform Commercial Code. In addition and
without limitation, Lender may exercise any one or more of the following
rights and remedies:
ACCELERATE INDEBTEDNESS. Lender may declare the entire indebtedness,
including any prepayment which Grantor would be required to pay
immediately due and payable, without notice of any kind to Grantor.
ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender
all or any portion of the Collateral and any and all certificates of
title and other documents relating to the Collateral. Lender may
require Grantor to assemble the Collateral and make it available to
Lender at a place to be designated by Lender. Lender also shall have
full power to enter upon the property of Grantor to take possession of
and remove the Collateral. If the Collateral contains other goods not
covered by this Agreement at the time of repossession, Grantor agrees
Lender may take such other goods, provided that Lender makes
reasonable efforts to return them to Grantor after repossession.
SELL THE COLLATERAL. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof in
Lender's own name or that of Grantor. Lender may sell the Collateral
at public auction or private sale. Unless Collateral threatens to
decline speedily in value or is of a type customarily sold on a
recognized market, Lender will give Grantor reasonable notice of the
time after which any private sale or other intended disposition of the
Collateral is to be made. The requirements of reasonable notice shall
be met if such notice is given at least fifteen (15) days before the
time of the sale or disposition. All expenses relating to the
disposition of the Collateral, including without limitation the
expenses of retaking, holding insuring, preparing for sale and selling
the Collateral, shall become a part of the indebtedness secured by
this Agreement and shall be payable on demand, with interest at the
Note rate from date of expenditure until repaid.
APPOINT RECEIVER. In the event of a suit being instituted to
foreclose this Agreement, Lender shall be entitled to apply at any
time pending such foreclosure suit to the court having jurisdiction
thereof for the appointment of a receiver of any or all of the
Collateral, and of all rents, incomes, profits, issues and revenues
thereof, from whatsoever source. The parties agree that the court
shall forthwith appoint such receiver with the usual powers and duties
of receivers in like cases. Such appointment shall be made by the
court as a matter of strict right to Lender and without notice to
Grantor, and without reference to the adequacy or inadequacy of the
value of the Collateral, or to Grantor's solvency or any other party
defendant to such suit. Grantor hereby specifically waives the right
to object to the appointment of a receiver and agrees that such
appointment shall be made as an admitted equity and as a matter of
absolute right to Lender, and consents to the appointment of any
officer or employee of Lender as receiver. Lender shall have the
right to have a receiver appointed to take possession of all or any
part of the Collateral, with the power to protect and preserve the
Collateral, to operate the Collateral preceding foreclosure or sale,
and to collect the Rents from the Collateral and apply the proceeds,
over and above the cost of the receivership, against the indebtedness.
The receiver may serve without bond if permitted by law. Lender's
right to the appointment of a receiver shall exist whether or not the
apparent value of the Collateral exceeds the indebtedness by a
substantial amount. Employment by Lender shall not disqualify a
person from serving as a receiver.
COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
receiver, may collect the payments, rents, income, and revenues from
the Collateral. Lender may at any time in Lender's discretion
transfer any Collateral into Lender's own name or that of Lender's
nominee and receiver the payments, rents, income, and revenues
therefrom and hold the same as security for the indebtedness or apply
it to payment of the indebtedness in such order of preference as
Lender may determine. Insofar as the Collateral consists of accounts,
general intangibles, insurance policies, instruments, chattel paper,
choses in action, or similar property, Lender may demand, collect,
receipt for, settle, compromise, adjust, sue for, foreclose, or
realize on the Collateral as Lender may determine, whether or not
indebtedness or Collateral is then due. For these purposes, Lender
may, on behalf of and in the name of Grantor, receive, open and
dispose of mail addressed to Grantor; change any address to which mail
and payments are to be sent; and endorse notes, checks, drafts, money
orders, documents of title, instruments and items pertaining to
payment, shipment, or storage of any Collateral. To facilitate
collection, Lender may notify account debtors and obligors on any
Collateral to make payments directly to Lender.
OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the
Collateral, Lender may obtain a judgment against Grantor for any
deficiency remaining on the indebtedness due to Lender after
application of all amounts received from the exercise of the rights
provided in this Agreement. Grantor shall be liable for a deficiency
even if the transaction described in this subsection is a sale of
accounts or chattel paper.
OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and
remedies of a secured creditor under the provisions of the Uniform
Commercial Code, as may be amended from time to time. In addition,
Lender shall have and may exercise any or all other rights and
remedies it may have available at law; in equity, or otherwise.
ELECTION OF REMEDIES. Except as may be prohibited by applicable law,
all of Lender's rights and remedies, whether evidenced by this
Agreement, the Related Documents, or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election
by Lender to pursue any remedy will not bar any other remedy, and an
election to make expenditures or to take action to perform an
obligation of Grantor under this Agreement, after Grantor's failure to
perform, shall not affect Lender's right to declare a default and
exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in writing
and signed by the parties or parties' agent to be charged or bound by
the alteration or amendment.
ATTORNEY'S FEES: EXPENSES. Granter agrees to pay upon demand all of
Lender's cost and expenses, including Lender's reasonable attorney's
fees and Lender's legal expenses, incurred in connection with the
enforcement of this Agreement. Lender may hire or pay someone else to
help enforce this Agreement, and Granter shall pay the costs and
expenses of such enforcement. Costs and expenses include Lender's
reasonable attorneys' fees and legal expenses whether or not there is
a lawsuit, including reasonable attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Grantor also shall pay all court
costs and such additional fees as may be directed by the court.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
GOVERNING LAW. This Agreement shall be governed by, construed and
enforced in accordance with federal law and the laws of the State of
Florida. This Agreement has been accepted by Lender in the State of
Florida.
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NO WAIVER BY LENDER. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement
shall not prejudice or constitute a waiver of Lender's right otherwise
to demand strict compliance with that provisions or any other
provision of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Grantor, shall constitute a
waiver of any of Lender's rights or of any of Grantor's obligations as
to any future transactions. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender
in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent
may be granted or withheld in the sole discretion of Lender.
NOTICES. Any notice required to be given under this Agreement shall
be given in writing, and shall be effective when actually delivered,
when actually received by telefacsimile (unless otherwise required by
law), when deposited with a nationally recognized overnight courier,
or, if mailed, when deposited in the United State mail, as first
class, certified or registered mail postage prepaid, directed t the
addresses shown near the beginning of this Agreement. Any party may
change its address for notices under this Agreement by given written
notice to the other parties, specifying that the purpose of the notice
is to change the party's address. For notice purposes, Grantor agrees
to keep Lender informed at all times of Grantor's current address.
Unless otherwise provided or required by law, if there is more than
one Grantor, any notice given by Lender to any Grantor is deemed to be
notice given to all Grantors.
POWER OF ATTORNEY. Grantor hereby appoints Lender as Grantor's
irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect or continue the security interest
granted in this Agreement. Lender may at any time, and without
further authorization from Grantor, file a carbon, photographic or
other reproduction of any financing statement or of this Agreement for
use as a financing statement. Grantor will reimburse Lender for all
expenses for the perfection and the continuation of the perfection of
Lender's security interest in the Collateral.
SEVERABILITY. If a court of competent jurisdiction finds any
provision of this Agreement to be illegal, invalid, or unenforceable
as to any circumstance, that finding shall not make the offending
provision illegal, invalid, or unenforceable as to any other
circumstance. If feasible, the offending provision shall be
considered modified so that it becomes legal, valid and enforceable.
If the offending provision cannot be so modified, it shall be
considered deleted from this Agreement. Unless otherwise required by
law, the illegality, invalidity, or unenforceability of any provision
of this Agreement shall not affect the legality, validity or
enforceability of any other provision of this Agreement.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this
Agreement on transfer of Grantor's interest, this Agreement shall be
binding upon and inure to the benefit of the parties, their successors
and assigns. If ownership of the Collateral becomes vested in a
person other than Grantor, Lender, without notice to Grantor, may deal
with Grantor's successors with reference to this Agreement and the
indebtedness by way of forbearance or extension without releasing
Grantor from the obligations of this Agreement or liability under the
indebtedness.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, and agreements made by Grantor in this Agreement shall
survive the execution and delivery of this Agreement, shall be
continuing in nature, and shall remain in full force and effect until
such time as Grantor's indebtedness shall be paid in full.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Agreement.
WAIVE JURY. All parties to this Agreement hereby waive the right to
any jury trial in any action, proceeding, or counterclaim brought by
any party against any other party. (Initial Here ___)
DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Agreement. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in
lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the
singular, as the context may require. Words and terms not otherwise
defined in this Agreement shall have the meanings attributed to such terms
in the Uniform Commercial Code:
ACCOUNT. The word "Account" means a trade account, account
receivable, other receivable, or other right to payment for goods sold
or services rendered owing to Grantor (or to a third party grantor
acceptable to Lender).
AGREEMENT. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Commercial Security Agreement from time to time.
BORROWER. The word "Borrower" means P.P.C.T. Products L.L.C., and all
other persons and entities signing the Note in whatever capacity.
COLLATERAL. The word "Collateral" means all of Grantor's right, title
and interest in and to all the Collateral as described in the
Collateral Description section of this Agreement.
DEFAULT. The word "Default" means the Default set forth in this
Agreement in the section titled "Default."
ENVIRONMENTAL LAWS. The words "Environmental Laws" mean any and all
state, federal and locate statutes, regulations and ordinances
relating to the protection of human health or the environment,
including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section
9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. No.99-499 ("SARA"), the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or
other applicable state or federal laws, rules, or regulations adopted
pursuant thereto.
EVENT OF DEFAULT. The words "Event of Default" mean any of the Events
of Default set forth in this Agreement in the Default section of this
Agreement.
GRANTOR. The word "Grantor" means P.P.C.T. Products, L.L.C.
GUARANTOR. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the indebtedness.
GUARANTY. The word "Guaranty" means the guaranty from Guarantor to
Lender, including without limitation a guaranty of all or part of the
Note.
HAZARDOUS SUBSTANCES. The words "Hazardous Substances" mean materials
that, because of their quantity, concentration or physical, chemical
or infectious characteristics, may cause or pose a present or
potential hazard to human health or the environment when improperly
used, treated, stored, disposed of, generated, manufactured,
transported or otherwise handled. The words 'Hazardous Substances"
are used in their very broadest sense and include without limitation
any and all hazardous or toxic substances, materials or waste as
defined by or listed under the Environmental Laws. The term
"Hazardous Substances" also includes, without limitation, petroleum
and petroleum by-products or any fraction thereof and asbestos.
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COMMERCIAL SECURITY AGREEMENT PAGE 5
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INDEBTEDNESS. The word "Indebtedness" means the indebtedness
evidenced by the Note or Related Documents, including all principal
and interest together with all other indebtedness and costs and
expenses for which Grantor is responsible under this Agreement or
under any of the Related Documents.
LENDER. The word "Lender" means SouthTrust Bank, N.A., its successors
and assigns.
NOTE. The word "Note" means the Note executed by Grantor in the
principal amount of $250,000.00 dated October 29, 2000, together with
all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for the note or credit agreement.
RELATED DOCUMENTS. The words "Related Documents" mean all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security
deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the indebtedness.
GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL
SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
OCTOBER 29, 1999.
GRANTOR:
P.P.C.T. PRODUCTS, L.L.C.
BY: /s/ GERALD F. O'CONNELL BY: /s/ JOSEPH A. ROTMIL
-------------------------------------------------------- -----------------------------------------------------
GERALD F. O'CONNELL, MEMBER OF P.P.C.T. PRODUCTS, L.L.C. JOSEPH A. ROTMIL, MEMBER OF P.P.C.T. PRODUCTS, L.L.C.