SECURITY AGREEMENT AND MASTER ASSIGNMENT OF LEASES
THIS SECURITY AGREEMENT AND MASTER ASSIGNMENT OF LEASES ("SECURITY
AGREEMENT") is made as of this day of April, 1997, by MERIDIAN
FINANCIAL CORPORATION (the "COMPANY"), an Indiana corporation with its
principal place of business located at 8250 Haverstick Road, Suite 110
Indianapolis, Indiana 46240 for the benefit of LASALLE NATIONAL BANK
("BANK"), a national banking association with offices at One American
Square, Suite 1800, Indianapolis, Indiana 46282.
RECITALS
WHEREAS, the Company and the Bank have entered into a Credit Agreement
of even date herewith (the "CREDIT AGREEMENT", as the same may be amended,
modified or supplemented from time to time); and
WHEREAS, the Credit Agreement requires that Company execute and
deliver this Security Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals, the
promises and mutual covenants herein contained, and other valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and to induce the Bank to make advances pursuant to the
Credit Agreement, the Company, intending to be legally bound, hereby agrees
as follows:
ARTICLE 1.
DEFINITIONS
1 CREDIT AGREEMENT DEFINITIONS. Each capitalized term used herein
shall have the meaning ascribed to such term in the Credit Agreement.
ARTICLE 2.
GRANT OF SECURITY INTEREST
1 GRANT OF SECURITY INTEREST. To secure the payment and
performance by the Company of each and every one of the Secured
Obligations, including without limitation the payment of all indebtedness
now owed to the Bank, and all future Advances which may be made from time
to time by the Bank to the Company under the Credit Agreement or the Notes,
the Company does hereby pledge, assign, and transfer to the Bank, and grant
to the Bank a lien on and a Security Interest in, all of the Company's
right, title, and interest in and to the following, whether now owned or
hereafter acquired (collectively, the "Collateral"):
(a) All Leases, Lease Documents, contract rights, chattel paper,
goodwill, general intangibles, accounts, accounts receivable,
instruments, and documents;
(b) All Leased Equipment, equipment, inventory and fixtures,
including all attachments, accessions, accessories, tools, and
supplies;
(c) All deposit accounts, credits, and money held by the Bank in the
name of or for the benefit of the Company, including, without
limitation, the Lockbox Account and the Cash Collateral Account;
(d) All records and data relating to any of the Collateral described
herein, whether in the form of microfiche, microfilm, or electronic
media, together with all of Company's interest in and to all computer
software required to utilize, create, maintain, and process any such
records or data on electronic media; and
(e) All proceeds and products of the Collateral, both cash and non-
cash, and including, without limitation, any and all proceeds of any
insurance, indemnity, warranty or guaranty, any and all payments made
or due the Company in connection with the requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the
Collateral (or any person acting under color of governmental
authority), and all rents, monies, payments and all other rights
arising out of the sale, lease or other disposition of any Collateral
described herein.
2 EXCLUDED ASSETS. Notwithstanding anything herein to the
contrary, the Bank's Security Interest shall not include a security
interest in any of the Leases and Leased Equipment which have been assigned
by Company to the Trustee under the Trust, the proceeds of any of the
Trustee Leases, the debt service reserve fund or any other deposit account
established by the Trustee in connection with the Trustee Leases, so long
as such Leases and Leased Equipment remain subject to such assignment. As
used herein, the term "Leases" shall be deemed to mean all of Company's
existing and hereafter executed Leases except the Trustee Leases.
3 IDENTIFICATION OF LEASES. As provided in the Credit Agreement
and herein, the Secured Obligations shall be secured by, INTER ALIA, all of
the Company's Leases, whether currently existing or hereafter entered into
by the Company, excluding only the Trustee Leases. The Leases consist of
the following: (i) all existing Leases identified on EXHIBIT A attached
hereto; and (ii) all Leases (other than a Trustee Lease) subsequently
entered into by the Company.
4 EXECUTION OF SUBSEQUENT ASSIGNMENTS. Pursuant to Section 6.3 of
the Credit Agreement, in conjunction with the delivery of any Request for
Advance to Bank, the Company shall also deliver to Bank (with a copy
simultaneously to its designated counsel) an executed original Lease
Assignment, in the form attached hereto as EXHIBIT B, for each specific
Lease (other than a Trustee Lease): (a) on the Effective Date of this
Security Agreement in connection with any such Lease then existing; (b) at
the time of a Request for Advance in connection with such Lease; or (c)
within ten (10) days after receipt by Borrower of the Lessee's written
acceptance of the Leased Equipment thereunder.
5 ORIGINAL LEASE DOCUMENTS TO BE DELIVERED TO BANK. As provided in
the Credit Agreement, all original Lease Documents pertaining to all Leases
shall be delivered to, and held by, Bank. The Lease Documents shall be
held by Bank to further secure the Secured Obligations.
ARTICLE 3.
DELIVERY OF LEASE DOCUMENTS TO PURCHASER OF LEASES
It is contemplated that Company may seek to sell some of the Leases,
from time to time, to third party purchasers (the "Purchaser"). At such
time as Company has arranged a proposed sale of any of the Leases to a
Purchaser, the Company shall provide Bank with prior written notice, and a
request for approval, of the proposed sale in the form of EXHIBIT C (a
"SHIPPING REQUEST"), attached hereto. The Shipping Request shall
specifically describe the Leases and include a computation and allocation
of the payment to be made by the Purchaser for the Leases, consistent with
the provisions of the Credit Agreement. The Bank shall use its best
efforts to review the Shipping Request and advise Company of its approval
or disapproval on within three (3) Business Days of its receipt. If the
Bank approves the Shipping Request, the Bank's wire transfer instructions
shall be promptly communicated to the Purchaser so that the total purchase
price for the Leases may be paid directly to the Bank. All payments in
respect of any Lease purchased by a Purchaser shall not be deemed received
by the Bank until such funds are received by federal funds wire transfer
and constitute immediately available funds in the Lockbox Account. All
such immediately available funds received by the Bank in the Lockbox
Account prior to 4:00 p.m. on a Business Day shall be deemed received on
such day and shall be applied to the Note as a prepayment on the same
Business Day, except as otherwise set forth in the Credit Agreement. Not
later than one Business Day following the Bank's receipt of Purchaser's
payment for the Leases, the Bank will mail the requisite Lease Documents to
the Purchaser, along with a Lease Sale Transmittal Letter (the "TRANSMITTAL
LETTER") in the form of EXHIBIT D attached hereto, by express overnight
mail.
ARTICLE 4.
LOCKBOX ACCOUNT
1 ESTABLISHMENT OF LOCKBOX AND CASH COLLATERAL ACCOUNTS. As
provided in the Credit Agreement, the Company will maintain a Lockbox
Account and Cash Collateral Account at the offices of the Bank. It is
expressly understood by the Company that it shall have no access whatsoever
to the Lockbox Account or the Cash Collateral Account. Without limiting
the foregoing, the Company shall have no right to issue, or request the
issuance of, and the Bank is hereby irrevocably instructed not to accept or
permit, any checks on, orders for withdrawal from, or other orders in
respect of, the Lockbox Account or the Cash Collateral Account. All
proceeds of sales of Leases and all Collections and other payment amounts
received by, or payable to, Company shall be initially deposited into the
Lockbox Account by Debtor.
2 SECURITY INTEREST IN LOCKBOX AND CASH COLLATERAL ACCOUNTS. The
Company hereby confirms the grant made by it to the Bank as security for
all present and future Secured Obligations, of a first lien and Security
Interest in the Lockbox Account and Cash Collateral Account.
3 ACCOUNT AGREEMENTS. The Company shall execute and deliver to
Bank such further agreements and instruments in connection with the Lockbox
Account and the Cash Collateral Account as Bank deems reasonably necessary
or advisable.
ARTICLE 5.
RELEASE OF COLLATERAL
1 CONDITIONS RESULTING IN RELEASE. The lien and Security Interest
provided for herein with respect to one or more Leases shall be released in
accordance with, and upon, the conditions set forth in Section 2.5 of the
Credit Agreement. Any provision of this Security Agreement
notwithstanding, Bank shall not be obligated to release any Lease except as
required by the Credit Agreement.
2 MANDATORY PREPAYMENT OR REPLACEMENT OF LEASES. If any such
release of any Lease under this Security Agreement shall create or result
in a Borrowing Base Deficiency, the Company shall promptly assign to Bank a
Qualified Lease not then already assigned to Bank or make payment to Bank
of the amount of such Borrowing Base Deficiency in accordance with the
terms of the Credit Agreement.
3 RELEASE OF DOCUMENTS WITHOUT RECOURSE. In the event it shall be
necessary for the Bank to assign or endorse any of the Lease Documents in
connection with any release hereunder, such assignment or endorsement shall
be without representation or warranty of any kind or nature and without
recourse to the Bank in any event whatsoever.
4 RETURN OF COLLATERAL. If the lien and Security Interest in favor
of the Bank in any Collateral is terminated pursuant hereto, the Bank shall
release and redeliver to the Company or its designee any such Collateral
then held by the Bank that is the subject of such terminated Security
Interest.
ARTICLE 6.
PAYMENTS ON LEASES
If, while this Security Agreement is in effect, the Company shall
become entitled to receive or shall receive any payment in respect of a
Lease, the Company agrees to accept the same as the agent for, and to hold
the same in trust on behalf of, the Bank and to deposit such payment into
the Lockbox Account. All sums of money so paid in respect of Leases (other
than the Trustee Leases) which are received by the Company and paid to the
Bank shall be deposited into the Lockbox Account and, at the option of the
Bank, without prior notice to the Company, credited against the Secured
Obligations or to the Company's general depository account with the Bank.
ARTICLE 7.
REPORTS CONCERNING EXISTING COLLATERAL
AND HEREAFTER ACQUIRED COLLATERAL
The Company will provide to the Bank the information required by the
Credit Agreement. Without in any manner limiting the foregoing, the
Company shall provide to the Bank a Request for Advance in connection with
each Loan, Monthly Lease Portfolio Summary Report and a Borrowing Base
Certificate monthly as required by Sections 3.1, 9.4(f) and 9.4(g),
respectively, of the Credit Agreement. Upon the request of the Bank, the
Company shall promptly provide additional information concerning, or a more
complete description of, any Lease, Leased Equipment, Location, the
Company's business, affairs, assets and liabilities or other information,
as Bank may reasonably request.
ARTICLE 8.
REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants that:
(1) all of the representations and warranties set forth in the Credit
Agreement are true and correct;
(2) the Company is the legal and equitable owner of the Collateral,
and its interests therein are free and clear of all liens, security
interests, charges, and encumbrances of every kind and nature (except as
provided in the Credit Agreement);
(3) the Company has good right, power, and lawful authority to
pledge, assign, and deliver the Collateral in the manner contemplated by
this Security Agreement;
(4) no consent or approval (other than any which may be incidental to
any filing which may be necessary to perfect the security interests in the
Collateral) of any governmental body, regulatory authority, person, trust,
or entity is or will be either (i) necessary to the validity of the rights
created hereunder, or (ii) required prior to the assignment, transfer, and
delivery of any of the Collateral to the Bank;
(5) to the Company's knowledge, no material dispute, right of setoff,
counterclaim, or defense exists with respect to all or any part of the
Collateral, except with respect to Advance Payments paid by Lessees;
(6) this Security Agreement constitutes the legal, valid, and binding
obligation of the Company enforceable against the Company and the
Collateral in accordance with its terms (subject to limitations as to
enforceability which might result from bankruptcy, reorganization,
arrangement, insolvency, or other similar laws affecting creditors' rights
generally);
(7) in making and closing each Lease, the Company has fully complied
with, and all Lease Documents delivered with respect to such Leases comply
with, all applicable federal, state, and local laws, regulations, and
rules, including, but not limited to, laws relating to disclosure of credit
terms, equality of credit opportunity, real estate settlement procedures,
and usury laws;
(8) immediately upon the execution and delivery of the Credit
Agreement, the Note, and other Loan Documents, and upon the assignment,
transfer, and delivery of the Collateral to the Bank as contemplated
herein, the Bank shall have valid first priority Security Interests in the
Collateral;
(9) this Security Agreement is made with full recourse to the Company
and pursuant to and upon all the warranties, representations, covenants and
agreements on the part of the Company contained herein, in the Credit
Agreement and otherwise in writing in connection herewith or therewith;
(10) the chief executive office of the Company is located at the
address set forth in the first paragraph of this Security Agreement. The
Company will not move such offices without giving the Bank thirty (30)
calendar days prior written notice. Other than as permitted by the Credit
Agreement, the Company shall not change its name, identity or corporate
structure so long as the Secured Obligations remain unpaid. The originals
of all documents evidencing the Collateral (except that which has been
delivered to the Bank) and the only original books of accounts and records
of the Company relating thereto are, and will continue to be, kept at such
chief executive office;
(11) the Company will not sell, assign, transfer, exchange, settle any
claim with respect to, or otherwise dispose of, or grant any option with
respect to, the Collateral, nor will it create, incur or permit to exist
any pledge, lien, mortgage, hypothecation, security interest, charge,
option or any other encumbrance with respect to any of the Collateral or
any interest therein, or any proceeds thereof, except for (i) the Security
Interest provided by this Security Agreement, and (ii) any sale or other
disposition provided for under the terms of this Security Agreement or the
Credit Agreement;
(12) The Lease Documents related to the Borrowing Base Leases are
genuine and not subject to any security interest, liens, offsets or
counterclaims, except: a) with respect to Advance Payments paid by Lessees;
and b) the Security Interest provided by this Security Agreement;
(13) The Lease Documents related to the Borrowing Base Leases, and
delivered to the Bank, are the only documents executed for the Leased
Equipment described therein;
(14) The terms of the Leases are in compliance with all applicable
laws and regulations;
(15) There is no deficiency with respect to the Leases, and the Leases
are not otherwise in default; and
(16) The Leased Equipment described in the Leases has been delivered
to and accepted by, and is in the possession of, the Lessees identified in
the Leases.
ARTICLE 9.
COLLECTIONS
1 COLLECTIONS ON LEASES. As provided in the Credit Agreement, all
Collections with respect to the Leases shall be paid directly to the Bank
and deposited in the Lockbox Account.
2 ACCOUNTING. Upon notice from the Bank to the Company, given
after the occurrence and during the continuation of an Event of Default,
the Company shall furnish to the Bank not later than the tenth (10th)
business day after the end of each month a report and accounting of all
collections received during the preceding month including: (a) the name of
the Lessee, (b) the Company's Lease number for the Lease, (c) current
principal balance of the Lease, (d) current number and amount of past due
payments on the Lease, and (e) the amount of the Collections received
during such months with respect to the Lease.
3 DEFAULTED LEASES; COLLECTION AND FORECLOSURE PROCEEDINGS. If the
Company wishes to institute collection or foreclosure proceedings with
respect to a Lease, it shall substitute other Collateral so that it is
entitled, pursuant to the terms of the Credit Agreement to a release of
such Lease. If the Company does not own sufficient other collateral to
obtain a release of such Lease, then, so long as an Event of Default has
not occurred and is continuing, the Bank may, upon written request of the
Company, deliver to an attorney, as the agent of the Bank, upon such terms
and conditions as the Bank in its sole discretion may establish, for the
purpose of enabling said attorney to institute in the name of the Company
or the Bank, or in their names or in the names of their nominees, as the
Bank may determine, collection, repossession, foreclosure and/or other
recovery proceedings on any Lease in default or with respect to any Leased
Equipment thereunder, such instruments and documents in the possession of
the Bank as may be required for the successful prosecution of collection or
recovery proceedings; provided, however, that all such Collateral and all
proceeds of any such collection, repossession, foreclosure and/or other
recovery efforts shall remain subject to this Security Agreement and to the
Security Interests granted herein and all such proceeds shall be delivered
to the Bank as and when and in the form received. The Company hereby
covenants and agrees that, without the prior written consent of the Bank,
which consent shall not be unreasonably withheld, it will not request or
accept, in lieu of recovery, any discount on, or any conveyance,
endorsement, transfer, or assignment of any right, title, or interest in
and to any of the real, personal, or mixed properties sold, mortgaged,
hypothecated, assigned, transferred, set over, or conveyed to the Company
as security for any of the Leases if, after giving effect to any such
proposed transaction, the Applicable Borrowing Base would be less than the
aggregate outstanding principal balance of the Secured Obligations.
ARTICLE 10.
DEFAULT
1 EVENTS OF DEFAULT. The occurrence of one or more of the
following events shall constitute an Event of Default:
(a) the occurrence of an Event of Default as described in Article 10
of the Credit Agreement;
(b) any default in or breach of any covenant, term, condition,
representation, or warranty contained herein by the Company; or
(c) the Collateral, or any portion thereof, should diminish in value
so that the aggregate outstanding principal balance of the Secured
Obligations exceeds the Applicable Borrowing Base, whether such diminution
is caused by the default of any Lessee, an uninsured loss to the Leased
Equipment underlying any Lease, resulting from defect of title to or
casualty to the Leased Equipment or otherwise, and such excess shall not
have been paid to the Bank immediately after demand.
2 REMEDIES IN EVENT OF DEFAULT. If one or more Events of Default
shall occur, then the Bank, at its option, in addition to any and all other
rights and remedies which it may then have under this Security Agreement,
under the Credit Agreement, under any other instrument, or at law or in
equity or otherwise, may:
(a) Declare the unpaid balance of the Secured Obligations, or of a
part thereof, to be immediately due and payable;
(b) Transfer the Collateral or any part thereof into the Bank's name,
or the name of its nominee;
(c) In the name of the Company, or otherwise, to demand, collect,
receive, and receipt for all sums or payments due to the Company from
Lessees, including Collections and proceeds of Collateral;
(d) In the name of the Company, or otherwise, compromise, settle and
give acquittance for, and prosecute and discontinue any suits or legal
proceedings with respect to any or all of the Collateral;
(e) Take any action which the Bank may reasonably deem necessary or
desirable in order to realize on the Collateral, including the power to
take possession all books and records relating to the Collateral, to
perform any contract, endorse in the name of the Company, without recourse
to the Bank, any checks, drafts, notes, or other instruments or documents
received in payment of or on account of the Collateral;
(f) Enter upon the premises where any of the Collateral, including,
without limitation, Leased Equipment, not in the possession of the Bank is
located and take possession thereof and remove the same, with or without
judicial process;
(g) Reduce its claim to judgment or foreclose or otherwise enforce
the Security Interests herein granted and assigned, in whole or in part, by
any available judicial procedure;
(h) After any required notice, sell, lease, or otherwise dispose of
all or any part of the Collateral, in its then condition or following any
commercially reasonable preparation or processing, and any such sale or
other disposition may be as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts (it being agreed that the
sale of any part of the Collateral shall not exhaust the Bank's power of
sale, but sales may be made from time to time, and at any time, until all
the Collateral has been sold or until all Secured Obligations have been
fully paid and performed), and at any such sale the Bank may participate as
a buyer and bid on and purchase any of the Collateral;
(i) In its discretion, retain the Collateral in full satisfaction of
the Secured Obligations; and
(j) Exercise any and all other rights, remedies, and privileges it
may have under the Uniform Commercial Code, this Security Agreement, or any
of the other Loan Documents.
3 BANK APPOINTED ATTORNEY-IN-FACT. Effective upon the occurrence
and continuation of an Event of Default, the Company hereby irrevocably
appoints and constitutes the Bank the Company's attorney-in-fact, with full
power of substitution, to: (a) transfer any Lease (other than a Trustee
Lease) and related Lease Documents to a purchaser, and (b) for the purpose
of carrying out the provisions of this Security Agreement, take any action
and execute and endorse in the name of the Company, without recourse to the
Bank, any instrument or document which the Bank may deem necessary or
advisable to accomplish the purpose hereof. This appointment is coupled
with an interest and, accordingly, is irrevocable. Without limiting the
generality of the foregoing, the Bank shall have the right and power to
receive, endorse, and collect checks and other orders for the payment of
money made payable to the Company representing any payment or reimbursement
made under, pursuant, or with respect to the Collateral or any part thereof
and to give full discharge for the same. The authority of the Bank to act
pursuant to the foregoing appointment shall lapse if, prior to acceleration
of the Secured Obligations, the Company shall have fully cured, to the
satisfaction of the Bank, the Event of Default. Whether or not an Event of
Default shall have occurred or be continuing, the Company hereby authorizes
the Bank in its discretion at any time and from time to time to complete
any assignment which heretofore was, or hereafter at any time may be,
executed and delivered in blank by the Company to the Bank; provided,
however, that if no Event of Default has occurred or is continuing, the
Bank may complete any such assignment only pursuant to the direction of the
Company.
4 COLLECTIONS ON COLLATERAL BY THE BANK. Upon the occurrence and
continuation of an Event of Default, the Bank shall be entitled, but not
obligated, at any time and from time to time, to notify and direct any or
all account debtors and/or Lessees with respect to any of the Collateral to
thereafter make all Rentals and other payments on such Collateral directly
to the Bank or such other person or entity designated by the Banks,
regardless of whether the Company was previously making Collections
thereon. The Bank shall account to the Company for all such payments
received. Each account debtor and/or Lessee making such Rentals or other
payments to the Bank or such other person or entity designated by the Bank
shall be fully protected in relying on the written statement of the Bank
that it then holds the Security Interests herein granted and assigned which
entitled it to receive such payment, and the receipt of the Bank or of such
other person or entity designated by the Bank for such payment shall be
full acquittance therefore to the account debtor and/or Lessee making such
payment.
5 APPLICATION OF PROCEEDS. Until all Secured Obligations have been
paid in full, any and all proceeds received by the Bank from any sale or
other remedy pursuant to this Article 10 shall be applied by the Bank as
follows:
First, to the payment of all costs and expenses incurred by the Bank
in connection with the administration and enforcement of this Security
Agreement, including the reasonable fees and the expenses of counsel and
accountants employed in connection therewith;
Second, to the payment of all other costs and expenses of sale or
other disposition of any of the Collateral, including the out-of-pocket
expenses of the Bank and the reasonable fees and out-of-pocket expenses of
counsel employed in connection therewith;
Third, to the payment in full of the Secured Obligations and all
interest and fees thereon, in such order as the Bank shall determine; and
Fourth, the balance (if any) of such proceeds shall be paid to the
Company, its successors or assigns, or as a court of competent jurisdiction
may direct.
In the event that such proceeds are not sufficient to satisfy the
Secured Obligations in full, the Company shall remain liable to the Bank
for any deficiency.
ARTICLE 11.
MISCELLANEOUS
1 FURTHER ASSURANCES. The Company will:
(a) upon the request of the Bank, promptly correct any defect, error,
or omission which may be discovered in the contents of this
Security Agreement or in the execution hereof, and will do such
further acts and things, and execute, acknowledge, endorse, and
deliver such further instruments, agreements, schedules, and
certificates, including, but not limited to, (a) notes,
assignments, chattel mortgages, security agreements, and
financing statements covering the title to any real, personal, or
mixed property now owned or hereafter acquired by the Company and
now or hereafter constituting Collateral, and (b) schedules and
certificates respecting all or any of the Collateral at the time
subject to the Security Interest granted hereunder, or the items
or amounts received by the Company in full or partial payment or
otherwise as proceeds of any of the Collateral, that the Bank may
at any time and from time to time reasonably request in
connection with the administration or enforcement of this
Security Agreement or related to the Collateral or any part
thereof. Any such instrument, agreement, schedule, or
certificate shall be executed by a duly authorized officer of the
Company and shall be in such form and detail as the Bank may
reasonably specify. Promptly upon the request of the Bank, the
Company will mark, or permit the Bank to mark in a reasonable
manner, the Company's books, records, and accounts showing or
dealing with the Collateral with a notation clearly setting forth
that a Security Interest in the Collateral has been granted to
the Bank, which notation shall be in form and substance
satisfactory to the Bank.
(b) do all acts and things, and will execute and file or record all
instruments (including mortgages, pledges, assignments, security
agreements, financing statements, amendments to financing
statements, continuation statements, etc.) required, or
reasonably requested, by the Bank, to establish, perfect,
maintain, and continue the perfection and priority of the
Security Interest of the Bank in the Collateral, and the Company
will pay the costs and expenses of: (i) all filings and
recordings, including taxes thereon (other than those imposed
with respect to the net income of Bank); (ii) all searches
reasonably deemed necessary by the Bank; (iii) the cost and
reasonable fees of Bank's counsel for advice and document review,
to establish and determine the validity and the priority of such
Security Interest of the Bank; and (iv) also to satisfy all other
liens which in the reasonable opinion of the Bank might
prejudice, imperil, or otherwise affect the Collateral or the
existence or priority of such Security Interest. The Company
hereby authorizes the Bank to execute and file on behalf, and in
the place and stead, of the Company any financing statement,
amendment to financing statement (including those listing
additional Collateral), continuation statements and copy and
information requests and to file such statements, amendments,
continuation and requests without the signature of the Company.
2 WAIVERS. The Company, for itself and all who may claim under the
Company, as far as the Company now or hereafter lawfully may, waives all
right to have all or any portion of the Collateral marshalled and the
Company agrees that any court having jurisdiction over this Security
Agreement may order the sale of all or any portion of the Collateral. Any
sale of, or the grant of options to purchase (for the option period thereof
or after exercise thereof), or any other realization upon, all or any
portion of the Collateral under Article 10 of this Security Agreement shall
operate to divest all right, title, and interest, either at law or in
equity, of the Company in and to the Collateral so sold, optioned, or
realized upon, and shall be a perpetual bar, both at law and in equity,
against the Company and against any and all persons claiming or attempting
to claim the Collateral so sold, optioned, or realized upon or any part
thereof, from, through, and under the Company. No delay on the part of the
Bank in exercising any of its rights hereunder, and no failure on the part
of the Bank to give any notice or make any demand which may be given to or
made upon the Company, shall constitute a waiver thereof, or impair the
right of the Bank to take any action or to exercise any power under this
Security Agreement or the Credit Agreement, or otherwise. Each and every
remedy given the Bank shall, to the extent permitted by law, be cumulative
and shall be in addition to any other remedy given hereunder or now or
hereafter existing at law or in equity or by statute. The exercise of any
one or more remedies with respect to some of the Collateral shall not
preclude the later exercise of such remedy with respect to any other
Collateral nor the exercise of any other remedy.
3 NOTICE. Reasonable notification of the time and place of any
public sale of any of the Collateral, or reasonable notification of the
time after which any private sale or other intended disposition of any of
the Collateral is to be made, shall be sent to the Company and to any other
person entitled by law to notice. It is agreed that notice of any
Collateral sale or other disposition given not less than ten (10) calendar
days prior to the taking of such action to which the notice relates is
reasonable notification, and that such notice is sufficient if it states
only the type and amount of the Collateral to be sold, together with the
time and place of sale. All notices required or permitted to be given
hereunder shall be given in writing and shall be personally delivered or
sent by telecopier (receipt confirmed), by express courier service, or by
registered or certified United States mail, return receipt requested,
postage prepaid, addressed as follows (or to such other address as to which
any party hereto shall have given the other written notice):
If to the Company:
MERIDIAN FINANCIAL CORPORATION
8250 Haverstick Road, Suite 110
Indianapolis, Indiana 46240
Attn:
If to the Bank:
Attn: Gary L. Jacobson, Senior Vice President
LaSALLE NATIONAL BANK
1600 One American Square
Indianapolis, Indiana 46204
All notices hereunder shall be deemed given upon the earliest of: (a)
actual delivery in person or by telecopier, (b) one (1) Business Day after
delivery to an express courier service, or (c) three (3) Business Days
after having been deposited in the United States mail, in accordance with
the foregoing.
4 COSTS AND EXPENSES. The Company shall pay: (a) all reasonable
out-of-pocket expenses including, without limitation, any recording or
filing fees, cost of insurance policies and endorsements thereof and all
taxes levied or assessed upon the Collateral (or any similar fees or
taxes), incurred by the Bank in connection with the enforcement and
administration of this Security Agreement and the Credit Agreement and the
rights of the Bank thereunder, including, without limitation, the fees and
disbursements of counsel for the Bank; and (b) any and all present and
future stamp and other similar taxes with respect to the enforcement and
administration of this Security Agreement and with respect to the
transactions contemplated herein and in the Credit Agreement (except those
taxes attributable to the net income of Bank).
5 INDEMNIFICATION. The Company shall indemnify and hold the Bank
harmless from and against any and all liabilities, obligations, losses,
damages, penalties, judgments, suits, costs, expenses, and disbursements of
any kind whatsoever, except for gross negligence or willful misconduct of
the Bank or its employees (the "INDEMNIFIED LIABILITIES"), which may be
imposed on, incurred by, or asserted against the Bank in any way relating
to or arising out of this Security Agreement or the Credit Agreement or any
of the transactions contemplated herein or therein, including any such
Indemnified Liabilities which may result (directly or indirectly) from any
claims made, or any actions, suits, or proceedings commenced or threatened,
whether in an original action or by counterclaim by or on behalf of any
creditor (excluding the Bank), security holder, shareholder, customer,
obliger, trustee, director, officer, employee, and/or agent of the Company
acting in such capacity, the Company, or any governmental regulatory body
or authority. The undertakings of the Company set forth in this Section
shall survive the payment in full of the Note and the termination of this
Security Agreement and the Credit Agreement.
6 TERMINATION. This Security Agreement shall terminate when all
the Secured Obligations have been fully paid and performed and Bank shall
have no further obligation to make any Advance under the Credit Agreement
or the Notes, at which time the Bank shall reassign and redeliver, without
recourse upon, or representation or warranty by, the Bank and at the
expense of the Company, to the Company, or to such other person or persons
as the Company shall designate, against receipt, such of the Collateral (if
any) as shall not have been sold or otherwise disposed of by the Bank
pursuant to the terms hereof or of the Credit Agreement, and shall still be
held by the Bank together with appropriate instruments of reassignment and
release.
7 NON-ASSUMPTION OF LIABILITY. Nothing herein contained shall
relieve the Company from performing any covenant, agreement, or obligation
on the part of the Company to be performed under or in respect to any of
the Collateral or from any liability to any party or parties having an
interest therein, nor shall anything herein be construed to impose any
liability on the Bank for the acts or omissions of the Company in
connection with any of the Collateral. The Bank shall not assume or become
liable for, nor shall it be deemed or construed to have assumed or become
liable for, any obligation of the Company with respect to any of the
Collateral, or otherwise, by reason of the grant to it of security
interests in the Collateral. The Bank shall use reasonable care in the
custody and preservation of such of the Collateral as comes into its
possession. No act or omission of the Bank's counsel in reviewing document
submissions prior to or following the execution of this Security Agreement
with respect to any of the Leases or any other Collateral shall, in any
way, be deemed to excuse, release or waive any errors, omissions or defects
in the procedures, documentation or other practices of the Company. It is
understood that the failure of any representation or warranty of the
Company with regard to the validity or enforceability of any of the Lease
Documents or other Collateral shall be solely dependent upon the Company to
assure, at all times, that such warranty or representation continues to be
true.
8 GOVERNING LAW. This Security Agreement shall be governed by and
construed in accordance with the internal laws of the State of Indiana,
giving effect to federal law applicable to national banking associations,
without giving effect to the conflict of law principles thereof.
9 COUNTERPARTS; EFFECTIVENESS. This Security Agreement and any
amendments, waivers, consents, or supplements thereto may be executed in
any number of counterparts, and by different parties hereto in separate
counterparts, but all such counterparts together shall constitute but one
and the same agreement. This Security Agreement shall become effective
when the Credit Agreement becomes effective.
10 SUCCESSORS AND ASSIGNS. This Security Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns; provided, however, that the Company may
not assign its interest in this Security Agreement, nor delegate its duties
thereunder, without the prior written consent of the Bank.
11 ACCEPTANCE WAIVED. Notice of acceptance of this Security
Agreement is waived.
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed as of the day and year first above written.
MERIDIAN FINANCIAL CORPORATION,
an Indiana corporation
By:
Printed Name and Title
LASALLE NATIONAL BANK
By:
Gary L. Jacobson, Senior Vice
President
<<Date>>/dll/lnb/security.agt
EXHIBIT "A"
IDENTIFICATION OF EXISTING LEASES
State and
County Where Principal
Lease Equipment Balance
NUMBER LESSEE CONCEPT IS LOCATED OF LEASE
9608002-001 Terry Fazoli's 132,550.23
Enterprises
9607001-001 Pizza OK Papa John's 49,833.07
9607001-002 Pizza OK Papa John's 80,556.93
9610001-001 Tina Leuta Great Steak 85,330.86
& Potato
9609001-001 Parish Pizza Papa John's 106,428.03
9609001-002 Parish Pizza Papa John's 29,354.07
9609001-003 Parish Pizza Papa John's 38,928.52
9611001-001 Shteiwi-Faraj Great Steak 116,524.16
& Potato
9611001-002 Shteiwi-Faraj Great Steak 25,246.90
& Potato
9611001-003 Shteiwi-Faraj Great Steak 122,603.62
& Potato
9605001-001 F&L Krystal's 106,594.47
Enterprises
9605001-002 F&L Krystal's 124,182.37
Enterprises
9611002-001 D. Pizza Papa John's 93,527.38
Company
9603003-003 Waverly Italian Oven 47,064.80
Village Ovens
9411003-002 Lake Worth Delancey 6,702.29
Deli, LLC Street Deli
9411003-003 Lake Worth Delancey 3,328.89
Deli, LLC Street Deli
9411003-005 Lake Worth Delancey 52,158.63
Deli, LLC Street Deli