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AMENDED AND RESTATED SECURITY AGREEMENT

Security Agreement

AMENDED AND RESTATED SECURITY AGREEMENT | Document Parties: GROW BIZ GAMES, INC | LASALLE BANK NATIONAL ASSOCIATION | WINMARK CAPITAL CORPORATION | WINMARK CORPORATION | WIRTH BUSINESS CREDIT, INC You are currently viewing:
This Security Agreement involves

GROW BIZ GAMES, INC | LASALLE BANK NATIONAL ASSOCIATION | WINMARK CAPITAL CORPORATION | WINMARK CORPORATION | WIRTH BUSINESS CREDIT, INC

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Title: AMENDED AND RESTATED SECURITY AGREEMENT
Governing Law: Minnesota     Date: 8/1/2008
Industry: Misc. Financial Services     Sector: Financial

AMENDED AND RESTATED SECURITY AGREEMENT, Parties: grow biz games  inc , lasalle bank national association , winmark capital corporation , winmark corporation , wirth business credit  inc
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EXHIBIT 10.2

 

AMENDED AND RESTATED SECURITY AGREEMENT

 

THIS AMENDED AND RESTATED SECURITY AGREEMENT, dated as of June 10, 2008 (the “ Agreement ”), is made and given by WINMARK CORPORATION, a Minnesota corporation (“ Winmark ”), WIRTH BUSINESS CREDIT, INC., a Minnesota corporation (“ WBC ”), WINMARK CAPITAL CORPORATION, a Minnesota corporation (“ WCC ”), and GROW BIZ GAMES, INC., a Minnesota corporation (“ Grow Biz ”, and together with Winmark, WBC and WCC, the “ Grantors ” or individually, a “ Grantor ”),to LASALLE BANK NATIONAL ASSOCIATION (the “ Secured Party ”), for the ratable benefit of the Secured Party and the Lenders (as defined below).

 

RECITALS

 

A.            The Grantors and the Secured Party have entered into a Credit Agreement dated as of September 30, 2004 (as amended, the “ Existing Credit Agreement ”) pursuant to which the Secured Party agreed to extend to the Grantors certain credit accommodations.

 

B.            As a condition precedent to the obligation of the Secured Party to extend credit accommodations pursuant to the terms of the Existing Credit Agreement, the Grantors executed and delivered to the Secured Party a Security Agreement dated as of September 30, 2004 (as amended, the “ Existing Security Agreement ”).

 

C.            The Grantors and the Secured Party have agreed to amend and restate the Existing Credit Agreement pursuant to the terms and conditions set forth in that certain Amended and Restated Revolving Credit Agreement of even date herewith (the “ Amended and Restated Credit Agreement ”) by and among the Grantors, each lender from time to time party thereto (each a “ Lender ” and collectively, the “ Lenders ”), and the Secured Party, as a Lender and as agent for the Lenders.

 

D.            It is a condition precedent to the obligations of the Secured Party and the Lenders to extend credit and certain other accommodations pursuant to the terms of the Amended and Restated Credit Agreement that this Agreement be executed and delivered by the Grantors.

 

E.             Each Grantor finds it advantageous, desirable and in its best interests to comply with the requirement that it execute and deliver this Agreement to the Secured Party.

 

NOW, THEREFORE, in consideration of the premises and in order to induce the Lenders and the Secured Party to enter into the Amended and Restated Credit Agreement and to extend credit and certain other accommodations to the Grantors thereunder, the Grantors hereby agree with the Secured Party, for the ratable benefit of the Secured Party and the Lenders, as follows:

 

Section 1.               Defined Terms.

 

1(a)         As used in this Agreement, the following terms shall have the meanings indicated:

 

Account ”:  A right to payment of a monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased (excluding non-recourse

 



 

discounted leases), licensed, assigned, or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated, sponsored, licensed or authorized by a State or governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State.  The term includes health-care insurance receivables.

 

Account Debtor ”:  A Person who is obligated on or under any Account, Chattel Paper, Instrument or General Intangible.

 

Chattel Paper ”:  A record or records that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods, or a lease of specific goods and license of software used in the goods.

 

Collatera l”:  All property and rights in property now owned or hereafter at any time acquired by the Grantors in or upon which a Security Interest is granted to the Secured Party, for the ratable benefit of the Secured Party and the Lenders, by the Grantors under this Agreement.

 

Deposit Account ”:  Any demand, time, savings, passbook or similar account maintained with a bank.

 

Document ”:  A document of title or a warehouse receipt.

 

Equipment ”:  All machinery, equipment, motor vehicles, furniture, furnishings and fixtures, including all accessions, accessories and attachments thereto, and any guaranties, warranties, indemnities and other agreements of manufacturers, vendors and others with respect to such Equipment.

 

Event of Defaul t”:  As defined in Section 18.

 

Financing Statement ”:  As defined in Section 4.

 

Fixtures ”:  Goods that have become so related to particular real property that an interest in them arises under real property law.

 

General Intangibles ”:  Any personal property (other than goods, Accounts, Chattel Paper, Deposit Accounts, Documents, Instruments, Investment Property, Letter of Credit Rights and money) including things in action, contract rights, payment intangibles, software, corporate and other business records, inventions, designs, patents, patent applications, service marks, trademarks, trade names, trade secrets, internet domain names, engineering drawings, good will, registrations, copyrights, licenses, franchises, customer lists, tax refund claims, royalties, licensing and product rights, rights to the retrieval from third parties of electronically processed and recorded data and all rights to payment resulting from an order of any court.

 

Instrument ”:  A negotiable instrument or any other writing which evidences a right to the payment of a monetary obligation and is not itself a security agreement or lease and is of a type which is transferred in the ordinary course of business by delivery with any necessary endorsement or assignment.

 

Inventory ”:  Goods, other than farm products, which are leased by a person as lessor, are held by a person for sale or lease or to be furnished under a contract of service, are furnished by a person under a contract of service, or consist of raw materials, work in process, or materials used or consumed in a business or incorporated or consumed in the production of any of the foregoing

 

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and supplies, in each case wherever the same shall be located, whether in transit, on consignment, in retail outlets, warehouses, terminals or otherwise, and all property the sale, lease or other disposition of which has given rise to an Account and which has been returned to the Grantors or repossessed by the Grantors or stopped in transit.

 

Investment Property ”:  A security, whether certificated or uncertificated, a security entitlement, a securities account and all financial assets therein, a commodity contract or a commodity account.

 

Letter of Credit Right ”:  A right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance.

 

Lien ”:  Any security interest, mortgage, pledge, lien, charge, encumbrance, title retention agreement or analogous instrument or device (including the interest of the lessors under capitalized leases), in, of or on any assets or properties of the Person referred to.

 

Obligations ”:  (a) All indebtedness, liabilities and obligations of the Grantors to the Secured Party and the Lenders of every kind, nature or description under the Amended and Restated Credit Agreement, including the Grantors’ obligation on any promissory note or notes under the Amended and Restated Credit Agreement, and any note or notes hereafter issued in substitution or replacement thereof, (b) all liabilities of the Grantors under this Agreement, and (c) in all of the foregoing cases whether due or to become due, and whether now existing or hereafter arising or incurred.

 

Person ”:  Any individual, corporation, partnership, limited partnership, limited liability company, joint venture, firm, association, trust, unincorporated organization, government or governmental agency or political subdivision or any other entity, whether acting in an individual, fiduciary or other capacity.

 

Security Interest ”:  As defined in Section 2.

 

1(b)         All other terms used in this Agreement which are not specifically defined herein shall have the meaning assigned to such terms in Article 9 of the Uniform Commercial Code as in effect in the State of Minnesota.

 

1(c)         Unless the context of this Agreement otherwise clearly requires, references to the plural include the singular, the singular, the plural and “or” has the inclusive meaning represented by the phrase “and/or.”  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The words “hereof,” “herein,” “hereunder” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement.  References to Sections are references to Sections in this Amended and Restated Security Agreement unless otherwise provided.

 

Section 2.               Grant of Security Interes t.  As security for the payment and performance of all of the Obligations, each Grantor hereby grants to the Secured Party, for the ratable benefit of the Secured Party and the Lenders, a security interest (the “ Security Interest ”) in all of such Grantor’s rights, titles, and interests in and to the following, whether now or hereafter owned, existing, arising or acquired and wherever located:

 

2(a)         All Accounts.

 

2(b)         All Chattel Paper.

 

2(c)         All Deposit Accounts.

 

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2(d)         All Documents.

 

2(e)         All Equipment.

 

2(f)          All Fixtures.

 

2(g)         All General Intangibles.

 

2(h)         All Instruments.

 

2(i)          All Inventory.

 

2(j)          All Investment Property.

 

2(k)         All Letter of Credit Rights.

 

2(l)          To the extent not otherwise included in the foregoing, all other rights to the payment of money, including rents and other sums payable to any Grantor under lease, rental agreements and other Chattel Paper; all books, correspondence, credit files, records, invoices, bills of lading, and other documents relating to any of the foregoing, including, without limitation, all tapes, cards, disks, computer software, computer runs, and other papers and documents in the possession or control of any Grantor or any computer bureau from time to time acting for any Grantor; all rights in, to and under all policies insuring the life of any officer, director, stockholder or employee of any Grantor, the proceeds of which are payable to any Grantor; all accessions and additions to, parts and appurtenances of, substitutions for and replacements of any of the foregoing; and all proceeds (including insurance proceeds) and products thereof.

 

Section 3.               Grantors Remain Liable .  Anything herein to the contrary notwithstanding, (a) the Grantors shall remain liable under the Accounts, Chattel Paper, General Intangibles and other items included in the Collateral to the extent set forth therein to perform all of their duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Secured Party of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under the Accounts or any other items included in the Collateral, and (c) the Secured Party shall have no obligation or liability under Accounts, Chattel Paper, General Intangibles and other items included in the Collateral by reason of this Agreement, nor shall the Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

 

Section 4.               Title to Collateral .  Each Grantor has (or will have at the time it acquires rights in Collateral hereafter acquired or arising) and will maintain so long as the Security Interest may remain outstanding, title to each item of Collateral (including the proceeds and products thereof), free and clear of all Liens except the Security Interest and except Liens permitted by the Amended and Restated Credit Agreement.  No Grantor will license any Collateral.  The Grantors will defend the Collateral against all claims or demands of all Persons (other than the Secured Party) claiming the Collateral or any interest therein.  As of the date of execution of this Amended and Restated Security Agreement, no effective financing statement or other similar document used to perfect and preserve a security interest under the laws of any jurisdiction (a “ Financing Statement ”) covering all or any part of the Collateral is on file in any recording office, except such as may have

 

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been filed (a) in favor of the Secured Party, relating to this Agreement or the Existing Security Agreement, or (b) to perfect Liens permitted by the Amended and Restated Credit Agreement.

 

Section 5.               Disposition of Collateral .  No Grantors will sell, lease or otherwise dispose of, or discount or factor with or without recourse, any Collateral, except for sales of items of Inventory in the ordinary course of business and dispositions of Equipment which are immediately replaced with comparable replacement equipment.

 

Section 6.               Names, Offices, Locations, Jurisdiction of Organization .  The Grantors’ legal names (as set forth in their constituent documents filed with the appropriate governmental official or agency) are as set forth in the opening paragraph hereof.  The jurisdiction of organization of the Grantors is the state of Minnesota, and the organizational numbers of the Grantors are set forth on the signature page of this Agreement.  The Grantors will from time to time at the request of the Secured Party provide the Secured Party with current good standing certificates and/or state-certified constituent documents from the appropriate governmental officials.  The chief places of business and chief executive offices of the Grantors are located at the addresses set forth on the signature page hereof.  The Grantors will not locate or relocate any item of Collateral into any jurisdiction in which an additional Financing Statement would be required to be filed to maintain the Secured Party’s perfected security interest in such Collateral.  The Grantors will not change their name, the location of their chief place of business or chief executive offices or their corporate structure (including without limitation, their jurisdiction of organization) unless the Secured Party has been given at least 30 days prior written notice thereof and the Grantors have executed and delivered to the Secured Party such Financing Statements and other instruments required or appropriate to continue the perfection of the Security Interest.

 

Section 7.               Rights to Payment .  Except as the Grantors may otherwise advise the Secured Party in writing, each Account, Chattel Paper, Document, General Intangible and Instrument constituting or evidencing Collateral is (or, in the case of all future Collateral, will be when arising or issued) the valid, genuine and legally enforceable obligation of the Account Debtor or other obligor named therein or in the Grantors’ records pertaining thereto as being obligated to pay or perform such obligation.  Without the Secured Party’s prior written consent, no Grantor will agree to any modifications, amendments, subordinations, cancellations or terminations of the obligations of any such Account Debtors or other obligors except in the ordinary course of business.  Each Grantor will perform and comply in all material respects with all their obligations under any items included in the Collateral and exercise promptly and diligently their rights thereunder.

 

Section 8.               Further Assurances; Attorney-in-Fact .

 

8(a)         The Grantors agree that from time to time, at their expense, they will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that the Secured Party may reasonably request, in order to perfect and protect the Security Interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies hereunder with respect to any Collateral (but any failure to request or assure that the Grantors execute and deliver such instrument or documents or to take such action shall not affect or impair the validity, sufficiency or enforceability of this Agreement and the Security Interest, regardless of whether any such item was or was not executed and delivered or action taken in a similar context or on a prior occasion).  Without limiting the generality of the foregoing, the Grantors will, promptly and from time to time at the request of the Secured Party: (i) execute and file such Financing Statements or continuation statements in respect thereof, or

 

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amendments thereto, and such other instruments or notices (including fixture filings with any necessary legal descriptions as to any goods included in the Collateral which the Secured Party determines might be deemed to be fixtures, and instruments and notices with respect to vehicle titles), as may be necessary or desirable, or as the Secured Party may request, in order to perfect, preserve, and enhance the Security Interest granted or purported to be granted hereby; (ii) obtain from any bailee holding any item of Collateral an acknowledgement, in form satisfactory to the Secured Party that such bailee holds such collateral for the benefit of the Secured Party; (iii) obtain from any securities intermediary, or other party holding any item of Collateral, control agreements in form satisfactory to the Secured Party (iv) and deliver and pledge to the Secured Party, for the ratable benefit of the Secured Party and the Le


 
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