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Exhibit
10.6
COMMERCIAL SECURITY AGREEMENT
THIS COMMERCIAL SECURITY AGREEMENT dated November 30,
2007, is made and executed between 3-D SERVICE,
LTD., an Ohio limited liability company with its principal
place of business at 800 Nave Road, S.E., Massillon, Ohio 44646
(“Grantor”) and
BDEWEES, INC., an Ohio corporation with its
principal place of business at 5316 Hawick Street, N.W., Canton,
Ohio 44708 (“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.
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:
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.
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.
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
3-D Service, Ltd.
Indebtedness . The word "Indebtedness" means
the indebtedness evidenced by the promissory note of Grantor to
Lender dated on or about November 30, 2007 (“Note”),
including all principal and interest thereon together with all
other indebtedness and costs and expenses for which Grantor is
responsible under this Agreement.
Lender . The word “Lender” means
BDEWEES, INC., its successors and assigns.
Property . The word “Property”
means all of Grantor’s right, title and interest in and to
all the Property as described in the “Collateral
Description” section of this Agreement.
Related Documents. The words
“Related Documents” mean that certain lease between
3D3E, Ltd., an Ohio limited liability company, landlord, and
Magnetech Industrial Services, Inc., an Indiana corporation,
tenant, entered into on or about the 30 th day of
November 2007 and the Commercial Security Agreement entered into
between Grantor and X GEN III, Ltd., an Ohio limited liability
company, on or about November 30, 2007.
COLLATERAL DESCRIPTION . The word
‘Collateral” as used in this Agreement means the
following described property, whether now 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 of the Indebtedness and performance of all other
obligations under this Agreement:
All
of 3-D Service, Ltd.’s machinery, equipment, tools and
dies, hand tools, motor vehicles, rolling stock, leasehold
improvements, furniture, supplies, office equipment, computers
and other data processing hardware, improvements, parts and
other tangible personal property used or held for use in the
operation of 3-D Service, Ltd., whether now existing or
hereafter arising, whether now owned or hereafter acquired or
whether now or hereafter subject to any rights in the
foregoing property; along with:
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(A)
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All
accessions, attachments, accessories, tools, parts, replacements of
and additions to any of the Collateral described herein, whether
added new or later.
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(B)
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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.
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(C)
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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.
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GRANTOR’S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE
COLLATERAL . With respect to the Collateral,
Grantor represents and promises to Lender that:
Perfection of Security Interest . Grantor
agrees to take whatever actions are requested by Lender to perfect
and continue Lender’s interest in the
Collateral. Upon request of Lender, Grantor will deliver
to Lender any and all of the documents evidencing or constituting
Collateral, and Grantor will note Lender’s interest upon any
and all chattel paper and instruments if not delivered to
possession by Lender.
Notices to Lender . Grantor will promptly
notify Lender in writing at Lender’s address shown above (or
such other address 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; (3) change in the authorized
signer(s); (4) change in Grantor’s principal office address;
(5) change in Grantor’s principal residence; (6) conversion
of Grantor to a new or different type of business 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 or principal residence will take
effect until after Lender has received notice.
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.
Location of the Collateral . Except in the
ordinary course of Grantor’s business, Grantor agrees to keep
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, 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 the
State of Ohio other than in the ordinary course of business,
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, or otherwise transfer or dispose
of the Collateral. 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, the security
interest in favor of X GEN III, Ltd., and any lien, security
interest, encumbrance or charge in favor of Wells Fargo Bank
National Association, without the prior written consent of
Lender. Lender shall sign and deliver a form of
Subordination Agreement substantially similar to the form of
Subordination Agreement attached hereto as Exhibit A unless such
form of Subordination Agreement does not permit scheduled and final
payments of interest and principal under the Note and does not
permit Grantor to exercise any right of set off against the
Note. 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
fund; 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. Except for financing
statements in favor of Grantor’s commercial lenders, 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 that
portion of the Collateral necessary to the proper operation of
Grantor’s business 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 either 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 operations, upon this Agreement, or upon any promissory note
or notes evidencing the Indebtedness. 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 opinion. If the Collateral
is subjected 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 provide for
the discharge of the lien plus any interest, costs,
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 security 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 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.
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.
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 dimini
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