Exhibit
10(xiii)
[FIRST NIAGARA LETTERHEAD]
GENERAL SECURITY AGREEMENT
1. SECURITY
INTEREST .
TAYLOR DEVICES,
INC., a corporation organized under the law of the State of New
York and having its chief executive office at, 90 Taylor Drive,
North Tonawanda, New York 14120-6832, (the "Debtor"), hereby grants
to FIRST NIAGARA BANK, a federally chartered financial institution
with its chief executive office at 6950 South Transit Road, P.O.
Box 514, Lockport, New York 14095-0514, (the "Secured Party") a
continuing security interest ("Security Interest") in all property
of Debtor described in Schedule A annexed hereto and made part
hereof and on any separate schedule(s) at any time or from time to
time furnished by Debtor to Secured Party, (all of which are hereby
deemed part of this Agreement) whether or not affixed to realty, in
all Proceeds and Products thereof in any form, in all parts,
accessories, attachments, special tools, additions, replacements,
substitutions and accessions thereto or therefor, in all supporting
obligations thereof and in all increases or profits received
therefrom (the "Collateral").
2.
INDEBTEDNESS SECURED .
The Security
Interest granted by Debtor secures the payment, performance and
observance of all loans, advances, debts, liabilities, obligations,
covenants and duties owing by Debtor to Secured Party or any
affiliate of Secured Party of any kind or nature, present or
future, however evidenced, whether arising under this Agreement or
any other loan, note, letter of credit, collateral or other
agreement or by operation of law, and whether direct or indirect,
absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired, including, without
limitation, all interest, charges, expenses, commitment or facility
fees, collateral management or other fees, including reasonable
attorneys' fees and expenses, and any other amounts payable by
Debtor under this Agreement or any other agreements between Debtor
and Secured Party whether executed in connection herewith or
otherwise (collectively, the "Indebtedness").
3.
REPRESENTATIONS AND WARRANTIES OF DEBTOR
. Debtor represents
and warrants, and so long as any Indebtedness remains unpaid shall
be deemed continuously to represent and warrant, that:
(a)
Debtor is the owner of the Collateral free and clear of all
security interests, liens or other encumbrances, except the
Security Interest and except as set forth on Schedule B annexed
hereto ("Permitted Liens").
(b) Debtor has the
power and authority to own the Collateral, to grant the Security
Interest and to enter into and perform this Agreement and any other
document or instrument delivered in connection herewith;
4. COVENANTS OF DEBTOR .
(a) Debtor will
defend the Collateral against the claims and demands of all other
parties including, without limitation, defenses, setoffs, claims
and counterclaims asserted by any obligor against Debtor and/or
Secured Party, will keep the Collateral free from all security
interests, liens or other encumbrances, except for Permitted Liens,
and will not sell, transfer, lease, assign, deliver or otherwise
dispose of any Collateral or any interest therein without the prior
written consent of Secured Party except for sales of Inventory and
payment of expenses in the ordinary course of Debtor's
business;
(b) Debtor will
keep, in accordance with generally accepted accounting principles
consistently applied, accurate and complete records concerning the
Collateral, and at Secured Party's request, Debtor will mark any
and all such records to indicate the Security Interest and will
permit Secured Party or its agents to inspect the Collateral and to
audit and make extracts from such records or any of Debtor's books,
ledgers, financial reports, correspondence or other
records;
(c) Except in
connection with Permitted Liens , Debtor will
deliver to Secured Party, upon demand, any instruments, documents
and chattel paper constituting, representing or relating to the
Collateral or any part thereof and any schedules, invoices,
shipping documents, delivery receipts, purchase orders, contracts
or other documents representing or relating to the Collateral or
any part thereof;
(d) Without thirty
(30) days prior written notice to Secured Party, Debtor will not
change its business addresses or chief executive office, will not
change the address at which all records concerning the Collateral
are kept or will not make any change in Debtor's name, identity or
organizational status;
(e) Debtor will
keep the Collateral in good condition, working order and repair and
will not use the Collateral in violation of any provisions of this
Agreement, any applicable law or governmental regulation or of any
policy insuring the Collateral, unless the failure to so keep the
Collateral will not have a material adverse effect on Debtor or the
business, operation, assets or affairs of Debtor;
(f) Debtor will pay
all taxes, assessments and other charges of every nature which may
be levied or assessed against the Collateral other than taxes,
assessments, fees and charges being contested in good faith by
appropriate proceedings being diligently pursued and will at all
times keep the Collateral insured against loss, damage, theft and
other risks, in such amounts, with such insurance carriers and
under such form of policies as shall be reasonably acceptable to
Secured Party, and which policies of insurance shall provide that
all losses thereunder shall be payable to Secured Party, as its
interest may appear, and Secured Party may apply any proceeds of
such insurance received by it toward payment of any of the
Indebtedness, whether or not due, in such order of application as
Secured Party may determine, and the original or duplicates of such
policies of insurance or certificates thereof shall be delivered to
Secured Party, upon its request;
(g) Debtor will not
permit any part of the Collateral to be or become an accession to
other goods not covered by this Agreement; and
(h) Debtor will
execute and deliver to Secured Party such certificates of title,
financing statements, assignments and other documents and will take
such other actions relating to the Security Interest and the
perfection thereof as Secured Party may reasonably request and will
pay all costs of title searches and filing financing statements,
certificates of title, assignments and other documents in all
public offices requested by Secured Party.
5. VERIFICATION OF COLLATERAL
. Secured Party
shall have the right to verify all or any Collateral in any manner
and through any medium Secured Party may consider appropriate, and
Debtor agrees to furnish all assistance and information and perform
any acts which Secured Party may reasonably require in connection
therewith.
6. NOTIFICATION AND PAYMENTS
. Secured Party may
notify Debtor in writing, at any time after the occurrence of an
Event of Default, and without waiving in any manner the Security
Interest, that any payments on account of and from the Collateral
received by Debtor (a) shall be held by Debtor in trust for Secured
Party in the same medium in which received, (b) shall not be
commingled with any assets of Debtor and (c) shall be turned over
to Secured Party not later than the next business day following the
day of their receipt.
7. EVENTS OF DEFAULT .
(a) Any of the
following events or conditions shall constitute an Event of
Default: (i) nonpayment when due, of any part of the
Indebtedness or any sum payable according to the terms of this
Agreement; (ii) the filing by or against Debtor of a request
or petition for liquidation, reorganization, arrangement,
adjustment of debts, adjudication as a bankrupt, relief as a debtor
or other relief under the bankruptcy, insolvency or similar laws of
the United States or any state or territory thereof or any foreign
jurisdiction, now or hereafter in effect; the making of any general
assignment by Debtor for the benefit of creditors; the appointment
of a receiver or trustee for Debtor, or for any assets of Debtor,
if any, including, without limitation, the appointment of or taking
possession by a "custodian", as defined in the Federal Bankruptcy
Code; the institution by or against Debtor of any other type of
insolvency proceeding (under the Federal Bankruptcy Code or
otherwise), or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or
winding up of affairs of Debtor or Borrower; (iii) the sale,
assignment, transfer or delivery of all or substantially all of the
assets of any obligor of the Indebtedness; the cessation by any
obligor of the Indebtedness as a going business concern; the entry
of judgment against any obligor of the Indebtedness other than a
judgment for which such obligor is fully insured, if ten (10) days
thereafter such judgment is not satisfied, vacated, bonded or
stayed pending appeal; if any obligor of the Indebtedness is
generally not paying its debts as such debts become due;
(iv) default by Debtor in the performance of any covenant,
obligation, term or condition of this Agreement or any instrument
or agreement which evidences the Indebtedness or pursuant to which
the Indebtedness is incurred; or (v) if any certificate,
statement, representation, warranty or audit heretofore or
hereafter furnished by or on behalf of Debtor, or any other obligor
of the Indebtedness, pursuant to or in connection with this
Agreement
