EXHIBIT 10.3.1
SECURITY AGREEMENT (ALL ASSETS)
BY AMERIGON INCORPORATED
IN FAVOR OF COMERICA BANK DATED
AS OF MAY 20, 2005
Security Agreement
(“Agreement”)
(All Assets)
As of May 20, 2005, for value received, the
undersigned, Amerigon Incorporated, a Michigan corporation,
successor by reason of merger with Amerigon Incorporated, a
California corporation (“Debtor or “Borrower”),
grants to Comerica Bank, a Michigan banking corporation
(“Bank”), whose address is 39200 Six Mile Road,
Livonia, Michigan 48152, Attention: Commercial Loan Documentation,
Mail Code 7578, a continuing security interest and lien (any
pledge, assignment, security interest or other lien arising
hereunder is sometimes referred to herein as a ‘security
interest”) in the Borrower Collateral (as defined below) to
secure payment when due, whether by stated maturity, demand,
acceleration or otherwise, of all existing and future indebtedness
(“Indebtedness”) to the Bank of Borrower. Indebtedness
includes without limit any and all obligations or liabilities of
the Borrower to the Bank, whether absolute or contingent, direct or
indirect, voluntary or involuntary, liquidated or unliquidated,
joint or several, known or unknown; any and all obligations or
liabilities for which the Borrower would otherwise be liable to the
Bank were it not for the invalidity or unenforceability of them by
reason of any bankruptcy, insolvency or other law, or for any other
reason to the extent permitted by applicable law; any and all
amendments, modifications, renewals and/or extensions of any of the
above; all costs incurred by Bank in establishing, determining,
continuing, or defending the validity or priority of its security
interest, or in pursuing its rights and remedies under this
Agreement or under any other agreement between Bank and Borrower or
in connection with any proceeding involving Bank as a result of any
financial accommodation to Borrower, and all other costs of
collecting Indebtedness, including without limit attorney fees.
Debtor agrees to pay Bank all such costs incurred by the Bank,
immediately upon demand, and until paid all costs shall bear
interest at the highest per annum rate applicable O any of the
Indebtedness, but not in excess of the maximum rate permitted by
law. Any reference in this Agreement to attorney fees shall be
deemed a reference to reasonable fees, costs, and expenses of both
in-house and outside counsel and paralegals, whether or not a suit
or action is instituted, and to court costs if a suit or action is
instituted, and whether attorney fees or court costs are incurred
at the trial court level, on appeal, in a bankruptcy,
administrative or probate proceeding or otherwise. References
herein to the Credit Agreement are to the Credit Agreement dated as
of ‘November 14, 2002 between Debtor (as successor to
Amerigon Incorporated, a California corporation) and Bank, as
amended, modified or supplemented from time to time. Debtor further
covenants, agrees and represents as follows:
|
1.
|
Borrower
Collateral shall mean all of the following property Debtor now or
later owns or has an interest in, wherever located:
|
|
|
(a)
|
all Accounts
Receivable (for purposes of this Agreement, “Accounts
Receivable’ consists of all accounts; general intangibles;
chattel paper (including without limit electronic chattel paper and
tangible chattel paper); contract rights; deposit accounts;
documents; instruments; rights to payment evidenced by chattel
paper, documents or instruments; health care insurance receivables;
commercial tort claims; letters of credit; letter of credit rights;
supporting obligations; and rights to payment for money or funds
advanced or sold),
|
|
|
(c)
|
all Equipment
and Fixtures,
|
|
|
(d)
|
all Software (for purposes of
this Agreement, “Software” consists of all
(i) computer programs and supporting information provided in
connection with a transaction relating to the program, and
(ii) computer programs embedded in goods and any supporting
information provided in connection with a transaction relating to
the program whether or not the program is associated
|
|
|
with the goods in such a manner
that it customarily is considered part of the goods, and whether or
not, by becoming the owner of the goods, a person acquires a right
to use the program in connection with the goods, and whether or not
the program is embedded in goods that consist solely of the medium
in which the program is embedded),
|
|
|
(e)
|
specific items
listed below and/or on attached Schedule A, if any, is/are , also
included in Borrower Collateral:
|
|
|
(f)
|
all goods,
instruments, documents, policies and certificates of insurance,
deposits, money, investment property or other property (except real
property which is not a fixture) which are now or later in
possession or control of Bank, or as to which Bank now or later
controls possession by documents or otherwise, and
|
|
|
(g)
|
all additions,
attachments, accessions, parts, replacements, substitutions,
renewals, interest, dividends, distributions, rights of any kind
(including but not limited to stock splits, stock rights, voting
and preferential rights), products, and proceeds of or pertaining
to the above including, without limit, cash or other property which
were proceeds and are recovered by a bankruptcy trustee or
otherwise as a preferential transfer by Debtor.
|
|
|
(h)
|
the Borrower
Patent and Trademark Collateral (as defined in the Patent and
Trademark Security Agreement, dated as of May 20, 2005,
between Debtor and Bank).
|
In the definition of Borrower
Collateral, a reference to a type of collateral shall not be
limited by a separate reference to a more specific or narrower type
of that collateral.
Notwithstanding anything herein to
the contrary, “Borrower Collateral” shall not include
any general intangible that is the subject of a written agreement
which specifically prohibits assignment thereof or grant of a
security interest therein but only to the extent of such
prohibition, and only to the extent that the terms and provisions
of such written agreement, document or instrument creating or
evidencing such property or’ any rights relating thereto
expressly prohibit the granting of a security interest therein or
condition the granting of a security interest therein on the
consent of a third party whose consent has not been obtained or
would cause, or allow a third party to cause, forfeiture of such
property upon the granting of a security interest therein or a
breach under any written agreement relating thereto; provided,
however, that immediately upon the ineffectiveness, lapse or
termination of such provision, the Borrower Collateral shall
include, and Debtor shall be deemed to have granted a security
interest in, all such general intangibles as if such term had never
been In effect.
|
2.
|
Warranties,
Covenants and Agreements. Debtor warrants, covenants and agrees as
follows:
|
|
|
2.1
|
Debtor shall
furnish to Bank, in form and at intervals as Bank may request, any
information Bank may reasonably request and allow Bank to examine,
inspect, and copy any of Debtor’s books and records. Debtor
shall, at the request of Bank, mark its records and the Borrower
Collateral to dearly indicate the security interest of Bank under
this Agreement.
|
|
|
2.2
|
At the time any Borrower
Collateral becomes, or is represented to be, subject to a security
interest in favor of Bank, Debtor shall be deemed to have warranted
that, except as expressly provided in the Credit Agreement
(a) Debtor is the lawful owner of the Borrower Collateral and
has the right and authority to subject it to a security interest
granted to Bank; (b) none of the Borrower Collateral is
subject to any security interest other than that in
|
2
|
|
favor of Bank and Permitted Liens
(as defined in the Credit Agreement); (c) there are no
financing statements on file, other than in favor of Bank and
Permitted Liens; (d) no person, other than Bank, has
possession or control (as defined in the Uniform Commercial Code)
of any Borrower Collateral of such nature that perfection of a
security interest may be accomplished by control; and
(e) Debtor acquired its rights in the Borrower Collateral in
the ordinary course of its business.
|
|
|
2.3
|
Debtor will
keep the Borrower Collateral free at all times from all claims,
liens, security interests and encumbrances other than those in
favor of Bank and Permitted Liens. Debtor will not, without the
prior written consent of Bank, sell, transfer or lease, or permit
to be sold, transferred or leased, any or all of the Borrower
Collateral, except for Inventory in the ordinary course of its
business or as otherwise expressly permitted by the Credit
Agreement. Bank or its representatives may at all reasonable times
inspect the Borrower Collateral and may enter upon all premises
where the Borrower Collateral is kept or might be
located.
|
|
|
2.4
|
Debtor will do
all acts and will execute or cause to be executed all writings
requested by Bank to establish, maintain and continue an exclusive,
perfected and first security interest of Bank in the Borrower
Collateral, subject only to Permitted Liens. Debtor agrees that
Bank has no obligation to acquire or perfect any lien on or
security interest in any asset(s), whether realty or personalty, to
secure payment of the Indebtedness.
|
|
|
2.5
|
Debtor will pay
within the time that they can be paid without interest or penalty
all taxes, assessments and similar charges which at any time are or
may become a lien, charge, or encumbrance upon any Borrower
Collateral, except to the extent contested in good faith and bonded
in a manner satisfactory to Bank. If Debtor fails to pay any of
these taxes, assessments, or other charges in the time provided
above, Bank has the option (but not the obligation) to do so and
Debtor agrees to repay all amounts so expended by Bank immediately
upon demand, together with interest at the highest lawful default
rate which could be charged by Bank on any Indebtedness.
|
|
|
2.6
|
Debtor will
keep the Borrower Collateral in good condition and will protect it
from loss, damage, or deterioration from any cause in all material
respects. Debtor has and will maintain at all times (a) with
respect to the Borrower Collateral, insurance under an “all
risk” policy against fire and other risks customarily insured
against, and (b) public liability insurance and other
insurance as may be required by law or reasonably required by Bank,
all of which insurance shall be in amount, form and content, and
written by companies as may be satisfactory to Bank, containing a
lender’s loss payable endorsement acceptable to Bank. Debtor
will deliver to Bank immediately upon demand evidence satisfactory,
to Bank that the required insurance has been procured. If Debtor
fails to maintain satisfactory insurance, Bank has the option (but
not the obligation) to do so and Debtor agrees to repay all amounts
so expended by Bank immediately upon demand, together with interest
at the highest lawful default rate which could be charged by Bank
on any Indebtedness.
|
|
|
2.7
|
On each occasion on which Debtor
evidences to Bank the account balances on and the nature and extent
of the Accounts Receivable, Debtor shall be deemed to have
warranted that except as otherwise indicated (a) each of those
Accounts Receivable is valid and enforceable without performance by
Debtor Of any act; (b) each of those account balances are in
fact owing, (c) there are no setoffs, recoupments, credits,
contra accounts, counterclaims or defenses asserted against any of
those Accounts Receivable, (d) as to any Accounts Receivable
represented by a note, trade acceptance, draft or other instrument
or by any chattel paper or document, the same have been endorsed
and/or delivered by Debtor to Bank, (e) Debtor has not
received with respect to any Account Receivable, any notice of the
death of the related account debtor, nor of the dissolution,
liquidation, termination of existence, insolvency, business
failure, appointment of a receiver for, assignment for the benefit
of creditors by, or filing of a petition in bankruptcy by or
against, the account debtor, and (f) as to each Account
Receivable, except as has been disclosed to Bank, the account
debtor is not an affiliate of Debtor, the United States of America
or any department, agency or instrumentality of it, or a citizen or
resident of any jurisdiction outside of the United
|
3
|
|
States. Debtor will do all acts
and will execute all writings reasonably requested by Bank to
perform, enforce performance of, and collect all Accounts
Receivable. Debtor shall neither make nor permit any material
modification, compromise or substitution for any Account Receivable
without the prior written consent of Bank. Debtor shall, at
Bank’s request, arrange for verification of Accounts
Receivable directly with account debtors or by other methods
acceptable to Bank.
|
|
|
2.8
|
Debtor at all
times shall be in compliance in all material respects with all
applicable laws, including without limit any laws, ordinances,
directives, orders, statutes, or regulations an object of which is
to regulate or improve health, safety, or the environment
(“Environmental Laws”), in all material
respects.
|
|
|
2.9
|
If Bank, acting
in its sole discretion, redelivers Borrower Collateral to Debtor or
Debtor’s designee for the purpose of (a) the ultimate
sale or exchange thereof; or (b) presentation, collection,
renewal, or registration of transfer thereof; or (c) loading,
unloading, storing, shipping, transshipping, manufacturing,
processing or otherwise dealing with it preliminary to sale or
exchange; such redelivery shall be in trust for the benefit of Bank
and shall not constitute a release of Bank’s security
interest in it or in the proceeds or products of it unless Bank
specifically so agrees in writing. If Debtor requests any such
redelivery, Debtor will deliver with such request if requested by
Bank a duly executed financing statement in form and substance
satisfactory to Bank. Any proceeds of Borrower Collateral coming
into Debtor’s possession as a result of any such redelivery
shall be held in trust for Bank and immediately delivered to Bank
for application on the Indebtedness. Bank may (in its sole
discretion) deliver any or all of the Borrower Collateral to
Debtor, and such delivery by Bank shall discharge Bank from all
liability or responsibility for such Borrower Collateral. Bank, at
its option, may require delivery of any Borrower Collateral to Bank
at any time with such endorsements or assignments of the Borrower
Collateral as Bank may request.
|
|
|
2.10
|
At any time and
without notice after the occurrence and during the continuance of
an Event of Default, Bank may (a) cause any or all of the
Borrower Collateral to be transferred to its name or to the name of
its nominees; (b) receive or collect by legal proceedings or
otherwise all dividends, ,interest, principal payments and other
sums and all other distributions at any time payable or receivable
on account of the Borrower Collateral, and hold the same as
Borrower Collateral, or apply the same to the Indebtedness, the
manner and distribution of the application to be in the sole
discretion of Bank; and (c) enter into any extension,
subordination, reorganization, deposit, merger or consolidation
agreement or any other agreement relating to or affecting the
Borrower Collateral, and deposit or surrender control of the
Borrower Collateral, and accept other property in exchange for the
Borrower Collateral and hold or apply the property or money so
received pursuant to this Agreement. In addition, at any time and
without notice, Bank may take such actions in its own name or in
Debtor’s name as Bank, in its sole discretion, deems
necessary or appropriate to establish exclusive control (as defined
in the Uniform Commercial Code) over any Borrower Collateral of
such nature that perfection of Bank’s security interest may
be accomplished by control.
|
|
|
2.11
|
Bank may assign
any of the Indebtedness and deliver any or all of the Borrower
Collateral to its assignee, who then shall have with respect to
Borrower Collateral so delivered all the rights and powers of Bank
under this Agreement, and after that Bank shall be fully discharged
from all liability and responsibility with respect to Borrower
Collateral so delivered.
|
|
|
2.12
|
Debtor delivers this Agreement
based solely on Debtor’s independent investigation of (or
decision not to investigate) the financial condition of Borrower
and is not relying on any information furnished by Bank. Debtor
assumes full responsibility for obtaining any further information
concerning the Borrower’s financial condition, the status of
the Indebtedness or any other matter which the undersigned may deem
necessary or appropriate now or later. Debtor waives any duty on
the part of Bank, and agrees that Debtor is not relying upon nor
expecting Bank to disclose to Debtor any fact now or later known by
Bank, whether relating to the operations or condition of
|
4
|
|
Borrower, the existence,
liabilities or financial condition of any guarantor of the
Indebtedness, the occurrence of any default with respect to the
Indebtedness, or otherwise, notwithstanding any effect such fact
may have upon Debtor’s risk or Debtor’s rights against
Borrower. Debtor knowingly accepts the full range of risk
encompassed in this Agreement, which risk includes without limit
the possibility that Borrower may incur Indebtedness to Bank after
the financial condition of Borrower, or Borrower’s ability to
pay debts as they mature, has deteriorated.
|
|
|
2.13
|
Debtor shall
defend, indemnify and hold harmless Bank, its employees, agents,
shareholders, affiliates, officers, and directors from and against
any and all claims, damages, fines, expenses, liabilities or causes
of action of whatever kind, including without limit consultant
fees, legal expenses, and, attorney fees, suffered by any of them
as a direct or indirect result of any actual or asserted violation
of any law that is or may be applicable to Debtor, including,
without limit, Environmental Laws, or of any remediation relating
to any property required by any law, including without limit
Environmental Laws.
|
|
3.
|
Collection
of Proceeds.
|
|
|
3.1
|
Debtor agrees
to collect and enforce payment of all Borrower Collateral until
Bank shall direct Debtor to the contrary. Immediately upon notice
to Debtor by Bank after the occurrence and during the continuance
of an Event of Default (as defined in Section 4.1 hereof) and
at all times after that, Debtor agrees to fully and promptly
cooperate and assist Bank in the collection and enforcement of all
Borrower Collateral and to hold in trust for Bank all payments
received in connection with Borrower Collateral and from the sale,
lease or other disposition of any Borrower Collateral, all rights
by way of suretyship or guaranty and all rights in the nature of a
lien or security interest which Debtor now or later has regarding
Borrower Collateral. Immediately upon and after such notice, Debtor
agrees to (a) endorse to Bank and immediately
|
|
