SECURITY AGREEMENT:
EQUIPMENT AND FIXTURES
1. GRANT OF SECURITY INTEREST. For valuable consideration, the
undersigned STRATFORD AMERICAN CORPORATION, an Arizona corporation, and
STRATFORD AMERICAN CAR RENTAL SYSTEMS, INC., an Arizona corporation, or any of
them ("Debtor"), hereby grants and transfers to IMPERIAL BANK ("Bank") a
security interest in all titled vehicles, goods, tools, machinery, furnishings,
furniture and other equipment and fixtures, now or at any time hereafter, and
prior to the termination hereof, owned or acquired by Debtor, wherever located,
whether in the possession of Debtor or any other person and whether located on
Debtor's property or elsewhere, and all improvements, replacements, accessions
and additions thereto, excluding, however, the "Excluded Collateral" (as defined
in the Credit Agreement) (collectively called "Collateral"), and including all
of the foregoing which are now or hereafter affixed or to be affixed to, and
whether or not severed and removed from, the real property described on Schedule
1 attached hereto and incorporated herein by this reference, together with
whatever is receivable or received when any of the Collateral or proceeds
thereof are sold, leased, collected, exchanged or otherwise disposed of, whether
such disposition is voluntary or involuntary, including without limitation, (a)
all accounts, contract rights, chattel paper, instruments, general intangibles
and rights to payment of every kind now or at any time hereafter arising out of
any such sale, lease, collection, exchange or other disposition of any of the
foregoing, (b) all rights to payment, including returned premiums, with respect
to any insurance relating to any of the foregoing, and (c) all rights to payment
with respect to any cause of action affecting or relating to any of the
foregoing (hereinafter called "Proceeds").
2. OBLIGATIONS SECURED. The obligations secured hereby are the payment
and performance of: (a) all present and future Indebtedness of Debtor to Bank;
(b) all obligations of Debtor and rights of Bank under this Agreement; and (c)
all present and future obligations of Debtor to Bank of other kinds. The word
"Indebtedness" is used herein in its most comprehensive sense and includes any
and all advances, debts, obligations and liabilities of Debtor, or any of them,
heretofore, now or hereafter made incurred or created, whether voluntary or
involuntary and however arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and whether Debtor may
be liable individually or jointly with others, or whether recovery upon such
Indebtedness may be or hereafter becomes unenforceable.
3. TERMINATION. This Agreement will terminate upon the performance of
all obligations of Debtor to Bank, including without limitation, the payment of
all Indebtedness of Debtor to Bank existing or committed by Bank at the time
Bank receives written notice from Debtor of the termination of this Agreement.
4. OBLIGATIONS OF BANK. Bank has no obligation to make any loans
hereunder. Any money received by Bank in respect of the Collateral may be
deposited, at Bank's option, into a non-interest bearing account over which
Debtor shall have no control, and the same shall, for all purposes, be deemed
Collateral hereunder.
5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Bank that: (a) Debtor is the owner and has possession or control of the
Collateral and Proceeds; (b) Debtor has the right to grant a security interest
in the Collateral and Proceeds; (c) all Collateral and Proceeds are genuine,
free from liens, adverse claims, setoffs, default, prepayment, defenses and
conditions precedent of any kind or character, except as heretofore disclosed to
Bank in writing; (d) all statements contained herein are true and complete; (e)
except the Permitted Liens (as defined in the Credit Agreement), no financing
statement covering any of the Collateral or Proceeds, and naming any secured
party other than Bank, is on file in any public office; and (f) Debtor is not in
the business of selling goods of the kind included within the Collateral subject
to this Agreement, and Debtor acknowledges that no sale of any Collateral,
including without limitation, any Collateral which Debtor may deem to be
surplus, has been or shall be consented to or acquiesced in by Bank, except as
specifically set forth in writing by Bank.
6. COVENANTS OF DEBTOR.
(a) Debtor agrees in general: (i) to pay Indebtedness secured hereby
when due; (ii) to indemnify Bank against all losses, claims, demands,
liabilities and expenses of every kind caused by property subject hereto; (iii)
to pay all costs and expenses, including reasonable attorneys' fees, incurred by
Bank in the perfection, preservation, realization, enforcement and exercise of
its rights, powers and remedies hereunder; (iv) to permit Bank to exercise its
powers; (v) to execute and deliver such documents as Bank deems necessary to
create, perfect and continue the security interests contemplated hereby; and
(vi) not to change its chief place of business or the places where Debtor keeps
any of the Collateral or Debtor's records concerning the Collateral and Proceeds
without first giving Bank written notice of the address to which Debtor is
moving same.
(b) Debtor Agrees with Regard to the Collateral and Proceeds: (i) to
insure the Collateral with Bank as loss payee, in form and amounts, under
agreements, against risks and liabilities, and with insurance companies
satisfactory to Bank; (ii) to operate the Collateral in accordance with all
applicable statutes, rules and regulations relating to the use and control
thereof, and not to use the Collateral for any unlawful purpose or in any way
that would void any insurance required to be carried in connection therewith;
(iii) not to permit any lien on the Collateral or Proceeds, including without
limitation, liens arising from repairs to or storage of the Collateral, except
in favor of Bank; (iv) to pay when due all license fees, registration fees and
other charges in
2.
connection with any Collateral; (v) not to remove the Collateral from Debtor's
premises without Bank's prior written consent, unless the Collateral consists of
mobile goods as defined in the California Uniform Commercial Code, in which case
Debtor agrees not to remove or permit the removal of the Collateral from its
state of domicile for a period in excess of thirty (30) calendar days; (vi) not
to sell, hypothecate or otherwise dispose of any of the Collateral or Proceeds,
or any interest therein, without Bank's prior written consent; (vii) other than
in the ordinary course of Debtor's business, not to rent, lease or charter the
Collateral without Bank's prior written consent; (viii) to permit Bank to
inspect the Collateral at any time; (ix) to keep, in accordance with generally
accepted accounting principles, complete and accurate records regarding all
Collateral and Proceeds, and to permit Bank to inspect the same and make copies
thereof at any reasonable time; (x) if requested by Bank, to receive and use
reasonable diligence to collect Proceeds, in trust and as the property of Bank,
and to immediately endorse as appropriate and deliver such Proceeds to Bank
daily in the exact form in which they are received together with a collection
report in form satisfactory to Bank; (xi) not to commingle Proceeds or
collections thereunder with other property; (xii) to give only normal allowances
and credits and to advise Bank thereof immediately in writing if they effect any
Collateral or Proceeds; (xiii) upon the occurrence and continuation of an Event
of Default (as defined in the Credit Agreement), in the event Bank elects to
receive payments of Proceeds hereunder, to pay all expenses incurred by Bank in
connection therewith, including expenses of accounting, correspondence,
collection efforts, reporting to account or contract debtors, filing, recording,
record keeping and expenses incidental thereto; and (xiv) to provide any service
and do any other acts which may be necessary to maintain, preserve and protect
all Collateral and, as appropriate and applicable, to keep the Collateral in
good and saleable condition and repair, to deal with the Collateral in
accordance with the standards and practices adhered to generally by owners of
like property, and to keep all Collateral and Proceeds free and clear of all
defenses, rights of offset and counterclaims.
7. POWERS OF BANK. Debtor appoints Bank its true attorney in fact to
perform any of the following powers, which are coupled with an interest, are
irrevocable until termination of this Agreement and may be exercised from time
to time by Bank's officers and employees, or any of them, whether or not Debtor
is in default: (a) upon the occurrence and continuation of an Event of Default
(as defined in the Credit Agreement), to perform any obligation of Debtor
hereunder in Debtor's name or otherwise; (b) upon the occurrence and
continuation of an Event of Default (as defined in the Credit Agreement), to
give notice of Bank's rights in the Collateral and Proceeds, to enforce the same
and make extension agreements with respect thereto; (c) upon the occurrence and
continuation of an Event of Default (as defined in the Credit Agreement), to
release persons liable on Proceeds and to give
3.
receipts and acquittances and compromise disputes in connection therewith; (d)
upon the occurrence and continuation of an Event of Default (as defined in the
Credit Agreement), to release security; (e) to resort to security in any order;
(f) to prepare, execute, file, record or deliver notes, assignments, schedules,
designation statements, financing statements, continuation statements,
termination statements, statements of assignment, applications for registration
or like papers to perfect, preserve or release Bank's interest in the Collateral
and Proceeds; (g) upon the occurrence and continuation of an Event of Default
(as defined in the Credit Agreement), to receive, open and read mail addressed
to Debtor; (h) upon the occurrence and continuation of an Event of Default (as
defined in the Credit Agreement), to take cash, instruments for the payment of
money and other property to which Bank is entitled; (i) to verify facts
concerning the Collateral and Proceeds by inquiry of obligors thereon, or
otherwise, in its own name or a fictitious name; (j) upon the occurrence and
continuation of an Event of Default (as defined in the Credit Agreement), to
endorse, collect, deliver and receive payment under instruments for the payment
of money constituting or relating to Proceeds; (k) to prepare, adjust, execute,
deliver and receive payment under insurance claims, and to collect and receive
payment of and endorse any instrument in payment of loss or returned premiums or
any other insurance refund or return, and to apply such amounts received by
Bank, at Bank's sole option, toward repayment of the Indebtedness or replacement
of the Collateral; (l) upon the occurrence and continuation of an Event of
Default (as defined in the Credit Agreement), to exercise all rights, powers and
remedies which Debtor would have, but for this Agreement, with respect to all
the Collateral and Proceeds subject hereto; (m) to enter onto Debtor's premises
in inspecting the Collateral; and (n) to do all acts and things and execute all
documents in the name of Debtor or otherwise, deemed by Bank as necessary,
proper and convenient in connection with the preservation, perfection or
enforcement of its rights hereunder.
8. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Debtor
agrees to pay, prior to delinquency, all insurance premiums, taxes, charges,
liens and assessments against the Collateral and Proceeds, and upon the failure
of Debtor to do so, Bank at its option may pay any of them and shall be the sole
judge of the legality or validity thereof and the amount necessary to discharge
the same. Any such payments made by Bank shall be obligations of Debtor to Bank,
due and payable immediately upon demand, together with interest at a rate
determined in accordance with the provisions of Section 12 hereof, and shall be
secured by the Collateral and Proceeds, subject to all terms and conditions of
this Agreement.
9. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement, subject to the expiration
of all applicable notice and cure periods set forth in the Credit Agreement: (a)
any default in the payment or performance of any obligation, or any defined
event
4.
of default, under (i) any contract or instrument evidencing any Indebtedness, or
(ii) any other agreement between any Debtor and Bank, including without
limitation any loan agreement, relating to or executed in connection with any
Indebtedness; (b) any representation or warranty made by any Debtor herein shall
prove to be incorrect, false or misleading in any material respect when made;
(c) any Debtor shall fail to observe or perform any obligation or agreement
contained herein; (d) any attachment or like levy on any property of any Debtor;
and (e) Bank, in good faith, believes any or all of the Collateral and/or
Proceeds to be in danger of misuse, dissipation, commingling, loss, theft,
damage or destruction, or otherwise in jeopardy or unsatisfactory in character
or value.
10. REMEDIES. Upon the occurrence of any Event of Default, Bank shall
have the right to declare immediately due and payable all or any Indebtedness
secured hereby and to terminate any commitments to make loans or otherwise
extend credit to Debtor. Bank shall have all other rights, powers, privileges
and remedies granted to a secured party upon default under the Uniform
Commercial Code or otherwise provided by law, including without limitation, the
right to contact all persons obligated to Debtor on any Collateral or Proceeds
and to instruct such persons to deliver all Collateral and/or Proceeds directly
to Bank. All rights, powers, privileges and remedies of Bank shall be
cumulative. No delay, failure or discontinuance of Bank in exercising any right,
power, privilege or remedy hereunder shall affect or operate as a waiver of such
right, power, privilege or remedy; nor shall any single or partial exercise of
any such right, power, privilege or remedy preclude, waive or otherwise affect
any other or further exercise thereof or the exercise of any other right, power,
privilege or remedy. Any waiver, permit, consent or approval of any kind by Bank
of any default hereunder, or any such waiver of any provisions or conditions
hereof, must be in writing and shall be effective only to the extent set forth
in writing. It is agreed that public or private sales, for cash or on credit, to
a wholesaler or retailer or investor, or user of property of the types subject
to this Agreement, or public auction, are all commercially reasonable since
differences in the sales prices generally realized in the different kinds of
sales are ordinarily offset by the differences in the costs and credit risks of
such sales. While an Event of Default exists: (a) Debtor will deliver to Bank
from time to time, as requested by Bank, current lists of all Collateral and
Proceeds; (b) Debtor will not dispose of any of the Collateral or Proceeds
except on terms approved by Bank; (c) at Bank's request, Debtor will assemble
and deliver all Collateral and Proceeds, and books and records pertaining
thereto, to Bank at a reasonably convenient place designated by Bank; and (d)
Bank may, without notice to Debtor, enter onto Debtor's premises and take
possession of the Collateral.
11. DISPOSITION OF COLLATERAL AND PROCEEDS. Upon the transfer of all or
any part of the Indebtedness, Bank may transfer
5.
all or any part of the Collateral or Proceeds and shall be fully discharged
thereafter from all liability and responsibility with respect to any of the
foregoing so transferred, and the transferee shall be vested with all rights and
powers of Bank hereunder with respect to any of the foregoing so transferred;
but with respect to any Collateral or Proceeds not so transferred, Bank shall
retain all rights, powers, privileges and remedies herein given. Any proceeds of
any disposition of any of the Collateral or Proceeds, or any part thereof, may
be applied by Bank to the payment of expenses incurred by Bank in connection
with the foregoing, including reasonable attorneys' fees, and the balance of
such proceeds may be applied by Bank toward the payment of the Indebtedness in
such order of application as Bank may from time to time elect.
12. COSTS, EXPENSES AND ATTORNEYS' FEES. Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), incurred by
Bank in exercising any right, power, privilege or remedy conferred by this
Agreement or in the enforcement thereof, including any of the foregoing incurred
in connection with any bankruptcy proceeding relating to Debtor or the valuation
of the Collateral and/or Proceeds, including without limitation, the seeking of
relief from or modification of the automatic stay or the negotiation and
drafting of a cash collateral order. All of the foregoing shall be paid by
Debtor with interest at the default interest rate set forth in the Notes (as
defined in the Credit Agreement).
13. STATUTE OF LIMITATIONS. Until all Indebtedness shall have been paid
in full, the power of sale and all other rights, powers, privileges and remedies
granted to Bank hereunder shall continue to exist and may be exercised by Bank
at any time and from time to time irrespective of the fact that the Indebtedness
or any part thereof may have become barred by any statute of limitations, or
that the personal liability of Debtor may have ceased, unless such liability
shall have ceased due to the payment in full of all Indebtedness secured
hereunder.
14. MISCELLANEOUS. The obligations of Debtor are joint and several;
presentment, protest, notice of protest, notice of dishonor and notice of
nonpayment are waived with respect to any Proceeds to which Bank is entitled
hereunder; any right to direct the application of payments or security for any
Indebtedness of Debtor, or indebtedness of customers of Debtor, and any right to
require proceedings against others or to require exhaustion of security are
waived; and consent to extensions, forbearances or alterations of the terms of
Indebtedness, the release or substitution of security, and the release of
guarantors is given with respect to Proceeds subject to this Agreement; provided
however, that in each instance, Bank believes in good faith that the action in
question is commercially reasonable in that it does
6.
not unreasonably increase the risk of nonpayment of the Indebtedness to which
the action applies. Until all indebtedness shall have been paid in full, no
Debtor shall have any right of subrogation or contribution, and each Debtor
hereby waives any benefit of or right to participate in any of the Collateral or
Proceeds or any other security now or hereafter held by Bank.
15. NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the address specified in any
other loan documents entered into between Debtor and Bank and to Debtor at the
address of its chief executive office (or personal residence, if applicable)
specified below or to such other address as any party may designate by written
notice to each other party, and shall be deemed to have been given or made as
follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt.
16. GOVERNING LAW; SUCCESSORS, ASSIGNS. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California, and shall be binding upon and inure to the benefit of the heirs,
executors, administrators, legal represen tatives, successors and assigns of the
parties, provided, however, the creation and enforcement of any UCC security
interest and lien shall be governed by the laws of the State of Arizona.
17. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or any
remaining provisions of this Agreement.
Debtor warrants that its chief executive office (or personal residence,
if applicable) is located at the following address: 2400 East Arizona Xxxxxxxx
Xxxxxx, Xxxxxxxx 0, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000.
Debtor warrants that the Collateral (except goods in transit) is
located or domiciled at the following additional addresses: See Schedule 1
attached hereto and incorporated herein by this reference.
7.
IN WITNESS WHEREOF, this Agreement has been duly executed as of
December 11, 1996.
STRATFORD AMERICAN CORPORATION, IMPERIAL BANK
an Arizona corporation
By: /s/ Xxx X. Xxxxxx By: /s/ R. Xxxx Xxxxxxxx
-------------------------- --------------------------
Title: President Title: Vice President
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STRATFORD AMERICAN CAR RENTAL SYSTEMS, INC.,
an Arizona corporation
By: /s/ Xxx X. Xxxxxx
--------------------------
Title: President
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8.
SCHEDULE 1
Dollar Rent A Car Phoenix Locations
America West Arena Sun City/Surprise
201 X. Xxxxxxxxx 00000 X. Xxxx Xxxx
Xxxxxxx, Xxxxxxx 00000 Xxx Xxxx Xxxx, Xxxxxxx
000-0000 583-4718
Arizona Biltmore Hotel Sky Harbor Airport
2400 E. Missouri Terminal 2 267-0097
Xxxxxxx, Xxxxxxx 00000 Terminal 3 267-0996
956-9012 Terminal 4 264-0995
Deer Valley Airport Dollar Rent A Car Main Office
000 X. Xxxx Xxxxxx Xxxx 50 S. 24th Street
Deer Valley, Arizona Xxxxxxx, Xxxxxxx 00000
861-0366 275-7588
Holiday Inn Tempe
000 X. Xxxxxx Xxxx.
Xxxxx, Xxxxxxx
000-0000
Scottsdale Radisson Resort
0000 X. Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
947-7295
Southeast Regional Location
0000 X. Xxxxxxx Xxxx
Xxxx, Xxxxxxx
497-9298
West Valley Regional Location
0000 X. Xxxxxxxxxxx
Xxxxxx, Xxxxxxx 00000
486-7990
