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EXHIBIT 4.9.4
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PLEDGE AGREEMENT
This PLEDGE AGREEMENT ("Agreement"), dated as of August 10,
1995, is made by XXXXX AUTOMOTIVE, INC., a Delaware corporation ("Grantor"), in
favor of SUMITOMO BANK OF CALIFORNIA ("Secured Party"), with reference to the
following facts:
RECITALS
A. Pursuant to a Commercial Loan Agreement of even
date herewith, by and among Grantor, Grant Products, Inc., a Delaware
corporation ("Grant"), and G.T. Styling, Inc., a California corporation
("G.T.") (each a "Borrower" and, collectively, "Borrowers") and Secured Party
(as the same may from time to time be supplemented, modified, amended, replaced
or supplemented the "Loan Agreement") and the related documents, Secured Party
has agreed to extend credit facilities to Borrowers. Borrowers will borrow up
to ELEVEN MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($11,550,000), as
evidenced by the Revolving Line Note, the Non-Revolving Line Note and the Term
Note and other agreements executed by Borrowers in favor of Bank. Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in the Loan Agreement.
B. Grantor is the owner of 100% of the issued and
outstanding capital stock of Grant and G.T.
C. As a condition to the extension of credit to
Borrowers by Secured Party and to induce Secured Party to continue to extend
credit to Borrowers, Grantor has agreed to the terms and conditions contained
herein and to allow certain collateral to be used as security for the payment
and performance of certain obligations of Borrowers to Secured Party.
AGREEMENT
NOW, THEREFORE, in order to induce Secured Party to extend
credit facilities to Borrowers under the Loan Agreement, and for other good and
valuable consideration, the receipt and adequacy of which hereby is
acknowledged, Grantor hereby represents, warrants, covenants, agrees, and
pledges as follows:
1. Definitions. Terms defined in the Loan Agreement and not
otherwise defined in this Agreement shall have the meanings given those terms
in the Loan Agreement as though set forth
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herein in full. The following terms shall have the meanings respectively set
forth after each:
"Agreement" means this Pledge Agreement and any extensions,
modifications, renewals, restatements, supplements or amendments
thereof.
"Certificates" means and includes all certificates,
instruments or other documents now or hereafter representing or
evidencing any Pledged Securities.
"Grantor" means Xxxxx Automotive, Inc., a Delaware
corporation.
"Obligations" means and includes all loans, advances,
debts, liabilities, obligations or any other financial
accommodations, howsoever arising, owing by Borrowers to Secured
Party of every kind and description (whether or not evidenced by a
note or other instrument and whether or not for the payment of
money), direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising pursuant to the terms
of the Loan Agreement and all documents executed in connection
therewith, including, without limitation, all interest, fees,
charges, expenses, reasonable attorneys' fees and accountants' fees
chargeable to Borrowers or incurred by Secured Party in connection
with its dealings with Borrowers.
"Person" means and includes any natural person,
corporation, firm, association, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or
other capacity.
"Pledged Collateral" means (i) the Pledged Securities and
the Certificates representing or evidencing same, (ii) any other
property of Grantor from time to time delivered to Secured Party
pursuant to a writing which designates the same as "Pledged
Collateral" under this Agreement and (iii) any and all proceeds and
products of any of the foregoing, and any and all collections,
dividends (whether in cash, stock or otherwise), distributions,
redemption payments or liquidation payments with respect to any of
the foregoing.
"Pledged Securities" means (i) any and all shares of
capital stock owned or hereafter acquired by Grantor in Grant and
G.T. (the "Pledged Companies"), (ii) any and all securities now or
hereafter issued in substitution, exchange or replacement therefor,
or with respect thereto, (iii) any and all warrants, options or
other rights to subscribe to or acquire any additional capital
stock of
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the Pledged Companies owned by Grantor, and (iv) any and all
additional capital stock of the Pledged Companies owned by Grantor.
2. Creation of Security Interest.
2.1 Pledge of Pledged Collateral. Grantor hereby pledges
to Secured Party and grants to Secured Party a security interest in and to all
Pledged Collateral for the benefit of Secured Party, together with all
products, proceeds, dividends, redemption payments, liquidation payments, cash,
instruments and other property, and any and all rights, titles, interests,
privileges, benefits and preferences appertaining or incidental to the Pledged
Collateral, provided, however, that the pledge of the stock of Grant shall not
take effect until the release of the lien of Bank Leumi Trust Company of New
York in said stock, pursuant to the Subordination Agreement required under
Section 5.1(n) of the Loan Agreement. The security interest and pledge created
by this Section 2.1 shall continue in effect so long as any Obligations are
owed to Secured Party or any commitment to extend credit to Grantor remains
outstanding from Secured Party.
2.2 Delivery of Certain Pledged Collateral. On or before
the execution hereof, Grantor shall cause to be pledged and delivered to
Secured Party the Certificates evidencing One Hundred percent (100%) of the
capital stock of the Pledged Companies. At any time after the date hereof,
additional Pledged Collateral may from time to time be delivered to Secured
Party by agreement between Secured Party and Grantor. All Certificates at any
time delivered to Secured Party shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to Secured Party.
Secured Party shall hold all Certificates pledged hereunder pursuant to this
Agreement unless and until released in accordance with Section 2.3 of this
Agreement.
2.3 Release of Pledged Collateral. Pledged Collateral
that is required to be released from the pledge and security interest created
by this Agreement in order to permit Grantor to consummate any disposition of
stock or assets, merger, consolidation, amalgamation, investment, acquisition,
dividend or distribution that does not violate the terms of the Loan Agreement,
if any, shall be so released by Secured Party at such times and to the extent
necessary to permit Grantor to consummate such permitted transactions promptly
following Secured Party's receipt of written request therefor by Grantor and
the Pledged Companies specifying the purpose for which release is requested and
such further certificates or other documents as Secured Party reasonably shall
request in its discretion to confirm that Grantor is permitted to consummate
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such permitted transaction and to confirm Secured Party's replacement lien on
appropriate collateral.
3. Security for Obligations. This Agreement and the pledge
and security interests granted herein secure the prompt payment, in full in
cash, and full performance of, all Obligations, whether for principal,
interest, fees, expenses or otherwise, including, without limitation, all
Obligations of Grantor now or hereafter existing under this Agreement, and all
interest that accrues on all or any part of any of the Obligations after the
filing of any petition or pleading against Grantor, any one of the Borrowers,
the Pledged Companies or any other Person for a proceeding under any bankruptcy
or debtor relief law.
4. Covenants. In accordance with the terms of the Loan
Agreement, Grantor hereby agrees that Grantor shall not, without Secured
Party's prior written consent, transfer all or any portion or its ownership
interest in the Pledged Companies to any Person other than Secured Party.
5. Further Assurances. Grantor agrees that at any time, and
from time to time, at its own expense Grantor will promptly execute, deliver
and file or record all further financing statements, instruments and documents,
and will take all fur-ther actions, including, without limitation, causing the
Pledged Companies to so execute, deliver, file or take other actions, that may
be necessary or desirable, or that Secured Party reasonably may request, in
order to perfect and protect any pledge or security interest granted hereby or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Pledged Collateral and to preserve, protect and
maintain the Pledged Collateral and the value thereof, including, without
limitation, payment of all taxes, assessments and other charges imposed on or
relating to the Pledged Collateral. Grantor hereby consents and agrees that
the issuers of, or obligors on, the Pledged Collateral, or any registrar or
transfer agent or trustee for any of the Pledged Collateral, shall be entitled
to accept the provisions of this Agreement as conclusive evidence of the right
of Secured Party to effect any transfer or exercise any right hereunder,
notwithstanding any other notice or direction to the contrary heretofore or
hereafter given by Grantor or any other Person to such issuers or such obligors
or to any such registrar or transfer agent or trustee.
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6. Voting Rights; Dividends; etc. So long as no Event of
Default under the Loan Agreement occurs and remains continuing:
6.1 Voting Rights. Grantor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Pledged
Securities, or any part thereof, for any purpose not prohibited by the terms of
this Agreement, the Loan Agreement, or the other documents executed in
connection therewith; provided, however, that Grantor shall not exercise, or
shall refrain from exercising, any such right if it would result in an Event of
Default.
6.2 Dividend and Distribution Rights. Grantor shall be
entitled to receive and to retain and use any and all dividends or
distributions paid in respect of the Pledged Securities; provided, however,
that any and all such dividends or distributions received in the form of
capital stock shall be, and the Certificates representing such capital stock
forthwith shall be delivered to Secured Party to hold as, Pledged Collateral
and shall, if received by Grantor, be received in trust for the benefit of
Secured Party, be segregated from the other property of Grantor, and forthwith
be delivered to Secured Party as Pledged Collateral in the same form as so
received (with any necessary endorsements).
7. Rights During Event of Default. When an Event of Default
has occurred and is continuing:
7.1 Voting, Dividend, and Distribution Rights. At the
option of Secured Party, all rights of Grantor to exercise the voting and other
consensual rights which Grantor would otherwise be entitled to exercise
pursuant to Section 6.1 above, and to receive the dividends and distributions
which it would otherwise be authorized to receive and retain pursuant to
Section 6.2 above, shall cease, and all such rights shall thereupon become
vested in Secured Party who shall thereupon have the sole right to exercise
such voting and other consensual rights and to receive and to hold as Pledged
Collateral such dividends and distributions. Secured Party shall give notice
to Grantor of its election to exercise voting rights with respect to the
Pledged Collateral; provided, however, that (i) neither the giving of such
notice nor the receipt thereof by Grantor shall be a condition to exercise of
any rights of Secured Party hereunder, and (ii) Secured Party shall incur no
liability for failing to give such notice.
7.2 Dividends and Distributions Held in Trust. All
dividends and other distributions which are received by Grantor contrary to the
provisions of this Agreement shall be received in trust for the benefit of
Secured Party, shall be segregated
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from other funds of Grantor, and forthwith shall be paid over to Secured Party
as Pledged Collateral in the same form as so received (with any necessary
endorsements).
7.3 Irrevocable Proxy. Grantor hereby revokes all
previous proxies with regard to the Pledged Securities and appoints Secured
Party as its proxyholder to attend and vote at any and all meetings of the
shareholders of the corporations which issued the Pledged Securities, and any
adjournments thereof, held on or after the date of the giving of this proxy and
prior to the termination of this proxy and to execute any and all written
consents of shareholders of such corporations executed on or after the date of
the giving of this proxy and prior to the termination of this proxy, with the
same effect as if Grantor had personally attended the meetings or had
personally voted its shares or had personally signed the written consents;
provided, however, that the proxyholder shall have rights hereunder only upon
the occurrence and during the continuance of an Event of Default under the Loan
Agreement and only when so elected by Secured Party. Grantor hereby authorizes
Secured Party to substitute another person as the proxyholder and, upon the
occurrence or during the continuance of any Event of Default, hereby authorizes
and directs the proxyholder to file this proxy and the substitution instrument
with the secretary of the appropriate corporation. This proxy is coupled with
an interest and is irrevocable until such time as no commitment to extend
credit to Grantor remains outstanding from Secured Party and until such time as
all Obligations have been paid and performed in full.
8. Transfers and Other Liens. Grantor agrees that, except as
specifically permitted under the Loan Agreement or the other documents executed
in connection therewith, Grantor will not (i) sell, assign, exchange, transfer
or otherwise dispose of, or contract to sell, assign, exchange, transfer or
otherwise dispose of, or grant any option with respect to, any of the Pledged
Collateral, (ii) create or permit to exist any lien upon or with respect to any
of the Pledged Collateral, except for liens in favor of Secured Party, or (iii)
take any action with respect to the Pledged Collateral which is prohibited by
the provisions or purposes of this Agreement or the Loan Agreement.
9. Secured Party Appointed Attorney-in-Fact. Grantor hereby
irrevocably appoints Secured Party as Grantor's attorney-in-fact, with full
authority in the place and stead of Grantor, and in the name of Grantor, or
otherwise, from time to time, in Secured Party's sole and absolute discretion
to do any of the following acts or things: (a) to do all acts and things and
to execute all documents necessary or advisable to perfect and continue
perfected the security interests created by this Agreement and to preserve,
maintain and protect the Pledged
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Collateral; (b) to do any and every act which Grantor is obligated to do under
this Agreement; (c) to prepare, sign, file and record, in Grantor's name, any
financing statement covering the Pledged Collateral; and (d) to endorse and
transfer the Pledged Collateral upon foreclosure by Secured Party; provided,
however, that Secured Party shall be under no obligation whatsoever to take any
of the foregoing actions, and Secured Party shall have no liability or
responsibility for any act (other than Secured Party's own gross negligence or
willful misconduct) or omission taken with respect thereto. Grantor hereby
agrees to repay immediately upon demand all reasonable costs and expenses
incurred or expended by Secured Party in exercising any right or taking any
action under this Agreement, together with interest as provided for in the Loan
Agreement.
10. Secured Party May Perform Obligations: If Grantor fails to
perform any Obligation contained herein, Secured Party may, but without any
obligation to do so and without notice to or demand upon Grantor, perform the
same and take such other action as Secured Party may deem necessary or
desirable to protect the Pledged Collateral or Secured Party's security
interests therein, Secured Party being hereby authorized (without limiting the
general nature of the authority hereinabove conferred) to pay, purchase,
contest and compromise any lien which in the reasonable judgment of Secured
Party appears to be prior or superior to Secured Party's security interests,
and in exercising any such powers and authority to pay necessary expense,
employ counsel and pay reasonable attorneys' fees. Grantor hereby agrees to
repay immediately upon demand all sums so expended by Secured Party, together
with interest from the date of expenditure at the rates provided for in the
Loan Agreement. Secured Party shall not be under any duty or obligation to (i)
preserve, maintain or protect the Pledged Collateral or any of any Grantor's
rights or interest therein, (ii) exercise any voting rights with respect to the
Pledged Collateral, whether or not an Event of Default has occurred or is
continuing, or (iii) make or give any notices of default, presentments, demands
for performance, notices of nonperformance or dishonor, protests, notices of
protest or notice of any other nature whatsoever in connection with the Pledged
Collateral on behalf of Grantor or any other Person having any interest
therein; and Secured Party does not assume and shall not be obligated to
perform the obligations of Grantor, if any, with respect to the Pledged
Collateral.
11. Reasonable Care. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially similar to that which Secured Party accords its own property, it
being under-stood that Secured Party shall not have any responsibility for (i)
ascertaining or taking action with respect to calls, con-
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versions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not Secured Party has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against any Person with respect to any Pledged Collateral.
12. Events of Default and Remedies.
12.1 Rights Upon Event of Default. Upon the occurrence
and during the continuance of an Event of Default, Grantor shall be in default
hereunder and Secured Party shall have in any jurisdiction where enforcement is
sought, in addition to all other rights and remedies that Secured Party may
have under this Agreement and under applicable law or in equity, all of its
rights and remedies as a secured party under the Uniform Commercial Code as
enacted in any such jurisdiction, and in addition the following rights and
remedies, all of which may be exercised with or without further notice to
Grantor:
(a) to notify any issuer of any Pledged
Securities, and any and all other obligors on any Pledged Collateral, that the
same has been pledged to Secured Party and that all dividends and other
payments thereon are to be made directly and exclusively to Secured Party; to
renew, extend, modify, amend, accelerate, accept partial payments on, make
allowances and adjustments and issue credits with respect to, release, settle,
compromise, compound, collect or otherwise liquidate, on terms acceptable to
Secured Party, in whole or in part, the Pledged Collateral and any amounts
owing thereon or any guaranty or security therefor; to enter into any other
agreement relating to or affecting the Pledged Collateral; and to give all
consents, waivers and ratifications with respect to the Pledged Collateral and
exercise all other rights (including voting rights), powers and remedies and
otherwise act with respect thereto as if Secured Party were the owner thereof;
(b) to enforce payment and prosecute any
action or proceeding with respect to any and all of the Pledged Collateral and
take or bring, in Secured Parties' names or in the name of Grantor, all steps,
actions, suits or proceedings deemed by Secured Party necessary or desirable to
effect collection of or to realize upon the Pledged Collateral;
(c) in accordance with applicable law, to take
possession of the Pledged Collateral with or without judicial process;
(d) to endorse, in the name of Grantor, all
checks, notes, drafts, money orders, instruments and other evidences of payment
relating to the Pledged Collateral;
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(e) to transfer any or all of the Pledged
Collateral into the name of Secured Party or its nominee or nominees; and
(f) in accordance with applicable law, to
foreclose the liens and security interests created under this Agreement or
under any other agreement relating to the Pledged Collateral by any available
judicial procedure or without judicial process, and to sell, assign or
otherwise dispose of the Pledged Collateral or any part thereof, either at
public or private sale or at any broker's board or securities exchange, in lots
or in bulk, for cash, on credit or on future delivery, or otherwise, with or
without representations or warranties, and upon such terms as shall be
acceptable to Secured Party; all at the sole option of and in the sole
discretion of Secured Party.
12.2 Notice of Sale. Secured Party shall give Grantor at
least five (5) days' written notice of sale of all or any part of the Pledged
Collateral. Any sale of the Pledged Collateral shall be held at such time or
times and at such place or places as Secured Party may determine in the
exercise of its sole and absolute discretion. Secured Party may bid (which bid
may be, in whole or in part, in the form of cancellation of Obligations) for
and purchase for the account of Secured Party or any nominee of Secured Party
the whole or any part of the Pledged Collateral. Secured Party shall not be
obligated to make any sale of the Pledged Collateral if it shall determine not
to do so regardless of the fact that notice of sale of the Pledged Collateral
may have been given. Secured Party may, without notice or publication, adjourn
the sale from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned.
12.3 Private Sales. Whether or not any of the Pledged
Collateral has been effectively registered under the Securities Act of 1933 or
other applicable laws, Secured Party may, in its sole and absolute discretion,
sell all or any part of the Pledged Collateral at private sale in such manner
and under such circumstances as Secured Party may deem necessary or advisable
in order that the sale may be lawfully conducted. Without limiting the
foregoing, Secured Party may (i) approach and negotiate with a limited number
of potential purchasers, and (ii) restrict the prospective bidders or
purchasers to persons who will represent and agree that they are purchasing the
Pledged Collateral for their own account for investment and not with a view to
the distribution or resale thereof. In the event that any of the Pledged
Collateral is sold at private sale, Grantor agrees that if the Pledged
Collateral is sold for a price which Secured Party in good faith believes to be
reasonable, then (A) the sale shall be deemed to be commercially
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reasonable in all respects, (B) Grantor shall not be entitled to a credit
against the Obligations in an amount in excess of the purchase price, and (C)
Secured Party shall not incur any liability or responsibility to Grantor in
connection therewith, notwithstanding the possibility that a substantially
higher price might have been realized at a public sale. Grantor recognizes
that a ready market may not exist for Pledged Collateral which is not regularly
traded on a recognized securities exchange, and that a sale by the Secured
Party of any such Pledged Collateral for an amount substantially less than a
pro rata share of the fair market value of the issuer's assets minus
liabilities may be commercially reasonable in view of the difficulties that may
be encountered in attempting to sell a large amount of Pledged Collateral or
Pledged Collateral that is privately traded.
12.4 Title of Purchasers. Upon consummation of any sale
of Pledged Collateral pursuant to this Section 12, Secured Party shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof
the Pledged Collateral so sold. Each such purchaser at any such sale shall
hold the Pledged Collateral sold absolutely free from any claim or right on the
part of Grantor, and Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. If the sale of all or any part of the Pledged
Collateral is made on credit or for future delivery, Secured Party shall not be
required to apply any portion of the sale price to the Obligations until such
amount actually is received by Secured Party, and any Pledged Collateral so
sold may be retained by Secured Party until the sale price is paid in full by
the purchaser or purchasers thereof. Secured Party shall not incur any
liability in case any such purchaser or purchasers shall fail to pay for the
Pledged Collateral so sold, and, in case of any such failure, the Pledged
Collateral may be sold again upon like notice.
12.5 Disposition of Proceeds of Sale. The net cash
proceeds resulting from the collection, liquidation, sale or other disposition
of the Pledged Collateral shall be applied, first, to the reasonable costs and
expenses (including reasonable attorneys fees) of retaking, holding, storing,
processing and preparing for sale, selling, collecting and liquidating the
Pledged Collateral, and the like; second, to the satisfaction of all
Obligations, with application as to any particular Obligations to be in the
order set forth in the Loan Agreement or other documents executed in connection
therewith; and, third, to all other indebtedness secured hereby in such order
and manner as Secured Party in its sole and absolute discretion may determine.
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13. Covenant Not to Issue Uncertificated Securities. Grantor
represents and warrants to Secured Party that all of the capital stock of the
Pledged Companies is in certificated form (as contemplated by Division 8 of the
California Commercial Code), and covenants to Secured Party that Grantor will
use its best efforts to prevent the Pledged Companies from issuing any capital
stock in uncertificated form or seeking to convert all or any part of its
existing capital stock into uncertificated form (as contemplated by Division 8
of the California Commercial Code).
14. Covenant Not to Dilute Interests of Secured Party in
Pledged Securities. Grantor represents, warrants and covenants to Secured
Party that Grantor will not at any time vote to authorize the Pledged Companies
to issue any additional capital stock, or any warrants, options or other rights
to acquire any additional capital stock, if the effect thereof would be to
dilute in any way the interests of Secured Party in any Pledged Securities or
any corporation whose securities constitute Pledged Securities.
15. Attorneys Fees. Grantor agrees to pay to Secured Party all
costs and expenses (including without limitation reasonable attorneys' fees and
disbursements, including the allocated costs of in-house counsel) incurred by
Secured Party in the enforcement of this Agreement with regard to the
Collateral owned by it, whether or not an action is filed in connection
therewith, and in connection with any waiver or amendment of any term or
provision hereof. All advances, charges, costs and expenses, including
reasonable attorneys' fees, incurred or paid by Secured Party in exercising any
right, power or remedy conferred by this Agreement (including without
limitation the right to perform any Obligation of Grantor under the loan
documents), or in the enforcement thereof, shall be secured hereby and shall
become a part of the Obligations and shall be paid to Secured Party by Grantor,
immediately upon demand, together with interest thereon at the rate(s) provided
for under the Loan Agreement.
16. Governing Law. This Agreement shall be governed and
construed in accordance with the Laws of the State of California.
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17. Successors and Assigns of Secured Party. This Agreement
shall inure to the benefit of the successors and assigns of Secured Party.
IN WITNESS WHEREOF, Grantor has caused this Agreement to be
duly executed as of the date first above written.
"Grantor"
XXXXX AUTOMOTIVE, INC.,
a Delaware corporation
By: Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
President
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Assistant Secretary
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