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EXHIBIT 10.18
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (as the same may be amended, restated,
supplemented or otherwise modified from time to time,"Agreement"), dated as of
August 15, 2000, 2000, is made by UNION-TRANSPORT CORPORATION, a New York
corporation ("Borrower"), UNION-TRANSPORT (U.S.) HOLDINGS, INC., a Delaware
corporation ("UT Holdings"), UNION-TRANSPORT BROKERAGE CORPORATION, a California
corporation ("UT Brokerage"), UT SERVICES, INC., a California corporation ("UT
Services"), UNION-TRANSPORT LOGISTICS INC., a Delaware corporation ("UT
Logistics"), and VANGUARD CARGO SYSTEMS, INC., a New York corporation ("UT
Vanguard") (Borrower, UT Holdings, UT Brokerage, UT Services, UT Logistics and
UT Vanguard being referred to collectively as "Grantors" and each individually
as a "Grantor"); in favor of GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, as agent (in such capacity, "Agent") for the lenders ("Lenders")
from time to time a party to the Credit Agreement (as defined below).
RECITALS
A. Pursuant to that certain Credit Agreement of even date
herewith by and among Grantors, Agent and Lenders (including all annexes,
exhibits and schedules thereto, as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
Lenders have agreed to extend certain financial accommodations to or for the
direct or indirect benefit of Grantors.
B. In order to induce Agent and Lenders to enter into the
Credit Agreement and the other Loan Documents and to induce Agent and Lenders to
extend the financial accommodations as provided for in the Credit Agreement,
Grantors have agreed to grant a continuing Lien on the Collateral to secure the
Obligations (each as hereinafter defined). These recitals shall be construed as
part of this Security Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Grantors and Agent
agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein, capitalized terms or
matters of construction defined or established in Annex A to the Credit
Agreement shall be applied herein as defined or established therein. All other
undefined terms contained in this Agreement, unless the context indicates
otherwise, shall have the meanings provided for by the Code to the extent the
same are used or defined therein.
2. GRANT OF LIEN.
(a) To secure the prompt and complete payment, performance and
observance of all of the Obligations, each Grantor hereby grants, assigns,
conveys, mortgages, pledges, hypothecates and transfers to Agent, for the
benefit of Agent and Lenders, a Lien upon all of its right, title and interest
in, to and under the following property, whether now owned by or owing to, or
hereafter acquired by or arising in favor of, such Grantor (including under any
trade names, styles
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or derivations of such Grantor), and whether owned by or consigned by or to, or
leased from or to, such Grantor, and regardless of where located (all of which
being hereinafter collectively referred to as the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all Fixtures;
(vii) all General Intangibles;
(viii) all Goods;
(ix) all Instruments and letters of credit;
(x) all Inventory;
(xi) all Investment Property;
(xii) all Letter of Credit rights;
(xiii) all Supporting Obligations;
(xiv) all Blocked Accounts, all Lock Boxes, all
Concentration Accounts, all Disbursement
Accounts, and all other Deposit Accounts and
all deposits therein;
(xv) all money, cash or cash equivalents of any
Grantor; and
(xvi) to the extent not otherwise included, all
Proceeds and products of the foregoing and
all accessions to, substitutions and
replacements for, and rents and profits of,
each of the foregoing.
Notwithstanding the generality of the foregoing, the "Collateral" shall not
include: (A) Contracts or General Intangibles to the extent the granting of a
security interest therein (1) is contrary to applicable law or (ii) is
prohibited by or would constitute a default under any agreement or document
governing any such Contract or General Intangible (but only to the extent such
prohibition or default is enforceable under applicable law); or (B) any and all
monies collected by Debtor for the sale of air cargo transportation sold on
behalf of the air carriers described in, and pursuant to the terms of, the Cargo
Agency and Authorized Intermediary Agreement between Borrower and The Cargo
Network Services Corporation, as in effect from time to time.
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(b) In addition, to secure the prompt and complete payment,
performance and observance of the Obligations and in order to induce Agent and
Lenders as aforesaid, each Grantor hereby grants to Agent, for the benefit of
Agent and Lenders, a right of setoff against the property of such Grantor held
by Agent or any Lender, including all property described above in Section 2(a)
now or hereafter in the possession or custody of or in transit to Agent or any
Lender, for any purpose (including safekeeping, collection or pledge), for the
account of such Grantor, or as to which such Grantor may have any right or
power.
3. AGENT'S AND LENDERS' RIGHTS; LIMITATIONS ON AGENT'S AND
LENDERS' OBLIGATIONS.
(a) It is expressly agreed by each Grantor that, anything
herein to the contrary notwithstanding, such Grantor shall remain liable under
each of its Contracts and each of its Licenses to observe and perform all the
conditions and obligations to be observed and performed by it thereunder.
Neither Agent nor any Lender shall have any obligation or liability under any
such Contract or License by reason of or arising out of this Agreement or the
granting herein of a Lien thereon or the receipt by Agent or any Lender of any
payment relating to any such Contract or License pursuant hereto. Neither Agent
nor any Lender shall be required or obligated in any manner to perform or
fulfill any of the obligations of any Grantor under or pursuant to any such
Contract or License, or to make any payment, or to make any inquiry as to the
nature or the sufficiency of any payment received by it or the sufficiency of
any performance by any party under any such Contract or License, or to present
or file any claims, or to take any action to collect or enforce any performance
or the payment of any amounts that may have been assigned to it or to which it
may be entitled at any time or times.
(b) At any time after an Event of Default shall have occurred
and be continuing, (i) Agent may, without prior notice to any Grantor, notify
Account Debtors of such Grantor, parties to the Contracts of such Grantor and
obligors in respect of Instruments and Chattel Paper of such Grantor, that the
Accounts of such Grantor and the right, title and interest of such Grantor in,
to and under such Contracts, Instruments and Chattel Paper have been assigned to
Agent, and that payments shall be made directly to Agent, for the benefit of
Agent and Lenders, and (ii) upon the request of Agent, each Grantor shall so
notify such Account Debtors, parties to such Contracts and obligors in respect
of such Instruments and Chattel Paper.
(c) Agent may at any time in Agent's own name, in the name of
a nominee of Agent, or in the name of any Grantor communicate (by mail,
telephone, facsimile or otherwise) with Account Debtors of such Grantor, parties
to Contracts of such Grantor, and obligors in respect of Instruments or Chattel
Paper of such Grantor to verify with such Persons, to Agent's satisfaction, the
existence, amount, terms and any other matter relating to of any such Accounts,
Contracts, Instruments or Chattel Paper. If an Event of Default shall have
occurred and be continuing, each Grantor, at its own expense, shall cause the
independent certified public accountants then engaged by such Grantor to prepare
and deliver to Agent and each Lender at any time and from time to time promptly
upon Agent's request the following reports with respect to such Grantor: (i) a
reconciliation of all Accounts of such Grantor; (ii) an aging of all such
Accounts; (iii) trial balances of such Accounts; and (iv) test verifications of
such Accounts as Agent may request. Each Grantor, at its own expense, shall
deliver to Agent the results of each physical verification, if any, that such
Grantor may in its discretion have made, or caused any other Person to have made
on its behalf, of all or any portion of its Inventory.
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4. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and warrants
that:
(a) Ownership of Collateral. Each Grantor is the sole owner of
each item of the Collateral upon which it purports to xxxxx x Xxxx hereunder,
and has good and marketable title thereto free and clear of any and all Liens
other than Permitted Encumbrances.
(b) Filings. No effective security agreement, financing
statement, equivalent security or Lien instrument or continuation statement
covering all or any part of the Collateral is on file or of record in any public
office, except such as may have been filed (i) by any Grantor in favor of Agent
pursuant to this Agreement or the other Loan Documents, or (ii) in connection
with any other Permitted Encumbrances.
(c) Liens. This Agreement is effective to create a valid and
continuing Lien upon the Collateral. Upon filing of appropriate financing
statements in the jurisdictions listed in Schedule I hereto, Agent, for the
benefit of Agent and Lenders, shall have a perfected Lien on the Collateral with
respect to which a Lien may be perfected by filing pursuant to the Code, which
Lien (i) shall be prior to all other Liens, except Permitted Encumbrances that
would be prior to Liens in favor of Agent, for the benefit of Agent and Lenders,
as a matter of law, and (ii) is enforceable as such as against any and all
creditors of, and purchasers from, each Grantor (other than purchasers of
Inventory in the ordinary course of business). All action by each Grantor
necessary or desirable to protect and perfect such Lien on each item of the
Collateral has been duly taken.
(d) Instruments. Schedule II hereto lists all Instruments
(other than checks received in the ordinary course of business), letters of
credit and Chattel Paper of each Grantor. All action by each Grantor necessary
or desirable to protect and perfect the Lien in favor of Agent on each item set
forth in Schedule II has been duly taken. The Lien in favor of Agent, for the
benefit of Agent and Lenders, on the Collateral listed in Schedule II hereto is
prior to all other Liens, except Permitted Encumbrances that would be prior to
the Liens in favor of Agent as a matter of law, and is enforceable as such
against any and all creditors of and purchasers from any Grantor. Each Grantor
shall, upon obtaining ownership of any additional Instruments (other than checks
received in the ordinary course of business), letters of credit or Chattel
Paper, promptly (and in any event within three Business Days) deliver to Agent,
for the benefit of Agent and Lenders, all such additional Instruments or Chattel
Paper duly endorsed and all such letters of credit.
(e) Locations of Collateral. Each Grantor's chief executive
office, principal place of business, corporate offices, all warehouses and
premises where any item of Collateral is stored or located, and the locations of
all of its books and records concerning the Collateral are set forth in
Disclosure Schedule 3.2 to the Credit Agreement.
(f) Accounts. With respect to any Account of any Grantor,
except as specifically disclosed on the most recent Collateral Report delivered
to Agent (i) such Account represents a bona fide sale of Inventory or rendering
of services to the applicable Account Debtor in the ordinary course of such
Grantor's business and is not evidenced by a judgment, Instrument or Chattel
Paper; (ii) there are no setoffs, claims or disputes existing or asserted with
respect thereto and such Grantor has made no agreement with the applicable
Account Debtor for any extension of time for the
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payment thereof, any compromise or settlement for less than the full amount
thereof, any release of such Account Debtor from liability therefor, or any
deduction therefrom except a discount or allowance allowed by such Grantor in
the ordinary course of its business for prompt payment and disclosed to Agent;
(iii) to such Grantor's knowledge, there are no facts, events or occurrences
that in any way impair the validity or enforceability thereof or could
reasonably be expected to reduce the amount payable thereunder as shown on such
Grantor's books and records and any invoices, statements and Collateral Reports
delivered to Agent and Lenders with respect thereto; (iv) such Grantor has
received no notice of proceedings or actions that are threatened or pending
against the applicable Account Debtor that might result in any adverse change in
such Account Debtor's financial condition; and (v) such Grantor has no knowledge
that the applicable Account Debtor is unable generally to pay its debts as they
become due. In addition, with respect to any Account of such Grantor (1) the
amounts reflected on all records, invoices, statements and Collateral Reports
that may be delivered to Agent with respect thereto are actually and absolutely
owing to such Grantor as indicated thereon and are not in any way contingent;
(2) no payments have been or shall be made thereon except payments made in
accordance with the requirements of Annex C to the Credit Agreement; and (3) to
such Grantor's knowledge, the applicable Account Debtor has the capacity to
contract.
(g) Intellectual Property Collateral. Each Grantor has no
interest in, or title to, any License, Patent, Trademark or Copyright except as
set forth in Schedule III hereto. This Agreement is effective to create a valid
and continuing Lien upon the Intellectual Property Collateral of each Grantor.
Upon the filing of the Patent, Trademark and Copyright Security Agreement with
each of the United States Copyright Office and the United States Patent and
Trademark Office, and the filing of appropriate financing statements in the
jurisdictions listed in Schedule I hereto, (i) Agent shall have perfected Liens
upon each Grantor's Intellectual Property Collateral; (ii) such perfected Liens
shall be enforceable as such as against any and all creditors of and purchasers
from any Grantor; and (iii) all action necessary or desirable to protect and
perfect Agent's Lien on each Grantor's Intellectual Property Collateral shall
have been duly taken.
(i) Survival. The representations and warranties set forth in
this Section 4 shall survive the execution and delivery of this Agreement.
5. COVENANTS. Each Grantor covenants and agrees with Agent, for the
benefit of Agent and Lenders, that from and after the date of this Agreement and
until the Termination Date:
(a) Further Assurances; Pledge of Instruments.
(i) At any time and from time to time, upon the
written request of Agent and at the sole expense of such Grantor, such Grantor
shall promptly and duly execute and deliver any and all such further instruments
and documents and take such further actions as Agent may reasonably deem
desirable to obtain the full benefits of this Agreement and of the rights and
powers herein granted, including (A) using its best efforts to secure all
consents and approvals necessary or appropriate for the assignment to or for the
benefit of Agent of any License or Contract held by such Grantor or in which
such Grantor has any rights not heretofore assigned, (B) filing any financing or
continuation statements under the Code with respect to the Liens granted
hereunder or under any other Loan Document, (C) transferring Collateral to
Agent's possession (for the benefit of Agent and Lenders) if such Collateral
consists of Chattel Paper or Instruments or if a Lien on such Collateral can be
perfected only by possession, or if otherwise requested by Agent, (D) obtaining,
or using its
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best efforts to obtain, waivers of Liens, if any exist, from landlords and
mortgagees in accordance with the Credit Agreement; (E) obtaining signed
acknowledgments of Agent's Liens from bailees having possession of any of such
Grantor's Goods; and (F) obtaining Control Letters from any issuer or securities
intermediary with respect to Investment Property of such Grantor. Such Grantor
also hereby authorizes Agent, for the benefit of Agent and Lenders, to file any
such financing or continuation statements without the signature of such Grantor
to the extent permitted by applicable law. If any amount payable under or in
connection with any of the Collateral is or shall become evidenced by any
Instrument, such Instrument, other than checks and notes received in the
ordinary course of business, shall be duly endorsed in a manner satisfactory to
Agent immediately upon such Grantor's receipt thereof and promptly delivered to
Agent.
(ii) Such Grantor will deliver to Agent the original
of all letters of credit issued to it as a beneficiary along with a collateral
assignment thereof evidencing the consent to such assignment by the issuer of
the letter of credit and each correspondent or confirming bank, all in form and
substance satisfactory to Agent.
(iii) Such Grantor will take all steps necessary to
grant to Agent, for the benefit of Agent and Lenders, control of all electronic
chattel paper in accordance with the Code.
(iv) Such Grantor authorizes Agent to file financing
statements describing the Collateral without the signature of such Grantor to
the extent permitted by law.
(b) Maintenance of Books and Records. Such Grantor shall keep
and maintain, at its own cost and expense, satisfactory and complete records of
each item of Collateral on which it purports to xxxxx x Xxxx hereunder,
including a record of any and all payments received and any and all credits
granted with respect to each such item of Collateral and all other dealings with
respect to each such item of Collateral. Such Grantor shall xxxx its books and
records pertaining to each such item of Collateral to evidence this Agreement
and the Liens granted hereby. All Chattel Paper shall be marked with the
following legend: "This writing and the obligations evidenced or secured hereby
are subject to the security interest of General Electric Capital Corporation, as
Agent, for the benefit of Agent and certain Lenders."
(c) Covenants Regarding Intellectual Property.
(i) Such Grantor shall notify Agent immediately if it
knows or has reason to know (A) that any application or registration relating to
any License, Patent, Trademark or Copyright that such Grantor reasonably
determines is necessary for the conduct of its business may become abandoned or
dedicated, or (B) of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court) regarding such Grantor's ownership of any such License,
Patent, Trademark or Copyright, its right to register the same, or to keep and
maintain the same.
(ii) In no event shall such Grantor, either itself or
through any agent, employee, licensee or designee, file an application for the
registration of any Patent, Trademark or Copyright with the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency without giving Agent prior written notice thereof, and, upon request
of Agent, such Grantor shall execute and deliver any and all security documents
as Agent may
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request, including the Patent, Trademark and Copyright Security Agreement, to
evidence Agent's Lien on such Patent, Trademark or Copyright, and the General
Intangibles of such Grantor relating thereto or represented thereby.
(iii) Such Grantor shall take all actions necessary
or requested by Agent to maintain and pursue each application, to obtain the
relevant registration and to maintain the registration of each of the Patents,
Trademarks and Copyrights, including the filing of applications for renewal,
affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings, unless such Grantor shall determine
that such Patent, Trademark or Copyright is not material to the conduct of its
business.
(iv) In the event that any of such Grantor's
Intellectual Property that such Grantor reasonably determines is necessary for
the conduct of its business is infringed upon, or misappropriated or diluted by
a third party, such Grantor shall notify Agent promptly after such Grantor
learns thereof. Such Grantor shall, unless such Grantor shall reasonably
determine that such Intellectual Property is in no way material to the conduct
of its business or operations, promptly xxx for, and seek recovery of any and
all damages resulting from, such infringement, misappropriation or dilution, and
shall take such other actions as Agent reasonably shall deem appropriate under
the circumstances to protect such Intellectual Property.
(d) Indemnification. In any suit, proceeding or action brought
by Agent or any Lender relating to any Account, Chattel Paper, Contract,
Document, General Intangible, Investment Property or Instrument of such Grantor
for any sum owing thereunder or to enforce any provision of any such Account,
Chattel Paper, Contract, Document, General Intangible, Investment Property or
Instrument, such Grantor shall save, indemnify and keep Agent and Lenders
harmless from and against all expense (including reasonable attorneys' fees and
expenses), loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by such Grantor of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing to, or in favor of, such obligor or its successors from such Grantor,
except to the extent such expense, loss, or damage is attributable solely to the
gross negligence or willful misconduct of Agent or any Lender as finally
determined by a court of competent jurisdiction. All such obligations of such
Grantor shall be and remain enforceable against and only against such Grantor
and shall not be enforceable against Agent or any Lender.
(e) Compliance with Terms of Accounts, Etc. In all material
respects, such Grantor shall perform and comply with all obligations in respect
of its Accounts, Chattel Paper, Contracts and Licenses and all other agreements
to which it is a party or by which it is bound relating to the Collateral.
(f) Limitation on Liens on Collateral. Such Grantor shall not
create, permit or suffer to exist, and such Grantor shall defend the Collateral
against, and take such other action as is necessary to remove, any Lien upon the
Collateral except Permitted Encumbrances, and shall defend the right, title and
interest of Agent and Lenders in and to any of such Grantor's rights under the
Collateral against the claims and demands of all Persons whomsoever.
(g) Limitations on Disposition. Such Grantor shall not sell,
lease, transfer or otherwise dispose of any of the Collateral, or attempt or
contract to do so except as permitted by the Credit Agreement.
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(h) Further Identification of Collateral. Such Grantor shall,
if so requested by Agent, furnish to Agent, as often as Agent reasonably
requests, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as Agent may
reasonably request, all in such detail as Agent reasonably may specify.
(i) Notices. Such Grantor shall advise Agent promptly, in
reasonable detail, (i) of any Lien (other than Permitted Encumbrances) or claim
made or asserted against any of the Collateral, and (ii) of the occurrence of
any other event that would have a Material Adverse Effect on the aggregate value
of the Collateral or on the Liens created hereunder or under any other Loan
Document.
6. AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT. On the Closing Date each
Grantor shall execute and deliver to Agent a power of attorney (each, a "Power
of Attorney") substantially in the form attached hereto as Exhibit A. The power
of attorney granted pursuant to each Power of Attorney is a power coupled with
an interest and shall be irrevocable until the Termination Date. The powers
conferred on Agent, for the benefit of Agent and Lenders, under each Power of
Attorney are solely to protect Agent's Liens upon and interests in (for the
benefit of Agent and Lenders) the Collateral and shall not impose any duty upon
Agent or any Lender to exercise any such powers. Agent agrees that (a) it shall
not exercise any power or authority granted under any Power of Attorney unless
an Event of Default has occurred and is continuing, and (b) Agent shall account
for any moneys received by Agent in respect of any foreclosure on or disposition
of any of the Collateral pursuant to any Power of Attorney; provided, that,
except as set forth in Xxxxxxx 0, xxxx of Agent or any Lender shall have any
duty as to any Collateral, and Agent and Lenders shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers.
NONE OF AGENT, LENDERS OR THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO ANY GRANTOR FOR ANY
ACT OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN
RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION, NOR FOR
ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.
7. REMEDIES; RIGHTS UPON DEFAULT.
(a) In addition to all other rights and remedies granted to it
under this Agreement, the Credit Agreement, the other Loan Documents and under
any other instrument or agreement securing, evidencing or relating to any of the
Obligations, if any Event of Default shall have occurred and be continuing,
Agent may exercise all rights and remedies of a secured party under the Code.
Without limiting the generality of the foregoing, each Grantor expressly agrees
that in any such event Agent, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of the
time and place of any public or private sale) to or upon such Grantor or any
other Person (all and each of which demands, advertisements and notices are
hereby expressly waived to the maximum extent permitted by the Code and other
applicable law), may forthwith enter upon the premises of such Grantor where any
Collateral is located through self-help, without judicial process, without first
obtaining a final judgment or giving such Grantor or any other Person notice and
opportunity for a hearing on Agent's claim or action,
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and without paying rent to such Grantor, and may collect, receive, assemble,
process, appropriate and realize upon the Collateral, or any part thereof, and
may forthwith sell, lease, assign, give an option or options to purchase, or
sell or otherwise dispose of and deliver said Collateral (or contract to do so),
or any part thereof, in one or more parcels at public or private sale or sales,
or at any exchange, at such prices as it may deem acceptable, for cash or on
credit or for future delivery without assumption of any credit risk. Agent or
any Lender shall have the right upon any such public sale or sales and, to the
extent permitted by law, upon any such private sale or sales to purchase for the
benefit of Agent and Lenders the whole or any part of said Collateral so sold,
free of any right or equity of redemption, which equity of redemption each
Grantor hereby releases. Such sales may be adjourned or continued from time to
time with or without notice. Agent shall have the right to conduct such sales on
any Grantor's premises or elsewhere and shall have the right to use any
Grantor's premises without charge for such sales at such time or times as Agent
deems necessary or advisable.
(b) If any Event of Default shall have occurred and be
continuing, each Grantor further agrees, at Agent's request, to assemble the
Collateral and make it available to Agent at places that Agent shall select,
whether at such Grantor's premises or elsewhere. Until Agent is able to effect a
sale, lease, or other disposition of Collateral, Agent shall have the right to
hold or use the Collateral, or any part thereof, to the extent that it deems
appropriate for the purpose of preserving the Collateral or its value or for any
other purpose deemed appropriate by Agent. Agent shall have no obligation to any
Grantor to maintain or preserve the rights of such Grantor as against third
parties with respect to the Collateral while Collateral is in the possession of
Agent. Agent may, if it so elects, seek the appointment of a receiver or keeper
to take possession of Collateral and to enforce any of Agent's remedies (for the
benefit of Agent and Lenders), with respect to such appointment without prior
notice or hearing as to such appointment. Agent shall apply the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale to
the Obligations as provided in the Credit Agreement, and only after so paying
over such net proceeds, and after the payment by Agent of any other amount
required by any provision of law, need Agent account for the surplus, if any, to
any Grantor. To the maximum extent permitted by applicable law, each Grantor
waives all claims, damages, and demands against Agent or any Lender arising out
of the repossession, retention or sale of the Collateral except such as arise
solely out of the gross negligence or willful misconduct of Agent or such Lender
as finally determined by a court of competent jurisdiction. Each Grantor agrees
that ten days' prior notice by Agent of the time and place of any public sale or
of the time after which a private sale may take place is reasonable notification
of such matters. Grantors shall remain liable for any deficiency if the proceeds
of any sale or disposition of the Collateral are insufficient to pay all
Obligations, including any attorneys' fees or other expenses incurred by Agent
or any Lender to collect such deficiency.
(c) Except as otherwise specifically provided herein, each
Grantor hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this
Agreement or any Collateral.
8. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For the purpose of
enabling Agent to exercise its rights and remedies under Section 7 hereof
(including, without limiting the terms of Section 7 hereof, in order to take
possession of, hold, preserve, process, assemble, prepare for sale, market for
sale, sell or otherwise dispose of Collateral) at such time or times as Agent
shall be lawfully entitled to exercise such rights and remedies, each Grantor
hereby grants to Agent, for the benefit of Agent and Lenders, an irrevocable,
non-exclusive license
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(exercisable without payment of royalty or other compensation to such Grantor)
to use, license or sublicense any Intellectual Property of such Grantor, and
wherever the same may be located, and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof.
9. LIMITATION ON AGENT'S AND LENDERS' DUTY IN RESPECT OF COLLATERAL.
Agent and each Lender shall use reasonable care with respect to the Collateral
in its possession or under its control. Neither Agent nor any Lender shall have
any other duty as to any Collateral in its possession or control or in the
possession or control of any agent or nominee of Agent or such Lender, or any
income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto.
10. REINSTATEMENT. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against any
Grantor for liquidation or reorganization, should any Grantor become insolvent
or make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of any
Grantor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a "voidable preference," "fraudulent transfer," or otherwise, all as
though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
11. NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other party, or whenever any of the parties desires to give or
serve upon any other party any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be given in the manner, and deemed
received, as provided for in the Credit Agreement.
12. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall 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 the remaining provisions of this Agreement. This Agreement is
to be read, construed and applied together with the Credit Agreement and the
other Loan Documents, which, taken together, set forth the complete
understanding and agreement of Agent, Lenders and Grantors with respect to the
matters referred to herein and therein.
13. NO WAIVER; CUMULATIVE REMEDIES. Neither Agent nor any Lender shall
by any act, delay, omission or otherwise be deemed to have waived any of its
rights or remedies hereunder, and no waiver shall be valid unless in writing and
signed by Agent, and then only to the extent therein set forth. A waiver by
Agent of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy that Agent would otherwise have on any
future occasion. No failure by Agent or any Lender to exercise, nor any delay in
exercising, any right, power or privilege hereunder, shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or future exercise thereof or
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the exercise of any other right, power or privilege. The rights and remedies
provided hereunder are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights and remedies provided by law. None of the
terms or provisions of this Agreement may be waived, altered, modified or
amended except by an instrument in writing, duly executed by Agent and Grantors.
14. LIMITATION BY LAW. All rights, remedies and powers provided in this
Agreement may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law, and all the provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
law that may be controlling and to be limited to the extent necessary so that
they do not render this Agreement invalid, unenforceable, in whole or in part,
or not entitled to be recorded, registered or filed under the provisions of any
applicable law.
15. TERMINATION OF THIS AGREEMENT. Subject to Section 10 hereof, this
Agreement shall terminate upon the Termination Date.
16. SUCCESSORS AND ASSIGNS. This Agreement and all obligations of each
Grantor hereunder shall be binding upon the successors and assigns of such
Grantor (including any debtor-in-possession on behalf of such Grantor) and
shall, together with the rights and remedies of Agent, for the benefit of Agent
and Lenders, hereunder, inure to the benefit of Agent and Lenders, all future
holders of any Instrument evidencing any of the Obligations and their respective
successors and assigns. No sales of participations, other sales, assignments,
transfers or other dispositions of any agreement governing or Instrument
evidencing the Obligations or any portion thereof or interest therein shall in
any manner affect the Lien granted to Agent, for the benefit of Agent and
Lenders, hereunder. No Grantor may assign, sell, hypothecate or otherwise
transfer any interest in or obligation under this Agreement.
17. COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
18. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, AND
ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH GRANTOR HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY,
CITY OF NEW YORK, NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN GRANTORS, AGENT AND LENDERS PERTAINING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT AGENT, LENDERS AND GRANTORS ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY,
CITY OF NEW YORK, NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER
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JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH GRANTOR HEREBY WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH
GRANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH GRANTOR AT THE ADDRESS SET FORTH ON ANNEX I TO THE CREDIT
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS,
PROPER POSTAGE PREPAID.
19. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTES
ARISING HEREUNDER OR RELATED HERETO BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE, AMONG AGENT, LENDERS, AND
GRANTORS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO.
20. SECTION TITLES. The Section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of the agreement between the parties hereto.
21. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
22. ADVICE OF COUNSEL. Each of the parties represents to each other
party hereto that it has discussed this Agreement (and, specifically, the
provisions of Sections 18 and 19) with its counsel.
23. BENEFIT OF LENDERS. All Liens granted or contemplated hereby shall
be for the benefit of Agent and Lenders, and all proceeds or payments realized
from Collateral in accordance herewith shall be applied to the Obligations in
accordance with the terms of the Credit Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be executed and delivered by its duly authorized officer
as of the date first set forth above.
"Grantors" "Agent"
UNION-TRANSPORT CORPORATION GENERAL ELECTRIC CAPITAL
By: /s/ THURSO XXXXXXXX CORPORATION, as Agent
----------------------------
Name: Thurso Xxxxxxxx
-------------------------- By: /s/ XXXXXX X. XXXXXXXXX
Title: VP Finance --------------------------
------------------------- Xxxxxx X. Xxxxxxxxx
Duly Authorized Signatory
UNION-TRANSPORT (U.S.)
HOLDINGS, INC.
By: /s/ THURSO XXXXXXXX
----------------------------
Name: Thurso Xxxxxxxx
--------------------------
Title: VP Finance
-------------------------
UNION-TRANSPORT BROKERAGE CORP.
By: /s/ THURSO XXXXXXXX
----------------------------
Name: Thurso Xxxxxxxx
--------------------------
Title: VP Finance
-------------------------
UT SERVICES, INC.
By: /s/ THURSO XXXXXXXX
----------------------------
Name: Thurso Xxxxxxxx
--------------------------
Title: VP Finance
-------------------------
UNION-TRANSPORT LOGISTICS INC.
By: /s/ THURSO XXXXXXXX
----------------------------
Name: Thurso Xxxxxxxx
--------------------------
Title: VP Finance
-------------------------
VANGUARD CARGO SYSTEMS, INC.
By: /s/ THURSO XXXXXXXX
----------------------------
Name: Thurso Xxxxxxxx
--------------------------
Title: VP Finance
-------------------------
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