EXHIBIT 10.13
LOUISIANA
SECURITY AGREEMENT
THIS SECURITY AGREEMENT entered into as of the 29th day of June, 2004, by
and between LOUISIANA, TRANSPORTATION, INC., a Michigan corporation whose
address is 00000 Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx 00000 ("Grantor"), and FIRST
TENNESSEE BANK NATIONAL ASSOCIATION, a national banking association whose
address is 000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000, Attention: Commercial
Finance Division ("Bank").
WITNESSETH:
That for good and valuable considerations, the receipt and sufficiency of
which are hereby acknowledged, the Grantor hereby agrees with Bank as follows:
1. Definitions. Reference is made to the Loan Agreement, bearing date as
of the 31st day December, 2001, by and among Universal Truckload Services, Inc.
("Universal Truckload"), The Xxxxx and Xxxxx Lines, incorporated ("Xxxxx
Xxxxx"), Universal Am-Can, Ltd. ("Universal Am-Can"), and the Bank therein
mentioned and described, as amended by that certain First Amendment to Loan
Agreement by and among Universal Truckload, Xxxxx Xxxxx, Universal Am-Can, Xxxxx
Xxxxx Intermodal, Inc. ("Xxxxx Intermodal"), Grantor and Economy Transport, Inc.
("Economy") as amended, the "Loan Agreement") said loan agreement being
incorporated. herein by reference. All terms used in this Security Agreement
which are defined in the Loan Agreement or in Article 9 of the Uniform
Commercial Code (the "Code") of Tennessee and which are not otherwise defined
herein shall have the same meanings herein as set forth therein.
2. Grant of Security Interest. As collateral security for all of the
Obligations (as defined in Section 3 hereof), the Grantor hereby pledges and
assigns to Bank, and grants to Bank a continuing security interest in, the
following (the "Collateral"):
a) all of the Grantor's accounts, accounts receivable, chattel
paper, instruments, and other obligations of any kind, whether or not
evidenced by an instrument or chattel paper, and whether or not earned by
performance (collectively hereinafter "Accounts Receivable" or
"Receivables") whether now or hereafter existing, arising out of or in
connection with the sale of goods or the rendering of services, and all
rights now or there after existing in and all security agreements, and
other contracts securing or otherwise relating to any such Accounts
Receivable but excluded from Accounts Receivable are any accounts arising
out of the leasing of trucks, trailers, tractors and equipment;
b) all of Grantor's customer lists, original books and records,
ledger and account cards, computer tapes, discs and printouts, whether now
in existence or hereafter created pertaining to the collateral described
in paragraph 2(a).
c) All proceeds ("Proceeds") of any and all of the foregoing
Collateral including, without limitation, all moneys due or to
become due in connection with any of the Collateral, guaranties
and security for the payment of such moneys. (Although proceeds
are covered Bank does not authorize the sale or other transfer
of any of the Collateral or the transfer of any interest in the
Collateral, except for the sale of goods and the ordinary course
of Grantor's business);
in each case, whether now owned or hereafter acquired by the Grantor and
howsoever its interest therein may arise or appear (whether by ownership, lease,
security interest, claim, or otherwise).
3. Security for Obligations. The security interest created hereby in the
Collateral constitutes continuing collateral security for all of the following
obligations, whether now existing or hereafter incurred (the "Obligations"):
a) the full and prompt payment, when due, of the indebtedness (and
interest thereon) evidenced and to be evidenced by that certain promissory
note, bearing date of the 31st day of December, 2001, in the principal sum
of Twenty Million Dollars ($20,000,000.00), executed by Universal
Truckload, Xxxxx Xxxxx and Universal Am-Can and payable to the order of
Bank, as amended and restated by the Amended and Restated Promissory Note
dated June 29, 2004, in the principal sum of Forty Million Dollar
($40,000,000,00), executed by Universal Truckload, Xxxxx Xxxxx, Xxxxx
Intermodal, Universal Am-Can, Grantor and Economy and any and all
renewals, modifications, and extensions of said note, in whole or in part;
b) the due performance and observance by the Grantor, Xxxxx Xxxxx,
Xxxxx Intermodal, Economy, Universal Truckload and/or Universal Am-Can, as
applicable, of all of its covenants, agreements, representations,
liabilities, obligations, and undertakings as set forth herein, or in the
Loan Agreement (as the same may be modified, renewed or extended from time
to time), in the Xxxxx Xxxxx Security Agreement, in the Universal Security
Agreement, in the Economy Security Agreement, in the Louisiana Security
Agreement or in any other instrument or document which now or at any time
hereafter evidences or secures, in whole or in part, all or any part of
the Obligations hereby secured; and
c) the prompt payment and performance of any and all other present
and future obligations of Grantor, Xxxxx Xxxxx, Xxxxx Intermodal,
Universal Am-Can, Economy or Universal Truckload to Bank with respect to
any letters of or edit issued at any time by Bank for the benefit of
Grantor, Xxxxx Xxxxx, Xxxxx Intermodal, Universal Am-Can, Economy or
Universal Truckload under the Loan Agreement.
4. Representations and Warranties. The Grantor represents and warrants as
follows:
a) The Grantor's chief place of business and chief executive office, the
place where the Grantor keeps its records concerning Accounts Receivable and all
originals of all chattel.
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paper which constitute Accounts Receivable are located at the address specified
for the Grantor in the initial paragraph hereof. None of the Accounts Receivable
is evidenced by a promissory note or other instrument. Grantor is a Michigan
corporation registered in the state of Michigan and has as its organizational
number the following: 133-290.
(b) (i) Except as otherwise specifically mentioned in EXHIBIT "A", hereto
attached, the Grantor owns the Collateral free and clear of any lien,
security interest or other charge or encumbrance except for the security
interest created by this Agreement.
(ii) Except for the financing statements filed in favor of Bank
relating to this Agreement, and except for any financing statements filed
with respect to the security interests mentioned in EXHIBIT "A", hereto
attached, no other financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any
recording office.
(c) The exercise by Bank of its rights and remedies hereunder will not
contravene any law or governmental regulation or any contractual restriction
binding on or affecting the Grantor or any of its properties and will not result
in or require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to any of its properties.
(d) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or other regulatory body is required
either for the grant by the Grantor of the security interest created hereby in
the Collateral or for the exercise by Bank of its rights and remedies hereunder.
(e) This Agreement creates a valid security interest in favor of the Bank
in the Collateral. The taking possession by the Bank of all instruments and
chattel paper constituting Collateral from time to time, and the filing of
financing statements with the Michigan Secretary of state will perfect and
establish the priority of the Bank's security interest hereunder in the
Collateral, subject to no other liens and encumbrances, except as otherwise
specifically disclosed in EXHIBIT "A". Except as set forth in this Section 4(c),
no action is necessary or desirable to perfect or otherwise protect such
security interest.
5. Covenants as to the Collateral. So long as any of the Obligations shall
remain outstanding, unless Bank shall otherwise consent in writing:
(a) Further Assurances. The Grantor will at its expense, at any time and
from time to time, promptly execute and deliver all further instruments and
documents and take all further action that Bank reasonably deems necessary or
desirable or the Bank may reasonably request in order (i) to perfect and protect
the security interest created or purported to be created hereby; (ii) to enable
Bank to exercise and enforce its rights and remedies hereunder in respect of the
Collateral; or (iii) to otherwise effect the purposes of this Agreement,
including, without limitation: (A) executing and filing such financing or
continuation statements, or amendments thereto, as Bank deems necessary or
desirable or that Bank may request in order to perfect and preserve the security
interest created or purported to be created hereby; (B) subject to the
limitations regarding field inspections set forth in Section 5(d),
(iii), furnishing to Bank from time to time statements and schedules further
identifying and describing the Collateral and such other
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reports in connection with the Collateral as Bank may reasonably request, all
in reasonable detail; (C) marking conspicuously each chattel paper included in
the Accounts Receivable and, at the request of the Bank, each of its records
pertaining to the Account Receivable with a legend, in form and substance
satisfactory to the Bank, indicating that such chattel paper is subject to the
security interest created hereby; and (D) if any Account Receivable shall be
evidenced by a promissory note or other instrument or chattel paper, delivering
and pledging to the Bank hereunder such note, instrument or chattel paper duly
endorsed and accompanied by executed instruments of transfer or assignment, all
in form and substance satisfactory to the Bank.
(b) Taxes. The Grantor will pay promptly before delinquent all property
and other taxes, assessments, and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials, and supplies) against,
the Collateral, except to the extent the validity thereof is being contested
diligently and in good faith by proper proceedings satisfactory to the Bank.
(c) Place of Organization. Grantor will not change its place of
incorporation without providing the Bank at least thirty (30) days written
notice.
(d) As to Receivables.
(i) The Grantor will (A) keep its chief place of business and chief
executive office and all originals of all chattel paper which constitute
Accounts Receivable, at the location(s) specified in paragraph 4(a)
thereof, and (B) maintain and preserve complete and accurate records
concerning the Receivables, and such chattel paper.
(ii) As of the time any Receivable becomes subject to the security
interest granted by this Security Agreement, including, without
limitation, as of each time any specific assignment or transfer or
identification is made to Bank of any Receivable, Grantor shall be deemed
to have warranted as to each and all of such Receivables that each
Receivable that is necessary to support the Borrowing Base (as defined in
the Loan Agreement) meets the criteria of an Acceptable Account and such
Receivable and all papers and documents relating thereto are genuine and
in all respects what they purport to be; that each Receivable is valid and
subsisting and arises out of all bond fide sale of goods sold and
delivered, or in the process of being delivered, or out of land for
services theretofore actually rendered, to the account debtor named in
the Receivable; that the amount of the Receivable represented as owing is
the correct amount actually and unconditionally owing except for normal
cash discounts and is not disputed, and except for such normal cash
discount is not subject to any setoffs, credits, deductions or
counter-charges; that the Grantor is the owner thereof free and clear of
all prior liens, except for the security interest in favor of Bank and any
security interest specifically mentioned in "EXHIBIT" "A" hereto attached;
and that no surety bond was required or given in connection with said
Receivable or the contracts or purchase orders out of which the same
arose; and that Grantor has no notice of or reason to believe that the
account debtor is subject to any pending bankruptcy proceeding, insolvency
proceeding or operations of any creditors committee.
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(iii) Bank shall have the privilege at any time upon its request, of
inspection during reasonable business hours of any of the business
properties or premises of the Grantor and the books and records of the
Grantor relating to said Receivables and inventory or the processing or
collection thereof as well as those relating to its general business
affair and financial condition. Bank shall have the right at any time,
after an Event of Default, to notify any and all account debtors to make
payment thereof directly to Bank; but to the extent Bank does not so
elect, Grantor shall continue to collect the Receivables. Upon the
occurrence of an Event of Default, except as the Bank shall otherwise
expressly agree in writing, all proceeds of collection of Receivables
received by the Grantor shall be forthwith accounted for and transmitted
to Bank in the form as received by the Grantor and shall not be coming led
with any funds of the Grantor. In the event the account debtor of any
Receivable included in this Security Agreement shall also be indebted to
the Grantor in any other respect and such account debtor shall make
payment without designating the particular indebtedness against which it
is to apply, such payment shall be conclusively presumed to be payment on
the Receivable of such account debtor included in this Security Agreement.
Any proceeds of Receivables so transmitted to Bank under the terms hereof
shall be handled and administered by Bank in and through a Remittance or
similar account, but the Guarantor acknowledges that the maintenance of
such an account by Bank is solely for its convenience in facilitating its
own operations pursuant hereto and that Grantor has not and shall not have
any right, title or interest in said Receivable or in the amounts at any
time to the credit thereof. Except to the extent Bank may from time to
time in its discretion release proceeds to the Grantor for use in its
business, all proceeds received by Bank shall be applied on the
Obligations secured thereby, whether or not such Obligations shall have by
their terms matured, such application to be made at such intervals as Bank
may determine, except that Bank need not apply or give credit for any item
included in such proceeds until two (2) business days after receipt by
Bank of such item at its Main Office in Memphis, Tennessee. Items received
after 2:00 o' clock p.m. on any business day shall be deemed to have been
received the following business day. In administering the collection of
proceeds as herein provided for, Bank may accept checks or draft in any
amount and bearing any notation without incurring liability to Grantor for
so doing. Grantor will accompany each transmission of proceeds of
Receivables to Bank with a report in such form as Bank may require in
order identifying the Receivables to which such proceeds apply.
(iv) Upon the occurrence of an Event of Default, bank shall have the
night, but shall incur no liability for failing to do so, in its own name,
of in the name of the Grantor to demand, collect, receive, receipt for,
xxx for, compound and give acquaintance for, any and all amounts due or to
become due on the Receivables, to adjust, settle or compromise the amount
or payment thereof, in the same manner and to the same extent as Grantor
might have done, and to endorse the name of the Grantor on all commercial
paper given in payment or part payment thereof, and in its discretion to
file any claim or take any action or proceedings which Bank may deem
necessary or appropriate to protect and preserve and realize upon the
security interest of Bank in the Receivables and the proceeds thereof.
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(v) Grantor will from time to time execute such further instruments
and do such further acts and things as Bank may reasonably require by way
of further assurance to Bank of the matters and things herein provided for
or intended so to be, including but not limited to the execution of
financing statements necessary to perfect the Bank's security interest in
the Collateral. Without limiting the foregoing, Grantor agrees to execute
and deliver to Bank an assignment as security or other form of
identification in the form required by Bank of all Receivables at any time
included under this Security Agreement, together with such other evidence
of the existence and identify of such Receivables as Bank may reasonably
require; and Grantor will xxxx its books and records to reflect this
Security Agreement.
(e) Transfer and Other Liens. Without the prior consent of Bank, the
Grantor will not (i) sell, assign (by operation of law or otherwise), discount,
exchange, or otherwise dispose of any of the Collateral; or (ii) create or
suffer to exist any lien, security interest or other charge or encumbrance upon
or with respect to any of the Collateral except for the security interest
created by this Agreement, and except for any security interest specifically
disclosed in EXHIBIT "A", attached hereto.
(f) Periodic Reports: On or before the tenth (10th) day of each calendar
month, furnish to Bank an Accounts Receivable aging report which shall report
Grantor's Total Accounts Receivable as of the close of business for the previous
month and shall segregate such Accounts Receivable into categories, according to
whether such Accounts Receivable remain unpaid for more than thirty (30) days,
or for more than sixty (60) days, for more than ninety (90) days or for more
than one hundred twenty (120) days from the date of invoice.
6. Additional Provisions Concerning the Collateral.
(a) The Grantor hereby authorizes Bank to file, without the Signature of
the Grantor where permitted by law, one or more continuation statements relating
to the Collateral.
(b) The Grantor hereby irrevocably appoints Bank the Grantor's
attorney-in-fact and proxy, with full authority in the place and stead of the
Grantor and in the name of the Grantor or otherwise, from time to time in the
Bank's discretion, upon the occurrence of an Event of Default, to take any of
the following actions: (i) to ask, demand, collect, xxx for, recover, compound,
receive, and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral; (ii) to receive, endorse, and
collect any checks, drafts or other instruments, documents, and chattel paper in
connection with clause (i) above; (iii) to sign its name on any invoice or xxxx
of lading relating to any Receivable, on drafts against customers, on schedules
and assignments of Receivables, on notices of assignment, on verification of
accounts and on notices to customers (including notices directing customers to
make payment direct to Bank); (iv) to notify the post office authorities to
change the address for delivery of its mail to an address designated by Bank, to
receive, open and process all mail addressed to Grantor, to send requests for
verification of Receivables to customers; and (v) to file any claims or take any
action or institute any proceedings which Bank may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the rights
of Bank with respect to any of the Collateral.
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(c) If the Grantor fails to perform any agreement contained herein, if not
cured by Grantor within the Cure Period, Bank may itself perform, or cause
performance of, such agreement or obligation, and the reasonable costs and
expenses of Bank incurred in connection therewith on a time and charges basis
shall be payable by the Grantor under Section 9 hereof, and shall be fully
secured hereby; provided that the Bank may perform or cause the performance of
any of Grantor's agreement or obligation contained herein immediately if
Grantor's failure to perform would materially adversely affect the Collateral or
the Bank's security interest therein.
(d) The powers conferred on Bank hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, Bank shall have
no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral; provided that so long as there is no Event of Default, in the event
that the Grantor initiates suit to collect any of the Accounts Receivable, in
the event that the Bank is a necessary party to such litigation, Bank agrees to
join in such suit at the expense of the Grantor.
(e) Anything herein to the contrary notwithstanding, (i) the Grantor
shall remain liable under any contracts and agreements relating to the
Collateral to the extent set forth therein to perform all of its obligations
thereunder to the same extent as if this Agreement had not been executed; (ii)
the exercise by Bank of any of its rights hereunder shall not release the
Grantor from any of its obligations under the contracts and agreements relating
to the Collateral; and (iii) Bank shall not have any obligation or liability by
reason of this Agreement under any contracts and agreements relating to the
Collateral, nor shall Bank be obligated to perform any of the obligations or
duties of the Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
7. Remedies Upon Default. If an Event of Default shall have occurred:
(a) Bank may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party on default under the Code whether or not
the Code applies to the affected Collateral), and also may (i) require the
Grantor to, and the Grantor hereby agrees that it will at its expense and upon
request of Bank forthwith, assemble all or part of the Collateral as directed by
Bank and make it available to Bank at a place to be designated by Bank which its
reasonably convenient to Bank; and (ii) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of Bank's offices or elsewhere, for cash, on credit or
for future delivery, and at such price or prices and upon such other terms as
Bank may deem commercially reasonable. The Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten (10) days' notice to the
Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Bank shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. Bank may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefore, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Notwithstanding the foregoing provisions, Bank agrees that prior to
exercising any other remedies with respect to the Collateral, it will collect
the Accounts Receivable for a period of thirty (30) days after which it can
either (i) continue to
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collect Accounts Receivable or (ii) after fifteen (15) days written notice to
the Grantor, exercise any and all rights and remedies provided for herein or
available to it under law, unless within said fifteen (15) day period, Grantor
provides a third party purchaser who purchases the Accounts Receivable and pays
to Bank therefor, in good funds, the lesser of (i) the face amount of the
Accounts Receivable remaining uncollected by the Bank or (ii) the outstanding
amount of the Obligations.
(b) Any cash held by Bank as Collateral and all cash proceeds received by
Bank in respect of any sale of, collection from, or other realization upon, all
or any part of the Collateral shall be applied as follows:
(i) First, to the repayment of the reasonable costs and expenses,
including reasonable attorneys' fees and legal expenses on a time and
charges basis, incurred by Bank in connection with (A) the administration
of this Agreement, (B) the retaking, custody, preservation, use, or
operation of, or the sale of, collection from, or other realization upon,
any Collateral, (C) the exercise or enforcement of any of the rights of
Bank hereunder, or (D) the failure of the Grantor to perform or observe
any of the provision hereof or of the Loan Agreement;
(ii) Second, to the reimbursement of Bank for the amount of any
obligations of the Grantor paid or discharged by Bank pursuant to the
provisions of this Agreement, and of any expenses of Bank payable by the
Grantor thereunder;
(iii) Third, to the satisfaction of the Obligations, in such order
as Bank shall elect;
(iv) Fourth, to the payment of any other amounts required by
applicable law [INCLUDING, WITHOUT LIMITATION, SECTION 47-9-615 OF THE
CODE OR ANY SUCCESSOR OR SIMILAR, APPLICABLE STATUTORY PROVISION]; and
(v) Fifth, the surplus proceeds, if any, to the Grantor or to
whomsoever shall be lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct.
8. Rights and Duties of Bank, Etc. Bank undertakes, as to this Agreement,
to exercise only such duties as are specifically set forth in this Agreement and
to exercise such of the rights, powers and remedies as are vested in it by this
Agreement or by law.
9. Indemnity and Expenses. (a) The Grantor agrees to indemnify Bank from
and against any and all claims, losses, and liabilities growing out of or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement, except claims, losses, or liabilities resulting solely and
directly from Bank's gross negligence or willful misconduct.
(b) Upon the occurrence of an Event of Default, the Grantor will upon
demand pay to Bank the amount of any and all costs and expenses, including the
fees and disbursements of the Bank's counsel and of any experts and agents on a
time and charges basis, which Bank may incur in connection with (i) the
administration of this Agreement (excluding the salary of Bank's
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employees and Bank's normal and usual overhead expenses); (ii) the custody,
preservation, use, or operation of, or the sale of, collection from, or other
realization upon, any Collateral; (iii) the exercise or enforcement of any of
the rights of Bank hereunder; or (iv) the failure by the Grantor to perform or
observe any of the provisions hereof, except expenses resulting solely and
directly from Bank's gross negligence or willful misconduct.
10. Notices Etc. All notices and other communications provided for
hereunder (except for routine informational communications) shall be in writing
and shall be mailed (by registered or certified mail, return receipt requested,
except for routine informational communications) or delivered, if to the Grantor
to it at its address specified in the first paragraph of this Agreement;
Attention: Xxxxxx Xxxxxx, with a copy to Xxxx, Klein, Umphrey, Xxxxxxxx & May,
P.C., 000 Xxxx Xxx Xxxxxx Xxxx, Xxxxx 000, Xxxx, Xxxxxxxx 00000, Attention:
Xxxxx X. Xxxxxxxx, Xx.; and if to the Bank, to it Attention: Commercial Finance
Division at its address specified in the first paragraph of this Agreement, with
a copy (if other than a routine informational communication) to Baker, Donelson,
Bearman, Xxxxxxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxxx 00000, Attention: Xxxx Xxxxxx. All such notices and other
communications shall be effective (i) if mailed, when received or three (3) days
after mailing, whichever is earlier; or (ii) if delivered, upon delivery.
11. Security Interest Absolute. All rights of Bank, all security interests
and all obligations of the Grantor hereunder shall be absolute and
unconditional irrespective of: (i) any lack of validity or enforceability of the
Loan Agreement, any guaranty, or any other agreement or instrument relating
thereto; (ii) any change in the time, manner, or place of payment of, or in any
other term in respect of, all or any of the obligations, or any other amendment
or waiver of or consent to any departure from this Agreement, any guaranty, or
any other agreement or instrument relating thereto; (iii) any increase in,
addition to, or exchange, release, or non-perfection of, any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Obligations; (iv) any other circumstance which
might otherwise constitute a defense available to, or a discharge of, the
Grantor in respect of the Obligations or this Agreement; or (v) the absence of
any action on the part of Bank to obtain payment or performance of the
Obligations from the Grantor or any other party.
12. Miscellaneous. (a) No amendment of any provision of this Security
Agreement shall be effective unless it is in writing and signed by the Grantor
and Bank, and no waiver of any provision of this Agreement, and no consent to
any departure by the Grantor therefrom, shall be effective unless it is in
writing and signed by Bank, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
(b) No failure on the part of Bank to exercise, and no delay in
exercising, any right hereunder or under any other instrument or document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies of Bank provided herein and in the other
instruments and documents are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law. The rights of Bank under
any Loan Agreement between the parties, any guaranty, any other instrument which
now or hereafter evidences or secures all or part of the Obligations, or any
related document against any party thereto are not conditional or
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contingent on any attempt by Bank to exercise any of its rights under any other
such instrument or document against such party or against any other party.
(c) Any provision of this Security Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction ,be ineffective
to the extent of such prohibition or invalidity without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(d) This agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of all of the Obligations, (ii) be binding on the Grantor and its
successors and permitted assigns and shall inure, together with all rights and
remedies of Bank hereunder, to the benefit of Bank and its successors,
transferees, and permitted assigns. None of the rights or obligations of the
Grantor hereunder may be assigned or otherwise transferred without the prior
written consent of Bank. The Bank shall not have the right to assign any part of
its right under this Agreement without the consent of the Grantor whose consent
shall not be unreasonably withheld.
(e) Upon the satisfaction in full of all of the Obligations, Bank will,
upon the Grantor's request and at the Grantor's expense, (i) return to the
Grantor such of the Collateral as shall not have been sold or otherwise disposed
of or applied pursuant to the terms hereof; and (ii) execute and deliver to the
Grantor such documents as the Grantor shall reasonably request to evidence
termination of the security interest herein granted.
(f) This Agreement shall be governed by the construed in accordance with
the statutes and laws of the State of Tennessee, except as required by mandatory
provisions of law and except to the extent that the validity or perfection of
the security interest created hereby, or remedies hereunder, in respect of any
particular Collateral are governed by the laws of a jurisdiction other than the
State of Tennessee. If any provision hereof is in conflict with the provisions
of the Loan Agreement, the provisions of the Loan Agreement shall control.
13. Compromises. Releases, Etc. The Grantor agrees that:
(a) The Bank is hereby authorized from time to time, without notice to
anyone, to make any sales, pledges surrenders, compromises, settlements,
releases, indulgences, alterations, substitutions, exchanges, changes in,
modifications, or other dispositions including, without limitation,
cancellations, of all or any part of the Loan indebtedness, or of any contract
or instrument evidencing any thereof, or of any security or collateral therefor,
and/or to take any security for or other guaranties upon any of said
indebtedness; and the liability of the Grantor shall not be in any manner
affected, diminished, or impaired thereby, or by any lack of diligence, failure,
neglect, or omission on the part of Bank to make any demand or protest, or give
any notice of dishonor or default, or to realize upon or protect any of said
indebtedness or any collateral or security therefor, except for the notices
required by the Loan Agreement.
(b) The Bank shall have the exclusive right to determine how, when, and
what application of payments and credits, if any, shall be made on the Loan and
extensions of credit or any part thereof, and shall be under no obligation, at
any time, to first resort to, make demand on, file a claim against, or exhaust
its remedies against the Borrower, or its property or estate, or to
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resort to or exhaust its remedies against any collateral, security property,
liens, or other rights whatsoever.
(c) [INTENTIONALLY DELETED]
(d) Any claims against the Borrower accruing to the Grantor by reason of
the Grantor's granting of the security interest herein contained and any
payments made to the Bank with respect thereto shall be subordinate to any
indebtedness now or at any time hereafter owing by the Borrower to the Bank,
Grantor hereby defers the exercise of all rights of subrogation against the
Borrower until all indebtedness, liabilities and obligations of the Borrower
to the Bank shall have been fully and finally paid and satisfied.
(e) Venue of Actions. As an integral part of the consideration for the
making of the Loan as provided in the Loan Agreement it is expressly understood
and agreed that no suit or action shall be commenced by the Grantor or by any
heir, successor, personal representative or assignee of any of them, with
respect to the Obligations or this Agreement, the Loan Agreement, or with
respect to any of the loan documents, other than in a state court of competent
jurisdiction in and for the County of the State in which the principal place of
business of the Bank is situated, or in the United States District Court for the
District in which the principal place of business of the Bank is situated, and
not elsewhere. Nothing in this paragraph contained shall prohibit Bank
instituting suit in any court of competent jurisdiction for the enforcement of
its rights hereunder, in the Note, in this Agreement, in the Loan Agreement or
in any other loan document. If any suit or action brought hereunder can qualify
for filing in federal court, the parties agree to file the suit or action in
federal court.
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be executed
and delivered by its duly authorized officers on this the day and year first
above written.
LOUISIANA TRANSPORTATION, INC.,
a Michigan corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Title: PRESIDENT
GRANTOR
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EXHIBIT "A"
TO
SECURITY AGREEMENT
A-1
