SECURITY AGREEMENT
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THIS SECURITY AGREEMENT (this "Agreement") dated as of
February 27, 1998 by and among:
XXXX INTERNATIONAL HOLDINGS, INC., a Delaware corporation
("Holdings");
DEFLECTA-SHIELD CORPORATION, a Delaware corporation ("Deflecta"),
XXXX INDUSTRIES, INCORPORATED, a Minnesota corporation ("LII"),
BELMOR AUTOTRON CORP., a Delaware corporation ("Autotron"),
DFM CORP., an Iowa corporation ("DFM"),
(each a "Borrower" and, collectively, "Borrowers");
XXXX ACQUISITION CORP., a Minnesota corporation ("LAC"),
BAC ACQUISITION CO., a Delaware corporation ("BAC"),
TRAILMASTER PRODUCTS, INC., a Delaware corporation
("Trailmaster"),
DELTA III, INC., a Delaware corporation ("Delta"),
(each an "Active Subsidiary" and, collectively, "Active
Subsidiaries"),
(each of Holdings, Borrowers and Active Subsidiaries referred to
herein individually as a "Grantor" and collectively, "Grantors");
and
XXXXXX FINANCIAL, INC., a Delaware corporation, as agent
("Agent") for the benefit of all Lenders.
W I T N E S S E T H:
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WHEREAS, each of the Grantors, Agent and Lenders are parties
to a Credit Agreement dated as of the date hereof (as the same
may be amended, restated, supplemented or otherwise modified and
in effect from time to time, the "Credit Agreement");
WHEREAS, each Grantor executed a Guaranty dated as of the
date hereof (as the same may be amended, restated, supplemented
or otherwise modified from time to time, the "Guaranty") pursuant
to which each Grantor has guaranteed to Agent, for the benefit of
Lenders, the full payment and performance by Borrowers of all of
Borrowers' indebtedness, liabilities and obligations under the
Credit Agreement, each of the Notes and the other Loan Documents;
WHEREAS, Grantors are part of the same affiliated enterprise
and as such, will derive direct and indirect economic benefits
from the making of loans and issuances of letters of credit and
risk participation agreements under the Credit Agreement; and
WHEREAS, it is a condition precedent to the making of loans
and issuances of Lenders Letters of Credit and Risk Participation
Agreements under the Credit Agreement that Grantors shall have
granted the security interests contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises and in
order to induce Lenders to make loans and issue Lenders Letters
of Credit and Risk Participation Agreements under the Credit
Agreement, Grantors hereby agree with Agent for its benefit and
the benefit of Lenders as follows:
SECTION 1. DEFINITIONS
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1.1 Certain Defined Terms. Terms defined in the Credit
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Agreement and not otherwise defined herein have the respective
meanings provided for in the Credit Agreement. The following
terms, as used herein, have the meanings set forth below:
"Accounts" means all "accounts" (as defined in the UCC) now
owned or hereafter created or acquired by any Grantor including,
without limitation all of the following now owned or hereafter
created or acquired by any Grantor: (a) accounts receivable,
contract rights, book debts, notes, drafts and other obligations
or indebtedness owing to such Grantor arising from the sale,
lease or exchange of goods or other property and/or the
performance of services; (b) such Grantor's rights in, to and
under all purchase orders for goods, services or other property,
(c) such Grantor's rights to any goods, services or other
property represented by any of the foregoing (including returned
or repossessed goods and unpaid sellers' rights of rescission,
replevin, reclamation and rights to stoppage in transit); (d)
monies due to or to become due to such Grantor under all
contracts for the sale, lease or exchange of goods or other
property and/or the performance of services (whether or not yet
earned by performance on the part of such Grantor); (e)
uncertificated securities; and (f) Proceeds of any of the
foregoing and all collateral security and guaranties of any kind
given by any Person with respect to any of the foregoing.
"Assigned Agreements" means all agreements of the type
identified on Schedule I hereto, as each may be amended,
restated, supplemented or otherwise modified and in effect from
time to time.
"Blocked Account" has the meaning assigned to that term in
Section 7.
"Blocked Account Agreement" has the meaning assigned to that
term in Section 7.
"Collateral" has the meaning assigned to that term in
Section 2.
"Collecting Banks" has the meaning assigned to that term in
Section 7.
"Copyright License" means any written agreement now or
hereafter in existence granting to any Grantor any right to use
any Copyright including, without limitation, the agreements
described in Schedule 2 to the Intellectual Property Assignment.
"Copyrights" means collectively all of the following: (a)
all copyrights, rights and interests in copyrights, works
protectable by copyright, copyright registrations and copyright
applications now owned or hereafter created or acquired by any
Grantor including, without limitation, those listed on Schedule 2
to the Intellectual Property Assignment; (b) all renewals of any
of the foregoing; (c) all income, royalties, damages and payments
now or hereafter due and/or payable under or with respect to any
of the foregoing including, without limitation, damages and
payments for past, present and future infringements of any of
the foregoing; (d) the right to xxx for past, present and future
infringements of any of the foregoing; (e) all rights
corresponding to any of the foregoing throughout the world; and
(f) all goodwill associated with and symbolized by any of the
foregoing.
"Depository Account" has the meaning assigned to the term
"Agent's Account" in the Credit Agreement.
"Documents" means all "documents" (as defined in the UCC) or
other receipts covering, evidencing or representing goods now
owned or hereafter acquired by any Grantor.
"Equipment" means all "equipment" (as defined in the UCC)
now owned or hereafter acquired by any Grantor including, without
limitation, all furniture, furnishings, machinery, motor
vehicles, trucks, trailers, vessels, aircraft and rolling stock
and all parts thereof and all additions and accessions thereto
and replacements therefor.
"Fixtures" means all of each Grantor's "fixtures" (as
defined in the UCC) and, to the extent not otherwise included,
all of the following now owned or hereafter acquired by any
Grantor: plant fixtures; trade fixtures; business fixtures; other
fixtures and storage office facilities, wherever located; and all
additions and accessions thereto and replacements therefor.
"General Intangibles" means all "general intangibles" (as
defined in the UCC) now owned or hereafter acquired by any
Grantor including, without limitation, all right, title and
interest of any Grantor in and to: (a) the Assigned Agreements
and all other agreements, leases, licenses and contracts to which
such Grantor is or may become a party; (b) all obligations or
indebtedness owing to such Grantor (other than Accounts) or other
rights to receive payments of monies from whatever source
arising; (c) all tax refunds; (d) Intellectual Property; and (e)
all trade secrets and other confidential information relating to
the business of such Grantor including by way of illustration and
not limitation: systems and techniques for the analysis,
diagnosis and correction of malfunctions of products used by such
Grantor's customers; the names and addresses of, and credit and
other business information concerning, such Grantor's past,
present or future customers; the prices which such Grantor
obtains for its services or at which it sells merchandise;
estimating and cost procedures; profit margins; policies and
procedures pertaining to the sale and design of equipment,
components, devices and services furnished by such Grantor;
information concerning supplies of such Grantor; and information
concerning the manner of operation, business plans, pledges,
projections, and all other information of any kind or character,
whether or not reduced to writing, with respect to the conduct by
such Grantor of its business not generally known by the public.
"Guaranty" has the meaning assigned to that term in the
preamble of this Agreement.
"Guaranty Obligations" has the meaning assigned to the term
"Obligations" in the Guaranty.
"Instruments" means all "instruments", "chattel paper" or
"letters of credit" (each as defined in the UCC) including, but
not limited to, promissory notes, drafts, bills of exchange and
trade acceptances, now owned or hereafter acquired by any
Grantor.
"Intellectual Property" shall mean collectively all of the
following: Copyrights, Copyright Licenses, Patents, Patent
Licenses, Trademarks and Trademark Licenses.
"Intellectual Property Assignment" means the Assignment for
Security of Patents, Trademarks and Copyrights dated the date
hereof executed and delivered by Grantors to Agent, in form and
substance satisfactory to Agent, as such agreement may hereafter
be amended, supplemented or otherwise modified from time to time.
"Intercompany Indebtedness" means, with respect to each
Grantor, all assets and liabilities howsoever arising which are
due to such Grantor from, or which are due from Holdings or any
Borrower or other Grantor to, or which otherwise arise from any
transactions by such Grantor with, Holdings, any Borrower or any
other Grantor, or any Affiliate of any such Person.
"Inventory" means all "inventory" (as defined in the UCC)
now owned or hereafter acquired by any Grantor, wherever located
including, without limitation, finished goods, raw materials,
work in process and other materials and supplies (including
packaging and shipping materials) used or consumed in the
manufacture or production thereof and goods which are returned to
or repossessed by any Grantor.
"Investment Property" means "investment property" (as
defined in the UCC) now owned or hereafter acquired by any
Grantor including, without limitation, (a) all securities,
whether certificated or uncertificated, including, without
limitation, stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of
deposit, and mutual fund shares; (b) all security entitlements of
any Grantor including, without limitation, the rights of any
Grantor to any securities account and the financial assets held
by a securities intermediary in such securities account and any
free credit balance or other money owing by any securities
intermediary with respect to that account; (c) all securities
accounts held by any Grantor; (d) all commodity contracts held by
any Grantor; and (e) all commodity accounts held by any Grantor.
"Patent License" means any written agreement now or
hereafter in existence granting to any Grantor any right to use
any invention on which a Patent is in existence including,
without limitation, the agreements described in Schedule 1 to the
Intellectual Property Assignment.
"Patents" means collectively all of the following: (a) all
patents, patent applications and patent licenses now owned or
hereafter created or acquired by any Grantor including, without
limitation, those listed on Schedule 1 to the Intellectual
Property Assignment and the inventions and improvements described
and claimed therein, and patentable inventions; (b) the reissues,
divisions, continuations, renewals, extensions and continuations-
in-part of any of the foregoing; (c) all income, royalties,
damages or payments now and hereafter due and/or payable under or
with respect to any of the foregoing including, without
limitation, damages and payments for past, present and future
infringements of any of the foregoing; (d) the right to xxx for
past, present and future infringements of any of the foregoing;
(e) all rights corresponding to any of the foregoing throughout
the world; and (f) all goodwill associated with and symbolized by
any of the foregoing.
"Proceeds" means "proceeds" (as defined in the UCC)
including, without limitation, all proceeds of, and all other
profits, rentals or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other
disposition of, or realization upon, any Collateral including,
without limitation, all claims of any Grantor against third
parties for loss of, damage to or destruction of, or for proceeds
payable under, or unearned premiums with respect to, policies of
insurance with respect to any Collateral, and any condemnation or
requisition payments with respect to any Collateral, in each case
whether now existing or hereafter arising.
"Secured Obligations" has the meaning assigned to that term
in Section 3.
"Security Interests" means the security interests granted
pursuant to Section 2, as well as all other security interests
created or assigned as additional security for the Secured
Obligations pursuant to the provisions of this Agreement.
"Trademark License" means any written agreement now or
hereafter in existence granting to any Grantor any right to use
any Trademark, including, without limitation, the agreements
described in Schedule 3 to the Intellectual Property Assignment.
"Trademarks" means collectively all of the following now
owned or hereafter created or acquired by any Grantor: (a) all
trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks,
logos, other business identifiers, prints and labels on which any
of the foregoing have appeared or appear, all registrations and
recordings thereof, and all applications and licenses in
connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision
thereof, including, without limitation, those described in
Schedule 3 to the Intellectual Property Assignment; (b) all
reissues, extensions or renewals thereof; (c) all income,
royalties, damages and payments now or hereafter due and/or
payable under or with respect to any of the foregoing including,
without limitation, damages and payments for past, present and
future infringements of any of the foregoing; (d) the right to
xxx for past, present and future infringements of any of the
foregoing; (e) all rights corresponding to any of the foregoing
throughout the world; and (f) all goodwill associated with and
symbolized by any of the foregoing.
"UCC" means the Uniform Commercial Code as in effect on the
date hereof in the State of New York, as amended from time to
time, and any successor statute; provided, that if
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by reason of mandatory provisions of law, the perfection or the
effect of perfection or non-perfection of the Security Interest
in any Collateral or the availability of any remedy hereunder is
governed by the Uniform Commercial Code as in effect on or after
the date hereof in any other jurisdiction, "UCC" means the
Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection or availability of such
remedy.
1.2 Other Definition Provisions. References to "Sections",
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"subsections", "Exhibits" and "Schedules" shall be to Sections,
subsections, Exhibits and Schedules, respectively, of this
Agreement unless otherwise specifically provided. Any of the
terms defined in subsection 1.1 may, unless the context otherwise
requires, be used in the singular or the plural depending on the
reference. In this Agreement, "hereof," "herein," "hereto,"
"hereunder" and words of similar import as used in this Agreement
shall refer to this Agreement as a whole and not merely to the
specific section, paragraph or clause in which the respective
word appears; words importing any gender include the other
gender, references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible
visible form; the words "including," "include" shall be deemed to
be followed by the words "without limitation"; references to
agreements and other contractual instruments shall be deemed to
include subsequent amendments, assignments, and other
modifications thereto, but only to the extent such amendments,
assignments and other modifications are not prohibited by the
terms of this Agreement or any other Loan Document; references to
Persons include their respective permitted successors and assigns
or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to
statutes and related regulations shall include any amendments of
same and any successor statutes and regulations.
SECTION 2. GRANT OF SECURITY INTERESTS
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In order to secure the payment and performance of the
Secured Obligations in accordance with the terms thereof, each
Grantor hereby grants to Agent for the benefit of Lenders a
continuing security interest in and to all right, title and
interest of such Grantor in the following property, whether now
owned or existing or hereafter acquired or arising and regardless
of where located (all being collectively referred to as the
"Collateral".):
(A) Accounts;
(B) Inventory;
(C) General Intangibles;
(D) Documents;
(E) Instruments;
(F) Equipment;
(G) Fixtures;
(H) Intellectual Property;
(I) Intercompany Indebtedness;
(J) Investment Property;
(K) All deposit accounts of such Grantor maintained
with any bank or financial institution, all cash
deposited therein from time to time;
(L) Any and all other property of any kind which any
Grantor may hereafter at any time deliver to Agent
or any Lender to secure the obligations of such
Grantor owed to Agent or any Lender and all
proceeds of any such property;
(M) All books, records, ledger cards, files,
correspondence, computer programs, tapes, disks
and related data processing software that at any
time evidence or contain information relating to
any of the property described in subparts (A) -
(L) above or are otherwise necessary or helpful in
the collection thereof or realization thereon; and
(N) Proceeds of all or any of the property described
in subparts (A) - (M) above and of any insurance
policies covering any such property.
Notwithstanding the foregoing, so long as no Event of Default has
occurred and is continuing, each Grantor shall have the
exclusive, non-transferable right and license to use the
Intellectual Property and the exclusive right to grant to other
Persons licenses and sublicenses with respect to any of the
Intellectual Property.
SECTION 3. SECURITY FOR OBLIGATIONS.
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This Agreement secures the payment and performance of all
obligations of each Grantor now or hereafter existing under this
Agreement, the Credit Agreement, the Notes, the Guaranty and the
other Loan Documents, including, without limitation, all
Obligations (as defined in the Credit Agreement) and the Guaranty
Obligations, and all obligations of each Grantor now or
hereafter existing under this Agreement and all renewals,
extensions, restructurings and refinancings of any of the above
(all such debts, obligations and liabilities of Grantors,
individually and together, being collectively called the "Secured
Obligations").
SECTION 4. EACH GRANTOR REMAINS LIABLE
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Anything herein to the contrary notwithstanding: (a) each
Grantor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed; (b) the
exercise by Agent of any of the rights hereunder shall not
release any Grantor from any of its duties or obligations under
the contracts and agreements included in the Collateral; and (c)
neither Agent nor Lenders shall have any obligation or liability
under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall Agent or Lenders be obligated
to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
SECTION 5. REPRESENTATIONS AND WARRANTIES
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Grantors jointly and severally represent and warrant as
follows:
5.1 Binding Obligation. This Agreement is the legally
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valid and binding obligation of each Grantor, enforceable against
it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium, or
similar laws or equitable principles relating to or limiting
creditor's rights generally.
5.2 Location of Equipment and Inventory. All of the
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Equipment and Inventory is located at the places specified on
Schedule 2.8 annexed to the Credit Agreement.
5.3 Ownership of Collateral; Bailees; Leased Premises.
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Except for matters disclosed on Schedule II hereto, other
Permitted Encumbrances and the Security Interests, each Grantor
owns the Collateral free and clear of any Lien. No effective
financing statement or other form of lien notice covering all or
any part of the Collateral is on file in any recording office,
except for those in favor of Agent and as disclosed on Schedule
II hereto. Except as disclosed on Schedule II hereto, none of
the Collateral is in the possession of any bailee, warehouseman,
agent or processor.
5.4 Office Locations; FEIN; Fictitious Names. The chief
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place of business, the chief executive office and the office
where each Grantor keeps its books and records are located at the
places specified on Schedule 5.11 annexed to the Credit
Agreement. Each Grantor's federal employee identification number
is specified in Schedule 5.11 annexed to the Credit Agreement.
No Grantor does business or conducts business nor has any Grantor
done business or conducted business during the five (5) years
prior to the Closing Date under any trade-name or fictitious
business name except as disclosed on Schedule 5.10 annexed to the
Credit Agreement.
5.5 Filing Requirements; Perfection. None of the
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Collateral is of a type in which security interests or liens may
be registered, recorded or filed under, or notice thereof given
under, any federal statute or regulation except for Collateral
described in the schedules to the Intellectual Property
Assignment. This Agreement, together with such filings,
recordings, registering creates a valid, perfected and, except
for matters disclosed on Schedule II hereto and Permitted
Encumbrances, first priority security interest in the Collateral,
securing the payment of the Secured Obligations, and all filings
and other actions necessary or desirable to perfect and protect
such security interest have been duly taken, other than the
filing of the Intellectual Property Assignment with the United
States Copyright Office and with the United States Patent and
Trademark Office.
5.6 Governmental Authorizations; Consents. No
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authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body (other
than perfection filings required under the UCC or any federal
statute governing the Collateral) or consent of any other Person
(including, without limitation, any licensor of Intellectual
Property or party to any Assigned Agreement) is required either
(a) for the grant by any Grantor of the security interest granted
hereby or for the execution, delivery or performance of this
Agreement by any Grantor or (b) for the perfection of or the
exercise by Agent of its rights and remedies hereunder (except,
with respect to Intellectual Property, for the filings
contemplated in Section 5.5).
5.7 Accounts. As to each Account, (a) the Account
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constitutes the legally, valid and binding obligation of the
customer obligated to pay the same and represents an undisputed
indebtedness incurred by the named customer; (b) no customer has
any defense, set-off, claim or counterclaim against any Grantor
that can be asserted against Agent, whether in any proceeding to
enforce Agent's rights in the Collateral or otherwise, and there
are no set-offs, offsets or counterclaims, genuine or otherwise,
against the Account; (c) the Account does not represent a sale to
an Affiliate or a consignment, sale or return or a xxxx and hold
transaction; (d) no agreement exists permitting any deduction or
discount (other than the discount stated on the invoice); (e) the
Grantor which holds such Account is the lawful owner of such
Account and has the right to assign the same to Agent, for the
benefit of Lenders; (f) the Account is free of all security
interests, liens and encumbrances other than those in favor of
Agent, on behalf of Lenders, except for Permitted Encumbrances;
and (g) the Account is due and payable in accordance with its
terms.
5.8 Intellectual Property. The Copyrights, Copyright
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Licenses, Patents, Patent Licenses, Trademarks and Trademark
Licenses listed on the respective schedules to the Intellectual
Property Assignment constitute all of the Intellectual Property
owned by each Grantor.
5.9 Accurate Information. All information heretofore,
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herein or hereafter supplied to Agent by or on behalf of any
Grantor with respect to the Collateral is and will be accurate
and complete in all material respects, taking into account any
amendments to Schedules as a result of any disclosures made by
Grantors to Agent after the Closing Date and approved by Agent.
5.10 Credit Agreement Warranties. Each representation and
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warranty set forth in Section 5 of the Credit Agreement and in
each of the Loan Documents is true and correct in all material
respects and such representations and warranties are hereby
incorporated herein by this reference with the same effect as
through set forth in their entirety herein.
SECTION 6. FURTHER ASSURANCES; COVENANTS
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6.1 Other Documents and Actions. Each Grantor will, from
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time to time, at its expense, promptly execute and deliver all
further instruments and documents and take all further action
that may be necessary or desirable, or that Agent may reasonably
request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable Agent to
exercise and enforce its rights and remedies hereunder or the
rights and remedies of any Lender, with respect to any Collateral
or to carry out the provisions and purposes hereof. Without
limiting the generality of the foregoing, each Grantor will: (a)
execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as Agent may reasonably request, in
order to perfect and preserve the security interests granted or
purported to be granted hereby, (b) at any reasonable time, upon
reasonable prior notice by Agent (except, upon the occurrence and
during the continuance of an Event of Default, at any time and
without notice) exhibit the Collateral to allow inspection of the
Collateral by Agent or persons designated by Agent, provided that
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nothing contained herein shall grant to Agent or Lenders rights
to obtain appraisals in addition to those provided in Section 4.7
(H) of the Credit Agreement; and (c) upon Agent's request, appear
in and defend any action or proceeding that may affect such
Grantor's title to or Agent's security interest in the
Collateral.
6.2 Agent Authorized. Each Grantor hereby authorizes Agent
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to file one or more financing or continuation statements, and
amendments thereto (or similar documents required by any laws of
any applicable jurisdiction), relating to all or any part of the
Collateral without the signature of such Grantor to the extent
permitted by law.
6.3 Corporate or Name Change. Each Grantor will notify
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Agent promptly in writing not less than thirty (30) days prior to
any change in such Grantor's name, identity or corporate
structure.
6.4 Locations. Each Grantor will keep the Collateral at
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the locations specified on Schedule 2.8 annexed to the Credit
Agreement, as such schedule may be amended from time to time.
Each Grantor will give Agent thirty (30) days prior written
notice of any change in such Grantor's chief place of business or
of any new location of business or any new location for any of
the Collateral. With respect to any new location (which in any
event shall be within the continental United States), each
Grantor will execute such documents and take such actions as
Agent reasonably deems necessary to perfect and protect the
Security Interests.
6.5 Bailees; Landlords. If any Collateral is at any time
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in the possession or control of any warehouseman, bailee or any
of any Grantor's agents or processors, Grantors shall, upon the
request of Agent, notify such warehouseman, bailee, agent or
processor of the Security Interests created hereby and instruct
such Person to hold all such Collateral for Agent's account
subject to Agent's instructions and shall use its best efforts to
obtain from each such Person a bailee's letter reasonably
satisfactory in form and substance to Agent with respect to such
Collateral. If any Collateral is at any time located on premises
leased by any Grantor, such Grantor shall, upon the request of
Agent, notify the lessor of each such leased premises of the
Security Interests created hereby and, to the extent such
premises constitute such Grantor's principal place of business or
other location where books or records relating to such Grantor's
business are maintained, shall use its best efforts to obtain
from each such Person a landlord's waiver and consent reasonably
satisfactory in form and substance to Agent with respect to such
Collateral; provided, however, if Grantor uses its best efforts
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to obtain such waivers or consents and fails to so obtain such
waivers or consents then such failure shall not be deemed a
violation or breach of this Agreement or of any other Loan
Document.
6.6 Instruments. Each Grantor will deliver and pledge to
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Agent all Instruments duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and
substance reasonably satisfactory to Agent. Each Grantor will
xxxx conspicuously all chattel paper with a legend, in form and
substance reasonably satisfactory to Agent, indicating that such
chattel paper is subject to the Security Interests. Without
limiting the generality of the foregoing, Grantors will xxxx
conspicuously all Assigned Agreements (whether or not
constituting chattel paper) with the legend referred to in the
preceding sentence.
6.7 Certificates of Title. Upon Agent's request, each
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Grantor shall promptly deliver to Agent any and all certificates
of title, applications for title or similar evidence of ownership
of all Equipment and shall cause Agent to be named as lienholder
on any such certificate of title or other evidence of ownership.
Each Grantor shall promptly inform Agent of any material
additions to or material deletions from the Equipment and shall
not permit any such items to become fixtures to real estate other
than real estate described in the Mortgages.
6.8 Account Covenants. Except as otherwise provided in
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this subsection 6.8, each Grantor shall continue to collect, at
its own expense, all amounts due or to become due such Grantor
under the Accounts. In connection with such collections, each
Grantor may take (and, at Agent's direction, shall use its best
efforts to take) such action as such Grantor or Agent may deem
reasonably necessary or advisable to enforce collection of the
Accounts; provided, that Agent shall have the right at any time
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after the occurrence and during the continuation of an Event of
Default to: (a) notify the customers or obligors under any
Accounts of the assignment of such Accounts to Agent (on behalf
of Lenders) and to direct such customers or obligors to make
payment of all amounts due or to become due directly to Agent;
(b) enforce collection of any such Accounts; and (c) adjust,
settle or compromise the amount or payment of such Accounts.
After the occurrence and during the continuation of an Event of
Default: (i) all amounts and proceeds (including Instruments)
received by any Grantor with respect to the Accounts shall be
received in trust for the benefit of Agent (on behalf of
Lenders), shall be segregated from other funds of Grantors and
shall be forthwith paid over to Agent in the same form as so
received (with any necessary endorsement) to be applied in
accordance with Section 14; and (ii) no Grantor shall adjust,
settle or compromise the amount or payment of any Account, or
release wholly or partially any customer or obligor thereof, or
allow any credit or discount thereon without the prior consent of
Agent.
6.9 Intellectual Property Covenants. Grantors shall
-------------------------------
concurrently herewith deliver to Agent the Intellectual Property
Assignment and all other documents, instruments and other items
as may be necessary for Agent to file such agreement with the
United States Copyright Office, United States Patent and
Trademark Office and any similar domestic or foreign office,
department or agency. Before the Secured Obligations are paid in
full, if any Grantor obtains any new Intellectual Property or
rights thereto or becomes entitled to the benefit of any
Intellectual Property not listed on the respective schedules to
the Intellectual Property Assignment, such Grantor shall give to
Agent prompt written notice thereof, and shall amend the
Intellectual Property Assignment to include any such new
Intellectual Property. Each Grantor shall: (a) prosecute
diligently any copyright, patent, trademark or license
application at any time pending; (b) make application on all new
copyrights, patents and trademarks as reasonably deemed
appropriate by such Grantor; (c) preserve and maintain all rights
in the Intellectual Property; and (d) use its best efforts to
obtain any consents, waivers or agreements necessary to enable
Agent to exercise its remedies with respect to the Intellectual
Property. No Grantor shall abandon any right to file a
copyright, patent or trademark application nor shall any Grantor
abandon any pending copyright, patent or trademark application,
or Copyright, Copyright License, Patent, Patent License,
Trademark or Trademark License without the prior written consent
of Agent, which consent shall not be unreasonably withheld. Each
Grantor represents and warrants to Agent that the execution,
delivery and performance of this Agreement by such Grantor will
not violate or cause a default under any of the Intellectual
Property or any agreement in connection therewith which could
reasonably be expected to have a Material Adverse Effect.
6.10 Equipment Covenants. Each Grantor shall cause the
-------------------
Equipment to be maintained and preserved in the same condition,
repair and working order as when new, ordinary wear and tear
excepted, and in accordance in all material respects with any
manufacturer's manual, and shall promptly make or cause to be
made all repairs, replacements, and other improvements in
connection therewith that are reasonably necessary or desirable
to such end.
6.11 Insurance. Each Grantor shall maintain insurance with
---------
respect to the Collateral in accordance with the terms of the
Credit Agreement.
6.12 Taxes and Claims. Each Grantor will pay promptly when
----------------
due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the
Collateral (including claims for labor, materials and supplies),
except to the extent the validity thereof is being contested in
good faith by appropriate proceedings and appropriate reserves
therefor have been established in accordance with GAAP.
6.13 Collateral Description. Each Grantor will furnish to
----------------------
Agent, from time to time, 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 reasonable detail.
6.14 Use of Collateral. No Grantor will use or permit any
-----------------
Collateral to be used unlawfully or in violation of any provision
of this Agreement or any applicable statute, regulation or
ordinance or any policy of insurance covering any of the
Collateral.
6.15 Records of Collateral. Each Grantor shall keep full
---------------------
and accurate books and records relating to the Collateral and
shall stamp or otherwise xxxx such books and records to indicate
Agent's Security Interest in the Collateral, for the benefit of
Lenders.
6.16 Other Information. Each Grantor will, promptly upon
-----------------
request, provide to Agent all information and evidence Agent may
reasonably request concerning the Collateral, and in particular
the Accounts, to enable Agent to enforce the provisions of this
Agreement.
SECTION 7. BANK ACCOUNTS; COLLECTION OF ACCOUNTS AND PAYMENTS
--------------------------------------------------
Within thirty (30) days after the Closing Date, Grantors
shall establish lockboxes and blocked accounts (collectively,
"Blocked Accounts") in Grantors' names with such banks
("Collecting Banks") as are reasonably acceptable to Agent
(subject to irrevocable instructions acceptable to Agent as
hereinafter set forth and contained in agreements among Agent and
the applicable Borrowers and Collecting Banks ("Blocked Account
Agreements")) to which accounts Grantors shall directly remit all
payments on Accounts and in which Grantors will immediately
deposit all payments constituting proceeds of Collateral in the
identical form in which such payment was made, whether by cash or
check. The Collecting Banks shall acknowledge and agree, in a
manner reasonably satisfactory to Agent, that all payments made
to the Blocked Accounts are the sole and exclusive property of
Agent, for the benefit of Lenders, and that the Collecting Banks
have no right of setoff against the Blocked Accounts, and that
all such payments received will be transferred to Grantor until
the Collecting Bank receives written direction from Agent,
subject to the immediately succeeding paragraph, that all such
payments received will be promptly transferred to the Depository
Account. Grantors hereby agree that all payments received by
Agent, whether by cash, check, wire transfer or any other
instrument, made to such Blocked Accounts or otherwise received
by Agent and whether on the Accounts or as proceeds of other
Collateral or otherwise will be the sole and exclusive property
of Agent, for the benefit of Lenders. Grantors, and any of their
Affiliates, employees, agents or other persons acting for or in
concert with any Grantor, shall, acting as trustee for Agent,
receive, as the sole and exclusive property of Agent, any monies,
checks, notes, drafts or any other payments relating to and/or
proceeds of Accounts or other Collateral which come into the
possession or under the control of any Grantor or any of
Grantor's Affiliates, employees, agents or other Persons acting
for or in concert with any Grantor, and immediately upon receipt
thereof, Grantors or such Persons shall remit the same or cause
the same to be remitted, in kind, to the Blocked Accounts.
Notwithstanding the foregoing, unless an Event of Default
has occurred and is continuing, Agent shall not direct the
Collecting Banks to transfer payments from the Blocked Accounts
to the Depository Account. If an Event of Default shall occur
and be continuing, Agent may direct the Collecting Banks to
transfer funds from the Blocked Accounts to the Depository
Account.
SECTION 8. AGENT APPOINTED ATTORNEY-IN-FACT
--------------------------------
Each Grantor hereby irrevocably appoints Agent as such
Grantor's attorney-in-fact, with full authority in the place and
stead of such Grantor and in the name of such Grantor, Agent or
otherwise, from time to time following the occurrence and during
the continuance of an Event of Default, in Agent's discretion to
take any action and to execute any instrument that Agent may deem
necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation the following:
(a) to obtain and adjust insurance required to be paid
to Agent;
(b) to ask, demand, collect, xxx for, recover,
compound, receive and give acquittance and receipts for
monies due and to become due under or in respect of any of
the Collateral;
(c) to receive, endorse, and collect any drafts or
other instruments, documents and chattel paper, in
connection with clauses (a) and (b) above;
(d) to file any claims or take any action or institute
any proceedings that Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to
enforce the rights of Agent with respect to any of the
Collateral;
(e) to pay or discharge taxes or Liens, levied or
placed upon or threatened against the Collateral, the
legality or validity thereof and the amounts necessary to
discharge the same to be determined by Agent in its sole
discretion, and such payments made by Agent to become
obligations of Grantors to Agent, due and payable
immediately without demand;
(f) to do, at Agent's option and at Grantors' expense,
at any time or from time to time, all acts or things that
Agent reasonably deems necessary to protect and preserve the
Collateral;
(g) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse
receipts, assignments, verifications and notices in
connection with Accounts and other documents (including
without limitation financing statements, continuation
statements and other documents necessary or advisable to
perfect the Security Interests) relating to the Collateral;
and
(h) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though Agent were the
absolute owner thereof for all purposes, and to do, at
Agent's option and Grantors' expense, at any time or from
time to time, all acts and things that Agent deems necessary
to protect, preserve or realize upon the Collateral.
Grantor hereby ratifies and approves all acts of Agent made or
taken pursuant to this Section 8. Neither Agent nor any person
designated by Agent shall be liable for any acts or omissions or
for any error of judgment or mistake of fact or law. This power,
being coupled with an interest, is irrevocable so long as this
Agreement shall remain in force.
SECTION 9. TRANSFERS AND OTHER LIENS
-------------------------
Except as otherwise permitted by the Credit Agreement, no
Grantor shall:
(a) Sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to,
any of the Collateral, except that each Grantor may sell (i)
Inventory in the ordinary course of business and (ii) other
Assets as permitted under the Credit Agreement; or
(b) Except for Permitted Encumbrances, directly or
indirectly create, incur, assume or permit to exist any
Lien, security interest or other charge or encumbrance on or
with respect to any of the Collateral or any proceeds,
income or profits therefrom.
SECTION 10. REMEDIES
--------
If any Event of Default shall have occurred and be
continuing, Agent may exercise in respect of the Collateral, in
addition to all 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 UCC (whether or not the UCC
applies to the affected Collateral) and also may: (a) require any
Grantor to, and each Grantor hereby agrees that it will, at its
expense and upon request of Agent forthwith, assemble all or part
of the Collateral as directed by Agent and make it available to
Agent at a place to be designated by Agent which is reasonably
convenient to both parties; (b) withdraw all cash in the
Depository Account and apply such monies in payment of the
Secured Obligations in the manner provided in Section 14; (c)
without notice or demand or legal process, enter upon any
premises of any Grantor and take possession of the Collateral;
and (d) 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 the Agent's offices or elsewhere, at
such time or times, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as Agent
may deem commercially reasonable and apply the proceeds of such
sales in payment of the Secured Obligations in the manner
provided in Section 14. Each Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days notice
to such 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. At any sale of the Collateral, if
permitted by law, Agent may bid (which bid may be, in whole or in
part, in the form of cancellation of indebtedness) for the
purchase of the Collateral or any portion thereof for the account
of Agent (on behalf of Lenders). Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having
been given. Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. To the extent
permitted by law, each Grantor hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have
under any law now existing or hereafter enacted.
SECTION 11. LICENSE OF INTELLECTUAL PROPERTY
--------------------------------
Each Grantor hereby assigns, transfers and conveys to Agent,
effective upon the occurrence and during the continuation of any
Event of Default hereunder, the nonexclusive right and license to
use all Intellectual Property owned or used by such Grantor
together with any goodwill associated therewith, all to the
extent necessary to enable Agent to realize on the Collateral and
any successor or assign to enjoy the benefits of the Collateral.
This right and license shall inure to the benefit of all
successors, assigns and transferees of Agent and its successors,
assigns and transferees, whether by voluntary conveyance,
operation of law, assignment, transfer, foreclosure, deed in lieu
of foreclosure or otherwise. Such right and license is granted
free of charge, without requirement that any monetary payment
whatsoever be made to any Grantor by Agent.
SECTION 12. ASSIGNED AGREEMENTS
-------------------
If an Event of Default has occurred and is continuing,
Grantors hereby irrevocably authorizes and empower Agent to
assert, either directly or on behalf of any Grantor, any claims
such Grantor may have, from time to time, against any other party
to the Assigned Agreements or to otherwise exercise any right or
remedy of any Grantor under the Assigned Agreements (including,
without limitation, the right to enforce directly against any
party to an Assigned Agreement all of such Grantor's rights
thereunder, to make all demands and give all notices and to make
all requests required or permitted to be made by such Grantor
under the Assigned Agreements).
SECTION 13. LIMITATION ON DUTY OF AGENT WITH RESPECT TO
-------------------------------------------
COLLATERAL
----------
Beyond the safe custody thereof, Agent shall have no duty
with respect to any Collateral in its possession or control (or
in the possession or control of any agent or bailee) or with
respect to any income thereon or the preservation of rights
against prior parties or any other rights pertaining thereto.
Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that
which it accords its own property. Agent shall not be liable or
responsible for any loss or damage to any of the Collateral, or
for any diminution in the value thereof, by reason of the act or
omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by Agent in good
faith.
SECTION 14. APPLICATION OF PROCEEDS
-----------------------
Upon the occurrence and during the continuance of an Event
of Default, the proceeds of any sale of, or other realization
upon, all or any part of the Collateral and any cash held in the
Depository Account shall be applied: first, to all fees, costs
-----
and expenses incurred by Agent or any Lender with respect to the
Credit Agreement, the other Loan Documents or the Collateral
including, without limitation, those described in the Credit
Agreement and in Section 15 hereof; second, to all fees due and
------
owing to Agent or any Lender, third, to accrued and unpaid
-----
interest on the Obligations (including any interest which but for
the provisions of the Bankruptcy Code, would have accrued on such
amounts); fourth, to the principal amounts of the Obligations
------
outstanding; fifth, to any other indebtedness or obligations of
-----
any Grantor owing to Agent or any Lender; and sixth, upon payment
-----
in full of all such amounts, remaining surplus, if any, to
Grantors.
SECTION 15. EXPENSES
--------
Each Grantor shall pay (i) all insurance expenses subject to
the terms and provisions of the Credit Agreement, (ii) all
reasonable expenses of protecting, storing, warehousing,
appraising, insuring, handling, maintaining and shipping the
Collateral, (iii) all reasonable costs, fees and expenses of
perfecting and maintaining the Security Interests, (iv) any and
all excise, property, sales and use taxes imposed by any state,
federal, local or foreign authority on any of the Collateral;
provided, however, that no such tax need be paid if such Grantor
-------- -------
is contesting same in good faith in a manner which stays
enforcement thereof by appropriate proceedings promptly
instituted and diligently conducted and if such Grantor has
established reserves or other appropriate provisions as shall be
required in conformity with GAAP, and (v) all costs, fees and
expenses with respect to periodic appraisals and inspections of
the Collateral, or with respect to the sale or other disposition
thereof. If any Grantor fails promptly to pay any portion of the
above expenses when due (except for any such expenses referred to
in clause (iv) that are being contested in good faith and against
which reserves are so established) or to perform any other
obligation of such Grantor under this Agreement, Agent or any
other Lender may, at its option, but shall not be required to,
pay or perform the same and charge Grantors' account for all
costs and expenses incurred therefor, and each Grantor agrees to
reimburse Agent or such Lender therefor on demand. All sums so
paid or incurred by Agent or any other Lender for any of the
foregoing, any and all other sums for which any Grantor may
become liable hereunder and all costs and expenses (including
attorneys' fees, legal expenses and court costs) incurred by
Agent or any other Lender in enforcing or protecting the Security
Interests or any of their rights or remedies under this Agreement
shall be payable on demand, shall constitute Obligations, shall
bear interest until paid at the highest rate provided in the
Credit Agreement and shall be secured by the Collateral.
SECTION 16. TERMINATION OF SECURITY INTERESTS; RELEASE OF
---------------------------------------------
COLLATERAL
----------
Upon payment in full in cash of all Secured Obligations and
the termination of all commitments to make loans or to issue
Lender Letters of Credit or Risk Participation Agreements, Agent
shall release and discharge its Security Interests in the
Collateral. Upon such termination of the Security Interests or
release of any Collateral, Agent will, at the expense of
Grantors, execute and deliver to Grantors such documents as
Grantors shall reasonably request to evidence the termination of
the Security Interests or the release of such Collateral, as the
case may be.
SECTION 17. NOTICES
-------
Unless otherwise provided specifically herein, all notices,
approvals, requests, demands and other communications hereunder
shall be given in accordance with the notice provision of the
Credit Agreement and, with respect to the Grantors, at the
address of the Grantors indicated in the notice provision of the
Credit Agreement.
SECTION 18. WAIVERS, NON-EXCLUSIVE REMEDIES
-------------------------------
No failure on the part of Agent to exercise, and no delay in
exercising and no course of dealing with respect to, any power,
privilege or right under the Credit Agreement, this Agreement or
any of the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise by Agent of any
power, privilege or right under the Credit Agreement, this
Agreement or any of the other Loan Documents preclude any other
or further exercise thereof or the exercise of any other power,
privilege or right. The powers, privileges and rights contained
in this Agreement, the Credit Agreement and the other Loan
Documents are cumulative and are not exclusive of any other
remedies provided by law.
SECTION 19. SUCCESSORS AND ASSIGNS
----------------------
This Agreement is for the benefit of Agent and Lenders and
their successors and assigns, and in the event of an assignment
of all or any of the Secured Obligations, the rights hereunder,
to the extent applicable to the Secured Obligations so assigned,
may be transferred with such Secured Obligations. This Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns except that
none of the Grantors may assign their respective rights or
obligations hereunder without the prior written consent of all
Lenders. Lenders' rights of assignment are subject to subsection
----------
9.1 of the Credit Agreement.
---
SECTION 20. CHANGES IN WRITING
------------------
No amendment, modification, termination or waiver of any
provision of this Agreement or consent to any departure by any
Grantor therefrom, shall in any event be effective without the
written concurrence of Agent and Grantors and, to the extent
required by the Credit Agreement, Requisite Lenders.
SECTION 21. APPLICABLE LAW
--------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS
----------------------------------------------
EACH GRANTOR AGREES THAT, SUBJECT TO AGENT'S ELECTION, ANY
ACTION OR PROCEEDING TO ENFORCE OR ARISING OUT OF THIS AGREEMENT
MAY BE COMMENCED IN ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
BOROUGH OF MANHATTAN, STATE OF NEW YORK, AND EACH GRANTOR WAIVES
PERSONAL SERVICE OF PROCESS AND AGREES THAT A SUMMONS AND
COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN ANY SUCH COURT
SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION
IF SERVED BY MESSENGER OR REGISTERED MAIL TO GRANTORS AND, IF BY
REGISTERED MAIL, SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
FOUR (4) BUSINESS DAYS AFTER THE SAME SHALL HAVE BEEN POSTED, OR
AS OTHERWISE PROVIDED BY THE LAWS OF NEW YORK OR THE UNITED
STATES.
SECTION 23. WAIVER OF JURY TRIAL
--------------------
EACH GRANTOR, AGENT AND EACH LENDER ACKNOWLEDGES THAT THE
TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND
EXPENSE REQUIRED FOR A BENCH TRIAL AND HEREBY WAIVES, TO THE
EXTENT PERMITTED BY LAW, TRIAL BY JURY. EACH GRANTOR HEREBY
WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, ANY OBJECTION
----- --- ----------
TO VENUE OF ANY ACTION INSTITUTED HEREUNDER, AND WAIVES ANY BOND
OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS
WAIVER, BE REQUIRED OF AGENT OR LENDERS.
SECTION 24. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
------------------------------------------
CUMULATIVE
----------
No failure or delay on the part of Agent or any Lender in
the exercise of any power, right or privilege hereunder shall
impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or any other right,
power or privilege. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
SECTION 25. HEADINGS
--------
Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be
given any substantive effect.
SECTION 26. COUNTERPARTS
------------
This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
and the same instrument and any of the parties hereto may execute
this Agreement by signing any such counterpart.
[signature pages follow]
IN WITNESS WHEREOF, each of the undersigned has caused this
Security Agreement to be duly executed and delivered by its duly
authorized officer as of the date first above written.
XXXX INTERNATIONAL HOLDINGS, INC.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
XXXX INDUSTRIES, INCORPORATED
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
DEFLECTA-SHIELD CORPORATION
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
BELMOR AUTOTRON CORP.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
DFM CORP.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
[SIGNATURE PAGE TO SECURITY AGREEMENT]
XXXX ACQUISITION CORP.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
BAC ACQUISITION CO.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
TRAILMASTER PRODUCTS, INC.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
DELTA III, INC.
By: /s/ Xxx X. Xxxxxxxx
----------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of
Directors
ACKNOWLEDGED AND ACCEPTED BY:
XXXXXX FINANCIAL, INC.,
AS AGENT
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
[SIGNATURE PAGE TO SECURITY AGREEMENT]
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
I, Xxxxxxx Xxxxxx, a Notary Public in and for said County,
in the State aforesaid, DO HEREBY CERTIFY that
Xxx X. Xxxxxxxx, personally known to me to be the Chairman of the
Board of Directors of each of XXXX INTERNATIONAL HOLDINGS, INC., a
Delaware corporation, DEFLECTA-SHIELD CORPORATION, a Delaware
corporation, XXXX INDUSTRIES, INCORPORATED, a Minnesota
corporation, BELMOR AUTOTRON CORP., a Delaware corporation, DFM
CORP., an Iowa corporation, XXXX ACQUISITION CORP., a Minnesota
corporation, BAC ACQUISITION CO., a Delaware corporation,
TRAILMASTER PRODUCTS, INC., a Delaware corporation, and DELTA
III, INC., a Delaware corporation, the person who executed the
foregoing instrument, who being by me duly sworn, did depose and
say he is the Chairman of the Board of Directors of each such
corporations described in and which executed the foregoing
instrument; that said instrument is signed on behalf of each such
corporation by order its respective Board of Directors; and that
he acknowledged said instrument to be the free act and deed of
each such corporations.
GIVEN under my hand and notarial seal this 24th day of
February, 1998.
/s/ Xxxxxxx Xxxxxx
-------------------------------------
Notary Public
My commission expires: 9/22/99
-------------------------------------
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
I, Xxxxxxxx X. XxXxxxx, a Notary Public in and for
said County, in the State aforesaid, DO HEREBY CERTIFY that
Xxxxxx X. Xxxxxxxxx, personally known to me to be the Senior
Vice President of Xxxxxx Financial, Inc., the person
who executed the foregoing instrument, who being by me duly
sworn, did depose and say he is the officer of such corporation
described in and which executed the foregoing instrument; that
said instrument is signed on behalf of such corporation by order
of its Board of Directors; and that he acknowledged said
instrument to be the free act and deed of such corporation.
GIVEN under my hand and notarial seal this 23rd day of
February, 1998.
/s/ Xxxxxxxx X. XxXxxxx
-------------------------------------
Notary Public
My commission expires: 12/31/99
-------------------------------------
SCHEDULE I
ASSIGNED AGREEMENTS
SCHEDULE II
OTHER LIENS, SECURITY INTERESTS AND FINANCING STATEMENTS;
BAILEES; LANDLORDS
