EXHIBIT D
SECURITY AGREEMENT, dated as of [_______], 1999, among TELETRAC, INC.,
a Delaware corporation (the "Grantor"), and the several purchasers executing
this Security Agreement (the "Purchasers").
The Purchasers have agreed to purchase the Grantor's Senior Secured
Notes due [______], 2000 in an aggregate principal amount of up to $3,000,000
(the "Senior Secured Notes") and Class A Warrants (the "Warrants") to purchase
shares of Common Stock of the Grantor, pursuant to the Senior Secured Note and
Class A Warrant Purchase Agreement, dated as of [ ], 1999 (the "Purchase
Agreement"), among the Grantor and the Purchasers. The obligations of the
Purchasers to purchase the Senior Secured Notes and the Class A Warrants are
conditioned on, among other things, the execution and delivery by the Grantor of
a security agreement in the form hereof to secure (a) the due and punctual
payment of (i) the principal of and interest on the Senior Secured Notes when
and as due, whether at maturity, at a date fixed for prepayment, by acceleration
or otherwise, (ii) all other monetary obligations of the Grantor to the
Purchasers under the Purchase Agreement now or hereafter existing, and (iii) all
out-of-pocket costs and expenses (including reasonable costs and expenses of
counsel to the Purchasers) that may be incurred by the Purchasers in connection
with the administration and enforcement of the Purchase Agreement or this
Agreement or the realization on the security provided for hereby and (b) the due
and punctual performance of all other obligations of the Grantor under the
Purchase Agreement (collectively, the "Obligations").
Accordingly, the Grantor and the Purchasers hereby agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the following meanings:
"ACCOUNTS" shall mean any and all rights of the Grantor to payment for
goods or services sold or leased, including any such right evidenced by chattel
paper, whether due or to become due, whether or not earned by performance and
whether now existing or hereafter acquired or arising in the future, including
accounts receivable from affiliates of the Grantor.
"ACCOUNT DEBTOR" shall mean any person who is or who may become
obligated to the Grantor under, with respect to, or on account of, an Account.
"ACCOUNTS RECEIVABLE" shall mean all Accounts and all rights of the
Grantor in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary.
"AGENT" shall mean ___________________________.
"CASH" shall mean all cash, including, but not limited to, all deposit
accounts and instruments of the Grantor wherever such cash and instruments are
located.
"COLLATERAL" shall mean, now owed or hereafter acquired, all (i)
Accounts Receivable, (ii) Documents, (iii) Equipment, (iv) Inventory, (v)
Proceeds, (vi) Cash and (vii) all capital stock held by Grantor in any of its
Subsidiaries. Notwithstanding the foregoing, "Collateral" shall not include (x)
any Accounts Receivable, Documents, Equipment, Inventory, Proceeds or Cash
[described in] the Asset Purchase and Option Agreement by and among Grantor
Ituran Location and Control, Ltd., and the other parties thereto dated as of
June 9, 1999 and (y) Accounts Receivables as described in Sections 6.10(iv)(h)
and 6.11(ix) of the Purchase Agreement.
"DOCUMENTS" shall mean all instruments, files, records, ledger sheets
and documents covering or relating to any of the Accounts Receivable, Equipment
or Inventory.
"EQUIPMENT" shall mean all equipment, furniture, furnishings and
Fixtures, and all tangible personal property similar to any of the foregoing,
including tools, parts and supplies of every kind and description, and all
improvements, accessions or appurtenances thereto, which are now or hereafter
owned by the Grantor.
"FIXTURES" shall mean all items of Collateral, whether now owned or
hereafter acquired, of the Grantor that become so related to particular real
estate that an interest in them arises under any real estate law applicable
thereto.
"INVENTORY" shall mean all goods and merchandise of the Grantor,
whether now owned or hereafter acquired, held for sale or lease in the ordinary
course of business, or furnished or to be furnished by the Grantor under
contracts of service, or consumed in the Grantor's business, including raw
materials, work in process, finished goods, semi-finished inventory, scrap
inventory, manufacturing supplies, spare parts and all such property which has
been returned to, repossessed, or stopped in transit by or on behalf of the
Grantor. Notwithstanding the foregoing, "Inventory" shall not include sales (in
the ordinary course), financing or leases of vehicle location units to customers
of Grantor subscribing to Grantor's services.
"PROCEEDS" shall mean any consideration received from the sale,
exchange, lease or other disposition of any asset or property that constitutes
Collateral, any value received as a consequence of the possession of any
Collateral and any payment received from any insurer or other person or entity
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as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property that constitutes
Collateral.
"SECURITY INTEREST" shall have the meaning assigned to such term in
Section 2.1.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. SECURITY INTEREST; AGENT. As security for the payment or
performance, as the case may be, of the Obligations, the Grantor hereby creates
and grants to the Purchasers, their respective successors and assigns, a
security interest in the Collateral (the "Security Interest"), which, except for
the security interests described in Schedule I hereto, to which the security
interest granted hereby shall be subordinate, shall constitute a first and prior
security interest in the Collateral to all other security interests. Without
limiting the foregoing, each of the Purchasers is hereby authorized to file one
or more financing statements (including fixture filings), continuation
statements or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest without the signature
of the Grantor, naming the Grantor as debtor and the Purchasers as secured
parties.
Grantor and Purchasers hereby agree and acknowledge that the Agent
shall have all of the rights, power and obligations of the Purchasers hereto and
under the Purchase Agreement pursuant to the Agency Agreement, dated as of the
date hereof, by and among the Agent and the Purchaser (the "Agency Agreement").
The Grantor agrees at all times to keep accounting records that are
complete and accurate in all material respects with respect to the Collateral,
including a record of all payments and Proceeds received.
SECTION 2.2. FURTHER ASSURANCES. The Grantor agrees, at its expense,
to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as any of the Purchasers may
from time to time reasonably request for the better assuring and preserving of
the security interests and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
delivery of this Agreement, the granting of the security interests created
hereby and the filing of any financing statements (including fixture filings) or
other documents in connection herewith. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to a representative or agent of the
Purchasers, duly endorsed in a manner satisfactory to the Purchasers.
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SECTION 2.3. INSPECTION AND VERIFICATION. Without limiting the scope
of Section 5.1 of the Purchase Agreement, each of the Purchasers and such
representatives as such Purchaser may reasonably designate shall have the right,
at all reasonable times and as often as reasonably requested, to inspect the
Collateral, all records related thereto (and to make extracts and copies from
such records), and the premises upon which any of the Collateral is located, to
discuss the Grantor's affairs with the officers of the Grantor and the Grantor's
independent accountants and to verify under reasonable procedures the validity,
amount, quality, quantity, value and condition of, or any other matter relating
to, the Collateral, including, in the case of Accounts or Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Collateral for the purpose of making such a verification.
SECTION 2.4. TAXES; ENCUMBRANCES. At his or its option, any Purchaser
may discharge past due taxes, liens, security interests or other encumbrances at
any time levied or placed on the Collateral and not permitted hereby or under
the Purchase Agreement, and may pay for the maintenance and preservation of the
Collateral to the extent the Grantor fails to do so, and the Grantor agrees to
reimburse such Purchaser on demand for any payment made or any expense incurred
by him or it pursuant to the foregoing authorization; PROVIDED, HOWEVER, that
nothing in this Section 2.4 shall be interpreted as excusing the Grantor from
the performance of, or requiring the Purchaser to cure or perform, any covenants
or other promises of the Grantor with respect to taxes, liens, security
interests or other encumbrances or maintenance or other matters as set forth
herein or in the Purchase Agreement.
SECTION 2.5. ASSIGNMENT OF SECURITY INTEREST. If at any time the
Grantor shall take and perfect a security interest in any property of an Account
Debtor or any other person to secure payment and performance of an Account, the
Grantor shall promptly assign such security interest to the Purchasers. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other person granting the security interest.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantor represents and warrants to the Purchasers that:
SECTION 3.1. TITLE AND AUTHORITY. The Grantor has valid rights in and
good title to the Collateral and has full corporate power and authority to grant
to the Purchasers the Security Interest in the Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person other than
any consent or approval which has been obtained.
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SECTION 3.2. FILINGS. Fully executed Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings containing a description of the Collateral shall be filed of record in
every governmental, municipal or other office in every jurisdiction in which
filings are necessary to publish notice of and protect the validity of and to
establish a valid and perfected security interest in favor of the Purchasers in
respect of the Collateral, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration will be necessary in any
such jurisdiction, except as provided under applicable law with respect to the
filing of continuation statements.
SECTION 3.3. VALIDITY OF SECURITY INTEREST. The Security Interest
constitutes a valid, legal and perfected security interest in all the Collateral
(other than (i) any licenses issued by the Federal Communications Commission
("FCC"), (ii) that Collateral in which a security interest may be perfected by
the filing of a security agreement with the United States Patent and Trademark
Office and/or the United States Copyright Office, (iii) that Collateral
consisting of instruments or securities that only can be perfected upon
possession of such instruments or securities and (iv) cash that is not
considered "identifiable cash proceeds" within the meaning of Section 9-306 of
the Uniform Commercial Code as in effect in the State of New York) securing the
payment and performance of the Obligations.
SECTION 3.4. ABSENCE OF OTHER LIENS. Except for the Security Interest
granted hereby, the liens described in Schedule I hereto and any liens permitted
under the Purchase Agreement, the Collateral is owned by the Grantor free and
clear of any claim, lien, security interest or encumbrance. The Grantor has not
filed or consented to the filing of a financing statement under the Uniform
Commercial Code covering any Collateral other than as contemplated hereby or as
permitted by the Purchase Agreement.
ARTICLE IV
COVENANTS
SECTION 4.1. LOCATION OF COLLATERAL; PLACE OF BUSINESS; RECORDS AND
SCHEDULES OF COLLATERAL. (a) The Grantor agrees promptly to notify the
Purchasers of any change (i) in its corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its properties
or (ii) in the location of its chief executive office, its principal place of
business, any office in which it maintains records relating to Collateral owned
by it or the offices or facilities at which Collateral owned by it is located
(including the establishment of any such new office or facility). The Grantor
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings under the Uniform Commercial Code or otherwise which are
required in order for the Purchasers to continue at all times following such
change to have a valid and perfected security interest in all the Collateral,
subject to no liens other than as contemplated by Section 3.4, have been made
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(other than any security interest lapsing through the Purchasers' failure to
sign any continuation statement provided in a timely manner by the Grantor). The
Grantor agrees promptly to notify the Purchasers if any material portion of the
Collateral is damaged or destroyed.
(b) The Grantor shall keep or cause to be kept records of Accounts
that are accurate in all material respects.
(c) The Grantor agrees to maintain complete and accurate records in
all material respects with respect to the Collateral, in addition to those
records described in the foregoing paragraph (b), owned by it and, at such time
or times as any of the Purchasers may request, promptly to prepare and deliver
to such Purchaser a duly certified schedule or schedules in such form and detail
as the Purchasers may reasonably request, showing the identity, amount and
location of any and all such Collateral.
SECTION 4.2. PROTECTION OF SECURITY. The Grantor shall, at its own
cost and expense, take any and all actions necessary to defend title to the
Collateral against all persons and to defend the Security Interest of the
Purchasers in the Collateral and the priority thereof against any lien not
permitted hereby or under the Purchase Agreement.
SECTION 4.3. CONTINUING OBLIGATIONS OF THE GRANTOR. The Grantor shall
remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to or constituting the Collateral, all in accordance with the terms and
conditions thereof, and shall indemnify and hold harmless the Purchaser against
liability for such performance.
SECTION 4.4. LIMITATION ON MODIFICATIONS OF ACCOUNTS. The Grantor
shall not, without the Purchasers' prior written consent, grant any extension of
the time of payment of any of the Accounts Receivable, compromise, compound or
settle the same for less than the full amount thereof, release, wholly or
partly, any person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business.
ARTICLE V
REMEDIES
SECTION 5.1. COLLECTIONS. Upon the occurrence and during the
continuation of an Event of Default (as defined in the Purchase Agreement), each
of the Purchasers shall have the right, as the true and lawful agent of the
Grantor, with power of substitution for the Grantor and in the Grantor's name,
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the Purchasers' name or otherwise, for the use and benefit of the Purchasers (a)
to receive, endorse, assign and/or deliver any and all notes, acceptances,
checks, drafts, money orders or other evidences of payment relating to the
Collateral or any part thereof; (b) to demand, collect, receive payment of, give
receipt for and give discharges and releases of all or any of the Collateral;
(c) to sign the name of the Grantor on any invoice or xxxx of lading relating to
any of the Collateral; (d) to send verifications of Accounts Receivable to any
Account Debtor; (e) to commence and prosecute any and all suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral; (f) to settle, compromise, compound, adjust
or defend any actions, suits or proceedings relating to all or any of the
Collateral; (g) to notify, or to require the Grantor to notify, the Account
Debtors obligated on any of or all the Accounts Receivable to make payment
thereof directly to the Purchasers; and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Purchasers
were the absolute owner of the Collateral for all purposes; PROVIDED, HOWEVER,
that nothing herein contained shall be construed as requiring or obligating any
Purchaser to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by such Purchaser, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and no action taken or omitted to be taken by such
Purchaser with respect to the Collateral or any part thereof shall give rise to
any defense, counterclaim or offset in favor of the Grantor or to any claim or
action against such Purchaser. It is understood and agreed that the appointment
of each of Purchasers as the agent of the Grantor for the purposes set forth
above is coupled with an interest and is irrevocable. The provisions of this
Section 5.1 shall in no event relieve the Grantor of any of its obligations
hereunder or under the Purchase Agreement with respect to the Collateral or any
part thereof or impose any obligation on any Purchaser to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by such Purchaser of any other or further right which it
may have on the date of this Agreement or hereafter, whether hereunder, under
the Purchase Agreement or by law or otherwise.
SECTION 5.2. OTHER REMEDIES UPON DEFAULT. Upon the occurrence and
during the continuance of an Event of Default (as defined in the Purchase
Agreement), the Grantor agrees to deliver each item of Collateral to the
Purchasers on demand, and it is agreed that any Purchaser shall have the right
to take any of or all the following actions at the same or different times: with
or without legal process and with or without previous notice or demand for
performance, to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located for the
purpose of taking possession of or removing the Collateral and, generally, to
exercise any and all rights afforded to a secured party under the Uniform
Commercial Code or other applicable law. Without limiting the generality of the
foregoing, the Grantor agrees that any Purchaser shall have the right to sell or
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otherwise dispose of all or any part of the Collateral, at public or private
sale or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery as such Purchaser shall deem appropriate. Each
Purchaser shall be authorized at any such sale (if it deems it advisable to do
so) to restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Collateral for their own
account for investment and not with a view to the distribution or sale thereof
where the failure to obtain such a representation and agreement could result in
a violation of any applicable Federal or state securities laws, and upon
consummation of any such sale such Purchaser shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the Collateral so
sold. Each such purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of the Grantor, and the
Grantor hereby waives (to the extent permitted by law) all rights of redemption,
stay and appraisal which the Grantor now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted.
The Purchasers shall give the Grantor 10 days' written notice (which
the Grantor agrees is reasonable notice within the meaning of Section 9-504(3)
of the Uniform Commercial Code as in effect in the State of New York or its
equivalent in other jurisdictions) of any Purchaser's intention to make any sale
of Collateral of the Grantor. Such notice, in the case of a public sale, shall
state the time and place for such sale and, in the case of a sale at a broker's
board or on a securities exchange, shall state the board or exchange at which
such sale is to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as any Purchaser may fix and state in the notice (if any) of
such sale. At any public or private sale, the Collateral, or portion thereof, to
be sold may be sold in one lot as an entirety or in separate parcels, as any
Purchaser may (in its sole and absolute discretion) determine. The Purchasers
shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Purchasers may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Purchasers until the sale price is paid by the purchaser or purchasers thereof,
but the Purchasers shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public sale made pursuant to this Section 5.2, the Purchasers may bid for or
purchase, free (to the extent permitted by law) from any right of redemption,
stay, valuation or appraisal on the part of the Grantor (all said rights being
also hereby waived and released to the extent permitted by law), the Collateral
or any part thereof offered for sale and may make payment on account thereof by
using any claim then due and payable to them from the Grantor as a credit
against the purchase price, and they may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
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to such Grantor therefor. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Purchasers shall be free to carry out such sale pursuant to such agreement and
the Grantor whose Collateral is being sold shall not be entitled to the return
of the Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Purchasers shall have entered into such an agreement all
Events of Default shall have been remedied and the Obligations paid in full. As
an alternative to exercising the power of sale herein conferred upon it, any
Purchaser may proceed by a suit or suits at law or in equity to foreclose this
Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
SECTION 5.3. APPLICATION OF PROCEEDS. As between the Grantor and the
Purchasers, the Purchasers shall have absolute discretion as to the manner and
time of application of any such proceeds, moneys or balances in accordance with
this Agreement. Upon any sale of the Collateral by any Purchaser (including,
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of such Purchaser or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to such Purchaser or
such officer or be answerable in any way for the misapplication thereof.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. PURCHASER APPOINTED ATTORNEY-IN-FACT. The Grantor hereby
appoints each of the Purchasers the attorney-in-fact of the Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument which such Purchaser may deem necessary or
advisable to accomplish the purposes hereof upon the occurrence and during the
continuation of an Event of Default (as defined in the Purchase Agreement),
which appointment is irrevocable and coupled with an interest.
SECTION 6.2. PURCHASERS' EXPENSES. The Grantor agrees to pay upon
demand to the Purchasers the amount of any and all reasonable expenses,
including the reasonable expenses of their counsel and of any experts or agents,
which the Purchasers may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from
or other realization upon any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Purchasers hereunder or (iv) the failure
of the Grantor to perform or observe any of the provisions hereof. Any such
amounts payable as provided hereunder shall be additional Obligations secured
hereby.
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SECTION 6.3. NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by facsimile as follows:
(a) if to the Grantor, to: Teletrac, Inc., 0000 Xxxxxxxxx Xxxxx, Xxxxx
000, Xxxxx, Xxxxxxxxxx 00000, (000) 000-0000 (Facsimile); Attention:
General Counsel; and
(b) if to any of the Purchasers, to such Purchaser at his or its
address specified therefor in the Purchase Agreement.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of transmission if delivered by hand or sent by facsimile, the first day
after delivery to an overnight national courier service if sent by such service
or on the date of receipt if sent by certified or registered mail, in each case
delivered, sent or mailed (properly addressed) to such party as provided in this
Section 6.3 or in accordance with the latest unrevoked direction from such party
given in accordance with this Section 6.3.
SECTION 6.4. SUCCESSORS AND ASSIGNS. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party, and the term "Purchaser" shall
include each successor and assignee of such Purchaser permitted under the
Purchase Agreement; and all covenants, promises and agreements by or on behalf
of the Grantor or the Purchasers that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and permitted assigns
referred to above.
(b) The Grantor shall not assign or delegate any of its rights and
duties hereunder.
SECTION 6.5. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CHOICE OF LAW PROVISIONS THEREOF.
SECTION 6.6. WAIVERS; AMENDMENT. (a) No failure or delay of any
Purchaser in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other right or power. The rights and remedies of the Purchasers
hereunder are cumulative and exclusive of any rights or remedies which they
would otherwise have. No waiver of any provision of this Agreement or consent to
any departure by the Grantor therefrom shall in any event be effective unless
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the same shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on the Grantor in any case shall entitle the
Grantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Grantor and the Purchasers. Notwithstanding the foregoing,
upon the written consent of holders of a majority of the outstanding principal
amount of the Senior Secured Notes, this Agreement may be amended to release the
Security Interest on Accounts Receivable (and Proceeds thereof) and to delete
Accounts Receivable (and Proceeds thereof) from the definition of Collateral, in
which event the Security Interest in Accounts Receivable and all Proceeds
thereof shall be deemed released. The Purchasers shall be bound by any
modification or amendment authorized by this Section regardless of whether the
Senior Secured Notes shall have been marked to make reference thereto, and any
consent by any holder of a Senior Secured Note pursuant to this Section shall
bind any person subsequently acquiring a Senior Secured Note from it, whether or
not such Senior Note shall have been so marked.
SECTION 6.7. ENTIRE AGREEMENT. This Agreement and the Purchase
Agreement constitute the entire contract between the parties relative to the
subject matter hereof. Any previous agreement among the parties with respect to
the subject matter hereof is superseded by this Agreement and the Purchase
Agreement. Nothing in this Agreement or in the Purchase Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto or
thereto any rights, remedies, obligations or liabilities under or by reason of
this Agreement or the Purchase Agreement.
SECTION 6.8. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Purchasers and shall survive the purchase by the Purchaser of the Senior Secured
Notes and the Warrants pursuant to the Purchase Agreement regardless of any
investigation made by any of the Purchasers, or on his or its behalf, and shall
continue in full force and effect as long as any Obligation is outstanding and
unpaid.
SECTION 6.9. TERMINATION. This Agreement and the Security Interest
shall terminate when all the Obligations have been paid in full, at which time
the Purchasers shall execute and deliver to the Grantor, at the Grantor's
expense, all Uniform Commercial Code termination statements and similar
documents which the Grantor shall reasonably request to evidence such
termination and release the Collateral hereunder.
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SECTION 6.10. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 6.11. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract.
SECTION 6.12. HEADINGS. Article and Section headings used herein are
for convenience of reference only are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
TELETRAC, INC.
By _______________________
Name:
Title:
[PURCHASERS]
13
SCHEDULE I
14
