EXHIBIT 10.24
SECURITY AGREEMENT
(DEPOSIT ACCOUNTS)
1. Grant of Security Interest. As security for any and all
Indebtedness (as defined below) of the undersigned, Vans, Inc. ("Pledgor"),
Pledgor hereby irrevocably and unconditionally grants a security interest in and
assigns and transfers the Deposit Accounts (as defined below) to Bank of
America, N.A. ("Secured Party").
2. Indebtedness. "Indebtedness" means all debts, obligations
or liabilities now or hereafter existing, absolute or contingent of Pledgor to
Secured Party, whether voluntary or involuntary, whether due or not due, arising
under that certain Business Loan Agreement of even date herewith between Pledgor
and Secured Party, as amended from time to time ("Loan Agreement").
3. Deposit Accounts. For purposes of this Agreement, "Deposit
Accounts" means the following deposit account(s) opened by Pledgor with Secured
Party, any renewals or rollovers thereof, any proceeds thereof, and any general
intangibles and choses in action arising therefrom or related thereto:
Deposit Account Current Principal
Number Amount
--------------- -----------------
14580-01296 $12,500,000
4. No Other Security Interests. Pledgor hereby represents and
warrants to Secured Party that it owns each of the Deposit Accounts free and
clear of any and all liens, encumbrances, or interests of any third parties
other than the security interest of Secured Party.
5. Withdrawals; Renewals; Rollovers. Subject to Section 1.3 of
the Loan Agreement, Pledgor shall not withdraw funds from the Deposit Accounts
without Secured Party's prior written consent. Pledgor agrees that, except as
provided in Section 1.3 of the Loan Agreement, upon maturity of any Deposit
Account with a maturity date, such Deposit Account shall be renewed at Secured
Party's then prevailing rate of interest for successive thirty (30) day periods
(or such other time period as may be agreed by Secured Party and Pledgor).
6. Certificates. Upon Secured Party's request, Pledgor shall
deliver any certificate evidencing any of the Deposit Accounts to Secured Party,
duly endorsed over to Secured Party, as necessary.
7. Interest Payments. Notwithstanding Secured Party's security
interest in the proceeds of the Deposit Accounts, Secured Party will continue to
pay to Pledgor interest accruing thereunder until the occurrence of an Event of
Default under this Agreement.
8. Costs. All advances, charges, costs and expenses, including
reasonable attorneys' fees, incurred or paid by Secured Party in exercising any
right, power or remedy conferred by this Agreement or in the enforcement
thereof, shall become a part of the Indebtedness secured hereunder and shall be
paid to Secured Party by Debtors immediately and without demand, with interest
thereon at an annual rate equal to the highest rate of interest of any
Indebtedness secured by this Agreement. Such costs and attorneys' fees shall
include, without limitation, the allocated cost of in-house counsel.
9. Events of Default. Any Event of Default under the Loan
Agreement shall be an Event of Default under this Agreement.
10. Remedies. Upon the happening of any Event of Default,
Secured Party may then exercise as to such collateral all the rights, powers and
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remedies of an owner and all rights, powers and remedies of a secured party
under the California Uniform Commercial Code and other laws. Secured Party may
exercise any rights of setoff, without notice, against any funds in any Deposit
Account.
11. Transfer of Collateral. Upon the transfer of all or any
part of the Indebtedness, Secured Party may transfer all or any part of the
collateral and shall be fully discharged thereafter from all liability and
responsibility with respect to such collateral so transferred, and the
transferee shall be vested with all the rights and powers of Secured Party
hereunder with respect to such collateral so transferred; but with respect to
any collateral not so transferred Secured Party shall retain all rights and
powers hereby given.
12. Continuing Agreement. This is a continuing Agreement and
all the rights, powers and remedies hereunder shall apply to all past, present
and future Indebtedness of Pledgor, including that arising under successive
transactions which shall either continue the Indebtedness, increase or decrease
it, or from time to time create new Indebtedness after all or any prior
Indebtedness has been satisfied, and notwithstanding the bankruptcy of Pledgor,
or any other event or proceeding affecting Pledgor.
13. Continuing Powers. Until all Indebtedness shall have been
paid in full all rights, powers and remedies granted to Secured Party hereunder
shall continue to exist and may be exercised by Secured Party at the time
specified hereunder irrespective of the fact that the Indebtedness or any part
thereof may have become barred by any statute of limitations, or that the
personal liability of any Debtor may have ceased.
14. Other Rights. The rights, powers and remedies given to
Secured Party by this Agreement shall be in addition to all rights, powers and
remedies given to Secured Party by virtue of any statute or rule of law. Any
forbearance or failure or delay by Secured Party in exercising any right, power
or remedy hereunder shall not be deemed to be a waiver of such right, power or
remedy, and any single or partial exercise of any right, power or remedy
hereunder shall not preclude the further exercise thereof; and every right,
power and remedy of Secured Party shall continue in full force and effect until
such right, power or remedy is specifically waived by an instrument in writing
executed by Secured Party.
15. Arbitration and Waiver of Jury Trial.
(a) This paragraph concerns the resolution of any
controversies or claims between the parties, whether arising in
contract, tort or by statute, including but not limited to
controversies or claims that arise out of or relate to: (i) this
agreement (including any renewals, extensions or modifications); or
(ii) any document related to this agreement (collectively a "Claim").
For the purposes of this arbitration provision only, the term "parties"
shall include any parent corporation, subsidiary or affiliate of the
Bank involved in the servicing, management or administration of any
obligation described or evidenced by this agreement.
(b) At the request of any party to this agreement, any Claim
shall be resolved by binding arbitration in accordance with the Federal
Arbitration Act (Title 9, U. S. Code) (the "Act"). The Act will apply
even though this agreement provides that it is governed by the law of a
specified state.
(c) Arbitration proceedings will be determined in accordance
with the Act, the applicable rules and procedures for the arbitration
of disputes of JAMS or any successor thereof ("JAMS"), and the terms of
this paragraph. In the event of any inconsistency, the terms of this
paragraph shall control.
(d) The arbitration shall be administered by JAMS and
conducted, unless otherwise required by law, in Los Angeles,
California. All Claims shall be determined by one arbitrator; however,
if Claims exceed $5,000,000, upon the request of any party, the Claims
shall be decided by three arbitrators. All arbitration hearings shall
commence within 90 days of the demand for arbitration and close within
90 days of commencement and the award of the arbitrator(s) shall be
issued within 30 days of the close of the hearing. However, the
arbitrator(s), upon a showing of good cause, may extend the
commencement of the hearing for up to an
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additional 60 days. The arbitrator(s) shall provide a concise written
statement of reasons for the award. The arbitration award may be
submitted to any court having jurisdiction to be confirmed and
enforced.
(e) The arbitrator(s) will have the authority to decide
whether any Claim is barred by the statute of limitations and, if so,
to dismiss the arbitration on that basis. For purposes of the
application of the statute of limitations, the service on JAMS under
applicable JAMS rules of a notice of Claim is the equivalent of the
filing of a lawsuit. Any dispute concerning this arbitration provision
or whether a Claim is arbitrable shall be determined by the
arbitrator(s). The arbitrator(s) shall have the power to award legal
fees pursuant to the terms of this agreement.
(f) This paragraph does not limit the right of any party to:
(i) exercise self-help remedies, such as but not limited to, setoff;
(ii) initiate judicial or non-judicial foreclosure against any real or
personal property collateral; (iii) exercise any judicial or power of
sale rights, or (iv) act in a court of law to obtain an interim remedy,
such as but not limited to, injunctive relief, writ of possession or
appointment of a receiver, or additional or supplementary remedies.
(g) The filing of a court action is not intended to constitute
a waiver of the right of any party, including the suing party,
thereafter to require submittal of the Claim to arbitration.
(h) By agreeing to binding arbitration, the parties
irrevocably and voluntarily waive any right they may have to a trial by
jury in respect of any Claim. Furthermore, without intending in any way
to limit this agreement to arbitrate, to the extent any Claim is not
arbitrated, the parties irrevocably and voluntarily waive any right
they may have to a trial by jury in respect of such Claim. This
provision is a material inducement for the parties entering into this
agreement.
16. Pledgors' Residence. Each Pledgor represents and warrants
that Pledgor resides in, or, if Pledgor is not an individual, has its chief
executive office in the state specified on the signature page hereof. Each
Pledgor agrees to give Secured Party at least thirty (30) days notice before
changing its state of residence or chief executive office.
17. Singular and Plural. All words used herein in the plural
shall be deemed to have been used in the singular where the context and
construction so require, and the obligations and undertakings hereunder are
joint and several.
18. Termination. This Agreement shall remain in full force and
effect until terminated by Secured Party.
19. California Law. This Agreement shall be governed by the
laws of the state of California.
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This Security Agreement is executed as of the 12th day of May, 2003.
Bank of America, N.A.
Vans, Inc.
By /s/ Xxxxxxx X. Xxxxxxxxxx By /s/ Xxxxx X. Xxxxxxxx
-------------------------- --------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President Title Senior Vice President and General Counsel
By _______________________________
Title ____________________________
Address: Address:
000 Xxxxx Xxxxxxxxx, 0xx Xxxxx 00000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000 Xxxxx Xx Xxxxxxx, XX 00000
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TAXPAYER INFORMATION
(OWNER'S CERTIFICATION) Under penalties of perjury, I
certify that the taxpayer
My Taxpayer Identification information provided is true,
Number (TIN) to be used for correct and complete.
tax reporting purposes is
_____________________________ _______________________________
OWNER'S SIGNATURE
(Holder of TIN to be used for
tax reporting purposes)
(Check if applicable):
/_/ Exempt Foreign Persons, Mailing Address:
Individuals. I am
neither a citizen nor a _______________________________
resident of, nor am I
doing business in the _______________________________
United States, and I
have not, and do not
plan to be, present
in the United States
for 183 or more days
during the calendar
year.*
/_/ Exempt Foreign Persons,
Non-Individuals. The
Owner is not a U.S.
corporation, partnership,
estate or trust and the
collateral is not effec-
tively connected (related)
to any U.S. trade or
business the Owner is
currently engaged in or
plans to engage in during
the year.*
/_/ I am subject to backup
withholding under the
provisions of Internal
Revenue Service Code
3406(a)(1)(C) as notified
by the Internal Revenue
Service.
* Exempt Foreign Person status is valid for three years. Prior
to the third year you will be required to recertify your
status as an Exempt Foreign Person.
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