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EXHIBIT 10.4
SECURITY AGREEMENT
(SUBSIDIARY)
THIS SECURITY AGREEMENT, dated as of May 20, 1998, is made by ITCO
TIRE COMPANY OF GEORGIA, a Virginia corporation (the "Grantor"), in favor of
BANKBOSTON, N.A., a national banking association, in its capacity as
administrative agent (the "Agent") for the financial institutions (the
"Lenders") party from time to time to the Amended and Restated Loan and Security
Agreement dated on or about the date hereof (the same as it may be amended,
modified or supplemented or restated, the "Loan Agreement") by and among The
X.X. Xxxxxxx Company, Inc., a North Carolina corporation ("Xxxxxxx"), Xxxxxx &
Xxxxxxx, Inc., a North Carolina corporation, ITCO Holding Company, Inc., a North
Carolina corporation, The Speed Merchant, Inc., a California corporation (each a
"Borrower" and collectively, the "Borrowers"), the Lenders, the Co-Agents and
the Agent (the Agent together with any successor agent under the Loan Agreement
also referred to as the "Secured Party" herein). Unless otherwise defined
herein, terms defined in the Loan Agreement are used herein as therein defined.
Preliminary Statement
As a condition precedent to the Lenders' making loans and other
financial accommodations to the Borrowers under the Loan Agreement, the
obligations of the Borrowers under which have been guaranteed by the Grantor
pursuant to a Guaranty dated as of even date herewith (the principal, interest,
fees, expenses and other indebtedness, obligations and liabilities of Grantor
under said Guaranty, (including, without being limited to, the Guaranteed
Obligations as defined therein) and this Agreement and all other indebtedness,
obligations and liabilities of the Grantor to the Secured Party and the Lenders,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising under the Loan Documents (as defined in the Loan
Agreement), being hereinafter referred to collectively as the "Secured
Obligations"), the Agent and the Lenders have required that Grantor shall have
granted the security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to continue to make loans and other financial accommodations
to the Borrowers, the Grantor hereby agrees as follows:
SECTION 1. Grant of Security. As security for payment and
performance of the Secured Obligations, the Grantor hereby conveys, mortgages,
pledges, assigns, transfers, sets over, grants and delivers to the Secured Party
a continuing security interest in all of the Grantor's right, title and interest
in and to the following property, wherever located, whether now owned or
existing or hereafter acquired or arising (hereinafter referred to as the
"Collateral"):
(a) (i) all rights to the payment of money or other forms of
consideration of any kind (whether classified under the UCC as accounts,
contract rights, chattel paper, general intangibles or otherwise) including, but
not limited to, accounts receivable, insurance proceeds, letters of credit and
the right to receive payment thereunder, chattel paper, any rights under
contracts not yet earned by performance and not evidenced by an instrument or
chattel paper,
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notes, drafts, instruments, documents, acceptances and all other debts,
obligations and liabilities in whatever form from any Person, but excluding tax
refunds and insurance proceeds not arising out of the Collateral, (ii) all
guaranties, security and Liens securing payment thereof, (iii) all goods,
whether now owned or hereafter acquired, and whether sold, delivered,
undelivered, in transit or returned, which may be represented by, or the sale or
lease of which may have given rise to, any such right to payment or other debt,
obligation or liability, and (iv) all proceeds of any of the foregoing (the
foregoing, collectively, "Receivables"),
(b) (i) all inventory, (ii) all goods intended for sale or lease or
for display or demonstration, (iii) all work in process, (iv) all raw materials
and other materials and supplies of every nature and description used or which
might be used in connection with the manufacture, packing, shipping,
advertising, selling, leasing or furnishing of goods or services or otherwise
used or consumed in the conduct of business, and (v) all documents of title,
including bills of lading and warehouse receipts, and other documents evidencing
and general intangibles relating to any of the foregoing (the foregoing,
collectively, "Inventory"),
(c) any demand, time, savings, passbook, money market or like
depository account, and all certificates of deposit, maintained with a bank,
savings and loan association, credit union or like organization (other than an
account evidenced by a certificate of deposit that is an instrument under the
UCC) to which proceeds of Collateral are deposited (the foregoing, collectively,
"Deposit Accounts"),
(d) all certificated and uncertificated securities, all security
entitlements, all securities accounts, all commodity contracts and all commodity
accounts, EXCLUDING, HOWEVER, the equity securities of any Subsidiary, to the
extent acquired directly with proceeds of Collateral (the foregoing,
collectively, "Investment Property"),
(e) (i) any investment account maintained by or on behalf of the
Grantor with the Agent or any Lender or any Affiliate of the Agent or any
Lender, (ii) any agreement governing such account, (iii) all cash proceeds and
Investment Property now or hereafter held by the Agent or any Lender or any
Affiliate of the Agent or any Lender on behalf of the Grantor in connection with
such investment account and (iv) all documents evidencing and general
intangibles related to the foregoing (the foregoing, collectively, "Investment
Accounts"),
(f) all cash or other property deposited with the Agent or any
Lender or any Affiliate of the Agent or any Lender or which the Agent, for its
benefit and for the benefit of the Lenders, or any Lender or such Affiliate is
entitled to retain or otherwise possess as collateral pursuant to the provisions
of this Agreement or any of the Loan Documents or any agreement relating to any
Letter of Credit, including, without limitation, amounts on deposit in the Cash
Collateral Account,
(g) all goods and other property, whether or not delivered, (i) the
sale or lease of which gives or purports to give rise to any Receivable,
including, but not limited to, all merchandise returned or rejected by or
repossessed from customers, or (ii) securing any Receivable, including, without
limitation, all rights as an unpaid vendor or lienor (including,
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without limitation, stoppage in transit, replevin and reclamation) with respect
to such goods and other properties,
(h) all mortgages, deeds to secure debt and deeds of trust on real
or personal property, guaranties, leases, security agreements and other
agreements and property which secure or relate to any Receivable or other
Collateral or are acquired for the purpose of securing and enforcing any item
thereof,
(i) all files, correspondence, computer programs, tapes, disks and
related data processing software which contain information identifying or
pertaining to any of the Collateral or any Account Debtor or showing the amounts
thereof or payments thereon or otherwise necessary or helpful in the realization
thereon or the collection thereof,
(j) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items referred to in
this definition and any claims against third parties for loss of, damage to or
destruction of any or all of the Collateral or for proceeds payable under or
unearned premiums with respect to policies of insurance) in whatever form,
including, but not limited to, cash, negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements and
other documents.
SECTION 2. Grantor Remains Liable. Anything contained herein to the
contrary notwithstanding, (a) the 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 the
Secured Party of any of the rights hereunder shall not release the Grantor from
any of its duties or obligations under the contracts and agreements included in
the Collateral, and (c) the Secured Party shall not have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Secured Party be obligated to perform
any of the obligations or duties of the Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
SECTION 3. Representations and Warranties. The Grantor represents
and warrants as follows:
(a) The Grantor is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, has
the power and authority to own its properties and to carry on its business as
now being and as hereafter proposed to be conducted and is duly qualified and
authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization.
(b) The Grantor has the right and power, and has taken all necessary
action to authorize it, to execute, deliver and perform this Agreement in
accordance with its terms. This Agreement has been duly executed and delivered
by the duly authorized officers of the Grantor and is a legal, valid and binding
obligation of the Grantor, enforceable in accordance with its terms.
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(c) The execution, delivery and performance of this Agreement in
accordance with its terms does not and will not, by the passage of time, the
giving of notice or otherwise,
(i) require any Governmental Approval or violate any
Applicable Law relating to the Grantor,
(ii) conflict with, result in a breach of or constitute a
default under the articles of incorporation or by-laws of the Grantor, any
material provisions of any indenture, agreement or other instrument to
which the Grantor is a party or by which it or any of its property may be
bound or any Governmental Approval relating to the Grantor or
(iii) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired
by the Grantor other than the security interest contemplated by this
Agreement.
(d) There is no pending or threatened action or proceeding affecting
the Grantor before any court, governmental agency or arbitrator, which may
materially adversely affect the financial condition or operations of the
Grantor.
(e) All of the Inventory is located at the address(es) set forth in
PART I of EXHIBIT A hereto.
(f) The address of the chief executive office of the Grantor is set
forth in PART II of EXHIBIT A hereto. The address(es) of such chief executive
office has not been changed during the year preceding the date hereof.
(g) The office(s) where the Grantor keeps its records concerning the
Receivables and originals of chattel paper, if any, which evidences Receivables
is located at the address set forth in PART III of EXHIBIT A hereto and except
as otherwise indicated in said PART III of EXHIBIT A, such office(s) has (have)
been located at such address(es) continuously for the past year. None of the
Receivables is evidenced by a promissory note or other instrument which has not
been delivered to the Secured Party at its request.
(h) If the business of the Grantor has been conducted under a
different name or names during the last five years, such name(s) is (are) set
forth in PART IV of EXHIBIT A hereto.
(i) The Grantor owns the Collateral free and clear of any lien,
security interest, charge or encumbrance except for the security interest
created by this Agreement, Permitted Liens, and except as may be set forth in
EXHIBIT B attached hereto and made a part hereof. Except as may be set forth on
EXHIBIT B, no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Secured Party
relating to this Agreement.
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(j) This Agreement creates a valid security interest in the
Collateral, securing the payment of the Secured Obligations and upon completion
of the filings and other actions set forth on EXHIBIT B, all actions necessary
to perfect such security interest as a first priority security interest (subject
to Permitted Liens) will have been duly taken.
(k) Except for the filing of UCC financing statements in the
appropriate jurisdictions, no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required either (i) for the grant by the Grantor of the security interest
granted hereby or for the execution, delivery or performance of this Agreement
by the Grantor or (ii) for the exercise by the Secured Party of its rights and
remedies hereunder.
SECTION 4. Further Assurances. (a) The Grantor agrees that from time
to time, at the expense of the Grantor, the Grantor shall promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Secured Party may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Grantor shall take all actions contemplated by
SECTION 7.2(b) of the Loan Agreement.
(b) The Grantor hereby authorizes the Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of the Grantor where
permitted by law and agrees that a photographic or other reproduction of this
Agreement of this may be used and filed as a financing statement.
(c) The Grantor shall furnish to the Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Secured Party may
reasonably request, all in reasonable detail.
SECTION 5. As to Inventory. The Grantor shall:
(a) Keep the Inventory (other than Inventory in transit to any such
location or sold in the ordinary course of business) at Permitted Inventory
Locations or, with the prior consent of the Secured Party, at such other places
in jurisdictions where all action required by SECTION 4 shall have been taken
with respect to the Inventory.
(b) Pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Inventory, except to the
extent the validity thereof is being contested in good faith by appropriate
proceedings.
SECTION 6. Insurance. The Grantor shall take all actions
contemplated by SECTION 8.8 of the Loan Agreement.
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SECTION 7. As to Receivables. (a) the Grantor shall keep its chief
place of business and chief executive office and the office(s) where it keeps
its records concerning the Receivables, and all originals of all chattel paper
which evidence Receivables, at the location(s) therefor specified in EXHIBIT A
or, upon 30 days' prior written notice to the Secured Party, at such other
location(s) in a jurisdiction where all action required by SECTION 4 shall have
been taken with respect to the Receivables. The Grantor will hold and preserve
such records and chattel paper and will permit representatives of the Secured
Party at any time during normal business hours to inspect and make abstracts
from such records and chattel paper.
(b) Except as otherwise provided in this SUBSECTION (b) or SECTION
8.1 of the Loan Agreement, the Grantor shall continue to collect, at its own
expense, all amounts due or to become due the Grantor under the Receivables. In
connection with such collections, the Grantor may take (and, during the
continuation of an Event of Default, at the Secured Party's direction, shall
take) such action as the Grantor or the Secured Party may deem necessary or
advisable to enforce collection of the Receivables; PROVIDED, HOWEVER, that the
Secured Party shall have the right at any time, upon the occurrence and during
the continuation of an Event of Default, to notify the Account Debtors or
obligors under any Receivables of the assignment of such Receivables to the
Secured Party and to direct such Account Debtors or obligors to make payment of
all amounts due or to become due to the Grantor thereunder directly to the
Secured Party and, upon such notification and at the expense of the Grantor, to
enforce collection of any such Receivables, and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as the
Grantor might have done. After receipt by the Grantor of the notice from the
Secured Party referred to in the PROVISO to the preceding sentence and during
the continuation of an Event of Default, (i) all amounts and proceeds (including
instruments) received by the Grantor in respect of the Receivables shall be
received in trust for the benefit of the Secured Party hereunder, shall be
segregated from other funds of the Grantor and shall be forthwith paid over to
the Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash collateral and either (A) released to the
Grantor so long as no Event of Default shall have occurred and be continuing or
(B) if any Event of Default shall have occurred and be continuing, applied as
provided by SECTION 13(b), and (ii) the Grantor shall not adjust, settle or
compromise the amount or payment of any Receivable, or release wholly or partly
any account debtor or obligor thereof, or allow any credit or discount thereon.
SECTION 8. Transfers and Other Liens. The Grantor shall not without
the prior written consent of the Secured Party:
(a) Sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral except Inventory in the ordinary course of
business, subject to the limitations set forth in the Loan Agreement.
(b) Create or suffer to exist any Lien upon or with respect to any
of the Collateral to secure Indebtedness of any person or entity, except for the
security interest created by this Agreement and Permitted Liens.
SECTION 9. Secured Party Appointed Attorney-in-Fact. The Grantor
hereby irrevocably appoints the Secured Party the Grantor's attorney-in-fact,
with full authority in the
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place and stead of the Grantor and in the name of the Grantor, the Secured Party
or otherwise, during the continuation of an Event of Default, to take any action
and to execute any instrument which the Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement (subject to the rights of
the Grantor under SECTION 7), including, without limitation:
(i) to obtain and adjust insurance required to be paid to the
Secured Party pursuant to SECTION 6,
(ii) to ask demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(iii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with CLAUSE (i) or
(ii) above, and
(iv) to file any claims or take any action or institute any
proceedings which the Secured Party may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights
of the Secured Party with respect to any of the Collateral.
SECTION 10. Secured Party May Perform. If the Grantor fails to
perform any agreement contained herein, the Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of the Secured Party
incurred in connection therewith shall be payable by the Grantor under SECTION
14(b).
SECTION 11. The Secured Party's Duties. The powers conferred on the
Secured Party hereunder are solely to protect its interest (for the benefit of
the Lenders), in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Secured Party shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
SECTION 12. Events of Default. The occurrence of any "Event of
Default" as defined in the Loan Agreement shall constitute an Event of Default
hereunder.
SECTION 13. Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Secured Party may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it under Applicable Law or in equity or otherwise, all the rights and
remedies of a secured party on default under the applicable Uniform Commercial
Code (the "Code") (whether or not the Code applies to the affected Collateral)
and also may do any or all of the following:
(i) Declare any or all of the Secured Obligations then
existing to be immediately due and payable and they shall thereupon become
forthwith due and payable,
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without notice of any kind to the Grantor and without any other
presentment, demand, protest, or notice of any kind, all of which are
hereby expressly waived;
(ii) Terminate the Lenders' obligations, if any, to make or to
permit the Borrowers to make further Loans or extensions of credit or
other financial accommodations to the Grantor;
(iii) In the name of the Secured Party or in the name of the
Grantor or otherwise, demand, xxx for, collect or receive any money or
property at any time payable or receivable on account of or in exchange
for, or make any compromise or settlement deemed desirable with respect
to, any of the Collateral, but the Secured Party shall be under no
obligation so to do, and the Secured Party may extend the time of payment,
arrange for payment installments, or otherwise modify the terms of, or
release, any of the Collateral without thereby incurring responsibility
to, or discharging or otherwise affecting any liability of, the Grantor;
(iv) Enter upon the premises, or wherever the Collateral may
be, and take possession thereof, and demand and receive such possession
from any Person who has possession thereof;
(v) Require the Grantor to, and the Grantor hereby agrees that
it will at its expense and upon request of the Secured Party forthwith,
assemble all or part of the Collateral as directed by the Secured Party
and make it available to the Secured Party at a place to be designated by
the Secured Party which is reasonably convenient to both parties;
(vi) Without notice except as specified below and with or
without taking the possession thereof, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any location
chosen by the Secured Party, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as the Secured Party
may deem commercially reasonable. The Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to the
Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification,
but notice given in any other reasonable manner or at any other reasonable
time shall constitute reasonable notification. The Secured Party shall not
be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Secured Party 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;
(vii) In any action hereunder, the Secured Party shall be
entitled to the appointment of a receiver, without notice, to take
possession of all or any portion of the Collateral and to exercise such
power as the court shall confer upon the receiver; and
(viii) Apply, without notice, any cash or cash items
constituting Collateral in the Secured Party's possession to payment of
any of the Secured Obligations.
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The undersigned waives, to the extent permitted by Applicable Law,
all rights it has to prior notice (except as set forth in Section 13(a)(vi)) and
hearing under the Constitution of the United States and the Uniform Commercial
Codes and constitutions of the States of New York, California and under any
other applicable statute or constitution.
(b) All cash proceeds received by the Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Secured Party, be held by the Secured
Party as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Secured Party pursuant to SECTION 14) in
whole or in part by the Secured Party against, all or any part of the Secured
Obligations in accordance with the provisions of Section 12.3 of the Loan
Agreement. Any surplus of such cash or cash proceeds held by the Secured Party
and remaining after payment in full of all the Secured Obligations shall be paid
over to the Grantor or to whomsoever may be lawfully entitled to receive such
surplus. The Grantor shall remain liable for any deficiency.
SECTION 14. Amendments; Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Grantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Secured Party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 15. Notices. All notices and other communications hereunder
shall be given in accordance with the provisions of Section 15.1 of the Loan
Agreement, to the Grantor at its address set forth on the signature pages hereof
(with a copy to the Borrowers), to the Secured Party at its address set forth on
the signature pages hereof, or as to either party at such other address as shall
be designated by such party in a written notice to each other party complying as
to delivery with the terms of this Section.
SECTION 16. Continuing Security Interest; Transfer of Obligations.
This Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until payment in full of the Secured
Obligations, (ii) be binding upon the Grantor, its successors and assigns, and
(iii) inure to the benefit of the Secured Party and its successors, transferees
and assigns. Without limiting the generality of the foregoing clause (iii), any
Lender may assign or otherwise transfer the Secured Obligations to another
Person in accordance with the provisions of the Loan Agreement and such Person
shall thereupon become vested with all the benefits in respect thereof granted
to the Secured Party herein or otherwise. Upon the payment in full of the
Secured Obligations, the security interest granted hereby shall terminate and
all rights to the Collateral shall revert to the Grantor. Upon any such
termination, the Secured Party will, at the Grantor's expense, execute and
deliver to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.
SECTION 17. Governing Law; Terms. (a) This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except as required by mandatory provisions of law and except to the extent that
the validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein,
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terms used in Article 9 of the Uniform Commercial Code of the State of New York
are used herein as therein defined.
(b) The Grantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court for the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment and both parties
hereto hereby irrevocably and unconditionally agree that all claims in respect
of any such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by law, in such federal court. Both
parties hereto agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Agent or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement against the Grantor or its
properties in the courts of any jurisdiction.
SECTION 18. Conflict with Loan Agreement. To the extent any
provision hereof shall be in conflict with or inconsistent with any provision of
the Loan Agreement, the provision of the Loan Agreement shall control.
SECTION 19. Grantor's Representative. Xxxxxxx shall act under this
Agreement as the representative of the Grantor, and the Grantor hereby appoints
Xxxxxxx as its representative hereunder for all purposes, including receiving
notices and communications to the Grantor from the Agent or any Lender. The
Agent and the Lenders may rely, and shall be fully protected in relying, on any
report, information or any other notice or communication made or given by
Xxxxxxx, whether in its own name or on behalf of the Grantor and neither the
Agent nor any Lender shall have any obligation to make any inquiry or request
any confirmation from or on behalf of the Grantor as to the binding effect on it
of any such report, information, notice or communication.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officer(s) as
of the date first above written.
GRANTOR:
ITCO TIRE COMPANY OF GEORGIA
By: /s/ XXXXXXX X. XXXXXXX
Name:____________________________
Title:___________________________
Address: 0000 Xxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxx, X.X. 00000
SECURED PARTY:
BANKBOSTON, N.A., AS AGENT
By: /s/ XXXXXXXXX X. XXXXXX
Name:____________________________
Title:___________________________
Address: 000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
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SECURITY AGREEMENT
(SUBSIDIARY)
THIS SECURITY AGREEMENT, dated as of May 20, 1998, is made by ITCO
TIRE COMPANY, a North Carolina corporation (the "Grantor"), in favor of
BANKBOSTON, N.A., a national banking association, in its capacity as
administrative agent (the "Agent") for the financial institutions (the
"Lenders") party from time to time to the Amended and Restated Loan and Security
Agreement dated on or about the date hereof (the same as it may be amended,
modified or supplemented or restated, the "Loan Agreement") by and among The
X.X. Xxxxxxx Company, Inc., a North Carolina corporation ("Xxxxxxx"), Xxxxxx &
Xxxxxxx, Inc., a North Carolina corporation, ITCO Holding Company, Inc., a North
Carolina corporation, The Speed Merchant, Inc., a California corporation (each a
"Borrower" and collectively, the "Borrowers"), the Lenders, the Co-Agents and
the Agent (the Agent together with any successor agent under the Loan Agreement
also referred to as the "Secured Party" herein). Unless otherwise defined
herein, terms defined in the Loan Agreement are used herein as therein defined.
Preliminary Statement
As a condition precedent to the Lenders' making loans and other
financial accommodations to the Borrowers under the Loan Agreement, the
obligations of the Borrowers under which have been guaranteed by the Grantor
pursuant to a Guaranty dated as of even date herewith (the principal, interest,
fees, expenses and other indebtedness, obligations and liabilities of Grantor
under said Guaranty, (including, without being limited to, the Guaranteed
Obligations as defined therein) and this Agreement and all other indebtedness,
obligations and liabilities of the Grantor to the Secured Party and the Lenders,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising under the Loan Documents (as defined in the Loan
Agreement), being hereinafter referred to collectively as the "Secured
Obligations"), the Agent and the Lenders have required that Grantor shall have
granted the security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to continue to make loans and other financial accommodations
to the Borrowers, the Grantor hereby agrees as follows:
SECTION 1. Grant of Security. As security for payment and
performance of the Secured Obligations, the Grantor hereby conveys, mortgages,
pledges, assigns, transfers, sets over, grants and delivers to the Secured Party
a continuing security interest in all of the Grantor's right, title and interest
in and to the following property, wherever located, whether now owned or
existing or hereafter acquired or arising (hereinafter referred to as the
"Collateral"):
(a) (i) all rights to the payment of money or other forms of
consideration of any kind (whether classified under the UCC as accounts,
contract rights, chattel paper, general intangibles or otherwise) including, but
not limited to, accounts receivable, insurance proceeds, letters of credit and
the right to receive payment thereunder, chattel paper, any rights under
contracts not yet earned by performance and not evidenced by an instrument or
chattel paper, notes, drafts, instruments, documents, acceptances and all other
debts, obligations and liabilities
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in whatever form from any Person, but excluding tax refunds and insurance
proceeds not arising out of the Collateral, (ii) all guaranties, security and
Liens securing payment thereof, (iii) all goods, whether now owned or hereafter
acquired, and whether sold, delivered, undelivered, in transit or returned,
which may be represented by, or the sale or lease of which may have given rise
to, any such right to payment or other debt, obligation or liability, and (iv)
all proceeds of any of the foregoing (the foregoing, collectively,
"Receivables"),
(b) (i) all inventory, (ii) all goods intended for sale or lease or
for display or demonstration, (iii) all work in process, (iv) all raw materials
and other materials and supplies of every nature and description used or which
might be used in connection with the manufacture, packing, shipping,
advertising, selling, leasing or furnishing of goods or services or otherwise
used or consumed in the conduct of business, and (v) all documents of title,
including bills of lading and warehouse receipts, and other documents evidencing
and general intangibles relating to any of the foregoing (the foregoing,
collectively, "Inventory"),
(c) any demand, time, savings, passbook, money market or like
depository account, and all certificates of deposit, maintained with a bank,
savings and loan association, credit union or like organization (other than an
account evidenced by a certificate of deposit that is an instrument under the
UCC) to which proceeds of Collateral are deposited (the foregoing, collectively,
"Deposit Accounts"),
(d) all certificated and uncertificated securities, all security
entitlements, all securities accounts, all commodity contracts and all commodity
accounts, EXCLUDING, HOWEVER, the equity securities of any Subsidiary, to the
extent acquired directly with proceeds of Collateral (the foregoing,
collectively, "Investment Property"),
(e) (i) any investment account maintained by or on behalf of the
Grantor with the Agent or any Lender or any Affiliate of the Agent or any
Lender, (ii) any agreement governing such account, (iii) all cash proceeds and
Investment Property now or hereafter held by the Agent or any Lender or any
Affiliate of the Agent or any Lender on behalf of the Grantor in connection with
such investment account and (iv) all documents evidencing and general
intangibles related to the foregoing (the foregoing, collectively, "Investment
Accounts"),
(f) all cash or other property deposited with the Agent or any
Lender or any Affiliate of the Agent or any Lender or which the Agent, for its
benefit and for the benefit of the Lenders, or any Lender or such Affiliate is
entitled to retain or otherwise possess as collateral pursuant to the provisions
of this Agreement or any of the Loan Documents or any agreement relating to any
Letter of Credit, including, without limitation, amounts on deposit in the Cash
Collateral Account,
(g) all goods and other property, whether or not delivered, (i) the
sale or lease of which gives or purports to give rise to any Receivable,
including, but not limited to, all merchandise returned or rejected by or
repossessed from customers, or (ii) securing any Receivable, including, without
limitation, all rights as an unpaid vendor or lienor (including, without
limitation, stoppage in transit, replevin and reclamation) with respect to such
goods and other properties,
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(h) all mortgages, deeds to secure debt and deeds of trust on real
or personal property, guaranties, leases, security agreements and other
agreements and property which secure or relate to any Receivable or other
Collateral or are acquired for the purpose of securing and enforcing any item
thereof,
(i) all files, correspondence, computer programs, tapes, disks and
related data processing software which contain information identifying or
pertaining to any of the Collateral or any Account Debtor or showing the amounts
thereof or payments thereon or otherwise necessary or helpful in the realization
thereon or the collection thereof,
(j) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items referred to in
this definition and any claims against third parties for loss of, damage to or
destruction of any or all of the Collateral or for proceeds payable under or
unearned premiums with respect to policies of insurance) in whatever form,
including, but not limited to, cash, negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements and
other documents.
SECTION 2. Grantor Remains Liable. Anything contained herein to the
contrary notwithstanding, (a) the 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 the
Secured Party of any of the rights hereunder shall not release the Grantor from
any of its duties or obligations under the contracts and agreements included in
the Collateral, and (c) the Secured Party shall not have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Secured Party be obligated to perform
any of the obligations or duties of the Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
SECTION 3. Representations and Warranties. The Grantor represents
and warrants as follows:
(a) The Grantor is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, has
the power and authority to own its properties and to carry on its business as
now being and as hereafter proposed to be conducted and is duly qualified and
authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization.
(b) The Grantor has the right and power, and has taken all necessary
action to authorize it, to execute, deliver and perform this Agreement in
accordance with its terms. This Agreement has been duly executed and delivered
by the duly authorized officers of the Grantor and is a legal, valid and binding
obligation of the Grantor, enforceable in accordance with its terms.
(c) The execution, delivery and performance of this Agreement in
accordance with its terms does not and will not, by the passage of time, the
giving of notice or otherwise,
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(i) require any Governmental Approval or violate any
Applicable Law relating to the Grantor,
(ii) conflict with, result in a breach of or constitute a
default under the articles of incorporation or by-laws of the Grantor, any
material provisions of any indenture, agreement or other instrument to
which the Grantor is a party or by which it or any of its property may be
bound or any Governmental Approval relating to the Grantor or
(iii) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired
by the Grantor other than the security interest contemplated by this
Agreement.
(d) There is no pending or threatened action or proceeding affecting
the Grantor before any court, governmental agency or arbitrator, which may
materially adversely affect the financial condition or operations of the
Grantor.
(e) All of the Inventory is located at the address(es) set forth in
PART I of EXHIBIT A hereto.
(f) The address of the chief executive office of the Grantor is set
forth in PART II of EXHIBIT A hereto. The address(es) of such chief executive
office has not been changed during the year preceding the date hereof.
(g) The office(s) where the Grantor keeps its records concerning the
Receivables and originals of chattel paper, if any, which evidences Receivables
is located at the address set forth in PART III of EXHIBIT A hereto and except
as otherwise indicated in said PART III of EXHIBIT A, such office(s) has (have)
been located at such address(es) continuously for the past year. None of the
Receivables is evidenced by a promissory note or other instrument which has not
been delivered to the Secured Party at its request.
(h) If the business of the Grantor has been conducted under a
different name or names during the last five years, such name(s) is (are) set
forth in PART IV of EXHIBIT A hereto.
(i) The Grantor owns the Collateral free and clear of any lien,
security interest, charge or encumbrance except for the security interest
created by this Agreement, Permitted Liens, and except as may be set forth in
EXHIBIT B attached hereto and made a part hereof. Except as may be set forth on
EXHIBIT B, no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Secured Party
relating to this Agreement.
(j) This Agreement creates a valid security interest in the
Collateral, securing the payment of the Secured Obligations and upon completion
of the filings and other actions set
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forth on EXHIBIT B, all actions necessary to perfect such security interest as a
first priority security interest (subject to Permitted Liens) will have been
duly taken.
(k) Except for the filing of UCC financing statements in the
appropriate jurisdictions, no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required either (i) for the grant by the Grantor of the security interest
granted hereby or for the execution, delivery or performance of this Agreement
by the Grantor or (ii) for the exercise by the Secured Party of its rights and
remedies hereunder.
SECTION 4. Further Assurances. (a) The Grantor agrees that from time
to time, at the expense of the Grantor, the Grantor shall promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Secured Party may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Grantor shall take all actions contemplated by
SECTION 7.2(b) of the Loan Agreement.
(b) The Grantor hereby authorizes the Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of the Grantor where
permitted by law and agrees that a photographic or other reproduction of this
Agreement of this may be used and filed as a financing statement.
(c) The Grantor shall furnish to the Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Secured Party may
reasonably request, all in reasonable detail.
SECTION 5. As to Inventory. The Grantor shall:
(a) Keep the Inventory (other than Inventory in transit to any such
location or sold in the ordinary course of business) at Permitted Inventory
Locations or, with the prior consent of the Secured Party, at such other places
in jurisdictions where all action required by SECTION 4 shall have been taken
with respect to the Inventory.
(b) Pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Inventory, except to the
extent the validity thereof is being contested in good faith by appropriate
proceedings.
SECTION 6. Insurance. The Grantor shall take all actions
contemplated by SECTION 8.8 of the Loan Agreement.
SECTION 7. As to Receivables. (a) the Grantor shall keep its chief
place of business and chief executive office and the office(s) where it keeps
its records concerning the
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Receivables, and all originals of all chattel paper which evidence Receivables,
at the location(s) therefor specified in EXHIBIT A or, upon 30 days' prior
written notice to the Secured Party, at such other location(s) in a jurisdiction
where all action required by SECTION 4 shall have been taken with respect to the
Receivables. The Grantor will hold and preserve such records and chattel paper
and will permit representatives of the Secured Party at any time during normal
business hours to inspect and make abstracts from such records and chattel
paper.
(b) Except as otherwise provided in this SUBSECTION (b) or SECTION
8.1 of the Loan Agreement, the Grantor shall continue to collect, at its own
expense, all amounts due or to become due the Grantor under the Receivables. In
connection with such collections, the Grantor may take (and, during the
continuation of an Event of Default, at the Secured Party's direction, shall
take) such action as the Grantor or the Secured Party may deem necessary or
advisable to enforce collection of the Receivables; PROVIDED, HOWEVER, that the
Secured Party shall have the right at any time, upon the occurrence and during
the continuation of an Event of Default, to notify the Account Debtors or
obligors under any Receivables of the assignment of such Receivables to the
Secured Party and to direct such Account Debtors or obligors to make payment of
all amounts due or to become due to the Grantor thereunder directly to the
Secured Party and, upon such notification and at the expense of the Grantor, to
enforce collection of any such Receivables, and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as the
Grantor might have done. After receipt by the Grantor of the notice from the
Secured Party referred to in the PROVISO to the preceding sentence and during
the continuation of an Event of Default, (i) all amounts and proceeds (including
instruments) received by the Grantor in respect of the Receivables shall be
received in trust for the benefit of the Secured Party hereunder, shall be
segregated from other funds of the Grantor and shall be forthwith paid over to
the Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash collateral and either (A) released to the
Grantor so long as no Event of Default shall have occurred and be continuing or
(B) if any Event of Default shall have occurred and be continuing, applied as
provided by SECTION 13(b), and (ii) the Grantor shall not adjust, settle or
compromise the amount or payment of any Receivable, or release wholly or partly
any account debtor or obligor thereof, or allow any credit or discount thereon.
SECTION 8. Transfers and Other Liens. The Grantor shall not without
the prior written consent of the Secured Party:
(a) Sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral except Inventory in the ordinary course of
business, subject to the limitations set forth in the Loan Agreement.
(b) Create or suffer to exist any Lien upon or with respect to any
of the Collateral to secure Indebtedness of any person or entity, except for the
security interest created by this Agreement and Permitted Liens.
SECTION 9. Secured Party Appointed Attorney-in-Fact. The Grantor
hereby irrevocably appoints the Secured Party the Grantor's attorney-in-fact,
with full authority in the place and stead of the Grantor and in the name of the
Grantor, the Secured Party or otherwise, during the continuation of an Event of
Default, to take any action and to execute any instrument
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which the Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement (subject to the rights of the Grantor under SECTION
7), including, without limitation:
(i) to obtain and adjust insurance required to be paid to the
Secured Party pursuant to SECTION 6,
(ii) to ask demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(iii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with CLAUSE (i) or
(ii) above, and
(iv) to file any claims or take any action or institute any
proceedings which the Secured Party may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights
of the Secured Party with respect to any of the Collateral.
SECTION 10. Secured Party May Perform. If the Grantor fails to
perform any agreement contained herein, the Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of the Secured Party
incurred in connection therewith shall be payable by the Grantor under SECTION
14(b).
SECTION 11. The Secured Party's Duties. The powers conferred on the
Secured Party hereunder are solely to protect its interest (for the benefit of
the Lenders), in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Secured Party shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
SECTION 12. Events of Default. The occurrence of any "Event of
Default" as defined in the Loan Agreement shall constitute an Event of Default
hereunder.
SECTION 13. Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Secured Party may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it under Applicable Law or in equity or otherwise, all the rights and
remedies of a secured party on default under the applicable Uniform Commercial
Code (the "Code") (whether or not the Code applies to the affected Collateral)
and also may do any or all of the following:
(i) Declare any or all of the Secured Obligations then
existing to be immediately due and payable and they shall thereupon become
forthwith due and payable, without notice of any kind to the Grantor and
without any other presentment, demand, protest, or notice of any kind, all
of which are hereby expressly waived;
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(ii) Terminate the Lenders' obligations, if any, to make or to
permit the Borrowers to make further Loans or extensions of credit or
other financial accommodations to the Grantor;
(iii) In the name of the Secured Party or in the name of the
Grantor or otherwise, demand, xxx for, collect or receive any money or
property at any time payable or receivable on account of or in exchange
for, or make any compromise or settlement deemed desirable with respect
to, any of the Collateral, but the Secured Party shall be under no
obligation so to do, and the Secured Party may extend the time of payment,
arrange for payment installments, or otherwise modify the terms of, or
release, any of the Collateral without thereby incurring responsibility
to, or discharging or otherwise affecting any liability of, the Grantor;
(iv) Enter upon the premises, or wherever the Collateral may
be, and take possession thereof, and demand and receive such possession
from any Person who has possession thereof;
(v) Require the Grantor to, and the Grantor hereby agrees that
it will at its expense and upon request of the Secured Party forthwith,
assemble all or part of the Collateral as directed by the Secured Party
and make it available to the Secured Party at a place to be designated by
the Secured Party which is reasonably convenient to both parties;
(vi) Without notice except as specified below and with or
without taking the possession thereof, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any location
chosen by the Secured Party, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as the Secured Party
may deem commercially reasonable. The Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to the
Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification,
but notice given in any other reasonable manner or at any other reasonable
time shall constitute reasonable notification. The Secured Party shall not
be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Secured Party 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;
(vii) In any action hereunder, the Secured Party shall be
entitled to the appointment of a receiver, without notice, to take
possession of all or any portion of the Collateral and to exercise such
power as the court shall confer upon the receiver; and
(viii) Apply, without notice, any cash or cash items
constituting Collateral in the Secured Party's possession to payment of
any of the Secured Obligations.
The undersigned waives, to the extent permitted by Applicable Law,
all rights it has to prior notice (except as set forth in Section 13(a)(vi)) and
hearing under the Constitution of the
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United States and the Uniform Commercial Codes and constitutions of the States
of New York, California and under any other applicable statute or constitution.
(b) All cash proceeds received by the Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Secured Party, be held by the Secured
Party as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Secured Party pursuant to SECTION 14) in
whole or in part by the Secured Party against, all or any part of the Secured
Obligations in accordance with the provisions of Section 12.3 of the Loan
Agreement. Any surplus of such cash or cash proceeds held by the Secured Party
and remaining after payment in full of all the Secured Obligations shall be paid
over to the Grantor or to whomsoever may be lawfully entitled to receive such
surplus. The Grantor shall remain liable for any deficiency.
SECTION 14. Amendments; Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Grantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Secured Party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 15. Notices. All notices and other communications hereunder
shall be given in accordance with the provisions of Section 15.1 of the Loan
Agreement, to the Grantor at its address set forth on the signature pages hereof
(with a copy to the Borrowers), to the Secured Party at its address set forth on
the signature pages hereof, or as to either party at such other address as shall
be designated by such party in a written notice to each other party complying as
to delivery with the terms of this Section.
SECTION 16. Continuing Security Interest; Transfer of Obligations.
This Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until payment in full of the Secured
Obligations, (ii) be binding upon the Grantor, its successors and assigns, and
(iii) inure to the benefit of the Secured Party and its successors, transferees
and assigns. Without limiting the generality of the foregoing clause (iii), any
Lender may assign or otherwise transfer the Secured Obligations to another
Person in accordance with the provisions of the Loan Agreement and such Person
shall thereupon become vested with all the benefits in respect thereof granted
to the Secured Party herein or otherwise. Upon the payment in full of the
Secured Obligations, the security interest granted hereby shall terminate and
all rights to the Collateral shall revert to the Grantor. Upon any such
termination, the Secured Party will, at the Grantor's expense, execute and
deliver to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.
SECTION 17. Governing Law; Terms. (a) This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except as required by mandatory provisions of law and except to the extent that
the validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein,
terms used in Article 9 of the Uniform Commercial Code of the State of New York
are used herein as therein defined.
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(b) The Grantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court for the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment and both parties
hereto hereby irrevocably and unconditionally agree that all claims in respect
of any such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by law, in such federal court. Both
parties hereto agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Agent or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement against the Grantor or its
properties in the courts of any jurisdiction.
SECTION 18. Conflict with Loan Agreement. To the extent any
provision hereof shall be in conflict with or inconsistent with any provision of
the Loan Agreement, the provision of the Loan Agreement shall control.
SECTION 19. Grantor's Representative. Xxxxxxx shall act under this
Agreement as the representative of the Grantor, and the Grantor hereby appoints
Xxxxxxx as its representative hereunder for all purposes, including receiving
notices and communications to the Grantor from the Agent or any Lender. The
Agent and the Lenders may rely, and shall be fully protected in relying, on any
report, information or any other notice or communication made or given by
Xxxxxxx, whether in its own name or on behalf of the Grantor and neither the
Agent nor any Lender shall have any obligation to make any inquiry or request
any confirmation from or on behalf of the Grantor as to the binding effect on it
of any such report, information, notice or communication.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officer(s) as
of the date first above written.
GRANTOR:
ITCO TIRE COMPANY
By: /s/ XXXXXXX X. XXXXXXX
Name:____________________________
Title:___________________________
Address: 0000 Xxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxx, X.X. 00000
SECURED PARTY:
BANKBOSTON, N.A., AS AGENT
By: /s/ XXXXXXXXX X. XXXXXX
Name:____________________________
Title:___________________________
Address: 000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
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SECURITY AGREEMENT
(SUBSIDIARY)
THIS SECURITY AGREEMENT, dated as of May 20, 1998, is made by
PHOENIX RACING, INC., a California corporation (the "Grantor"), in favor of
BANKBOSTON, N.A., a national banking association, in its capacity as
administrative agent (the "Agent") for the financial institutions (the
"Lenders") party from time to time to the Amended and Restated Loan and Security
Agreement dated on or about the date hereof (the same as it may be amended,
modified or supplemented or restated, the "Loan Agreement") by and among The
X.X. Xxxxxxx Company, Inc., a North Carolina corporation ("Xxxxxxx"), Xxxxxx &
Xxxxxxx, Inc., a North Carolina corporation, ITCO Holding Company, Inc., a North
Carolina corporation, The Speed Merchant, Inc., a California corporation (each a
"Borrower" and collectively, the "Borrowers"), the Lenders, the Co-Agents and
the Agent (the Agent together with any successor agent under the Loan Agreement
also referred to as the "Secured Party" herein). Unless otherwise defined
herein, terms defined in the Loan Agreement are used herein as therein defined.
Preliminary Statement
As a condition precedent to the Lenders' making loans and other
financial accommodations to the Borrowers under the Loan Agreement, the
obligations of the Borrowers under which have been guaranteed by the Grantor
pursuant to a Guaranty dated as of even date herewith (the principal, interest,
fees, expenses and other indebtedness, obligations and liabilities of Grantor
under said Guaranty, (including, without being limited to, the Guaranteed
Obligations as defined therein) and this Agreement and all other indebtedness,
obligations and liabilities of the Grantor to the Secured Party and the Lenders,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising under the Loan Documents (as defined in the Loan
Agreement), being hereinafter referred to collectively as the "Secured
Obligations"), the Agent and the Lenders have required that Grantor shall have
granted the security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to continue to make loans and other financial accommodations
to the Borrowers, the Grantor hereby agrees as follows:
SECTION 1. Grant of Security. As security for payment and
performance of the Secured Obligations, the Grantor hereby conveys, mortgages,
pledges, assigns, transfers, sets over, grants and delivers to the Secured Party
a continuing security interest in all of the Grantor's right, title and interest
in and to the following property, wherever located, whether now owned or
existing or hereafter acquired or arising (hereinafter referred to as the
"Collateral"):
(a) (i) all rights to the payment of money or other forms of
consideration of any kind (whether classified under the UCC as accounts,
contract rights, chattel paper, general intangibles or otherwise) including, but
not limited to, accounts receivable, insurance proceeds, letters of credit and
the right to receive payment thereunder, chattel paper, any rights under
contracts not yet earned by performance and not evidenced by an instrument or
chattel paper,
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notes, drafts, instruments, documents, acceptances and all other debts,
obligations and liabilities in whatever form from any Person, but excluding tax
refunds and insurance proceeds not arising out of the Collateral, (ii) all
guaranties, security and Liens securing payment thereof, (iii) all goods,
whether now owned or hereafter acquired, and whether sold, delivered,
undelivered, in transit or returned, which may be represented by, or the sale or
lease of which may have given rise to, any such right to payment or other debt,
obligation or liability, and (iv) all proceeds of any of the foregoing (the
foregoing, collectively, "Receivables"),
(b) (i) all inventory, (ii) all goods intended for sale or lease or
for display or demonstration, (iii) all work in process, (iv) all raw materials
and other materials and supplies of every nature and description used or which
might be used in connection with the manufacture, packing, shipping,
advertising, selling, leasing or furnishing of goods or services or otherwise
used or consumed in the conduct of business, and (v) all documents of title,
including bills of lading and warehouse receipts, and other documents evidencing
and general intangibles relating to any of the foregoing (the foregoing,
collectively, "Inventory"),
(c) any demand, time, savings, passbook, money market or like
depository account, and all certificates of deposit, maintained with a bank,
savings and loan association, credit union or like organization (other than an
account evidenced by a certificate of deposit that is an instrument under the
UCC) to which proceeds of Collateral are deposited (the foregoing, collectively,
"Deposit Accounts"),
(d) all certificated and uncertificated securities, all security
entitlements, all securities accounts, all commodity contracts and all commodity
accounts, EXCLUDING, HOWEVER, the equity securities of any Subsidiary, to the
extent acquired directly with proceeds of Collateral (the foregoing,
collectively, "Investment Property"),
(e) (i) any investment account maintained by or on behalf of the
Grantor with the Agent or any Lender or any Affiliate of the Agent or any
Lender, (ii) any agreement governing such account, (iii) all cash proceeds and
Investment Property now or hereafter held by the Agent or any Lender or any
Affiliate of the Agent or any Lender on behalf of the Grantor in connection with
such investment account and (iv) all documents evidencing and general
intangibles related to the foregoing (the foregoing, collectively, "Investment
Accounts"),
(f) all cash or other property deposited with the Agent or any
Lender or any Affiliate of the Agent or any Lender or which the Agent, for its
benefit and for the benefit of the Lenders, or any Lender or such Affiliate is
entitled to retain or otherwise possess as collateral pursuant to the provisions
of this Agreement or any of the Loan Documents or any agreement relating to any
Letter of Credit, including, without limitation, amounts on deposit in the Cash
Collateral Account,
(g) all goods and other property, whether or not delivered, (i) the
sale or lease of which gives or purports to give rise to any Receivable,
including, but not limited to, all merchandise returned or rejected by or
repossessed from customers, or (ii) securing any Receivable, including, without
limitation, all rights as an unpaid vendor or lienor (including,
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without limitation, stoppage in transit, replevin and reclamation) with respect
to such goods and other properties,
(h) all mortgages, deeds to secure debt and deeds of trust on real
or personal property, guaranties, leases, security agreements and other
agreements and property which secure or relate to any Receivable or other
Collateral or are acquired for the purpose of securing and enforcing any item
thereof,
(i) all files, correspondence, computer programs, tapes, disks and
related data processing software which contain information identifying or
pertaining to any of the Collateral or any Account Debtor or showing the amounts
thereof or payments thereon or otherwise necessary or helpful in the realization
thereon or the collection thereof,
(j) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items referred to in
this definition and any claims against third parties for loss of, damage to or
destruction of any or all of the Collateral or for proceeds payable under or
unearned premiums with respect to policies of insurance) in whatever form,
including, but not limited to, cash, negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements and
other documents.
SECTION 2. Grantor Remains Liable. Anything contained herein to the
contrary notwithstanding, (a) the 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 the
Secured Party of any of the rights hereunder shall not release the Grantor from
any of its duties or obligations under the contracts and agreements included in
the Collateral, and (c) the Secured Party shall not have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Secured Party be obligated to perform
any of the obligations or duties of the Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
SECTION 3. Representations and Warranties. The Grantor represents
and warrants as follows:
(a) The Grantor is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, has
the power and authority to own its properties and to carry on its business as
now being and as hereafter proposed to be conducted and is duly qualified and
authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization.
(b) The Grantor has the right and power, and has taken all necessary
action to authorize it, to execute, deliver and perform this Agreement in
accordance with its terms. This Agreement has been duly executed and delivered
by the duly authorized officers of the Grantor and is a legal, valid and binding
obligation of the Grantor, enforceable in accordance with its terms.
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(c) The execution, delivery and performance of this Agreement in
accordance with its terms does not and will not, by the passage of time, the
giving of notice or otherwise,
(i) require any Governmental Approval or violate any
Applicable Law relating to the Grantor,
(ii) conflict with, result in a breach of or constitute a
default under the articles of incorporation or by-laws of the Grantor, any
material provisions of any indenture, agreement or other instrument to
which the Grantor is a party or by which it or any of its property may be
bound or any Governmental Approval relating to the Grantor or
(iii) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired
by the Grantor other than the security interest contemplated by this
Agreement.
(d) There is no pending or threatened action or proceeding affecting
the Grantor before any court, governmental agency or arbitrator, which may
materially adversely affect the financial condition or operations of the
Grantor.
(e) All of the Inventory is located at the address(es) set forth in
PART I of EXHIBIT A hereto.
(f) The address of the chief executive office of the Grantor is set
forth in PART II of EXHIBIT A hereto. The address(es) of such chief executive
office has not been changed during the year preceding the date hereof.
(g) The office(s) where the Grantor keeps its records concerning the
Receivables and originals of chattel paper, if any, which evidences Receivables
is located at the address set forth in PART III of EXHIBIT A hereto and except
as otherwise indicated in said PART III of EXHIBIT A, such office(s) has (have)
been located at such address(es) continuously for the past year. None of the
Receivables is evidenced by a promissory note or other instrument which has not
been delivered to the Secured Party at its request.
(h) If the business of the Grantor has been conducted under a
different name or names during the last five years, such name(s) is (are) set
forth in PART IV of EXHIBIT A hereto.
(i) The Grantor owns the Collateral free and clear of any lien,
security interest, charge or encumbrance except for the security interest
created by this Agreement, Permitted Liens, and except as may be set forth in
EXHIBIT B attached hereto and made a part hereof. Except as may be set forth on
EXHIBIT B, no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Secured Party
relating to this Agreement.
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(j) This Agreement creates a valid security interest in the
Collateral, securing the payment of the Secured Obligations and upon completion
of the filings and other actions set forth on EXHIBIT B, all actions necessary
to perfect such security interest as a first priority security interest (subject
to Permitted Liens) will have been duly taken.
(k) Except for the filing of UCC financing statements in the
appropriate jurisdictions, no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required either (i) for the grant by the Grantor of the security interest
granted hereby or for the execution, delivery or performance of this Agreement
by the Grantor or (ii) for the exercise by the Secured Party of its rights and
remedies hereunder.
SECTION 4. Further Assurances. (a) The Grantor agrees that from time
to time, at the expense of the Grantor, the Grantor shall promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Secured Party may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Grantor shall take all actions contemplated by
SECTION 7.2(b) of the Loan Agreement.
(b) The Grantor hereby authorizes the Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of the Grantor where
permitted by law and agrees that a photographic or other reproduction of this
Agreement of this may be used and filed as a financing statement.
(c) The Grantor shall furnish to the Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Secured Party may
reasonably request, all in reasonable detail.
SECTION 5. As to Inventory. The Grantor shall:
(a) Keep the Inventory (other than Inventory in transit to any such
location or sold in the ordinary course of business) at Permitted Inventory
Locations or, with the prior consent of the Secured Party, at such other places
in jurisdictions where all action required by SECTION 4 shall have been taken
with respect to the Inventory.
(b) Pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Inventory, except to the
extent the validity thereof is being contested in good faith by appropriate
proceedings.
SECTION 6. Insurance. The Grantor shall take all actions
contemplated by SECTION 8.8 of the Loan Agreement.
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SECTION 7. As to Receivables. (a) the Grantor shall keep its chief
place of business and chief executive office and the office(s) where it keeps
its records concerning the Receivables, and all originals of all chattel paper
which evidence Receivables, at the location(s) therefor specified in EXHIBIT A
or, upon 30 days' prior written notice to the Secured Party, at such other
location(s) in a jurisdiction where all action required by SECTION 4 shall have
been taken with respect to the Receivables. The Grantor will hold and preserve
such records and chattel paper and will permit representatives of the Secured
Party at any time during normal business hours to inspect and make abstracts
from such records and chattel paper.
(b) Except as otherwise provided in this SUBSECTION (b) or SECTION
8.1 of the Loan Agreement, the Grantor shall continue to collect, at its own
expense, all amounts due or to become due the Grantor under the Receivables. In
connection with such collections, the Grantor may take (and, during the
continuation of an Event of Default, at the Secured Party's direction, shall
take) such action as the Grantor or the Secured Party may deem necessary or
advisable to enforce collection of the Receivables; PROVIDED, HOWEVER, that the
Secured Party shall have the right at any time, upon the occurrence and during
the continuation of an Event of Default, to notify the Account Debtors or
obligors under any Receivables of the assignment of such Receivables to the
Secured Party and to direct such Account Debtors or obligors to make payment of
all amounts due or to become due to the Grantor thereunder directly to the
Secured Party and, upon such notification and at the expense of the Grantor, to
enforce collection of any such Receivables, and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as the
Grantor might have done. After receipt by the Grantor of the notice from the
Secured Party referred to in the PROVISO to the preceding sentence and during
the continuation of an Event of Default, (i) all amounts and proceeds (including
instruments) received by the Grantor in respect of the Receivables shall be
received in trust for the benefit of the Secured Party hereunder, shall be
segregated from other funds of the Grantor and shall be forthwith paid over to
the Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash collateral and either (A) released to the
Grantor so long as no Event of Default shall have occurred and be continuing or
(B) if any Event of Default shall have occurred and be continuing, applied as
provided by SECTION 13(b), and (ii) the Grantor shall not adjust, settle or
compromise the amount or payment of any Receivable, or release wholly or partly
any account debtor or obligor thereof, or allow any credit or discount thereon.
SECTION 8. Transfers and Other Liens. The Grantor shall not without
the prior written consent of the Secured Party:
(a) Sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral except Inventory in the ordinary course of
business, subject to the limitations set forth in the Loan Agreement.
(b) Create or suffer to exist any Lien upon or with respect to any
of the Collateral to secure Indebtedness of any person or entity, except for the
security interest created by this Agreement and Permitted Liens.
SECTION 9. Secured Party Appointed Attorney-in-Fact. The Grantor
hereby irrevocably appoints the Secured Party the Grantor's attorney-in-fact,
with full authority in the
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place and stead of the Grantor and in the name of the Grantor, the Secured Party
or otherwise, during the continuation of an Event of Default, to take any action
and to execute any instrument which the Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement (subject to the rights of
the Grantor under SECTION 7), including, without limitation:
(i) to obtain and adjust insurance required to be paid to the
Secured Party pursuant to SECTION 6,
(ii) to ask demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(iii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with CLAUSE (i) or
(ii) above, and
(iv) to file any claims or take any action or institute any
proceedings which the Secured Party may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights
of the Secured Party with respect to any of the Collateral.
SECTION 10. Secured Party May Perform. If the Grantor fails to
perform any agreement contained herein, the Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of the Secured Party
incurred in connection therewith shall be payable by the Grantor under SECTION
14(b).
SECTION 11. The Secured Party's Duties. The powers conferred on the
Secured Party hereunder are solely to protect its interest (for the benefit of
the Lenders), in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Secured Party shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
SECTION 12. Events of Default. The occurrence of any "Event of
Default" as defined in the Loan Agreement shall constitute an Event of Default
hereunder.
SECTION 13. Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Secured Party may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it under Applicable Law or in equity or otherwise, all the rights and
remedies of a secured party on default under the applicable Uniform Commercial
Code (the "Code") (whether or not the Code applies to the affected Collateral)
and also may do any or all of the following:
(i) Declare any or all of the Secured Obligations then
existing to be immediately due and payable and they shall thereupon become
forthwith due and payable,
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without notice of any kind to the Grantor and without any other
presentment, demand, protest, or notice of any kind, all of which are
hereby expressly waived;
(ii) Terminate the Lenders' obligations, if any, to make or to
permit the Borrowers to make further Loans or extensions of credit or
other financial accommodations to the Grantor;
(iii) In the name of the Secured Party or in the name of the
Grantor or otherwise, demand, xxx for, collect or receive any money or
property at any time payable or receivable on account of or in exchange
for, or make any compromise or settlement deemed desirable with respect
to, any of the Collateral, but the Secured Party shall be under no
obligation so to do, and the Secured Party may extend the time of payment,
arrange for payment installments, or otherwise modify the terms of, or
release, any of the Collateral without thereby incurring responsibility
to, or discharging or otherwise affecting any liability of, the Grantor;
(iv) Enter upon the premises, or wherever the Collateral may
be, and take possession thereof, and demand and receive such possession
from any Person who has possession thereof;
(v) Require the Grantor to, and the Grantor hereby agrees that
it will at its expense and upon request of the Secured Party forthwith,
assemble all or part of the Collateral as directed by the Secured Party
and make it available to the Secured Party at a place to be designated by
the Secured Party which is reasonably convenient to both parties;
(vi) Without notice except as specified below and with or
without taking the possession thereof, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any location
chosen by the Secured Party, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as the Secured Party
may deem commercially reasonable. The Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to the
Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification,
but notice given in any other reasonable manner or at any other reasonable
time shall constitute reasonable notification. The Secured Party shall not
be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Secured Party 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;
(vii) In any action hereunder, the Secured Party shall be
entitled to the appointment of a receiver, without notice, to take
possession of all or any portion of the Collateral and to exercise such
power as the court shall confer upon the receiver; and
(viii) Apply, without notice, any cash or cash items
constituting Collateral in the Secured Party's possession to payment of
any of the Secured Obligations.
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The undersigned waives, to the extent permitted by Applicable Law,
all rights it has to prior notice (except as set forth in Section 13(a)(vi)) and
hearing under the Constitution of the United States and the Uniform Commercial
Codes and constitutions of the States of New York, California and under any
other applicable statute or constitution.
(b) All cash proceeds received by the Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Secured Party, be held by the Secured
Party as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Secured Party pursuant to SECTION 14) in
whole or in part by the Secured Party against, all or any part of the Secured
Obligations in accordance with the provisions of Section 12.3 of the Loan
Agreement. Any surplus of such cash or cash proceeds held by the Secured Party
and remaining after payment in full of all the Secured Obligations shall be paid
over to the Grantor or to whomsoever may be lawfully entitled to receive such
surplus. The Grantor shall remain liable for any deficiency.
SECTION 14. Amendments; Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Grantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Secured Party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 15. Notices. All notices and other communications hereunder
shall be given in accordance with the provisions of Section 15.1 of the Loan
Agreement, to the Grantor at its address set forth on the signature pages hereof
(with a copy to the Borrowers), to the Secured Party at its address set forth on
the signature pages hereof, or as to either party at such other address as shall
be designated by such party in a written notice to each other party complying as
to delivery with the terms of this Section.
SECTION 16. Continuing Security Interest; Transfer of Obligations.
This Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until payment in full of the Secured
Obligations, (ii) be binding upon the Grantor, its successors and assigns, and
(iii) inure to the benefit of the Secured Party and its successors, transferees
and assigns. Without limiting the generality of the foregoing clause (iii), any
Lender may assign or otherwise transfer the Secured Obligations to another
Person in accordance with the provisions of the Loan Agreement and such Person
shall thereupon become vested with all the benefits in respect thereof granted
to the Secured Party herein or otherwise. Upon the payment in full of the
Secured Obligations, the security interest granted hereby shall terminate and
all rights to the Collateral shall revert to the Grantor. Upon any such
termination, the Secured Party will, at the Grantor's expense, execute and
deliver to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.
SECTION 17. Governing Law; Terms. (a) This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except as required by mandatory provisions of law and except to the extent that
the validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein,
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terms used in Article 9 of the Uniform Commercial Code of the State of New York
are used herein as therein defined.
(b) The Grantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court for the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment and both parties
hereto hereby irrevocably and unconditionally agree that all claims in respect
of any such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by law, in such federal court. Both
parties hereto agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Agent or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement against the Grantor or its
properties in the courts of any jurisdiction.
SECTION 18. Conflict with Loan Agreement. To the extent any
provision hereof shall be in conflict with or inconsistent with any provision of
the Loan Agreement, the provision of the Loan Agreement shall control.
SECTION 19. Grantor's Representative. Xxxxxxx shall act under this
Agreement as the representative of the Grantor, and the Grantor hereby appoints
Xxxxxxx as its representative hereunder for all purposes, including receiving
notices and communications to the Grantor from the Agent or any Lender. The
Agent and the Lenders may rely, and shall be fully protected in relying, on any
report, information or any other notice or communication made or given by
Xxxxxxx, whether in its own name or on behalf of the Grantor and neither the
Agent nor any Lender shall have any obligation to make any inquiry or request
any confirmation from or on behalf of the Grantor as to the binding effect on it
of any such report, information, notice or communication.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officer(s) as
of the date first above written.
GRANTOR:
PHOENIX RACING, INC.
By: /s/ XXXXXXX X. XXXXXXX
Name:____________________________
Title:___________________________
By: /s/ J. XXXXXXX XXXXXXX
Name:____________________________
Title:___________________________
Address: 0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
SECURED PARTY:
BANKBOSTON, N.A., AS AGENT
By: /s/ XXXXXXXXX X. XXXXXX
Name:____________________________
Title:___________________________
Address: 000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
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SECURITY AGREEMENT
(SUBSIDIARY)
THIS SECURITY AGREEMENT, dated as of May 20, 1998, is made by ITCO
LOGISTICS CORPORATION, a Delaware corporation (the "Grantor"), in favor of
BANKBOSTON, N.A., a national banking association, in its capacity as
administrative agent (the "Agent") for the financial institutions (the
"Lenders") party from time to time to the Amended and Restated Loan and Security
Agreement dated on or about the date hereof (the same as it may be amended,
modified or supplemented or restated, the "Loan Agreement") by and among The
X.X. Xxxxxxx Company, Inc., a North Carolina corporation ("Xxxxxxx"), Xxxxxx &
Xxxxxxx, Inc., a North Carolina corporation, ITCO Holding Company, Inc., a North
Carolina corporation, The Speed Merchant, Inc., a California corporation (each a
"Borrower" and collectively, the "Borrowers"), the Lenders, the Co-Agents and
the Agent (the Agent together with any successor agent under the Loan Agreement
also referred to as the "Secured Party" herein). Unless otherwise defined
herein, terms defined in the Loan Agreement are used herein as therein defined.
Preliminary Statement
As a condition precedent to the Lenders' making loans and other
financial accommodations to the Borrowers under the Loan Agreement, the
obligations of the Borrowers under which have been guaranteed by the Grantor
pursuant to a Guaranty dated as of even date herewith (the principal, interest,
fees, expenses and other indebtedness, obligations and liabilities of Grantor
under said Guaranty, (including, without being limited to, the Guaranteed
Obligations as defined therein) and this Agreement and all other indebtedness,
obligations and liabilities of the Grantor to the Secured Party and the Lenders,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising under the Loan Documents (as defined in the Loan
Agreement), being hereinafter referred to collectively as the "Secured
Obligations"), the Agent and the Lenders have required that Grantor shall have
granted the security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to continue to make loans and other financial accommodations
to the Borrowers, the Grantor hereby agrees as follows:
SECTION 1. Grant of Security. As security for payment and
performance of the Secured Obligations, the Grantor hereby conveys, mortgages,
pledges, assigns, transfers, sets over, grants and delivers to the Secured Party
a continuing security interest in all of the Grantor's right, title and interest
in and to the following property, wherever located, whether now owned or
existing or hereafter acquired or arising (hereinafter referred to as the
"Collateral"):
(a) (i) all rights to the payment of money or other forms of
consideration of any kind (whether classified under the UCC as accounts,
contract rights, chattel paper, general intangibles or otherwise) including, but
not limited to, accounts receivable, insurance proceeds, letters of credit and
the right to receive payment thereunder, chattel paper, any rights under
contracts not yet earned by performance and not evidenced by an instrument or
chattel paper,
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notes, drafts, instruments, documents, acceptances and all other debts,
obligations and liabilities in whatever form from any Person, but excluding tax
refunds and insurance proceeds not arising out of the Collateral, (ii) all
guaranties, security and Liens securing payment thereof, (iii) all goods,
whether now owned or hereafter acquired, and whether sold, delivered,
undelivered, in transit or returned, which may be represented by, or the sale or
lease of which may have given rise to, any such right to payment or other debt,
obligation or liability, and (iv) all proceeds of any of the foregoing (the
foregoing, collectively, "Receivables"),
(b) (i) all inventory, (ii) all goods intended for sale or lease or
for display or demonstration, (iii) all work in process, (iv) all raw materials
and other materials and supplies of every nature and description used or which
might be used in connection with the manufacture, packing, shipping,
advertising, selling, leasing or furnishing of goods or services or otherwise
used or consumed in the conduct of business, and (v) all documents of title,
including bills of lading and warehouse receipts, and other documents evidencing
and general intangibles relating to any of the foregoing (the foregoing,
collectively, "Inventory"),
(c) any demand, time, savings, passbook, money market or like
depository account, and all certificates of deposit, maintained with a bank,
savings and loan association, credit union or like organization (other than an
account evidenced by a certificate of deposit that is an instrument under the
UCC) to which proceeds of Collateral are deposited (the foregoing, collectively,
"Deposit Accounts"),
(d) all certificated and uncertificated securities, all security
entitlements, all securities accounts, all commodity contracts and all commodity
accounts, EXCLUDING, HOWEVER, the equity securities of any Subsidiary, to the
extent acquired directly with proceeds of Collateral (the foregoing,
collectively, "Investment Property"),
(e) (i) any investment account maintained by or on behalf of the
Grantor with the Agent or any Lender or any Affiliate of the Agent or any
Lender, (ii) any agreement governing such account, (iii) all cash proceeds and
Investment Property now or hereafter held by the Agent or any Lender or any
Affiliate of the Agent or any Lender on behalf of the Grantor in connection with
such investment account and (iv) all documents evidencing and general
intangibles related to the foregoing (the foregoing, collectively, "Investment
Accounts"),
(f) all cash or other property deposited with the Agent or any
Lender or any Affiliate of the Agent or any Lender or which the Agent, for its
benefit and for the benefit of the Lenders, or any Lender or such Affiliate is
entitled to retain or otherwise possess as collateral pursuant to the provisions
of this Agreement or any of the Loan Documents or any agreement relating to any
Letter of Credit, including, without limitation, amounts on deposit in the Cash
Collateral Account,
(g) all goods and other property, whether or not delivered, (i) the
sale or lease of which gives or purports to give rise to any Receivable,
including, but not limited to, all merchandise returned or rejected by or
repossessed from customers, or (ii) securing any Receivable, including, without
limitation, all rights as an unpaid vendor or lienor (including,
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without limitation, stoppage in transit, replevin and reclamation) with respect
to such goods and other properties,
(h) all mortgages, deeds to secure debt and deeds of trust on real
or personal property, guaranties, leases, security agreements and other
agreements and property which secure or relate to any Receivable or other
Collateral or are acquired for the purpose of securing and enforcing any item
thereof,
(i) all files, correspondence, computer programs, tapes, disks and
related data processing software which contain information identifying or
pertaining to any of the Collateral or any Account Debtor or showing the amounts
thereof or payments thereon or otherwise necessary or helpful in the realization
thereon or the collection thereof,
(j) any and all products and cash and non-cash proceeds of the
foregoing (including, but not limited to, any claims to any items referred to in
this definition and any claims against third parties for loss of, damage to or
destruction of any or all of the Collateral or for proceeds payable under or
unearned premiums with respect to policies of insurance) in whatever form,
including, but not limited to, cash, negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements and
other documents.
SECTION 2. Grantor Remains Liable. Anything contained herein to the
contrary notwithstanding, (a) the 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 the
Secured Party of any of the rights hereunder shall not release the Grantor from
any of its duties or obligations under the contracts and agreements included in
the Collateral, and (c) the Secured Party shall not have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Secured Party be obligated to perform
any of the obligations or duties of the Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
SECTION 3. Representations and Warranties. The Grantor represents
and warrants as follows:
(a) The Grantor is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, has
the power and authority to own its properties and to carry on its business as
now being and as hereafter proposed to be conducted and is duly qualified and
authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization.
(b) The Grantor has the right and power, and has taken all necessary
action to authorize it, to execute, deliver and perform this Agreement in
accordance with its terms. This Agreement has been duly executed and delivered
by the duly authorized officers of the Grantor and is a legal, valid and binding
obligation of the Grantor, enforceable in accordance with its terms.
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(c) The execution, delivery and performance of this Agreement in
accordance with its terms does not and will not, by the passage of time, the
giving of notice or otherwise,
(i) require any Governmental Approval or violate any
Applicable Law relating to the Grantor,
(ii) conflict with, result in a breach of or constitute a
default under the articles of incorporation or by-laws of the Grantor, any
material provisions of any indenture, agreement or other instrument to
which the Grantor is a party or by which it or any of its property may be
bound or any Governmental Approval relating to the Grantor or
(iii) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired
by the Grantor other than the security interest contemplated by this
Agreement.
(d) There is no pending or threatened action or proceeding affecting
the Grantor before any court, governmental agency or arbitrator, which may
materially adversely affect the financial condition or operations of the
Grantor.
(e) All of the Inventory is located at the address(es) set forth in
PART I of EXHIBIT A hereto.
(f) The address of the chief executive office of the Grantor is set
forth in PART II of EXHIBIT A hereto. The address(es) of such chief executive
office has not been changed during the year preceding the date hereof.
(g) The office(s) where the Grantor keeps its records concerning the
Receivables and originals of chattel paper, if any, which evidences Receivables
is located at the address set forth in PART III of EXHIBIT A hereto and except
as otherwise indicated in said PART III of EXHIBIT A, such office(s) has (have)
been located at such address(es) continuously for the past year. None of the
Receivables is evidenced by a promissory note or other instrument which has not
been delivered to the Secured Party at its request.
(h) If the business of the Grantor has been conducted under a
different name or names during the last five years, such name(s) is (are) set
forth in PART IV of EXHIBIT A hereto.
(i) The Grantor owns the Collateral free and clear of any lien,
security interest, charge or encumbrance except for the security interest
created by this Agreement, Permitted Liens, and except as may be set forth in
EXHIBIT B attached hereto and made a part hereof. Except as may be set forth on
EXHIBIT B, no effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Secured Party
relating to this Agreement.
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(j) This Agreement creates a valid security interest in the
Collateral, securing the payment of the Secured Obligations and upon completion
of the filings and other actions set forth on EXHIBIT B, all actions necessary
to perfect such security interest as a first priority security interest (subject
to Permitted Liens) will have been duly taken.
(k) Except for the filing of UCC financing statements in the
appropriate jurisdictions, no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required either (i) for the grant by the Grantor of the security interest
granted hereby or for the execution, delivery or performance of this Agreement
by the Grantor or (ii) for the exercise by the Secured Party of its rights and
remedies hereunder.
SECTION 4. Further Assurances. (a) The Grantor agrees that from time
to time, at the expense of the Grantor, the Grantor shall promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Secured Party may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Grantor shall take all actions contemplated by
SECTION 7.2(b) of the Loan Agreement.
(b) The Grantor hereby authorizes the Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of the Grantor where
permitted by law and agrees that a photographic or other reproduction of this
Agreement of this may be used and filed as a financing statement.
(c) The Grantor shall furnish to the Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Secured Party may
reasonably request, all in reasonable detail.
SECTION 5. As to Inventory. The Grantor shall:
(a) Keep the Inventory (other than Inventory in transit to any such
location or sold in the ordinary course of business) at Permitted Inventory
Locations or, with the prior consent of the Secured Party, at such other places
in jurisdictions where all action required by SECTION 4 shall have been taken
with respect to the Inventory.
(b) Pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Inventory, except to the
extent the validity thereof is being contested in good faith by appropriate
proceedings.
SECTION 6. Insurance. The Grantor shall take all actions
contemplated by SECTION 8.8 of the Loan Agreement.
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SECTION 7. As to Receivables. (a) the Grantor shall keep its chief
place of business and chief executive office and the office(s) where it keeps
its records concerning the Receivables, and all originals of all chattel paper
which evidence Receivables, at the location(s) therefor specified in EXHIBIT A
or, upon 30 days' prior written notice to the Secured Party, at such other
location(s) in a jurisdiction where all action required by SECTION 4 shall have
been taken with respect to the Receivables. The Grantor will hold and preserve
such records and chattel paper and will permit representatives of the Secured
Party at any time during normal business hours to inspect and make abstracts
from such records and chattel paper.
(b) Except as otherwise provided in this SUBSECTION (b) or SECTION
8.1 of the Loan Agreement, the Grantor shall continue to collect, at its own
expense, all amounts due or to become due the Grantor under the Receivables. In
connection with such collections, the Grantor may take (and, during the
continuation of an Event of Default, at the Secured Party's direction, shall
take) such action as the Grantor or the Secured Party may deem necessary or
advisable to enforce collection of the Receivables; PROVIDED, HOWEVER, that the
Secured Party shall have the right at any time, upon the occurrence and during
the continuation of an Event of Default, to notify the Account Debtors or
obligors under any Receivables of the assignment of such Receivables to the
Secured Party and to direct such Account Debtors or obligors to make payment of
all amounts due or to become due to the Grantor thereunder directly to the
Secured Party and, upon such notification and at the expense of the Grantor, to
enforce collection of any such Receivables, and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as the
Grantor might have done. After receipt by the Grantor of the notice from the
Secured Party referred to in the PROVISO to the preceding sentence and during
the continuation of an Event of Default, (i) all amounts and proceeds (including
instruments) received by the Grantor in respect of the Receivables shall be
received in trust for the benefit of the Secured Party hereunder, shall be
segregated from other funds of the Grantor and shall be forthwith paid over to
the Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash collateral and either (A) released to the
Grantor so long as no Event of Default shall have occurred and be continuing or
(B) if any Event of Default shall have occurred and be continuing, applied as
provided by SECTION 13(b), and (ii) the Grantor shall not adjust, settle or
compromise the amount or payment of any Receivable, or release wholly or partly
any account debtor or obligor thereof, or allow any credit or discount thereon.
SECTION 8. Transfers and Other Liens. The Grantor shall not without
the prior written consent of the Secured Party:
(a) Sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral except Inventory in the ordinary course of
business, subject to the limitations set forth in the Loan Agreement.
(b) Create or suffer to exist any Lien upon or with respect to any
of the Collateral to secure Indebtedness of any person or entity, except for the
security interest created by this Agreement and Permitted Liens.
SECTION 9. Secured Party Appointed Attorney-in-Fact. The Grantor
hereby irrevocably appoints the Secured Party the Grantor's attorney-in-fact,
with full authority in the
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place and stead of the Grantor and in the name of the Grantor, the Secured Party
or otherwise, during the continuation of an Event of Default, to take any action
and to execute any instrument which the Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement (subject to the rights of
the Grantor under SECTION 7), including, without limitation:
(i) to obtain and adjust insurance required to be paid to the
Secured Party pursuant to SECTION 6,
(ii) to ask demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral,
(iii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with CLAUSE (i) or
(ii) above, and
(iv) to file any claims or take any action or institute any
proceedings which the Secured Party may deem necessary or desirable for
the collection of any of the Collateral or otherwise to enforce the rights
of the Secured Party with respect to any of the Collateral.
SECTION 10. Secured Party May Perform. If the Grantor fails to
perform any agreement contained herein, the Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of the Secured Party
incurred in connection therewith shall be payable by the Grantor under SECTION
14(b).
SECTION 11. The Secured Party's Duties. The powers conferred on the
Secured Party hereunder are solely to protect its interest (for the benefit of
the Lenders), in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Secured Party shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
SECTION 12. Events of Default. The occurrence of any "Event of
Default" as defined in the Loan Agreement shall constitute an Event of Default
hereunder.
SECTION 13. Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Secured Party may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it under Applicable Law or in equity or otherwise, all the rights and
remedies of a secured party on default under the applicable Uniform Commercial
Code (the "Code") (whether or not the Code applies to the affected Collateral)
and also may do any or all of the following:
(i) Declare any or all of the Secured Obligations then
existing to be immediately due and payable and they shall thereupon become
forthwith due and payable,
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without notice of any kind to the Grantor and without any other
presentment, demand, protest, or notice of any kind, all of which are
hereby expressly waived;
(ii) Terminate the Lenders' obligations, if any, to make or to
permit the Borrowers to make further Loans or extensions of credit or
other financial accommodations to the Grantor;
(iii) In the name of the Secured Party or in the name of the
Grantor or otherwise, demand, xxx for, collect or receive any money or
property at any time payable or receivable on account of or in exchange
for, or make any compromise or settlement deemed desirable with respect
to, any of the Collateral, but the Secured Party shall be under no
obligation so to do, and the Secured Party may extend the time of payment,
arrange for payment installments, or otherwise modify the terms of, or
release, any of the Collateral without thereby incurring responsibility
to, or discharging or otherwise affecting any liability of, the Grantor;
(iv) Enter upon the premises, or wherever the Collateral may
be, and take possession thereof, and demand and receive such possession
from any Person who has possession thereof;
(v) Require the Grantor to, and the Grantor hereby agrees that
it will at its expense and upon request of the Secured Party forthwith,
assemble all or part of the Collateral as directed by the Secured Party
and make it available to the Secured Party at a place to be designated by
the Secured Party which is reasonably convenient to both parties;
(vi) Without notice except as specified below and with or
without taking the possession thereof, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any location
chosen by the Secured Party, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as the Secured Party
may deem commercially reasonable. The Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to the
Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification,
but notice given in any other reasonable manner or at any other reasonable
time shall constitute reasonable notification. The Secured Party shall not
be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Secured Party 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;
(vii) In any action hereunder, the Secured Party shall be
entitled to the appointment of a receiver, without notice, to take
possession of all or any portion of the Collateral and to exercise such
power as the court shall confer upon the receiver; and
(viii) Apply, without notice, any cash or cash items
constituting Collateral in the Secured Party's possession to payment of
any of the Secured Obligations.
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The undersigned waives, to the extent permitted by Applicable Law,
all rights it has to prior notice (except as set forth in Section 13(a)(vi)) and
hearing under the Constitution of the United States and the Uniform Commercial
Codes and constitutions of the States of New York, California and under any
other applicable statute or constitution.
(b) All cash proceeds received by the Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Secured Party, be held by the Secured
Party as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Secured Party pursuant to SECTION 14) in
whole or in part by the Secured Party against, all or any part of the Secured
Obligations in accordance with the provisions of Section 12.3 of the Loan
Agreement. Any surplus of such cash or cash proceeds held by the Secured Party
and remaining after payment in full of all the Secured Obligations shall be paid
over to the Grantor or to whomsoever may be lawfully entitled to receive such
surplus. The Grantor shall remain liable for any deficiency.
SECTION 14. Amendments; Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Grantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Secured Party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 15. Notices. All notices and other communications hereunder
shall be given in accordance with the provisions of Section 15.1 of the Loan
Agreement, to the Grantor at its address set forth on the signature pages hereof
(with a copy to the Borrowers), to the Secured Party at its address set forth on
the signature pages hereof, or as to either party at such other address as shall
be designated by such party in a written notice to each other party complying as
to delivery with the terms of this Section.
SECTION 16. Continuing Security Interest; Transfer of Obligations.
This Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until payment in full of the Secured
Obligations, (ii) be binding upon the Grantor, its successors and assigns, and
(iii) inure to the benefit of the Secured Party and its successors, transferees
and assigns. Without limiting the generality of the foregoing clause (iii), any
Lender may assign or otherwise transfer the Secured Obligations to another
Person in accordance with the provisions of the Loan Agreement and such Person
shall thereupon become vested with all the benefits in respect thereof granted
to the Secured Party herein or otherwise. Upon the payment in full of the
Secured Obligations, the security interest granted hereby shall terminate and
all rights to the Collateral shall revert to the Grantor. Upon any such
termination, the Secured Party will, at the Grantor's expense, execute and
deliver to the Grantor such documents as the Grantor shall reasonably request to
evidence such termination.
SECTION 17. Governing Law; Terms. (a) This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except as required by mandatory provisions of law and except to the extent that
the validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein,
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terms used in Article 9 of the Uniform Commercial Code of the State of New York
are used herein as therein defined.
(b) The Grantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court for the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment and both parties
hereto hereby irrevocably and unconditionally agree that all claims in respect
of any such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by law, in such federal court. Both
parties hereto agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Agent or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement against the Grantor or its
properties in the courts of any jurisdiction.
SECTION 18. Conflict with Loan Agreement. To the extent any
provision hereof shall be in conflict with or inconsistent with any provision of
the Loan Agreement, the provision of the Loan Agreement shall control.
SECTION 19. Grantor's Representative. Xxxxxxx shall act under this
Agreement as the representative of the Grantor, and the Grantor hereby appoints
Xxxxxxx as its representative hereunder for all purposes, including receiving
notices and communications to the Grantor from the Agent or any Lender. The
Agent and the Lenders may rely, and shall be fully protected in relying, on any
report, information or any other notice or communication made or given by
Xxxxxxx, whether in its own name or on behalf of the Grantor and neither the
Agent nor any Lender shall have any obligation to make any inquiry or request
any confirmation from or on behalf of the Grantor as to the binding effect on it
of any such report, information, notice or communication.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officer(s) as
of the date first above written.
GRANTOR:
ITCO LOGISTICS CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
Name:____________________________
Title:___________________________
Address: 0000 Xxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxx, X.X. 00000
SECURED PARTY:
BANKBOSTON, N.A., AS AGENT
By: /s/ XXXXXXXXX X. XXXXXX
Name:____________________________
Title:___________________________
Address: 000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
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