Security Agreements in substantially the following form secruing
indebtedness under the Master Revolving Note (Exhibit 4.5(b)) have been executed
by Morgan Drive Away, Inc. Morgan Finance, Inc., TDI, Inc. and Interstate
Indemnity Company.
KEYBANK NATIONAL ASSOCIATION
MORGAN DRIVE AWAY, INC.
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") executed and to be effective the
27 day of March, 1997, by MORGAN DRIVE AWAY, INC. ("Company"), whose address is
2746 Old U.S. 20 West, Elkhart, Indiana 46514, to and in favor of KEYBANK
NATIONAL ASSOCIATION ("Bank"), whose address is 127 Public Square, Cleveland,
Ohio 44114, in consideration of credit extended or to be extended, or financial
accommodation given or to be given by Bank to Company, Company agrees with Bank
as follows:
1.0 Grant of Security Interest by Company. Company grants to Bank a
continu ing security interest in:
(a) All of the Company's accounts (the "Accounts"), which term
includes, but is not limited to, the Company's accounts, contract
rights, notes, drafts, accep tances and other forms of receivables, now
existing and all such as may hereafter come into existence and any
security held by the Company for any of the foregoing;
(b) All of the Company's inventory (the "Inventory"), which
term includes, but is not limited to, all goods, merchandise and other
personal property now owned and hereafter acquired by the Company,
wherever located, which are held for sale or lease or are furnished or
to be furnished under a contract of service and/or raw materials, part,
finished goods, work in process and materials used or consumed or to be
used or consumed in the Company's business, including all contract
rights relating to, and documents representing, the above;
(c) All of the Company's equipment now owned and hereafter
acquired (the "Equipment"), which term includes, but is not limited to,
all of the Company's machinery, parts, tools, furniture, and
accessories, of whatever name, nature, kind or description and wherever
located, together with all attachments, additions and accessions
thereto, and added and substituted parts, equipment and repairs now or
hereafter placed upon such property, whether because of necessary
repairs or otherwise;
(d) All of the Company's general intangibles now owned and
hereafter acquired (the "General Intangibles"), including, but not
limited to, (i) all contracts (whether completed or not); (ii) all
judgments, patents, trademarks, trade styles, trade or business names,
service marks, bids and proposals, logos, copyrights, trade secrets,
engineering reports, plans, blueprints, drafting papers, licenses,
permits, tax or other refunds, programs, inventions, models, business
or technical data, processes, product formulas, mailing and customer
lists, books and records (including research and development costs and
records and accounting records), and goodwill; (iii) all rights,
1
applications, continuations, renewals, substitutions, improvements,
modifications and extensions in any manner related thereto; and (iv)
all proceeds and products thereof, including but not limited to all
license royalties and royalty rights, payments made under insurance
policies, unliquidated claims, publication rights, and proceeds of
infringement suits and any other suits;
(e) All monies, credits, documents, instruments, chattel paper
and other property of any nature whatsoever of the Company now or
hereafter in the possession of, in transit to or from, under the
custody or control of, or on deposit with (whether held by the Company
individually or jointly with another), the Secured Party or any
affiliate of the Secured Party, including but not limited to cash
collateral accounts; and
(f) The proceeds and products of the foregoing in whatever
form the same may be, including, but not limited to, proceeds from
insurance policies (including, without limitation, proceeds of credit
insurance policies).
All of the above property in which a continuing security interest has been
granted to Bank by Company is collectively referred to as the "Collateral".
2.0 Indebtedness Secured by Agreement.
2.1 Indebtedness. The continuing security interest granted to
Bank by Company in this Agreement is to secure the payment of:
All obligations, liabilities and indebtedness of Company to or
in favor of Bank of every kind and description, direct or indirect,
absolute or contingent, primary or secondary, liquidated or
unliquidated, joint, several or joint and several, due or to become
due, now existing or hereafter arising, and howsoever evidenced,
including, but not limited to, principal, interest, future advances,
any duty to act or refrain from acting, and any and all extensions or
renewals of all the foregoing, and all costs and expenses incurred by
Bank in collecting any of the foregoing and in protecting or enforcing
Bank's rights under this Agreement, including reasonable attorneys'
fees (the "Indebtedness").
2.2 Note Legends. Each loan or advance made by Bank to Company
to be secured hereby, upon request of Bank, may be evidenced by certain
Notes of Company to Bank, and all such notes may bear a legend
referring to this Security agreement. The omission of the legend from
any note shall not affect its secured status and it shall be secured
under this Agreement.
2.3 Payment of Indebtedness. Company agrees to pay all
Indebtedness to Bank when due, whether at maturity or by acceleration,
all without relief from valua tion and appraisement laws and with the
costs and expenses of collection, and reason able attorneys' fees.
3.0 Representations and Warranties of Company. Company represents and
warrants to Bank the following, all of which shall survive the execution and
delivery of this Agreement and the making of any and all extensions of credit
and/or granting of financial accommodations secured by this Agreement.
3.1 Organization and Location. Company is a corporation duly
organized, existing and in good standing under the laws of the State of
Indiana and is in good standing as a foreign corporation authorized to
do business in each jurisdiction where failure to qualify would have a
material adverse effect on Company or Company's business, or any
adverse effect on Bank's rights or interests under this Agreement.
Company's principle place of business and corporate headquarters is at
the address indicated for Company at the beginning of this Agreement,
and Company has its sole and only place of business at such address or,
if Company has more than one place of business, its chief executive
office is at such address.
3.2 Authority. Company has incurred the Indebtedness for its
business operations, and the Collateral is now or will, when acquired,
be only used in such business operations and for no other purpose
without the prior written consent of Bank; none of the provisions of
this Agreement contravenes or is in conflict with the provisions of any
existing loan, loan agreement or other agreement of Company, and
Company has taken all necessary action to authorize the Indebtedness,
the execution and delivery of this Agreement and all other things, as
may be required under this Agreement.
3.3 Financial Information. Subject to any limitations stated
in or in con nection with them, all balance sheets, earnings statements
and other financial data which have been or may hereafter be furnished
to Bank to induce Bank to make extensions of credit and/or financial
accommodations to or for the benefit of Company, do and shall fairly
represent the financial condition of Company as of the dates indicated
and all results of Company's operations for the periods for which they
are furnished, and all other information, reports and other papers and
data furnished to Bank are or shall be, at the time they are so
furnished, accurate and correct in all material respects and complete
insofar as completeness may be necessary to give Bank a true and
accurate knowledge of the subject matter. There has been no material
adverse change, financial or otherwise, in the condition of Company
from the period for which such financial data has been provided and the
date of this Agreement, except as disclosed in such data provided to
Bank.
3.4 No Adverse Litigation or Proceedings. No litigation or
proceedings of any governmental body are pending or threatened, to the
knowledge of Company
2
against Company, which, if adversely determined, could materially
affect the opera tions or properties of Company, or any of the
Collateral or the rights or interests of Bank in the Collateral.
Company will immediately notify Bank of any litigation or proceedings
instituted or threatened after the date of this Agreement.
3.5 Agreement Binding and Enforceable. This Agreement is a
legal, valid and binding obligation of Company, enforceable in
accordance with its terms.
3.6 Collateral Ownership. Company is the sole owner of all
existing Collateral and will be the sole owner of all Collateral
hereafter arising or acquired.
3.7 Collateral Free of Lien. Other than the security interests
granted by this Agreement and prior security agreements executed by
Company in favor of Bank, all existing Collateral and Collateral
hereafter arising or acquired is and shall be free and clear of any
security interests, liens, encumbrances, claims or rights of others,
and Company does and shall warrant and defend the Collateral against
any person, firm or entity claiming an interest in the Collateral
adverse to the interest of Bank.
3.8 No Conflicting Filing. Other than the filings by First
National Bank and Society National Bank, Indiana, predecessors in
interest to Bank, no security agree ment, financing statement, or
equivalent security or lien document covering all or any part of the
Collateral is on file or of record, or will be placed on file or of
record, in any public office other than the security interest granted
by the Company in favor of Bank.
3.9 Validity of Rights to Payment for Collateral. Each Account
and other right of payment to Company is and will be a valid, legal and
enforceable obligation of the account debtor or other obligor to
Company, is not subject to any agreement in which the account debtor or
other obligor may claim a deduction or discount, and the amount
represented by Company to Bank from time to time as owing by each
account debtor or other obligor or by all account debtors and other
obligors with respect to the Accounts and other Rights to Payment will
at such time be the correct amount actually and unconditionally owing
by such account debtors and other obligors.
3.10 Location and Use of Collateral. All of the records
pertaining to the Collateral are and will be kept at the address of
Company indicated at the beginning of this Agreement, and Company will
not remove any material part of the Collateral without the prior
express written consent of Bank: and the Collateral will only be used
for the business operations of Company and in a manner not inconsistent
with any of the terms of this Agreement.
3
4.0 Agreements of Company. Company covenants and agrees with
Bank from and after the date of this Agreement, and until all of the
Indebtedness is fully paid and satisfied and this Agreement is
terminated in accordance with paragraph 8.10.
4.1 General Protection of Collateral. Company will keep all
items of Collateral reasonably protected from the elements and in safe
storage places. Company shall not waste or destroy the Collateral or
any part of it. Company will comply in all material respects with all
rules, regulations, orders, decrees and acts of any governmental
authority, and provisions or requirements of all policies of insurance
applicable to the Collateral or any part of it, or to Company's
operations.
4.2 Records and Inspection. Company will keep and maintain
satisfactory, accurate and complete records of the Collateral now
existing and hereafter arising or acquired, including a record of all
payments received and all credits granted with respect to the
Collateral, and all other dealings with the Collateral and Company's
operations. Company will permit Bank and its designees from time to
time upon reasonable request to inspect the Collateral and to inspect,
audit and make copies and extracts of all records and other papers in
possession of Company or its accountants or other representatives
pertaining to the Collateral and the operations of Company and will,
upon request of Bank, deliver all such records and papers to Bank.
Company will upon request furnish to Bank such balance sheets, earnings
statements and other financial data concerning Company's operations as
Bank shall require. Company will immediately notify Bank of any event
causing a loss or depreciation in the value of the Collateral and of
any event pending or threatened affecting the condition of affairs of
Company, financial or otherwise, which if adversely determined, could
materially adversely affect Company, the operations of Company or the
Collateral or other properties of Company. Bank will endeavor not to
interfere unreasonably with Company's business in connection with the
inspection of records or Collateral.
4.3 Taxes and Other Claims. Company will promptly pay when due
all taxes, assessments and governmental charges or levies imposed on
Company, and/or the Collateral or other properties, or with respect to
the income and profits from the Collateral or other properties,
including, but not limited to, all income, sales and use, withholding,
unemployment and other taxes and assessments, and will promptly pay
when due all claims for labor, materials, services and supplies,
excepting that any such amount need not be paid if the validity is
being contested in good faith by Company in appropriate proceedings,
and such proceedings do not involve any danger of the sale, forfeiture
or loss of any of the Collateral or to the operations of Company, and
such amounts have been adequately reserved against in accordance with
generally accepted accounting principles or fully bonded.
4.4 Insurance. Company will maintain at all times, with
respect to Company, its operations and business and the Collateral,
fire, extended, all risk,
4
sprinkler leakage, liability, and other risk coverage customarily
insured against by persons, firms and entities in operations and
businesses similar to that of Company, such coverages, the amounts,
terms, form, period of coverage and insuring companies to be
satisfactory to Bank. All policies shall contain appropriate loss
payable clauses in favor of Bank as its interests may appear and shall
provide that no cancellation of coverage shall be effective until at
least thirty (30) days after receipt by Bank of written notice from the
insuring companies. Company shall inform Bank of any reductions or
changes in coverage. Company shall furnish policies, certificates or
other evidence satisfactory to Bank of compliance with these insurance
provisions. Any sums received as compensation for loss or damage to the
Collateral shall be paid to Bank in partial payment of the Indebtedness
or, at Bank's option, any part or all of such payments may be used to
restore or repair the damage to the Collateral with respect to which
the payments are received.
4.5 Protection of Claims of Bank's Secured Interest.
(1) Except for the security interest granted herein,
Company will not create, permit or suffer to exist, and will
take such action as is necessary to remove, and will defend
the Collateral against any security interest, lien,
encumbrance, claim or other adverse interest in and to the
Collateral against all persons, firms and entities, and will
defend the right, title and interest of Bank in and to all the
Collateral.
(2) Company will advise Bank promptly in reasonable
detail of any security interest, lien, encumbrance, claim or
other interest made or asserted in or against any of the
Collateral, of any material change in the composition of the
Collateral, of any change in the state issuing title to motor
vehicles which is Collateral or of any other change in the
location of Collateral with an aggregate value in excess of
Twenty-Five Thousand Dollars ($25,000.00) in any calendar
year, or of any occurrence of any other event which would have
a material adverse affect on the value of the Collateral, the
security interest created in this Agreement, or Company, its
operations and business, or other properties.
(3) Company will not sell, transfer or otherwise
dispose of or enter into any agreement concerning the sale,
transfer or other disposition of any asset or assets which in
the aggregate total an amount in excess of Twenty-Five
Thousand Dollars ($25,000.00) in any calendar year which
constitute Collateral without the written consent of Bank.
(4) In any suit, proceeding or action brought by Bank
under any Account, other right of payment or General
Intangible, for any sum owing, Company will save and hold
harmless Bank from any and all expense, loss or damage
suffered by reason of any defense, set off, counterclaim, or
reduction of
5
liability whatsoever of the obligor arising out of a breach by
Company of any obligation.
(5) Company shall not change its address without
prior written notice to Bank.
4.6 Advances by Bank to Protect its Secured Position. Bank
may, in its discretion, pay or otherwise discharge taxes, governmental
charges, other liens charges and/or encumbrances at any time levied or
placed, on or against, any of the Collateral, or on or against Company,
its operations or business, or other properties, if Bank determines
that such matters could affect the Collateral, or pay or acquire and
pay any insurance required under this Agreement, or pay, or procure and
pay, any and all costs and expenses for the repair, maintenance and
preservation of the Collateral or the other properties of Company. Any
and all advances made by Bank for any of these items shall constitute
Indebtedness secured by this Agreement and shall bear interest at the
same rate as the highest rate provided in any of the notes then
outstanding, or if no note is then outstanding but this Agreement has
not been terminated as provided in paragraph 8.10, the highest rate
permitted by law, and Company shall reimburse and/or pay bank on demand
for any payment made, or cost and expense incurred by Bank pursuant to
the authorization contained in this paragraph.
4.7 Perfection of Security Interests.
(l) Company will, upon request of Bank to secure the
payment of the Indebtedness, execute and deliver such
financing statements and other documents, including, but not
limited to, title to motor vehicles, and pay the reasonable
cost of preparation, filing or recording the same, in all
public offices deemed necessary by Bank, and do such other
acts and things as Bank may, from time to time, request to
establish and maintain valid security interests in the
Collateral free of all other security interests, encumbrances,
liens, claims and rights of third parties whatsoever.
(2) Company authorizes Bank to execute and file or
record such financing statements or other documents signed
only by Bank, as Secured Party, and without the signature of
Company in any public office deemed necessary by Bank to
perfect or continue the perfection of Bank's security
interests in the Collateral.
4.8 Assembly of Collateral. Company agrees to assemble and
make avail able the Collateral to Bank at such times and such places as
may be reasonably desig nated by Bank.
6
4.9 Processing, Sale and Collections
(1) Until such time as Bank shall notify Company of
the revocation of such authority, Company may, in the ordinary
course of business, at its own expense, sell, lease or furnish
under contracts of service, any of the Inventory normally held
by Company for such purpose (a sale in the ordinary course of
business does not include a transfer in total or partial
satisfaction of a debt), and use and consume, in the ordinary
course of its business, any raw materials, work in process or
materials normally held by it for such purpose:
(2) Company will, at its own expense, endeavor to
collect, as and when due, all amounts due with respect to any
Collateral, including the taking of such action with respect
to such collection as Bank may reasonably request or, in the
absence of such request, as Company may deem advisable:
(3) Company may grant, in the ordinary course of
business, to any person purchasing goods from Company
("Account Debtor"), any rebate, refund or adjustment to which
such Account Debtor may be lawfully entitled, and may accept
the return of goods, the sale or lease of which shall have
given rise to the obligation of the Account Debtor:
(4) Upon written notice from Bank, Company will upon
receipt of all checks, drafts, cash and other remittances in
payment of inventory sold or in payment of Accounts Receivable
of Company, deposit them in a special collateral account
("Collateral Account") maintained with Bank. Such proceeds
shall be deposited in the form received except for the
endorsement of Company where required, which endorsement Bank
is authorized to make on Company's behalf and shall be held by
Bank as security for all Liabilities of Company in favor of
Bank;
(a) Upon written notice from Bank, Company will
deliver to Bank all chattel paper which
constitutes proceeds from the sale of
Collateral subject to delivery of the
proceeds resulting from the sale of such
chattel paper which shall be deposited in
the Colla teral Account;
(b) Company agrees that prior to the time of any
deposit or delivery, it will keep segregated
any such checks, drafts, cash, chattel paper
or other remittances from any of Company's
funds or property. Company agrees to hold
such checks, drafts, cash, chattel paper or
other remittances in trust for the benefit
of Bank until delivery or deposit into the
Collateral Account. Bank may charge the
Collateral Account at any time and, at its
sole discre tion, apply the funds in payment
of notes executed and delivered by Company
pursuant to the provisions of this
Agreement, and/or any other Liability of
Company in favor of Bank, or upon receipt of
a statement duly certified by an authorized
officer or agent of Company in the form then
specified by or acceptable to Bank, may
release funds to the general account of
Company.
4.10 Payment to Bank by Account Debtors. Company agrees that
Bank may, at any time before or after the maturity of any Indebtedness,
notify any Account Debtor to make payment directly to Bank of any
amounts due or to become due and enforce the collection of any Account
by suit or otherwise and surrender, release or exchange all or any
part, or compromise or extend or renew for any period (whether or not
longer than the original period) any Indebtedness under or evidenced by
any Account.
4.11 Noting Security Interest of Bank on Company's Records.
Company will, if requested by Bank, note the security interest of Bank
on all records relating to the Collateral.
5.0 Events of Default. Company will be in default under this Agreement
upon the occurrence of any of the following events or conditions, each of which
shall constitute an event of default ("Event of Default"):
5.1 Default on Indebtedness. Default in the payment or
performance, when due or payable of any Indebtedness of Company, or of
any accommodation party, endorser, guarantor, or surety for any
Indebtedness of Company to Bank.
5.2 Default on this or other Agreement. Default under any
provision in this Agreement, or in any loan agreement, mortgage,
security agreement, guaranty or other instrument or document executed
by Company or any accommodation party, endorser, guarantor or surety of
any liability of Company to Bank which is not cured or as to which
Company has not taken actions satisfactory to Bank within ten (10) days
after written notice of such default.
5.4 Misrepresentation or False or Misleading Information. The
making by Company of any misrepresentation to Bank for the purpose of
obtaining credit or an extension of credit or inducing Bank to take any
action or refrain from any action or the furnishing of any financial
information to Bank which is false or misleading in any material
respect.
5.5 Failure to Furnish Financial Information or Allow
Inspection. Failure of Company after reasonable request by Bank to
furnish financial information or to permit the inspection of books and
records and/or Collateral.
7
5.6 Injunction or Attachment. Issuance of an injunction
against Company or property of Company, or attachment, levy or seizure
against property of Company.
5.7 Creditors' Proceedings. Calling of a meeting of creditors,
appointment of a committee of creditors or liquidating agents, offering
of a composition or extension to creditors by, for or of Company.
5.8 Insolvency. Insolvency of Company, of any endorser,
guarantor or surety for any Indebtedness of Company to Bank or of the
grantor of any collateral security for any Indebtedness of Company to
Bank.
5.9 Change Respecting Company or Others. Such a change in the
condition or affairs (financial or otherwise) of Company, of any
endorser, guarantor or surety for any Indebtedness of Company to Bank
or of the grantor of any collateral security for any Indebtedness of
Company to Bank, as in the opinion of Bank impairs Bank's security or
increases its risk.
5.10 Change respecting Collateral. An agreement to or a sale,
transfer or use, or an attempted sale, transfer or use, of the
Collateral, in contravention of this Agreement: loss, theft,
substantial damage, destruction, encumbrance or granting any security
interest in the Collateral without the consent of Bank: and the filing
of any suit for the purpose of or the making of any attachment, levy or
seizure of any of the Collateral.
5.11 Insecurity of Bank. Bank reasonably deems itself insecure
for any reason whatsoever.
6.0 Rights and Remedies of Bank. In the Event of Default, Bank shall
have all the rights and remedies permitted under the Uniform Commercial Code of
Indiana and in effect in each jurisdiction in which Collateral is located,
permitted under other laws and authorized under this Agreement, and without
limitation of other rights and remedies, the following:
6.1 Accelerate Indebtedness. Bank may, without notice or
demand, at Bank's option and notwithstanding any time or credit allowed
by an instrument evidencing an Indebtedness, accelerate and declare the
entire unpaid balance of any and all Indebtedness immediately due and
payable.
6.2 Take Possession of Collateral. Bank may take possession of
the Colla teral and, for that purpose, Bank may enter in or on to any
premises on which the Collateral or any part of it may be situated and
remove the Collateral or store it on such premises, and if such
premises are owned by Company, Bank shall have the right to store any
of the Collateral for a reasonable period of time rent-free. If Bank
stores Collateral on any premises owned by Company, Bank may segregate
such Collateral,
8
lock buildings and do whatever else may be necessary for the
preservation or protection of the Collateral, or Bank's rights.
6.3 Require Collateral to be Made Available. Bank may require
Company to make the Collateral available to Bank at a place to be
designated by Bank that is reasonably convenient to Bank and Company.
6.4 Preservation of Collateral. Bank may, but in no way is
obligated to, take steps to preserve rights in the Collateral against
any third party.
6.5 Use of Collateral while in Bank's Possession. When in
possession of the Collateral, Bank may use it for any purpose or in any
manner or cause it to lose its identity without an obligation to
account for such use, except when used for a purpose not connected with
performing Company's obligations with respect to it, preservation or
disposal of the Collateral unless otherwise authorized by law. Bank may
use, without charge, any and all equipment, machinery or appliances
necessary to unload and remove any Collateral from storage facilities
in the event that the removal of the Collateral is necessary for
purposes of repossession by Bank to realize on Bank's security
interest. The standard of care imposed upon Bank as to the use of the
Collateral in its possession is that of a prudent person without any
special skill or knowledge.
6.6 Collection of Collateral. Bank may:
(1) Notify any party liable for payment under any
Account, Right of Payment, General Intangible, Miscellaneous
Property in possession or control of Bank, or Proceeds,
including insurance and tort claims, and ask, demand, collect,
receive and give acquittances and receipts to such party for
any and all monies due or to become due under any such
Collateral.
(2) Bank may, in the name of Company or in Bank's
name or otherwise, take possession of, endorse and collect all
checks, drafts, notes, cash and other remittances due under
any Collateral.
(3) Bank may commence and prosecute any suits,
actions or other proceedings to collect any part or all of the
Collateral or to enforce any other rights with respect to the
Collateral: defend any suit brought against Company with
respect to any Collateral: settle, compromise or adjust any
such suit, action or proceeding, and give such discharges and
releases as Bank may deem appropriate: sell, transfer, pledge
(including executing instruments and other documents), make
any agreement with respect to, or otherwise deal, with any of
the Collateral as fully and completely as though the Bank was
the owner for all purposes: and generally do all acts and
things which Bank deems appropriate to
9
protect, preserve, collect and/or realize upon the Collateral
and the security interests granted by this Agreement, all as
fully and effectively as the Company might do. In connection
with the exercise of all these rights and remedies, Company,
as a power coupled with an interest, irrevocably appoints Bank
as its attorney in fact to exercise any and all rights
described in this paragraph 6.6.
6.7 Disposition of Collateral on Credit. Bank disposing of
Collateral may dispose of it upon credit secured by a security interest
in the Collateral taken from the purchaser. Such disposal may be upon
such terms and under such a form of security agreement as is
customarily employed in such purchases. Bank shall continue to hold a
security interest in the proceeds, including cash and non-cash proceeds
of the sale, as Proceeds of the Collateral covered by this Agreement.
6.8 Sale of Collateral. Unless the Collateral is perishable,
threatens to decline speedily in value or of a type customarily sold on
a recognized market, Bank shall give Company at least ten (10) days
prior written notice of the time and place of any public sale or of the
time after which any private sale or other intended disposition is to
be made. Bank may sell any of the Collateral, at public or private
sales, or a combination, for cash or on credit as a unit or in lots.
The order of sale of times in lots shall be as Bank shall determine.
Bank may become purchaser at any sale.
6.9 Expenses Incurred in Connection with a Sale of Collateral.
Expenses of retaking, holding, preparing for sale, selling or the like
shall include Bank's costs, expenses and reasonable attorneys' fees
which are secured under this Agreement and all such expenses shall be
first paid out of the proceeds of any disposition of Collateral.
6.10 Deficiency. Company will pay to Bank upon demand any
deficiency on the Indebtedness remaining after any disposition of the
Collateral and the application of the proceeds to the expenses
described in paragraph 6.9 and in partial satisfaction of the
Indebtedness.
6.11 Remedies Cumulative. All remedies, to the full extent
provided by law, shall be cumulative. Pursuit by the Bank of its
judicial or other remedies with respect to part of all of the
Indebtedness shall not abate or bar its judicial and other remedies
with respect to the Collateral or other portions of the Indebtedness,
and pursuit by Bank of its judicial or other remedies with respect to
part or all of the Collateral shall not bar its judicial and other
remedies with respect to the Indebtedness or other portions of the
Collateral.
7.0 Deposits. Any and all deposits of other sums at any time credited
by or due from Bank to Company shall at all times constitute security for any
and all Indebtedness and Bank may apply or set off such deposits or other sums
against Indebtedness at any time
10
whether or not the Indebtedness is then due or other Collateral is considered by
Bank to be adequate.
8.0 General.
8.1 Waivers by Company. Company waives notice of acceptance of
this Agreement, presentment, demand, notice of dishonor and protest of
any Indebtedness or under this Agreement, notice of loans made or
credit extended, Collateral received or delivered or other action taken
in reliance on this Agreement, and all other demands and notices of any
description whatsoever. With respect to both the Indebtedness and the
Collateral, Company assents to any and all extensions, renewals or
postponements of the time of payment or any other indulgence, to any
substitutions, exchanges, or releases of Collateral, to the additions
or releases of any party or person primarily or secondarily liable, to
the acceptance of partial payments and the settlement, compromising or
adjusting of any of them, all in such manner and at such time or times
as Bank may deem advisable. A Company who is or becomes an
accommodation party, surety, guarantor or endorser or other person
whose obligation is conditioned upon this Agreement waives any
requirement of notice of acceptance and defenses arising from releases
of, extensions of time to, renewals and alterations of the contract
with the principal; from lack of presentment, demand, notice, notice of
dishonor and protest of any Indebtedness or under this Agreement: from
failure of Bank to proceed with diligence against the principal after
notice or under any requirement of law; and from releases of Collateral
or other security.
8.2 Company not Released. No transfers, renewals, extensions
or assign ments of this Agreement or the Indebtedness, or any interest
thereunder, and no loss, damage or destruction of the Collateral, and
no taking of security in other Collateral shall release Company from
this Agreement or the Indebtedness secured under this Agreement.
8.3 Waivers of Default by Bank. No waiver of any default by
Bank shall be effective, unless in writing, nor shall any such waiver
operate as a waiver of any other default or of the same default on a
future occasion.
8.4 Delays by Bank. No delay on the part of Bank in the
exercise of any right or remedy shall operate as a waiver, and no
single or partial release by Bank of any right or remedy shall preclude
other or further exercise or the exercise of any other right or remedy.
8.5 No Duty of Bank to Act on Collateral. Bank shall have no
duty:
(1) To take possession of any of the Collateral or to
take any action for the care, preservation, protection or
insurance of any of the Collateral:
11
(2) To collect, foreclose on or otherwise realize on
the Collateral; or
(3) To collect, foreclose on or otherwise realize on
the Collateral in any particular manner, in any particular
sequence or at all.
8.6 Limitations on the Care, Preservation and Protection of
Collateral. Bank shall be deemed to have exercised reasonable care in
the care, preservation and protection of any of the Collateral in
Bank's possession if it takes action for that purpose as Company
requests in writing, but failure of Bank to comply with any such
request shall not be deemed a failure to exercise reasonable care, and
no failure of Bank to preserve or protect any rights with respect to
such Collateral against prior or subsequent parties, or to do any act
with respect to the care, preservation or protection of such Collateral
not reasonably requested by Company as provided in this paragraph shall
be deemed a failure to exercise reasonable care in the care,
preservation or protection of such Collateral.
8.7 Notices. Any demand upon or notice to Company that Bank
may elect to give shall be effective if personally delivered: sent by
ordinary mail, certified or registered mail; transmitted by telegraph,
wireless or radio company and/or sent by overnight courier addressed to
Company at the address identified at the beginning of this Agreement as
Company's address or, if Company has notified Bank in writing of a
change of address noted in its records, to Company's last address so
notified. Demands or notices addressed to Company's address at which
Bank customarily communicates with Company shall also be effective.
Notices and demands of Bank to Company shall be effective upon their
personal delivery, mailing, transmission, or delivery to an overnight
courier, as the case may be, whether or not actually received by
Company.
8.8 Joint and Several Obligation of Company. If there is more
than one company, the obligations of each and every company under this
Agreement are joint and several.
8.9 Transfers of Indebtedness or Collateral. If at any time or
times by assignment or otherwise Bank transfers any part of the
Indebtedness or Collateral, such transfer shall carry with it the
Bank's power and rights under this Agreement with respect to the part
of the Indebtedness or Collateral transferred and the transferee shall
become vested with such powers and rights whether or not they are
specifically referred to in the transfer. If and to the extent Bank
retains any other part of the Indebtedness or Collateral, Bank will
continue to have the rights and powers in this Agreement set forth by
Company with respect to the same.
8.10 Termination by Company and Effect. Provided that all
Indebtedness secured under this Agreement shall have been paid in full
and there shall be no commitments by Bank to extend credit or grant
financial accommodation to be secured
12
by this Agreement, whether to Company or any other party whose
Indebtedness is to be secured by this Agreement, Company may terminate
this Agreement and the security interest in the Collateral granted by
this Agreement, by giving written notice to Bank, actually received by
Bank and acknowledged in writing by an officer of Bank, that Company is
terminating this Agreement. Otherwise, even though no Indebtedness is
outstanding at the time, this Agreement shall continue in full force
and effect to secure credit which may be extended or financial
accommodations which may be given by Bank to Company. No notice of
termination shall in any way effect this Agreement or any transactions
entered into, Indebtedness incurred by Company, or rights and powers
created in favor of Bank prior to the receipt of notice of termination
given in accordance with this subparagraph.
8.11 Meaning of the Term Insolvency. "Insolvency" of Company,
or any other person or entity, means that there shall have occurred
with' respect to Company, or such person or entity, one or more of the
following events: death, dissolution, termination of existence,
insolvency, inability to pay debts as they come due, business failure,
appointment of a receiver of any part of the property of, assignment
for the benefit of creditors by, or the filing of a petition in
bankruptcy or the commencement of any proceedings under any bankruptcy
or insolvency laws, or any laws relating to the relief of debtors,
readjustment of Indebtedness, reorganization, composition, or
extension, by or against, Company, or such person or entity.
8.12 Titles in Agreement. Titles of the several paragraphs and
subparagraphs of this Agreement are for convenience of reference only
and do not have any substantial effect or limit the contents of such
paragraphs.
8.13 Participations. Company consents to the assignment or
granting of participation interests in all or part of the Indebtedness
and the Collateral.
8.14 Form of Words. When applicable, use of the singular form
of any word shall also mean or apply to the plural, and the masculine
form shall mean and apply to the feminine or the neuter.
8.15 Severability of Agreement. If and to the extent that
applicable law confers any rights or imposes any duties inconsistent
with or in addition to any of the provisions of this Agreement, the
affected provisions shall be amended to conform to such law, and if any
provision of this Agreement shall be invalidated, all other provi sions
shall remain in full force and effect.
8.16 Successors and Assigns. All rights of Bank shall inure to
the benefit of its successors and assigns, and obligations of Company
shall bind the Company's successors and assigns.
13
8.17 Governing Law. This Agreement and all rights and
obligations under it, including matters of construction, value and
performance, shall be governed by the Uniform Commercial Code, as
amended from time to time, in effect in the State of Indiana and by
other applicable laws of the State of Indiana.
EXECUTED AND DELIVERED by Company and Bank to be effective as of the
date first written above.
COMPANY:
Morgan Drive Away, Inc.
By:/s/ Richard B. DeBoer
------------------------------------------
(Signature)
Richard B. DeBoer, Chief Financial Officer
and Treasurer
------------------------------------------
(Typed or Printed Name and Office)
BANK:
KeyBank National Association
By:_________________________________________
(Signature)
------------------------------------------
(Typed or Printed Name and Office)
14