EXHIBIT 10.264
SECURITY AGREEMENT - CONDITIONAL SALES CONTRACT
[KOMATSU FINANCIAL LOGO]
ACCOUNT NO._________
Subject to the Terms and Conditions herein contained, the Seller hereby agrees
to sell, and the Buyer having been quoted and offered both a cash sale price,
payable immediately or within a limited number of days, and a contract time
price which permits the Buyer to purchase the property now but pay in
installments over an extended period of time, hereby agrees to buy, the
following described property ("property")on a contract time price basis set
forth below. The Contract time price is more than the cash sale price because it
includes charges by the Seller to compensate the Seller for having to wait a
period of time before collecting its full purchase price and for taking a risk
in waiting such period of time. The property is to be used only for commercial
or business purposes, includes all accessories and attachments, and shall,
except as permitted by Paragraph 7 on page 4 hereof, be located at Buyer's
Address set forth immediately below.
Seller's Information KOMATSU EQUIPMENT COMPANY Quote 385
3825 LOSEE ROAD Number:
NORTH LAS VEGAS, NV 89030
BUYER'S INFORMATION
MEADOW VALLEY CONTRACTORS INC. Physical Location: 4411 S. 40TH STREET SUITE
P.O. BOX 60726 D-11'
PHOENIX, AZ 85082 PHOENIX, AZ 85040
County: MARICOPA
602-437-5400 State Charter Number:
State of Registration:
County: MARICOPA Tax ID: 88-0171959
Telephone: 602-437-5400
PROPERTY DESCRIPTION
Make Model Type Description Serial No. Price
Used Komatsu PC228US-3 Hydraulic KE# 6930 2003 Model with Quick Coupler w/ 30259 $165,775.54
Excavator 24" bucket s/n, 1052 KE# 33559
TRADE-IN DESCRIPTION
Year Make Model Type Description Serial No. Allowance Amt. Owed Net Trade
SCHEDULE OF PAYMENTS STATEMENT OF TRANSACTION
- -------------------------------------------------------------- --------------------------------- ----------- -----------
BUYER AGREES TO PAY SELLER, OR IF THIS CONTRACT IS ASSIGNED, 1. Sales Price $165,775.54
TO ASSIGNEE OF SELLER, THE 'TOTAL OF PAYMENTS' (ITEM 10) IN 2. Delivery, Installation, Repair $ 0.00
ACCORDANCE WITH THE FOLLOWING SCHEDULE. PAYMENTS IN (or Other Service Charges)
NUMBER AND AMOUNT ARE DUE EACH SUCCESSIVE MONTH ON THE SAME 3. Sales Tax $ 10,165.17
DAY AS THE STARTING DATE, OR AS INDICATED BELOW.
4. Cash Price (1+2+3) $175,940.71
Payments Start Date End Date Payment Total 5. a. Cash Down Payment $ 30,240.00
36 5/5/2004 4/5/2007 $4,382.06 $157,754.16 b. Net Trade-In $ 0.00
-- -----------
36 Total of Payments $157,754.16 c. Less Insurance $ 0.00
Total Down Payment (5a+5b-5c) $ 30,240.00
6. Net Cash Price (4 - 5) $145,700.71
7. a. Lien & Filing Fees $ 0.00
b. Other Fees $ 7,314.00
Total Other Charges $ 7,314.00
8. Amount Financed (6 + 7) $153,014.71
9. Finance Charge (1.99%) $ 4,739.45
10. Total of Payments (8 +9) $157,754.16
-----------
11. Total Time Price (4 + 7+ 9) $187,994.16
Date finance charge begins to accrue (if different than contract date)
KF524R (05/03) ORIGINAL FOR SELLER (IF ASSIGNED, FOR KOMATSU BUYER'S INITIALS
FINANCIAL LIMITED PARTNERSHIP) [ ]
Page 1 of 5
SECURITY AGREEMENT - CONDITIONAL SALES CONTRACT
[KOMATSU FINANCIAL LOGO]
ACCOUNT NO.________
Insurance Coverage Buyer Place Of Business and Other Buyer Information
- ---------------------------------------------------------------------------------------------------------------------
LIABILITY INSURANCE COVERAGE FOR BODILY IN JURY IF BUYER'S ACTUAL CHIEF PLACE OF BUSINESS (CHIEF
AND PROPERTY DAMAGE CAUSED TO OTHER IS NOT EXECUTIVE OFFICE IF MORE THAN ONE PLACE OF BUSINESS)
INCLUDED IN THIS AGREEMENT. IS IN A STATE OTHER THAN STATE WHERE THE PROPERTY IS
LOCATED (AS SET FORTH ON PAGE 1), SPECIFY ACTUAL CHIEF
PLACE OF BUSINESS.
Physical Damage Insurance Covering The Property is Required.
Physical Location:
BUYER HAS OBTAINED INSURANCE THROUGH THE INSURANCE
AGENCY LISTED BELOW OR ON FORM KF543R, SUBMITTED WITH THIS
CONTRACT.
Agency Name: BUYER DOES NOT HAVE PLACES OF BUSINESS IN MORE THAN
Mailing Address: ONE COUNTY IN THE STATE WHERE PROPERTY IS LOCATED.
THIS SALE IS CONTINGENT UPON FINANCING ON TERMS WHICH
ARE SATISFACTORY TO THE PARTIES.
Contact: IF DATE OF DELIVERY IS DIFFERENT THAN EFFECTIVE DATE
SHOWN BELOW, SHOW ACTUAL DELIVERY DATE:
Phone:
PARTNER NAMES AND ADDRESSES
Name Address Tax ID
DELINQUENCY CHARGE: After maturity, each installment shall bear charges at the
highest rate permitted by law, but not to exceed 1.5% per month. Buyer also
agrees to pay all expenses, including reasonable attorney's fees, incurred in
the collection and enforcement, by suit or otherwise, of any amount payable
under this contract.
SECURITY INTEREST: In order to secure payment of the indebtedness contained
herein or incurred hereunder, Seller hereby retains, and Buyer hereby grants, a
purchase money security interest under the Uniform Commercial Code in and to the
above described property sold hereunder, together with all replacements,
substitutions, additions, attachments, repairs, accessions and proceeds,
including amounts payable under any insurance policies with respect thereto.
Buyer hereby authorizes Seller to file one or more financing statements and/or a
carbon or reproduction of this contract as a financing statement. Buyer hereby
authorizes Seller or its assigns to sign and execute on its behalf any and all
necessary UCC-1 forms to perfect the security interest herein granted to Seller.
LOCATION OF PROPERTY: Buyer and Seller agree that regardless of the manner of
affixation, the property shall remain personal property and not become part of
the real estate. Except as permitted by Paragraph 7, Buyer agrees to keep the
property at the location set forth herein, and will notify Seller promptly in
writing of any change in the location of the property within such State, but
will not remove the property from such State without the prior written consent
of Seller (except that in the State of Pennsylvania, the property will not be
moved from the above location without such prior written consent).
ENTIRE AGREEMENT: BUYER agrees that this contract including the ADDITIONAL TERMS
AND CONDITIONS PRINTED ON Page 3-5 hereof, which he has read and to which he
agrees, contains the entire agreement relating to the conditional sale of the
property and supersedes all previous contracts and agreements between Buyer and
Seller relating to the order or sale of the property. This contract is not
binding upon Seller, unless signed by the manager of Seller or owner.
NOTICE TO BUYER: 1. DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT OR IF IT
CONTAINS BLANK SPACES. 2. YOU ARE ENTITLED TO AN EXACT AND COMPLETELY FILLED-IN
COPY OF THE CONTRACT YOU SIGN. 3. UNDER LAW, YOU HAVE THE FOLLOWING RIGHTS,
AMONG OTHERS: (a) TO PAY OFF IN ADVANCE THE FULL AMOUNT DUE AND OBTAIN A PARTIAL
REFUND OF ANY UNEARNED FINANCE CHARGE; (b) TO REDEEM THE PROPERTY IF REPOSSESSED
FOR A DEFAULT; AND (c) TO REQUIRE, UNDER CERTAIN CONDITIONS, A RESALE OF THE
PROPERTY IF REPOSSESSED. 4. IF YOU DESIRE TO PAY OFF IN ADVANCE THE FULL AMOUNT
DUE, THE AMOUNT OF THE REFUND YOU ARE ENTITLED TO, IF ANY, WILL BE FURNISHED
UPON REQUEST. 5. KEEP THIS CONTRACT TO PROTECT YOUR LEGAL RIGHTS.
BUYER ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS CONTRACT SIGNED BY SELLER
Buyer: MEADOW VALLEY CONTRACTORS INC. Effective Contract Date: 4/5/2004
By: Title: Salesman's Signature: ________________
______________________________________
Co-Signer: Signature For ________________________
______________________________________
By: Title: Seller Approval:
______________________________________
KF524R (05/03) ORIGINAL FOR SELLER (IF ASSIGNED, FOR KOMATSU Buyer's Initials
FINANCIAL LIMITED PARTNERSHIP) [_______________]
Page 2 of 5
[KOMATSU FINANCIAL LOGO]
SECURITY AGREEMENT - CONDITIONAL SALES CONTRACT
ACCOUNT NO._________
Conditional Terms and Conditions:
1. ASSIGNMENT BY SELLER; WAIVER OF DEFENSES AGAINST ASSIGNEE:
Seller may hold this contract or it may assign it for value to Komatsu Financial
Limited Partnership (hereinafter referred to as "KF"). If Seller does in fact
assign this contract to KF then after such assignment: a) KF as assignee, shall
have all the rights and remedies of Seller hereunder and all of Buyer's
agreements, representations and warranties shall be deemed to have been made to
KF with the same force and effect as if KF were an original party hereto; b)
Seller shall not be KF's agent for any purposes; c) Seller shall not have any
power or authority to change or modify this contract or any related document or
instrument in any way (except any relevant warranty or service agreement which
is exclusively between Seller and Buyer and shall not bind KF or affect any of
Buyer's or KF's rights or obligations under this contract); d) Buyer will settle
all claims, defenses, set-offs and counterclaims of any nature, it may have
against Seller, including but not limited to delivery of property, defects in
the property and the like, directly with Seller, and not set up any such claim,
defense, set-off or counterclaim against KF. Seller hereby agreeing to remain
responsible therefor.
2. WAIVER OF DEFENSES ACKNOWLEDGMENT; PLACE OF PAYMENT:
Buyer acknowledges that: KF has no knowledge or information as to the condition
or suitability for Buyer's purposes of the property, and KF's decision to
purchase this contract from Seller, if so offered, will be made in reliance on
Buyer's warranties, agreements and covenants herein, including Buyer's express
agreement not to assert against KF any claims, defenses, set-offs or
counterclaims it may now or in the future have against Seller named on page 1
hereof. If this contract is assigned to KF then after assignment to KF, Buyer
will make all payments directly to KF at such places as KF may from time to time
designate in writing to Buyer.
3. BUYER'S WARRANTIES AND REPRESENTATIONS:
Buyer warrants, represents and covenants; a) that Buyer is justly indebted to
Seller for the full amount of the foregoing indebtedness; b) that except for the
security interest granted hereby the property is free from and will be kept free
from all liens, claims, security interests and encumbrances; c) that no
financing statement covering the property or any proceeds is on file in favor of
anyone other than Seller but if such other financing statement is on file, it
will be terminated or subordinated; d) that all information supplied and
statements made by Buyer in any financial, credit or accounting statement or
application for credit prior to, contemporaneously with or subsequent to the
execution of this contract with respect to this transaction are and shall be
true, correct, valid and genuine; e) Buyer has full authority to enter into this
contract and in so doing it is not violating any law or regulation or agreement
with third parties, and it has taken all such action as may be necessary or
appropriate to make this contract binding upon it.
4. EVENTS OF DEFAULT; ACCELERATION:
A very important element of this contract is that Buyer make all its payments
promptly as agreed upon. Also essential is that the property continue to be in
good condition and adequate security for the indebtedness. The following are
events of default under this contract which will allow Seller to take such
action under this Paragraph and under Paragraph 5 as it deems necessary:
(a) any of Buyer's obligations to Seller under any agreement with Seller is not
paid promptly when due:
(b) Buyer breaches any warranty or provision hereof, or of any other instrument
or agreement delivered by Buyer to Seller in connection with this or any other
transaction;
(c) Buyer dies, becomes insolvent or ceases to do business as a going concern;
(d) it is determined Buyer has given Seller false information of a substantial
nature regarding its financial condition;
(e) any of the property is lost or destroyed;
(f) a petition in bankruptcy or for arrangement or reorganization be filed by or
against Buyer or Buyer admits its inability to pay its debts as they mature;
(g) property of Buyer be attached or a receiver be appointed for Buyer;
(h) whenever Seller in good faith believes the prospect of payment or
performance is impaired or in good faith believes the property is insecure;
(i) any guarantor, surety or endorser for Buyer defaults in any obligation or
liability to Seller or any guaranty obtained connection with this transaction is
terminated or breached.
IF BUYER SHALL BE IN DEFAULT HEREUNDER, THE INDEBTEDNESS HEREIN DESCRIBED AND
ALL OTHER DEBTS THEN OWING BY BUYER TO SELLER UNDER THIS OR ANY OTHER PRESENT OR
FUTURE AGREEMENT SHALL, IF SELLER SHALL SO ELECT, BECOME IMMEDIATELY DUE AND
PAYABLE.
This acceleration of all indebtedness, if elected by Seller, shall be subject to
all applicable laws, including laws as to rebates and refunds of unearned
charges.
5. SELLER'S REMEDIES AFTER DEFAULT; CONSENT TO ENTER PREMISES:
So long as any obligations are owed by Buyer to Seller hereunder, Seller shall
have all the rights and remedies provided by this contract and provided a
secured party under the Uniform Commercial Code and any other applicable law.
After default by Buyer, Seller's rights and remedies include but are not limited
to a number of choices. Buyer acknowledges that if it defaults Seller is justly
entitled to do whatever the law allows to avoid loss to itself and also to
obtain for itself the benefit of the bargain under this contract.
Consequently, Buyer agrees that Seller, among its other rights and remedies, may
itself or through its agent enter the premises or upon the land where the
property is located and without removing the property render any equipment which
is part of the property unusable and/or take possession of the property without
notice to anyone or without judicial process of any kind, provided such
self-help is done without breach of the peace (meaning actual or threatened
violence to a person at the time of repossession). In order to afford itself of
these and related remedies, Seller must be able to enter the premises or land in
or upon which the property is located.
KF524R (05/03) ORIGINAL FOR SELLER (IF ASSIGNED, FOR KOMATSU BUYER'S INITIALS
Page 3 of 5 FINANCIAL LIMITED PARTNERSHIP) [______________]
[KOMATSU FINANCIAL LOGO]
SECURITY AGREEMENT - CONDITIONAL SALES CONTRACT
ACCOUNT NO._________
BUYER THEREFORE AGREES THAT SELLER BY ITSELF OR THROUGH ITS AGENT MAY, WITHOUT
NOTICE TO ANY PERSON AND WITHOUT JUDICIAL PROCESS OF ANY KIND, ENTER INTO ANY
PREMISES OR UPON ANY LAND (INCLUDING ACCESS ROADS AND RIGHTS OF WAY) OWNED,
LEASED OR OTHERWISE UNDER THE REAL OR APPARENT CONTROL OF BUYER OR ANY AGENT OF
BUYER WHERE THE PROPERTY MAY BE OR WHERE SELLER BELIEVES THE PROPERTY MAY BE,
AND USING ANY REASONABLE FORCE WITH RESPECT TO THE PROPERTY AND ANY PROPERTY
CONNECTED TO THE PROPERTY, DISASSEMBLE, RENDER UNUSABLE, DISCONNECT AND SEPARATE
ALL PROPERTY FROM ANY OTHER PROPERTY AND/OR REPOSSESS AND REMOVE ALL OR ANY ITEM
OF THE PROPERTY.
Buyer will not hinder or delay Seller or its agent in any way and will, if
requested, assist Seller or its agent in disassembling and/or removing the
property. Seller may require Buyer to assemble the property and return it to
Seller at a place to be designated by Seller which is reasonably convenient to
both parties. Buyer expressly waives all further rights to possession of the
property after default and all claims for damages related to such removal,
disassembling, entering and/or repossession. The security interest granted
hereby shall continue effective irrespective of any retaking and redelivery of
the property to Buyer until all amounts secured hereby are fully paid in money.
Unless Buyer otherwise agrees in writing after default and unless the property
is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Seller will give Buyer reasonable
notice of the time and place of any public sale of the property or reasonable
notice of the time after which any private sale or other intended disposition
thereof is to be made. Unless otherwise provided by law, the requirement of
reasonable notice shall be met if such notice is mailed, postage prepaid, to the
address of Buyer shown herein at least ten days before the time of the sale or
disposition. Expenses of retaking, holding, preparing for sale, selling and the
like shall include reasonable attorneys' fees and other legal expenses. Buyer
understands that Seller's rights are cumulative and not alternative and that
Buyer will remain fully liable for any deficiency remaining after disposition of
the property.
6. WAIVER OF DEFAULTS; AGREEMENTS INCLUSIVE:
Seller may in its sole discretion waive a default or cure a default at Buyer's
expense. Any such waiver in a particular instance or of a particular default
shall not be a waiver of other defaults or the same kind of default at another
time. No modification or change in this contract shall bind Seller (after
assignment, "Seller", as stated above means "KF") unless in writing signed by
Seller. No oral agreement shall be binding.
7. BUYER'S AGREEMENTS:
Buyer agrees; a) to defend at Buyer's own cost any action, proceeding or claim
affecting the property; b) to pay reasonable attorneys' fees and other expenses
incurred by Seller in enforcing its rights after Buyer's default: c) to pay
promptly all taxes, assessments, license fees and other public or private
charges when levied or assessed against the property or this contract and this
obligation shall survive the termination of this contract; d) that if a
certificate of title be required or permitted by law, Buyer shall obtain such
certificate with respect to the property, showing the security interest of
Seller thereon, and in any event do everything necessary or expedient to
preserve or perfect the security interest of Seller; e) that Buyer will not
misuse, fail to keep in good repair, secrete, or, except as provided in the
remaining sentences of this Paragraph 7, without the prior written consent of
Seller, and notwithstanding Seller's claim to proceeds, sell, rent, lend,
encumber or transfer any of the property; f) that Seller may enter upon Buyer's
premises or wherever the property may be located at any reasonable time to
inspect the property. Buyer may lease the property in the ordinary course of
Buyer's business and, in each instance, only on an arms-length basis upon the
terms hereinafter set forth. In the event that Buyer leases the property to an
affiliate of Buyer, the lease agreement between Buyer and such affiliate shall
provide that such lease agreement is subordinate to this Contract.
To further secure payment of the indebtedness contained herein or incurred
thereinafter, Buyer agrees to assign and hereby pledges, assigns and grants to
Seller a security interest in the following collateral (collectively called
"Additional Collateral"); all leases of the Property ("Leases"), other chattel
paper, accounts, contract rights, documents, instruments and general
intangibles, including all guaranties thereof, now existing or hereafter arising
with respect to the Property (collectively with the Leases called the
"Documents"); all rental payments and other amounts due or to become due under
the Documents and all other cash and non-cash proceeds of the Property and the
Documents (collectively called "Revenues"); all rights under and benefits of the
terms, covenants and provisions of the Documents; and all legal and other
remedies available for enforcement of the terms, covenants and provisions of the
Documents. No Lease shall relieve Buyer of any of its obligations to Seller
under Contract, and the aforesaid assignment of and security interest granted in
the Documents and other Additional Collateral shall not be construed as
authorizing Buyer to do anything with the Property other than to lease the same
in accordance with the terms of this Contract. Buyer agrees that Seller does
not, by this Contract or otherwise, assume any of the obligations of Buyer under
any Lease or other Documents. Buyer agrees, upon the request of Seller, from
time to time (a) to deliver to Seller any or all Documents and (b) to execute
and deliver to Seller any and all further instruments and documents, including,
without limitation, separate assignments and financing statements, which Seller
deems necessary or desirable to obtain the full benefits of the assignment,
rights, interests and powers herein granted.
Buyer hereby grants to Seller the right (in Buyer's name or otherwise, and
without affecting Buyer's obligations to Seller) during the continuance of an
event of default under Paragraph 4: to demand, receive, compromise, extend the
time of payment of, or give discharge for, any and all Revenues; to endorse any
checks or other instruments or orders in connection with the Revenues; and to
file any claims or take such actions or institute such proceedings as Seller may
deem necessary or advisable to protect Seller's interest. Buyer shall have no
authority during the continuance of an event of default under Paragraph 4 to,
and will not, during such period of time without Seller's prior written consent,
accept collections, repossess, substitute or consent to the return of the
Property or modify the terms or provisions of the Documents.
KF524R (05/03) ORIGINAL FOR SELLER (IF ASSIGNED, FOR KOMATSU BUYER'S INITIALS
Page 4 of 5 FINANCIAL LIMITED PARTNERSHIP) [______________]
[KOMATSU FINANCIAL LOGO]
SECURITY AGREEMENT - CONDITIONAL SALES CONTRACT
ACCOUNT NO._________
Buyer agrees, upon the request of Seller, during the continuance of an event of
default under Paragraph 4 (i) to notify all obligors under the Documents of the
interest of Seller or its assigns, and (ii) to direct all obligors under the
Documents to pay all Revenues directly to Seller. Buyer further agrees, upon
request of Seller, to forward promptly to Seller all notices received by Buyer
from any of the obligors under the Documents. Buyer agrees and warrants that: if
required by Seller, all Leases shall provide that obligors under the Documents
shall waive all rights to any defenses, set-offs and counterclaims as against
Seller; if required by Seller, each lessee shall acknowledge and agree (or the
Lease shall provide) that lessee's rights to the Property are subject and
subordinate to all of the terms of this Contract, including, without limitation,
Seller's right to possession of the Property after the occurrence of an event of
default under this Contract; there are and will be no purchase option or rights
of third persons in or to the property or the Additional Collateral, except as
approved by Seller in writing; the Property is and will remain personal
property; and the Property and the Additional Collateral are and will be free
from all liens and encumbrances other than Seller's. Buyer further agrees that
it will notify Seller upon learning of any material damage to or destruction of
any of the Property. Buyer will not remove the Property or permit any lessee of
the Property to remove the Property from those states where Seller has agreed in
writing the Property may be located. Buyer's chief executive office and
principal place of business are at Buyer's address as set forth on pages 1
and/or 2 of this Contract unless otherwise set forth herein, and Buyer agrees to
notify Seller promptly of any change of such address(es). Buyer shall cause each
lessee of Property to permit Seller to visit and inspect the Property on such
lessee's premises or on any other premises where such lessee has control. Buyer
warrants, represents and covenants that (i) Buyer's true and correct legal name
is as set forth on page 1 of this Contract and (ii) Buyer will not do any of the
following without prior written notice to Seller; change its legal name, merge
or consolidate with or into any other entity, change its type of business
organization or change the jurisdiction of its organization.
8. INSURANCE AND RISK OF LOSS: LIABILITY INSURANCE COVERAGE FOR BODILY AND
PROPERTY DAMAGE CAUSED TO OTHERS IS NOT INCLUDED HEREIN.
All risk of loss of, damage to or destruction of the property shall at all times
be on Buyer. Buyer will procure forthwith and maintain fire and theft insurance
with extended or combined additional coverage on the property for the full
insurable value thereof for the life of this contract plus such other insurance
as Seller may specify, and promptly deliver each policy to Seller with a
standard long form endorsement attached showing loss payable to Seller or
assigns as respective interests may appear. Seller's acceptance of policies in
lesser amounts of risks shall not be a waiver of Buyer's foregoing obligation.
In the event that the property damage insurance required hereby shall be issued
through the Agency as provided in the Insurance Coverage section on the second
page of this Contract (such insurance obtained through the Agency, the
"Insurance") and any portion of the cash down payment and trade-in equipment
allowance set forth in the Trade-In Equipment Description section of the first
page of this Contract shall be allocated to the payment of the premium for the
insurance indicated in section 5c of the first page of this Contract. Seller
agrees that the portion of the Cash and Trade-in allowance to be allocated to
the payment of the premium on the Insurance shall constitute monies to be paid
by Seller on behalf of Buyer to pay such premium. Buyer directs that such
portion of such cash down payment and allowance be used by Seller to promptly
pay on behalf of Buyer the premium on the Insurance. Buyer acknowledges that (i)
Buyer has the option of furnishing the insurance required by this Section 8
through an agent or insurer of Buyer's choice and (ii) Seller merely informed
Buyer of an insurance agent which dealt with insurance of the type required by
this Contract and aided Buyer in completing the application form for the
insurance. Buyer agrees that Seller may from time to time communicate directly
with the Agency and the insurer with respect to the Insurance. As additional
security for the payment of the indebtedness owing by Buyer under this Contract,
Buyer hereby grants to Seller a first priority security interest in the
Insurance and all rights of Buyer with respect to the insurance (including,
without limitation, the right to cancel the insurance and all rights to Buyer
relating to unearned premiums and dividends which may be payable on or in
respect of the Insurance).
Buyer represents, warrants and agrees that it has not heretofore assigned or
transferred and will not assign or transfer any or all of its interest in the
Insurance, except in favor of Seller. In addition to any and all other rights
and remedies available to Seller under this Contract, applicable law or
otherwise, upon and after the occurrence of an event of default under this
Contract, Buyer agrees that Seller may cancel the Insurance and receive on
behalf of Buyer the unearned insurance premium and dividends thereon. Such
unearned insurance premium and dividends shall be applied by Seller to the
payment of the amounts owing by Buyer to Seller under this Contract (and Buyer
so directs that Seller make such application). Buyer hereby constitutes and
appoints Seller as Buyer's attorney-in-fact with full authority upon and after
the occurrence of an event of default under this Contract to cancel the
Insurance, to receive (and give receipt for) monies payable with respect to the
Insurance as a result of such cancellation and to endorse Buyer's name on any
check, draft, or other form of payment for all monies that may become due from
the Insurer with respect to any such cancellation.
The foregoing power of attorney, being coupled with an interest, is irrevocable
until all obligations of Buyer under this Contract have been paid in full. Buyer
hereby releases Seller of any liabilities, claims, demands, obligations, costs
and expenses now or hereafter incurred by Buyer in any way relating to the
Insurance, except for the failure of Seller to make the payment on the insurance
premium with respect to the Insurance as provided above and except for the gross
negligence or willful misconduct of Seller. Seller assumes no liability as an
insurer. Buyer acknowledges and agrees that the insurer and the Agency may
conclusively rely on the agreements made by the Buyer in this Contract
(including, without limitation, the direction of Buyer for Seller to pay on
behalf of Buyer all or a portion of the insurance premium on the Insurance, the
right of Seller to communicate from time to time directly with the Agency and
insurer and the power of attorney herein provided in favor of Seller in order to
cancel the Insurance) and shall have no liability to Buyer for relying on this
Contract (including, without limitation, with respect to such power of
attorney). Buyer acknowledges that neither the insurer nor the Agency shall be
required to determine whether an event of default exists under this Contract in
order to honor such power of attorney and the insurer and the Agency may
conclusively rely on any statement given by Seller with respect to any such
cancellation.
9. MISCELLANEOUS:
Buyer waives all exemptions. Seller may correct patent errors herein and fill in
such blanks as serial numbers, date of first payment and the like. Any
provisions hereof contrary to, prohibited by, or invalid under applicable laws
or regulations shall be inapplicable and deemed omitted herefrom, but shall not
invalidate the remaining provisions hereof. Buyer acknowledges receipt of a true
copy and waives acceptance hereof. "Buyer" and "Seller" as used in this contract
also mean "debtor" and "secured party" respectively and include heirs,
executors, or administrators, successors or assigns to those parties. If more
than one Buyer executes this contract, their obligations under this contract
shall be joint and several.
KF524R (05/03) ORIGINAL FOR SELLER (IF ASSIGNED, FOR KOMATSU Buyer's Initials
FINANCIAL LIMITED PARTNERSHIP) [______________]
Page 5 of 5